Burning Too

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Take a long hard look at this map, especially the upper right-hand corner, and then tell me why Brazilian President Jair Bolsonaro deserves a dressing-down from leaders of some of the world’s most powerful countries, while Russian President Vladimir Putin, guilty of the exact same indifference towards the forest wildfires raging over what, as the map suggests, is a much larger area in Siberia and the Russian Far East, has been criticized only by Greenpeace Russia and rank-and-file Russians living in the line of the fires and the enormous smoke clouds generated by them.

What has Putin ever done to deserve this indulgence?

When you have puzzled that one out, try and explain how four [ahn-TEE-fuh] musicians from Washington, DC, wrote the anthem for the summer of 2019 way back in 1989, that is, exactly thirty years ago, when many of today’s hottest climate changers were not even a gleam in their parents’ eyes.

Anytime but now
Anywhere but here
Anyone but me
I’ve got to think about my own life

Anytime but now
Anywhere but here
Anyone but me
I’ve got to think about my own life

We are consumed by society
We are obsessed with variety
We are all filled that anxiety
World would not survive

We gotta put it out, put it out, we gotta put it out
The sky is burning
We gotta put it out, we gotta put it out, put it out
The water’s burning
We gotta put it out, put it out, put it out
The earth is burning

Outrage
But then they say…

Anytime but now
Anywhere but here
Anyone but me
I’ve got to think about my own life

Anytime but now
Anywhere but here
Anyone but me
I’ve got to think about my own life

The world is not our facility
We have a responsibility
To use our abilities
To keep this place alive

We gotta put it out, put it out, put it out
The sky is burning
We gotta put it out, we gotta put it out, put it out
The water’s burning
We gotta put it out, put it out, we gotta put it out
The earth is burning

Right here
Right now
Do it
Do it
Now
Do it
Now
Do it
Now
Do it

Lyrics courtesy of Genius.com

Alexander Skobov: The Myth of “Good” Liberals in Power

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Alexander Skobov
Facebook
August 18, 2019

I have to reiterate my fundamental disagreement with mainstream liberal political analysts. Stated briefly, their big idea is that the Russian political elite consists of two parties, so-called civic liberals, who support bourgeois modernization, and the security forces, who support the restoration of the Soviet Union in both its manifestations—as a totalitarian political regime and as an economy totally subordinated to the state. All recent events are thus interpreted in the light of the alleged struggle between the two parties, i.e., the party of the security forces has gone on a decisive offensive.

This is a liberal myth. The Russian liberal crowd, who are mainly right-wing liberals, concocted the story that increasing crackdowns and the Putin mafia state’s transition from a soft-core authoritarian imitation democracy to a hard-core authoritarian regime has been opposed by a party of court (systemic) liberals, a party informally led by former Russian finance minister Alexei Kudrin.

Can anyone produce even a single bit of evidence corroborating the so-called Kudrin party’s opposition to the policy of increasing crackdowns? Right-wing liberals would tell me the Kudrinistas are forced to act out of the public eye and play by the rules governing infighting among courtiers (apparatchiks). The fact this infighting has no outward manifestations is no proof that there is no showdown between the two parties, they would argue.

Let’s assume this is true. Where, however, did Russia liberals get the idea there is even one cause for such a showdown? Kudrin and other systemic right-wing liberals have always advocated an authoritarian modernization in which a “progressive” elite imposes unpopular social and economic reforms on the unwashed masses with an iron hand. By and large, their ideal is shared by the so-called Russian fascists, i.e., the “patriots” and statists. The occupation regime running mainland China carried out the very same economic reforms after crushing dissenters on Tiananmen Square in 1989.

Has Mr. Kudrin ever said publicly that he is a principled opponent of such methods of strangling the opposition? He has not. Then why have Russian liberals decided he opposes the mass detention of peaceful citizens for protesting in public at certain times?

Liberals should stop imagining they have intercessors in the top ranks of the Putin organized crime group. There are no such intercessors.

Translation and photo by the Russian Reader

Vitaly Manski: Don’t Shop at Armenia on Tverskaya

armenia.jpgVitaly Manski
Facebook
August 17, 2019

I will never again darken the door of the Armenia cafe and shop at Tverskaya 17. It’s next to my house. I have bought groceries there for many years and held work meetings there.

I love the country of Armenia. But the Armenia shop on Tverskaya has sued the unregistered candidates in the Moscow City Duma elections for loss of revenue due to the events of July 27 in Moscow. Loss of revenue!!!

I really would like the shop owners to experience an actual loss of revenue. I hope that I won’t be the only person to take action against these businessmen.

Image courtesy of Vitaly Manski. Thanks to Andrey Silvestrov for the heads-up. Translated by the Russian Reader

Steven Salaita: The Inhumanity of Academic Freedom

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“The Inhumanity of Academic Freedom,” a lecture Steven Salaita gave the day before yesterday at the University of Cape Town, is so powerful and echoes so many of the depressing things I have gone through as an agitator and (former) academic in the past several years that I would like to quote it here in full, but I’ll limit myself to quoting a single passage. Please read the lecture from beginning to end: it’s more than worth it. Salaita is a rare truthteller in a fallen world that fancies itself chockablock with truthtellers but which is actually pullulating with hasbaristas of various stripes. Thanks to George Ciccariello-Maher for the heads-up. Thanks to the Imatra IPV Reds Finnish baseball club for the image. (If you think it has nothing to do with the lecture, it means you haven’t read the whole thing.) // TRR

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In the end, we have to apply value judgments (mediated by lawless forces) to balance speech rights with public safety. In societies like the USA and South Africa, steeped in the afterlives of colonization, this task is remarkably difficult. We know that racism is bad, but global economic systems are invested in its survival. We know that anti-Zionism isn’t racism, that, in fact, it is the just position.  Yet no agreement exists about what comprises appropriate speech, in large part because maintaining a community is at odds with corporate dominion. As a result, there’s no way to prioritize a set of beliefs without accusations of hypocrisy (or without actual hypocrisy). The easy answer is to protect speech equally and let a marketplace of ideas sort the winners and losers. 

There’s a catch, though. Value judgments don’t arise in a vacuum and discourses don’t exist in a free market. Structural forces, often unseen, always beneficial to the elite, determine which ideas are serious and which in turn get a hearing. If we conceptualize speech as a market-driven phenomenon, then we necessarily relinquish concern for the vulnerable. We’re left with competing narratives in a system designed to favor the needs of capital. It’s a highly lopsided competition. Those who humor the ruling class will always enjoy a strong advantage, which aspiring pundits and prospective academics are happy to exploit. Corporate and state-run media don’t exist to ratify disinterest, but to reproduce status quos. 

The political left is already restricted, on and beyond campus. The same notions of respectability or common sense that guide discussion of academic freedom also limit the imagination to the mechanical defense of abstractions. Sure, academic freedom is meant to protect insurgent politics, and often does, but the milieu in which it operates has plenty of ways to neutralize or quash insurgency.  

I focus on radical ideas because Palestine, one of my interests and the source of my persecution, belongs to the set of issues considered dangerous by polite society, at least in North America and much of Europe (and, for that matter, the Arab World). Others include Black liberation, Indigenous nationalism, open borders, decolonization, trans-inclusivity, labor militancy, communism, radical ecology, and anti-imperialism. Certain forms of speech reliably cause people trouble: condemning the police, questioning patriotism, disparaging whiteness, promoting economic redistribution, impeaching the military—anything, really, that conceptualizes racism or inequality as a systemic problem rather than an individual failing. More than anything, denouncing Israeli aggression has a long record of provoking recrimination. Anti-Zionism has always existed in dialogue with revolutionary politics around the globe, including the long struggle against Apartheid. 

Spikery, or, How to Give Aid and Comfort to Fascist War Criminals While Making Lots of Money

It’s funny the things you find in your email inbox in the morning. This morning, as usual, I found mailers from many of the Russian and English-language online newspapers I read, including Petersburg’s humble but always revealing business daily Delovoi Peterburg.

Today’s big news was that police had searched the head office of Bukvoyed, one of Russia’s largest bookstore chains.

Founded in 2000, Bukvoyed (“Bookworm”) has 140 stores around the country.

A source at Bukvoyed told Delovoi Peterburg the search had nothing to do with the company per se but with one of its business partners.

If you have been monitoring the fortunes of Russian business under the Putinist tyranny, a crony state-capitalist regime, run by “former” KGB officers as if it was the Soprano mob, only a million times nastier, you would know it has not been easy to do business of any kind in Russia during the last twenty years. The country’s current prime minister and ex-president, Dmitry Medvedev, once famously said the regime’s vast police and security apparatus, known collectively as the siloviki, needed to stop “nightmaring” (koshmarit) business.

He also famously said, when he was president, that his country was plagued by “legal nihilism.”

Although he was right on both counts, Medvedev did nothing about it. Since the brief, supposedly more “liberal” period when he was freer to speak his mind because, technically, he was the most powerful man in Russia, the nightmaring of business (and nearly everyone else who makes themselves a target by doing anything more ambitious than hiding their light in a bushel) has only got worse, and legal nihilism, along with anti-Americanism, homophobia, xenophobia, and neo-imperialism, has become even more entrenched as part of the Kremlin’s unwritten ideology and, thus, a guidepost for how Russia’s police, security agencies, prosecutors, and judges deal with “criminals.” 

As Denis Sokolov recently argued in Republic, the siloviki have established a system of “police feudalism” in Russia under which the FSB, the Russian Investigative Committee, the Interior Ministry, the Russian Prosecutor General’s Office, the Russian National Guard, the tax police, and other state security agencies have divided the country into fiefs, bits of “turf” where they are almost entirely free to shake down, rob, nightmare, and legally nihilize whomever and whatever they want under a set of unwritten rules outsiders can only guess at.

After reading about Bukvoyed’s legal-nihilistic woes, then, I was startled by the banner ad I found at the bottom of the page.

mooks“Synergy Global Forum, October 4–5, 2019, Gazprom Arena, Saint Petersburg. Arnold Schwarzenegger. Grant Cardone. Michael Porter. Randi Zuckerberg. Ichak Adize.” Ad courtesy of Delovoi Peterburg

Referred to, hilariously, as “spikery” (“speakers”) on the Russian version of the Synergy Global Forum’s website, these five greater and lesser lights of global capitalism have been, no doubt, promised or paid extraordinarily hefty fees to keynote this hootenanny in the belly of the crony state-capitalist beast.

Formerly known as the Zenit Arena (after the city’s Russian premier league football team, FC Zenit, owned by state-controlled Gazprom), even the venue itself, the Gazprom Arena, is a monument to the mammoth crookedness, thuggery, violence, and corruption replicated all over the world’s biggest country every day for the last twenty years by the Kremlin’s minions.

But you would never know that by reading the cheery boilerplate on the Synergy Global Forum’s website.

Gazprom Arena is the most visited indoor stadium in Eastern Europe, second only to the famous Wembley in London. The main feature of the project — a sliding roof, which allows you to carry out activities in a comfortable environment at any time of the year and in all weather conditions. Large capacity, modern technical equipment, and two-tier parking make Gazprom Arena one of the best venues for major festivals, exhibitions, and business conferences.

More important, however, is the ostensible point of all this spikery, other than making lots of money for everyone involved.

Synergy Global Forum has been held since 2015. The first Forum gathered 6,000 participants and became the largest business event in the country. Two years later, we broke this record and entered Guinness World Records — 25,000 entrepreneurs and top managers participated at SGF in Olympiyskiy in 2017. This year we set a new big goal — to gather 50,000 participants from all over the world at SGF 2019 in St. Petersburg. Synergy Global Forum not only gives you an applied knowledge, but also motivates and inspires to global achievements, gives the belief that any ambitious goal is achievable. What goals do you set for yourself?

Aside from being one big [sic], this sampling of spikery reveals that the apocryphal gospel of Dale Carnegie and other “good capitalist” snake oil salesmen is alive and well and making waves in a place like Russia, where it could not be more out of place.

I don’t mean that Russia and Russians are “culturally” or “civilizationally” incompatible with self-improvement, the power of positive thinking, and other tenets of American capitalist self-hypnosis. If you had spent most of your adult life in Russia, as I have, you would know the opposite is the case.

Unfortunately. Because what Russia needs more than anything right now is not more navel-gazing and better business practices, but regime change and the rule of law. Since I’m a democratic socialist, not a Marxist-Leninist, and, I hope, a realist, these things cannot come about other than through a revolution in which Russia’s aspiring middle classes, at whom snake-oil festivals like the Synergy Global Forum are targeted, join forces with the grassroots, who have been nightmared and legally nihilized in their own way under Putin.

One of the first things a new bourgeois-proletariat Russian coalition government would have to do, aside from prosecuting and imprisoning tens of thousands of siloviki and banning them from politics and the civil service for life, would be to disentangle the country from its current incredibly destructive armed and unarmed interventions in conflicts in other countries, starting with Ukraine and Syria.

What does the Synergy Global Forum and its sponsor, Synergy Business School have to do with such seemingly distant and terribly messy international politics? Well, this:

The school has branches in 26 Russian cities, as well as a unique campus in Dubai, which is home base for an international MBA program for students from the UAE, Yemen, Saudi Arabia, and Iran.

So, in fact, Synergy Business School is in the business of equipping people from some of the world’s most powerful and aggressive theocratic, monarchist, and crony state-capitalist tyrannies with MBAs while claiming its core values are “openness to newness, commitment to development, and intelligence.”

You can say I’m a dreamer but I am nearly sure SBS’s core values are completely at odds with the neo-imperialism, neo-colonialism, militarism, hostility to civil and human rights, and fascism of the current regimes in Russia, Saudi Arabia, and Iran.

I write this not because I believe in building a “better” capitalism (I don’t), but because I am nearly sure one party to this mass chicanery, including the invited spikery, does believe it is possible to do just that and thus “peacefully” transform these countries into slightly quirky versions of Australia and Canada. (For the record, I don’t for a minute believe these supposedly democratic countries have no problems of their own with human rights, etc.)

That is not going to happen if only because, at another level, carefully hidden from the incurious eyes of the people who go to such events, their real purpose is to whitewash these regimes, make them more attractive to foreign investors, and expand their international networks of shills and useful idiots.

I learned this valuable lesson about Putinist Russia by carefully following the amazing career of Vladimir Yakunin, another “former” KGB officer and fellow Ozero Dacha Co-op member who could write a textbook about how to co-opt distinguished foreign academics, decision-makers, and journalists into, mostly unwittingly, toeing the Putinist line.

It comes down to this. Why are Arnold Schwarznegger, Randi Zuckerberg, and their fellow 2019 Synergy Global Forum spikery so willing to help whitewash a gang of fascist war criminals who are also at war with their own people?

Since there is no good answer to this question, they should be arrested upon their return from the forum and charged with colluding with hostile foreign powers.

If you don’t understand what I mean by “fascist war criminals,” please read the article below. // TRR

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Russia and Assad are butchering Syrian civilians again. No one seems to mind
Terry Glavin
National Post
July 24, 2019

Maybe it’s because of the guilty anti-interventionist conscience of the world’s comfortable liberal democracies, or because it’s now an article of respectable faith in the NATO capitals that Syrian lives simply aren’t worth the bother. Maybe it’s just that we’ve all become so accustomed to reports of slaughter and barbarism in Syria that it barely warrants public attention at all.

Whatever the reason, or excuse, Russian foreign minister Sergei Lavrov is finally having his way in the Syrian governorate of Idlib, and the world barely notices.

It’s been nearly a year since Lavrov expressed his desire that the “abscess” of Syrian resistance in Idlib, a sprawling province that borders Turkey in Syria’s northwest, be “liquidated.” It’s been nearly a month since 11 humanitarian organizations came together with the United Nations Office for Humanitarian Affairs to warn that “Idlib is on the brink of a humanitarian nightmare unlike anything we have seen this century.”

We’ve reached that brink now. Just this week, 66 civilians have been killed and more than 100 non-combatants wounded, the UN reports, in a series of bombing runs carried out across Idlib. The worst massacre was an airstrike Monday on a public market in the village of Maarat al-Numan. At least 39 people were killed, among them eight women and five children.

Since the Syrian dictator Bashar Al-Assad’s barrel bombers and Russia’s fighter-bombers began their recent offensive in Idlib on April 29, the Syrian Observatory for Human Rights has tallied 2,641 casualties. The UN counts 400 civilian deaths, but there is no accurate count of the dead and injured in Syria anymore. The wounded lie dying in the rubble of bombed buildings. At least 25 hospitals and clinics in Idlib have been destroyed since April 29, bringing the number of health centers deliberately targeted since 2011 to about 570. More than 800 health workers have been killed.

Three years ago, when the UN and monitoring agencies stopped counting, the Syrian dead were numbered at 500,000. In the face of these most recent war crimes and atrocities, the UN’s humanitarian affairs office has been reduced to begging Assad and Lavrov to ease up to allow humanitarian aid into Idlib’s besieged districts, and pleading with Russia and Turkey to uphold the terms of a year-old memorandum of understanding that was supposed to demilitarize Idlib. Fat chance of that.

The Kremlin-Ankara pact arose from negotiations that began in the months following the 2016 fall of Aleppo, where thousands of Syrian civilians were slaughtered by Vladimir Putin’s air force in the course of the Kremlin’s commitment to Assad to help bomb the Syrian resistance into submission. Joining with Russia and Iran, Turkish strongman Recip Erdoğan entered into a series of talks in Astana, Kazakhstan, that eventually led to an agreement to establish Idlib as a jointly-patrolled “deconfliction zone.”

A series of these de-escalation agreements have each in their turn become death traps. In Homs, in Ghouta, in Quneitra, the pattern has repeated itself. Weakened by starvation sieges, and bloodied by Russian fighter jets, Assad’s barrel bombs, ground assaults by Iran’s Hezbollah units and multiple chemical attacks — sarin, chlorine, napalm — Syria’s various and fractious resistance outfits have surrendered several cities and towns on the promise of safe passage with their families to one or another de-escalation area. Convoys of buses carry them across the countryside. They settle in, and then they come under attack again.

Until April 29, Idlib was the last of these demilitarized zones, and by then the population had doubled to three million people. Among Idlib’s recent arrivals were civilians fleeing the Syrian carnage who had not been able to join the six million Syrians who have managed to escape the country altogether. But the newcomers also include members of various armed opposition groups, and the Assad regime has deftly manipulated its “de-escalation” and safe-passage arrangements to pit those groups against one another.

More than a dozen safe-passage agreements struck prior to the Kremlin-Ankara arrangement amount to what democratic opposition leaders have called ethnic cleansing and “compulsory deportation.” Most of the opposition groups that submitted to them have ended up in Idlib. Among them: Islamic State fighters from Yarmouk, and the jihadist fronts Ahrar al-Sham and Jaish al-Fatah from districts around Aleppo and Damascus.

What this has meant for Idlib is that the mainline opposition in the Turkish-backed and formerly American-supported Syrian Interim Government has been losing its hold on the governorate, and its democratically elected local councils have come under increasing pressure from the Hay’at Tahrir al-Sham jihadist coalition. And now that Assad’s Syrian Arab Army has been moving in from the south, and Russian and regime bombs are falling from the skies, tens of thousands of civilians are on the move again.

More than 300,000 people are on the roads, most of them headed towards Turkey, but Turkey has already taken in half of Syria’s six million refugees and the Turkish border is now closed to them. More than 1,000 Turkish troops are patrolling Idlib’s northern countryside as part of the Astana accord, and they won’t let the Syrian civilians pass. Humanitarian groups report that hundreds of Syrian refugees have been picked up in Istanbul in recent weeks and deported back to Syria.

“Yet again innocent civilians are paying the price for the political failure to stop the violence and do what is demanded under international law — to protect all civilians,” is the way UN Humanitarian Coordinator Mark Lowcock puts it. “Our worst fears are materializing.”

No help is coming from Europe. The European Union has made its peace with Ankara — Erdoğan prevents Syrian refugees from sneaking into Greece or Bulgaria or setting out in leaky rafts into the Mediterranean, and Europe looks the other way while Erdoğan deports Syrian refugees back to the slaughterhouse of Idlib.

Neither is any help coming from the United States, where the Kremlin-friendly Trump administration is balking at the idea of imposing sanctions on Turkey for buying into Russia’s S-400 missile system, and is otherwise continuing the Obama administration’s policy of thinking about mass murderer Assad as somebody else’s problem.

And then there’s Canada, where we’re all supposed to congratulate ourselves for having high-graded the best and brightest Syrians from the UN’s refugee camps, and we expect the Syrian refugees we’ve taken in to be grateful and to forgive us all for standing around and gawping while their country was turned into blood, fire, and rubble.

Whatever our reasons, or excuses, Idlib is being liquidated, a humanitarian nightmare is unfolding in Syria again, and hardly anybody notices.

Inland Empire: Life in Russia Without Visa and Mastercard

buyerThis woman is happy she doesn’t live in Russia, where Visa and Mastercard may soon be banned. Courtesy of Fluencia

Inland Empire: How Will Russians Live Without Visa and Mastercard?
Sergei Khestanov
Republic
July 12, 2019

The new attack by Russian lawmakers on the international payment systems Visa and Mastercard may come to a head, successfully or unsuccessfully, this summer. For the law bill’s sponsors success would mean the near-total financial isolation of Russians from the rest of the world. All that would remain would be to adopt restrictions on foreign currency.

Going Our Own Way
There had long been talk of the need to talk of a completely autonomous domestic payments system, but the events of 2014 and, especially, the imposition of sanctions visibly accelerated the process.

In fact, in the spring of 2014, MPs in the Russian State Duma drafted amendments to the law “On the National Payment System” that would have forced Mastercard and Visa, which had been obliged to observe the sanctions against a number of Russian banks, to deposit amounts of money equal to their two-day turnover in special accounts at the Russian Central Bank. Visa said it would stop doing business in Russia. Negotiations with the Russian government and Central Bank followed this announcement. The draft law was considerably softened. The amount of the obligatory deposit was removed from the bill, and it was decided that international payment systems would operate in Russia through specially established local subsidiaries.

After Mir bank cards were launched, they were quite unpopular among Russians for a long time. Russians preferred time-tested foreign bank cards. Besides, initially there were purely technical problems with Mir that caused their cards to be rejected, but after the Russian Central Bank issued stern warnings, banks updated the software of their ATMs and payment terminals, more or less solving the glitches.

Another problem is that Russian cards are nearly useless abroad since they are accepted almost nowhere. However, given the small percentage of Russians who travel abroad, this is not such a huge problem.

The breakthrough in promoting the domestic cards came in 2018. On July 1, 2018, the electronic wage payments of all state-sector workers were transferred by law to Russian bank cards. By January 1, 2019, they had taken a big bite out of the share of the Russian market controlled by their famous competitors. According to the Federal Anti-Monopoly Service, during the period from January 1, 2018, to January 1, 2019, the share of actively used Visa cards among the Russian populace fell from 45% to 39.5%, while Mastercard’s share fell from 42% to 36%. The reduction in the international payment systems’ share of the Russian market happened as Mir doubled its share of active card users, which rose from 12.5% to 24.5%.

This is not surprising. The traditional Russian principle of pushing certain things, ironically dubbed the “voluntary compulsory” method, is rather effective. Outcomes are achieved quickly, making such methods of promotion quite popular. We should say, in all fairness, that this happens not only in Russia.

Such aggressiveness has a price, however. Compulsory promotion of goods and services reduces competition, since the advantages of using a particular service or buying a certain product derive from the market’s absence. Over time, products and services pushed in this way lag behind their absent competitors in terms of their quality.

Striking examples of diminishing quality in a market in which competition was restricted were the Soviet automobile and electronics industries. The latter lagged behind the world especially disastrously. Remember the old joke, “Soviet handheld calculators are the biggest handheld calculators in the worlds”?

Rejecting the Outside World
But degradation as a consequence of pushing goods and services through non-market methods is only half the trouble. It is much more dangerous to ban and expel foreign products and services from the domestic market. The new regulations described in the draft law “On the National Payment System” could force international payment systems out of Russia since they would be unable to comply with the regulations. Once they leave, Russian bank cards would not be accepted for payment abroad, and cards issued by foreign banks would not be valid in Russia.

Mir cardholders who never travel abroad would not even notice this nastiness. Everyone else would soon voluntarily be forced to join them. Give the Russian state’s high and growing share in the Russian economy, the regulations would not provoke fatal disaffection with the leadership.

Russia’s policy of self-isolation was adopted long ago, and a large segment of the populace has no real objections to it, while people who use their bank cards within Russia mostly do not care what system processes their transactions. What matters is that everything works fine and does not cost too much. Mir’s reliability is now on a par with the international payment system, and so are its rates. Besides, if push came to shove, the Russian Central Bank and the Federal Anti-Monopoly Service could force it to reduce its rates.

There are no rational reasons for establishing a homegrown system when the duopoly of Visa and Mastercard serve the Russian market just fine. China’s UnionPay and Japan’s JBC have been processed by certain Russian banks, but they have never played a significant role. You cannot make money in a highly competitive, mature market, long dominated by world leaders like Visa and Mastercard, unless you employ non-market methods of competition. The market simply does not need new players.

The reason for the persistent promotion of Mir card is not commercial. It is an insurance policy of sorts, one that will have claims made on it if real, harsh Iranian-style sanctions are imposed on Russia. If you regarded this scenario as a serious possibility you would have cause to establish a national system, especially because Chinese banks (on whom great hopes were placed in 2014) have essentially supported US sanctions. In these circumstances, it is better to have a stunted system in terms of its international access than to witness a sudden collapse of cashless payments if harsh sanctions are imposed.

However, this non-competitive idea immediately inspires people who are willing to make money by destroying their competitors.

If regulations pushing the international payment systems out of the Russian market were adopted, it would deprive Russians of the ability to pay for things abroad without cash, and the logical next step of banning or restricting the export of foreign currency from the country would be easy as pie. Simultaneously, Russians would find it much harder to purchase foreign goods in foreign online shops, something that would be incredibly difficult without access to international payment systems.

A side effect of the ban would be the promotion of Russian-registered joint ventures for selling Chinese goods to Russians.  This would have a positive effect on the receipt of VAT from these purchases. VAT matters since VAT revenues constitute up to a third of Russian federal revenues, making them comparable to Russia’s export revenues.

The natural consequence of depriving Russians of access to foreign online shops would be a rise in prices. At first, the government would profit slightly because VAT revenues would grow—until people stopped buying things.

The policy of isolating the Russian economy from the world economy in terms of Russian nationals being unable to spend money outside Russia has been reasserted, and yet another step on the long road of restrictions and bans may soon be taken. The tendency towards restrictions on foreign currency has once again been confirmed. We might recall the recent discussion about restricting unqualified investors from opening foreign currency accounts.

The hope remains, of course, that, as in 2014, the international payment systems would reach an agreement with the Russian government, Russian MPs would be reined in, and cardholders would not feel the pain. Unlike 2014, however, the Russian Central Bank has supported the bill.

Sergei Khestanov is a macroeconomics adviser to the director of Open Broker and associate professor of financial markets and financial engineering at RANEPA. Translated by the Russian Reader

They Wore Uniforms

angela davisEast German politician Margot Honecker and Angela Davis at the communist World Festival of Youth and Students. Photo courtesy of Ullstein Bild, Getty Images, and the Wall Street Journal

In yesterday’s edition, the Wall Street Journal revealed the grim truth about actually existing socialism.

“In the Atrium Gallery, the Regimes Museum displays uniforms, flags, posters and other paraphernalia from East Germany. Not only soldiers, sailors and police wore military-style uniforms. So did postmen, bus and streetcar operators, volunteer firefighters and members of the Red Cross.” (Joseph D’Hippolito, “Angela Davis, East Germany and Fullerton,” Wall Street Journal, June 27, 2019)

Mr. D’Hippolito might be interested to know that East Berlin actually had streetcar operators because it actually had streetcars. The last tram made its last run in West Berlin in October 1967. Since reunification, the city’s transport authority has tentatively expanded a few of the East Berlin lines into West Berlin, but there are bigger plans afoot for expanding the city’s “half of a tram network.”

Nevertheless, Berlin has the third longest streetcar system in the world, after Melbourne and Petersburg. I have no clue about what has been going on in Melbourne, but Petersburg has spent many of the last thirty some years devastating its network, once the longest in the world. Trams there have had to give way, as they did in West Berlin, to private cars, thus exacerbating climate change.

But capitalism is superior to socialism, no?

Watch this space for “Was There Life on Mars?”, my report on East Berlin: Half a Capital, a terrific exhibition currently on view at the Ephraim Palace in Berlin-Mitte.

Needless to say, the exhibition’s curators have a slightly more sophisticated take on life under socialism than the WSJ could ever imagine. Tellingly, the day I visited, all the other visitors were my age and older and had the bearing and look of East Germans, meaning they were revisiting their childhoods and youths.

I doubt what they were feeling was the much-dreaded or much-celebrated “Ostalgia,” but something more akin to surprise. After all, the planet on which they were born and grew up disappeared in the twinkling of an eye. Since there was an extraordinarily large, determined grassroots resistance and reform movement in East Germany in the seventies and eighties, a movement wholly or almost wholly absent in West Germany, the country and the world lost a lot when the capitalist vacuum cleaner simply sucked up the country after 1989.

In Berlin, one effect has been the extraordinarily intense gentrification of many former East Berlin districts, especially Mitte, Prenzlauer Berg, and Friedrichshain. As I discovered recently, however, there are pockets of wholesale gentrification as far east as Friedrichshagen, now a picture-perfect bourgeois colony for West Germans.

You do find yourself wondering where all the pre-1989 inhabitants of these places have gone.

In Fullerton, California, however, they are still fighting “communism,” something that never existed in any case {TRR}

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

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.”

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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.