Russian Import Substitution Blues

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

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

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

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

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

Full import substitution has not been achieved: suppliers from the sanctioned countries have been replaced by suppliers who work with other countries, who often charge more for their goods.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

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

Translated by the Russian Reader

Harmacy

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.

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

“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!”

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

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

“Viva asymmetrical responses! (Genocide)”

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

Annals of Import Substitution: Ricotta Days

Because of the severe if not crippling margarine deficit in this district of the ex-capital of All the Russias, I have been reduced to buttering my toast with ricotta.

Pictured, above, is Unagrande Ricotta, my preferred brand, and the brand all the shops in my neighborhood (half of which are Dixie chain supermarkets) seem to have in stock all the time, suddenly.

Despite the Italian-sounding name, however, and Unagrande’s cutesy-pie Italian-tricolor-as-heart logo, it is manufactured not in Italy, which as an EU member, is subject to Putin’s anti-sanctions against the import of most EU produce to Russia.

What has bitten Russian taste buds especially hard has been the sudden absence of decent cheese, which, before the Putin regime decided to rule the world, had been imported to Russia in large quantities, mostly because the majority of domestic Russian cheeses were neither particularly tasty nor plentiful.

Crimea-is-oursism changed all that.

Russians traveling abroad now consider it their patriotic duty to stock up on cheese before heading back to the Motherland, where they will consume it with relish themselves or, since Russians like to share, to divvy up among their friends or have a cheese-tasting party. Likewise, Europeans welcoming friends from the Motherland have been known to serve their country’s finest cheeses before and after dinner.

There are even black market Estonian and Finnish cheese outlets, practically operating in broad daylight, in the farther flung corners of the city. A friend of mine has bought such zapreshchonka (banned goods) in these establishments, usually housed in inconspicuous kiosks, on several occasions.

No, my daily ricotta is produced not in Italy, as the name and the packaging insistently suggest, but at 130 Lenin Street in the town of Sevsk, in the far western Russian region of Bryansk.

Despite its exalted status as the new ricotta capital of Russia, Sevsk is a modest town whose population, according to the 2010 census, was 7,282.

To their credit, however, the Sevskians produce their delectable Unagrande Ricotta from whey, pasteurized cream, and salt. That’s it.

Unagranda Ricotta contains zero percent of the detestable and environmentally ruinous palm oil that other Russian cheese manufacturers have pumped into their cheeses, also bearing European-sounding names, to make up for real milk and cream, which have been in short supply and are more expensive, of course.

So I doff my cap to the honest dairy workers of Sevsk, who have managed to produce a delightful 250-gram tublet of perfectly edible and utterly non-counterfeited ricotta, which sells for 144 rubles (a bit over two euros) at my local Dixie.

I would still like to know, however, what has happened to all the margarine. TRR

Image courtesy of planetadiet.com

How Hybrid Warfare Really Works

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This is how hybrid war really works.

Whenever the US and EU make a (usually milquetoast) move the Kremlin doesn’t like, the Kremlin responds by punishing its own citizens, either collectively or individually, through measures like the counter-sanctions against produce imports (involving the massive confiscation and destruction of perfectly good food in a country where the populace spends 80% of its income on essentials) or the “foreign agents” law, which the wildly misnamed Russian Justice Ministry has been implementing with sheer abandon the last couple of years, doing palpable damage to Russian civil society and social research in the process.

The latest victim in this war of attrition or “cold civil war” against what should be the Kremlin’s home team but which it treats as its sworn enemies is Moscow’s estimable SOVA Center. If the SOVA Center had not existed all these years, we would know 500% less about homegrown racism, discrimination, neo-Nazism, and the Russia state’s quirky battle against “extremism” than we actually do know thanks to the terrific research, monitoring, and analysis carried out by the SOVA Center.

But all the clueless blowhards currently having fun mocking and sending up the so-called red scare gripping, allegedly, the US and Europe, know nothing (or pretend to know nothing) about how the Putin regime has been chewing up the scenery at home for years, leaving an institutional and organizational void in its wake, and the grassroots pushback against this academic, cultural, and political scorched earth campaign. They could not care less about the “white” menace (if we’re getting our political colors right) that was unleashed years ago when Putin took over the country, and they are way too lazy to investigate the myriad of ways the Kremlin has been exercising its imperialist hard and soft power for years right out in the open.

So does it matter whether the Kremlin responded immediately or not to the expulsion of its diplomats? No, it doesn’t. It “gets back” at the Great Satan every single day by relentlessly pounding Russia itself into an unpalatable meat patty.

Now that’s “smart.”

Thanks to Comrade SH for the inspiration and Comrade GV for the heads-up. Drawing by Helena Rönkä, as published on the website of Verkauden Lehti newspaper on June 12, 2015.

Let’s Call the Whole Thing Off

Rosselkhoznadzor Destroys Nearly 20 Tons of Turkish Tomatoes Near Orenburg
RIA Novosti
May 7, 2016

1346405445 — Sanctioned produce being destroyed. Archive photo courtesy of Viktor Tolochko/RIA Novosti

Rosselkhoznadzor (Russian Federal Service for Veterinary and Phytosanitary Compliance) specialists have destroyed 19.5 tons of Turkish tomatoes, which had been shipped from Kazakhstan, at a site near Orenburg, the agency’s website reported on Saturday.

“During inspection, labels were found on the cardboard boxes that indicated the country of origin was Turkey. On May 7, 2016, the restricted imported produce was, by decision of the proprietor (the cargo agent), destroyed by means of mechanical deformation with the tracks of a tractor and mixed with solid household waste at the Sol-Iletsk city landfill in Orenburg Region,” the statement read.

According to Rosselkhoznadzor, misdemeanor charges have been filed.

Relations between Russian and Turkey have been in crisis since a Turkish F-16 fighter aircraft shot down a Su-24 Russian bomber in Syria on November 24, 2015. Russian President Vladimir Putin called it a “stab in the back” by accomplices of terrorists and signed a decree ensuring national security and introducing special economic measures against Turkey.

On January 1, 2016, the Russian Federation banned the import from Turkey of fruits and vegetables, including citrus fruits, grapes, apples, pears, apricots, peaches, nectarines, plums, sloes, strawberries, tomatoes, onions, shallots, cauliflowers, broccoli, cucumbers, and gherkins. The carcasses and innards of chickens and turkeys, salt, and cloves also fell under the embargo.

Translated by the Ketchup Board

Hunger Games 2

George Losev
August 10, 2015
Facebook

The EU and US have imposed sanctions against a number of Putin’s friends and several major Russian companies. The sanctions basically boil down to the fact that these people and companies cannot borrow money from foreigners.

In response, the Russian authorities have announced that these sanctions are against the whole of Russia. The Russian authorities have been seeking to make it possible for Putin’s friends and major Russian companies to borrow from foreigners once again.

In addition, the Russian authorities have imposed retaliatory sanctions. They have banned the import of produce from several countries. Not from specific individuals and companies, but from whole countries. Of course, even just six months before the sanctions were introduced, no one knew anything about them and was not preparing for anything of the sort. This has led to yet another hike in food prices and has primarily hurt the working class.

And yet the official propaganda of the Russian Federation declares that this produce is dangerous (!), and that all countries destroy contraband (!!), and the murderer and mafioso [Russian agriculture minister Alexander] Tkachev has been doing the rounds on TV, explaining that the problem should be solved once and for all.

That is the picture. Total capitalist whack jobs who have privatized the state and have been using it for their own personal interests are plundering the working class and the poor and pushing the country towards war with the whole world.

And yet half the folks on my Facebook feed, including leftists, have started moaning, Oh, enough of this destroying produce already, oh, shame on them, shame.

But what do you want to see? What issues are more important?

“Food to the workers, death to the bourgeoisie!”

Photos courtesy of Comrade SG, who took them in the Russian city of Petrozavodsk recently.

Fake Finnish Eggs in Russian Stores

In Finnish, hyvää huomenta means “good morning!” (As this package prompts us—in Russian.)

There’s nothing like fresh Finnish eggs in the morning.

For those of you who have the good fortune not to be able read either Finnish or Russian, these eggs were, in fact, produced by a company called Volzhanin, Ltd., in the village of Yermakovo in the Rybinsk District of Yaroslavl Region. They were not produced in Finland, however hard the top side of the carton tries to convince us otherwise.

In Russian, hyvää huomenta apparently means “screw you!”

The odd thing is that on its website, Volzhanin, Ltd., goes out of its way to boast about its environmentally friendly policies and practices.

Interestingly, you won’t find Hyvää Huomenta eggs on Volzhanin, Ltd.’s list of products.

So this is the kind of three-card monte Volzhanin, Ltd., plays with folks in Petrograd, used to buying food at Finnish chain stores like Prisma, which have set up shop in their city, or making trips across the border and loading up on high-quality Finnish produce before heading back home.

For more on this shady business generally, see Sergey Chernov’s fantastic photo reportage from this past January.