Skepticism greets Putin Net initiative: The president’s suggestion of a state fund for innovative online projects raises doubts over its political implications and its ability to attract private investment

(Moscow News – themoscownews.com – Dan Peleschuk – Dec. 3, 2012)

Despite President Vladimir Putin’s newfound appreciation of the Internet as a useful tool to fight Russia’s “brain drain,” experts question how fair his proposed funding scheme will actually be.

They argue his new proposal to help finance online start-ups may be little more than a cash cow for government-friendly initiatives, as well as a potential hurdle for Internet-savvy investors.

“It’s not a question about whether money will be handed out,” said opposition blogger and media expert Oleg Kozyrev, “it’s a question of who will get it.”

Last month, Putin suggested establishing a special fund for online initiatives.

Under the Agency of Strategic Initiatives, a nominally nongovernmental agency established in August 2011, the fund would seek to boost Russia’s dwindling intellectual capital by providing the creative class with the funds it needs for a variety of online civic projects.

Putin added that the state should allot several hundred million rubles to the new fund, which is to be personally overseen by the ASI’s manager of projects for young professionals, Dmitry Peskov.

Fruitful soil

There are signs that such a fund might find fertile ground in Russia.

In recent years, a slew of Internet-based civil society projects have shot to prominence, from anti-corruption crusader Alexei Navalny’s corruption-tracking website, RosPil, to online elections for the opposition’s coordinating council, which attracted more than 80,000 voters.

Observers said these online initiatives have played a key role in the “rejuvenation” of Russia’s civil society, but they also say there is little guarantee that this new initiative will see state funding make its way to these types of projects.

While Putin has expressed aversion to the Internet in the past, his proposal has hit on what both critics and government officials alike have long cast as one of the biggest problems in the post-Soviet economy: the lack of resources for young innovators, many of whom are flocking abroad.

“It is important to create the necessary conditions so that these people pursue their projects here in Russia, on their native soil,” Putin said during a meeting with the ASI leadership on Nov. 22.

About one-fifth of Russians say they want to emigrate, according to a poll conducted earlier this year by the Levada Center think tank.

Combining state funding with “crowd funding,” the initiative would finance projects that are deemed feasible and already have a degree of backing from private donors. If the demand is there, the logic goes, the money will follow.

ASI director general Andrei Nikitin said at the same meeting that his agency would have formal proposals for the fund ready by February 2013.

Managed innovation

Few, it seems, are convinced.

“It’s hard to imagine that this money will go to human rights organizations or any true civil society projects, such as RosPil,” said Kozyrev, the opposition blogger.

He pointed to pro-Kremlin youth groups such as Nashi, which have often used the Internet for a variety of pro-government activities, such as waging web-based smear campaigns against opposition leaders and civic activists.

Controversy broke out earlier this year when the hacked e-mail correspondence of former Nashi press secretary Kristina Potupchik implicated her in a 2008 attack on the website of the respected and critical newspaper Kommersant.

The correspondence also showed the group had paid Internet users to leave negative comments on anti-Putin stories and blog posts. Potupchik did not comment on the matter at the time, and other Nashi leaders downplayed its significance.

Critics, such as Kozyrev and Internet entrepreneur and top Russian blogger Anton Nossik, allege that Nashi’s strategy is to “imitate” civil society, with Kremlin support, in order to distract people from “genuine” civil society projects.

But Nashi has also organized a variety of civic projects ostensibly aimed at tackling social issues, such as endemic alcohol abuse.

Nikita Borovikov, the group’s leader, brushed off allegations that his organization was out to mimic civil society.

“The problem is that those who do the complaining don’t offer any alternatives,” he told RIA Novosti on Monday.

Meanwhile, media expert Alexander Morozov, editor of Russky Zhurnal, said that the new fund represents the Kremlin’s approach: giving back to society, but only in ways that will benefit the powersthat- be or at least keep anti-government voices at bay.

“It’s like the old Soviet theory about small deeds, which says that you shouldn’t aspire to big politics, but instead become active in, for example, creating bicycle lanes,” he said.

What’s the catch?

Others have pointed to the potential lack of appeal of governmentfunded initiatives to innovators and start-up entrepreneurs.

Skolkovo, the innovation center and brainchild of Prime Minister Dmitry Medvedev, has seen some success in luring students, employees and companies, with international partnerships and exchange programs with the world’s top universities. However, some argue that the ASI fund just won’t have the same pulling power.

“Why should [entrepreneurs] be willing to rely on government funding instead of market funding?” Nossik asked.

He pointed to what he called the unrealistic expectations that innovation “leaders” will have, looking to the government for support, rather than focusing on key elements such as solid design to draw in a following.

“It doesn’t seem logical to me, because depending on bureaucrats rather than depending on your customers is a strange choice,” Nossik said.

Tough times for Runet

Putin’s proposal comes during a stressful period for the Russian Internet (“RuNet”).

An Internet “blacklist” came into effect this month and has already registered over 180 websites as illegal since coming into force Nov. 1.

While the authorities have pitched the blacklist, or the “Registry,” as a means to protect children from harmful content, critics have blasted the move as an attempt to clamp down on dissent.

According to Kozyrev, such moves provide not only obstacles for Russia’s dissenters, but a dose of unpredictability for Internet entrepreneurs looking to invest in Russian start-ups.

“We’ve entered a time in which it’s very difficult for the RuNet to develop,” he said, adding that the “risks are too great” for many investors.

“When they’re able to shut down such major resources as YouTube, who will want to invest?” Kozyrev added.