Squandering Its Way to Superpowerdom

“Squandering”: Did the US Secretary of State Grasp the Russian Approach to Budget Spending?
The Kremlin Accused the State Department of Tactlessness and Unprofessionalism, Yet Pompeo’s Remarks Were on the Mark
Yevgeny Karasyuk
Republic
December 13, 2018

padrino.jpgVenezuelan Defence Minister Vladimir Padrino gives his thumb up as he sits on the cockpit of a Russian Tupolev Tu-160 strategic long-range heavy supersonic bomber after it landed at Maiquetia International Airport, north of Caracas, on December 10, 2018. Courtesy of Federico Parra/AFP/Getty Images

Russian’s decision to send strategic bombers on a junket to an airport near Caracas elicited a curious reaction from US Secretary of State Mike Pompeo, who publicly expressed his pity for Russian taxpapers, whose money the Kremlin, habitually disregarding the costs, has been spending on its geopolitical moves.

“The Russian and Venezuelan people should see this for what it is: two corrupt governments squandering public funds, and squelching liberty and freedom while their people suffer,” Pompeo wrote.

The Russian Foreign Ministry responded by calling Pompeo’s statement “utterly unprofessional” and even “villainous.” Pompeo’s remarks, which the Kremlin, in turn, dubbed “inappropriate” and “undiplomatic,” were apparently really lacking in nuance: the hardships of Russians, fortunately, cannot yet be compared with the suffering of Venezuelans. But, hand on heart, was Pompeo so wrong when he talked about the losses to the Russian federal budget and lack of oversight?

Russian society has an extremely vague notion about how much the Kremlin’s expansionism has ultimately cost the country. According to calculations made by IHS Jane’s at the outset of Russia’s operations in Syria in autumn 2015, Russia could have been spending as much as $4 million a day. Later, the Yabloko Democratic Party, which is not seated in the Russian parliament, estimated the Kremlin had spent a total of 108–140 billion rubles [between $1.6 and $2.1 billion] on Syria. A more accurate assessment would be difficult to make. Experts doubt that anyone, including the Finance Ministry, keeps tabs on such expenditures. Thus, nobody knows the real cost of Russia’s involvement in the Syrian conflict, argues the Gaidar Institute’s Military Economics Laboratory.

The budget’s fading transparency has been a trend in recent years. In 2016, secret and top-secret allocations accounted for 22% of total federal budget expenditures, a record for the entire post-Soviet period, and much higher than secret allocations in comparable countries, according to RANEPA’s March 2015 report on the Russian economy.

Quite naturally, this state of affairs has not improved the quality of the state’s financial decisions. In terms of effective state spending, Russia ranked nineteenth in a new rating of twenty-five countries, compiled by the Higher School of Economics using data from the World Bank and OECD. Since they are not priorities for the current regime, problems with child mortality and life expectancy were among the reasons Russia ranked so low in the survey: the government spends more on the army than on healthcare—4.3% of GDP versus 3.8% of GDP, respectively. In these circumstances, the chances the Kremlin’s strategic projects in the Middle East and Africa (e.g., the Central African Republic, Burkina Faso, the Democratic Republic of the Congo, and Mozambique) will be decently funded are always much greater than the national healthcare project, which stipulated increased government spending on cancer treatment. The government nixed the plan over summer.

Since it remains largely Soviet in spirit, Russia’s foreign policy has been categorically blind to history’s lessons. The Soviet Union’s exorbitant geopolitical ambitions and support for fringe regimes around the world left the country with a legacy of mostly toxic multi-billion-dollar debts. The process of writing them off has been disguised as a form of international charity or, speaking diplomatically, official development assistance (ODA). According to RANEPA, writing off the debts of developing countries accounted for 35% of all such “international aid” last year or $425 million. It has been the Russian government’s usual way of doing business. Previously, the Russian government wrote off the debts of Nicaragua ($6.3 billion), Iraq ($21.5 billion), North Korea ($10.9 billion), Syria ($9.8 billion), Afghanistan ($11 billion), and Cuba ($29 billion), among other countries. Venezuela risks joining this sad list. Over the past twelve years, Russia has invested a total of $17 billion in the country.

Russia’s Expenditures on Official Development Assistance (Excluding Humanitarian Aid), 2005–2017, in Millions of Dollars. Sources: OECD, Russian Finance Ministry. Courtesy of Republic

Since it was paid for by the Russian federal budget, which has been running a deficit for the last seven years, Russian officials probably did not see the transatlantic flight of its strategic bombers as too expensive. On the contrary, they saw it as a flashy display of Russia’s military prowess and proof of its influence in the region. However, the government of Nicolás Maduro signed off on the stunt. Subject to growing pressure from creditors and an angry, desperate population, it lives day by day. In all likelihood, it will soon collapse, leaving behind a mountain of unpaid bills and unfulfilled obligations to its allies. If this is the case, can we evaluate the Russian government’s action better than the tactless Mike Pompeo did? Probably not.

Translated by the Russian Reader

Making Life Easier for Vegans in Petersburg

Анастасия Емельянова, основатель VegCode
Anastasia Yemelyanova, VegCode founder. Photo courtesy of Sergei Yermokhin and Delovoi Peterburg

A Barcode for Vegans: Petersburgers Develop App for Identifying Vegan Products Through Barcode
Inna Reikhard
Delovoi Peterburg
December 12, 2018

App Interests a Thousand Users in Single Woeek
Petersburgers Anastasia Yemelyanova, Alyona Kabardinova, and Nikolai Dubrovsky have developed the mobile VegCode app (Vegan IT LLC). Made available to users in early December, the app is designed for vegans. It lets shoppers use barcodes to figure out whether or not items in stores contain animal products and have been animal tested. The app currently has a database of 26,000 items marked “vegan” and “non-vegan.” Most of the items are edibles and cosmetics. Household cleaning products will soon be added to the list.

A Growing Segment
As the designers explained, there is a demand for the app, since the number of vegans in Russia has been growing at a rate of fifty percent annually. There are now approximately 150,000 vegans in Russia.

The team has been preparing to expand the app’s functionality by adding a map of vegan shops, cafes, and producers. The app, which operates in Russia and the CIS, will earn money by advertising the services of these businesses.

Attracting Investors
“Unlike Western Europe and the US, the problem of identifying vegan goods is much gnarlier in Russia, because there is not a well-defined system for labeling goods and far fewer speciality magazines,” Yemelyanova explains.

For example, you might find a retail item labeled “Lenten,” but it might not be appropriate for vegans. On the other hand, producers sometimes have no clue their product lines include ethical products.

The startuppers commenced work on the app in early 2018. They raised money on the crowdfunding website Planeta. They also made it to the finals of Philtech Accelerator, winning a 100,000-ruble prize from the Higher School of Economics. The team got another 300,000 rubles from venture investor Alexander Rumyantsev.

Yemelyanova says the hardest thing was compiling the database of retail items marked “vegan.”

“We get information about the content of products from open sources. Our users can also add items via the app. After they are moderated, the new items are listed in the database,” a spokesperson for the company said.

In a week’s time, the nearly thousand users who downloaded the app have suggested 4,000 more items for inclusion in the database.

Prospects
The market for vegan products in Petersburg has been growing rapidly. In 2015, sales were estimated at 80 million rubles [approx. 1 million euros]. In 2017, this figure climbed to 400 million rubles [approx. 5.3 million euros].

Petersburg has several dozen fast food outlets and shops catering to vegans, including Bunker and B12 Vegan Shop.

Petersburg is also home to a small number of vegan producers. Businessman Ivan Ivanov, for example, makes lactose-free dairy products, wheat steaks, and other edibles under the Primal Soymilk brand. Verde produces cheese and curd. Veganov makes soy and vegetable sausages, while Soymik produces soy-based products.

“Petersburg has the most thriving vegan movement in Russia. The city also has a growing number of vegan producers. Mainly, however, these are small businesses in which not a lot of money has been invested. Their products are usually not sold in retail chains, but I think the day when they’ll be sold there is not far off,” says Ivanov.

Ivanov says he had thought himself about making an app for identifying vegan products.

Translated by the Russian Reader

Give Me Your Datasets!

December 10, 2018

Hi,

I am trying to collect a richer database of all the large protests that have occurred in Russia since 1/1/17, and where they have occurred in space and time.

Our research is to determine the significance of cultural landmarks and locations for protests.

For example, we know 4 large protests occurred on the following day and locations (and we are trying to pin point the approximate time):

datasetBut we would love 100s more records.

By the looks of the attached white paper [there was no “white paper” attached], and the below links, CEPR has tracked over 2,500 protest locations.  I would love to work with the CEPR team doing this research, collaborating in any way we can.

http://cepr.su/category/monitoring-protests/

https://themoscowtimes.com/news/number-protests-russia-spikes-in-2018-researchers-say-63428

“With less than two months to go before the end of 2018, CEPR researchers said they have already recorded over 2,500 protests this year compared to under 1,500 nationwide last year, according to the report published Thursday.”

Thanks,

Mark

______________________

December 10, 2018

Mark,

You introduced yourself in no way, shape or form, and I’m not sure what it is that you’re asking me to do. I’m not an information clearinghouse.

I edit, translate, and write a blog called the Russian Reader, which is not affiliated in any way with the Center for Economic and Political Reform, although I have translated several articles by the center’s director, Nikolai Mironov, over the years.

If you would like to work with the CERP, you would have to send them a letter or call them. Their contact information is clearly indicated on their website.

http://cepr.su/about/

Контакты ЦЭПР:
E-mail: ceprsu@yandex.ruceprsu@gmail.com
Пресс-служба: +7 916 629 5609

If you don’t speak Russian, I would encourage you to learn it before doing research on Russia.
Yours,

The Russian Reader

______________________

December 11, 2018

Dear Russian Reader,

You sound angry. I think what I was asking for was pretty straightforward, and I don’t need to know Russian for what I am looking for.

I am looking for a dataset of protest locations in space and time, which is just simple math.

Have a nice 2019 and thanks for the tip on CERP.

Mark

______________________

And you are obtuse.

You just want a dataset. It’s simple math.

Where did I indicate on my site that I was in the business of handing out datasets I don’t have to people who don’t introduce themselves?

What you were asking for was not straightforward, and you were asking the wrong person.

People who don’t know Russia or Russian probably shouldn’t attempt to do research on it. Because you could have the most precise dataset on Russian protests possible, but it wouldn’t tell you anything about Russia or Russians.

Just as you failed to tell me anything about yourself or why you need this dataset.

______________________

From: Mark
7:18 AM (15 minutes ago)

Whatever.

Sent from Mobile Phone

Mercy

clean

I’m really surprised by people who think it’s an important development that Lev Ponomaryov, the veteran Russian human rights activist who was sentenced to 25 days in jail the other day for, essentially, no particular reason, had his sentence reduced to 16 days in jail.

This is not a meaningful distinction. He shouldn’t have been detained, hauled into a kangaroo court, and jailed in the first place.

Don’t let the Putinist vampires fool you with their little acts of “mercy.” They don’t mean well—ever. And if push comes to shove, God forbid, the judges amongst them will hand out death sentence after death sentence just like in the 1930s. And the FSB will carry out the executions as happily as their esteemed predecessors in the NKVD did in the 1930s.

It’s hard for any society to learn anything from its past and arrange things in the present so the past doesn’t repeat itself, so to speak, but Russian society has every chance of showing us, in the very near future, that it has learned nothing from its past.

The Putin regime has spent the last twenty years doing absolutely nothing but priming the populace for a wholesale bloodbath against the Motherland’s numerous enemies. Let’s keep hoping it has just been “kidding” all this time. {TRR}

________________

Squealing on Victims of the Great Terror: Who Wants to Tear Down Petersburg’s Last Address Plaques?

досто 25-табличкиThree Last Address plaques on the house at 27 Dostoevsky Street, in downtown Petersburg

Squealing on the Executed: Who Wants to Remove the Last Address Plaques?
Tatyana Voltskaya
Radio Svoboda
December 6, 2018

Alexander Mokhnatkin, a former aide to Russian MP Vitaly Milonov, filed a complaint with the Petersburg authorities, claiming the plaques mounted on houses throughout the city by Last Address had been erected illegally.

досто 25-улица и домThe plaques are barely visible from only ten meters away.

Andrei Pivovarov, co-chair of the Petersburg branch of Open Russia, wrote about the complaint on his Facebook page.

The city’s urban planning and architecture committee has already reacted to the complaint. It said the plaques, which bear the names of victims of Stalin’s Great Terror and have been placed on the walls of the houses where they lived just before their arrests and executions, were illegal.

досто 27-подворотняThere are two more plaques right next door, in the gateway of the house at 27 Dostoevsky Street.

“The informer decided the plaques were illegal advertisements? I wonder what for. The Stalinist Terror? He thinks they should be taken down. The Smolny responds to the snitch by indicating there were no legal grounds for putting the plaques up, and special city services would deal with them. It is difficult to guess when the wheel of the bureaucratic machine will turn, but, as Solzhenitsyn wrote, the country should know its snitches. I introduce you to Alexander Mokhnatkin, a man who has denounced people long ago victimized by the state and executed, and who has denounced the memory of those people,” Pivovarov wrote.

нев 111:полтав 3-3Unaware of the Last Address plaque on the wall next to her, a woman walks down Poltava Street, just off Old Nevsky, on a sunny day in October.

MP Milonov argues his former aide’s opinion is his personal opinion. Milonov, on the contrary, welcomes memorial plaques, but he does not like the fact that, currently, ordinary citizens have taken the lead in putting them up. He believes it would be better to let officials take the lead.

“I don’t think it would be good if there were lot of plaques on every house, as in a cemetery. The right thing to do, probably, would be to adopt a government program. The plaques would be hung according to the rules of the program, and protected by the law and the state,” argues Milonov.

нев 111:полтав 3-5When you step back ten or fifteen meters, the same plaque is nearly invisible to the naked eye.

He argues what matters most is “remembering the grandfathers of the people who now call themselves liberals squealed on our grandfathers and shot our grandfathers. Our grandfathers did not squeal on anyone. They died on the Solovki Islands. They were shot in the Gulag and various other places.”

Milonov admits different people wrote denunciations, but he believes the International Memorial Society has deliberately politicized the topic, using the memory of those shot during the Terror for their own ends. The MP argues that erecting memorial plaques should not be a “political mom-and-pop store.” Milonov fears chaos: that today one group of people will put up plaques, while tomorrow it will be another group of people. To avoid this, he proposes adopting official standards.

разъезжая 36-подъезд.jpgA Last Address plaque in the doorway of the house at 36 Razyezhaya Street, in Petersburg’s Central District.

​On the contrary, Evgeniya Kulakova, an employee of Memorial’s Research and Information Centre in Petersburg, stresses that Last Address is a grassroots undertaking. An important part of Last Address is the fact that the installation of each new plaque is done at the behest of private individuals, who order the plaques, pay for their manufacture, and take part in mounting them. Kulakova regards Milonov’s idea as completely unfeasible, since the municipal authorities have their own program in any case. The program has its own concept for commemorating victims of political terror, and the authorities have the means at their disposals to implement it. Last Address, however, is hugely popular among ordinary people who feel they can make their own contribution to the cause of preserving the memory of the people who perished during the Terror.

соц 6-улицаA Last Address plaque in the archway of the house at 6 Socialist Street, in central Petersburg.

Kulakov thinks it no coincidence Mokhnatkin has brought attention to the Last Address plaques, since previously he had taken an interest in the Solovetsky Stone in Trinity Square. Apparently, his actions are part of a campaign against remembering Soviet state terror and the campaign against Memorial.

Many Memorial branches in Russia have been having lots of trouble lately. In particular, Memorial’s large annual Returning the Names ceremony in Moscow was nearly canceled this autumn, while the Petersburg branch has been informed that the lease on its premises has been terminated. It has been threatened with eviction as of January 6, 2019.

черняховского 69-домThree Last Address plaques, barely visible from the middle of the street, on the house at 69 Chernyakhovsky Street, near the Moscow Station in Petersburg.

Historian Anatoly Razumov, head of the Returned Names Center, supports the concept of memorial plaques. He stressed they are installed only with the consent of building residents and apartment owners, and ordinary people welcome the undertaking. Moreover, people often put up the plaques not only to commemorate their own relatives but also to honor complete strangers whose lives have touched them. Razumov says people often find someone’s name in the Leningrad Martyrology. They then get written confirmation the person lived in a particular house. Only after collecting information about the person and obtaining the consent of the building’s residents do they erect a plaque.

“In Europe, such things are always under the protection of municipal authorities. I think we should also be going in the other direction: local district councils should do more to protect the plaques instead of saying they don’t meet the standards and they’re going to tear them down,” the historian argues.

Razumov argues that inquiries like the inquiry about the legality of the memorial plaques are served up under various attractive pretexts, but they are always based on the same thing: the fight against remembering the Terror. Some people want to preserve this memory forever, while others do everything they can to eradicate it by concocting hybrid or counter memories.

черняховского-все таблички.jpgThe plaques at 69 Chernyakhovsky Street commemorate Vasily Lagun, an electrician; Solomon Mayzel, a historian of the Arab world; and Irma Barsh. They were executed in 1937–1938 and exonerated of all charges in the late 1950s and early 1960s.

Boris Vishnevsky, a member of the St. Petersburg Legislative Assembly, argues that Last Address and Immortal Regiment are the most important popular undertakings of recent years. He is outraged by attempts of officials to encroach on them. He says he has written an appeal to the city’s urban planning and architecture committee.

Translation and photos by the Russian Reader

House of Cards

mir-sberbankA disembodied hand proudly holding a Sberbank-issued Mir card. Photo courtesy of PressTV

Central Bank Preparing for Cutoff of Some Banks from International Payment Systems
Regulator Asks Small Banks to Have Backup Intermediary Able to Service Their Cards
Anna Yeryomina
Vedomosti
December 6, 2018

The Russian Central Bank has asked small banks to find a backup partner that would be able to service their bank cards. This would be an asset if their current intermediary banks were cut off from international payment systems.

The Central Bank is concerned with the continuity of card transactions in banks that work with payment systems indirectly, that is, via an intermediary bank. The regulating authority has advised these indirect clients of payment systems to contract with another bank, besides their primary intermediary bank, that could supply them with access to card payment systems. Five bankers confirmed to us they had received the memorandum.

The memorandum also says the contract should provide for a test exchange of information when integrating with the new intermediary banks. It also states payment systems should draft an action plan and recommend it to their participating banks.

The major intermediary banks are Payment Center Credit Union, Uralsib, VTB Bank, Rosbank, and Promsvyazbank.

A Central Bank spokesperson stressed the memorandum was only advisory, but it was based on international recommendations for risk management in payment systems. The need for banks to contract with backup intermediary banks is not so obvious. According to several of its recipients, in early autumn the Central Bank had sent banks a letter urging them to draft plans to ensure the continuity of payments, but it had not recommended any specific measures.

Switching intermediary banks is a time-consuming, expensive process that takes between three to six months, notes Maya Glotova, director of Kartstandart, a processing center that partners with Payment Center Credit Union. The most high-profile case occurred in 2013 after Master Bank’s license was revoked. As Glotova recalls, Master Bank had functioned as an intermediary bank in payment systems and provided payment processing services. Small banks had to halt their operations for several weeks, and several of them had to leave the payments business. Glotova estimates it would cost a single bank more than $100,000 to switch intermediary banks in the three payment systems.

Intermediary banks had little to say about the memorandum. A spokesperson at Promsvyazbank promised to follow the Central Bank’s recommendations, while a spokesperson at VTB Bank said their own intermediary program had worked well.

Several bankers believe the Central Bank is hedging not only against the collapse of intermediary banks but also potential sanctions, which are fraught with the possibility that intermediary banks would be cut off from Visa and Mastercard, as occurred in 2014 and 2015. The United States has been drafting a new set of sanctions that could affect major banks. Payments within Russia would not be affected: these transactions are processed by the National Payment Card System (NSPK). Russian bank cards, however, would not function abroad. (A spokesperson for NSPK, which operates the Mir payment system, said they had not received the Central Bank’s memorandum.)

VTB Bank had drafted a plan to counter sanctions, its president, Andrei Kostin, told the TV channel Rossiya 24 in October.

“We have been mapping out with both the government and the Central Bank how to avoid the consequences, especially for individuals and companies. I think we can overcome them. I don’t think the sanctions will be wholesale and directed against the entire financial sector,” Kostin said.

Translated by the Russian Reader