Breaking News! Russia Reveals Cyber Wars Program

From the Russian press:
Russian military admits developing information warfare arsenal

According to Vedomosti:

"Первый заместитель начальника Генштаба ВС РФ генерал Алексей Бурутин на заседании Национального форума информационной безопасности сообщил, что Россия приступила к разработке «информационного оружия»".

"First assistant chief of the Russian Armed Forces High Command general Aleksey Burutin (Алексей Бурутин),
in the meeting of the National Information Security Forum said that Russia has begun developing «information weapons»".

According to CNews.ru news article titled "Armed Forces High Command: Russia has to prepare for information warfare":

"Генерал-лейтенант Алексей Бурутин, первый заместитель начальника Генштаба Вооруженных Сил РФ, заявил на ИБ-форуме «Информационные решения для безопасности России», что Россия должна готовиться к глобальным информационным войнам, сообщает Прайм-ТАСС."

"Lieutenant-General Aleksey Burutin (Алексей Бурутин), first assistant chief of the Russian Armed Forces High Command (первый заместитель начальника Генштаба Вооруженных Сил РФ) said during the National Information Security Forum's conference «Information solutions for the security of Russia», that Russia has to prepare for global information warfare, according to Russian leading state press agency Prime TASS".

"Итар-ТАСС пишет с его слов: «победы в возможных войнах будут достигаться путем уничтожения ИТ-управления государством и вооруженными силами. «В ближайшем будущем достижение побед в войнах и вооруженных конфликтах будет решаться за счет подавление государственного и военного управления противника, его навигации и связи, воздействия на ИТ-объекты, от которых зависит стабильность управления страной»"

"According to Itar-TASS with reference to the general: «victory in possible future wars will be achieved by destroying IT management structure of the state and its armed forces. In the nearest future victories in wars and armed conflicts will be achieved by suppressing state and army management of the enemy, his navigation and communications, by affecting IT entities, on which state's management stability depends»".

Despite the fact that the general isn't giving many details on what methods of subduing enemies' IT infrastructure or what kind of "information weapons" are in development by his army, instead doing something similar to quoting random geek's magazines, technically there's hardluy any other possible way than applying, and massively applying hackers' techniques, spam, DDOS, viruses etc, perhaps combined with some hardware on the military and intelligence side. The general says in one of the quoted articles, that achieving the goals of the information war wouldn't require crossing the border into enemy territory.

From this point it seems to me that Mr Burutin's presentation may in fact be too modest as compared to actual capacities of his subordinates. After the Russian cyber blizkrieg in late April and early May I can only wonder if the announced "information forces" already possess in their CV not unsuccessful IT weaponry test.

Rosbalt: Russian Political Hacktivism Concept Explained

The threat of cyber attacks is promoted as political conspiracy tool?

Russian news portal Rosbalt, which is managed by the wife of a top ranking FSB official and close associate of "you know who", Victor Cherkesov, published an interesting opinion about the events of April and May in Estonia, including the famous cyber attacks (emphasize added):

"Случаи массовых D-dos-атак и ранее неоднократно случались; сами по себе они не считаются чем-то из ряда вон выходящим. Но именно идеологическое противостояние Рунета и эстонских властей приобрело размах настоящей войны, так как Рунет в тот момент фактически взял на себя функции субъекта мировой политики. В глобальной информационной среде возник прообраз экстерриториального и негосударственного цивилизационного единства всех русских. Были налажен обмен информацией, выработаны общие ценности, обозначено пространство национальных интересов, сигнальная система оповещения об угрозах. Началась и международная деятельность — разъяснение своих позиций и формирование групп поддержки в иноязычных сегментах Интернета".

"Cases of massive DDos attacks had happened many tiimes before; by themselves they aren't considered significant. But it was precisely ideological clash between the Estonian authorities and Russian internet (RuNet), which lead to a real war, because at that moment RuNet in fact undertook functions of a player in the World politics. Prototype of an extraterritorial and non-governmental civilization-like unity of all Russians has been born in the global information environment. As result, exchange of information, common values, common area of national interests and threats monitoring system were developed. International activity was created as well - explaining own positions and forming support groups inside foreign language segments of the internet".

"А в момент кризисной ситуации пользователями Рунета были приняты меры по защите своих ценностей и моральных приоритетов, оказавшиеся весьма болезненными для небольшого государства. Рунет проделал работу, которую российское государство должно было проделать еще до Бронзовых ночей, но по каким-то причинам этого не сделало".

"In time of crisis the users of RuNet undertook measures to defend their values and moral priorities, which appeared to have quite painful effect for a small country (Estonia - editor's note). RuNet did the job, which the Russian state should have done even before the Bronze Nights, but chose not to, reasons unknown".

"Фактически Рунет по своей воле без чьего-либо указания коллективно принял решение и вступил в партизанскую войну за ценности русской цивилизации. В этом бою Рунет оказался гораздо более эффективным средством прямого действия, чем пожирающие огромные средства российские молодежные организации. Партизанские действия рунетчиков, конечно, не могли принести победы в борьбе со страной-членом НАТО. Но мы должны признать, что Рунет стал субъектом мировой политики. В боях за Бронзового солдата появился прообраз международной социальной структуры русского мира. Эта глобальная сеть, объединяющая русских разных стран, может выполнять важнейшие функции в тех сферах, где у государства по каким-либо причинам связаны руки".

"In fact RuNet, acting on its own and without any leadership decided collectively to start a guerilla war in the name of the Russian values. In that battle RuNet proved to be much more effective as compared to insanely resource hungry youth organizations. Guerilla activities of the members of the RuNet couldn't, of course, bring the victory against a NATO country. But we have to acknowledge that RuNet became a player in the World politics. As the result of the battle for the Bronze Soldier a prototype of the global social network uniting all Russians appeared. This global network, uniting Russians from different countries can fulfill different tasks in those areas, where the state has its hands tied".

These ideas can clearly be seen as an attempt to explain and promote the thinking of those who, in the opinion of the author of the article, Dmitri Varfolomeyev (Дмитрий Варфоломеев, sp?), stand behind the phenomenon of the Russian hacktivism, best known examples of which are DDOS attacks against Kremlin's adversaries including the campaign against the web sites of the Russian opposition political movement "Other Russia", as well as the carnage unleashed upon the communications of the Estonian government, the press and the banks in 2007 Spring Cyber War.

One could expect a concept like this, with its conspiracy-style wording ("global network of Russians" acting in the Kremlin's interest when "the state has its hands tied") would rather come as an accusation by some of the victims of the DDOS and spam attacks, not as a triumphant story in a major Russian news portal perceived as pro-Kremlin.

Pieces like these demonstrate once again how little the opinion leaders in Russia are concerned about something, which has been seen as an issue across whole range of the World press, facilitated the launch of a new, cybernetic type of defense forces in a number of countries, and cast a shadow on the relations between the EU and Russia (look for key words similar to "cyber attack" in the EU parliament's resolution condemning Russian aggression against Estonia).

While the World, at least its Western part is discussing defensive measures against the attacks, Russians are discussing the benefits of attacking. So much about finding common ground with Russians.

Estonia crushed Nascism

Picture by a Russian blogger.

From today's Russian news it seems that pro-Kremlin movement "Nashi", which gained notoriety mainly for the siege of the Estonian Embassy and participated in the organization of April 2007 mass riots in Tallinn, faces disbandment. Newsru.com and Novye Izvestia report about the imminent decline of the organization, served as “restructuring” by its leadership.

According to Newsru.com, which cites well informed business daily Kommersant, the conference of Nashi leadership announced disbandment of 45 out of 50 regional offices, with some activists, now jobless, being re-directed to “special projects”. According to the press the Krelmin decided to put an end on Nashi's political role.

Famous political scientists with connections to the Kremlin is quoted as saying that Vladimir Putin himself is discontent with the results of unleashing Nashi against Western countries. When Nashi were refused Schengen entry, according to Stanislav Belkovsky, Russia was put into difficult position because she had to put up “a symmetrical response”. Here Mr Belkovsky obviously refers to a well known Russian foreign policy doctrine. However, responding with contre-measures in case like that would not be beneficial to Russia, the expert explains. Refusal of Schengen visas turned the games of the Nashist into dangerous ones for the interests of the Kremlin.

It goes without saying that the country in question, which added select Nashi activists into the Schengen black list (1, 2) was Estonia. Thus, in just several weeks of effect Estonian reaction turned the organization, hailed as “the forge of new Russian elite” by the Kremlin PR people, into political corpse.

Novye Izvestia journalists reporting on the development cannot restrain themselves reminding about the incentives the Kremlin promised to its poodle organizations. There were speeches by high ranking functionaries about the Nashi activists forming new or rejuvenating old political and economic elites of the country. Speeches about government's holdings like giant Gazprom needing young, modern thinking people to fill in managerial positions. Speeches about the importance of organizational skills and skills in political competition gained as member of youth movement for opening the doors of the Kremlin's political parties.

This all turned a lie.

Instead of the doors opened, there are doors closed, for all but few select organizers. For some of the fooled activists the closed doors not only include those of the the Kremlin, but, for a number of years, of most of the European countries.

Just 7 representatives of the four pro-Kremlin youth organizations such as "Molodaya Gvardya", "Mestnye", "Rossiya Molodaya" and of course 100.000 strong "Nashi" received positions in the offices near or inside state apparatus, the paper reveals. Initial promises turned a PR trick, according to an opposition politician commenting on the fate of the movement. The whole proclaimed “revolution of the cadres” ended up with just a handful of leaders receiving government positions, the rest to be disbanded and sent back to the countryside. In a manner reminiscent of the fall of the Chinese “cultural revolution”.

Citizenship discounts: black maket put price tag on Balts and Russians

Soon after Latvia joined the free travel area known as Schengen at the end of 2007 the country's authorities revealed, with a sigh of relief, existence of a major passports falsification scam, involving significant number of third countries' nationals illegally obtaining Latvian passports.
According to the Russian and Baltic press corrupt officials from the Latvian equivalent of the bureau of citizenship and migration have been dealing on black market issuing fake Latvian IDs. Major Moscow radio station Eho reported on the scandal as follows (from Jan 7th, 2008):

"'Паспорта изготавливались и продавались в основном россиянам и гражданам Белоруссии и Украины', - сообщает министерство"

"'The passports were generally manufactured for and sold to the citizens of Russia, Belarus and Ukraine' -- ministry says"

The story goes on disclosing some financial and marketing elements of the deal, in which 19 Latvian state officials are under investigation:

"Список лиц, получивших поддельные паспорта, пока не разглашается, однако все эти люди правоохранительным органам известны"

"The list of the persons, which received falsified passports has not been disclosed, all these persons, however, are known to the law enforcement authorities"

"Сеть работала в 2004-2005 годах, и незаконно было выдано более 100 паспортов. По данным латвийских СМИ, среди "покупателей" паспортов могут числится известные в России люди. Покупка "легального" паспорта обходилась заказчику в 70-100 тысяч евро"

"The network operated in 2004-2005 and more than 100 passports were illegally issued. According to the Latvian media famous Russians can be found among the "buyers" of the passports. For a "legal" passport a buyer had to pay between 70 and 100 thousand EUR"

Thus, for a Russian a foolproof Latvian passport would cost between €70.000 and €100.000. No wonder then there are wealthy people among the buyers.

Yesterday the press revealed the names of some of the Russians yearning for unhindered travel within the borders of Europe (Delfi):

"За незаконное получение паспорта летом прошлого года была осуждена гражданка России Наталья Рукина, которая после уплаты штрафа была выслана из Латвии и, скорее всего, включена в "черный список" Шенгенской зоны"

"Russian citizen Natalia Rukina was convicted in the summer of last year for illegally obtaining a passport; after paying a fine she was released and deported from Latvia, as well as most probably inserted into Schengen's 'black list'"

"Латвийские паспорта были у всех членов семьи Рукиных — у родителей, а также у детей"

"All Rukin's family members had Latvian passports - the parents as well as the children"

The story goes on saying that the Rukin family, as testified Mrs Rukina, bought fake Latvian passports in order to travel throughout Europe, unstopped. Mrs Rukina husband is Russian millionaire, dealer in expensive cars, BMWs and Rolls-Royces as well as food businessman, producing Russian pelmenes (spelling?) and other brands of food, according to the news.

These facts established let's turn to the Russian black market on documents. Russian search engine provides abundant facts for comparison.
This story in major news portal Newsru.com tells about a criminal gang, operating in Moscow, which dealt in citizenship and other forms of document falsification:

"Сыщики УБЭП ГУВД Москвы обезвредили организованную преступную группу, члены которой всего за 2 тысячи долларов помогали всем желающим получить российское гражданство"

"Detectives of Moscow's Central Department of Internal Affairs' Department of Investigation of Economic Crimes (УБЭП ГУВД) have disarmed an organized criminal group, whose members provided anyone with Russian citizenship for just 2000 dollars"

According to the story the Moscow gang offered to the interested parties any documents, diplomas, certificates, military certificates, including unfilled blanks of the documents from the presidential administration.

The referred case in Moscow is really on the upper part of the price curve. On the lower part of the curve stand the cases where a passport is obtained for a couple of hundreds of bucks. Funny one is the case from Volga region in Southern Russia, where the IDs are sold and bought at inexpensive prices if not to say at significant discounts.

Of course, local registration is an important part of the price because Russian citizens who aren't Muscovites can't legally stay for long in Moscow without having to register themselves, which is expensive. This makes Moscow documents outstanding.

So, how much is for non-Moscow, distant region passport? Pravda has the answer (Pravda):

"в Заволжье гражданином можно стать за десять баранов"

"in the Volga region you can become a citizen for ten sheep"

Finally one can see what is the difference in price between Russian and Latvian passports. Latvian passport is 50 to 75 times more valuable than Moscow's. In Volga region, however, for a price of one Latvian passport one could get settled a shipload of emigrants from Africa. That is if they'd agree.

I guess, this also reflects the difference between living in a normal country and in Russia.

Joke of the day: Kosachev won't let me into... Russia!

Russian news portals in the Baltic states, including Delfi make headlines reporting on the newest round of Russia's threats against Estonia, this time by Konstantin Kosatchev, chairman of the State Duma's international affairs committee and a major foreign policy actor in Russia's parliament, speaking at European parliamentary discussion club, PACE.

Photo from http://www.blogger.com/www.radiorus.ru

He astonished the public with Kremlin's latest mind blowing idea, a punish package for Estonia and Europe - blocking Estonian and other Schengen citizens access to a criminal, despotic entity, known as Russia. Had the reasons given to justify this step not been presented by a Russian, I wouldn't have believed them. According to pro-Kremlin Russian news portal:

«Такими действиям Россию осознанно подталкивают к тому, чтобы она закрыла въезд на свою территорию всем, кто протестовал против ее контртеррористической операции в Чечне или выступал в защиту российской оппозиции»

«These actions deliberately push Russia towards banning entry to Russian territory to all those who protested against contre-terrorist operation in Chechnya or spoke in defense of Russian opposition»

In short, the madman, drunk with oil dollars, demands entry ban to the democratic World starting with your blogger and ending with countless European politicians and representatives of various civil defense bodies, such as the judges of the European Court of Human Rights, who ruled that the actions of the Russian "army" of butchers in the region constituted war crimes. Again, that's what he said according to Russian news portals.

But what would Europeans themselves make out of this threat, USA paper Christian Science Monitor offers one answer (2005):

"In the last ten years, foreign tourism to Russia dropped by 70%."

Moscow Times suggests another (re-print, 2006):

"The slide in the number of foreign tourists visiting Russia appears to be accelerating, with the number of people entering the country on tourist visas falling by almost a half-million in 2005 to 2.3 million, according to government statistics released Thursday."

Because of the horrific conditions, Russia offers dubious attraction to non-extremal travelers. In 2006 the country earned from tourism just 7 billion dollars. The number originates from World Tourism Organization statistics (PDF). On the other hand Estonia, a country 100 times (sic!) smaller than Russia and without access to any of such natural resorts as skiing mountains or warm seasides, which Russia does have, is able to pull 1 billion dollars from tourism annually!

Why are things so bad in Russia? After making acquaintance with the country in question citizens of Finland provided following key words (according to Baltic Russian Delfi):

"преступность, бедность, грязь, бюрократия и плохое обслуживание"

"crime, poverty, filth, bureaucracy, bad services"

The poll was conducted by a Finnish newspaper.

So, I guess, Kosachev is just doing Europe a favor.

Today Russian Headlines

Reading genuine Russian news daily is a necessary excercise for understanding Russia. Today I felt like posting my readings in this blog.

I ran the Russian news section taken from a major online news portal, Newsru.com, through Google autotranslator. Then I edited the text making it more comprehensible. It is far from grammatically perfect, but it is readable. I also included the original text in Russian.

These are the today's morning headlines as they appear on the portal.

Enjoy.

Newsru.com

Applications from the Ingush voters who ignored the elections could be left without official proceedings in order to avoid the loss of the republic’s MP

The opposition fears that the lack of single-member districts can cause the republic to lose its single MP if the court finds the results invalid. Meanwhile, an elected deputy from Ingushetia, Belana Hamchiev is considered as a possible mediator between the residents of Ingushetia, the current authorities, the security forces and the Kremlin.

Sharing Medvedev: the parties, which nominated the successor, want to participate in the preparations for the elections together with the "United Russia"

Leaders of Sverdlov offices of "Fair Russia", "Civilian force" and the Agrarian Party of Russia suggested setting up a regional headquarters of the electoral coalition candidate. So far, Medvedev’s headquarters on the ground are created on the basis of United Russia, and three other parties are allowed to work only formally.

Participation in the elections is threatening Kasyanov with three years of imprisonment

This can be the effect of the facts of falsification of signatures in the two entities of the Russian Federation (in the Yaroslavl region and the republic of Mari El). Experts explain that accusing or not accusing Kasyanov of criminal intent depends on the attitude of the prosecution.

In Moscow, an Armenian was knifed by a group of adolescents. He is in critical condition

Law enforcement has not yet said whether the motivation was racial hostility, but all the details point to it: on the Bolshaya Academicheskaya street, Vladimir Karamzhyana was attacked by five persons, without any reason, he was stabbed in the heart area.

In the Chelyabinsk region more than 20 garages dynamited, rescuers searching for a victim

Explosion in Troitsk thundered on Thursday morning. According to the rescuers, the search for the victim started from the three garages forming the biggest group of ruins. There the force of the blast raised and put back the roofs. At the explosion site the entire composition of Troitsky detachment of the Regional Rescue Service is operating.

A bus and a trolley bus full of passengers fell into a hole formed because of the aqueduct breakthrough in Blagoveshchensk

No one was hurt. Road is blocked, traffic is sent around the emergency zone. Water supplies had to be completely disconnected from the major water lines. 27.5 thousand people remain without hot and cold water. The consequences of the bridge accident are planned to be eliminated by noon.

Central Election Committee will declare the results of the second verification of signatures in support of Kasyanov

After the first verification of the signatures given in support of Kasyanov the percentage of falseness exceeded 15%. Preliminary results reviewed again - 13% of falseness. Thus, given that the decision in a similar case is based on the results of verification of two samples, the chances of a successful registration of Kasyanov remain relatively small.

Fire occurred in a school in the North of the Irkutsk region

According to preliminary data, the cause of the fire has been shorting of electrical wiring in the cupboard on the first floor, which occurred as a result of a breakthrough of the heating system on the second floor.

In Ingushetia armored personnel carrier with the military ambushed: there are dead and wounded

The incident occurred in the village of Troitskaya in the area near where the forces of the Ministry of Defense Regiment are deployed. Unknown assailants fired at the car with automatic rifles. A fight started, which lasted about 10 minutes. In the shooting two soldiers from armored carrier were killed. The prosecutors have the same information, but without the victims.

Kasyanov was urgently called to the Central Electoral Committee in the night. But he did not go

Representatives of presidential candidate were given a copy of the telegram: he was invited to 11:30 PM in order to receive a protocol on the results of a secondary stage of the verification of signatures. The headquarters of the ex-premier called this "humiliation". Meanwhile, the head of the CEC Churov found in Kasyanov’s signatures sheets the names of fictional characters from Saltykov-Shchedrin’s books.

Original Russian texts

Заявлениям от проигнорировавших выборы ингушей могут не дать ход, чтобы республика не лишилась депутата

Оппозиция опасается, что в связи с отсутствием одномандатных округов, если суд признает результаты недействительными, республика останется без депутата. Между тем, избранного депутата от Ингушетии Белана Хамчиева считают возможным посредником между жителями Ингушетии, ее нынешними властями, силовиками и Кремлем.

09:59

Поделить Медведева: партии, выдвинувшие преемника, хотят разделить участие в подготовке к выборам с "Единой России"

Лидеры свердловских отделений "Справедливой России", "Гражданской силы" и Аграрной партии России предложили создать в регионе коалиционный избирательный штаб кандидата. До сих пор штабы Медведева на местах создавались на базе "Единой России", а три другие партии допущены к работе в них лишь формально.

09:56

Участие в выборах грозит Касьянову тремя годами тюрьмы

Именно такие последствия может иметь возбуждение дел по фактам фальсификации подписей в двух субъектах Российской Федерации (в Ярославской области и республике Марий Эл). Эксперты поясняют, что вменять в вину Касьянову преступный умысел или нет, зависит от позиции следствия.

08:44

В Москве группа подростков порезала армянина. Он в критическом состоянии

О мотивах расовой неприязни в правоохранительных органах пока не говорят, но почерк указывает на это: на улице Большая Академическая на Владимира Карамжяна беспричинно напали пятеро, нанесли ему ножевое ранение в область сердца.

08:42

В Челябинской области взорваны более 20 гаражей, спасатели ищут пострадавшего

Взрыв в Троицке прогремел в четверг утром. По словам спасателей, поиски пострадавшего начаты с территории трех гаражей, где образовался самый крупный завал. Там силой удара приподняло и положило обратно крышу. На месте взрыва находится весь состав Троицкого отряда областной спасательной службы.

08:14

В Благовещенске в яму из-за прорыва водопровода упали автобус и троллейбус с пассажирами

Никто не пострадал. Дорога перекрыта, весь автотранспорт направляется в обход места ЧП. Пришлось отключить полностью от водоснабжения крупный микрорайон - 27,5 тысяч человек остались без горячей и холодной воды. Устранить аварию планируется к полудню.

07:57

ЦИК РФ огласит итоги повторной проверки подписей в поддержку Касьянова

После первой проверки подписей в поддержку Касьянова процент брака превысил 15%. Предварительные итоги повторной проверки - 13% брака. Таким образом, учитывая то, что решение в подобном случае выносится по сумме двух выборок, шансы Касьянова на успешную регистрацию сравнительно невелики.

07:35

В школе на севере Иркутской области произошел пожар

По предварительным данным, причиной пожара стало короткое замыкание электропроводки в буфете на первом этаже, которое произошло в результате прорыва системы отопления на втором этаже.

06:24

В Ингушетии обстрелян BMW с военными: есть данные о погибших и раненых

Инцидент произошел в станице Троицкая Сунженского района, рядом с местом дислокации полка Минобороны. Неизвестные обстреляли машину из автоматов. Начался бой, который продолжался около 10 минут. В перестрелке погибли двое военнослужащих из BMW. У прокуратуры те же сведения, но без жертв.

23 января 2008 г., 23:13

Касьянова на ночь глядя срочно вызвали в ЦИК. Но он не поехал

Представителям кандидата в президенты передали копию телеграммы: его пригласили к 23:30, чтобы получить протокол о результатах вторичной проверки подписей. Штаб экс-премьера назвал это "издевательством". Тем временем глава ЦИК Чуров нашел в его подписных листах имена вымышленных героев Салтыкова-Щедрина.

23 января 2008 г., 22:12

Estonia is turning the tide in workforce battle

EU accession exposed labor markets of the former Soviet satellite states to the dangers of competition. With enormously better working conditions in Western part of our union, notably in countries like the UK, Ireland and Sweden, which were the first to open up for EU8 workers, and on the other hand with unprecedented ease of movement across borders, countries like Estonia felt the pain of losing the competition for main d'oeuvre.

But in Estonia today this may have already turned around. Transitions Online says:

Migration is wreaking havoc on the Baltic labor market, as native workers leave and foreigners arrive. Only Estonia seems to be reining in the problem.

Amazing improvement of the economic situation, which took place in the recent years is finally able to breach one of the last major differences, that is difference in incomes between Estonia and Western Europe, though this process of readjustment will still take many years. Estonia's balance with Europe in terms of people moving around has been in red, with more leaving than coming for many years. Indications show it isn't anymore.

2007 brought a breakthrough in that trend and even reversed it in some occasions. A story in major daily Postimees noted the comeback of the former police force personnel, which went abroad to work as construction workers, but are now coming back, as salary increased. Indeed, the government claims it is increasing the average salary in the force from some 14 thousand kroons (900 EUR) in 2007 to about 19 thousand kroons in 2008 (1200 EUR) or 35 per cent up in 2008. It is important to understand that to stop the trend of negative labor balance between different countries one doesn't need to make salaries equal, it's enough that differences aren't seen as cosmic, but rather cosmetic. In this piece from 2006 in a local daily we can find Hansapank's chief analyst opinion according to which average Estonian would give up working abroad if he or she earned locally 11 - 12 thousand kroons. In 2007 this level was generally achieved.

The movement is not one-sided, however. Westerners come to Estonia too. And the numbers aren't neglectable. Business daily Äripäev (staunch market liberal) revealed that about 10 000 EU nationals came to Estonia in more or less settled form. Albeit hardly comparable to the masses which moved from the Baltic states alone to countries like the UK, this number of EU nationals is nevertheless already about 0,7 per cent of Estonia's population.

I checked the data earlier this year so my numbers may differ from Äripäev's. According to official estimates at the beginning of 2007 we've got 3 thousand citizens of Finland, settled, some three quarters of a thousand of Germans, around 500 Swedish citizens and roughly 400 people from the UK. Doesn't seem much, but can't say it's nothing, it's 0,7 per cent.

Now let's turn to Russia, which is ancestral home of whole lot of our people, 25-30 per cent of Estonia's population. The historic collapse of the USSR did not deprive Russia of love for setting ambition goals, however it took away much of the means to achieve these goals. Competition for labor isn't exception.

By 2005 Russia fixed her eyes on highly visible ethnic Russians living abroad, known in Russia as "compatriots", numbered some 25 millions, which were seen as possible solution for labor shortages without the costs associated with Central Asian immigrants (not ethnic Russians), employed on Moscow construction sites today.

Thus the top executive of the Federation, Mr Vladimir Putin made priority attracting Russians back to the Homeland, issuing a federal program. This program of attracting Russians to various Russian regions was put into practice in 2006.

According to the program, in 2007 Russia was set to obtain 50 thousand returnees, a modest account given the total estimates of Russians living abroad (see these pieces in Russian 1, 2, describing the outcome). 4.5 billion roubles ($180 million) was allocated in Federal budget, additional sums in the budgets of the regions. This means the state was willing to offer these people money; each one of the 50 thousand would have received $3600 from the state budget alone. In addition various other measures were offered including housing opportunities, vacant jobs and I believe also tax breaks.

3600 dollars per settler can be questioned, but it's Russian decision based on Russia's view. Knowing the attitude on the ground this number, 3600 dollars, can hardly be considered insignificant. For example this piece by Russian edition of BBC NEWS claims that Moscow city authorities agreed to pay the relatives of the victims of poison gas used by special forces during Dubrovka theatre siege just $3000. State compensation for terrorist attack victims’ relatives is similarly just 100 thousand roubles paid once per dead, which depending on current exchange rate can amount to 3000-4000 thousand dollars, as reported in the media. Sadly, in Russia 3000 dollars is widely seen as the price of human life.

But in so far as we are discussing labor market competition, as the federal program itself implies, it is not the subsidy, which is the main incentive for the people to move around. The working conditions such as salary as well as general living conditions in the country are the incentive or disincentive. If, on the basis of comparison, conditions are good enough, people themselves would pay to get into the country as we can see in many areas around the globe where immigrants pay considerable sums to get smuggled into more developed social and labor markets.

The plan failed.

The annual figure of those who returned in 2007 was just 400 (four hundred) persons, http://www.newsru.com/ reports (see the links above). This is a "healthy" 0,8 per cent of the number set by the plan for that year. In other words, the plan failed 99,2 per cent, succeeded 0,8 per cent. This figure shows how realistic are expectations and perception in modern Russia about herself and about the World surrounding it. In other words Russia's plans, not backed by sociological research, pilot projects or earlier experience like it is suggested by the principles of sound public management, can be random or even delusional. It goes without saying that for any state, Russia in particular, a federal program is one of the most important policy objectives for state executive branches, including the president if a country has one, federal state apparatus as well as regional administrations. In Russia, however, the institutions of the state aren't held responsible for the success of their policies, thus the failures are noticed, but have no direct political consequence.

Mr Putin, answering to a question about the program for return of compatriots (major news portal Lenta.ru):

"I can't say that the program has begun working well".

It is noteworthy, though logical that Estonia, one of the countries with highest concentration of Russians outside Russia failed to take advantage of the program. Despite continuous streams of accusations and allegations of bad treatment of local Russians, Estonia managed to produce just 19 expected returnees by middle of 2007 (Lenta.ru) with other 21 persons expressing some interest in the move. This is neglectable figure given some half million (340 thousand by official estimates) of ethnic compatriots in Estonia. According to what I've read in the press, later into the year this number, 19 dwindled to just 6 (six), though I am not able to recover the news anymore.

Russians are voting Russia out, Estonia and Europe in. They are aware of the facts on the ground so they prefer to adjust themselves to the conditions in countries like Estonia and Germany instead of false hospitality of their "precious Motherland".

UPDATE 25th of Jan, 2008

Estonian Daily Päevaleht reports updated numbers on the success of the plan. In total 143 Russian families returned to Homeland in 2007. According to the paper 50.000 returnees wasn't the initial figure for 2007, in fact the government's original plan foresaw 100.000 people returning that year. The number widely reported by the press, 50.000 was adopted later. Sometime in 2007 there was third cut, this time to 25.000. However, that number, too, proved delusional compared to the final results.

Crackdown in Chechnya threatens European integration. UPDATE!

Just a month after historic Schengen visa free travel area expansion, Western Europe, in particular Österreich and Deutschland are struggling with a wave of newcomers. Immigrant crowds besiegeing former domain of Charlemagne aren't nationals of the countries, which joined the EU in 2004 big bang enlargement, but largely asylum seekers from war torn Russian North Caucasus republic of Chechnya (see Wiki on Chechnya).

The leading political portal of the EU, "EU Observer" conveys following news:

Just one month after the EU's borderless zone expanded to eight countries in central and eastern Europe, some EU capitals, particularly Berlin and Vienna, has started saying it has led to increased flows of migrants.

According to data from Germany's interior ministry, approximately 420 people were caught in the country's border area with Poland and the Czech Republic in the last three weeks.

Many of those detained were reported to be asylum seekers from Chechnya, Russia's region seeking independence, who had applied for protection in the two EU states. Others were of Ukrainian and Vietnamese origin.

With regard to refugees from Chechnya, Europe is in difficult position, because the horrors associated with the Kremlin forces and local Kadyrov clique present in the region are widely recognized, therefore Europe feels entitled, under European set of values, to provide shelter to the victims. The refugees thus have their asylum status in countries across Eastern Europe. They should not, however, legally travel elsewhere, Deutsche Welle reports.

Yet they care little for legal provisions and do travel to richer countries in numbers, such as Germany, causing problems there, as reported in Austrian der Standard and even "threaten" the locals, according to another paper (see articles on Chechen problem in German press, temporary link).

As always, Russian press exploded in stories about criminal activities Chechens or should they be called Russian citizens of Chechen ethnicity, are allegedly perpetrating in Europe in what I can assume is an attempt to justify genocidal actions of Russia's own troops. The leading news portal, Newsru.com says that "a wave of Chechen immigrants has led to increased violence in Austria". Through a separate piece Newsru.com attempts to back this claim by a reference to Financial Times, but the relevant FT story doesn't mention any increase in violent crime. Russian insistence of Chechen "violent nature" is understandable, because in Russia a notion of Chechens as dangerous, knife wielding thugs is cultivated.

Newsru.com has, however other references, in particular to one infamous far-right Austrian politician. While I recognize that far-right politicians can be stating correct facts, I fail to see the alleged violence in mainstream German media in as far as I am able to follow it, yet for Russians it's "a fact" already.

The whole Chechen migration wave, if perceived so sensitively by the Western member states de notre belle union could become a source of tensions within the block (hitting us, in narrow or in broad sense). But the real cause of this has very little to do with Eastern European EU countries and it has everything to do, as you may have guessed already, with Russian Jamahiriya and her inhuman policies.

UPDATE!

The UK can become next country to expect wave of asylum seekers as notorious Russian secret service, the FSB, declared its intention to conduct something like fake prevention and advocacy work among the Russian employees of the outlawed British Council representations in Russia. Major online news outlets in Russia, including Lenta.ru report. FSB press-release, cited by the media tells with well familiar Stalinist tone:

"В целях ограждения российских граждан от возможного втягивания в качестве инструмента в провокационные игры британцев органы Федеральной службы безопасности начали проводить разъяснительную работу среди российских граждан - сотрудников этой организации о ситуации, складывающейся вокруг Британского совета, и позиции органов власти России в отношении филиалов этой организации в российских регионах"

"With the goal of protecting Russian citizens from possible involvement as a tool of the British provocative games, the Federal Security Service began conducting enlightment work among the employees of that organization, informing them about the situation, which formed around the British Council and about the position of the Russian authorities with regard to representations of the organization in the Russian regions"

Enlightment work by the FSB is too well known and in my opinion if it is allowed to go on, the UK will have moral obligation to evacuate its personnel lacking diplomatic protection from Russia.

UPDATE 2, Jan 17, 2008

It seems the Brits understood the message and finally stopped playing their "provocative games" by closing their "sabotage and espionage centres". How many days lasted the British "defiance"? How many British bomber airctrafts flew out to partol the Russian borders? How many British "leftist activists" on FSB payroll were suddenly "disabled"? If you have no simple answer to these questions you won't be taken serious in Russia. One should understand that the time of diplomatic games has passed. Today it's all about energy, power and realpolitik.

Do not trust British Independent, it is biased; new fact

In a blog entry few weeks ago I was able to demonstrate some striking inconsistencies in the coverage of the Baltic states by the British newspaper "The Independent". A correspondent of the paper presented to the readers a construct of half-truths and lies, which relied conveniently on the Russian (Kremlin) point of view. Kremlin point of view is easy to detect as in Russian state propaganda, including that published on the FM's webpage, Moscow characteristically makes misleading references to Council of Europe's recommendation papers, trying to shed bad light on the Baltic states. So when you read a phrase sounding like this: "International organizations including Council of Europe have been critical of Estonia's treatment of Russian speaking minorities" you should get suspicious, because it is the wording from virtually thousands Russian propaganda outlets.
On the other hand, The Independent failed to use any sources in Baltic states in order to provide alternative view in the dispute, which made it look like Pravda .

Today I have reason to withdraw that assessment. Scrolling trough Russian press coverage of the conflict I discovered a selection of pro-Russian comments, from Europe, published in widely popular nationalist, leftist Russian daily "Komsomolskaya Pravda" (the name translates as "The Truth of Young Communists", see her entry in Wiki), available at this address, by a known estophobic journalist. This selection of comments included one from Western media, the British Independent.

For the Russian press it is a common tactic to make a selection of comments from "C" and "D" class European dignitaries. On Estonia, invited speakers include chairman of supervisory board of a Gazprom controlled enterprise, who in the past served as German Chancellor, as well as chairman of supervisory board of a Russia-operating Dutch investment company, who served a term as European Council's body, PACE president. This time Moscow correspondent of the Independent participated, saying:

Эндрю ОСБОРН, московский корреспондент британской газеты «Индепендент»:

- Я не согласен с тем, что Запад поддерживает Эстонию. Сам я разделяю российскую позицию.

Andrew Osborn (sp?), Moscow correspondent of the British newspaper "The Independent":

- I disagree with the Western support of Estonia. I share Russian position.

(my translation)

The piece is from 28th of April, 2007, a day after the largest Russian attack against Estonia since 1991 took place, with Tallinn merchant quarters devastated by Russian nationalist organizations, Estonian diplomats besieged inside their own Embassy in Moscow, Estonian digital infrastructure collapsing (parts of it broke down during following two days and the country's internet was switched off outside World) under DDOS attacks and Russian Parliament delegation arriving to Tallinn to threaten Estonia and demand forming pro-Russian government.

Civilized World opinion was made clear by the EU High Representative Xavier Solana:

We support Estonia.

(on the EU reaction see in the same piece by Komsomolskaya. I didn't read further, but I guess they implied in the article Mr Solana was sort of fascist).

Yet "the Independent" was against Estonia. People like these particular journalists, sometimes graduates from students exchanges in the USSR times, from KGB sponsored faculties of "International Affairs and Friendship"; others directly enlisted to FSB payroll in modern times; more prominent figures, such as retired politicians given high salary jobs in Russia controlled undertakings. Best known examples are as already mentioned Mr former Germany chancellor and Mr former PACE president, now running exquisite gas and real estate Russian businesses. These "useful fools" and "friends" are routinely used to promote the expression "but the true Europe is with us!" among Russians. Not surprisingly the vote in the EU parliament, condemning Russia's actions was only 30 to 1 in support of our free country, the 1 representing the share of the two categories. But back to our main sujet.

Last time blogging on the topic I made advice to the journalist, who wrote the pasquill about Estonia and Latvia, to spend his local time better and to learn from our experience.

I was wrong.

Perhaps I was fooled by imagining the paper as sort of equivalent to Estonian non-partizan dailies.

I have no advice to "the Independent"'s managed journalism as I have no advice to Kremlin's managed democracy.

Kremlin movement exposes own hypocricy. Title of the day

Today's news title from the webpage of Russian pro-Kremlin youth movement "Nashi":

"Free Europe from under Estonian oppression"

Once again Estonia is in the headlines across Russia's media space. Hundreds of Nashists (members of fanatical pro-Kremlin "Nashi" youth movement) surrounded the Embassy of the European Union in Moscow, demanding entry into the Schengen member states for their activists, which, according to their webpage (http://www.nashi.su/) was denied by Estonia, quote: "for tens of thousands of Nashi members" by imposing ban on "100 000 Nashi members".

In fact, Estonia has banned entry of only about 2000 persons in total, as widely reported in Estonian media, not 100 000 Nashi members as claimed by the movement. With 2000 people banned from entering Estonia from foreign countries for various reasons, not only, but including those coming from Russia, our country is very far from being exception in Europe. European Schengen member states have currently banned entry for over 700 thousand persons. Latvia, a country marginally bigger than Estonia, has got a ban list of about 5800 persons, according to Baltic media (see this piece in Latvia's Russian language news portal rus.DELFI.lv). Among the Nashi members stopped at their attempt to infiltrate Estonia was Mr Goloskokov, self-proclaimed architect of internationally famous april Cyber War, who crossed Lithuanian border illegally. This is criminal offence. About this incident see this blog's archive.

Right now Russian blogs are full of question marks on Nashi movement's demands. Nashi movement has publicly asked for unhindered access to Europe. But this step contradicts sharply with organization's trademark anti-Western stance. Shouldn't they be studying in Russian high schools and traveling in such beautiful places as Russia's Far East, North Caucasus and inner oblasts instead of going to unfriendly European Union?

Estonia's Russian language radio station R4 has broadcasted (link to the broadcast) excerpts from public opinion survey and SMS poll done in Russia by Moscow radio station "Segodnya" according to which 90 per cent of respondents saw Estonian Europe-wide entry ban of Nashi members as justified.

Here I'd like to provide some examples of Russian blog entries raising this question (1, 2, 3, 4, 5, 6, 7):

If you hate Europe - in turn Europe also doesn't want seeing you, reciprocity isn't punishable, but stupidity is.

Now this underpaid Latvian guy can get even as far as Portugal just switching from one train to another, without visas, while good Russian people will have to form crowds struggling to get into (censored) Schengen Embassies, begging for visas and our most beautiful girls will be (censored).

But... What do they need to do in Europe, so hated by "Nashi"? They can take a break from traveling, including traveling to Paris and London. The commissaries in dusty helmets can go to prosperous Iran, North Korea and Cuba.

This is funny, hooligans thought that they could just do some hooliganism, entertainment in extremism without having to face anything but benefits. But here comes a little setback. Though this is right - patriots should not be hanging out in Europe.

Estonia went to Schengen and now Nashists aren't allowed into Europe, where they intended to study and live or at least to enjoy having a break from Russia.

Why Nashi activists would want to visit foreign countries? What would they do there? I don't go there (censored)

What have you counted on, jackals? You expected to be telling us about rotting West, about filthy claws of NATO, about disgusting Imperialists, and then, tired from propaganda, pay them leisure visits?

Ridiculousness of the situation must have appeared to someone in Kremlin, because after some hesitation Moscow's militia (police force) dispersed the protesters, ceasing about 50 of their activists, including movement's arch-leader.

SEE ALSO (ENGLISH) Nashi Picket for Schengen Visas (Kommersant English edition)

Is Lithuania's Adamkus overdoing it?

Anyone who had a chance to step into the corridors of power such as those of Brussels, or just followed foreign policy in-depth reviews domestically (such as in the last Välismääraja) can tell that Western European fonctionnaires can sometimes be similar to their Kremlin homologues in their sensitivity to the Russian myth of WWII.

Yesterday, Lithuania's president Valdas Adamkus broke into that sensitive topic by saying out loud several things on the verge of russophobic faux pas:

1) Russia must recognize 1940 occupation of Baltic states and

2) pay the damages to the victims.

This news was delivered to me by Russian and Baltic press. According to Newsru.com:

"We aren't giving up on demanding to recognize the fact of the Soviet occupation and we are going to demand compensating the damage, caused by the occupation, while at the same time we are going to be looking for ways of developing dialogue with Russia".

But even if it is correct to assume that Brussels and Moscow, implicitly or explicitly, avoid the sensitive question of the Russian WWII role in Eastern Europe, it is not because they are in agreement. Brussels' favorite moto is integration, while Russia's ideas center around its imperial power.

This can explain why you haven't heard about Mr Adamkus' latest claims. Unlike Russian press English speaking media just missed the news as if it wasn't important. In the Russian press however Lithuanian's claims provoked a wave of whining and anger, both in the blogs and in the media, printed and televised.

In order to highlight the difference between the two media spaces let me point to the sources from the internet. At this moment Google indexed pages, the ones based on English alphabet, are finding 0 (zero) press articles on Valdas Adamkus' renewed "outrageous demands", while Cyrillic-based World has been in high fervor since yesterday noon with the news on front pages. For example see the headlines at Newsru.com (a yesterday evening screen shot):

If you have a feeling you don't know what is important or not in Russia and you don't understand Russian, you are probably right, because your English or French media isn't reporting even the news making the headlines on the Russian major news portals.

Screen shot from: www.newsru.com:

Now let's turn briefly to Brussels, before going back to Russia again. As stated, Western countries, Brussels in particular, don't like seeing Russia unhappy, at least more unhappy than she has been on average since 1991. Brussels may have different reasons for that. Many of us would agree that Russia's whining is boring and irritating. Western countries don't like to deal with the disputes on history, as has already been pointed out once or twice in this blog, look for the reference to Ann Applebaum, opinion writer from the US. For Brussels in particular opening up WWII issues is considered as a threat of disrupting the sensitive process of European integration, with the reasons quite obvious. That's why Brussels likes telling people to just move on, forget about the past, be happy and if to worry than better for economic competitiveness.

What is Russia's message then? From what one can read in the current news, formally Russia seems to be in agreement with notre belle union. Russia too tells the World about forget and move on, economic competition and let's be friends, well armed. On the particular issue , that is the Lithuanian one, comments were made by a prominent Russian MP, Leonid Slutsky (see his Russian homepage), who is also well-connected in Europe, in particular to the European Parliamentary Assembly and the French parliament. He characterized alleged Lithuania's president remarks as "schizophrenic" and "discussion topic for historians, not for present days' politicians". Thus, Mr Slutsky is telling us what we have been hearing from Moscow during the time since perestroika, which can be called as "forget and move on" approach, used in an attempt to sidestep the unpleasant issues of 1940-1991, the Soviet oppression and terror.

From this point the similarity between the attitude of Brussels, silent, and outspoken one in Moscow is striking, with both the Western side and the Eastern side appealing to those in between to bury the hatchet. Are Brussels and Moscow indeed conveying the same message, with perhaps just slight differences in tone?

Not really. Because Russians are lying. On MP Slutsky homepage we read that he and his own parliament, State Duma on 27th of April of 2007 called upon the Russian government to break diplomatic relations with neighboring country of Estonia and impose economic sanctions in a colorful declaration titled (my own attempt at translation):

"About sacrilegious trampling by the Estonian authorities on the memory of the liberator-soldiers fallen in the fight against fascism"

(in Russian: "О кощунственном попрании властями Эстонии памяти воинов-освободителей, павших в боях с фашизмом")

This foreign affairs demarche, one of several of such on Estonia's issue, which can be found on the website, is both significant and telling. Russian parliament - both houses of it, was unanimous in proposing the measures of a harshness rarely seen even in the crude Russian parliamentary diplomacy. And what was the casus belli? Historic memory! Estonia doesn't want to remember things as Russians do, Estonia has no recollection of liberators. How outrageous, let's stop at nothing but war!

Based on these and other documents we have to admit the cause for the strongest Russian reaction affaires étrangères in 2007 was given by Estonia's open doubt in the official Russian WWII line. This tells us all we need to know about the real attitude in Russia towards the history. Clearly, Russia has not even a slight grasp of the meaning of "forget and move on" approach. That country lives in the past and guards history with fanaticism.
But in the constant litany of "forget and move on" teachings, abundantly provided by the country's top foreign affairs chiefs such as Mr Lavrov, Mr Kosachev and Mr Slutsky we see typical Russian-Soviet hypocrisy. The country is as sensitive to WWII issues as a bull to red color and doesn't hesitate to spend any diplomatic, political and economic resources on a theological dispute about the relocaltion of some rusty old statue to a more forgettable place.

Lithuania, however has got several things right.

Firstly, as opposed to Russia's approach, Lithuania's approach is honest, openly discussing what's troubling. It is only natural that this discussion is ongoing today (as opposed to late 1940s in Western Europe), because during 50 years of Soviet rule it was impossible.

Secondly, while theoretically we could say that the compensation demand is a bit provocative, the demand to recognize the fact of occupation isn't. It has been, actually both things, done elsewhere in Europe and it was also done by the Russian heads of state, including Vladimir Putin with regard to the events of 1956 in Hungary and by Boris Yeltsin with regard to Katyn massacre. They were recognized. However Russia sometimes sees the Baltic states differently, as if they were not real foreign countries and their independence is just temporary. Clearly, this attitude doesn't increase the Baltic states' willingness to compromize.

Thirdly, one can wonder whether Lithuania is playing some kind of deeper politics with Russia. Mr Adamkus' remarks strangely coincided with the claims by the current chief of notorious Russian FSB secret service, Nikolay Patrushev, who recently officially accused the Baltic states of undermining Russian security, thus making one of most ridiculous of the recent allegations from Kremlin. According to Lithuanian newspaper (see the piece in the Baltic Times) Russia is picking a fight specifically with Lithuania, claiming the country to be number one in the current list of Russia's European enemies after the UK, which is serious. Could be that Lithuania is just responding to this latest Russian provocation.

In such case, bon courage, Valdas!

The Singing Revolution.. one of the best films ?!

Scrolling through the favourite blogs I stumbled upon this entry by a Canadian Estonian "Singing Revolution Box Office receipts", which shows some kind of North American box office records.

See the picture (here).

The Singing Revolution holds 10th place. At first glance I didn't find it that much interesting, but then I looked at the other titles in the table, like "Juno" (Comedy), 1st place, "I Am Legend" (Science fiction/adventure), 2nd and The Diving Bell and the Butterfly (Romance?), 3rd, I realized that this is general table with all movies, it is not just documentaries/alternative, which is represented. Thus the Singing Revolution, a documentary, more precisely historic documentary is actually competing with mainstream movies like science fictions and comedies and is able to get into 10 best!

I doubt any of you occasionally watch Russian TV channels like I do, running sometimes hour-long shows about "low culture in America", such as the ones by the famous, talented Russian humorist Mihhail Zadornov (see his Russian Wikipedia entry or his English Wikipedia entry):

Zadornov is particularly famous for his satirical comparisons of Russians and nationals of other countries, especially Americans and Germans. He has rescinded his visa to the United States as a protest to the American athletes' flag-waving behavior at the Salt Lake City Winter Olympics in 2002.

But with all self-proclaimed Russian "cultural supremacy" over "undereducated Americans" I doubt a documentary would make it into 10 top movies in Russian cinemas.

Lars Christensen, you are being laughed at!

During approximately past two years Danske bank, the number one bank in Denmark also active in other markets in Scandinavia has been prophesying financial Doom's Days in the Baltic states. The campaign was lead by its chief analyst Lars Christensen.

Months after months we've been hearing from this Danish bank about how Baltic states' economic growth isn't sustainable, how hard the landing is going to be and how the currencies are going to be devalued.

In Spring of 2007 people in Latvia started to exchange their lats to EUR in the fear of imminent devaluation, which never came.
In November Russian speaking minorities in Estonia lined up to cash machines and in panic emptied currency exchanges from EUR, pounds and even Swiss franks in fear of "imminent" devaluation of kroon, after website of pro-Kremlin group Night Watch spread "reliable information" (lies) of overnight devaluation. This information fell to fertile ground because Danske bank's Lars Christensen has been producing truckloads of PDFs and press headlines about "bubbles", "bursting of market" and so on. Devaluation did not take place as in fact it is all but impossible in Estonia under the system, but it was a good pre-Christmas gift for the currency exchanges. Have a look at Mr Christensen's works in Google.

Russians lining up to withdraw their kroons from a cash machine during devaluation scare in November. Photo by Estonia in World Media.

I just scrolled through one of the fresher pieces by Danske bank, on Moody's credit rating agency downgrading Estonia's credit outlook... to stable, from positive. Immediately after this move by the credit agency Mr Christensen produced his press-release about imminent catastrophe. I could almost hear the sound of shampaign bottles being opened. No wonder the British Economist called Mr Christensen "hawkish analyst".

But in a longer overview in December Mr Christensen overdid himself, claiming Baltic states went "from red to very red". I stopped reading at this point because I am too sensitive a person to face the horrors of his vivid imagination. But judged by the fact how little attention this latest set of predictions received in the press I suspect Mr Christensen works could have just crossed the line between stupid to "very stupid".

Now, two years after the start of the crusade of the Dane vikings to bring the light of solid finance market analysis into the Baltic shores Estonia's GDP expansion rate "hit hard" to about 6 per cent of growth, with EEK, the Estonian currency iron-solid, state budget in bright green and verivorst still served, with hapukapsas as we celebrate New Year. Better than ever.

Toomas Hendrik Ilves appeared at twelve o'clock to congratulate the people and why not ridicule a little Last Days analysts (here see full text):

Free market economy involves development and change. This is why rapid economic growth, characteristic of transition economies, has now stabilized into a steady rise. Let us accept this and keep this in mind.

Yet we must not attach disproportionate or false qualities to our now more measured economic growth. We must not believe those foreboding crisis and crash. They are making an overstatement and a mistake, they mislead and discourage.

They are wrong.

So much for bubble bursts, devaluations and other false prophesies and prophets. Here a coin, catch.

There are two things, which set Danske bank apart from the pack. Firstly, it spells doom, while the rest of the community of financial institution analysts remain much more reserved, to say the least. Danske bank is thus practically the only one of its kind with his catastrophe scenarios, while every other estimation I can think of is about a dozen times less pessimist. There are reasons to be pessimistic this year, given that zillion per cent profits enjoyed by the private sector in the Baltic states now turned into mere insane profits and then there's a problem with high inflation and trade deficit with easy cash like EU structure funds - "free money" - just pouring in, but this is about it.

Secondly, Danske bank is probably the only one of the leading financial institutions of Scandinavia, which doesn't profit (insanely) from the Baltic states financial markets' growth. The bank in question has been too late to move to the Baltic markets, when it was the easiest in the 90s, when the markets emerged and when there was no serious competition. Today the fight is lost, chiefly to the competing banks from Sweden, which are now swelling with the profits from Estonia, Latvia and Lithuania.

Hansabank, Swedbanks' Baltic states daughter alone annually squeezes some €400 million in profits, with Estonia giving about half of this number, other half by the other Baltic states.
In first three quarters of year 2007 Hansabank put into pocket €364 million, earned in the Baltic states, according to his homepage. So by the year's end the sum should be up to €455 million. This is € half billion! Couple of years ago I did some googleing, comparing Baltic states' (7 million inhabitants) Hansabank's profit with cumulative profits of all Ukrainian (46 million inhabitants) commercial banks combined and it turned out about the same figure, in €. This is just enormous amount for such small market as Estonia or even three Baltic shore countries together. Thus instead of saying "lucrative market" perhaps I should be just screaming "crazy money!"

Hansabank's chief competitor SEB's Ühisbank is doing not as spectacularly, but in his modest capacity he too was able to pull some fantastic looking €60 million in profits in 9 months of year 2007, this time the number is from Estonia alone, according to his Estonian page (in English). Here we go again. This isn't all as there are other good looking numbers, but let's just limit this overview to two banks whose services I personally use.

But as Tallinn's fancy places filled with New Year celebrations where did Danske bank managers and share holders mark their hundreds of millions in Baltic profits? Radisson SAS, Swissotel, Meriton Grand Hotel Tallinn, or perhaps even Saku Suurhall?

Unfortunately there was unlikely any reason to celebrate for Danske bank. He only moved to Estonia and the other Baltic states in 2007 by a costly acquisition of Finnish Sampo bank and he's got market shares between 0 and 9 per cent. Both these factors demonstrate how big a loser he so far is in the competition for super profits with his Scandinavian arch rivals (on Danske's pitiful market shares see Wikipedia).

That's why there are voices in Estonia (for example in last Keskpäevatund) finally beginning to doubt in Mr Christensen's ability to impartially assess the situation. Not hard to doubt indeed, given that bursts from his propaganda gun aimed at Baltic states actually wound his salary payer's competitors. For the Danske bank there's no costs, only profits.

Stay tuned as next time I am going to have a look at Russian analysts' opinions - a lot more funnier.

Goloskokov captured!

Konstantin Goloskokov, photo from Jaanus Piirsalu

One of the leaders of Kremlin youth movement "Nashi" Konstantin Goloskokov has been captured by the Lithuanian border guards on the attempt to illegally cross into Lithuania with the goal of infiltrating Estonia, Baltic and Russian media reports, including TASS.

A look at Mr Goloskokov's record reveals that he is famous as one of the leading figures behind the harrassment of the British Ambassador to Russia (see here 1, 2, 3), petitioner to PACE (this piece) as well as for being no less than self-proclaimed chief architect of May 2007 Cyber War against Estonia (this Wikipedia entry). In Estonia Goloskokov is chiefly known for harassment of the Estonian Moscow Embassy staff. By virtue of claiming responsibility for the cybernetic attacks he is the only one known suspect in the case.

Now, according to the Baltic press Mr Goloskokov faces 2 months arrest for illegally crossing the border. No announcement has been made that the authorities in Lithuania or in Estonia are looking into his alleged role in the April and May DDOS attacks against Estonian internet servers and rooters, which, according to his own words he and his fellow associates organized from the lawless, self-governing Moldovan region of Transnistria. The attacks inflicted million of EURs in direct damage to the online banking establishments as well as unknown damage to other bank card-operating businesses and media outlets. Despite the importance of the cyber-sujet in question it is clear that investigating Mr Goloskokov now, several months after the attacks would be pointless, unless he brought his botnet controlling laptop with him.

It is good, however, that our fellow Lithuanians are doing good job of keeping rabid nationalist elements away from our borders.