Oleg Kozlovsky’s English Weblog

Politics, Democracy and Human Rights in Russia

Why Fight Crisis If You Can Hide It?

with 4 comments

Russian stock markets had a hard day today. Two main indexes fell at rates unseen since the August 1998 supercrisis: RTSI lost 19.1% of its morning value, MMVB lost 18.7%. Among the most unfortunate companies are giants like NorNikel (mining), Sistema (telecom), VTB (bank), UralSvyazInvest (telecom), and even Rosneft (petrol) who stole bought YUKOS’ assets.

This drop was the biggest in the world and is perceived by many as the end to the Putin’s “stability”. The long-promised economical crisis is not at the doorstep any more. It is here and its scale appears to be greater than anywhere else in the world (except maybe just for Ukraine with its traditionally weaker economy).

What’s notable is the reaction of Russian media, TV in particular, to this historical event. The two major TV channels (both state-owned) didn’t even mention this “black Monday”. On the contrary, while stock brokers were watching RTSI and MMVD indexes falling a point after a point, ORT and RTR news hosts said that “Russian economy is more protected against the crisis than economies of other countries”. They showed Dmitry Medvedev meeting in Kremlin with oligarch Mikhail Friedman whose assets include shares in cellular operators MTS (dropped -17% today) and Beeline (-23%), X5 Retail Group (-28%) et al. Friedman and Medvedev were telling each other that Russia’s economy is safe and that this crisis provides more opportunities for the national business. Then TV channels showed foreign stock markets and reported that Dow Jones passed a “psychological mark” of 10,000 points. None of them took time to say that Russian RTSI passed a “psychological mark” of 1000 points and then another “psychological mark” of 900 points with ease.

This way of dealing with the crises and avoiding their political consequences reminded me of a well-known Soviet story. When Chernobyl nuclear plant exploded and caused fallout in the whole Eastern Europe in 1986, Soviet television didn’t mention it. They thought it would cause panic and undermine the image of USSR at home and abroad. A few days later citizens of Kyiv and other Ukrainian and Belarussian cities next to Chernobyl participated in the traditional May 1st demonstrations in support of CPSU under radioactive rain. Several days later, however, fallout reached Scandinavia and was noticed by the West. Soviets then had to admit not only the disaster but also their lies and attempts to hide it. Looks like the modern Russian media chooses the same strategy.

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Written by Oleg Kozlovsky

October 6, 2008 at 23:50

Posted in essays

Tagged with , , ,

4 Responses

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  1. [...] been in the context of American and European financial woes […].” Oleg Kozlovsky has more on the Russian media reaction to the crisis. Posted by Veronica Khokhlova  Print Version Share [...]

  2. I don’t think Chernobyl and the way it was covered then, can be compared to today’s events
    Is a matter of fact that people all over the world are in panic and governments are acting more or less the same like the Kremlin
    There’s no other way
    The PM of my country also suggested which shares one should buy …
    I don’t speak Russian so I can follow only Russia Today and I noticed they stress a little bit too much on US responsibilities on the crisis [which are remarkable anyway]
    On the long run it can turn into a success if matched with recent Medvedev proposal about a European deal which would tend to overcome NATO and the fact that the Russiam Min of Finance participated to G7 is a signal
    Putin stability is not ending
    Probably the fact that the biggest oil-gas companies are owned by the government, makes the crisis bigger than it actual is
    After this bad moment has passed and the rules of the global financial system will be replanned, then we’ll see how Russia will fit in it
    Is still early to launch accusations

    Balqis

    October 14, 2008 at 12:57

  3. Balgis, what I was writing about is not the reaction of Russian authorities to the crisis. It is the absence of any reaction by the state-controlled media, an attempt to conceal the crisis. It’s obvious that not speaking of a problem won’t solve it. But for our leadership, the real economical situation is less important than the virtual picture on TV. Falling market indices is not as bad for them as falling Putin’s and Medvedev’s own ratings. This is what I am talking about.

    Oleg Kozlovsky

    October 15, 2008 at 12:14

  4. You say your media are state controlled
    Hence their reaction is the state reaction, unless you mean that they adopt a sort of self censorship
    Media can’t solve problems
    Indeed they must bring them to the attention of the people but in this specific case what you want them to do ? Keep on shouting night and day that Micex and RTS are loosing like hell ? That some wrong choices of the past are making it tougher ?
    Not necessary : when I go to the market to buy fruit and vegetables and I see the difference in prices compared with those of previous months, I know that something is wrong .
    Panic will not bring benefits.
    In a country like yours where [as an observer from outside] I understand, the image of the leadership is a primary element, I can justify their behaviour .
    They’re doing two mistakes basicly : not understanding the importance of communicating with the people through the media, and not giving more space to the current President.
    That would strengthen their establishment and the economy .

    Balqis

    October 15, 2008 at 18:15


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