NUMB3RS (Wages of War)

Illustration by Danny Berkovskii for *Mediazona*. Source: *New Tab*

Aided by a team of volunteers, journalists at Mediazona and the BBC’s Russian Service have identified 41,731 Russian soldiers killed in the war in Ukraine using open sources. This number includes employees of the Wagner mercenary group, but it does not include those who fought on Russia’s side in military units fielded by the self-proclaimed Donetsk and Luhansk “people’s republics,” the BBC noted in an article published on Friday, 12 January.

According to the article, more than 1,100 Russian military personnel killed in the war were under 20 years of age. Since the State Duma approved amendments to the relevant laws, in April 2023, thus permitting 18-year-old high school graduates to sign military service contracts, 48 Russians born in 2004 and five born in 2005 (who were thus “barely 18 years old” when they enlisted) have perished in the war.

As of 11 January, 2,377 airborne troops, 913 marines, 537 members of the Russian National Guard’s special forces, 450 members of the GRU’s special forces, 206 military pilots, and 77 FSB and FSO officers have been killed in combat operations.

The BBC points out that the number of casualties among those who voluntarily signed a contract to serve in the Russian armed forces has increased in recent months. Thus, volunteers, prisoners, and private mercenary company “recruits” now account for 37 percent of all confirmed losses 0n the Russian side. Another 12 percent of the identified casualties were draftees (of whom 5,005 died in Ukraine and 62 in Russia).

Source: Yevgeny Zhukov, “Journalists have confirmed the deaths of 41,700 Russian soldiers in Ukraine,” Deutsche Welle Russian Service, 13 January 2024. Translated by the Russian Reader

According to Ukrainian intelligence, the Russian forces in Ukraine currently consist of 462,000 military and 35,000 National Guard troops, responsible for the functioning of the occupation regime. This number of troops allows the Russians to carry out rotation — to withdraw units and subdivisions and bring them to the front line.

Source: Monique Camarra, “Jan 13: E-Stories,” EuroFile, 12 January 2024

When looking for a new advertising/PR agency in Ukraine in autumn 2023, PepsiCo made it a condition for a potential partner to exclude any mention of the war, or support for Ukraine and its army in future communications, according to a brief seen by B4Ukraine.

“NO: mention of war, hostilities, aggression, military personnel (from Brand side), Armed Forces of Ukraine. NO: support Ukraine and the army. NO: negative connotation, creating a feeling of ‘unsafe,’” states the “Pepsi restrictions” section of the brief.

The B4Ukraine Coalition contacted Pepsi offices in Ukraine and the US to ask for comment on this article but at the time of publication had not received any response.

In the meantime, the October 17 message on PepsiCo’s Instagram page announced that “PepsiCo volunteers distributed food kits to 1,200 families in the city of Borodyanka, whose homes were destroyed.” The message does not specify who exactly brutally destroyed the homes of these people.

Perhaps because PepsiCo’s Russia net profit increased by 333% to $525 million last year and the company paid about $115 million in taxes to the Kremlin? Treating such contributions as support for the economy of the aggressor state, Ukraine’s National Agency on Corruption Prevention (NACP) in September included PepsiCo in the list of international sponsors of war.

PepsiCo produces soft drinks, juices, chips, snacks, dairy products and other food products under the main brands Chester’s, Chipsy, Lay’s, Mirinda, Pasta Roni, Pepsi, Propel, Sandora, 7Up, Simba, Snack a Jacks, Sonric’s, Tropicana, etc.

The company has 19 factories, about 20,000 employees, 40,000 agricultural workers, and 600 open vacancies in Russia, according to the NACP.

The company announced the cessation of advertising activities and the production of some beverages in Russia in March 2022, while still allowing other products, such as infant formula and baby food to be sold, in order, as PepsiCo put it, “stay true to the humanitarian aspect of its business.” Yet in fact, the company continues the production and distribution of chips, snacks, and soft drinks. According to Bloomberg, PepsiCo’s revenue rose 16% in Russia and profits quadrupled, and the soda maker said operations in Russia accounted for 5% of consolidated net revenue for 2022, up from 4% a year earlier.

Now the iconic Pepsi cola is sold under the Evervess-Cola brand, although regular Pepsi Cola is still easy easily purchasable in Russian supermarkets due to the so-called parallel imports, when goods are imported without the manufacturer’s permission.

At the beginning of September last year, PepsiCo came under fire over its Russian business when the firm’s products were dropped by the Finnish parliament and Scandinavian Airlines’ operator SAS, and already on September 21, ironically, [a] Russian missile damaged a PepsiCo plant near Ukraine’s capital Kyiv.

A global [c]oalition of civil society organizations, B4Ukraine, is calling on PepsiCo to exit Russia ASAP and for the US government to issue a business advisory, warning US businesses of the growing legal, reputational, and financial risks of doing business under military control in Russia.

Source: “‘No support for Ukraine and its army’: PepsiCo restricts mentions of war in its PR,” B4Ukraine. Thanks to Monique Camarra (EuroFile) for the heads-up.

The war has markedly changed the Russian economy. Moscow has had to adjust its policy to fund its armed conflict against Kyiv, maintaining its military apparatus and police force, and integrating the territories it has annexed from Ukraine. These priorities have necessitated significant spending commitments that collectively threaten Russia’s economic stability. The Kremlin will spend six percent of GDP (more than eight percent when combined with spending on national security) on the war in 2024. This is more than the 3.8 percent of GDP that the United States spent during the Iraq war, although it falls short of the prodigious sums the Soviet Union allocated during the years of stagnation and its invasion of Afghanistan (18 percent of GDP).

Military spending has even eclipsed social spending—currently less than five percent of GDP—for the first time in Russia’s post-Soviet history. This pivot toward a militarized economy threatens social and developmental needs. The four annexed regions of Ukraine have already received the equivalent of $18 billion, and in 2024 almost $5 billion is expected to be transferred from the federal budget to regional budgets. No other regions in Russia receive this level of investment, which only increases interregional inequality. Rather than restore dilapidated housing in Russia, the Kremlin prefers to spend money on building houses and roads in annexed territories, to replace the houses and roads that Russian troops destroyed during their brutal invasion.

Russian industry has been transformed, with defense sectors now overshadowing civilian industries. The defense sector’s enterprises are now operating at a fever pitch and, as a consequence, any surge in demand is likely to force prices to rise because of the sector’s inability to increase supply. The military sector is receiving a disproportionately high amount of government spending, and it is also siphoning off labor from the civilian workforce, leading to an abnormally low unemployment rate of 2.9 percent. Before the war, Russia’s unemployment rate typically stood at around four to five percent. The military and public sectors now employ 850,000 more people than in late 2022–23. The invasion of Ukraine also prompted about 500,000 Russians to emigrate in 2022, driving shortages of qualified specialists and blue-collar workers.

Meanwhile, living standards have risen across Russia, and the percentage of Russians living below the poverty line has dropped to 9.8 percent, the lowest since 1992. Naturally, there are regional variations, and areas that have sent a significant number of their men to fight in Ukraine—including Altai Krai, the Altai Republic, Buryatia, Chechnya, and Dagestan—have witnessed the fastest income growth in low-income groups. This relative increase in prosperity can be expected to continue as Moscow disburses funds to the families of the deceased and wounded.

Overall, the Kremlin wishes to maintain an illusion of normality and even increasing prosperity for its citizens. The distortions in the labor market have pushed up salaries in military industry, as well as in civilian manufacturing, because of the need to compete to attract workers from well-paying military plants. Moscow is, meanwhile, making high payments to soldiers and people mobilized to fight in Ukraine, which are driving consumption. At the same time, thanks to a supply of cheap credit, the government is handing out subsidized mortgages, that are, for the moment, shielding families from economic reality.

Source: Alexandra Prokopenko, “Putin’s Unsustainable Spending Spree: How the War in Ukraine Will Overheat the Russian Economy,” Foreign Affairs, 8 January 2024

Elsewhere there are signs that the invasion of Ukraine may have disrupted the Russian economy more severely than the frothy party scene suggests. The Olivier salad, a mayonnaise-drenched confection of root vegetables, sausage and boiled eggs, is a staple at every table during the holidays. This winter the price of eggs suddenly rocketed (no one is quite sure why, but it may have been because farms were short of labour since so many workers have been conscripted or left the country). In some regions people cannot afford a box of six eggs and have to buy them individually. One pensioner even raised this with Putin during the president’s annual end-of-year call-in with the public. Putin promised to look into it.

Source: Kate de Pury, “Gucci is cheap and eggs are pricey in Russia’s surreal economy: War spending has Russians partying like it’s 2021. But some are also stockpiling dollars,” 1843 Magazine (The Economist), 10 January 2024

In the two years that have passed since the start of Russia’s large-scale invasion of Ukraine, residents of Ukraine have become less likely to use the Russian language, according to a press release on the outcome of research done by the Ludwig Maximilian University of Munich in cooperation with the University of Bath and the Technical University of Munich, which was published on Wednesday, 10 January.

Language plays a leading role in the identity of post-Soviet Ukraine, the authors of the study say. Many Ukrainians are fluent in both Ukrainian and Russian. And yet, only a few years ago, 50 to 60 percent of the country’s residents called Ukrainian their principal language of communication. After the Maidan protests in late 2013, sparked by then-Ukrainian President [Viktor] Yanukovych’s refusal to sign an association agreement with the EU, and Russia’s subsequent annexation of Crimea in 2014, more Ukrainians abandoned Russian.

[…]

The researchers explore this trend in a study published in the journal Communications Psychology. Using artificial intelligence and statistical analysis, they examined more than four million messages posted by 63,000 Ukrainian users on the social network X (formerly Twitter) between January 2020 and October 2022.

According to the study’s authors, users began switching from Russian to Ukrainian even before the large-scale Russian invasion, but this trend increased dramatically after the war began. In their opinion, this change in user behavior was a political reaction to events. Users wanted to distance themselves from both support for the war and Russia as such, so they started using Ukrainian en masse.

Source: Sergei Gushcha, “Ukrainians use Russian less since war began,” Deutsche Welle Russian Service, 10 January 2024. Translated by the Russian Reader

The full-scale war in Ukraine, which began almost two years ago, has led to increased violence in Russia itself. Military personnel with PTSD and criminals recruited into combat return from the front and maim and kill people in civilian life. Sometimes conversations about the war even end in violence. Mediazona and New Tab have uncovered over thirty criminal convictions for assaults and murders that occurred during quarrels about the “special military operation.” (The courts use the official wording for the war as mandated by the authorities.)

In Berdsk, Novosibirsk Region, draftee Khuler Mongush stabbed Nikolai Berezutsky, a passerby. The latter had asked Mongush why he was going to Ukraine. Saying that he was going there “to defend the Motherland,” the mobilized man attacked Berezutsky. Mongush was sentenced to eight years in prison for murder.

In the Irkutsk Region, farmer Maxim Khalapkhanov was drinking with an acquaintance, who began ridiculing the state of the Russian army during the war. Khalapkhanov eventually got angry and killed the acquaintance with a knife, whose handle was decorated in the colors of the Russian flag, and drew the letter Z on his stomach with a fireplace poker. Khalapkhanov was sentenced to seven years in a high-security penal colony.

Anton Rakov, a resident of Orenburg, was drinking with a new acquaintance. They began arguing about the war. Rakov did not like what his interlocutor was saying and killed him. While his victim breathed his final breaths, Rakov recorded a video with the dying man in the background, shouting, “This is what will happen to anyone who disagrees with me!”

Viktor Konnov of Zlatoust beat up a friend who said something nice about Ukraine, while Ivanovo resident Mikhail Vitruk received two and a half years in a penal colony for beating up his girlfriend, who allegedly called him a “Nazi” while they were watching the news.

In 2020, Mikhail Taskin attempted to shoot three people over a parking space and was sentenced to nine years in a penal colony, whence he was freed by the Wagner Group. Taskin spent several months in combat, where he lost a leg, eventually returning to his native village of Nerchinskiy Zavod in the Transbaikal Territory. In August 2023, he got into a fight at a local cafe. Taskin mocked the waitresses and promised to “hump all of them.” The incident ended in a brawl, and the police detained five people, but not Taskin was not among them. His sister and the local authorities argued that the disabled man had been assaulted by “opponents of the war.” But the news website Regnum discovered that two of the detainees were certainly not against the war because they had been involved in patriotic campaigns in the region.

It is not only drinking buddies and casual acquaintances who quarrel and fight over the war. Mediazona and New Tab turned up no less than seven court rulings in cases where the defendants and the victims were members of the same family. Vladimir Tofel from Petropavlovsk-Kamchatsky killed his nephew during an argument about the war. Yuri Makarkin stabbed his son, while Anna Cheremnova, a resident of the Altai Territory, stabbed her husband.

The experts asked for comment by Mediazona and New Tab argue that these are signs of a deep split within society, and the policy of the authorities does not help society to overcome this fissure. On the contrary, the hysterical rhetoric of propaganda only heightens the degree of intolerance, and people are increasingly willing to maim and kill each other.

Source: WTF (Mediazona) newsletter, 10 January 2024. Translated by the Russian Reader

Small Acts of Defiance

The town’s coroner and mortician, Dr. Ivan Malinin, a Russian immigrant who barely spoke English, performed the autopsy on Williams at the Tyree Funeral House. Malinin found hemorrhages in the heart and neck and pronounced the cause of death as “insufficiency of [the] right ventricle of [the] heart.” Malinin also found that, apparently unrelated to his death, Williams had also been severely kicked in the groin during a fight in a Montgomery bar a few days earlier in which he had also injured his left arm, which had been subsequently bandaged. That evening, when the announcer at Canton announced Williams’s death to the gathered crowd, they started laughing, thinking that it was just another excuse. After Hawkshaw Hawkins and other performers started singing “I Saw the Light” as a tribute to Williams, the crowd, now realizing that he was indeed dead, followed them.

Source: “Death of Hank Williams,” Wikipedia

Hyvästi Suomi!

This can be translated as “Goodbye, Finland,” or it can be translated as “Adieu, Finland.” The correct translation will depend on our neighbors.

Source: “News Roundup” email newsletter (Delovoi Peterburg), 24 November 2023. Translated by the Russian Reader

Finland has temporarily closed all but one of its eight passenger crossings to Russia in response to an unusually high inflow of migrants for which the Nordic country accuses Moscow.More than 700 migrants from nations such as Yemen, Afghanistan, Kenya, Morocco, Pakistan, Somalia and Syria, have in the past couple of weeks entered Finland via Russia. Helsinki says Russia is funneling migrants to the border, a charge the Kremlin has denied.

Having last week closed four border stations, Finland overnight closed all remaining passenger crossings except its northernmost one, Raja-Jooseppi located high north in the Arctic region, for a month.

Raja-Jooseppi opened its gates for traffic this morning and will continue to accept asylum applications during its four daily opening hours, the Finnish Border Guard said.

No migrants arrived overnight outside opening hours, it added.

The Border Guard is stepping up patrolling along the length of its 833-mile frontier with Russia.

It will get additional resources for the task from the European Union’s border agency Frontex, which said on Thursday it would deploy 50 border guard officers and other staff to Finland along with equipment such as patrol cars to bolster control activities.

Source: “Finland closes passenger border crossings with Russia,” NBC News, 24 November 2023

What are the benefits for Russia?

HS: Russia wants to create an image of a hostile West that is of benefit to the Russian leadership. Finland has not fit this image in the past, but now they are trying to build it. Relations between Finland and Russia are at a turning point. The Russians have realised that they do not know Finland after all. They want to see who Finland cooperates with and at the same time try to stir up discord within Finnish society. Building a new relationship will be a long-term process.

JS: Russia can create a fortress mindset due to a perceived ‘threat’ from the West. Finland’s eastern border is becoming a useful confrontational narrative for the Kremlin. When the same narrative is repeated, a kind of protection mechanism kicks in and even sceptics will start to believe it.

Source: “What is Russia hoping to achieve with hybrid tactics on the Finnish border?” Yle News, 21 November 2023

The Front Lawn, “Claude Rains” (1989)

Claude Rains in Casablanca

He was the French Police Inspector

A functionary through and through

A small man

Remember at the end out on the airstrip

He could have tried to stop them

Ingrid Bergman and her friend from the French Resistance

But he pretended not to see

It was a small act of defiance

As the storm broke in the distance

He was on their side after all.

Claude Rains gave the order to collect the usual suspects

And the camera came in close up on his face

He watched as the plane left the airstrip

Like hope leaves a dying man

But he hung on to the choice he’d made

Claude Rains

Claude Rains

Claude Rains

Claude Rains

I saw a new film the other day

And it was set at the start of a nuclear war

The actors weren’t as good as Claude Rains

But then there was nothing that they could do

All of their small acts could count for nothing

As the storm broke in the distance

Not much to make a film about

Source: “Claude Rains,” The Front Lawn: Lyrics

Civic Council named “undesirable organization” in the Russian Federation

The Prosecutor General’s Office added us to this list on November 3, exactly one year after we announced the creation of our Mobilization Center. We have openly stated that we are working to ensure that the Russian Federation in its current form, with its current government and all that this government calls the state, ceases to exist.

Today it is the Russian state that is criminal, and armed struggle against it is legitimate and necessary. So the Prosecutor’s Office and the Justice Ministry are formally correct: we are their enemies.

In fact, our status as an undesirable organization has not changed anything. Supporting the Civic Council within Russia was also a criminal offense before we were give this status, just like all other independent political and civic activities. The Russian authorities hand down approximately the same prison sentences for making [anti-war] comments on social media and engaging in armed resistance. So, we propose fighting effectively, rather than commenting in vain.

We have to resist intelligently, so we suggest that our supporters inside Russia observe the rules of information security and be vigilant.

We do not accept donations payable to Russian bank cards and do not have accounts in Russian banks.

We are not urging you to attend protest rallies right now. The time to go to the public squares will come later.

We invite those who are ready to take up arms to fight, fully aware of the consequences.

For those who do not want to stay on the sidelines but cannot fight for various reasons, there are other ways to support our cause:

donating money, including anonymously through crypto wallets (including Monero)
providing information to our OSINT service
disseminating information about the opportunity to volunteer

To volunteer for the Siberian Battalion, fill out this form.

Anyone who wants to make a donation should go here. All options are a help to us.

Anyone who wants to help with information or other work inside the Russian Federation should write to us at civic_council@proton.me.

Sincerely yours,

Civic Council, an undesirable organization in the Russian Federation

@obserwujący

P.S. We suggesting giving us the special status of “an organization readying the overthrow of the Putin regime.”

Source: Civic Council (Facebook), 23 November 2023. Translated by the Russian Reader

Foreign luxury brands are closing their flagship stores on Nevsky Prospect, but they could be replaced by Russian fashion retailers, say market participants.

Analysts expect a reduction in rental rates on Nevsky Prospect.

According to sources cited by Kommersant-SPb and NF Group, Breitling, Fendi, Omega, Rolex, and Salvatore Ferragamo have already vacated their spaces in downtown Petersburg. Louis Vuitton has the same plans. Market participants ascribed the mass exodus of luxury sellers to political pressure in the brands’ home countries and logistical and supply chain challenges.

“Luxury retailers initially took a wait-and-see attitude, but now it has become clear that there are no prospects for stabilizing the economic situation in the medium term,” said a source who spoke to Kommersant-SPb.

KNRU development director Polina Fiofilova noted that western brands that have been operating in the fashionable part of Nevsky Prospect for years have driven rents “sky-high” and inflated the expectations of landlords.

In the first half of 2023, the rates per square meter in this locale ranged from 2,600 to 6,700 rubles per month (VAT included), while in the adjacent Telezhny Lane they amounted to 2,500 to 5,200 rubles per square meter per month. Local fashion retailers simply would not be able to afford such rents, analysts said.

Nevsky Prospect is still empty. Despite a reduction in vacancies compared to the peak period, their level remains quite high, thus generating pressure on rental costs, added Mikhail Burmistrov, CEO of the agency Infoline Analytics.

As Delovoi Peterburg wrote earlier, despite the departure of a number of foreign brands, fashion retail sales increased by nine percent, a nineteen percent increase compared to the same period last year. But the average receipt remained at the level of last year or even decreased.

In period from July to September, ten international brand stores opened in Petersburg shopping centers. Most of the new boutiques belong to the fashion segment.

Three new Turkish clothing brand stores opened in Petersburg, along with Quiksilver (Australia), Mark Formelle (Belorussia), Woolrich (USA), Yamaguchi (Japan), Liu Jo (Italy) and two Stockmann’s stores (Finland).

We reported in October that the Italian clothing brand OVS would return to Petersburg after a ten-year hiatus.

Source: “Western luxury brands close Nevsky Prospekt boutiques en masse,” Delovoi Peterburg, 20 November 2023. Translated by the Russian Reader

Rosstat reports that the retail price of bananas increased to 143 rubles per kilo for the first time since it has been tracking their price. Compared to October last year, the cost of bananas increased by 47 percent, which was the biggest single-month increase since 2000. Oranges led the price growth among fruits: in October, they rose in price to 209 rubles per kilo, or by almost 80% year on year. Fruit prices were affected by the weakening of the ruble, which led to an increase in suppliers’ purchase prices and a rise in the cost of logistics, according to market participants. Albina Koryagina, a partner at NEO, a consulting company, says that last year the Russian authorities controlled the growth of retail prices for socially significant products, including bananas (aka “the poor people’s fruit”), as much as they were able, but this year retailers can no longer afford to hold down prices “even when pressured.”

Source: Moscow Times Russian Service, daily news roundup, 24 November 2023. Translated by the Russian Reader

4,121 criminal absence without leave [AWOL] cases have been delivered to Russia’s military courts since the start of the military mobilization in September 2022, as reported on Friday, November 24, by Mediazona, which studied information available on the websites of the military courts.

The courts have already made rulings in 3,470 of the cases. “Most AWOL cases result in suspended sentences. The percentage of such rulings is sixty-three for volunteer soldiers, while for mobilized [conscripted] soldiers, it is slightly lower—fifty-six percent,” the article says. A suspended sentence, it notes, makes it possible to return a serviceman to the front.

In addition to criminal AWOL cases, Mediazona found 317 cases of disobeying orders, 96 cases of desertion, 54 cases of assaulting a commanding officer, and 42 cases for other offenses on which the authorities have doubled down during the mobilization.

According to the infographic published by Mediazona, the most cases were launched in the Moscow Region (309), the Rostov Region (224), and the Maritime Territory (181). 123 cases were launched in Moscow, and 116 in St. Petersburg.

Source: Jan Roffe, “More than 4,000 criminal AWOL cases launched in Russia,” Deutsche Welle, 24 November 2023. Translated by the Russian Reader

The Ad Campaign

Sergey Abashin writes: “All of Petersburg is covered with ads like this.”

This ad says that on the day you sign a contract to serve in the Russian army you’ll be issued a plot of land (for building your own house) near Petersburg whose market value is around two million rubles. You’ll also (?) get a one-time payment of 500,000 rubles. Your monthly pay in the army (if you serve in the “special military operation zone,” says the fine print) starts at 200,000 rubles.

According to the municipal statistics agency Petrostat (as cited by business daily Delovoi Peterburg), the average monthly wage in the city was 101,155 rubles in August. At current exchange rates, that amounts to around 1,056 USD. ||| TRR

“Life in a War Zone Will Never Be Normal”

Just last week, I bought something I needed for my new job on Etsy from a husband-and-wife team of artisans in Kyiv, so I found this article from The Hustle, “Why Etsy is a financial lifeline for artisans in Ukraine,” timely and fascinating and sobering. ||| TRR

One day last October in the southwestern Ukrainian city where Olena Hryhorenko lives, the lights went out. Her house lost access to electricity, water, and the internet. The streets turned pitch-black.

In the darkness, she reached for a flashlight and started to knit.

The blackout, caused by Russian attacks on Ukrainian power systems, lasted two days in Hryhorenko’s city of Bilhorod-Dnistrovskyi and set the tone for a brutal winter of energy rationing and rolling blackouts. Over the next several months, Hryhorenko had electricity and water for four to six hours a day. At night, her family continued to dedicate limited battery power so Hryhorenko could practice her craft by flashlight.

Hryhorenko, who is 19 and a university student, has knitted since she was 12 and started an Etsy shop called Toysknit in 2018, selling knitted deers, squirrels, and bunnies in Easter and Christmas garb.

The cold, dark months were a challenge, but Hryhorenko managed to keep her business afloat and ship orders on time. In the last year, she’s sold 100+ knitted figurines to buyers across the world, using the money to help support her family.

Across Ukraine, there are thousands of crafters like Hryhorenko. For years, they’ve turned traditional hobbies into side hustles and full-fledged businesses, developing an outsized presence on the popular online marketplace. Per capita, Ukraine has more Etsy items for sale than every large European country except the United Kingdom and Germany.

[…]

But life in a war zone will never be normal.

Hryhorenko says she’s had to adapt to a new reality and is not optimistic the war will end soon. She believes morale is getting worse as Ukrainians struggle from depressed wages, fear for their children’s future, and cope with the constant fear that they could lose everything.

In this harrowing time, she’s thankful she can knit. When Hryhorenko relaunched her store not long after the start of the war, skeptical anyone would want to deal with long shipping times and other potential complications, she wasn’t sure she would even have that. Within two hours, somebody purchased a pair of knit bunnies.

The moment offered her a feeling she feared the war had taken away: inspiration.

Source: Mark Dent, “Why Etsy is a financial lifeline for artisans in Ukraine,” The Hustle, 29 September 2023

Clearance Sale

Let’s think about who the beneficiaries are and what their profit is: this should explain why the regime is stable. The beneficiaries include not only the supreme leader, who of course wants to be “mistress of the seas” and has been trying consolidate the regime for himself and his entourage. The beneficiaries also include different groups among the elites, the security forces, officialdom, businessmen, and “intellectuals” at all levels. Material and symbolic resources are now funneled to these groups, and they are granted new powers to cause mayhem in their own bailiwicks. Many of them have taken advantage of this opportunity to quash rivals and take up new positions in their respective economic, political, and cultural markets. The beneficiaries also include different sectors of the populace—for example, people employed in the defense industry, people employed by law enforcement agencies, people who volunteer for the army as contract soldiers, and people engaged in producing different kinds of propaganda. They amount to millions of people, and the streams of financing that nourish them flow far and wide. In addition to power and material gain, there is a psychological benefit: one can now openly be proud of one’s country and hate its “enemies.” How many of the insulted and injured now feel joy and have made their own complexes the norm. This satisfaction also costs money, and it means millions more in new profits.

Source: Sergey Abashin (Facebook), 2 August 2023. Translated by the Russian Reader

“These amendments are written for a big war and general mobilisation. And the smell of this big war can already be scented,” Andrei Kartapolov, the head of the Duma’s defence committee, said this week as the Russian parliament rushed to adopt a new law. The legislation enabling the Kremlin to send hundreds of thousands more men into combat reveals a sad truth: that far from seeking an off-ramp from his disastrous war in Ukraine, Vladimir Putin is preparing for an even bigger war.

It is understandable that many in Ukraine and the west want to believe that Russia’s president is cornered. The Ukrainian army is gradually reconquering lands occupied by the Russians and has shown itself capable of striking deep into enemy territory — even into the Kremlin itself. The sanctions pressure on Russia is mounting.

For now, the west remains united in support of Kyiv, and streams of modern weaponry and money sustain the Ukrainian war effort. Finally, the mutiny staged by the Wagner mercenary boss Yevgeny Prigozhin and visible conflicts among senior Russian military commanders add to hopes that the Kremlin’s war machine will break down.

Things likely look very different to the Kremlin, which believes that it can afford a long war. The Russian economy is forecast to record modest growth this year, mostly thanks to military factories working around the clock. Critical components such as microchips needed for the defence industry are arriving from China and other sources.

Despite sanctions, the Kremlin’s war chest is still overflowing with cash, thanks to windfall energy profits last year and also to the adaptability of Russian commodities exporters, who have found new customers and who settle payments mostly in yuan. If budgetary pressures were to become more acute, Russia’s central bank could further devalue the rouble, making it easier to pay soldiers, defence industry workers and the internal security forces who keep the Russian elite and public repressed and largely in line with Putin’s disastrous course.

When it comes to the war itself, the Kremlin still seems unperturbed by the Ukrainian counteroffensive. Even if Kyiv makes more advances, the Kremlin may brush them off as temporary. Putin is banking on the fact that the Russian manpower that can potentially be mobilised is three to four times bigger than Ukraine’s, and the only pressing task is to be able to tap into that resource at will: to mobilise many more men, arm them, train them and send them to fight. This is precisely the purpose of the new law, which should help the Kremlin to avoid another official mobilisation.

From now on, the government can quietly send draft notices to as many men as it deems necessary. The upper age limit for performing mandatory service will be increased from 27 to 30, and could be raised again in future. Once an electronic draft notice is issued, Russia’s borders will be immediately closed to its recipient in order to prevent a massive exodus of military-age men like the one Russia witnessed last autumn. The punishments for refusing to serve have also been ramped up. These moves, combined with massive state investment in expanding arms production, should help Putin to build a bigger and better equipped army.

A parallel tactic is the strangulation of Ukraine’s economy. Knowing that the Ukrainian budget is on life support provided by its western allies, the Kremlin wants to deny Kyiv all sources of revenue. Moscow has therefore not only pulled out of the grain deal that had enabled Ukrainian agricultural exports via the Black Sea, it has also launched massive air strikes against Ukrainian ports to destroy any possibility of reviving the agreement. The same logic underpins Russia’s air strikes against civilian infrastructure: they are aimed at making Ukrainian cities uninhabitable and preventing reconstruction efforts.

The Kremlin hopes that the rapid rebuilding of the Russian army and gradual decimation of the Ukrainian economy and armed forces will result in growing western frustration and a decline in material support for Kyiv. To speed up this process and break the west’s will, Moscow is using threats of escalation, including expansion of the conflict towards Nato territory via Belarus with the help of Wagner mercenaries based there.

Putin has made plenty of fatal mistakes. But as long as he is in charge, Moscow will dedicate its still vast resources to achieving his obsession with destroying and subordinating Ukraine. As western leaders think about policies to support Ukraine into the third year of this ugly war, any long-term strategy must take this reality into account.

Source: Alexander Gabuev, “Putin is looking for a bigger war, not an off-ramp, in Ukraine,” Financial Times, 30 July 2023. Thanks to Monique Camarra (EuroFile) for the heads-up.

Things like this also get written: “Is it just Putin’s war or a war on the part of all Russians? Perhaps neither one nor the other. Another sociological hypothesis is that the cynical elite has provided the real support for the military aggression, rather than a grassroots gone bad.” (This is a headline: you can google it.). Further, the authors define “the cynical elite” as “the mid-level and low-level officials who ensure the functioning of the Kremlin’s military-political machine; the para-state businesses engaged in import substitution and circumventing sanctions; the upper middle class and the leadership of so-called public sector entities, compelled in one way or another to demonstrate loyalty to the war”—that is, only a few million people. In other words, the Russian ruling class supports the foreign policy that the Russian state pursues in the interests of the Russian ruling class. This argument is tautological in the Marxist manner (although, as the authors of the article rightly point out, it occurs to very few people) and is not entirely true, because there are groups within the ruling class who do not benefit at all from this policy. But it certainly sounds more convincing than the theory of a “grassroots gone bad.”

Source: Grigorii Golosov (Facebook), 2 August 2023. Translated by the Russian Reader

I reread our interview with Dima Spirin [leader of the recently dissolved veteran Russian punk rock band Tarakany!], and one phrase cut me to the quick: “Our attempt to be free in an unfree country has failed.” An ordinary argument, seemingly, and it’s been made a hundred times. There were oases of freedom in Russia, but then they were destroyed and everything collapsed.

Such things are usually spoken of with regret, as of disappointed hopes. But oases of freedom in a poor dying country are not terribly moral, by and large. Do you know who was free in ancient Greece? That’s right, slaveholders. All the others were slaves.

Does this mean it isn’t worth fighting for freedom in an unfree country? It doesn’t mean that at all. But what’s worth fighting for is everyone’s freedom, not just one’s own. There is no separate freedom for fifteen percent of the population. That is called colonialism.

Some have it good, while others have it bad. Some are free, while others are slaves. Some are rich, while others are poor. There is no other way. Or rather, there is another way, but it ends exactly as it has now—in enormous bloodshed.

It’s either everyone or no one: freedom is not achieved piecemeal.

This is our collective fault. Our guilt is terrible and bloody. I don’t excuse myself either.

And the inner freedom that is the talk of the town nowadays is a lame excuse, like inner emigration. The madman and the drunkard are truly free. But neither meditation, nor reading Borges, nor listening to psychedelic rock will save you from hunger, cold, or getting smacked with a billy club. And they won’t cancel the fact that your neighbor has it bad.

A woman falls on the street, breaks her leg, and lies on the ground screaming. But you’re listening to Pink Floyd on your headphones: you’re free.

Source: Yan Shenkman (Facebook), 3 August 2023. Translated by the Russian Reader

Do Russians Have a Conscience?

This is Odessa today. It is useless to appeal to the conscience of Russians. They don’t have one. None of them, practically none of them. Accordingly, one can only wish them one thing: may you all go to the devil, bastards! And so it will be, I believe, and fairly.

Source: Yuri Leiderman (Facebook), 23 July 2023. Translated by the Russian Reader

Punters outside Chronicle Bar Nekrasov Street in Petersburg, 27 June 2021
Photo: vladislavkharchev (Instagram), via Bumaga

Consulting company NF Group analyzed the trends for the openings of cafes, bars and restaurants in downtown Petersburg in the first six moths of 2023. Their analysts came to the conclusion that the city’s principal bar street is Nekrasov Street, the NF Group’s press service informed Bumaga.

This claim is based on statistics on the distribution among different types of establishments on Nekrasov and Rubinstein streets. By mid-2023, bars and pubs accounted for 58% of all public dining projects on Nekrasov. On Rubinstein Street, this figure was lower: only 40% of all establishments there are bars or pubs.

In the first six months of last year, Rubinstein was also inferior to Nekrasov in terms of the percentage of bars and pubs: 42% on Rubinstein and 51% on Nekrasov, respectively.

Percentages of bars/pubs (goldenrod), cafes/restaurants (navy blue), and other business that opened on Rubinstein (left) and Nekrasov streets in central Petersburg in the first six months of 2022 (inner circles) and 2023 (outer circles).
Pie charts courtesy of NF Group

What other conclusions did the analysts draw?

In the first six months of 2023, fifty bars, restaurants, and cafes were opened in Petersburg. This is comparable to the figures that were observed in the city before the coronavirus pandemic.
On Nevsky Prospekt, restaurateurs are increasingly opening affordable establishments, including chain outlets.
Public dining establishments have room to grow on Nekrasov Street: there they occupy 51% of all commercial space. This figure is much higher—78%—on Rubinstein Street.

The Context. Rubinstein was long considered Petersburg’s primary bar street, but the recent Bar Affair and other scandals have spoiled this location’s image. Recently, the security forces have been organizing raids on Nekrasov Street: police visited local bars several times in July alone.

Source: “Nekrasov Street is Petersburg’s main bar location, according to statistics,” Bumaga, 22 July 2023. Translated by the Russian Reader

Em Uyaya’am (Things I Saw, Read and Watched This Week)

Asilomar State Beach, 21 July 2023. Photo by the *Russian Reader*

Who is Girkin?

Igor Girkin (Strelkov) is an ethno-fascist FSB officer and the warlord who prepared the ground and then launched the war in Donbas in 2014. He stated that without him, “there wouldn’t be any war”. He is also responsible for ordering the execution of numerous civilians, for which he still face justice. He was sentenced to life imprisonment in absentia by the International Criminal Court on November 17, 2022 as perpetrator of the downing of Malaysian Airlines 17 and the murder of 298 people—a war criminal.

[…]

Source: Monique Camarra, “Igor Girkin arrested in Moscow: the Kremlin is clamping down,” EuroFile, 22 July 2023

“The all-clear hasn’t sounded, the fight continues.”

Source: Sergey Abashin (Facebook), 21 July 2023

Stunning drone footage has revealed details of the Batagaika crater, a one-kilometer-long gash in Russia’s Far East that forms the world’s biggest permafrost crater.

In the video two explorers clamber across uneven terrain at the base of the depression, marked by irregular surfaces and small hummocks, which began to form after the surrounding forest was cleared in the 1960s and the permafrost underground began to melt, causing the land to sink.

“We locals call it ‘the cave-in,'” local resident and crater explorer Erel Struchkov told Reuters as he stood on the crater’s rim. “It developed in the 1970s, first as a ravine. Then by thawing in the heat of sunny days, it started to expand.”

Scientists say Russia is warming at least 2.5 times faster than the rest of the world, melting the long-frozen tundra that covers about 65% of the country’s landmass and releasing greenhouse gases stored in the thawed soil.

[…]

Source: “World’s biggest permafrost crater in Russia’s Far East thaws as planet warms,” Reuters, 21 July 2023

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“Let’s remember these people”

After the court hearing [in his criminal case], Oleg Orlov read out a long list of names of people convicted of “disseminating fake news” or “discrediting the army.” He mentioned Alexei Gorinov, Dmitry Ivanov, Samiel Vedel (aka Sergei Klokov), Vladimir Kara-Murza, Ilya Yashin, Maxim Lypkan, and many others.

“I am not imprisoned, and I can say what I deem necessary. I can answer your questions. But how many of my and your kindred spirits are deprived of this opportunity,” Orlov reminded. “I consider it my duty to read out the list. These are only some of the people who have been imprisoned for their anti-war stance.”

After reading out the names, Orlov cited data from OVD Info. “634 people from 78 regions [of Russia] have faced criminal charges for anti-war protests, for words and statements,” the human rights activist said. “And 200 of them have already been incarcerated. Let’s remember these people.”

Orlov stressed that he was fighting not only for his own sake. “Both my lawyer Katerina Tertukhina and my public defender Dmitry Muratov — we are fighting like this and trying to prove the nullity of the charges [against him], the nullity of the [prosecution’s] expert witness analysis, because we are trying to fight for all people.”

Video courtesy of SOTA

Source: memorial.hrc (Instagram), 21 July 2023. Translated by the Russian Reader

Crimean Tatar-led underground movement is already active behind Russian lines and hundreds of young Tatar men are ready to take up arms to liberate the occupied peninsula, a veteran community leader has said.

Mustafa Dzemilev, widely seen as the godfather of the Crimean Tatar rights movement, pointed to operations by the Atesh guerrilla group, comprising Crimean Tatars, Ukrainians and Russians, in Crimea and other occupied Ukrainian regions.

Atesh, which means “fire” in Crimean Tatar, was created in September last year, primarily to carry out acts of sabotage from within the ranks of the Russian army. It claims more than 4,000 Russian soldiers have already enrolled in an online course on how to “survive the war” by wrecking their own equipment.

There is no evidence linking the group to the latest attack on the Kerch Bridge, early on Monday morning, but the group has claimed a string of smaller-scale attacks, blowing up Russian checkpoints, assassinating Russian officers, setting fire to barracks and feeding sensitive information to Ukrainian intelligence. It recently accused Russian sappers of laying mines in the Krymskyi Titan chemical works in Armiansk, northern Crimea. An explosion there could spread an ammonia cloud across the land bridge between the peninsula and mainland Ukraine.

“Atesh is very deep underground,” Dzhemilev, 79, told the Guardian in an interview in Kyiv. “There was not a single arrest among Atesh members, but they are working inside Crimea territory blowing up targets.”

[…]

Source: Julian Borger, “The underground Crimean Tatar group taking up arms against Russia,” Guardian, 17 July 2023

Hello! This is Alexandra Prokopenko with your weekly guide to the Russian economy — brought to you by The Bell. In this newsletter we focus on the Kremlin’s decision to seize the Russian assets of two major foreign companies and what it means for the business climate and the other Western businesses who cannot — or will not — leave Russia. We also look at Friday’s interest rate hike and new Western sanctions on Russia.

Nationalization of Western assets heralds broader property redistribution

Finland’s Fortum and Germany’s Uniper saw their Russian assets seized by the Kremlin earlier this year. This week was the turn of France’s Danone and Denmark’s Carlsberg. It feels like we are witnessing the final chapter in the history of Western business in post-Soviet Russia. If the transfer of Fortum and Uniper’s energy assets to external management was explained as a response to the European Union’s treatment of Russian energy companies, there is no such obvious reason for the behavior toward Carlsberg and Danone and it likely reveals the Kremlin’s real intentions. This is direct nationalization — and opens the door to a new distribution of property in Russia.

[…]

Source: Alexandra Prokopenko, “Kremlin asset seizures the new normal,” The Bell, 21 July 2023

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“Russia, forward!”

Source: Marina Varchenko (Facebook), 14 July 2023. She writes: “In our hood) Petersburg, Razyezzhaya Street.“

The Arkhangelsk Region has allocated 800 million rubles to the occupied Ukrainian city of Melitopol, which will be used to repair the city, which has suffered from Russia’s invasion. However, the region itself does not have enough money to repair its own housing. Arkhangelsk is considered the capital of the Russian North, but has been informally dubbed the “capital of dilapidated housing.” Many people live in substandard housing: the city is chockablock with barracks and crumbling wooden houses. Watch Valeria Ratnikova’s report on how the region copes with a budget deficit while its money is spent on the war.

00:00 Opening 02:15 Ruins, barracks, and crumbling houses 06:00 Brevennik Island: expensive prices and derelict housing 10:56 Natalia Zubarevich about the lack of money in the region 12:04 The campaign against waste haulage to the region 16:18 The authorities are taking revenge on opposition activists opposed to landfills 31:35 Denunciations and criminal cases for statements about the war 33:22 One of the protesters went to the war 36:15 What residents say about the war 38:26 Getting fired for criticizing the war 39:40 A female student fled to Lithuania — the authorities wanted to jail her for talking about the war 46:25 The region’s environmental problems 49:10 Journalists detained during Putin’s visit 51:11 How the war has affected life in the region

Source: “The ruins of Arkhangelsk: how people whose money was given to occupied city live,” TV Rain (YouTube), 16 July 2023. Annotation translated by the Russian Reader

Fun with Pictures

Source: Josh Holder et al., “The West Tried to Isolate Russia. It Didn’t Work,” New York Times, 23 February 2023

Source: Francesca Ebel and Mary Ilyushina, “Russians abandon wartime Russia in historic exodus,” Washington Post, 13 February 2023

Takeaway: The countries to which “anti-war” Russians have fled in the greatest numbers since February 24, 2022, also figure prominently among the list of countries which have significantly increased their exports to Russia since its invasion of Ukraine. I’ve never seen this issue addressed, much less mentioned, by the “Russian diaspora” or the “Russian anti-war movement.” I wonder why. ||| TRR

Whiskey, You’re the Devil

A .7-liter bottle of Ladoga’s Carrygreen “Irish whiskey” will set you back 1,285 rubles (approx. 17 euros) if you order it online.

Amid the departure of a number of foreign brands, Ladoga Group is the first in Petersburg to launch the production of Irish whiskey under its own brand.

The products will be produced at the plant in Petersburg from Irish grain and malt distillates aged in oak barrels for more than three years. The company is counting on the new product’s success due to Irish whiskey’s growing popularity in Russia and the withdrawal of several foreign brands from the market, Ladoga president Veniamin Grabar said.

“If bottling Scotch whiskey in Russia is already a familiar thing, then Carrygreen is one of the first whiskeys from Irish distillates bottled in Russia. It is now a rapidly growing product in its category,” he said.

Grabar claims that the volume of imports on the market is about 70%. And yet, Irish whiskey’s share of this market has been growing — from 16% in 2017 to 25% in 2021. Since 2017, the number of Irish whiskey brands on the Russian market has doubled, growing to fifty.

Veniamin Grabar, president of the Ladoga Group, “a strategic partnership of several independent enterprises which were joined together for the production and import of alcoholic products and bringing them to consumers.”

As the company told DP, the first batch of products under its own brand will total 63,000 bottles. The planned annual volume is 400,000 half- and .7-liter bottles. At the moment, the project is aimed at the domestic market: the company plans to take a 30% share of Russia’s Irish whiskey segment, and the entire Ladoga Group (including its own import distribution companies) aims to grab 7-8% of the domestic whiskey market. If its resources and feedstocks allow, the group does not rule out starting exports to the CIS countries.

According to Maxim Chernigovsky, head of the Club of Alcohol Market Professionals, whiskey in Russia is currently produced by about twenty factories.

“A significant part of the whiskey market in past years was taken up by imports from the UK and the USA. After the departure of a number of foreign brands, there was a shortage. Russian producers eliminated it by ramping up the production of this alcoholic beverage by 37% in 2022 compared to 2021,” he notes.

Thus, the shortage of whiskey in Russia has already been surmounted by domestic producers. Competition in this segment will definitely be intense, says Chernigovsky. “The segment is interesting: it is premium and high-margin. In fact, there is competition only among our own Russian homegrown factories. Foreign-made whiskey, delivered to Russia through parallel imports, show up on store shelves at a price at least 20% higher,” the expert argues. “Irish whiskey will be bottled in St. Petersburg for the first time, and Ladoga’s prospects can be called positive.“

According to estimates by the Club of Alcohol Market Professionals, 2,838,000 decaliters of whiskey were produced in Russia in 2021; in 2022, production increased by 37% to 3,891,000 decaliters. Among the largest players in this market are the Stavropol-based Alvis Group, the Stellar Group, Beluga’s Georgiyevsk distillery, as well as Tula’s 1911 Distillery. In addition, Bacardi bottles whiskey under the William Lawson’s brand at a Russian plant.

The Ladoga Group consists of several companies, including a production facility with an annual capacity of 4.5 million decaliters and a network of wholesale distributors. In 2021, Ladoga Distribution’s revenue increased by 18% to 12.9 billion rubles, and its net profits amounted to 121.9 million rubles, compared to 345.2 million the previous year.

Source: Svetlana Afonina, “Production of Irish whiskey up and running in Petersburg,” Delovoi Peterburg, 6 February. Translated by the Russian Reader

The Pogues, “Whiskey, You’re the Devil”

Barrister gins have won three medals at the UK’s Gin Of The Year™, considered the most important gin competition in the world. Barrister Organic and Barrister Blue gins won gold medals, Barrister Dry was awarded silver.

Once a year, the world’s most successful gin producers gather in London to present their production to prestigious jury of the UK’s most authoritative gin buyers. Gin of the Year organizer Peak Publishing is “the world’s most influential beverage competition entity” with 1 billion bottles sold since 2006. Barrister family gins traditionally show high results in international competitions such as CWSA, The GIN Masters, Beverage Tasting Institute, World Gin Awards, Frankfurt International Trophy, International Wine & Spirit Competition, New Zealand Spirits Awards and others. Today Barrister gins are available in overseas markets in Europe, Australia, New Zealand, India, China and the Middle East.

Source: “New Barrister triumph in London,” Ladoga, 23 November 2022

International economic institutions, which recently doubted Russia’s economy could survive under Western sanctions, are now sounding more optimistic than even the Russian government. The International Monetary Fund (IMF), known for its gloomy forecasts, this week predicted Russia’s GDP will grow at 0.3% this year.

The typically conservative IMF was much more upbeat than usual in its most recent forecasts for the global economy — for which it anticipates 2.9% growth (up 0.2 percentage points from its October forecast) because of “unexpectedly stable” dynamics.

Russia’s forecast was upgraded even more than the global figures: in October, the IMF expected a 2.3% fall in Russian GDP in 2023, now it is talking about 0.3% growth. In 2024, they believe Russia’s GDP will increase by as much as 2.1%.

IMF economists explain this surge of optimism with a familiar narrative: the stability of Russian oil exports. “At the current oil price cap level, Russian crude oil export volumes are not expected to be significantly affected, with Russian trade continuing to be redirected from sanctioning to non-sanctioning countries,” the report stated.

The IMF’s latest figures are the most optimistic forecast around. They are well above the February consensus among Russian economists (decline of 1.5% in 2023) and the official projections of the Russian authorities: the Ministry of Economic Development currently predicts a fall of 0.8% in 2023, while the Central Bank expects a drop of up to 4%.

If Russia’s economy is to live up to the IMF’s expectations, output needs to increase by 0.4% every quarter from the fourth quarter of last year to the fourth quarter of 2023, according to a Telegram channel run by Bloomberg Economics’ Alexander Isakov. The economist thinks this is realistic. “The shocks of losing the European gas market, the departure of car manufacturers and others remain… while retail lending is accelerating to finance a recovery in consumer demand,” Isakov wrote. “Thus, the IMF’s figures seem persuasive.”

Russia’s economy has adapted quicker than expected after the shocks of 2022. Central Bank analysts see five underlying reasons for this:

The stability of the banking system. Thanks to ample capital reserves, banks have remained in reasonable shape — while lending was supported by regulatory easing;
Falling export volumes offset by rising prices;
Rapid redirection of exports toward Asia;
An effective reshaping of logistics chains by import-based businesses;
Government support, with an increase in budget spending.

Business activity in Russia continues to recover. According to an updated State Statistics Service (Rosstat) estimate and the Central Bank’s figures, in the third quarter the economy turned a corner (+0.86% compared with the previous quarter). Russia’s economy moves into 2023 with a higher level of activity than was expected in the spring, Central Bank analysts wrote last month. Demand has been underpinned by government spending.

However, it’s important to point out that the economic recovery is patchy.

Constraining factors include a growing preference for saving rather than spending among the general population, difficulties with maintaining imported equipment and staff shortages.

In November, almost half of Russian businesses (45%) reported staffing problems. The dwindling workforce and the significant wartime brain drain could result in fierce competition to hire the remaining talent. And that will likely push up salaries faster than productivity can match, bringing inflationary risks (The Bell recently spoke at length with Vladimir Gimpelson, director of the Center for Labor Studies at the Higher School of Economics about current trends on the labor market).

“The IMF scenario is clearly the most optimistic of the possible outcomes that have some chance of happening in 2023,” said Dmitry Polevoi, investment director at Loko-Invest.

“However, from our point of view, GDP will still fall by 1.5-2.5% in 2023 due to weak demand at home and abroad, coupled with high levels of uncertainty.”

Source: Alexandra Prokopenko, “IMF upbeat on Russia’s economy,” The Bell, 4 February 2023. Translated by Andy Potts

Running: the Numbers

Istanbul, December 2022. Photo courtesy of *Republic*

[…]

500 vacancies for military registration specialists were advertised from late September to last December last year, according to HeadHunter. Previously, this specialization was considered a rather rare and generally not very sought-after profile in the personnel departments of Russian organizations (private and public). For comparison: only 145 such vacancies were advertised in the whole of 2021. The military mobilization has changed the situation: since September — that is, in just three months — the number of such offers on the labor market has increased by about two and a half times (Superjob’s data also show the same thing). The reasons? One of them (apparently, the main one) is an increase in fines for lapses in paperwork: to avoid them, employers are willing to pay applicants for the popular vacancy 70-80 thousand rubles a month. And this is despite the fact that there is a shortage of a number of other specialists on the labor market (and, presumably, they are no less valuable than SMO-era personnel officers). The number of vacancies on Avito Jobs alone, according to a recent company study, increased by 69% in 2022. Most likely, the trend will continue, serving as a natural continuation of the outflow of people and, ultimately, personnel.

50% — the percentage of last year’s sales of existing housing in the Russian Federation made through a notarized power of attorney. This record figure for the entire observable history of the market, as calculated by investment company Flip, who were commissioned by Kommersant, clearly indicates that the sales trend was primarily shaped by property owners who had emigrated. The high volume of such transactions seems to be an anomalous phenomenon. In 2021, a power of attorney was the basis for sale in no more than 20% of deals. In 2020, this figure was 15%. It was 8% in 2019, and 5% in 2018. You ain’t seen nothing yet, though: the ongoing controversy over whether to confiscate the property of openly anti-war Russians who have left the country must be making an additional contribution to the process of selling apartments and houses, which was gaining momentum as it was.

$81.69 billion — the total amount of deposits by Russian nationals in foreign banks as of the end of November of last year, according to the latest data from the Russian Central Bank. (4.989 trillion rubles were recalculated at the exchange rate in effect on that date.) Over the past eleven months, the amount has more than doubled — and this is even if we rely entirely on the statistics of the Central Bank, which may not have a complete picture of what is happening. (Russian laws oblige citizens to report when they open accounts in foreign banks and move funds in them, but we cannot be absolutely sure that everyone strictly obeys them.) While one part of these funds remains in these bank accounts, the other goes to the purchase of real estate that, for the most part, is also located outside the Russian Federation.

16,300 houses and apartments in Turkey were purchased by Russian nationals in 2022, according to data published by the Turkish Statistical Institute (TurkStat), as studied by RBC. This is not just three times more than in 2021 (when Russian nationals purchased 5,400 housing units in the Turkish Republic), but also more than the total volume of such transactions over the past six years (16,200). It is not surprising that last year, for the first time, Russians took first place among foreigners in buying housing in Turkey, producing almost a quarter of the corresponding demand with their money. Earlier, we wrote that our compatriots purchased two thousand houses and apartments in Turkey in October 2022 alone, overtaking all other foreign home buyers in that country, as reported by TurkStat.

At first glance, the advantages of investing in Turkey are not entire obvious. Inflation in the country, according to TurkStat, exceeded 84% in November, once again breaking records previously established in the autumn of 1998. The Inflation Analysis Group, an independent Turkish entity, estimated that inflation had reached a whopping 170.7% . In addition, prices for real estate, which have rising robustly, can at any moment just as vigorously drop, taking into account, in particular, the rather murky prospects for “Erdonomics,” depending on the results of the upcoming presidential and parliamentary elections. According to Endeksa, in September, the average price for one square meter of housing in Turkey was about 12 thousand Turkish lira (approx. $644), while the average price per housing unit was just over 1.5 million Turkish lira (approx. $83,700). The term of return on investment in housing is estimated at nineteen years, although in the summer this figure was recalculated to seventeen years.

The intense interest on the part of Russian nationals in buying real estate in Turkey is primarily related to the prospect of obtaining Turkish citizenship, Anna Larina, head of the foreign real estate department at NF Group, explained to Republic. (In turn, having a Turkish passport makes it possible to obtain an American E-2 visa, which speeds up the process of immigrating to the United States.) In this sense, it is logical that Russians have become leaders in terms of the number of residence permits issued in Turkey — 153,000, of which, however, as the Turkish Ministry of Migration clarified, 132,000 are short-term tourist residence permits, which are valid for two years.

Turkey is one of the few countries (but not the only country) that is still open to Russian nationals and their private capital. Thus, as 2022 came to a close, Russian citizens took first place among non-residents in buying real estate in Dubai, Bloomberg recently reported, citing figures provided by the brokerage firm Betterhomes.

Withdrawing funds and setting up a new life abroad eloquently testify to the sentiments prevailing among the Russian urban middle class, primarily. Not all people who sell Russian real estate and buy foreign real estate are necessarily irreconcilable opponents of the regime. And yet, it is clear that the vast majority of these people do not want to live and raise children in Putin’s version of the future, which is practically incompatible with modern civilization. In its own way, it is symptomatic that Russians who support the government and dutifully follow it into its deadly adventures are also dissatisfied with what is happening. If it were possible, they would rather return to the past, to a point in time thirty, forty, or fifty years ago.

63% — the percentage of Russians, according to a December poll conducted by the Public Opinion Foundation (FOM), who regret the collapse of the USSR — that is, more than three decades after the event known in Kremlin mythology as “the greatest geopolitical catastrophe of the twentieth century.” Strictly speaking, the current longing for Soviet times cannot be considered a record: after the August 1998 ruble default, there were noticeably more Russians nostalgic for the Soviet Union — 85%. Nevertheless, an important indicator of public attitudes (as recorded, we should underscore, by a quasi-state polling service) is on the rise again, having increased by twelve percentage points since 2011.

It is clear that this sentiment is primarily voiced by the 46–60 age group (88% of whom are “nostalgic”) and to some extent, people aged 31–45 years (79% of whom are “nostalgic”), assuming that a considerable portion of these people associate the late USSR with their happy childhoods and wild youths. However, according to the poll, even today’s Russian youth, that is, people aged 18–30, mostly (64%) consider the Soviet era “generally a good time.” Of course, their judgments are based on the stories of older generations, and most importantly, on the inevitable comparison with what is happening with the largest post-Soviet country right now.

Source: Yevgeny Karasyuk, “Salvation in foreign real estate and a new bout of nostalgia for the USSR: timely numbers from Russia… and a few from Turkey,” Republic, 20 January 2023. Translated by Hambone Brewster, who is still implacably opposed to the Russian “pollocracy” and continues to be surprised that even otherwise smart cookies like Mr. Karasyuk continue to cite Russian “public opinion polls” as reliable sources of real information — rather than, at best, records of sustained trauma and unfreedom.