Does Russia need a democracy?

I was watching Euronews yesterday, where Mr. Putin has proudly announced that he will not allow other countries to meddle into internal Russian affairs. The atmosphere in the palace was that of respect and awe. Instead of asking themselves how international observers can harm Russia’s sovereignty and what is a true reason behind this decision, the public instead settled for a national pride.

Whilst I don’t live in Russia for over 10 years, I keep asking myself if Russia needs a democracy. In a country where security is non-existent and one can loose their life’s work in seconds, a job in the government offers a brief yet lucrative opportunity for self-enrichment and thus future security.  So the story repeats itself again and again when new politicians come to power, and instead of serving the nation they serve their own pocket (apologies to all honest politicians out there, I do not mean to generalize). When their pocket is full, their term is over, and so are the hopes of the electorate for brighter and better future.

But if Russia had a permanent government, then once it has become reasonably comfortable financially and secure, it can think about making a positive mark on the country’s future. It’s just like a Maslow pyramid where the need for self-realization comes after all basic needs (and they can be a matter of interpretation) are satisfied. This would be at least an honest set-up: we do not pretend we have a democracy, in fact, we don’t need one. Instead, the parliamentary elections circus continues, as further elaborated by Clifford Levy of New York Times.

Russia’s Election Is for Parliament, but the Real Vote Is on Putin

By CLIFFORD J. LEVY

Published: November 29, 2007

MOSCOW, Nov. 28 – His valor is extolled on billboards across the nation, and his daily feats dominate the television news. At a keynote election speech last week, his handlers even showcased a shimmying girl band singing an ode to that heartthrob in the Kremlin: “I want a man like Putin, full of strength!”

Thousands of candidates are vying on Sunday for seats in the next Parliament, but the election is really about only one politician, President Vladimir V. Putin. After steadily securing control over Russia since taking office in 2000, Mr. Putin has transformed the election into a vote of confidence on his leadership and on the nation’s economic recovery, and he is throwing the full weight of his government and party machine into the fight.

But to many in the opposition, the fight does not seem entirely fair.

Opposition parties have been all but suffocated by strict new election laws, scant television coverage, curbs on their ability to organize and criminal inquiries. Workers at government agencies and companies that receive state financing said they were being exhorted by their bosses to pull the lever for Mr. Putin’s party, United Russia.

A professor in Siberia named Dmitri Voronin, for example, said in an interview today that he and others at his university had been repeatedly called in by administrators and told that if they did not vote for United Russia, they would be dismissed.

An overwhelming victory for United Russia, which is all but assured, could embolden Mr. Putin to maintain power over the government after he formally leaves office next year. Mr. Putin cannot run for a third consecutive term, according to the Russian constitution, and he has vowed to abide by that rule. But he has also said he will continue to exert influence over Russia after the presidential election in March.

Whomever Mr. Putin endorses is most likely to become president, but he has not indicated a preference. Aides said he had recorded a major speech to be delivered to the nation on Thursday, but it was not known whether he would discuss succession.

To make the case that Mr. Putin has rescued Russia after the crises of the 1990s, the Kremlin has relied upon the kind of sophisticated political imagery seen in American campaigns. Mr. Putin’s speech last week occurred at a rally that had the trappings of a political convention at Madison Square Garden, with Mr. Putin shaking the hands of the faithful as he walked through the arena, just as American presidential candidates do.

“Together, my friends, we have already done so much,” he told the crowd at the Luzhniki arena in Moscow. “We have strengthened the sovereignty and revived the integrity of Russia. We have revived the power of law and the supremacy of the constitution”

At the same time, the party has deployed stylish television commercials that make the ones put together by its opponents seem like high school productions.

The advertisements often appeal to Russian patriotism, drawing an implicit contrast between the country’s current success, which has been spurred by the high price of oil, and the failings of the years after the fall of the Soviet Union, which were scarred by economic collapse, crime and political chaos.

“Today we are successful in politics, economics, arts, sciences, sports,” says the announcer in one advertisement to a stirring brass accompaniment and images of Mr. Putin and other smiling Russians. “We have reasons for pride. We enjoy respect and deference. We are citizens of a great country, and we have great victories ahead. Putin’s plan is a victory for Russia!”

Mr. Putin has high approval ratings, and it is clear that for some Russians, the nation’s stability and the sense of authority that he projects are more important than the ideal of having an active opposition.

But Mr. Putin’s opponents contend that he is popular only because he has prevented the airing of criticism of his policies.

Prosecutors confiscated more than 15 million campaign newsletters, calendars and fliers from the Union of Right Forces, one of the mainstream liberal parties that has come under regular harassment. In some cities, leaflets were anonymously distributed saying that the party was employing people with AIDS as canvassers.

Nikita Y. Belykh, a party leader, said he could not recall the last time that the party was covered by the main television news programs positively. Mr. Belykh was briefly detained by the police last weekend during protests conducted by an opposition coalition, Other Russia that is led by Garry Kasparov, the former chess champion. Mr. Kasparov was arrested and sentenced to five days in jail.

“United Russia, through all the mechanisms at its disposal, does not allow other political parties to enter the political landscape,” Mr. Belykh said.

He added that the party had received numerous reports from around the country of people being threatened with retribution if they did not vote for United Russia.

That was the experience of Mr. Voronin, the professor in Siberia, who lives in Prokopyevsk, 2,000 miles east of Moscow. Speaking by phone, Mr. Voronin said local United Russia officials had guaranteed party leaders that they would receive 80 percent of the vote in the region.

“They periodically summon directors of the local branches of the universities, directors of technical schools, specialized schools, head doctors of clinics and hospitals and give them instructions on how to vote,” Mr. Voronin said. “They also call together different categories of voters – for instance, young people who are going to vote for the first time – and explain to them how they should do it ‘correctly.’”

Nonpartisan groups that are monitoring the campaign, like Golos, a watchdog group in Moscow, said such complaints were common. The most prominent international election monitors have pulled out of Russia, saying that they were thwarted by Russian officials. But Vladimir Y. Churov, an ally of Mr. Putin who is chairman of the Central Election Commission, told reporters on Tuesday night that he did not believe such accusations. Mr. Putin himself said on Wednesday that he had no doubt that the election would be fair.

“We know the value of authentic democracy and are interested in conducting honest, maximally transparent and open elections without organizational shortcomings and malfunctions,” Mr. Putin said. “We are sure that this will be done.”

Microsoft Server Farm in Siberia

I saw this today and thought that if Microsoft goes ahead with the data centre in Irkutsk, then other businesses should take it as a sign that long term investments in Russia are feasible. By hosting its online business out of Siberia Microsoft is making a leap of faith and hope that the Russian government will not seize the assets of the giant for the weak environmental policies or worse – for tax code violations. Below is the article from El Reg.

Microsoft wraps up MOU for Siberian data centre

Ice station server

By Kelly Fiveash, 27th November 2007

Microsoft said yesterday that it has signed a memorandum of understanding with the Siberian government which could see the software giant park its latest data centre on a remote, sub-arctic part of Russia.

The city of Irkutsk has been pinpointed as a possible location for Microsoft’s latest data-pumping farm.

Over the past few months it has announced plans to build new data centres in Chicago and Dublin, at $500m a pop. The firm already has a number of US sites that power servers for the likes of Windows Live, Exchange and SharePoint.

The potential Siberian build could prove a significant investment for Redmond as it continues to push its growing online business. Aside from the planned Dublin site, Microsoft has – up to now – only had a data centre presence in the US.

Perhaps the firm has been eyeing up the Siberian city as a possible location from which it can spit out web-based apps to the masses because of its favourable weather conditions, which could provide natural cooling to the data centre.

In a recent interview with CNET, Microsoft’s senior director of data centres Mike Manos said that the software giant had 35 different criteria when selecting a site that included access to water and power, low energy costs and decent telecoms links.

But the jury is still out in chilly Siberia. The firm said in a statement:

“Microsoft is in the midst of an ongoing initiative to expand its global data centre presence… While we are very excited about the potential in Russia, no formal decision or commitment has been made to a data centre build in Russia at this time.”

Little Choice for Patriotic Russians

In conversations with my university friends from Siberia, I have posed a question: what is happening with Russia? Surprised, I received a reaction of pride and benevolence to the country’s leadership. ‘Russia, they said, is a strong country thanks to Putin. He finally made us feel proud of Russia. He doesn’t think twice about telling Americans off for setting up a radar base in Czech Republic, or supporting Iran on the nuclear programme if he feels it’s right’.

This is why perhaps many close their eyes on the increasing dominance of pro-government party United Russia. The nationalistic pride and stability have come to matter more than the freedom of choice. Below is the article from the Independent about the upcoming parliamentary elections. The spirit of this article can be found in many Russian blogs.

An article from The Independent, UK Daily from 22 November 2007.  

One-party poll’ fuels voter apathy in Russia

Sitting in a swanky cafe in downtown Vladivostok, Katya stirs her cappuccino thoughtfully. “Well, in the presidential elections I’d vote for Putin, or whoever he suggests to replace him,” she says. “But I’m not going to vote in the parliamentary elections. What’s the point?”

Katya is 25 and has a relatively good job, working in an investment bank in the Pacific port city. She speaks fluent English and has her own car and apartment. And like many thousands of young Russians who have done well financially in the past few years, she doesn’t have any time for politics, save for a vague support for President Vladimir Putin.

“I don’t talk about politics with my friends or colleagues,” she says with a laugh, as if the mere idea is ridiculous. “Maybe if it affects business, but just to be having lunch and start talking about politics – no.”

Less than two weeks before the elections on 2 December, the Kremlin has a problem, partially of its own making: nobody really cares about the outcome. Interest in party politics is at an all-time low, say analysts, partly due to a concerted set of moves on the part of the Kremlin to stifle real political debate and partly due to the belief that voting will change nothing.

In Vladivostok, like in Moscow, seven time zones to the west, and in every city in between, the streets are decked with posters for the pro-Putin United Russia party, which is expected to win about 60 per cent of the vote. The party has little real ideology except for a steadfast support for Mr Putin and has a near monopoly on television coverage. Its campaign posters are simple: a Russian flag and the slogan, “Putin’s plan is Russia’s victory”.

Last month, Mr Putin agreed to head the party’s list at the elections, and it is only by linking themselves to the President – the only politician with true mass appeal in Russia – that they are able to inspire support. Mr Putin himself made a carefully coordinated attack on the party last week, saying it was full of “all kinds of crooks” but was the best option available.

Fair Russia, a party created last year with Kremlin backing and meant to act as a controllable opposition to United Russia, has been doing dismally at the polls and may not make it into the Duma, the Russian parliament.

Widespread indifference to the parties can be partly explained by the cynical nature of Russian politics. “Nobody standing for the Duma elections is actually doing so based on real ideas, except the Communists,” said a Vladivostok-based analyst, who asked not to be named. “Everyone else uses a party platform to advance their own personal or business interests. And of course the trouble with the Communists is that their ideas aren’t very attractive any more.”

Since the previous elections, a whole range of regulations have prevented smaller parties from getting in. It has become tougher to register political parties, the threshold for Duma entry has been raised from 5 to 7 per cent of the vote, and the “against all” option has been removed, meaning that the only way to register a protest vote is to spoil the ballot or stay away. The 7 per cent barrier is likely to shut out the Russian liberal parties.

In Vladivostok, one man who has been part of the past two Duma sittings is Viktor Cherepkov, a former mayor who claims to have links with cosmic forces. “He’s completely insane,” says Alexander Helbach, a retired local journalist. “But people remember that when he was mayor in the 1990s, he got things done. And unlike everyone else here, he’s not corrupt.”

But whereas before, a certain number of seats were allocated through direct single-constituency voting, this duma will be entirely elected from party lists. This will mean no space for people such as Mr Cherepkov or the Kremlin critic Vladimir Ryzhkov.

According to internet sources and blogs, workers in state institutions such as schools and hospitals are being pressured to vote for United Russia, and in some cases are even being told they must photograph their ballot papers to prove it.

“Apathy can work both ways,” says Boris Dubin, an analyst with the Levada Centre polling agency in Moscow, explaining why a turnout of 60 per cent is still expected. “People are worried what might happen if they don’t vote. So, given that they don’t care much anyway, they think it’s better to go and vote for United Russia and avoid any potential problems.”

Amid the apathy, a few have taken the path of protest. The most radical of these have joined the Other Russia coalition, led by the former chess champion Garry Kasparov and the controversial writer Eduard Limonov, which has no media coverage, little support and is banned from taking part in the vote.

Campaigning for a big election turnout in Moscow yesterday, Mr Putin denounced Other Russia, without naming their leaders, as foreign-fed ” jackals”. Referring to opposition marches planned for the weekend, he said: “Now, they’re going to take to the streets. They have learned from Western experts and have received some training in neighbouring [ex-Soviet] republics. And now they are going to stage provocations here.”

In Vladivostok, Other Russia has just 70 members. Its regional co-ordinator, Tatyana Korchevnaya, claims the population is not apathetic, but believes any resistance to United Russia is futile.

The election in numbers

41.5%

Percentage of prime-time TV news coverage devoted to Mr Putin in October

16.5%

Percentage of prime-time news coverage devoted to United Russia in October

1.2%

Percentage of prime-time news coverage devoted to other parties in October

29%

Latest approval rating for work of Duma

83%

Latest approval rating for President Putin

Visiting Kyiv: Outsourcing Industry Buzz

I am in Kyiv right now. The city has an eclectic feel of any post-socialist state in the phase of economic growth. Shabby apartment blocks neighbour historical buildings and newly built monstrosities. Streets are congested. The taxi driver complains about the real estate prices ($80 000 for 30 sq.m. flat on the outskirts of the capital) and sets high expectation for a new coalition of Timoshenko and Yuschshenko. A pompous restaurant offers borsch, sushi and risotto on a single menu.

 

In a smoky lobby bar of a Lybid hotel I am meeting Alex Riabtsev, the CEO of the Developers.org.ua. This is a programmer community which allows its participants share their opinions about their employers, learn about other outsourcing companies, apply for a job or to benchmark their salaries against the industry average. The latter is gathered from 2000 entries of the community members. Average prices range from $1200 in Kyiv to $550 in Winnitsa but the software development companies themselves say that the prices are much higher.

 

Despite often unflattering remarks about some outsourcing providers on the website, the companies themselves are keen to participate. They see the value in the dialogue and reputation building to attract best people in the ever tightening labour market.

 

On the way to another meeting I am talking to the 40-year old taxi driver Sergei about Ukrainian nationalism. Ukrainian is the only national language in the country but socially Sergei speaks Russian, rather than Ukrainian, as his family and friends come from Kyiv. People that speak Ukrainian are the older generation which came from provinces. These days younger generation also starts speaking it, primarily due to nationalistic feelings but old habits are hard to break.

 

Two days of traffic jams later I am well healed in the current events of software development industry and its consolidation trends not to mention the personal lives of the taxi drivers. Interesting take-aways include continuous move of the outsourcing companies to the provinces, industry consolidation trend and opportunities for growth in BPO space and local IT market.

 

A tip for those who are planning their visit to Kiev: leave plenty of time between the meetings, and try their Japanese restaurants: Ukrainian sushi are fantastic. But if you miss european ambiance, try Belle Vue, a tiny Belgian oasis of Trappist beer.

Web 2.0 Expo Berlin 2007: The Rise of Irrelevance

In early November I have been exposed to the optimism of Tim O’Reiley as he and his team were cheering up the keynote attendants. The Web2.0 Conference which recently took place in California has now come to Berlin.  Visitors were encouraged to twitter, blog and broadcast in real time. Wifi was on, and MAC-equipped audience obliged. All the buzz was about socialising, communicating and new ways of sharing information.  

Having analysed Web2.0 space in Russia I was quite excited to hear new ideas and debates about the future of this new phenomenon. Here is what I have learned. During his keynote Mr. O’Reiley was talking about a meaning of Web2.0. According to him, ‘The key to competitive advantage in internet applications is the extent to which users add their own value to that which you provide’. And the opportunity is in ‘finding new meaning in user-generated data, and turning this meaning into real-time user facing services’.  

In essence, the speech was an accolade to Google, Wiki and Web2.0 capabilities which can be found on sites such as LinkedIn. The concept is not new: Amazon has been recommending books based on your purchases for a while now. LinkedIn uses Outlook contacts to grow one’s network since its early days. Ebay takes a chunk of each user-generated transaction. Most of the lucrative niches appeared to have been filled, and entrepreneurs must find new areas where the user generated content can be captured and capitalised on. What I am sure about though, is that these successful businesses did not stem from an idea of “let’s make money on user generated content”. Instead a real need was identified (a need for a more precise search results, less invasive advertisement, up-to-date contacts, need to learn about interesting books), which happened to be satisfied with what now called Web2.0 concept. 

Then there were some interesting ideas about integrating various sensors to create new real time user services. During the break I bumped into a schoolmate of mine from Novosibirsk  times (now living in a nearby Dusseldorf) who was bubbling with excitement about O’Reiley’s idea that real friends can be located in a mobile phone.  

What followed after Tim O’Reiley’s keynote produced a numbing sense of irrelevance. But more irrelevant than some speakers were the exhibitors. I have come across Nokia mobile phones, Wifi equipment manufacturers, network hardware companies, and many other firms whose representatives were shrugging their shoulders and saying something about a gamble. VoIP phone companies, hosting service providers and even my favourite bookshop Amazon, which was promoting its Web services business were also there. But there was no MySpace, Facebook or YouTube present in the exhibition hall or amongst speakers at the conference. 

Throughout this enthusiasm-filled environment I kept wondering about rationality of the prediction that Web2.0 will be huge. Of course, Web2.0 offers new ways of collaborating, socialising and information sharing. Usage of tags, blogs and shared workspace are interesting and quite useful, yet it requires a significant culture change amongst its community. Somehow I felt that we already have discussion forums, Sharepoint and too much time pressure in our lives to have time available for Twitter not to mention the praised “Unboxing.com”, the website which shows nothing more but the pictures of people “unboxing” their presents.  

Do you actually want another way to organise meetings (ikordo), which requires you to get all your friends registered at one website, and then revert to email forwarding for updates? Would you rather stick to the good old email?  Then there are privacy issues. Someone has done their analysis of a social network site, and managed to identify a person, his wife and his best friend without any additional input from the person in question. 

 Now onto the useful Web2.0 concepts. I was delighted to learn that Web2.0 functionality allows companies solve specific problems. For example, my chat with Benjamin Lorenz from Kapow Technologies revealed a specific customer need of integration of information obtained from various websites into a single enterprise system. Jive Software talked about companies who used their product to collaborate online. Istockphoto allows people to sell their images for miniscule amount, thereby creating a massive marketplace for amateur photographers and low-budget marketers.  Perhaps my scepticism about an abstract need for social networking is due to my living in Germany for the past year. Here I am becoming an even more rational person (sadly) than when I worked in finance. Here we do not sit around twiddling our thumbs. We’ve got to solve actual problems. So I want more examples of this proactive usage of the Web2.0 functionality. Please do get in touch if you read this and I would be happy to publish it.

Ukrainians and Luxury Boats: As Seen at Hamburg HanseBoot Expo

Every city in Germany has a massive exhibition hall in the city centre: Frankfurter Messe, Hannover Messe, Munich Messe, Last month I happened to stroll the halls of Hamburg Messe to see the boat exhibition there.  

Recreationally Michael and I sail Tornado catamaran, and I can hardly imagine that one can have so much fun with a motor boat or fully computerised sail boat, where technology overpowers forces of nature. So I wondered aimlessly around the white monsters until we stumbled across a Dragon boat, completely made out of wood.

Lagoon Dragon Boat 

‘A disposable boat’, I thought, imagining the damaging effect of sea water on the impeccable polish and joined others to listen to the salesperson, who spoke English with an Eastern European accent. Having asked an inevitable question about the representative’s accent I have learned that he is Estonian who lives in Ukraine and works with Lagoon Boats and other clients. I have also learned that the wood is treated and the boat will retain its conditions for many years.

Apparently Ukraine has very talented shipbuilders, so the German owner of the company has leveraged their skills in moving the whole production process there.  This is just another example of Ukraine rocking in the outsourcing world; so I am just about to board a flight to Kiev.

Germans in Romania and at Systems 2007

Last week I attended Systems 2007, one of the major IT exhibitions in Germany located at the massive Munich Messe. The two observations surprised me: a staggering number of ERP implementation companies in Germany and a stunning fluency of Romanian companies in speaking German. But forget about ERP.

Apparently, there are as many as 45 000 German speakers in Romania. According to Wiki, there are many different groups of Germans, the largest of whom have historically been known as the Transylvania Saxons. Germans once constituted a much larger portion of the Romanian population than they do today, though they are still the fourth largest ethno-linguistic group. In 1938 there were 700,000, and in 1992 there were 111,301 but the numbers are steadily on decline. Since 1989 Germans in Romania were represented by the Democratic Forum of Germans which functions in the German language.

On a separate subject. Whilst at the exhibition, I have conducted a short market study. Having spoken to over 20 representatives of German IT Mittelstand (many of them Geschäftsführers – Managing Directors) I learned that many are concerned about the quality of the code developed by an outsourcing provider, and prefer to keep the development in house. They believe that they retain a unique competitive advantage by doing so, as no one can do it better, or they rely on too specific a skill set to outsource.

Having lived in Germany now for over a year, I can see how much value Germans put on quality. It is almost impossible to convince a diligent German who takes pride in his or her work, that someone else can do the work just as good. A leading drills and saws manufacturer allegedly refused to outsource altogether for the same reason: “If we have managed to remain a leader in this field for so long, we must be doing something right”.

German market certainly represents an opportunity for the outsourcing companies. However it is a significant challenge for those suppliers that will have to break the wall of scepticism in what outsiders can achieve, fuelled by some negative experiences. But let’s start by speaking decent German first, shall we? Needless to say that we are now discussing collaboration with a number of Romanian companies who are already good at it.