Nationalizing Russia’s Middle Class

OLYMPUS DIGITAL CAMERAIn the last decade or two, Russia’s monied classes and middle classes have been wildly enriched or merely kept afloat by cheap, disenfranchised labor from Central Asia. I took this photo on April 10, 2017, in the container village inhabited by Central Asian migrant workers building Petersburg’s so-called Marine Façade on 476 hectares of reclaimed land in the Neva Bay next to Vasilyevsky Island.  

Nationalizing the Middle Class: Society’s Previously Most Dynamic Group Seeks to Rely on the State
Vladimir Ruvinsky
Vedomosti
June 26, 2019

Analysts at Alfa Bank have concluded Russia’s middle class has been shrinking. More importantly, it is being nationalized, which distances the prospects of qualitative economic growth.

What constitutes the Russian middle class is mostly a philosophical question: a specific definition of it has never gained a foothold. Some researchers argue it never emerged in the social sense and remains akin to a folklore character. Other researchers, focusing on income levels, have claimed to have sighted it in Russia, but in recent years their observations have been suffused with sadness.

In a new report, “The Russian Middle Class: Lowering the Appetite for Risk,” analysts at Alfa Banks have defined the middle class as a group of people whose monthly income is between 39,000 and 99,000 rubles per person [i.e., between 546 euros and 1,387 euros at current rates], that is, 110–250% of the median income in Russia, and who are able to buy durable goods.

In the noughties, the middle class grew. By 2014, it constituted 37% of the Russian populace. In four years, however, all of this growth had been forfeited. In 2017, only 30% of the populace could be counted as middle class, which was less than in 2004 (34%). Simultaneously, the group’s share in the populace’s total income dropped from 48% in 2014 to 39% in 2017.

The middle class has lost its economic clout, becoming more vulnerable. In some ways, it has lost more than other classes. Alfa Bank’s analysts write that the middle class’s real incomes stagnated in the ten-year period between 2008 and 2018, while the incomes of the country’s most impoverished groups rose by four percent, and the incomes of the wealthiest Russians increased by eleven percent. An indicator of the middle class’s fading fortunes was that its core spent three percentage points more on groceries during the ten-year period, just like the country’s lower classes, while its expenditures on holidays and education dropped by one to two percentage points. In 2014–2018, the middle class’s loan payments grew by 20% in nominal terms. This is probably why it has not been involved in the new consumer loan boom.

Simultaneously, the middle class has been undergoing nationalization. It is a commonplace the middle class consists of people independent of the state and living on their own means. Its progress has been regarded as a vital driver of economic growth, including in Russia.

Its potential, however, appears to have weakened. Whereas in 2003 approximately ten percent of the middle class was employed in the state sector, this figure had grown to fifteen percent in 2017, according to Alfa Bank.

This is not a disaster yet, especially since middle-class employment in commerce, the restaurant business, finance, real estate, and health care has grown. However, the middle class’s share of business income has decreased more than it has among the general populace.

Traditionally considered the core of civil society, the middle class has come to rely more and more on the state for employment, claims Natalya Orlova, Alfa Bank’s chief economist. Even if the middle class does not shrink anymore, its nationalization worsens the prospects for Russia’s progress, since its ranks will be replenished by people who do not power the economy but count on the regime for their livelihoods.

Translated by the Russian Reader

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Russian Import Substitution Blues

cherry coke 2018“Try Ripe Cherry Coca-Cola.” Billboard, Petersburg, July 28, 2018. Photo by the Russian Reader

The Consequences of Countersanctions: Food Import Embargo Makes Russian Producers More Inefficient
Vladimir Ruvinsky
Vedomosti
June 25, 2019

Vladimir Putin has extended Russia’s food embargo until the end of 2020, but the policy’s positive effect has dried up. Instead, it has been making Russian producers less efficient and driving up prices. The Kremlin imagined an embargo would be a good response to western sanctions over the annexation of Crimea, but Russian consumers have had to foot the bill.

Putin’s ban has been in effect since August 2014. It prohibits the import of meat, fish, and dairy products from the United States, the European Union, Canada, Australia, and Norway. During his televised “direct line” to the nation the other day, Putin explained that, over the past five years, the sanctions those countries imposed on Russia had led to the loss of $50 billion for the Russian economy since 2014. The west, however, had lost more. According to Putin, the EU had lost $140 billion, while the US had lost $17 billion. Apparently, Russians should take heart knowing they have not been the main losers in the sanctions war.

First, however, the economies of the EU and the US are many times bigger than Russia’s, so, in fact, Russia has lost the most. Second, the losses do not boil down to simple arithmetics. Third, the subject of countersanctions has not really been discussed. Natalya Volchkova, director of applied research at the Center for Economic and Financial Research (CEFIR), has calculated the protectionist policy costs every Russian 2,000 rubles a year: this is the sum total of what we overpay for products in the fourteen categories affected by the countersanctions. She argues that, out of this sum, 1,250 rubles go to Russian producers and 500 rubles go to companies importing food from countries not covered by countersanctions, while the toll on the Russian economy’s efficiency amounts to 250 rubles per person per year.

Full import substitution has not been achieved: suppliers from the sanctioned countries have been replaced by suppliers who work with other countries, who often charge more for their goods. Restricting competition was meant to give Russian agriculture a leg up, and some domestic producers have, in fact, increased output. According to Rosstat, retail food imports decreased from 34% in 2014 to 24% in 2018. Since 2016, however, the dropoff in imports has trailed off. Volchkova complains that most Russian import-substituted goods have increased in price. They are produced by businesses that had been loss-making. This is the source of the overall inefficiency.

Natalya Orlova, the chief economist at Alfa Bank, divides countersanctions into two phases. When they are implemented they have a positive effect, but over time the risks of negative consequences increase.  The only good option on the horizon is the lifting of the sanctions. When it might happen is not clear, says Orlova: it is currently not on the agenda. When it does happen, however, it will be bad news for Russian producers. Countersanctions have helped major players increase their shares of the domestic market. They have become more visible in such cushy conditions but less competitive as well. The longer the conditions are maintained, the less ready the Russian agro-industry will be to face the harsh competition. When the walls come tumbling down, we will see again that European producers are more sophisticated technologically.

Translated by the Russian Reader

Valentin Urusov: A Worker’s Struggle (August 2012)

One of the most egregious frame-ups on drug charges in Russia in recent memory was the case of Yakutia trade union activist Valentin Urusov.

The weekly magazine Russian Reporter told Urusov’s story in August 2012, after he had been in police custody and then prison for over three years.

The article was, in fact, part of a second international campaign, led by Russia’s independent trade unions, to persuade the Russian authorities to release Urusov from prison.

This time around, their efforts paid off, and after his release, Urusov was awarded the Arthur Svensson Prize, the “Nobel Prize” of international trade unionism.

When I posted the following translation of the Russian Reporter article on January 25, 2013, Urusov was still in prison, doing time for crimes everyone who knew anything about the case knew he had not committed.

It is silly to compare these things, but I think Urusov’s story is much more horrifying than the much more recent story of Meduza reporter Ivan Golunov. First, it happened at the end of the earth, geographically speaking. Second, Urusov’s supporters had neither the social capital or the numbers to instantly launch a widespread moral panic to secure his immediate release.

Powerful men, including the men who run Alrosa, Russia’s state-owned diamond mining company (whose board at the time included Alexei Kudrin, laughably regarded as a “liberal” by people who do not want to know any better), wanted Urusov to go down, and so he went down, despite the absurdity of the charges against him, despite the fact that the police officer who engineered his frame-up was later found guilty of fraud and abuse of authority, and despite the fact that the Yakutia Supreme Court overturned his conviction in May 2009. (It was reinstated by the original, lower court a little over a month later.)

In fact, although Urusov’s story is a central episode in the recent history of independent trade union activism in Russia, I would wager a large amount of money that the vast majority of Russians have never heard of Urusov and his horrifying ordeal at the hands of Russian “law enforcement.” || TRR

__________________________

A Worker’s Struggle
How an attempt to create a real labor union lands you in a penal colony
By Andrei Veselov
Russian Reporter
August 23, 2012

It is now acceptable to talk about political prisoners in Russia—it has become good form. But for some reason, bankers and financiers now and again end up on lists of “prisoners of conscience.” Their troubles are discussed in great detail, and there is sincere sympathy for them. Little is said about the fact that for the last four years Valentin Urusov, a rank-and-file worker, has been doing time at the penal colony in Verkhny Vestyak, Yakutia, for attempting to establish an independent labor union. Russian Reporter has decided to rectify this.

“When they drove off the road into the taiga, I hear, ‘Take out the plastic sheet so nothing gets splattered.’ That, as they say, is when I bid farewell to life, calmed down and resigned myself. I lay on the floor of the car and waited. Hands cuffed behind my back. They pulled me out, put me on my knees and fired three shots over my head. But they didn’t kill me.”

urusov

Valentin Urusov. Photo by Aleskey Maishev for Russian Reporter

The senior officer for education at the colony listens attentively to my conversation with Valentin Urusov, a prisoner at Penal Colony No. 3 in the Sakha Republic (Yakutia) and former leader of the independent labor union local in the town of Udachny. After the interview, the officer comes up to me and says, “You know, maybe he is really innocent. But if five percent are wrongly convicted in America, what can you expect from us?”

“What a terrific job!”

The idea that a full-fledged rather than puppet labor union could emerge in Udachny occurred to Valentin, a rank-and-file employee at Almazenergoremont, a subsidiary of the local mining and processing plant, after the scandalous “affair of the sandblasters.” Urusov himself is a local man, although he was born in Karachay-Cherkessia: he has lived in Yakutia since he was two years old and worked here since he was sixteen, mostly at facilities run by the state-owned diamond mining company Alrosa. There are few other options here.

Udachny is a town fourteen kilometers from the Arctic Circle, and one of the three main sites, along with Mirny and Aikhal, where diamonds are mined. Among the workers involved in the mining process are the so-called abrasive blasters or, more simply, sandblasters, whose job is to work solid surfaces with an abrasive, high-pressure stream of air pumped through a hose. It is not a job that is good for the health of the worker, to say the least: pulmonary silicosis is the occupational illness. Neither a safety helmet nor a [hazmat] suit, like cosmonauts wear, helps.

In 2007, a team of these sandblasters demanded overtime pay, which at that time went chronically unpaid. The workers filed a lawsuit and even managed to win their case: the Labor Code was clearly on their side.

“A special commission arrived in Udachny to arbitrate the dispute directly,” explains Andrei Polyakov, an Alrosa spokesman. “The company agreed with the validity of the claims, an agreement settling all grievances was signed, and compensation was paid out. The managers who were in direct dereliction of their duties were punished.”

This happened, it is true, but later. The main scandal occurred when the dispute was still being settled: the semi-official labor union at Alrosa, Profalmaz, negotiated not on the side of the workers, but on behalf of . . . management. This provoked astonishment and outrage in Udachny.

So, on the one hand, Profalmaz’s authority was undermined. On the other, the feeling arose that one’s labor rights could be protected—moreover, in a civilized manner, through the courts and arbitration, the European way, so to speak.

“I just found it interesting. I’m a generally curious person, and that is probably why I’m in prison,” jokes Valentin. “I went online and came across Sotsprof, a trade union association that is an alternative to the FNPR (the Federation of Independent Trade Unions of Russia). I wrote an email to its leader, who was then Sergei Khramov. He replied by sending me documents on how to create a new union.”

“But why a new one?” I ask. “Was it really impossible to make things work within the existing union?”

“All [organizations] belonging to Mikhail Shmakov’s FNPR, including Profalmaz, are not labor unions but appendages of personnel departments. All they do is allocate vacation vouchers. They will never oppose management.”

“Was the only problem overtime and the fact it wasn’t being paid then?”

“Of course not. There were a lot of problems! And then, you understand, this is very difficult work: you have to work night and day, and on holidays, and take someone else’s shift, whatever management says. But you get paid for an eight-hour day. And then there are the working conditions and safety. In the department where I worked, the equipment should have been scrapped twenty years ago, at best. There are a lot of accidents as a result. The ones that were made public were like a speck in a big heap of sand. I got a big piece of flesh taken out of my hand, and that was nothing. Of course, it’s hard to hush up fatal incidents. But fractures and injuries are different. There are thousands of them and nobody cares. It was a shame that the company was so wealthy, that it built five-star hotels and all kinds of business centers, but scrimped on us.”

In Moscow, I met with Sergei Khramov, to whom Valentin had sent the email and who had instructed him on creating a union local.

Udachnaya_pipe

The open pit of the Udachnaya Diamond Mine, Russia, from a helicopter, July 17, 2004. Photo by Alexander Stepanov

“Add to this the aggressive water in the gully where they mine diamonds.” Khramov hands me a complaint from Udachny miners addressed to Vladimir Putin. “It’s nearly acid and it penetrates their rubber suits. Here they write, ‘We don’t know what it is we are breathing when the ventilation equipment is lubricated with used oil.’ Or there’s this one: ‘Cold, unheated air is pumped into the mine, even in winter.’ And it’s minus forty-fifty in winter there. What a terrific job!”

How to frighten a republic’s leadership

Right at this time, in August 2008, the so-called Siberian Social Forum was held in Irkutsk. “Free” trade unions were among the forum’s founders. Urusov’s new acquaintances invited him there, too. In fact, it was a small event, attended by no more than two hundred people, but it made a strong impression on Valentin.

“[Civil rights lawyer] Stanislav Markelov, who was later murdered in Moscow, lectured on legal issues. He was a very competent, energetic, lively man—it’s a shame [what happened] to him. He talked about how to act in this or that situation so as not to set oneself up and achieve [your goals] at the same time. And then the call came. Problems with pay had begun at the second motor depot, and the guys had decided to organize a strike.”

Events unfolded rapidly. In a small suburban home outside of Udachny, Urusov met with motor depot drivers and mechanics in an almost conspiratorial atmosphere and began persuading them to join the union. Armed with new knowledge, Urusov tried to prove to his comrades that if a strike began they would immediately be fired for trumped-up excuses, and there would be no one left to work on getting them reinstated. During the second “conspiratorial” meeting, sixty-two people joined Urusov’s union local.

There were two options as to how to proceed. First, a classic strike. But the Udachny miners had no experience with strikes, and therefore they could easily have been fired for “absenteeism.” And even if they had managed to get fired workers reinstated, they would have lost the initiative, and the remaining workers would have been demoralized. The second option was a hunger strike. Everyone goes to work; there is no downtime and, therefore, nothing for management to complain about. But demands are loudly declared and, basically, a scandal erupts. They chose the second option.

“At first, [management] demonstratively paid no attention to us. Then they see we aren’t going to back down. That is when they began dropping by,” Urusov laughs. “People came from the police, from plant security, from the company itself, trying to talk us out of it. In exchange for setting up a conciliation commission, we suspended the hunger strike.”

However, the commission was unable to achieve a compromise. Management made no concessions.

“We decided to hold an open union meeting right on the town’s central square. It wasn’t a [protest] rally, and by law, we weren’t required to notify anyone. On the first day, all the motor depot workers came, plus another two hundred people. The director of the plant came and tried to say something. But he couldn’t answer a single question and left. And right there on the square, people began joining the union. By the end of the day, something like three hundred people had joined. We decided to repeat the meeting. The second time, more than eight hundred people gathered. There was no rioting and no laws were broken. We didn’t even have a loudspeaker. By evening, I remember it even now, 1,012 people had joined the union.”

We have to remember that Udachny is a very small town with a population of slightly over ten thousand, and such developments outright scared both the local authorities and certain people in high places. The situation was headed towards a citywide strike and a potential stoppage of diamond mining in the Udachnaya kimberlite pipe—the largest in the world, by the way.

“We have enormous enterprises in our country. Often [they] monopolize their regions, and so a strike or simply a large [industrial] action could freeze an entire industry,” explains Alexander Zakharin, Urusov’s friend and colleague, and chair of the Sotsprof local in Surgut. “And if you organize such an action, you risk running into a brutal response. From the owners and from the authorities. But it happens that milder measures don’t work. Then you need to choose: take a risk or keep your mouth shut.”

At Alrosa itself, the union’s activities in Udachny are seen primarily as an attempt at self-promotion.

“A media effect—promoting awareness of Sotsprof and the number of times it got mentioned in the press—was probably the main objective for some of its executives,” argues company spokesman Polyakov.

As during the [dispute in 2007], Profalmaz adopted a peculiar position in the new confrontation. Its leader, Il Tumen (Sakha Republic State Assembly) deputy Pavel Tretyakov, not only failed to help the workers but also asked the republic’s leaders to reason with the “rebels.” Profalmaz’s executive committee sent an appeal to the President of Yakutia, Vyacheslav Shtyrov, and FNPR head [Mikhail] Shmakov asking them to prevent “incitement of a conflict.”

Tretyakov later, in a similar vein, told Vasily Gabyshev, the Mirny town prosecutor, “It’s surprising that law enforcement authorities didn’t respond to attempts by various persons to artificially incite conflicts, to calls for illegal hunger strikes and [labor] strikes.”

The Yakutia presidential administration composed a panicked memo on the basis of Tretyakov’s appeals. The President instructed law enforcement agencies to figure out what was happening. (Russian Reporter has all these documents in its possession.) What exactly Shtyrov wanted from the security services is still unclear, but the local office of the FSKN (the Federal Drug Control Service) reacted to the situation, let’s say, in an extremely original way.

Udachny—Aikhal—Mirny

“Then what happened? Then the third of September came. I was leaving my place. I heard a car door open. I instinctively turned around.  It was a simple UAZ[-452], a “Pill” [i.e., a van] with tinted windows. Out came three guys in leather jackets and jeans with shaved heads. I didn’t know them. I immediately knew something was wrong and ran. They caught up to me and knocked me down.”

“Did they show you any identification?”

“Absolutely nothing. They restrained me and brought me to the van. First, they handcuffed me with my hands in front. Later, in the van, they tried to cuff me with my hands behind my back. I clasped my hands and held on. They pulled and pulled, broke my finger, and finally handcuffed my hands behind my back. They threw me to the floor and one of them sat on top of me. We drove for a long time.”

It subsequently emerged that Lieutenant Colonel Sergei Rudov, the head of drug control in the Mirny District, had personally led this “operation.” In order to apprehend Urusov, he and his subordinates had driven six hundred kilometers [to Udachny]: [his] “Hunter” [i.e., jeep] was waiting for the “Pill” on the outskirts of the town. In court, Rudov claimed to have had “operational information” that Urusov was involved in selling drugs.

“We asked the court to confirm or refute Rudov’s testimony, and requested written confirmation that the ‘operational information’ had been registered in the police operational ledger,” says Urusov’s attorney Yevgeny Chernousov, a former police colonel who specializes in narcotics cases. “We didn’t demand that this information itself or its source be revealed. We just wanted to confirm that the information had existed. The court did not fulfill our request. There is thus no evidence of its existence. In light of this, Rudov’s unwarranted trip to Udachny and back seems more than suspicious.”

Valentin says that Rudov was on the phone with a certain Alexei Yurevich or Yuri Alexeyevich the whole time, reporting to him that they had “taken” Urusov and wanting to know what to do next. After one of these conversations, the van pulled off into the taiga. There the narcotics officers spread out plastic sheeting and fired a few shots over Urusov’s head, recounts Urusov.

“They were shooting the whole time,” says Valentin. “They shot at birds, and at trees. Apparently, they wanted to frighten me. We had already driven far from town, and basically, they could have done whatever they wanted with me.”

At a fork in the Udachny-Aikhal-Mirny road, the car of Grigory Pustovetov, head of security at the Aikhal mining and processing plant, drove up to Rudov’s group “entirely by accident.” Only then did the police decide to search Urusov for drugs. Pustovetov and his driver acted as official witnesses. The search was a complete success: sixty-six grams of hashish oil were found in the union activist’s pocket.

“A number of questions arise,” says an outraged Chernousov. “First, when the arrest happens in one place, but the [official] search with witnesses happens dozens of kilometers away, it’s a clear sign that the drugs could have been planted. Second, if the head of one of a company’s security units serves as a witness when an employee in a labor dispute with that company is being searched, it also gives rise to the most unpleasant thoughts.”

Urusov himself claims the hashish was planted on him in the car after the fake execution. He says that hash oil was specially applied to his hands so that traces of the drug would later be detected when his hands were swabbed.

“When we were organizing the miners’ union in Neryungri (a major industrial center in Yakutia), I was reminded of this story,” says Valery Sobol, first secretary of the Neryungri Communist Party City Committee. “I won’t name the names [of the persons involved] because I live there. Employees of the so-called organs [i.e., the security services] invited me to a pub. We hung out there for a while. Then at another place, and then another. I myself didn’t drink, [but] they drank a lot. And, as if it was an afterthought, though they had summoned me there [to deliver just this message], one of them says, ‘You remember that thing with Urusov? You also better not be naughty. If anything happens, we’ll plant a gun [on you] or whatever.’ And then he laughed. Like it was a joke.”

Several months ago, Sobol nearly won the election for the head of the Neryungri District. He came in second by only a small margin. And if a potential district head can be threatened almost openly, then the kidnapping of a simple working stiff like Urusov, who has no political backing at all, does not seem farfetched.

Sobol and I sat in the kitchen of Sergei Yurkov, an engineer, businessman, and leader of [an organization called] the Russian Community of Yakutia. He met Urusov in a pre-trial detention facility. I ask him how he had ended up there.

“My story is simple. Transneft was building a pipeline here. They didn’t want to pay normal wages to the locals. So when the locals balked, they brought in rural Chinese willing to work for peanuts and live in barracks. When we organized a rally and put up flyers saying this wasn’t how things were done, I was arrested under Article 282 of the Criminal Code for ‘incitement of interethnic hatred.’ What does ‘incitement’ have to do with it? I was sentenced to two years in prison.”

Drugs via the Special Courier Service?

It must be said that the theme of drugs, with which they decided to shut Urusov up, did not arise by accident. Drug use is a local scourge. And this makes sense. There are few other ways to have fun in small towns and villages in the North. That is why on the surface Urusov’s prosecution under a drug statute was meant to have appeared more or less plausible.

“It’s a big problem here, as is drinking,” says Maxim Mestnikov, a Sotsprof spokesman in Yakutia. “When Friday comes, hang onto your head: there is a deluge of knife wounds [and] head injuries.”

But Urusov, in fact, never had the reputation of a mischievous drug addict. In his youth, at the beginning of the 2000s, he and a few friends created an organization called Youth for an Athletic Movement-North, whose activists patrolled the city monitoring places where drugs were sold. Eventually, the mayor of Udachny even suggested that they create a branch of City Without Drugs on the line of [Yevgeny] Roizman’s [controversial anti-drugs organization].

The relationship between certain local [Alrosa] subcontractors and drug dealers, however, may require a separate investigation. Russian Reporter has in its possession an official memo written by Sergei Denisov, the predecessor of [Grigory] Pustovetov (the man who acted as a witness during the police search of Urusov) as head of security at the Aikhal mining and processing plant.

The memo is addressed to Yuri Ionov, former vice-president for security at Alrosa, and it deals with the overall crime situation in the area. Among many others, the memo contains the following passage: “It is impossible to ignore the fact that a drug trafficking network has developed in the village. According to operational information from the Mirny office of the FSB, the delivery of drugs is carried out by the [Federal] Special Courier Service, with which Alrosa has a contractual relationship for the transportation of diamonds.” Moreover, the memo shows that confidential and friendly relations exist between certain high-ranking Alrosa executives, law enforcement officers, and outright criminals.

“I’ll say this: the criminal world is generally in first place here,” [Sotsprof’s] Mestnikov says with conviction. “In this respect, it is still the nineties here. Something needs to be done so you go to them and they handle it. And this could also have happened with Valentin. Perhaps it was better that they sicked the cops on him and not the wise guys.”

After he presented the memo to Ionov, Denisov was forced to resign and move to Novosibirsk.

“No decision was taken on my report. Ionov showed me the door and said he didn’t need any unnecessary problems. As for Urusov, I can say that it’s a pure frame-up,” [Denisov says].

In May 2010, Lieutenant Colonel Rudov was sentenced to three years of probation for fraud and abuse of authority. According to [Urusov’s other] lawyer Inga Reitenbakh, “He was charged with receiving 2.5 million rubles from Alrosa for the purchase of an apartment in Mirny.” The investigators and Rudov himself categorically denied any connection between this case and the Urusov case. Nevertheless, the funds were allocated to Rudov shortly after Urusov’s arrest. According to Russian Reporter’s source, Rudov now works as a procurements specialist in the repair and construction office at the Mirny mining and processing plant.

“He shoots before he thinks”

Urusov was also unlucky in that he had set about creating a Sotsprof local in Udachny exactly when the union’s leadership had entered the complex process of building relations with the Kremlin.

“Beginning in 2007, people from the Russian Presidential Administration began to pressure us very actively,” says Sergei Khramov. “We were strongly recommended to name Sergei Vostretsov from the United Russia party as [our] new leader. I had good reason to believe that if we didn’t, we would simply be destroyed. And I figured, the heck with him, let Vostretsov be the leader and do public relations, while I, as Sotsprof’s general labor inspector, will do the day-to-day work.”

The first outcome of this “castling” move was that the formerly oppositional Sotsprof supported Dmitry Medvedev in the 2008 presidential elections.

”And when they began pressuring Valentin, Vostretsov told me not to make any unnecessary noise, because he would fix everything anyway. I knew that the Vostretsov family—his younger brother was the youngest FSB colonel in the country—was very close to General Alexander Mikhailov, the then-director of the Federal Drug Control Service. I thought that Valentin’s case would be decided with a single phone call.”

For the sake of fairness, we should note that complicated events were underway at the Federal Drug Control Service at the time. Viktor Ivanov had replaced Viktor Cherkesov, who had famously publicized the existence of a war within the security services in an article [entitled “We Can’t Let Warriors Turn into Traders”]. In October, General Mikhailov left the FSKN as well. There was simply no one left to make that “single phone call.”

Subsequently, Vostretsov pushed Khramov out of Sotsprof altogether, and the organization became completely loyal to the Kremlin.

In December 2008, the Mirny District Court sentenced Valentin Urusov to six years in prison for drug possession. Vostretsov tried to fight it, but more from behind the scenes: he met with officials from the Yakutia administration and officials of the security services, and even, allegedly, raised the issue of Urusov with Medvedev. It was no use.

Khramov, in contrast, acted publicly. It was he who got the famous lawyer Chernousov to take the case. Chernousov convinced the Yakutia Supreme Court to overturn the verdict (on procedural grounds: the judge had not retired to chambers while considering a motion to dismiss), after which the case was retried.

“I had absolutely no illusions,” Valentin smiles. “After the Supreme Court decision, many people thought I would be exonerated.  I was certain of the opposite, that now I would be ‘shut down’ for sure. This was evident from the faces of those in the courtroom at the second trial. After the first hearing, I gathered my belongings, put on the track suit I’d been wearing while traveling between pre-trial detention facilities and prisons, and from then on I went to hearings in this outfit.”

In Udachny, there is a small newspaper with the humorous name of Gorodok [“The Burg”], edited by a local journalist named Alla Demidova. After Urusov was released, she published a short article. Immediately, the very same day, she got a call from Maxim Dobarkin, one of the police investigators who had participated in Urusov’s “arrest.”

“Dobarkin called me at home,” says Demidova. “Drunk. He told me how many bullets he would put in me, said that ‘he shoots before he thinks,’ that he knows where I live, and that he would ‘get’ me ‘whether in Udachny or in Sochi.’”

“What did you do?”

“I filed a complaint with the FSB.”

“Did they respond?”

“They responded by sending me a one-line answer: ‘There is no threat.’”

Dobarkin, however, was promoted to the rank of lieutenant colonel and together with Rudov took command of the Federal Drug Control Service’s interdistrict department in Mirny.

Another Yakutia journalist, Aitalina Nikiforova, was also threatened for covering Urusov’s case.

“I reported on every hearing during the trial from the courtroom. Rudov called me over during one of the hearings and said word for word, ‘Your oldest daughter is fifteen. It would be interesting to see how you’ll defend Urusov after some old drug dealers drug her up and pass her around.’ This definitely sounded like a threat. At the time I was working as editor-in-chief at the only independent newspaper in Mirny, Moya Gazeta. The only printing plant in town refused to print us. Local Federal Drug Control Service agents began coming to my house, allegedly because of anonymous tips that I also used and dealt drugs. Some of [the agents] were insolent and rude; others were ashamed because the last visits took place when I was six to seven months pregnant with my third child.”

After that Nikiforova decided it would be safer to leave her hometown and move to Yakutsk.

In June 2009, the Mirny District Court delivered a new verdict in the Urusov case that completely upheld the previous verdict, but in September the Yakutia Supreme Court lightened Urusov’s prison sentence by one year. The Sotsprof local in Udachny had been crushed. The second motor depot has been completely shut down. The company has had no more problems with the workforce in this town.

“Valentin, who do you tend to blame for what happened to you?” I finally asked.

“Alrosa is a state-run company. It is owned by the government, by the state, so . . . you understand.”

1345633951216469_big_photo

Valentin Urusov. Photo by Aleskey Maishev for Russian Reporter

***

“Our government is fascist,” Yurkov, the leader of the Russian Community of Yakutia, suddenly declares, and it sounds quite equivocal.

Sobol, the man who missed becoming head of the Neryungri District by a heartbeat, turns and stops smoking next to the window.

“We have to be precise with our terms: neither Nazi nor nationalist, but precisely fascist as it is understood in Mussolini’s theory of the corporate state, as Franco, Salazar, and even Pinochet understood it. In our country, the authorities and big business are intertwined in a ball. And anyone who gets in their way is crushed. Here in Yakutia, in the provinces, it’s just more clearly felt.  But it’s the same thing all over the country.”

Translated by Sean Guillory and Chtodelat News. Slightly different versions of the same translation were published by n+1 and Sean’s Russian Blog.

Sergei Shelin: Isolationism Has Corrupted Russia

vhuo87jzsh8j2vtaThe label from a bottle of Port Wine 777. Courtesy of Collectionerus

Isolationism Has Corrupted Russia
The Sukhoi Superjet 100’s crash shows what happens when a country isolates itself from the world while trying to keep up with the 21st century’s Joneses 
Sergei Shelin
Rosbalt
May 7, 2019

Only Murmansk Region announced an official day of mourning for the people who perished at Moscow’s Sheremetevo Airport on May 5. There was little expectation a national day of morning would be announced, since the protocol for such things, adopted by the country’s leaders for their own convenience, do not stipulate a national day of mourning after disasters of this magnitude. It is thus neither a matter of heartlessness nor the upcoming Victory Day holiday.

The Sukhoi Superjet 100s have not been grounded, however. True, the authorities are currently pushing the hypothesis the crash was caused by pilot error. This is a more intelligible and attractive explanation than the hypothesis that was cooked up just the other day as a diversion, the one about how some passengers, allegedly, prevented other passengers from escaping because they were trying to get their luggage out of the burning plane. Nothing has yet been proven, however, although hardly anyone would argue with the fact that the first passenger jet designed and built in Russia since the Soviet Union’s collapse has been a failure.

The Super Jet was produced long before the current falling out with the west. Its designers made generous use of imported parts, hoping the plane would sell like hotcakes abroad. Today, the few foreign airlines whom Sukhoi managed to persuade to purchase the planes, for example, the Mexicans, complain about the Super Jet’s unreliability, design flaws, and delays in procuring spare parts. It would seem they are looking for a good excuse to stop flying the planes.

The flip side of these failures has been the attempt to force Russian airlines to operate the plane, especially Aeroflot. What would grounding the plane mean now? It would be tantamount to bringing the entire undertaking to a close. Clearly, the Russian state’s ambitions and collective self-interest have coalesced to oppose this decision. The Super Jets are still flying, and we can only hope everything will work out for the best.

Such semi-Russian, semi-foreign collaborations are feasible and normal if the general contractor is not having a spat with the outside world, and airlines are free to choose which airplanes they fly. This was not quite the case from the get-go, but when Russia’s quarrel with the west gained momentum, all the worst aspects of the venture elbowed their way to the fore, turning into a self-sustaining process.

The deeper Russia sinks into isolation, the worse the links in all business chains function, while state protectionism constantly increases for anything that resembles import substitution or at least apes it. The number of failures and breakdowns in all parts of Russian society, some of them involving fatalities, sometimes without them, thank God, inevitably grows.

What is the difference between yesteryear’s Soviet isolationism and the current Russian isolationism? The former was preprogrammed to generate victims and hardship. They were merely part of the system. We need not talk about Stalin’s horrors. Even during its final decades, the Soviet Union was still typified by universal poverty, quite strong societal discipline, and the ruling class’s relative modesty. This state of affairs was maintained by a ragtag ideology and a still palpable fear of the state machine. Isolation was vouchsafed, of course, by the Soviet Union’s lagging behind the outside world. But it did not weigh heavy on every aspect of life and all at the same time. People moved into Khrushchev-era blocks of flats, regarding them as the last word in modern housing. They drank 777 brand “port wine,” having no clue how real Portuguese port tasted.

On the other hand, the Soviet military-industrial complex competed successfully with the rest of the world, at least until the early 1980s. Even though it was a byproduct of military aviation, Soviet civil aviation was quite impressive. The country’s professional communities, including the period’s passenger airline pilots, maintained a strict work ethic longer than Soviet society at large. Crashes were not so rare, however. But they were usually covered up not only due to totalitarianism but also because the information revolution had not yet happened.

The Soviet regime seemed invincible almost to the bitter end. Current attempts to resurrect it, despite their impressive magnitude, are laughable.

Today’s Russia is not the Soviet Union.  It does not have the stamina to compete in arms races and so forth with the outside world. It has even less will to self-denial, both among the elites and the grassroots. People have been adapting to the plans of the authorities to lock them up in a besieged fortress forever, but their life hacks are completely different from what they were in the last century.

Many Russians who have the right skills, experience, and education have been leaving abroad to work. By the way, their ranks have included hundreds if not thousands of the country’s best commercial pilots. Several millions of people, each of them capable of doing something well, have emigrated from Russia during Putin’s twenty-year reign.

Meanwhile, the majority of Russians, who have stayed in Russia, have tried to make themselves as comfy as they can in their import-substitution society, hoping either for special perks or state welfare, or perks and welfare all at once.

Since isolation has kicked in, independent business, already frail, has almost gone extinct. But the bureaucratized “state-minded” capitalists who took over the entire business field have nothing in common with the dexterous captains of Soviet management. As they get filthy rich through import substitution, today’s Russian magnates would never think of depriving themselves of the outside world’s blessings. They do not pretend to be farsighted. Simple minded, they loudly demand that the isolationist feast go on, becoming more creative as it proceeds. From time to time, the peculiarity of their exclamations spices up the sad circumstances, but not much.

Many people laughed at Viktor Linnik, president of Russian agribusiness giant Miratorg, and the National Meat Association when they called on the government to ban individuals from bringing small amounts of sanctioned European produce back to Russia. They were especially amused when Linnik said, “Jamon should be eaten in Spain, while Parmesan cheese should be eaten in France.”

The most striking thing about what Linnik said was not his confusion about Parmesan cheese’s national provenance, but the ease with which one could continue his line of though by saying, for example, that Russian bread should be eaten in Russia and, consequently, it was time to stop exporting grain, one of the few export sectors in which Russia has been blossoming. Would you tell me only a crazy blowhard would suggest such a thing? I doubt you would. Many things that had seemed impossible have already happened during the current orgy of import substitution, which consists of equal portions of greed and persecution mania.

Russia’s newfangled twenty-first-century isolationism not only vouchsafes the country will lag behind others. It is a species of intellectual, moral and professional corruption. It means no lessons can be learned from accidents and disasters. It means decadence, decay, and collapse are fobbed off as a decent, normal life.

Translated by the Russian Reader

Nastiness Is a Warm Gun: The Kremlin’s Cowboys

bd1bf37b99A Miratorg worker tending calves. Courtesy of Readovka

Business Russian Style, or, What is Miratorg, and What Do You Eat with It?
Dmitry Zhuravsky
Readovka
April 30, 2019

How Did a Company Importing Meat from Brazil End Up Getting Most of Russia’s Agricultural Subsidies? 
Miratorg’s own website identifies it as the largest agribusiness investor in Russia. The company is owned the Linnik twins, Viktor and Alexander. Viktor serves as the company’s president. It was Viktor Linnik who, last week, proposed tightening controls on the luggage of people entering Russia and increasing penalties for the illegal import of meat-based products. Today, he encouraged Russians to stop thinking about Parmesan cheese and start thinking more about the country’s growth. To rub it in, he dubbed everyone disgruntled with such proposals “blowhards.”

We should point out right off the bat that the fact Prime Minister Dmitry Medvedev’s wife’s maiden name is Linnik is only a funny coincidence, one which the Linnik twins have never tired of mentioning when they are interviewed by journalists.

The facts back this up. Blood relatives of the Russian state’s second most important person could not have established a giant agribusiness company that keeps all its accounts and founding capital outside Russia.

One hundred percent of Miratorg’s shares are owned by Cypriot offshore companies: 99.99% by Agromir, Ltd. (despite its Russian acronym, the company is registered in Nicosia), and 0.01% by Saudeid Enterprises, Ltd. (also registered in Nicosia).

Nevertheless, Miratorg is on the Russian federal list of so-called backbone companies and, since 2015, due to Russia’s self-imposed ban on meat and produce imports, it has been dubbed a strategic company. These regalia allow the Cypriot-based company to obtain loans from Vnesheconombank at discounted rates, which means it borrows part of its operating capital by drawing on the future pensions of Russians. (We published a detailed analysis of this scheme in a previous article.) It also means Miratorg can apply to the government for subsidies to pay back these selfsame loans.

A Success Story
Considering Viktor Linnik’s current circumstances, Miratorg’s origins appear laughable. The company was initially established to import meat from Holland and Brazil to Russia. To make the job easier, two years after the company was founded, in 1997, Miratorg opened a subsidiary in the Kaliningrad Sea Fishing Port, through which it imported meat to mainland Russia. Miratorg did business this way for nearly ten years. In 2005, it purchased a stake in two BelgoFrance-owned pig farms in Belgorod Region. The import company was transformed into a full-fledged agribusiness.

Kaliningrad Sea Fishing Port. Courtesy of Readovka

Miratorg went on to co-found a farm in Kaliningrad Region. A little later, it moved into Bryansk Region, which has become the company’s second home.

It was also in 2005 Miratorg was chosen to be involved in the National Priority Projects, a program for growing “human capital,” announced by Vladimir Putin on September 5, 2005. Until Dmitry Medvedev was elected president, the program, which included promoting the agricultural sector as one of its priorities, was overseen by the current Russian prime minister. Since 2008, when Medvedev was inaugurated president, the agricultural growth program has had its own line item in the federal budget.

Current Realities
Miratorg is currently Russia’s largest meat producer. According to Kontr.Focus.ru, an online service for assisting in doing due diligence on potential clients and business partners, Miratorg, Ltd., has founded thirty-six subsidiaries in eight regions of Russia. In 2017, the company produced 415,000 tons of pork, 114,000 tons of poultry, and 82,000 tons of beef.

Russia’s regions regard Miratorg as a valuable investor whom nearly any governor would be glad to welcome into his neighborhood. According to Miratorg’s website, the company has made a total of 200 billion rubles in investments. The advent of an agricultural market player of this caliber in a region means a guaranteed inflow of money from the federal budget in the form of subsidies from the government’s agricultural sector growth program and  Miratorg’s own investments.

On paper, Miratorg is a real find for regions heavily dependent on federal government subsidies. Aside from the federal agricultural subsidies it brings with it, Miratorg contributes to regional budgets through the land it leases. Its farms provide jobs while they are being builty and after they are brought on line. In addition, it pays taxes in the regions. The company is not a burden but a blessing, or so it would seem.

Russian Prime Minister Dmitry Medvedev and Miratorg President Viktor Linnik. Courtesy of Readovka

Taking advantage of its status, Miratorg moves confidently around Russia. In the regions, it has become accustomed to acting suddenly and brazenly. The company often receives land under indefinite gratuitous bailments by order of the federal government, whose decrees are personally signed by Prime Minister Medvedev.

Miratorg usually acts in full compliance with the law, although the effects of how it does business trip up regional governments. After three years, the land it leases free of charge is transferred from regional ownership to Miratorg’s ownership.

Last summer, the Bryansk Commercial Court adjudicated a conflict between the Bryansk Meat Company (Miratorg’s local subsidiary) and the Bryansk Regional Government. Miratorg tried to prove that members of a district council had violated the law by refusing to sell them land they had been leasing. According to law, a company that has leased agricultural land for three years has the right to purchase it and continuing farming it. Only two conditions must be met for the deal to go through: the relevant regulatory authorities must have no objections, and the land must be used for its original purpose.

The Bryansk Meat Company had complied with these terms, but local councilors had not signed off on the deal. Originally, they had agree to lease the land to the investor. Later, Miratorg’s subsidiary decided to trick the council and buy the land. Consequently, the local council was not paid the rent promised to it and did not profit from Miratorg’s presence in the district.

Instead of a lease, the local council was offered a one-time payment, which is transferred to the council’s accounts when the investor buys the land. Bryansk Meat Company’s farm occupies thirteen parcels of land totaling 7,398,700 square meters. Under the terms of the sale of the parcels to Miratorg, the average assessed value of one square meter of land is a mere 1.6 rubles. It is a great deal for Miratorg, but not for Bryansk Region.

We found reports of similar law suits ongoing between Miratorg and local governments in other regions of Russia.

Nastiness Is a Warm Gun
Since 2009, Miratorg has also confidently been colonizing Kursk Region. Its investments there began with the Pristen District, but currently the company operates in thirteen districts in the region. Its facilities in Kursk Region include the Pristen Pig Farm, Blagodatnoye Agricultural Enterprise, Renaissance Farm, Fatezh Lamb, and Miratorg Kursk, Ltd. According to Miratorg’s figures, it invested 17 billion rubles on its agribusiness facilities in Kursk Region between 2009 and 2017. In the Pristen District, it built two pig-breeding facilities with three sites each, while in the Oboyan District it built two pedigree breeding units.

Currently, Miratorg is building what will be Europe’s largest refrigerated slaughterhouse with a capacity to process 4.5 million head of hogs or 400,000 tons of meat in slaughter weight. Miratorg has also been building seven pig farms in two other districts in the region.

3fe1ac38af.jpgA billboard showing Miratorg’s assets in Kursk Region. Courtesy of Readovka

Why has Miratorg invested so much in Kursk Region? For the same reason it has invested heavily in Smolensk, Bryansk, Kaluga, Kaliningrad, and other regions in Russia. The Russian federal budget supports domestic industrial agricultural enterprises with subsidies. Some of the federal government’s assistance is earmarked for the largest players in agribusiness, the strategic, “backbone” companies we mentioned earlier. Some of the assistance is filtered through regional government budgets, where it is meant to boost small companies and support local producers. When Miratorg sets up a subsidiary in a region, it automatically grabs the lion’s share of federal subsidies for itself.

In Russia, there are no limits on the subsidies a particular agricultural holding company can receive. By using the subsidiaries it has established in the regions, a national agribusiness company can qualify for regional subsidies. For example, in 2016, the Bryansk Meat Company was awarded 98% of all subsidies earmarked in the federal budget for promoting agriculture in Bryansk Region.

At the same time, Miratorg has been officially designated as a strategic, “backbone” enterprise. Accordingly, the company and its subsidiaries also receive subsidies for pursuing particular projects. Since 2014, Vnesheconombank has lent Miratorg $871.5 million to expand meat production. Thanks to sleights of hand such as this on, in 2016, Bryansk Meat Company left not only farms in Bryansk high and dry in terms of financing but also farmers nationwide by hogging 90% of all subsidies earmarked for agriculture. The total amount of subsidized loans was 33.6 billion rubles, and this financing was obtained by a single Miratorg subsidiary for a single year.

The company has been feeding off this program since it was founded in 2005. Miratorg has received hundred of billions of rubles in subsidies over this period.

The more subsidiaries it gets, the more lines of credit Miratorg can receive. The story  of its rise to the top bears a strong resemblance to the way Yevgeny Prigozhin built his school cafeteria catering monopoly in Moscow. There is one signal difference, however: whereas Concord Catering’s contract implies that Prigozhin’s food production facility does the work for which it was contracted and pays back its debts out of the profit generated by the facility, some of Miratorg’s loan agreements contain an interesting loophole. It can fulfill its obligations to Vnesheconombank one of two ways, either the way Concord Catering does it, by paying back its debts out of its profits, or by selling off its founding shares in its subsidiaries to pay off its loans. Meaning, hypothetically, Miratorg can rid itself of some of its subsidiaries.

Where Do Miratorg’s Profits Go?
Considering the billions in government subsidies it receives annually, Miratorg and its owners do not even have to run a good business to live high on the hog. According to open sources, Miratorg’s profits shrunk fivefold in 2016, amounting to a mere five billion rubles, despite the fact the company received several tens of billions of rubles in subsidies from the Russian federal government.

Nevertheless, Miratorg is the main supplier of meat for huge fast food chains such as McDonalds and Burger King. It has also launched its own cafes and supermarket chain. Miratorg’s profits, which are incomparable to the subsidies paid to the company, end up not in Russian bank accounts, but in offshore accounts in Cyprus.

d79d3fe745.jpgA  Miratorg supermarket, newly opened somewhere in Russia. Courtesy of Readovka

Miratorg’s operations do not resemble an attempt to promote Russian agriculture, but rather a scheme for spiriting federal money out of the country. Given Miratorg is the industry leader in terms of land assets and government support, it should also have come to monopolize supermarket shelves. Its status as a strategic enterprise and the subsidies it receives simply oblige it to aspire to this end. The government’s plan was to have Miratorg replace all the imported meat banned from supermarkets with domestically produced meat.

Instead, Miratorg annually receives several hundreds of billions in subsidies allocated by the government to support the country’s agriculture. Miratorg spends the money to purchase land, which it uses, along with shares from its regional subsidiaries, as collateral to obtain more loans.

Ultimately, instead of building a successful business and resurrecting Russian domestic agriculture according to the government’s plan, Miratorg merely filches money from the federal budget. As long as it keeps feeding the “Cypriot butchers,” real hardworking Russian farmers will have to get by without substantial assistance. Eventually, the whirligig of subsidies could lead to the complete collapse of Russian agriculture as such.

Thanks to Anna Klimenko for the heads-up. Translated by the Russian Reader

Buggered

rossiya This bankrupt agribusiness was called Rossiya (“Russia”). Photo courtesy of Maxim Kemmerling/Kommersant and Republic

“The Data Leaves Us at a Loss”: A Few Figures That Might Surprise the Kremlin
Yevgeny Karasyuk
Republic
April 4, 2019

“Why on shoes? Why a third? Where did they get these figures?”

Dmitry Peskov, President Putin’s press secretary, responded with questions to journalists who questioned him yesterday about Rosstat’s depressing report for 2018.

According to Rosstat’s study, in which sixty thousand Russian households were surveyed, every fifth Russian skimps on fruits and vegetables. Every other Russian family cannot afford to travel anywhere when they have a week’s vacation, while every fourth family does not have enough money to invite people over to celebrate birthdays and the New Year’s holiday.

And, indeed, the report does conclude that 35% of Russians are unable to purchase each family member two pairs of seasonally appropriate footwear.

“I would be grateful to Rosstat if they clarified these figures. The data leaves us at a loss,” Peskov added.

Meanwhile, there are other figures—lots of figures—that would probably also bedevil the Kremlin if they were aired in public. Let us recall a few of them.

Nutrition
Consumer watchdog Rospotrebnadzor concluded that 63% of deaths in Russia were associated with bad food and poor nutrition. According to official figures, Russians spend approximately 35% of their household budgets on food, while independent researchers put that figure at over fifty percent. However, the average Russian household skimps on all purchases and tries to do without everything it can, claim the researchers behind Romir’s Coffee with Milk Index, which charts the quantities of chocolate, coffee, milk, and bottled water purchased by Russians. Researchers at RANEPA recently described the diets of Russians as unhealthy, unbalanced, and lacking in energy.

Health
According to a report by RANEPA’s Institute for Social Analysis and Forecasting, 22% of Russians who live in straitened circumstances face the stark choice of whether to buy the bare minimum of the cheapest produce or the cheapest drugs, drugs they need to survive. It is typical of Russians, not only those below the poverty line, to postpone going to the doctor, if it involves costs, noted researchers at the Institute for Health Economics at the Higher School of Economics.

Education
According to the pollsters at VTsIOM, fifty percent of Russian parents experience serious financial difficulties when getting their children ready for the first day of the school year. Over the past five years, the average sum of money Russians claim to spend getting children ready for school has increased by sixty percent, rising from 13,600 rubles to 21,100 rubles.

Housing
According to the Construction Ministry, the Russian populace’s debts for utilities and housing maintenance bills have grown by five and a half times since 2015. The ministry reported that, as of the end of last year, the total amount of this debt was 1.2 trillion rubles [approx. 16.34 billion euros]. The rates for water, electricity, gas, and other utilities and services increase rhythmically year after year, and yet the real incomes of Russians have continued to fall five years in a row.

Transportation
Forty percent of Russian car owners “try not to use their own vehicles, taking public transport instead.” Another 22% of car owners follow their lead, but do it less frequently. VTsIOM has explained the outcome of its January opinion poll by citing the concern of Russians for the environment while failing to note that the price of petrol has skyrocketed in recent years. Last year, a liter of AI-95 rose in price three times faster than inflation. The government has resorted to artificial, decidedly non-market measures to depress prices, and yet petrol in Russia is now twice as expensive as it was when the decade kicked off.

Only twelve percent of Russians believe that, when it describes the economy and the social sector, the Russian regime always or mostly tells the truth. The Levada Center has done polls on the same subject since 2010. Russian society’s confidence in what the country’s leaders and senior officials say has never been as low as it is now.

By voicing surprise at Russia’s poverty, at least on paper, the Kremlin is, apparently, determined to convince people it inhabits a parallel reality in which Russia makes one breakthrough after another, and the rank and file enjoy “stability” by way of spiting the country’s numerous enemies. Peskov seemed genuinely puzzled by Rosstat’s claim that Russian families have trouble buying shoes, but he probably had not yet read the government’s report on the increase in mortality rates in every third region of Russia. Clearly, something is wrong with the figures. In short, we expect a reaction.

Translated by the Russian Reader

Fatherlandish

I am going to break an unwritten rule today and publish a long videotaped interview with the Russian independent trade union organizer Dmitry Kozhnev without providing a translation in English.

Over the years, I have spent a lot of time covering the struggles of Russia’s independent trade unions, as well as the abuses of labor rights in the country and the grassroots pushback against these abuses.

I was alerted to the interview by my friend Comrade Moose who, when he posted it on Facebook, wrote that it was “perfect.”

I agree with him completely. Kozhnev provides an ideal primer on why we need trade and labor unions, and how to organize them into effective tools for advancing the interests of workers, not only in Russia, but anywhere else in the world.

In fact, the conversation between Kozhnev and his engaged, smart interviewer on the YouTube channel Station Marx is so exemplary of the other Russians and other Russias to whom I have been trying to give a voice to on this blog and its predecessor for the last twelve and half years, I would urge my readers who teach high school and university students Russian language, history, culture, and current events to use the interview to look at subjects such as labor rights and the fight to protect the interests of workers in Russia and elsewhere, and grassroots political and social movements in Russia today.

Station Marx‘s annotation to the video, which I have translated, includes a long list of the websites run by Russia’s independent trade unions and other good stuff. Maybe it would be worth your time and that of your students to take a break from Tolstoevsky and “There is no Russia without Putin” to see what some real Russians have been doing against incredible odds.

Sooner or later, the other Russias and the other Russians who exist in the subjunctive mood in this interview and on my blog will win the day. Why don’t we get to know them now? In a few years or so, they will be running Russia, while Putin and his gang of criminals will be rotting behind bars, utterly forgotten. {TRR}

Why Do Trade Unions Not Work in Russia? Dmitry Kozhnev
STATION MARX
March 15, 2019

Our guest today, Dmitry Kozhnev, is an activist with the Confederation of Labor of Russia (KTR), a trade union organizer with MPRA and Novoprof, and a member of the Marxist group Workers Platform. He came by for a cup to coffee and talked about Alexei Navalny’s program for a new-model trade union, the problems of the trade union movement, and how strikes are organized.

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