• By: Dan Donovan

A New Russia Emerges

Canada and Russia are kindred spirits. We share the coldest climates in the northern hemisphere, a multicultural population spread over vast landmasses, and regional governments that blame all their problems on a federal or central authority. In Canada, the provinces blame the feds, while in Russia, regional governments blame president Vladimir Putin and the federal Parliament for everything.

In the late 1990s and early 2000s, relations between Canada and Russia were frosty. For Ottawa residents, this all came to a head when a Russian diplomat drove while very drunk and killed a well-known Ottawa lawyer. The tragic incident proved to be a turning point for relations between the two countries and for the way diplomatic immunity is handled by the Government of Canada. The Russian diplomat in question was sent home to be tried and convicted. He was sentenced to six years in prison. The Canadian government was allowed to send representatives to the trial to monitor the process and outcome. The Russian Embassy in Ottawa took the matter seriously and was very contrite about the incident of vehicular homicide.

When the time came to appoint a new Russian ambassador to Canada, President Putin sent Georgiy Mamedov, a friend and one of his most able, trusted and seasoned diplomats to fill the Canadian posting. Mamedov has been a key player in post-Soviet affairs, leading arms negations with the Americans and advising the Russian Federation on its strategy on a range of international issues. Mamedov, a friendly and articulate man, quicly set a new tone when he arrived in Canada. In the fall of 2004, he openly criticized The Globe and Mail's Moscow bureau chief Mark MacKinnon for meeting and interviewing one of the key terrorists tied to the Beslan massacre, suggesting it was a kin to meeting with Osama Bin Laden.

In late April, Putin gave a speech lamenting the Soviet break-up as the "greatest geopolitical disaster of the last century." In an interview with The Globe and Mail days later, Mamedov was quick to clarify to Canadians the context of Putin's remarks, saying that Putin was "not being nostalgic for Communist times." Mamedov pointed out: "While there are many bad things that can be said about the Soviet Union — purges, lack of democracy, ideological crusades of the power of the state, we had free Medicare, education, pensions —and now the whole social safety net has collapsed." He also noted that Putin said there is no way back for Russia and the only alternative is for Russia to become a civilized, free and democratic country.This is something Mamedov believes in implicitly and, as he told Ottawa Life in an exclusive interview, Russia will do this in its own way on its own terms and it's going to take time.The ambassador also expressed real concern about the effect these changes are having on the older generation: "The young people have adjusted very well. They are entrepreneurial, dynamic and represent the potential of our country. We will have a Russian democracy".

He then talked about the oligarchy — the Russian business class that managed to take control of many state-owned enterprises by the mid-1990s. When I mention the nationalization of the Yukos oil and gas company, Mamedov is unapologetic: "In Canada, your government protects your energy resources.Yes, you have private sector development, but you also have rules. Companies must keep prices fair, pay their taxes and abide by environmental regulations. Yukos did not do that and they owed the state billions of dollars in taxes. So we did what any government would do and retrieved our taxes. The Americans have been critical, but there are rules that must be followed. The former Yukos executives are on trial and that is an open process. It is the duty of our government to have fair business rules and we want investors, but they must play by the rules." (Mamedov points out that Russia signed the Kyoto Protocol. Russians have the most to lose financially, but Putin believes it is important to have environmental standards, noting wryly that the Americans have not signed on to the climate change treaty.)

Many Russian observers believe that Putin used Yukos to reassert his government's authority over natural resources and take back control from the freewheeling oligarchs who made billions off the former state-owned energy enterprises.At an American Chamber of Commerce meeting held in Moscow on March 29, Putin was heavily criticized for privatizingYukos, but not to the point where it was ever suggested that Russia is not a good place to invest.

In fact, Russia is a very good place to invest. American and other foreign business leaders realize that Russia is worth the risk, but they would have to adjust to new rules. Canadian companies have invested billions in Russia in oil and gas, hotels, services and law firms. Investment is growing, not slowing.