Russian trade restrictions anger port city

Washington Times:

Last summer, the harbor in this city on Russia's Pacific coast was a symphony of commerce, with armies of dockworkers unloading ships as other vessels waited their turn in the glistening waters of Golden Horn Bay.

Secondhand Japanese cars, the most common cargo, filled the piers and packed nearby garages, where dealers did a brisk business moving them on to points across the former Soviet Union.

Now, six months into Russia's worst economic downturn in more than a decade, the cars are gone, many of the workers have lost their jobs, and the few ships left in the bay sit idle. But residents don't blame the global recession for the city's woes. They blame the Kremlin's efforts to fight the downturn.

In January, the government slapped a stiff tariff on imports of used cars in an attempt to help the nation's struggling automakers. The measure failed to stop sales of Russian-made cars from plunging, but it devastated the economy here and touched off protests against Prime Minister Vladimir Putin that appear to have rattled the Kremlin.

The decision to impose the tariff is an example of how the authoritarian system built by Putin has struggled to forge an effective response to the crisis. After eight years of growth, the economy is contracting and unemployment has soared. The Kremlin appears unsure what to do, as top officials offer contradictory forecasts and policies.

By intimidating organizers of the protests and controlling media coverage, the authorities have succeeded in preventing the demonstrations from getting out of hand. But there are signs the system is strained. At a critical moment, local officials here say, police commanders refused to use force against peaceful demonstrators.

The dispute over how to handle the protests reached the highest levels, with Putin favoring a tougher approach and his protege, President Dmitry Medvedev, backing a regional police official who resisted harsh measures, according to a person here who was briefed by a Kremlin insider and spoke on the condition of anonymity.

...

I think Putin missed the obvious. A used Japanese car was seen as a better vehicle than a new Russian built vehicle. Rather than encourage competition to build a better vehicle he tried to stop the imports putting the interests of workers in one region against those in another. He is also finding the limits to his ability to control political reaction too. It is too bad that Iranian police have not shown similar restraint.