Pivoting to the East: Russia Considers China Its Ally but the Feelings Aren

Cyberspace: The New Battleground for Competing Norms

By Cayley Clifford

Early in July 2021, cyber attacks originating from Russia prompted US President Joe Biden to call for action from Moscow. This, Biden said, was conveyed to Russian President Vladimir Putin during an hour-long phone call. While the Kremlin denies the US even contacted Moscow about the attacks, recent events have promoted debate around the responsibility of state actors, including Russia, in cyberspace.

That country’s attempts to promote or resist norms around traditional global governance areas are well documented. It is known to offer a more conservative approach towards issues of human rights and military intervention, for example. And now it is under scrutiny in newer areas of contestation, including cyber governance and cyber security.

Over the past five years, Russia has become an active promoter of cyber governance norms. As it continues to push its cyber proposals on the international stage, where does Africa stand? Do growing relations between Africa and Russia mean they always share the same stance?

‘Splinternet’ or global infrastructure?

Moscow’s cyber norm promotion is closely linked to its national interests. Russia seeks to reclaim its stature as a global power (including in the technology landscape), but is also interested in how cyberspace can be harnessed for domestic purposes.

In deciding whether the internet should remain a global infrastructure or become a “splinternet” (controlled nationally), Russia and China are proponents of cyber sovereignty. They argue that countries should manage their own cyberspace and that the internet should be bordered and thus restricted.

This has led to a range of concerns around internet freedoms, from the censorship of political content online to large-scale internet shutdowns (a practice that has gained traction in some parts of Africa, Asia and the Middle East, especially around elections or public protests). While traditionally opposed by the US and other democracies, the ability to confront cyber threats, conduct surveillance and enforce regulations on harmful content such as child pornography and terrorist propaganda, means the idea of cyber sovereignty is gaining ground in the Western world too.

In promoting this cyber norm, Russia seeks to pull as many countries as possible into its orbit to enhance its soft power capabilities. At the UN in 2018, a Russian-proposed working group, open to all UN member states, garnered the support of 109 countries. Many of these countries were African, demonstrating international interest in discussing cyber norms in terms favourable to Russia.

Of the working group’s initiatives, capacity-building efforts to enhance countries’ abilities to protect their ICT environment may particularly appeal to African states who perceive themselves as lagging. Indeed, the rise in cybercrime — with critical national services often affected — has seen cyber security become an issue of international concern.

African support for Russian cybercrime resolutions

Russia is a major supporter (and sponsor) of several international cybercrime resolutions at the UN. In December 2018, a Russia-backed resolution that required the UN Secretary-General to collect countries’ views about cybercrime was adopted by a majority vote. Of the 88 countries that voted in favour, 32 were African. Only four African countries — Botswana, Ghana, Morocco and South Africa — submitted their views, but all four listed lack of state capacity and lack of international consensus as major challenges in combating cybercrime. These and other views were summarised into a report for consideration by the General Assembly.

Moving the ball forward once more, in December 2019, Russia succeeded in pushing through a UN General Assembly resolution that aimed to create a negotiating platform, under UN auspices, for the consideration of a new cybercrime treaty. This move was strongly opposed by the US which expressed concerns that this resolution would stifle existing global anti-cybercrime efforts. But with 79 votes in favour, including 30 from Africa, the resolution was adopted. Officers were elected to the ad hoc committee in May 2021 and it has been agreed that six negotiating sessions will take place before the possible adoption of a treaty.

One of the major concerns with Russia’s resolution is its vagueness around the definition of cybercrime. Not only could this lead to legal uncertainty among countries, but could perhaps provide Russia with the regulatory room it needs to stifle political opposition or citizen dissent. A month before Russia’s UN resolution was passed, amendments to domestic legislation allowing the government to block internet traffic from outside Russia came into force. Human Rights Watch said the laws undermined freedom of expression and privacy.

How do Africa’s own cybercrime initiatives compare with Russia’s international efforts?

“A global governance system will be important,” Tomiwa Ilori, researcher at the University of Pretoria’s Expression, Information and Digital Rights Unit, told SAIIA. But African countries need to be wary of external influence, he said. “When deciding on a framework, a human rights-based approach should be used.”

An African Union Convention on Cyber Security and Personal Data Protection was adopted in 2014, but has yet to meet the minimum number of ratifications required for it to come into force. The convention references the need for regulatory frameworks to respect the rights of citizens, but it does not establish a framework for all member states. Instead, it encourages signatories to draft their own legal, policy and regulatory measures to manage cybercrime.

Almost 40 African countries have introduced legislation that deals with cybercrime. Some of the laws, like Russia’s UN resolution, are vaguely worded while others are similar to the European Union’s General Data Protection Regulation — an earlier attempt to establish uniform cyberspace policies across countries.

This tells us that as a continent of 54 states, African views on cyber governance are not homogenous. And while many share a preference for cyber sovereignty, particularly as a means to quash political dissent, African countries do have some level of agency when it comes to adopting a model. With cyberspace fast becoming the new battleground for competing norms and influence, there is also a role for civil society in Africa to continue advocating for cyber freedoms.

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This article was first published by the South African Institute of International Affairs (SAIIA).

Published by the good folks at The Elephant.

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Cyberspace: The New Battleground for Competing Norms

By Cayley Clifford Vladimir Putin has placed a high premium on rebuilding Russia’s stature as a global power, and these efforts extend to Africa. He first visited the continent in 2006, promising $1bn in investments and making a clear declaration of Russian interest.

If you google “Russia-Africa relations”, some of the first results include news articles about Russia and its “return” to the African continent. What does Russia want from Africa, many ask, and what’s behind Moscow’s recent push into the continent?

You may also see mention of the 2019 Russia-Africa Summit, the first of its kind, held in Sochi and attended by 43 African heads of state. Several memoranda of understanding were signed at the summit, including between the Russian government and the African Union.

“We are not going to participate in a new ‘repartition’ of the continent’s wealth; rather, we are ready to engage in competition for cooperation with Africa. We have a lot to offer our African friends,” President Vladimir Putin said at the summit. This too sparked debate about Russia’s growing influence on the continent.

Did Russia ever really leave Africa? That depends on who you ask.

In March 2021, building on previous work, the SA Institute of International Affairs (SAIIA) launched a two-year research programme seeking to understand Russia’s strategic engagement and policy impact in Africa. A series of online scoping workshops showed there are vast and varying opinions on the topic.

Sanctions Trigger Renewed Engagement

It’s well known that the Soviet Union provided support to a number of African countries during their anti-colonial struggles. Most scholars agree that in the early 1990s, at the height of the USSR’s transition to a multi- (or one-) party system, and preoccupied with domestic challenges, Russia’s presence in Africa reached an all-time low.

In 1991, the then president, Boris Yeltsin, announced that Russia’s foreign aid policy would come to an end. By 1992, nine embassies and four consular offices were closed, while many cultural centres disappeared.

Since then, Putin has placed a high premium on rebuilding Russia’s stature as a global power, and these efforts extend to Africa too. He first visited the continent in 2006, promising $1-billion in investments and making a clear declaration of Russian interest. By the following year, Russia had written off approximately $20-billion of debt incurred by African countries during the Cold War.

But some argue that it wasn’t until 2013 that material engagements emerged. Putin again visited South Africa, often seen as the gateway to Africa, for a Brazil, Russia, India, China, South Africa (BRICS) summit. Russia signed a Comprehensive Strategic Partnership with South Africa, with provision for cooperation in the political, economic, and defence spheres.

Diplomatic links between Russia and Africa have also increased, with several heads of state visiting Moscow since 2015. Through the UN, Russia has actively participated in aid programmes, providing food and medical assistance to African countries in need. It has also courted African votes on the UN Security Council and UN General Assembly. It’s widely speculated that renewed engagement is linked to economic sanctions placed on Russia in 2014 by the West, due to the Ukraine conflict and the “annexation” of Crimea. Here, two distinct interests stand out.

Military and Natural Resource Interests

Russia is a major supplier of arms to Africa. According to the Stockholm International Peace Research Institute, Africa accounted for 18% of all Russian arms exports between 2016 and 2020, with Algeria being the largest recipient. Defence relationships between Russia and Africa are also growing.

Since 2014, Rosoboronexport – a Russian state-owned agency that exports military products and services – has signed bilateral agreements with multiple African countries, including Angola, Equatorial Guinea, Mali, Nigeria, and Sudan. Apart from military equipment, the agreements contain provisions for countering terrorism and the joint training of troops.

Russia also has clear economic motives when it comes to natural resources. Although it boasts some of its own mineral wealth, Russia’s natural resources are difficult to extract, making it easier to import them instead. Notable developments are taking place in Zimbabwe (platinum group metals), Angola (diamonds), and Namibia (uranium).

Several Russian state-owned energy companies such as Gazprom, Rustec and Rosatom are also active in Africa, with key investments in the oil, gas and nuclear sectors in Algeria, Egypt, Uganda and Angola. It’s worth noting that state-led investments are often linked to military or diplomatic initiatives. For example, while an agreement is in place to construct two nuclear power plants in Nigeria, Russia has at the same time committed to countering terrorism there.

Incremental Growth

Events since 2014 have led to concerns from other countries about the return of the “bear” (in a 2018 speech, the then US national security adviser, John Bolton, singled out the expansionist efforts of Russia and its “influence across Africa”).

And while much attention is paid to Russian movements on the continent, it’s difficult to compare Russian engagement with Africa’s traditional partners like the US, UK and France, or with emerging powers like China, whose involvement dwarfs that of Russia. Interest from Turkey, Israel, the United Arab Emirates and others also means African countries can now pick and choose who they would like to partner with. These decisions are informed by a complex web of priorities. Conversely, while Putin has named Africa a foreign policy priority, it is not number one on the list. “In terms of overall economic ties, Russia still does much more trade with Europe and Asia than with Africa,” Alexandra Arkhangelskaya, researcher at the Russian Academy of Sciences’ Institute for African Studies, told SAIIA. This was due to its geographic location, she said.

Plans for the 2022 Russia-Africa summit are well under way, again causing a stir around growing Russian presence on the continent. Rumored to be taking place in either Cairo, Dakar or Addis Ababa, the summit will bring together hundreds of representatives from business and government.

Is this part of Russia’s new Africa strategy or a continuation of its prior involvement? Either way, we should expect incremental growth in levels of engagement.

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This article was initially published in the Daily Maverick.

Published by the good folks at The Elephant.

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Cyberspace: The New Battleground for Competing Norms

By Cayley Clifford Today, Russian ideologues and propagandists are raising alarms over the “West’s attempts to introduce ideals and norms alien to Russia. They denounce the Russian opposition, which allegedly operates under “orders from the West.” And they stoke fears among television audiences that the West is preparing “nothing short of a war” on Russia. In turn, American, British and Western European commentators accuse the Russian government of waging targeted attacks on Western institutions and conducting an information war against the West.

While all this noise can be tuned out, if you pay attention for just a moment, you quickly realize that the point of all this sensationalism isn’t the content itself but the feeling of comfort these ideologues and publicists evoke. Amid all thе accusations of “Western operatives” and “hybrid warfare,” there’s a nostalgia for the former bipolar order in which Russia — or perhaps more specifically, the post-war USSR — had a clear and leading role. Western politicians and authors, meanwhile, long for times past when they were triumphant champions of the twentieth century’s global conflict.

Preparing for a war gone by

All of these mutual threats hark back to the Cold War, which was more than just a frozen standoff between two superpowers (played out in regional wars). It was also a clear and comprehensible system of international relations, especially when viewed from Moscow and Washington. Each of these global poles flew a flag that other countries were compelled or enticed to rally around — cozying up to the (capitalist) West or to the (socialist) USSR.

From the Western point of view, the twentieth century was dedicated to a deadly standoff against the ideologies of fascism and communism, followed by another one between capitalism and communism as political and economic systems. All of these worldviews and doctrines were formed in Europe more than a hundred years ago. In this sense, Vladimir Putin — who never tires of evoking Russia’s triumph in World War II and the resulting repartition of the globe — holds a distinctly Western point of view. His position may be contentious, but it’s framing is rooted in Westernism all the same.

Meanwhile, hidden by the pall of conflict between capitalism and socialism was another confrontation entirely. The Cold War ruthlessly dragged in third countries, quashing their pursuit of decolonization, sovereign nation building, and the formation of their own political systems, writes Yale historian Odd Arne Westad in one of the best books on the history of the Cold War.

From a non-Western point of view — or more precisely, from the point of view of most non-Western people — the main global development of the twentieth century was the appearance of independent nation states from the ruins of European and Asian empires. Of course, people in Egypt, India, China, Pakistan, and Thailand, can imagine what worries Americans and Europeans (indeed, thanks to the ubiquitous spread of the English language, this isn’t so difficult for them to do). But the world looks different “from the other side.” From the perspective of those outside of Washington and Moscow, what’s important isn’t the conflicts “within the Western world,” but rather the relations between former colonies (or states caught in the orbits of these empires) and former colonizers.

Human rights and democracy as neocolonialism

In this prolonged and painful conflict with the West, which goes back much further than the Cold War, Russia occupies a unique and dualistic position in terms of both geography and history. In a recent meeting with his Chinese counterpart Wang Yi, Russian Foreign Minister Sergey Lavrov signed a joint declaration, “on several issues of global governance,” which stated that human rights should be protected “in conformity with national specificities.”

Legal mechanisms aimed at protecting the rights of the individual first appeared in international agreements and legal documents in the 1940s, at the end of World War II and the beginning of the post-war era.

The authors of the Universal Declaration of Human Rights, the Charter of the Nuremberg International Military Tribunal, the European Convention on Human Rights and other documents from that period were driven by an effort to protect the groups and nationalities that were victims of the crimes exposed at Nuremberg and in other post-war trials. It was therefore imperative to create a concept of human rights acceptable to conservatives simply because up until the 1940s, the idea of human rights itself was associated with the revolutionary tradition of droits de l’homme and the communist movement. It was important for the Christian Democrats and other centrist parties to create a “Judeo-Christian democratic” version of human rights that denied the communists (who were popular in post-war world) a monopoly on human rights.

The mass killing and widespread suffering of those persecuted during the war years was heightened by the exceptional difficulties Jews and other refugees had crossing borders. Some countries wouldn’t let them out, while others wouldn’t take them in (this included the United States, as evidenced by the unforgettable tragedy of the Voyage of the St. Louis). Human rights protection thus had to exist at a level above borders. The idea of human rights protection, which was established in the Universal Declaration and other post-war documents, arose from the existence of a moral absolute that reigned supreme above nations’ sovereignty over their territory.

This in turn became a predicament for the Soviet Union, even though it was founding member of the United Nations and its ambassador, Alexander Bogomolov, participated in the drafting of the Universal Declaration of Human Rights. The leaders of the USSR and the leaders of other socialist states and countries, which in the second half of the twentieth century were called the “third world” (in the sense that they were initially neither capitalist nor communist) came to see “western” human rights as a pretext for interfering in their affairs. The communists and their satellites saw their human rights not as political and civil rights, but as social rights: the right to have a roof over one’s head, clothes to wear, employment, and social services. While, the West reproached the communists for violating human rights (through suppression of opposition and lack of elections), the communists reproached the West for violating of social rights (due to unemployment and extreme inequality).

Even though Russia has grown closer to China and comes out on China’s side in the battle with the West, Russia still belongs to the “historical West” and, as such, faces grievances from China — and the exact scale of these grievances remains unknown.

Today’s Russian leaders are fond of emphasizing their conservatism and consider themselves guardians of traditional values. Yet the version of human rights they choose is not conservative democratic — it’s socialist. That is to say, it’s based on social rights, rather than civil or political ones.

China has long been at odds with its Western partners over human rights. “China, along with the rest of the developing world, chooses to first prioritize economic and social rights, as opposed to the Western focus on civil and political rights,” explains Phil Ma, a researcher at Duke University. “These rights emphasize collective values and opportunities for economic growth, not just democracy promotion.” More importantly, criticism for human rights violations in Tibet and Xinjiang are taken by Chinese politicians not in the context of the recent Cold War, but in the context of the Century of Humiliation, the period that ended with the establishment of the People’s Republic of China (PRC) in 1949.

The period from 1842 (the defeat of the Qing Dynasty in the First Opium War) to 1949 (the establishment of the People’s Republic of China), during which China lost a significant amount of territory and economic independence. China suffered one defeat after another at the hands of Western powers, which dictated trade conditions, including supplies of opium to China and taking Chinese cultural treasures to Europe. The destruction of the Old Summer Palace, burned and looted by the British and French during the Second Opium War in 1860, stands as a symbol of China’s foreign humiliation during this period.

In a broader context, contemporary Chinese state leaders act as representatives of a preeminent non-Western power trying to overcome challenges they inherited from the colonial period. These leaders therefore perceive human rights and the spread of democracy as nothing other than the West’s attempt to teach eastern barbarians to be “civilized.” Makau Mutua, a Kenyan-American professor at the SUNY Buffalo School of Law, calls this the “savages-victims-saviors” construction. This approach, in his opinion, is dangerously close to the old imperial notion that western civilizers are called to come and save eastern savages from themselves.

China’s Communist Party bases its legitimacy not in ideology, which lost its relevance when the Cold War ended, but in its role as a nation-building power. It was the party, after all, that brought an end to the era in which China suffered territorial and economic losses from the actions of great powers, namely Great Britain, France, the United States and, yes, Russia.

Celebrating victory over Russia

The Indian essayist and novelist Pankaj Mishra opens his book “From the Ruins of Empire: The Intellectuals Who Remade Asia,” with a story of what the defeat of the Russian navy in the 1905 Battle of Tsushima meant to the world outside the West. Japan, which won the battle, was not the only country celebrating. This good news covered the pages of newspapers in Egypt, China, Persia, and Turkey. It marked the first time in the new era when a non-European country was able to defeat a European power in a full-scale military conflict.

Intellectuals and reformers from the non-European world have regarded that day as a pivotal milestone. Mustafa Kemal, who would later come to be known as Atatürk, wrote that he became convinced at that point that modernization according to the Japanese model could change his country. Jawaharlal Nehru, the then future first prime minister of independent India, recollected how news of Tsushima gave him a breath of inspiration and hope for Asia’s liberation from their subordination to Europe. American civil rights leader and intellectual William E. Dubois wrote of a worldwide surge of “colored pride.”

Historically, Russia has been one of the colonialist powers. At the dawn of the new era, Russia was part of the West; it acted like a Western empire and was regarded as such by the non-European world. China’s grievances towards Russia, which essentially remain in place to this very day, are the standard objections of a former colony to a former colonial empire. When Deng Xiaoping met with Mikhail Gorbachev in Beijing in 1989, the Soviet leader was taken back by the array of “old” issues raised by the Chinese leader. Gorbachev had arrived to iron out relations with the USSR’s partner, only for the Chinese leader to remind him of Russia’s Tsarist policies, humiliations from years past, the territories ceded to Russia in the Treaty of Aigun and the Treaty of Beijing, and China’s resulting territorial disputes.

The communists and their satellites saw their human rights not as political and civil rights, but as social rights: the right to have a roof over one’s head, clothes to wear, employment, and social services.

Gorbachev, like all Russian leaders existing within the Western political agenda, couldn’t come up with a response “Protocol dictated that Gorbachev reply by laying out our position, our vision, but he didn’t do that, as he wasn’t prepared for such a reception. He was silent, effectively agreeing with Deng Xiaoping’s rendition,” recalled Andrei Vinogradov, a China specialist from the Institute of Far Eastern Studies, in a recent interview. In China, the 1969 Sino-Soviet border conflict is also seen as a “pushback against the northern aggressors.” On a recent anniversary of the clash in China, participants of the events were honored with awards.

In March 1969, an armed conflict broke out between the USSR and China over Damansky Island (Zhenbao Island), which is located near Manchuria. The Soviet Union regarded the island as its own, while the PRC saw it as territory Russia obtained thanks to colonial treaties. The clash killed 58 Soviet military personnel and injured 94 others. Estimates of the Chinese casualties range from 100 to 300, though the exact number remains unknown.

The island went to China after the border demarcation in May 1991. China acquired several other islands and territory totaling more than 300 square kilometers (nearly 116 square miles) during demarcation in 2005.

A Different historical perspective

Although the European Union continues to be Russia’s main trading partner, trade with China is on the rise. While seven years ago, the volume of EU trade with Russia exceeded trade with China five times over, today it’s only twice as large. China has already overtaken Germany in the role of Russia’s primary supplier industrial equipment. The relatively modest amounts of Russian natural gas exported to China are now increasing. Military collaboration is becoming ever closer and is most evidently expressed in the form of joint drills. There are realistic prospects of Russia gaining entry into China’s technological sphere of influence, specifically in the area of 5G network construction.

In his research examining the prospects of Russian integration into Pax Sinica (China’s geopolitical space), Alexander Gabuev, a senior fellow at the Carnegie Moscow Center, has found that for the time being China is exploiting its economic advantage, mostly by extracting better terms of trade — specifically, reduced prices for oil and gas. As Russia’s dependence on China grows, Chinese politicians could very well start to pressure Russia in areas other than commerce, for example to end military alliances with PRC antagonists, or to convince Central Asian countries to permit Chinese military presence on their territory as security for the Belt and Road Initiative. Short-term gains for Russia could turn into long-term losses.

While it’s still expedient for Kremlin politicians to play the role of zealous warriors against the West, Moscow’s non-Western partners have a much longer memory than the Russians do. The Kremlin’s logic is clear, but it’s dictated by views that were formulated during the Cold War years. The Russian perspective encompasses merely several decades, while Chinese politicians view Russia — and the rest of the world — from a centuries-long perspective. Thus, even though Russia has grown closer to China and comes out on China’s side in the battle with the West, Russia still belongs to the “historical West” and, as such, faces grievances from China — and the exact scale of these grievances remains unknown.

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Editors note: This article was first published in English by the Russian publication, Meduza.

Published by the good folks at The Elephant.

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Cyberspace: The New Battleground for Competing Norms

By Cayley Clifford Published by the good folks at The Elephant.

The Elephant is a platform for engaging citizens to reflect, re-member and re-envision their society by interrogating the past, the present, to fashion a future.

By Cayley Clifford Published by the good folks at The Elephant.

The Elephant is a platform for engaging citizens to reflect, re-member and re-envision their society by interrogating the past, the present, to fashion a future.

Cyberspace: The New Battleground for Competing Norms By Cayley Clifford

Published by the good folks at The Elephant. The Elephant is a platform for engaging citizens to reflect, re-member and re-envision their society by interrogating the past, the present, to fashion a future.

Cyberspace: The New Battleground for Competing Norms

By Cayley Clifford

When the Aramaic philosopher Jesus Christ declared that the poor will always be with us, I doubt that his Hebrew listeners had a word for austerity. But today Jeffrey Sachs and his friends at the International Monetary Fund (IMF), the World Bank, the World Trade Organisation (WTO) and all the other organisations that make up the Washington Consensus do, and they are committed to implementing it through Structural Adjustment Programmes (SAPs).

On March 7 this year, Kenya’s Cabinet Secretary for Finance, Henry Rotich, announced that the government was broke. He withdrew that statement a day later after a meeting with IMF officials. Rotich, who was running a broke government that could no longer service its debt, was inevitably forced to sign off to stringent terms, key among them freezing all megaprojects and introducing an amendment to the Division of Revenue Act 2017 that will reduce the amount of cash made available to county governments.

Still addicted to debt pegged on key infrastructure projects, Rotich would hit the road again for a round of begging bowl diplomacy, heading straight to the IMF and World Bank offices. This time, well aware of the potential backlash at home, he assented to IMF demands to levy 16% VAT on fuel that would kick in in September, while rejecting other undisclosed terms for the Sh150 billion forex insurance programme. One wonders why we’d go seeking a forex boost just after the Central Bank of Kenya had announced that it had nearly six months’ worth of foreign exchange reserves – enough to cushion shilling trading till February next year.

Before all this was set rolling, a small clause in the Statute Law Miscellaneous Amendment Bill 2018 removed the provision by which privatisation of state assets and parastatals would need National Assembly approval, leaving the privatisation function purely in the hands of the parastatal bureaucrats higher up. Twenty-three key state assets, including a critical port, may be up for sale to the highest bidder. These kinds of moves (mass retrenchment, increased taxes and massive privatisation) all have the hallmarks of the dreaded SAPs.

Sachs and SAPs

SAPs are the ultimate devil’s piss: heavily criticised policy recommendations by the Washington Consensus to debt-laden states that are meant to help the latter raise revenue and repay loans. SAPs’ raft of policy recommendations to fix national debt include liberalisation of the economy, minimising the role of the state, massive privatisation, currency devaluation, lax market regulation and elimination of subsidies.

However, to understand SAPs, one needs to take a look at its father, Jeffrey Sachs, the economics celebrity who graduated from Harvard with a PhD at the age of 26 and became a global icon on international finance and inflation by age 28.

Sachs hit stratospheric fame when he walked into the economic blizzard that was then Bolivia, whose peso had been wrecked by a 24,000% inflation, in the 1980s. Within seven weeks, he’d reined in the hyperinflation, with the resultant fame turning him into an economic Jesus Christ.

Read also: DEBT AND TAXES: Kenya is living large on borrowed money

However, that would pretty much be the end of his miracle-working as his recommendations in Poland – his next stop – would prove tenuous and tough on the citizens, wiping out personal savings and spiking both commodity prices and unemployment. Since then, SAPs have failed so miserably across Latin America, Africa and South East Asia that the IMF and the World Bank abandoned them in the mid-1990s – at least in theory – with Mexico being the last victim.

The net effect across a dozen or so countries was the thinning of the middle class, the ripping apart of communities and the unleashing of economic chaos that is yet to be fully fixed. In fact, China and India – two of the top 10 fastest growing nations of the 1990s and 2000s – had flatly rejected SAPs.

SAPs and poverty

A generally accepted fact now, which would have been debatable three decades ago, is that SAPs cause poverty and suffering and sometimes create chaos that descends into violence in the countries where they are implemented. For example, Mexico saw the rise of the Zapatista Army of the National Liberation that protested SAP-style policies in 1994. Since the mid-1980s, when SAPs were first introduced, several other countries nearly went up in flames. Following is a list of a few.

January 1985, JAMAICA – Jamaicans hit the streets in protest after the government’s decision to raise fuel prices as part of SAPs linked to a 1982 World Bank loan that was later renegotiated in November 1984.

January-February 1987, ZAMBIA – Riots hit the northern copper mining districts in response to a rise in food prices linked to a SAP announced in December 1986. The programme was eventually suspended.

October-November 1987, SUDAN – Crazy currency devaluation and price hikes resulting from IMF/World Bank demands lead to a 15,000-strong crowd demonstration in Khartoum.

April 1988, NIGERIA – Students in 33 universities hit the streets to protest against a fuel price increase demanded by an IMF-inspired SAP.

1989, BENIN – University of Cotonou students strike to protest suspension of student grants, paralysing the institution for 6 straight months. The government intended to stop paying them altogether in 1989 as part of SAP reforms.

April 1989, JORDAN – Riots over increase in food prices affects southern Jordan shortly after IMF- linked SAPs.

June-August 1999, ECUADOR – A broad coalition of local groups, political parties and civil society organisations, led by indigenous peasants, demand an end to austerity measures imposed by the IMF.

December 1993, RUSSIA – A coalition of parties and interest groups opposed to the neoliberal reform (SAP) measures of the Yeltsin government wins majority parliamentary seats as a result of a backlash against these measures.

Calamitous SAP recommendations have included privatisation of water systems in Tanzania, elimination of food subsidies in post-invasion Iraq, forced student fees in Ghana, lobbying for labour flexibility in Sri Lanka and denying Ecuadorians a much-needed $100-million loan facility on flimsy grounds. The legacy of coercive, painful and often disastrous recommendations in exchange for loan facilities is what’s earned SAPs the telling moniker “shock therapy”.

Gorbachev and Glasnost

Partly due to its size and complexity, the former Soviet Union still remains the ultimate specimen for the grandiose social engineering delusions that informed the mindset of SAPs’ ambassadors around the globe. In the mid-1980s Mikhail Gorbachev set out to create a mixed socialist economy – an imitation of China’s “socialism with market characteristics” that was set up by Deng Xiaoping a decade earlier.

Calamitous SAP recommendations have included privatisation of water systems in Tanzania, elimination of food subsidies in post-invasion Iraq, forced student fees in Ghana, lobbying for labour flexibility in Sri Lanka and denying Ecuadorians a much- needed $100- million loan facility on flimsy grounds. The legacy of coercive, painful and often disastrous recommendations in exchange for loan facilities is what’s earned SAPs the telling moniker “shock therapy”.

At that point, the Soviet Union was reeling from falling oil prices beginning in 1986 and an external debt crisis. Through a raft of policy decisions, Gorbachev effectively transferred the control of many Soviet enterprises from the government to the nomenklatura (employees and management in the provinces) and entrenched those moves into the constitution through the Law on State Enterprise. He followed that up with the Law of Cooperatives that created socialist cooperatives that ran as private entities and later on allowed farmers to farm and trade as individuals – a break from the collective farming model of yesteryears. Once the SAPs reforms were unleashed, there was no going back. In September 1990, the Soviet parliament granted Gorbachev emergency privatisation powers similar to Kenya’s Miscellaneous Amendment Bill 2018.

Jeffrey Sachs would show up in Moscow from late December 1991 till his resignation in January 1994. Sachs, who was by then working hand-in-hand with the economic radical faction of Gorbachev’s regime, would describe the situation in 1991 thus:

“Russia and the other republics bear the deep economic cancer of seven decades of communism: over-extended heavy industry; bloated, bureaucratic enterprises; a starved service sector; and the absence of market institutions, in law, finance, and administration. Now, on top of systemic disease, the republics face a financial crisis…Inflation has become hyperinflation. The foreign-exchange coffers are empty. The old administrative structures have collapsed…A deeper need for industrial retrenchment and restructuring will last for years, even decades, as the former Soviet Union scale back its old heavy industry…”

Yeltsin and the rise of Russian oligarchs

Gorbachev would soon pave the way for Boris Yeltsin’s presidency. In December 1991, in the months leading up to the dissolution of the USSR, Yeltsin put together an economic reform team led by Yegor Gaidar and Anatoly Chubais. By the time of the August Coup a few months later, SAPs, including drastic reforms to social safety nets, were steaming full-speed ahead. On January 2, 1992 Yeltsin, through his economic adviser Gaidar, was forced to declare an end to price controls amidst worsening food shortages tied to the mishandled reforms.

Between 1992 and 1994, market liberalisation, legal reforms, a push for Western aid and privatisation took on a much wider scale. These were engineered by the State Committee for State Property Management of the Russian Federation (SCSPMRF) under Chubais, a firm hand in the entire affair. The Committee adopted a new vehicle for turning over state assets into private hands (known as the voucher privatisation programme) as a means of quickly offloading the fast-crumbling state enterprises, a move that laid the groundwork for the rise of the Russian mafia and the wealthy and corrupt nomenklatura. In that three-year period, more than 15,000 Russian government firms were transferred to private hands even though they would, ironically, continue receiving government financial support for years.

The reforms to the decaying Soviet economy couldn’t stem the regime’s fiscal deficit, and as the 1996 election neared, the cash-strapped Yeltsin regime implemented the loan-for-shares scheme. The scheme, a brainchild of the elite banker Vladimir Potanin, involved leasing state enterprises through auctions for money lent by commercial banks to the government. The rigged system marred by factionalism, nepotism and shady deals raised a whole new pool of oligarchs.

Read also: HUNGER GAMES: Hard Times and Kenya’s Looming Economic Crisis

The problems facing the Soviet economy cannot be entirely blamed on Boris Yeltsin though. By the time the Soviet Union started crumbling in 1991, Jeffrey Sachs’s recommendations were running into headwinds and some of the assumptions, including securing large-scale Western assistance, were being downplayed by IMF’s point man, John Odling Smee. Sachs’s call for fiscal and monetary reforms failed to take into account the complexity of the Soviet bureaucracy and his call for reforms in social services failed to anticipate the rapid collapse of the healthcare sector. In the end, four classes of elites were created: the Communist Party patriarchs; the sleazy oligarchs trading in the smuggled goods; the nomenklatura (administrative) barons in the provinces as more enterprises got localised; and the younger relatives of these elites and a few educated and well-connected citizens.

The reforms to the decaying Soviet economy couldn’t stem the regime’s fiscal deficit, and as the 1996 election neared, the cash-strapped Yeltsin regime implemented the loan- for-shares scheme. The scheme, a brainchild of the elite banker Vladimir Potanin, involved leasing state enterprises through auctions for money lent by commercial banks to the government. The rigged system marred by factionalism, nepotism and shady deals raised a whole new pool of oligarchs.

Yeltsin ruled Russia through his close allies known as the Semibankirschina (or seven bankers), a team of powerful, visible and influential oligarchs who controlled roughly 71% of all Russian finances by the year 2000. The seven bankers – Vladimir Vinogradov Boris Berezovsky, Mikhail Fridman, Pyotr Aven, Mikhail Khodorkovsky, Vladimir Potanin, and Vitaly Malkin Alexander Smolensky, and Vladimir Gusinsky – shaped Yeltsin’s regime. Anatoly Chubais (aided by the Russian-American Prof. Andrei Shleifer) is known as the father of the neoliberal SAP reforms, having been the patriarch in charge during the era of Soviet reform efforts. Chubais and Gaidar led a process that was similar to former President Moi’s “Dream Team” in the 1990s. What started out as a simple process of reforming the rapidly decaying Soviet economy descended into kleptocratic and opaque processes driven by mafia bosses, rising well-connected kids, Soviet political patriarchs, relatives of senior administrators and Western apparatchiks.

Enter Putin

Enter the oligarch purge by Vladimir Putin. Just like Yeltsin, Putin had his gang of seven, dubbed Ozero, with whom he had built dachas on Lake Ladoga’s shoreline. In 1996, while Yeltsin met with his oligarchs, Putin took his Ozero gang (all natives of St. Petersburg) on a road trip to the Karelian Isthmus, a wealthy coastal suburb from where they reminisced the changing political fortunes of the country.

Vladimir Vladimirovich Putin was a consummate spy. He joined the Soviet government under Yuri Andopov in 1975, who during his tenure as the head of KGB, devised the plan to inject the espionage juggernaut with fresh blood. Putin has always had the uncanny fate of playing the outsider in just about anything he gets into. He was an outsider among the business elite in Ozero, a geographical outsider among the Moscow elites, an outsider even in the KGB where he was posted to Dresden, Germany’s third largest city, as opposed to Moscow, which was the heart of communist idiosyncrasies. He was even an outsider to Michael Gorbachev’s reformist programmes (Perestroika, Glasnost and uskoreniye), having received his letter to relocate to Dresden in mid-1985 just as Gorbachev was ascending to power in Moscow.

Putin showed up in the Soviet Union in early 1990 having watched communism convulse in Eastern Europe and having first-hand experience of how “the Soviet was silent at home”, a reference to the moment he called for back-up during an attack at the local communist offices in Dresden and received none. When he was back in the Soviet Union, he headed back to St Petersburg (then known as Leningrad) where he becomes the deputy mayor. It was only at the end of his tenure in 1996 that he was brought to Moscow to keep an eye and prepare dossiers on rogue oligarchs. Three years later, he becomes the Prime Minister after the sudden resignation of Boris Yeltsin.

Putin’s “outsiderism” shielded him from building personal ties with the oligarchs, a position that gave him a dispassionate capacity to rein them in with the dossier he, by a twist of fate, had prepared. Unlike the insiders who’d experienced all the glories and pains of Soviet culture and life, Putin, based in Dresden, saw in the Soviet Union’s fall a humiliating indictment of his predecessor’s incompetence and the myopia of the Moscow elite.

Of the gang of seven under Yeltsin, only four would survive under Putin and, surprisingly, Putin would build his own team of oligarchs, including members of the Ozero, the most famous among them being Usmanov, Abramovich, Alekpetrov, Yeltsin-era Potanin, and Vitaly Malkin. (The US Treasury lists at least 96 oligarchs in Russia.)

Nothing generates oligarchs better than corruption and privatisation, and Kenya, just like the Soviet Union in the 1990s, is no stranger to this phenomenon. In August this year, Kenyan detectives announced that they were pursuing officials at the Kenya Revenue Authority (KRA), the Kenya Ports Authority (KPA), the Inland Container Depot (ICD) and the Kenya Bureau of Standards (KEBS) over a 100-billion-shillings tax evasion scam. Such multi-billion scams signal state capture by oligarchs, which tends to open up the economy to counterfeit and contraband goods imported through collusion with state officials.

The riskier dynamic in the privatisation process and the mega-corruption scandals reminiscent of the Soviet-era fire-sale and smuggling, is that they only benefit a few highly liquid and well-connected native elite, marauding White Capital, corrupt government officials and wealthy families. Keep in mind that Kenya has been ranked eighth globally and sixth in Africa among countries with the largest number of people living in extreme poverty, based on the World Poverty Clock report. The report indicates that 29 per cent (14.7 million) of Kenya’s 49,684,300 people are extremely poor as they consume less than $1.90 (Sh195) per day or Sh5,920 monthly.

A combination of mass privatisation of key state assets and austerity measures are known to destroy the social tunnels needed to usher people into a middle-class existence; they effectively create a country with unassailable oligarchs and a massive underclass.

All this isn’t new though; as a colonial state, Kenya is already defined by a plantation economy, primitive elites, layered overlapping traumas, high poverty levels, and broken systems. It is likely to get worse.

Published by the good folks at The Elephant.

The Elephant is a platform for engaging citizens to reflect, re-member and re-envision their society by interrogating the past, the present, to fashion a future.

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The Elephant is a platform for engaging citizens to reflect, re-member and re-envision their society by interrogating the past, the present, to fashion a future.