The "Putin Doctrine of muscular nationalism" makes Russia's relations with the West fraught. Photo: Getty
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Is a return to constructive relations between Russia and the West possible?

Russia may be destined to remain a source of instability and confrontation for as long as Putin remains in the Kremlin.

Just when it looked as if tensions between Russia and the West couldn't get any worse, an international arbitration tribunal in The Hague is set to make a ruling on Monday that could have far-reaching consequences for relations with Moscow. It's the culmination of a decade long legal battle by the former majority shareholders of Yukos Oil to secure compensation for the expropriation of their assets by the Russian state in 2004. It is also the largest arbitration claim in history. If it loses, Russia could be out of pocket by as much as $100bn; a huge financial hit for any country, especially one flirting with recession and facing an escalating campaign of international sanctions.

Couldn't President Putin ignore a ruling against him and simply thumb his nose at the outside world like he has done on many occasions before? Not this time, because it turns out that the long arm of international law can be very long indeed. Russia may have renounced the Energy Charter Treaty on which the case is built, but it was legally bound by it at the time of the Yukos affair. Furthermore, the terms of the treaty allow any financial award against it to be enforced under the provisions of the New York Convention. If Russia refuses to pay up, its assets in any country that has ratified the convention could be seized to the full value of the award. This encompasses 148 countries, including the US, every member state of the EU and even China.

It is certainly possible that the ruling could go Russia's way. But legal observers point out that international tribunals have already considered the same evidence in two smaller cases and found against Russia on both occasions. Judges dislike contradicting their peers without compelling new evidence. If Monday's decision goes the same way, Putin faces a tricky dilemma that could profoundly alter the course of Russian policy for the remainder of his presidency.

The response that would fit most naturally with the new Putin Doctrine of muscular nationalism would be to reject the ruling and threaten economic retaliation against any country that allowed its enforcement under the New York Convention. Putin doesn't recognise a separation of judicial and political power, so he would be probably regard decisions by foreign courts to seize Russia property as essentially political acts. Russian politicians have already threatened to seize foreign assets in response to Western sanctions over Ukraine, so the idea is already out there.

The problem with this is that it would require a sharp re-direction of Russian economic strategy. Despite the rhetoric of 'sovereign democracy' - an ideology based on the rejection of foreign influence - Russia is deeply embedded in the global economy. It needs not only access to foreign trade, but also inflows of foreign capital and technology to modernise and thrive. The investment requirement for its dilapidated energy sector alone stands at $2.7 trillion over the next twenty years. Without this Russia faces the threat of a return to the kind of long-term stagnation that brought an end to the Soviet era.

A strategy based on economic autarky and a closed 'Russian world' isn't really viable. Russia doesn't have either the capital or the technology needed to build new infrastructure and open new energy production in the Arctic North. Besides, the Russian elite love their Swiss bank accounts and Park Lane apartments. An 'Asian pivot' and the friendly embrace of the BRICS might provide a degree of short-term diplomatic comfort, but Chinese money will always come with plenty of strings attached, especially since Beijing will sense Russia's desperation. In any case, China can't offer the technology Russia needs or the lifestyle options its oligarchs crave.

Putin understands this perfectly well. It is probably the only thing that has persuaded him to pull back from a full-scale invasion of Ukraine. At some point he will need to convince foreign companies that Russia is a safe place to invest once again. With net capital outflows already running at $75bn in the last six months, he is clearly a long way from achieving that goal. The last thing he needs to do is demonstrate that Russia is a country where property rights have no standing by seizing foreign assets and completely abandoning the rule of law. The damage would take a generation to repair.

If Russia loses on Monday, the pragmatic move would be for the Kremlin to swallow its pride and find a way of settling the claim quietly. The Yukos affair was in many ways Putin's 'original sin'. It was the moment when it became clear that he was determined to centralise political power and dismantle any democratic or legal safeguards that stood in his way. Drawing a line under the affair might become a symbol of Russia's willingness to put relations on a more businesslike footing.

Admittedly, that seems unlikely given the acrimony over Ukraine. But it wouldn't be entirely out of character either. The early phase of Putin's leadership was based on pragmatic modernisation, constructive relations with the West and a desire to nurture Russia's economic recovery. The question is whether too much bad blood has now passed between Russia and the West to make a return to that approach possible. The answer will tell us whether Russia is destined to remain a source of instability and confrontation for as long as Putin remains in the Kremlin.
 

David Clark is the founder and editor of Shifting Grounds, and served as special adviser to Robin Cook at the Foreign Office from 1997 to 2001. He is chair of the Russia Foundation.

David Clark is the editor of Shifting Grounds.

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Is there such a thing as responsible betting?

Punters are encouraged to bet responsibly. What a laugh that is. It’s like encouraging drunks to get drunk responsibly, to crash our cars responsibly, murder each other responsibly.

I try not to watch the commercials between matches, or the studio discussions, or anything really, before or after, except for the match itself. And yet there is one person I never manage to escape properly – Ray Winstone. His cracked face, his mesmerising voice, his endlessly repeated spiel follow me across the room as I escape for the lav, the kitchen, the drinks cupboard.

I’m not sure which betting company he is shouting about, there are just so many of them, offering incredible odds and supposedly free bets. In the past six years, since the laws changed, TV betting adverts have increased by 600 per cent, all offering amazingly simple ways to lose money with just one tap on a smartphone.

The one I hate is the ad for BetVictor. The man who has been fronting it, appearing at windows or on roofs, who I assume is Victor, is just so slimy and horrible.

Betting firms are the ultimate football parasites, second in wealth only to kit manufacturers. They have perfected the capitalist’s art of using OPM (Other People’s Money). They’re not directly involved in football – say, in training or managing – yet they make millions off the back of its popularity. Many of the firms are based offshore in Gibraltar.

Football betting is not new. In the Fifties, my job every week at five o’clock was to sit beside my father’s bed, where he lay paralysed with MS, and write down the football results as they were read out on Sports Report. I had not to breathe, make silly remarks or guess the score. By the inflection in the announcer’s voice you could tell if it was an away win.

Earlier in the week I had filled in his Treble Chance on the Littlewoods pools. The “treble” part was because you had three chances: three points if the game you picked was a score draw, two for a goalless draw and one point for a home or away win. You chose eight games and had to reach 24 points, or as near as possible, then you were in the money.

“Not a damn sausage,” my father would say every week, once I’d marked and handed him back his predictions. He never did win a sausage.

Football pools began in the 1920s, the main ones being Littlewoods and Vernons, both based in Liverpool. They gave employment to thousands of bright young women who checked the results and sang in company choirs in their spare time. Each firm spent millions on advertising. In 1935, Littlewoods flew an aeroplane over London with a banner saying: Littlewoods Above All!

Postwar, they blossomed again, taking in £50m a year. The nation stopped at five on a Saturday to hear the scores, whether they were interested in football or not, hoping to get rich. BBC Sports Report began in 1948 with John Webster reading the results. James Alexander Gordon took over in 1974 – a voice soon familiar throughout the land.

These past few decades, football pools have been left behind, old-fashioned, low-tech, replaced by online betting using smartphones. The betting industry has totally rebooted itself. You can bet while the match is still on, trying to predict who will get the next goal, the next corner, the next throw-in. I made the last one up, but in theory you can bet instantly, on anything, at any time.

The soft sell is interesting. With the old football pools, we knew it was a remote flutter, hoping to make some money. Today the ads imply that betting on football somehow enhances the experience, adds to the enjoyment, involves you in the game itself, hence they show lads all together, drinking and laughing and putting on bets.

At the same time, punters are encouraged to do it responsibly. What a laugh that is. It’s like encouraging drunks to get drunk responsibly, to crash our cars responsibly, murder each other responsibly. Responsibly and respect are now two of the most meaningless words in the football language. People have been gambling, in some form, since the beginning, watching two raindrops drip down inside the cave, lying around in Roman bathhouses playing games. All they’ve done is to change the technology. You have to respect that.

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war