With a clear conscience

Chapter 26

Day of Knowledge, Southern Cemetery.
Hauling himself up with difficulty over a high cemetery wall, Galkin dropped to the ground on the other side unsteadily, glanced left and right, then set off at a bulky trot across the unkempt Jewish plots. Puffing and wheezing as he neared the back wall of a primitive outhouse, above the entrances of which on either side, he noticed, were daubed crudely the letters for male and for female in thick red paint. For a few moments he leaned his heaving frame against the decrepit brick structure to catch his breath.
Composure regained, Galkin peeked out around the building's right-hand side. Through a ringed array of bunched-up silver birches, which helped to conceal his position, he was able to watch the funeral proceedings at a safe distance. Between the figures at the front of a band of dark-clad mourners, the tussled grey hair of Valentin Kulyeba could just about be seen like a stormy cloudscape. When some late-comers in heavy grey overcoats arrived, they shook hands discreetly with some of those at the back of the group, bear-hugged, laughed at some inaudible remark. The tubby priest seemed to be eking out the ceremony, prolonging his stint at the centre of the drama. After a while, one or two of the attendees sat down nearby at a wooden table and chairs fixed next to a mottled-pink marble headstone, sharing a drink from a chrome and leather flask.
For Chrissakes, was he ever going to get a shot at Kulyeba? The thought crossed Osip's mind that it might not happen, a surge of panic rising inside him momentarily, though after a while his concentration wandered, so that he found himself brushing the smudges of dirt on his pleated trousers with his fingertips, considering…. He poked at a small, neat rip in the fabric around the knee, which he must have got rolling in over the graveyard wall (it was set along the top with worn-down broken glass). The torn flap in the sea-green garment that rose on the hole in his trouser leg reminded him of a small pyramid casting its shadow, and by the time he checked back on the funeral gathering, Kulyeba was gone. "Oh, Christ!" the officer gasped. Had he let him get away again? What should he do? He found himself pulled in several directions at once.
He crept back along the rear wall of the toilet block. On the side path leading to the main exit, behind a clump of dense sedge thicket, a dark shape moved—he was in time to see Kulyeba pass through the cemetery’s huge cast-iron gates. A stillness infused Osip’s consciousness, underpinned with an unexpectedly firm sense of determination. It was as if he had changed his relation to physical space: his path was not just clear, but inevitable, almost, and he felt full of energy, a ball poised at the top of an arc, ready to roll. Everything was happening in slow motion, the details sharp and vivid.
One half of the gate was turned in towards him. Through the distorted perspective of its widely space bars, he could see Kulyeba come to a halt no more than two hundred metres in front of him, pull out a mobile phone to take a call. Osip advanced, trying to carry himself lightly, all the time keeping to his left, close to the cemetery wall, so as to make his approach out of the line of sight. At the gate post, he peeked around: Kulyeba was pacing back and forth slowly along the narrow dirt pathway outside the graveyard, one hand flattened to his ear to listen more intently, gesticulating with the same hand agitatedly every now and then as he spoke.
Just then, pacing back, Kulyeba tripped, his shoes' smooth leather soles losing their grip on a loose rock or stone, so that the mobile slipped from his hand like a bar of soap, spinning in a descending curve through the air until it bounced down into an open manhole between him and the adjacent building site. Kulyeba's face reddened, and the veins in his forehead rose. His arms jerked in angry, staccato movements and a frothing stream of obscenities flooded over his lips. Behind gritted teeth, he restrained a gurgling howl of rage.
Osip stood rigid, held his breath, as Kulyeba with his back turned got down on all fours, stiffly, and crawled towards the drain; stretching his legs out behind him, knees bent, he balanced on the tips of his toes, hands placed either side of the opening, as if preparing for a sprint start. Then he lent forward and peered timidly inside.
A new plan came to Osip: he'd sneak up from behind, grab Kulyeba by the ankles and tip him in. Much less noise to attract attention. Also, with Kulyeba distracted, he'd have the element of surprise. If necessary, he could finish him off with a couple of caps, firing the gun inside the cavity to muffle the percussive sound of the shots. All these lines of reasoning went on simultaneously, in a flash.
He reached for the gun in his jacket, but it was stuck. Curling his left hand around inside his jacket to hold the ad hoc holster, he gave a good tug on the gun's grip, but by the time he’d managed to withdraw the weapon, this time resolved to use it, Kulyeba had again disappeared.
Galkin scanned a monotonous horizon. It took a second or two to realise what had happened: in front of him, a pair of well-made leather shoes were poking out of the ground, flailing: Kulyeba must have lost his balance and tumbled in, head first, so that the sides of the drain bound his arms tightly around him.
Without thinking, Galkin moved reflexively to aid the stricken man. But then, halfway, he stopped in his tracks. What was he doing? His thoughts swirled, adapted, curled themselves around him. Looking around furtively, he began to withdraw towards the cemetery gates. It wasn't as if he had pushed him in, so it couldn't be said he was to blame. The same thing would have happened even if he hadn't been there. Was he a killer? Not at heart, he knew. But did he really intend to save Kulyeba now, after tracking him for so long? Of course, he'd have shot him if it had come down to it, he reasoned: he wasn't a coward. But now that he didn't have to, couldn't he wash his hands of the matter? Continue to walk tall in front of his wife and his colleagues, his conscience clear?
The tan shoes flapped for a while in the sullen air weakly, as Kulyeba's lungs gave out. There were no cars or passers-by, and Maltsev's mourners had vanished, presumably for a well-oiled wake; even the gang of workers who were doing up the bungalow opposite seemed to have knocked off for a tea break. The officer pulled out a sky-blue Prima packet, but then thought better of it, wheeling about to creep back through the iron gate, back past the crumbling outhouse, across the Jewish plots, as if by retracing his steps he thought he was erasing them, removing any evidence of his having been there, and he hopped back up and over the cemetery wall, feeling horrified and relieved.

Economic crisis in Central Asia and the Transcaucasus

Some notes from May 2009

In many of the economies of Central Asia and the Transcaucasus, the low level of development of their financial sectors and their low level of participation in the international capital markets were thought likely to insulate them from the impact of the global financial and economic crisis, which surfaced in the US property market in the second half of 2007.

With the escalation of the crisis since in September 2008, however, two clear channels of transmission of the crisis to the region have emerged. The first is directly, through precipitous declines in the prices of the region's main commodity exports—most notably hydrocarbons, but also metals. The second is indirectly, through the impact of financial turmoil on the real economies of Russia and Kazakhstan.

These two factors will have a differential impact, depending on the extent that each economy depends on Russia and Kazakhstan for sources of economic growth, as well as on whether they are net exporters of hydrocarbons (Kazakhstan, Azerbaijan, Uzbekistan and Turkmenistan) or importers (Kyrgyzstan, Tajikistan, Georgia and Armenia). These factors will condition the likely severity of the impact of the global crisis on the economies of particular countries, as well as their response to it.

For many countries in the region, economic growth held up reasonably well in 2008. In the case of the hydrocarbons exporters, this was because of very high prices for oil in the first half of the year. In other cases, the continued strength of neighbouring economies until the final months of 2008 helped to sustain the inflows of workers' remittances on which they heavily depend (the IMF estimates that remittances to the Kyrgyz Republic equalled around 25% of GDP in 2008, and for Tajikistan the figure was 50%). The increased price for gold was an additional factor sustaining foreign earnings for Uzbekistan and the Kyrgyz Republic, for which gold is a leading export item. However, the final quarter of 2008 and the first quarter of 2009, very sharp falls in trade and industrial output across the region—in part, as nervous businesses drew down on stocks—signalled that the crisis has arrived.

For the main hydrocarbons exporting countries, the fall in oil prices presented not only the prospect that the severe deterioration in the terms of trade would have a strong negative impact on domestic demand growth, but also that it would greatly reduce current-account surpluses and put pressure of fiscal revenue. Nonetheless, for many of these countries, including Kazakhstan and Azerbaijan, the oil boom of the past eight years has allowed them to build up a financial buffer, in the form of oil windfall funds, with which to tackle the effects of the crisis.

In contrast, for the hydrocarbons importing countries, the benefits of falling oil and food prices—two of the main factors behind the year-long inflationary surge across the region from the second half of 2007—are unlikely to make up for the multiple impacts of the regional economic downturn.

In Russia, the downturn was triggered by rising risk aversion globally, with a very rapid reversal of capital flows forcing an expensive defence of the rouble and, in January 2009, an eventual exchange-rate devaluation. In Kazakhstan, the foreign lending to domestic commercial banks, which was used to fund a credit boom in the non-oil sector, came to a halt much earlier, in late 2007, precipitating a sharp fall in property prices and a rapid slowdown in the construction sector—previously two of the drivers of Kazakh GDP expansion.

In the years since Russia's 1998 financial crisis, the region's trade dependence on Russia has declined, although for some countries—Kazakhstan, Uzbekistan and the Kyrgyz Republic—trade with Russia was still equal to 4-5% if GDP in 2008. More important perhaps this time around, according to a study by the IMF, is the likely negative impact on growth of a fall in financial flows from the region's largest economies. More tangibly still, especially for the Kyrgyz Republic and Tajikistan, but also for Georgia and Armenia, is the likely swift cut back in remittance inflows. This will not only affect consumption and poverty levels, but also investment demand, through the cut back in demand for residential construction and small business start-up capital.

Broadly, the responses of the various government's have been as follows:

• to try to protect the financial sector (especially important in Kazakhstan);
• to attempt external stabilisation and, if necessary, exchange-rate adjustment;
• if possible, to initiate fiscal measures to counter the impact that the drop in demand has on living standards; and
• to try to continue with measures to improve the business environment so as to put the economy on a better footing to attract investment once the worst of the global crisis passes.

Using either their own resources or those of foreign donors, this combination of strategies has a chance to allow the economies of the region to avoid severe destabilisation in the short term. However, threats to maintaining broad economic stability will depend on the length and depth of the crisis—in particular, whether Russia and Kazakhstan are able to resolve the problems in their domestic banking sectors. It could also depend on an absence of major outbreaks of social and political unrest, which would disrupt the implementation of anti-crisis measures, but to which the Kyrgyz Republic, Tajikistan and Georgia look acutely exposed.