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

Titan Beetles

titan beetle

“The titan beetle (Titanus giganteus) is a neotropical longhorn beetle, the sole species in the genus Titanus, and one of the largest known beetles. […] The short, curved and sharp mandibles are known to snap pencils in half and cut into human flesh. […] The adults defend themselves by hissing in warning and biting, and have sharp spines, as well as strong jaws.” Source: Wikipedia. Photo courtesy of Fluencia

Russian Government Approves Bills to Punish Fake News and “Flagrant Disrespect for the State” on the Internet
Mediazona
January 24, 2019

The Russian government has approved a bill criminalizing “flagrant disrespect for the state on the internet,” as well as stipulating fines for disseminating fake news, reports Interfax, which quotes Pavel Krasheninnikov, chair of the State Duma’s state building and legislation committee.

According to Krasheninnikov, the government’s commentary on the two law bills, which his committee had been waiting for, arrived tonight. Both reviews were positive.

Yesterday, the Prosecutor General’s Office sent the Duma a positive comment on the law bills, although previously it had refused to approve them.

In December 2018, MPs from the United Russia party tabled a law bill that would amend Article 20.1 of the Administrative Offenses Code (petty misconduct) by criminalizing the dissemination on the internet of information that “expresses in indecent form” a flagrant disrespect for society, the state, state symbols, and state bodies.

The law bill stipulates punishing violators with fines of up to 5,000 rubles or fifteen days in jail.

In addition, the bill’s drafters propose fines between 30,000 rubles and a million rubles for publishing false information.

Translated by the Russian Reader

You Gotta Fight for Your Right to Party

Involving Teenagers in Unauthorized Protest Rallies Could Cost as Much as One Million Rubles
Experts Say Authorities Won’t Find It Hard to Prove Charges
Olga Churakova
Vedomosti
July 11, 2018

Госдума готовится ввести многотысячные штрафы за вовлечение подростков в несанкционированные митингиThe State Duma plans to introduce hefty finds for involving teenagers in unauthorized protest rallies. Photo by Andrei Gordeyev. Courtesy of Vedomosti

On Tuesday, the State Duma’s Family Affairs Committee gave the go-ahead to a law bill that would introduce penalties for “encouraging” teenagers to attend unauthorized protest rallies. On Monday, the bill was approved by the government’s Legislative Affairs Commission. In its written appraisal of the bill, the Family Affairs Committee recommended clarifying the minimum age at which offenders would be held liable for violations, although the relevant committee reviewing the bill is the Committee on Constitutional Law.

Tabled by Alyona Arshinova, Anatoly Vyborny, and other United Russia MPs, the law would amend the Administrative Violations Code to include penalties of 15 days in jail, 100 hours of community service or a fine of 50,000 rubles for individuals who encourage minors to attend unauthorized protest rallies. Fines for officials would range from 50,000 to 100,000 rubles, while fines for legal entities would range from 250,000 to 500,000 rubles. A repeat violation could send individuals to jail for up to thirty days, while legal entities would be fined as much as one million rubles [approx. €13,800].

“In my experience, there is no such thing as a perfect law bill. As for the current bill, the relevant committee has not yet meet to discuss it,” says Vyborny.

However, Vyborny is certain the amendments are necessary.

“Children cannot resist the negative influence of adults. It matters to them to express themselves, and we hope this bill will deter them from ill-considered actions. Administrative liability will be a deterrent,” he says.

What matters is that young people are not drawn into a culture of legal nihilism, the MP argues. According to Vyborny, the bill does not aim to punish minors, but protest rally organizers. Hence, the age limit is defined in the bill.

OVD Info estimated that ninety-one teenagers were detained on May 5, 2018, in Moscow at an unauthorized protest rally to mark the inauguration of Vladimir Putin as president for the fourth time. According to OVD Info, at least 158 minors were detained nationwide on May 5 at similar protests. OVD Info estimated that a total of 1,600 people were detained that day.

Lawyer Oleg Sukhov says proving protest rally organizers are in violation of the new law would be a piece of cake. Rallies are organized in different ways, including personal contacts and public announcements.

“Our government is planning to deter all means of organizing protest rallies. It realizes this work on the part of the opposition will only intensify over time not only via the web but also through communication with young Russians,” notes Sukhov.

The main point is the government would not have to prove anything, argues Sukhov. Minors will go on attending protest rallies. Whenever they tell police they saw an announcement on the web, the organizers will be charged with violating the law according to a fast-track procedure.

“Clearly, the law will be enforced selectively. It’s a classic manifestation of the so-called mad printer. The terms used in the wording of the bill are not defined at all. For example, what does it mean to ‘encourage’ a teenager to attend a rally? Can teenagers attend rallies? They can. So, how do we figure out whether they attended on their own or were ‘encouraged’? We can’t,” says Navalny’s righthand man Leonid Volkov.

Volkov does not believe the law will be effective since protesters have been paying fines as it is.

“It is no accident this attempt to intimidate young people made the news today, the same day the Investigative Committee released a video about a teenager who goes to prison for reposting [‘extremist’ items] on social media. Of course, this will only produce new Primorsky Partisans,” Volkov concludes.

“Extremism Is a Crime,” a video posted on YouTube on June 25, 2018, by the MultiKit Video Studio. The annotation to the video reads, “A public service video on the dangers of extremism, produced by MultiKit Video Studio for the Russian Investigative Committee’s Altai Territory Office. The video will be shown in schools to prevent such crimes.”

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KMO_156800_00022_1_t218_212746.jpgAlexei Avetisov. Photo by Emin Dzhafarov. Courtesy of Kommersant

Youth Policy Finds a Direction
Kremlins Finds a Specialist in Subcultures and Extremism
Sofia Samokhina, Maxim Ivanov and Lada Shamardina
Kommersant
July 11, 2018

Kommersant has learned Alexei Avetisov, member of the Russian Public Chamber and president of the Russian Student Rescue Corps, could join the Office of Public Projects in the Kremlin. Avetisov has been tapped to head the Department for Combating Extremism among Youth. Ksenia Razuvayeva, head of Rospatriotcenter (Russian Center for the Civic and Patriotic Education of Children and Young People) has been named as a candidate for head of the Department of Youth Policy in the Office of Public Projects. Both candidates would still have to be vetted by the Kremlin.

Alexei Avetisov, member of the Russian Public Chamber and president of the Russian Student Rescue Corps, could head the Department for Combating Extremism among Youth in the Kremlin’s Office of Public Projects. Currently, the Office of Public Projects, which is run by Sergei Kiriyenko, the president’s first deputy chief of staff, has no such department. Our sources say Mr. Avetisov would be tasked with overseeing youth subcultures and decriminalizing the youth scene, in particular, by dealing with the popular AUE network of criminal gangs. The Presidential Human Rights Council discussed the issue with Vladimir Putin in December 2016.

Olga Amelchenkova, head of the Victory Volunteers Movement and member of the Russian Public Chamber, told us there were few organizations in Russia involved in volunteering in emergencies, and Mr. Avetisov was one of the few people who had constantly brought up the subject in the Public Chamber.

An acquaintance of Mr. Avetisov’s said his Russian Student Rescue Corps had brought many universities together. The organization took part in the first Taurida Camp held after the annexation of Crimea in 2014, an event attended by MPs and high-ranking officials. From 2015 to 2017, Mr. Avetisov was director of Territory of Meanings on the Klyazma, a youth education form, sponsored by Rosmolodezh (Russian Agency for Youth Affairs). His main job at the forum was providing technical support for the camp.

On June 6, Znak.com, citing its own sources, reported law enforcement agences were investigating Territory of Meanings on the Klyazma and, in this connection, “questions for the forum’s ex-director Alexei Avetisov could arise.” The website indicated companies allegedly affiliated with Mr. Avetisov had for several years been awarded “lucrative” contracts for constructing venues at the forum. The firms in question had no experience implementing government contracts. Currently, some of the companies have either gone out of business or are dormant, wrote the website.

Timur Prokopenko, deputy chief of staff in charge of the Office of Domestic Policy in the Kremlin, had been in charge of youth forums in recent years. He also handleded youth policy in his capacity as head of the Office of Domestic Policy. However, on June 14, a presidential decree turned youth policy over to the Office of Public Projects.

znakcom-2039402-666x375Territory of Meanings staffers. Photo from the camp’s VK page. Courtesy of Znak.com

Gazeta.Ru has reported that Rospatriotcenter head Ksenia Razuvayeva could take charge of the Office of Public Project’s Department of Youth Policy. Before taking over the running of Rospatriotcenter, Ms. Razuvayeva ran the Moscow branch of the Russian Volunteers Union and collaborated with the Young Guard of United Russia (MGER), which Mr. Prokopenko ran from 2010 to 2012. Ms. Razuvayeva would not confirm to us that she was moving to the Office of Public Projects Earlier, a source of ours in the Kremlin said she might not make it through the vetting process. Another of our sources noted a possible conflict of interests was at play. Ms. Razuvayeva also told us it was the first time she had heard about Mr. Avetisov’s moving to the Office of Public Projects.

“The vast majority of Young Guardsmen and other pro-regime activists brought up through the ranks in the past decades are supremely focused on their careers. The system simply spits out anyone else,” political scientist Abbas Gallyamov told us.

According to Gallyamov, “Changing colors for the new boss and refusing to have anything to do with people they worshipped only the day before are quite ordinary for this crowd.”

“Therefore, it does not matter whose people they were considered yesterday. They will be loyal to any boss, just because he or she is the boss,” Gallyamov added.

Translated by the Russian Reader

The Annals of PreCrime: “An Absolute Nightmare”

precriminals.jpegUnder legislation currently tabled in the Russian parliament, these up-and-coming Russian businesswomen could do hard time in a penal colony for the wholly fanciful crime of “complying” with western sanctions against target businesses and individuals. Image courtesy of Credit Bank of Moscow

Sanctions Victims Refuse the Russian State’s Protection
Big Business Categorically Rejects Adopting Law on Anti-Sanctions
Yelizaveta Bazanova, Anna Kholyavko and Yekaterina Burlakova
Vedomosti
May 16, 2018

“An absolute nightmare”: that was the phrase used by the majority of lawyers and executives of Russian and foreign companies whom we asked to comment on plans to imprison people who “implemented” foreign sanctions. On Monday, a law bill to this effect, tabled by State Duma Speaker Vyacheslav Volodin, Federation Council Speaker Valentina Matviyenko, and leaders of all four parliamentary factions was passed in its first reading. The second reading has been scheduled for Thursday.

Under the law bill, if a company refuses to sign a public contract with an entity on the sanctions list, the company and its executives would be threatened with a maximum fine of ₽600,000 [approx. €8,200] and a maximum prison term of four years.

The board of the Russian Union of Industrialists and Entrepreneurs (RSPP) has decided passage of the law would be completely unacceptable. Companies would find themselves between the frying pan and the fire: violations of sanctions would threaten them with secondary sanctions, while complying with sanctions would make them criminally prosecutable in Russia.

The RSPP’s resolution was supported even by board members who had themselves been sanctioned.

“We believe it would cause further damage to the Russian economy, including business with foreign and Russian companies, and both Comrade Vekselberg [Renova Group Chair Viktor Vekselberg] and I voted for the resolution,” Interfax has quoted VTB Bank president Andrei Kostin as saying.

A spokesperson for Vekselberg did not respond to our questions. We were also unable to contact a spokesperson for Oleg Deripaska, another target of western sanctions, yesterday evening.

If passed, the law would be unlikely to have a considerable impact on how businesses operate, but it could be a means of threatening and pressuring them, the entrepreneurs we surveyed said unanimously. The wording of the law bill is harsh. Nearly anyone could be prosecuted on the flimsiest of pretexts, complained an executive at a transnational food producer.

The key risk is the absence of clear criteria for defining what would constitute a violation of the proposed law, our sources all agreed. Even the Russian Finance Ministry could be prosecuted. In its Eurobonds prospectus, it pledged not to use the funds raised to support entities targeted by western sanctions. In January, Alfa Bank warned Russian defense companies it would not handle their accounts due to sanctions. Spokespeople for the Finance Ministry and Alfa Bank did not respond to our inquiries.

The Kremlin has also been unhappy with the law bill, said a federal official close to the presidential administration.

The law bill, if passed, would also generate risks for those companies who refuse to do business in Crimea due to sanctions, said Alexei Panich, a partner at Herbert Smith Freehills. These include the state banks Sberbank and VTB, as well as mobile telecom operators. Andrei Isayev, deputy head of the State Duma’s United Russia faction, claimed  companies who do not open branches in Crimea would not be affected by the law. What was at stake, he said, were the ordinary deals and transactions companies perform almost automatically. However, refusal to do business with counterparts in Crimea could be considered a criminal offense under the terms of the law, said an attorney at a major international law firm. The law could complicate public offerings, the issuing of loans, and contracts and transactions, he specified.

An employee at a major international firm explained it would be hard to determine whether a company refused a deal with a counterpart due to their bad reputation or the threat of sanctions. An auto dealer agreed the threat of criminal prosecution would be powerful leverage. To encourage its partners to agree to a deal, a business could threaten to report them to law enforcement agencies, argued Panich.

The proposed measures were excessive, agreed a spokesperson for an agricultural commodities trader. Some companies have in-house rules restricting such deals. Our source said the law bill appeared to be means of coercing such companies. Theoretically, it could be used as leverage. A company or person on the Specially Designated Nationals And Blocked Persons List (SDN) could show up and demand another company do business with them, agreed the head of major private bank. It was difficult to imagine how banks would solve such dilemmas, he said.

“There are many ambiguities in how the law would be interpreted, and what specific actions or inactions would be punishable,” he concluded.

Foreign businesses could interpret the law bill as a signal it was time to wrap up their operations in Russia, said the vice-president of a major foreign company that produces popular consumer products. No one has any intention of sacrificing their top executives to the Russian law enforcement and judicial system.

All issuers of bonds include in their covenants the refusal to do business with entities targeted by sanctions. Perhaps expatriates who do not want to take risks would leave the country, argued an employee at a large foreign company.

Passing the bill into law would be a mistake, said political scientist Yevgeny Minchenko. The law would have to be seriously amended over time.

“Knowing how this could affect both Russian companies and foreign business operating in Russia, this is very risky decision in my opinion,” Minchenko told us.

Spokespeople for Sberbank and Credit Bank of Moscow declined to comment.

With additional reporting by Vladimir Shtanov, Darya Borisyak, Alexandra Astapenko, and Svetlana Bocharova

Translated by the Russian Reader

Harmacy

DSCN6345.jpg

Back to the World of Me-Too Drugs: How Anti-Sanctions Will Deal a Blow to the Mental Health of Russians
Takie Dela
May 2, 2018

The ban on the import of drugs from the United States and other “unfriendly” western countries, tabled by MPs in the Russian State Duma, will worsen the mental health of Russians. Two psychiatrists discussed the consequences facing people with mental illnesses if brand-name drugs are replaced by domestic lookalikes.

The Big Picture
In early April, State Duma Speaker Vyacheslav Volodin announced the imminent expansion of countersanctions by Russia towards the US and other western countries opposed to the Russian Federation’s foreign policies. In particular, there are plans to introduce a ban on the import of drugs from the countries on the sanctions lists, but only on those drugs for which there are domestic counterparts. However, many foreign-manufactured psychotropic drugs have domestic counterparts, and they will be banned, therefore.

Russia is not a happy country in terms of psychiatry. Every fourth Russian suffers from mental illness at some point in his or her life, and between three and six percent of the populace needs to take medications regularly.

Due to severe conditions such as epilepsy, schizophrenia, clinical depression, and bipolar disorder, hundreds of thousands of Russians lose the capacity to work and are unable to adapt to society. Many of them commit suicide. Modern drugs are effective enough to let most patients lead full lives. Their well-being depends on drugs, which they must take for many years and, sometimes, their whole lives.

The drugs in question are antidepressants, antipsychotics, tranquillizers (sedatives), and normotics (mood stabilizers). Nearly all the brand-name drugs in the field are produced in Western Europe and the US. If theban is adopted, they will vanish from Russian pharmacies, since nearly all these drugs have counterparts (i.e., generics), with the same active ingredients, that are produced in Russian and Eastern Europe.

When discussing the possbile stop list, experts named two popular antidepressants: Paxil (France) and Cymbalta (USA). Many other drugs popular in Russia, including the antipsychotics Zyprexa (Eli Lilly, UK) and Seroquel (AstraZeneca, UK/Sweden), and the antidepressant Zoloft (Pfizer, USA), could be included in the ban. What would be the consequences for millions of patients?

Increasingly Ineffective Treatment
Mental equilibrium is a delicate matter, and selecting drugs to treat psychiatric conditions can much more complicated than selecting drugs to treat somatic illnesses. The optimal outcome is for the individual not merely to stop experiencing severe symptoms like obsessive suicidal tendencies and hallucinations, but also to remain capable of working and leading a social life, rather than turning into a lifeless vegetable.

People with clinical depression, which can last for years, know well the laborious process of choosing the right drug and the right dosage that will finally let them live a normal life. The process can take weeks and months.

Matters are even more complicated with bipolar disorder. The disease’s two opposite phases require different medications, and an unsuitable drug can even worse the outcome of the illness. Schizophrenia presents such a variety of symptoms that a veritable cocktail of drugs is sometimes needed, and attending physicians have to make sure the side effects do not outweigh the benefits of treatment.

“Current guidelines for pharmacotherapy recommend prescribing the brand-name drug and not substituting a generic without good reason,” says Maria Gantman, a psychiatrist at the Mental Health Center.

Dr. Gantman prescribes her patient brand-name drugs, which have undergone high-quality trials on thousands of patients and have a proven effect. Generics also undergo trials when they are licensed, trials that prove their similarity to brand-name drugs, but the evidentiary base is filled with too many gaps, she notes.

“Generics are usually less expensive, and we start off with them if the patient cannot afford the brand-name drug. The abrupt replacement of one generic with another can produce a change in the effect. Due to the peculiarities of their ingredients, generics may be absorbed at a greater or lesser rate and generate a different concentration of the active ingredient in the blood. The people who suffer most are those forced to switch from a brand-name drug they have been taking for years and that was laboriously selected for them to a generic,” explains Dr. Gantman.

She fears the Russian authorities will approach the issue in a perfunctory manner.

“For example, there is a drug that is effective in treating schizophrenia, Rispolept. There are Russian lookalikes, sold under the generic name risperidone. But if the brand-name drug is banned, it hard to imagine what lies in store for people who survive by taking Rispolept Consta (Belgium), which does not exist in this form as a generic in Russia,” says Dr. Gantman.

“The problem is that theRussian pharmaceutical industry hopelessly lags behind the western pharmaceutical industry. There are certain types of drugs Russia just cannot produce, because it does not have the resources, the equipment or the research,” continues Anatoly Shepenyov, a psychiatrist and psychotherapist. “Say, the antidepressant Cipralex (Denmark) cannot be synthesized in Russia. Folic acid is an indispensable drug, too. In Russia, it cannot be produced in the form needed for the synthesis of serotonin, that is, in the form needed for maintaining normal brain function.”

Side Effects
The side effects of psychotropic drugs are numerous and varied. Mental impairment, convulsions, fainting, anemia, and fever are only some of them. Predicting them ahead of them is impossible: they are the individual body’s reactions. A drug that simultaneously provides relief while not producing agonizing side effects is a valuable find for many patients.

Dr. Shepenyov illustrates the circumstances by mentioning the antidepressant Paxil (France). It has generics, for example, Rexetin (Hungary). Rexetin works, but its therapeutic effectiveness is lower. To get the same effect she would get from 20 mg of Paxil, thae patient would need to take at least 30 mg of Rexetin. As dosages increase, so do the side effects.

“The main difficult is not synthesizing the right substance, but isolating it in pure form. I’ll give you an example. The antidepressant must fit the receptor in the brain the way a key fits a lock. When generics are synthesized, a whole slew of impurities emerge, extra ‘keys,’ if you like. If you use this ‘dirty’ molecule, you won’t open the lock, but there will be something jammed in it,” notes Dr. Shepenyov.

The use of generics thus introduces the risk there will be a lack of therapeutic effect coupled with a slew of side effects that would never be produced by brand-name drugs. The liver also suffers more from the constant intake of “dirty” drugs.

“Take the most popular Russian-made antidepressant, Fluoxetine (a generic version of the US-produced Prozac). It is terrible in terms of side effects. Although its benefits are weak, patients suffer from phenomenal absentmindedness,” explains Dr. Shepenyov.

Withdrawal Syndrome
If western-produced drugs one day vanish from Russian pharmacies, thousands of patients will undergo withdrawal syndrome, the body’s physiological reaction to the absence of a substance to which it is accustomed.

“I felt terribly sick within a few days. I had a terrible chill, severe dizziness, nausea, weakness, and insomnia,” a female patient described her withdrawal from Paxil.

It is necessary to gradually reduce the dosage to avoid this effect, which means having a good supply of the drug and then just as gradually increasing the dosage of the new drug. This means weeks of enduring shaky health.

The Anti-Placebo Effect
“The anti-placebo effect is no less frequent and severe than the placebo effect. The patient knows she has taken another drug. This exacerbates her anxiety and could ultimately destabilize her condition. So, if an individual has taken the same drug for years and feels fine, there is no need to give her another drug. It’s risky,” says Dr. Gantman.

Both doctors are agreed that patient health should not be a geopolitical bargaining chip. According to Dr. Gantman, medical issues should be left out of the political games countries play, and she calls the State Duma’s plans to ban the imports of foreign-made drugs “profoundly unethical.”

“If Russian MPs adopt such a law, we should oblige them to be treated solely with Russian-made drugs, drive Russian-made cars, and use Russian-made telephones and computers. Those would be excellent sanctions that would finally force them to use their brains before making radical decisions without having the foggiest notion about either medicine or how the body functions,” concludes Dr. Shepenyov.

Translated by the Russian Reader

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Anastasia Plyuto
VK
May 12, 2018

A group picket was held on Saturday, May 12, 2018, in Petersburg’s Ovsyannikov Garden, to protest the Russian State Duma’s tabling of a bill that would ban the purchase of drugs abroad. Yes, we have heard that legislators have suggested removing the word “drugs” from the wording, but we know much freighted the phrase “and other goods” can be.

To increase the chances city authorities would authorize the picket, activists applied for several venues at once. The authorities waited until the last possible moment to render a decision, and so there was no time to inform the public about the planned protest. Around a dozen people were in attendance, including a diabetic who depends on imported insulin, and several people outraged by the politics and statements of our MPs.

One of the placards featured a toy pyramid for little children, which MP Iosif Kobzon gave to a teenaged cancer patient while visiting a hospital in Simferopol in 2015. In our view, the incident reflects the lack of understanding displayed by our bigwigs when it comes to the needs of patients.

There were few visitors in the garden, and nearly none of them had heard of the law bill, but no one, from schoolgirls to a seventy-year-old female pensioner, was left unmoved by the subject. They reacted with surprise, indignation, and complete support for the picketers.

meds-1“You want to ban imported drugs? Start with yourselves. Treat your ailments with oak bark!”

meds-2.jpg“Insulin addict. Bring it on! Deprive us of our doses, assholes. ‘Life in Russia is no picnic: you can survive without insulin.’ Insulin or formaldehyde? Neuroleptics or belladonna? You choose, Russia!”

meds-3“State Duma! By banning the import of drugs, you are killing people!”

meds-4“Ban yourselves from driving Geländewagens! Hands off the drugs!”

meds-5jpg“Viva asymmetrical responses! (Genocide)”

Photos by Mikhail Ryzhov and Anastasia Plyuto. Thanks to Victoria Andreyeva for the heads-up. Translated by the Russian Reader

As Protests Increase, National Guard Ready to Crack Down

dimon balet
“Dimon, what’s with the ballet?” Anti-corruption protesters on the Field of Mars in Petersburg. Photo courtesy of Sergei Nikolayev/DP

Experts Speak of Sharp Increase in Number of Protests in Russia
Delovoi Peterburg
November 7, 2017

According to a report by the Center for Economic and Political Reform (CEPF), the number of social and political protests in Russia has risen sharply compared to the beginning of the year.

The number of protests has been continuously growing in Russia throughout the year. In the first quarter, 284 protests were recorded; in the second quarter, 378; and in the third quarter, 445. Thus, as noted in the report, the overall number of protests has increased by almost 60% since the beginning of the year.

The analysts at the CEPF divide protests into political protests, socio-economic protests, and labor protests. They note that around 70% of protests had to do with socio-economic issues, including protests by Russian truckers against the Plato road tolls system, and protests by Russian farmers against the seizure of land by agroholdings, as well as protests by hoodwinked investors in unbuilt cooperative apartment buildings.

Political protests came in second place, including protests by supporters of opposition leader Alexei Navalny. A total of 106 political protests were recorded in the third quarter of 2017. There were 27 labor protests in the third quarter.

The number of conflicts related to labor relations has also steadily climbed throughout the year. The number of protests caused by cases of late payment and non-payment of wages, for example, has grown as follows: 142 in the first quarter, 196 in the second quarter, and 447 in the third quarter. Thus, by the third quarter, the number of such incidents had more than tripled.

The authors of the CEPR report cites figures provided by Rosstat, according to which the amount of unpaid back wages in Russia totaled 3.38 billion rubles [approx. 49 million euros] as of October 1, 2017. The number of incidents of late payment and non-payment of wages in the third quarter of 2017 (447 companies) was more than triple the number of such incidents in the first quarter (147 companies), and more than double the number in the second quarter (196 companies).

The analysts point out that Russia has not yet put in place a system for preventing and constructively solving social conflicts, and thus protests are still nearly the only effective means for employees to defend their rights.

“We should generally expect the high number of protests nationwide to continue, especially in the socio-economic realm. This is due to the fact the problems people (hoodwinked investors, truckers, farmers, opponents of construction projects, environmental activists et al.) have been currently protesting have not been solved. At the same time, evolution of the protest movement has been greatly hampered by the lack of capable political parties, grassroots organizations, and trade unions,” write CEPR’s analysts.

Translated by the Russian Reader

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Ahead Of Election, Putin Seeks Wider Mandate For Russian National Guard
Radio Free Europe/Radio Liberty
November 6, 2017

0327929D-DFC1-4E65-BD89-EC9685C0B625_cx0_cy8_cw0_w1023_r1_sRussian President Vladimir Putin (second right) and National Guard chief Viktor Zolotov (third left) take part in a ceremony marking National Guard Day in Moscow on March 27. Photo courtesy of Mikhail Klimentyev/TASS

Russian President Vladimir Putin has proposed legislation to widen the responsibility of the National Guard, an entity created last year and headed by Putin’s former chief bodyguard, to include protecting regional governors.

The bill was published on the website of the State Duma, the lower house of parliament, on November 6.

The Duma is dominated by the Kremlin-controlled United Russia party and supports almost all Kremlin initiatives.

The proposed change could enhance Putin’s ability to crack down on dissent or seek to impose order if there is unrest in Russia’s far-flung regions.

The National Guard reports directly to the president. Its director, Viktor Zolotov, was chief of the presidential security service from 2000 to 2013.

The initiative comes months before a March 18 election in which Putin is expected to seek and secure a new six-year term.

Putin will be barred from seeking reelection in 2024 if he does win a fourth presidential term in the March vote, raising questions about how Russian politics will play out in the coming years and how he will maintain his grip.

Putin established the National Guard (Rosgvardia) in 2016 on the basis of the Interior Ministry troops and other security forces.

Its stated tasks initially included preserving “social order,” fighting against terrorism and extremism, and guarding state facilities.

The National Guard announced that it will be also responsible for a fingerprints database, issuing weapons-possession licenses, averting “threats to state order,” and protecting information security.

“Senators” vs. “Undesirables”

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The Russian Federation Council,* whose members have a penchant for calling themselves “senators,” even though they are not a popularly elected body nor a body known as a “senate.” This peculiar fashion has been picked up by the Russian media and, now, even some foreign media, thus reinforcing the fallacy that Russia is governed democratically. Photo courtesy of Izvestia and Zurab Dzhavakhadze

Media Learns about Idea to Expel People from Russia for “Undesirable Behavior”
RBC
September 4, 2017

The Federation Council’s Committee for Defending State Sovereignty and Preventing Interference in Russian Domestic Affairs [sic] has been drafting a law bill that would stipulate expulsion from Russia for “undesirable behavior.” Izvestia learned about the bill from sources in the parliament familiar with the drafting of the document.

Acccording to the newspaper, the penalty of expelling people from Russia for “undesirable behavior” would be stipulated by a law bill that could be tabled in the State Duma as early as next year. It would amend the current federal law “On Undesirable Organizations,” adopted two years earlier.

The newspaper’s sources said that expulsion for “undesirable behavior” would be applied to individuals, mostly foreigners. However, the sources noted the term could be applied to Russian citizens and legal entities.

The newspaper notes that “undesirability” would be determined by whether the actions of the persons caused real harm to Russia’s national security. It could be a matter of “inciting ethnic and religious hatred and political discord,” as well as potential interference in Russia’s electoral process. The newspaper likewise notes that “outside work” with Russian educational institutions and young people could be deemed “undesirable.”

According to the sources, several options for how the law would be applied were currently under consideration. One of them would involve empowering State Duma and Federation Council members with the capacity to send requests to the Prosecutor General’s Office to check whether a person’s activities were “undesirable.” If the audit turned up a violation, Russian citizens could be accountable. [sic] Foreigners, on the contrary, would be threatened with expulsion from the country.

Andrei Klimov, deputy chair of the Federation Council’s Committee on Foreign Affairs confirmed that the amendments to the law were being drafted.

Translated by the Russian Reader

*Сritics of the Federation Council stress that it is an inherently undemocratic body made for regional elites, with little say from the Russian people. Since the reforms advocated and passed by President Putin in 2000, critics have also charged that the Council resembles more of a rubber stamp body for the Kremlin than an independent legislative body. Many senators are viewed as close allies of Putin and the United Russia party, despite rules which explicitly spell out that political factions are not allowed. Since Mironov’s rise in the Council in 2002, the Kremlin’s position on impending legislation is closely communicated to and coordinated with the Chairman and the committee and commission chairs. This top-down approach has meant that the Council votes with extreme efficiency, backing Kremlin positions on legislation nearly all of the time.

Critics also point to how long the Council convenes, meeting only one day every two weeks, speeding through legislative analysis and providing lop-sided majorities for each vote. Many blame this speedy legislation on the enormous influence the Kremlin exerts, who they charge have already instructed Council committee and commission chairs on how to vote. Several left-leaning State Duma deputies have lamented that Putin has stripped away the Federation Council’s last hold on checks and balances.

Since Putin’s restructuring of provincial executives in 2004, placing them under direct appointment by the Kremlin upon approval of their legislatures, federalist supporters have also charged the president in reducing the provincial role of the Federation Council. Where Yeltsin had envisioned a chamber [addressing] regional concerns, they argue, critics view Putin’s restructuring as deeply centralizing the Council to reflect the president’s and United Russia’s political interests, taking away provincial voices. Putin supporters counter these criticisms by acknowledging that Yeltsin had also appointed governors to Russia’s federal subjects in the early days of the Federation.

Source: Wikipedia