Blessed Are the (Un)Happy

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A post shared by Maria Pevchikh (@maria_pevchikh)

I was at an interview on TV Rain last week. We were supposedly going to discuss the Oscars, but suddenly we touched on what is an important topic, I think — how to behave appropriately during the war and amid everything else that is happening now.

I often read comments about how I smile all the time, but there is a war going on. About how I joke on the air, but now is not the time for jokes — Navalny is in prison. Why did I post this or that photo? It’s too glamorous and frivolous. Now is not the time for such things.

The complaints are understandable, but I totally reject the point they’re trying to make. It seems to me that the most destructive, the most incorrect thing we can do now is to don dark clothes, wring our hands and publicly suffer in front of our audience. By no means am I saying that there is no point in suffering in this situation. There is. The war is the most terrible event that has ever happened to us. It is absolutely incomprehensible how to go on living when your country has attacked and is destroying innocent people and destroying their lives forever as the scumbags on Russian national TV hoot and holler for joy. Everyone who is reading this post has experienced all this, I am sure, and of course you have been suffering. And those whom Putin came up with the idea of bombing with missiles and killing have been suffering even more.

Only one thing remains to us: to take all these terrible emotions, all these experiences, and turn them into concrete actions. Not cry on camera, not get hysterical, but to try and stop this horror as soon as possible. Today is better than tomorrow. Tomorrow is better than the day after tomorrow, etc. Each of us knows best of all what we ourselves are capable of doing and how to do it. The main thing is not to give in to despair. Despondency, despair and indifference are exactly what Putin wants from us. Don’t give him that.

I’ve attached a bit of the interview. And a frivolous photo to boot.

Source: Maria Pevchikh, Instagram, 31 January 2023. Translated by the Russian Reader

[…]

And where you find a hero, you always find tragedy. The hero is always a vehicle for suffering, pain, rupture and tragedy. There are no happy heroes: all heroes are necessarily unhappy. The hero equals misfortune.

Why? Because being both eternal and temporary, dispassionate and suffering, heavenly and earthly is the most unbearable experience for any being. It is a condition that you wouldn’t wish on your enemy.

Ascetics, martyrs, and saints took the place of heroes in Christianity. There are likewise no happy monks or happy saints. All of them are profoundly unhappy as individuals. But according to another heavenly account, they are blessed. Just as those who weep, those who are exiled, those who suffer slander, and those who hunger and thirst are blessed in the Sermon on the Mount. Blessed are the unhappy.

A person is made a hero made by an idea aimed skyward that crashes to the ground. A person is made a hero by suffering and misfortune, which tear him apart, which torment, torture, and harden him, and it has always been thus. This can happen during war or an agonizing death, but it can also happen without war, and without death.

The hero looks for his own war, and if he does not find it, he goes into a monk’s cell, to live as a hermit, and fights there with the real enemy. Because true warfare is spiritual warfare. Arthur Rimbaud wrote about this in Illuminations: “Spiritual combat is as brutal as battle between men.” (Le combat spirituel est aussi brutal que la bataille d’hommes.) He knew what he was talking about.

One hero, as the Neoplatonist Proclus says, is equal to a hundred or even thousands of ordinary souls. He is greater than a human soul because he makes every soul live vertically. This is the heroic dimension to the origins of the theater and, in fact, the ethics of our faith. It is the most important thing, which we should not lose, which we should cherish in others and nurture in ourselves.

Our job is to become deeply, fundamentally and irreversibly unhappy, no matter how scary that sounds. It is the only way we can find salvation.

Source: Alexander Dugin, “The Hero: The Metaphysics of Unhappiness,” Katehon, 3 February 2023. Translated by An Unhappy Translator. Thanks to Pavel Pryanikov for the heads-up

Maria Pevchikh: “In any puzzling situation this is what I choose and suggest that everyone else choose.” Source: Instagram

Now every employee of the Russian embassy in Germany has to think about Navalny on their way to work because they will see a replica of the solitary confinement cell where Alexei has been confined for the eleventh time.

Not only embassy employees see this solitary confinement cell. It is seen by Berlin residents, tourists and journalists. It is seen by readers of the world’s major media outlets. Millions of people see it — and thus learn about the torture chamber in which Navalny is being held. Some will tell their friends about the project, others will join the Free Navalny campaign, while still others will put pressure on local politicians contemplating compromise with Putin. Circles radiate all over the world from this one site.

It is in your power to make these circles spread even wider. Help us achieve freedom for Navalny and for the whole of Russia — support our campaign at acf.international/#donate.

Free Navalny!

Thank you for being on our side!

The Navalny Team

“Navalny has now been in prison for 745 days.”

Source: FBK (Anti-Corruption Foundation) email newsletter, 2 February 2023. Translated by the Russian Reader

Pevchikh: What Corruption Has Done to Russia / vDud
6,370,703 views • Feb 5, 2023
(In Russian, without subtitles in English — for the time being, I imagine)

Maria Pevchikh is an investigator and associate of Alexei Navalny.

0:00 Let’s go! 0:37 Why we met in London 5:13 How the film Navalny is saving Navalny’s life 9:36 Dud in the Internet’s homeland 13:03 How to turn a photo of a hallway into an investigation 16:17 What is going on with Navalny now? 20:26 The second largest house in the UK is owned by a Russian oligarch 25:30 But why can’t a Russian oligarch buy a house in London? 29:48 The UK is fighting Putin but harboring thieves: is that normal? 37:22 Who are you and where are you from? 42:31 Where did you get the money to study in London? 44:02 What’s wrong with Moscow State University’s sociology faculty 47:19 What did your father do for a living? 48:41 A crash course about British universities (eight lectures a week) 53:16 Alexander Dugin was Maria’s thesis advisor: how did that come about? 1:00:03 Does Putin listen to Dugin? 1:03:05 What Medvedev was like thirteen years ago 1:05:20 “My cat was hit by a car, please sort it out”: what British MPs do 1:08:22 Gadaffi’s son was at university with you 1:14:35 Where did you work before becoming an investigator? 1:16:32 Do you have a flat in London? 1:17:47 How did you meet Navalny? 1:22:50 Why didn’t you mention Skabeyeva and Popov’s mortgage? 1:27:28 How are drones able to fly over Putin’s and Medvedev’s residences? (A question from Nikolai Solodnikov) 1:33:14 Where did you get the conductor Gergiev’s bank statements? 1:36:32 Is it okay to pay a bribe to avoid mobilization? 1:40:54 What is your beef with Fridman? 1:48:13 Is Galitsky an accomplice of the regime? 1:57:18 Can we detest someone for being afraid? 1:58:26 Why does Popular Politics have such sensational headlines? 2:04:08 Is it okay to call a program guest a “fat beast”? 2:08:21 The rude tweet about Durov 2:10:21 Does radicalism prevent the Anti-Corruption Foundation from becoming popular? 2:16:09 Roman Abramovich is a master of reinventing himself 2:24:13 How soft power works 2:29:52 If Abramovich had ended the war would you have forgiven him? 2:31:38 The “List of the 6,000” 2:33:59 Why have you called for sanctions against Sobchak? 2:35:35 Why have you called for sanctions against Venediktov? 2:44:00 What did Oleg Kashin do wrong? 2:46:34 Why were the designers of a facial recognition system removed from the “List of the 6,000”? 2:51:01 Is your father an accomplice of the regime? 2:55:49 How do you do your work without Navalny? 2:57:18 Why were your supporters’ data hacked? 3:05:38 “Carry out a mission in the fight against Putin and get points”: what is that about?! 3:07:53 How do people who work for the regime change sides? 3:15:51 Do you see yourself as a politician? 3:19:44 Do you have a plan for Russia’s future? 3:25:09 Won’t the dictatorship in Russia survive without Putin? 3:30:20 Do you have a UK passport? 3:35:51 What exactly have you done over the past year to overthrow Putin? 3:41:21 “Compromisers” 3:52:07 Russia without Putin 3:56:58 What does it mean to be strong?

Source: vDud (YouTube). Annotation translated by the Russian Reader. Thanks to Tiina Pasanen for bringing this remarkable video to my attention and persuading me to watch it despite my initial misgivings. When I assembled the first part of this mash-up, a few days ago, I had no idea that Pevchikh and Dugin were so closely connected in real life. For another perspective on the sociology faculty at Moscow State University during roughly the same period as Pevchikh describes, see Oleg Zhuravlyov and Danail Kondov, “Towards a History of the Conflict in the Moscow State University Sociology Department” (2008). ||| TRR

How I Was Friends with Billionaires

Igor Mints, Rustam Yulbarisov, and Sasha Mints. Courtesy of Rustam Yulbarisov

How I Was Friends with Billionaires
Rustam Yulbarisov
Zanovo
November 1, 2020

This is a saga of two families, of poverty and wealth, and of the twin brothers who helped me see the biggest difference between people.

I learned that humanity was divided into classes at School No. 963. My mother managed to get me into the first A class, which was considered a university prep class, in contrast to the proletarian B and C classes. We studied English, drawing, ballroom dancing, and even the Vietnamese martial art Việt Võ Đạo, which was taught by an Azerbaijani. The school fees were also higher.

I learned directly about the divisions between people from my friendship with my classmates Sasha and Igor. I don’t know what caused us to become friends, but now I am sure that it was inevitable, because we had too much in common. Our families had moved to Moscow from the regions. We lived in neighboring houses on the same floors. We were non-Russian, and they were also a little non-Russian. They were twin brothers, and I had a brother. They clobbered each other, and we clobbered each other. Our fathers worked as officials in the new Russian government. They even gave their sons identical jackets: green ones for us and purple ones for them, and our mothers gave us identical books—Monsters, Ghosts, and UFOs.

The book so fascinated us that we formed a club called UGS (UFO and Ghost Society) and got a notebook in which we recorded the mystical happenings in our courtyard. We would visit each other, watch movies on videotape, and play LEGO. I liked going to their house more because we had a one-room apartment and they had a five-room apartment. I had to lie that we had another room, a secret one. Most importantly, they had a computer, at which I sat with the twins in turn on the same chair, battling it out on Heroes of Might and Magic II, with its codes for black dragons. Our family would get a computer later.

Our friendship ended in the eighth grade. Igor and Sasha went to study at University Prep School No. 1501 (affiliated with the STANKIN, the Moscow State Technology University), taking with them all the classmates with whom I was friends. I stayed at School No. 963 because I acted in the theater club and didn’t want to get my life entangled in machine tool engineering, mathematics and economics.

I will always remember the conversation we had in the hallway at school. We were walking past the changing rooms on the ground floor and discussing our position in the world.

“We’re middle class,” I said.

“No, we’re upper class,” they said.

Their names were Igor and Sasha (Alexander) Mints.

We’re Not the Mintses

I can still tell which Mints is which. Igor has a longer face. He’s on the left. Sasha has a rounder face and a lower voice. He’s on the right. Igor was considered a bully, and Sasha was more easy-going. I was more friends with Igor, and my brother was closer to Sasha. Their mother, Marina, is in the middle. Photo: Irina Buzhor/Kommersant

In early 2020, the Basmanny District Court in Moscow arrested in absentia Boris Mints, owner of O1 Group, and his sons Alexander (Sasha) and Dmitry, and put them on the international wanted list. The Mintses have been charged with a serious crime—aggravated embezzlement, punishable under Article 160.4 of the Russian Federal Criminal Code. The punishment for the crime is ten years in prison.

The Russian Investigative Committee accused the Mintses of embezzling 34 billion rubles from Otkritie Bank when it bought bonds from O1 Group. According to investigators, in 2017, Otkritie’s chair, Yevgeny Dankevich, agreed with the management of O1 Group to buy its bonds, although he knew that the real value of the securities was less than half of their face value. O1 Group repaid its loans from Oktritie ahead of schedule with the money made from the sale of the bonds. Shortly after the deal was concluded, Otkritie and Trust Bank were taken over by the Russian Central Bank.

The parties sued each other in court in the UK. The Mintses moved to London before the investigation was launched, and Dankevich went into hiding in Israel. The banks petitioned the court to freeze $572 million of the Mintses’ assets, including the Tower of Lethendy in Scotland, four hotels, two estates, and a residential building in Haifa. In 2017, Forbes estimated that Boris Mints was worth $1.3 billion, but a year later he had dropped out of the top ranks. He said that the two banks, in collusion with the Central Bank, had launched a “campaign” against him due to “strong personal animosity.” In 2018, Mints had to sell Budushchee pension fund, which was one of the three largest non-state pension funds in Russia, to pay his debts. Budushchee (“Future”) had made losses for its clients two years in a row, losing “every eighth ruble belonging to pensioners.” “If we all crash, then the country will crash,” Mints said in an interview.

I have nothing to brag about. My biggest crime is slightly injuring a couple of neo-Nazis. I also shoplifted clothes from stores. When I was young, I didn’t have enough clothes. I wanted to look attractive in front of the girls, and not wear jackets handed down to me by older relatives.

“We’re not the Mintses,” my mother would tell us when we couldn’t afford something. That was the most frequent phrase she muttered when talking about our family’s financial circumstance. The second most popular phrase was “we don’t have any money.” My brother remembers his childhood as “cold and gloomy.” I was forever saddled with an anxiety about what tomorrow would bring.

The last time I met Mintses in our neighborhood was before I went to university. A friend and I were drinking beer outside when a foreign-made car passed by. I recognized my school friend at the wheel. He stopped and opened the window. I smiled and put the beer on the roof of the car to free my hand for a handshake.

“Take it off, you’ll scratch the paint,” he said.

The irony is that my father doesn’t just know Boris Mints. Their career paths had been similar in many ways: both started as officials in regional governments, and then transferred to the presidential administration—with one nuance.

Rich Dad, Poor Dad

Boris Mints. Photo: Vladislav Shatilo/RBC

Boris Mints earned his first capital during perestroika: “It was fabulous money at the time—140-150 thousand rubles.” He was an associate professor of higher mathematics at the Ivanovo Textile Institute when he started working at a youth center for scientific and technical creativity (NTTM) in 1987. Mints wrote programs for automating jobs at textile mills, and along with them, he sold computers through his NTMM, receiving non-cash payments from enterprises, which were then cashed out. This scheme—selling computers and converting the sales into cash through an NTTM—was also employed by the future oligarch Mikhail Khodorkovsky.

In 1990, Mints became involved in privatizing the Ivanovo economy, heading its property management committee. In this capacity he met the head of the federal property committee, Anatoly Chubais, who hired him to join his team. Chubais then became the head of the presidential administration, and Mints was appointed head of the presidential office on local government. This position put him in contact with Russia’s leading lights, including Boris Yeltsin.

My father, Ildar Yulbarisov, graduated from the geology faculty of Moscow State University in 1981 and went off to explore the depths in the most remote corners of our Soviet homeland. In 1990, he was elected First Secretary of the Ufa City Komsomol Committee, but a year later he left because he “did not want to see the country and the Party fall apart.” My father enrolled in the Russian Academy of Foreign Trade in Moscow, while also working at the Bashkirian mission there. In 1994, my father returned to Bashkiria, where he worked for seven years. He would bring us chak-chak and Moscow sausage from Ufa.

The Mintses moved to Moscow in 1994. The Yulbarisovs had moved there in 1991. The two families crossed paths at Timiryazevskaya subway station.

“Dad, do you remember how you met Boris Mints?”

“I was hired to work in the administration of the President of the Republic of Bashkortostan. We knew the country’s leadership and the administration of the President of the Russian Federation, of course. One day Boris Mints showed up there. You and your brother went to visit them once, and your mother asked me to go pick you up. Boris opened the door. We greeted each other like old acquaintances. I told him that we were in the same system, and hinted that I would also like to move to Moscow. Then he invited me to his office on Staraya Ploshchad, and I invited him to Ufa for Sabantuy. There he met with President Murtaza Rakhimov. Mints was very pleased with the trip. When I accompanied on the way back, he said, ‘Murtaza is happy with you. You shouldn’t leave.'”

The 90s came to an end, as did the Yeltsin era. Vladimir Putin came to power, recruiting a new team. In 2000, Boris Mints left the presidential administration to invest in commercial real estate. In 2000, my father left the post of deputy department head at the Ministry of Ethnic Policy and went into the business of oilfield exploration. Mints was ranked among the top 100 richest people in Russia, and his son Sasha made it into the top ten most eligible bachelors in the country. In the Yulbarisov household, buckwheat and chicken on the table were replaced by pilaf and vak belyashi, which my father cooked with goose. I saved up the money I was given for lunch, spending it on dates with girls in cafes. I pretended that I wasn’t hungry.

The Mintses went to MGIMO to study international economic relations, while I continued a family tradition by majoring in journalism at Moscow State University. Once our football team played at MGIMO. We went nuts in the stands, burning flares and, finally, pissing the hell out of their gym, because no one liked the rich kids from MGIMO, not even the rich kids from Moscow State.

What the Mintses Fear

Ildar Yulbarisov, the last First Secretary of the Ufa Komsomol Committee, 1990. Photo: Vechernyaya Ufa

“Dad, according to my rough calculations, we are 1,500 times poorer than the Mintses. Why is there such a difference, if you both worked in government, and then went into business?”

“No big business is created by the labor of the people who own it because it is impossible to create such value independently: there are physiological limits. Capital accumulates only if the surplus value that other people create is confiscated from them. And if you add financial fraud to capitalist exploitation, in which people “voluntarily” engage in wage labor, you get these incredible figures. I have never taken anything that belonged to someone else.”

“Maybe Mints worked harder and better than you?”

“He had a chance, and took it. It was facilitated by his personal qualities, upbringing, and system of values. He went into politics to achieve personal enrichment. I’m a simple Soviet man.”

“Did you want to take bribes and steal when you worked in politics? Or did you just not have the chance?”

“No. I was involved in two election campaigns. They would bring us cash and put it on the table. I didn’t take a kopeck, because I’m an idealist. I was 26 years old when I became a full-time Komsomol worker. I had a clear idea of what I was doing: helping people and improving life in the republic. My father taught me to be honest, and the Komsomol taught me to be responsible to the people. We had a big NTTM attached to the Komsomol city committee in Ufa. They sold everything there, and then would go booze it up at a restaurant. They gave me Italian shoes. I didn’t have to do what they did, since we lived well under communism. I had a salary of 525 rubles a month, your mother worked as a teacher and made another 220 rubles a month. We set half of it aside.”

“Are you comparing yourself to Mints?”

“No, we have had different lives. I’m not jealous, because we had unequal opportunities. There were much fewer opportunities to earn money working for the regional authorities. Today, it is obvious that the Russia inside the Garden Ring and the Russia outside it are two different countries.”

“What is the main difference between the Yulbarisovs and the Mintses?”

“Over three decades, capitalism in Russia has degenerated into its most savage form, dividing people into the poorest and richest strata. According to the most conservative estimates, five percent of the population owns seventy percent of the wealth in Russia. We are at the bottom of the socio-economic ladder, while the Mintses are at the top. But the situation on the moral ladder is different: the Yulbarisovs are at the top, while Mintses are at the bottom. We’re poor, but we’re honest.”

“You know that sounds like an excuse, right?”

“That’s exactly what it sounds like. I’m not worried about it. It’s you young people who are out of luck. Now wages are paid so people don’t die of hunger, and in addition there is the cult of consumption and the cult of success. The world is getting worse, but I’m sure there will be a limit. Either the people will revolt, or the Communists will come to power. Rich people like Mints are afraid of this.”

The Code for Black Dragons
Midway upon the journey of my life, I found myself in a forest dark. Then I found my Bodhi Tree and sat under it, wondering what the forest was, who I was, and where I was going. I recalled my childhood and formulated four truths that I understood from my friendship with the Mintses.

Truth No. 1. I realized that all my life I had suffered from envy, from unfavorable comparisons and the sense of my own inferiority. I even set aside a page in my diary where I write down all the people I have envied. The habit of constant comparison has nurtured in me a capacity for reflection and self-awareness: comparing myself with others, I become aware of my position vis-à-vis all phenomena in the world.

Truth No. 2. It’s not my fault. The dark forest existed before I showed up, and my path has been shaped by the objective layout of obstacles in the thicket. I have extended this truth to all people. We are not to blame for anything, and especially for our poverty, since we are not able to choose the families into which we are born or the societies in which we live. My son had no choice either.

Truth No. 3. I have to work because I have no property. I have extended this truth to all people. People are the same everywhere, and human need is everywhere the same. The poor man works to live, and the rich man lives off his work, repeating again and again, “If you work harder and better, you’ll become like me.”

Truth No. 4. Their family’s social class is a determining factor in the lives of individuals. But it is merely a historically transitory form, a flaw in the capitalist system that we can overcome through collective effort.

We sit in the same chair, playing the same game. Let’s enter the code for the black dragons and win at last!

But we have been separated by capital—by a billion-dollar chasm.

What can I set against a billion dollars of capital? Only my own existential experience. I’ve seen things you never dreamed of. A crowd dressed in black, destroying the cozy streets of Copenhagen in a frenzy. Police sirens wailing in the rain, punctuated by singing. Hugs with a masked stranger: we were victorious then. I have seen things that we could have written down in our notebook. Those moments became mine forever, and I would never have wished for anything else.

I finished the text, opened a messenger app, and wrote to you. “Hello! This is Rustam Yulbarisov. We went to school together and were interested in things mystical. Do you still believe in aliens?”

Born in 1988, Rustam Yulbarisov works as a journalist in Moscow and is a socialist. Thanks to Bryan Gigantino for the heads-up. Translated by the Russian Reader

Vladislav Inozemtsev: The Foreign Agent in the Kremlin

The Foreign Agent in the Kremlin
Vladislav Inozemtsev
The Insider
December 31, 2019

One of the crucial events of the past year was passage of the law on labeling Russian nationals as “foreign agents.” Although the law emphasizes that such “agents” should disseminate information from foreign media outlets and receive financial remuneration from abroad, the notion of “foreign agent” has a quite definite meaning for most Russians: someone who works on behalf of a foreign government to the detriment of their own country.

However, if you think hard about the new law and its implementation (the Justice Ministry has been charged with designating individuals foreign agents, but citizens and NGOs will probably also be able to take the initiative), the first thing that comes to mind is the man who signed it so showily into law on December 2—Vladimir Putin, president of the Russian Federation, who took office exactly twenty years ago today, albeit as acting president.

When Putin moved into the Kremlin, Russia was successfully emerging from an economic crisis triggered by a sharp drop in oil prices in the late 1990s and the ruble crisis of 1998. These two events largely brought to a close the aftermath of the Soviet Union’s collapse and the transition from a planned economy to a market economy. Welcoming the new president, people believed him when he said, “The country’s future, the quality of the Russian economy in the twenty-first century, depends primarily on progress in those industries based on high technology and hi-tech products,” while the world took him at face value when he claimed, “Today we must declare once and for all that the Cold War is over. We abandon our stereotypes and ambitions, and henceforth we will jointly ensure the safety of the European population and the world as a whole.” It seemed that the coming decades should be extremely successful ones for Russia, and the country would inevitably takes its rightful place in the world economy and politics. However, events unfolded following a different scenario, and nearly all the trends that we can now ascertain as well-established suggest that if a CIA officer had taken charge of his country’s recently defeated enemy he would have done less damage to it than Putin has done.

First, Russia in the early noughties had very low labor costs: according to Rosstat, the average salary was $78 a month in 2000. Given that energy prices in Russia were then seven to ten times lower than in Europe, it was self-evident the country should decide to undertake large-scale industrialization by attracting foreign investors. The Central European countries, which in the late nineties and early noughties became successful industrial powers by attracting European capital (we can recall what happened with Škoda’s factories) were an example of the strategy’s wisdom.

However, despite what Russian authorities said at the time, preventing foreign capital from entering strategic industrial sectors became policy. Almost immediately after Putin came to power, the government began renationalizing assets that had been privatized in the nineties: instead of raising taxes on companies owned by Russian oligarchs, the regime commenced buying them out, constantly ratcheting up the price, culminating with Rosneft’s purchase of TNK-BP for $61 billion in 2013. In fact, taxes raised from the competitive sectors of the economy and redistributed through the budget went to buy assets in the extractive sector and were invested in rather dubious projects. Consequently, by the early teens, the share of raw materials (mineral products, ore, and metals) in Russian exports had reached 79–80%, as opposed to 50.4% of Soviet exports in 1989. Finally, in recent years, Russia has begun “diversifying” its raw materials exports by reaching out to China, effectively becoming an “energy appendage” not only of Europe but also of the whole world.

Second, as the economy became ever more dependent on extractive industries, Russia under Putin began to deindustrialize rapidly, resulting in a sharp decline in the demand for skilled workers, who could have been employed to develop the country on new foundations. According to various estimates, 16,000 to 30,000 industrial enterprises, which had employed over 13 million people in the late-Soviet period, were closed between 2000 and 2018. As of 2017, 9.9 million people were employed in Russian processing industries, as opposed to 21.7 million people in the RSFSR in 1989, although there was no significant increase in labor productivity. We can concede, of course, that a good many of these enterprises were not competitive, but most of them were never put up for auctions in which foreign investors were allowed to bid, the Russian government did not provide potential investors guarantees on investments in technically modernizing enterprises, and so on. Essentially, the government adopted a consistent policy of simplifying the industrial infrastructure, increasing dependency on imports, and most significantly, downgrading whole cities that had previously been important industrial centers. It would be no exaggeration to say that the bulk of Soviet industrial enterprises was destroyed not in the “accursed nineties,” but in the noughties and the early teens.

Third, the process went hand in glove with a demonstrative lack of attention to infrastructural problems and managing Russia’s vast expanses. About 700 airports were closed between 2000 and 2010, domestic passenger traffic dropped below international passenger traffic, and so many roads fell into disrepair and collapse that since 2012 city streets have been counted as roads in order to buff up the statistics. Infrastructure projects have been concentrated either in Moscow (e.g., the Moscow Ring Road, the Central Ring Road, expansion of the Moscow subway) or on the country’s borders as a kind of exercise in “flag waving” (e.g., Petersburg and environs, Sochi, Chechnya, the Crimean Bridge, the reconstruction of Vladivostok and Russky Island).

Consequently, rural settlements have begun dying out massively in most regions of the country: since 2000, around 30,000 villages in Russia have disappeared, and nearly 10,000 of them have eight or fewer residents. The number of residents in cities with populations ranging from 50,000 of 200,000 people has decreased: population reductions have been recorded in 70% of these cities, while the population has dropped by a quarter in more than 200 such cities. There has been a massive exodus of people from the Russian Far East. Even the solution of longstanding problems that were handled for better or worse in the nineties has been abandoned, including disposing solid wastes, minimizing harmful emissions, and storing hazardous industrial waste. Russian infrastructure is close to collapse: depreciation of the power grids exceeds 70%, while 75% of the heating network is obsolete. Only 52.8% of local roads meet Russia’s poor standards. All attempts to remedy the situation are propaganda tricks more than anything, and yet budget funds for infrastructure are allocated regularly, just as taxes are collected from the populace.

Fourth, despite formal achievements, such as increasing life expectancy and reducing per capita alcohol consumption, the nation’s physical and mental health is verging on the disastrous. From 2000 to 2016, the number of HIV-infected Russians increased almost twelve times, reaching 1.06 million people, meaning that the threshold for an epidemic has been crossed. Spending on health care has remained extremely low. It is usually measured as a percentage of GDP, but a comparison of absolute figures is much more telling: in 2019, the government and insurance companies allocated only 23,200 rubles or €330 for every Russian, which was 14.2 times less than in Germany, and 29 times less than in the US, not counting out-of-pocket expenses.

Despite the huge influx of immigrants and migrant workers during Putin’s rule, the population of Russia (without Crimea) decreased by 2.7 million people from 2000 to 2019. Drug addiction has been spreading rapidly, becoming one of the leading causes of death among relatively young people in small towns. And yet the authorities see none of these things as a problem, limiting access to high-quality foreign medicines and accessible medical care (the number of hospitals has been halved since 2000, while the number of clinics has decreased by 40%), all the while believing the HIV crisis can be solved by promoting moral lifestyles. There is little doubt that Russia’s population should began dying off at a furious pace now that the reserves of economic growth have been exhausted.

Fifth, the formation of a bureaucratic oligarchy, able to appropriate at will what the authorities see less as “public property” and more as “budget flows,” has generated enormous corruption and blatantly inefficient public spending. A sizeable increase in spending on the space program—from 9.4 billion rubles in 2000 to 260 billion rubles in 2019—producced a drop in the number of successful launches from 34 to 22. Despite promises in 2006 to build almost 60 new nuclear power units, only 12 units have been brought online over the last twenty years. Programs for growing the military-industrial complex have not been consistently implemented: production of new weapons has been minuscule, amounting to only ten to twenty percent of Soviet-era production. The country’s only aircraft carrier has for the second time suffered combat-like damage during an “upgrade,” while its only 4.5-generation fighter has just crashed during a test flight.

The latest challenges posed to Russia by the development of information technology around the world have elicited no response whatsoever from the regime. On the contrary, the bureaucrats and siloviki have consistently acted to discourage researchers and innovators. The dominance of the siloviki in most government decision-making, their utter lack of oversight, and unprecedented incompetence have meant that much of the money that could be used effectively in the military sector and open up new frontiers for Russia has been simply been embezzled.

Sixth, Putin’s rule has been marked by the impressive “gifts” he has made to countries which the Kremlin has often identified as potential enemies. Around $780 billion was spirited from Russia between 2009 and 2019, whereas less than $120 billion was taken out of the country during the entirety of the nineties. The most important cause of this outflow was a law, passed in 2001, establishing a nine-percent tax on dividends paid to “foreign investors” or, rather, the offshore companies registered as owners of Russian assets. (The subsequent abolition of this measure in 2015 has changed little.) Much of this money was invested in passive sources of income in the west or spent on the luxurious lifestyles of Russian billionaires, thus supporting local economies in other countries.

Even more “generous,” however, was Putin’s gift to west in the form of the four million Russian citizens who have left Russia during his presidency: mainly young and middle-aged, well-educated, willing to take risks and engage in business, they now control assets outside the country that are comparable to the Russian Federation’s GDP. This wealth has been generated from scratch by talented people the Russian regime regarded as dead weight. The destruction of human capital is the biggest blow Putin has dealt to Russia, and it is no wonder western analysts argue Russia will need a hundred years at best to bridge the emerging gap.

Seventh, we cannot ignore the holy of holies: national security. We have already touched on the military sector in passing. It is a realm in which technological progress has largely boiled down to showing cartoons to members of the Russian Federal Assembly: space launches are still carried out using Soviet Proton rockets, designed in the sixties; the last of the Tu-22M strategic bombers rolled off the line in 1993; the Su-57 is based on groundwork done while designing the Su-47 during the late eighties; and the advanced Angara (S-200) missile was developed as part of the Soviet Albatross program from 1987 to 1991. Things are no better in the secret services: agents sent on secret missions set off Geiger counters, like Lugovoy and Kovtun, blow their cover wherever they can, like Mishkin and Chepiga, or get caught in the act, as was the case with Krasikov.

The elementary inability to carry out their work in secret is the height of unprofessionalism: a handful of journalists can dig up nearly all the dirt on Russian agents, using information freely available on the internet. The same applies, among many other things, to the downing of Malaysia Airlines Flight 17 over the Donbass and the regime’s use of unprofessional, incompetent mercenaries from various private military companies.

Finally, eighth, President Putin’s foreign policy deserves special attention. Over the past ten years or so, the Kremlin’s own efforts have led to the creation of a buffer zone of neighboring countries that fear or hate Russia. If something like this could be expected from the Baltic states, which sought for decades to restore the independence they lost in 1940, no one could have imagined twenty years ago that Russia would make Georgia and Ukraine its worst enemies. However, our country’s principal “patriot”—whose daily bedtime reading seemingly consists of the works of Zbigniew Brzezinski, who once argued that Russia’s “imperial backbone” would be broken only when it lost Ukraine once and for all—has consistently sought to make Kiev recognize Moscow as its principal existential threat.

Similar sentiments have emerged in Minsk, where the authorities and populace of the country that suffered the greatest losses in the Great Patriotic War for the sake of the Soviet Union’s common victory have been nearly unanimous in their opposition to further rapprochement with Russia. We won’t even mention Russia’s damaged relations with the US and the EU: at the behest of Moscow, which is immeasurably weaker than the collective west, a new cold war has been launched that the Kremlin has no chance of winning but that could lead Russia to the same collapse suffered by the Soviet Union during the previous cold war. Meanwhile, Moscow’s hollow propaganda and its theatrical micro-militarism have been a genuine godsend to western military chiefs, who have been securing nearly unlimited defense budgets, just like the designers of advanced technology, who have been developing new weapons and gadgets in leaps and bounds.

I will not catalogue the current president’s other achievements—from destroying the Russian education system and nourishing a cult of power in society, thus generating a crisis of the family, to undermining Russian federalism and nurturing an unchecked power center in Chechnya. I will only emphasize once again that not just any foreign agent, after spending decades infiltrating the highest echelons of power in an enemy country, would be able to inflict such damage. I don’t consider Putin a foreign agent in the literal sense of the word, of course, but if it is now comme il faut in Russia to identify those who are working, allegedly, for hostile powers and thus inflicting damage on their own country, it is impossible to ignore what Putin has done over the past twenty years.

The current head of the Russian state should have a place of honor on the list of “foreign agents,” just as “Party card number one” was always reserved for Lenin in bygone days. And the west should be advised not to seek to undermine Putin’s regime but, on the contrary, do its utmost to extend his term in the Kremlin, simply because as long as Russia is so inefficient, backward, and profligate it poses no threat to the rest of the world, however much the strategists at the Pentagon try and convince the top brass otherwise.

Photo and translation by the Russian Reader

A History of Violence

autumn colors.jpg Spontaneous car park amidst the rubble on the corner of Kirochnaya and Novgorodskaya Streets, Petersburg, 12 October 2018. Photo by the Russian Reader

Since I had made nearly a dozen trips to and from the Interior Ministry’s Amalgamated Happiness Center this past summer to get my papers in order, I must have passed through the nearby intersection of Kirochnaya and Novgorodskaya Streets just as many times. So, when I happened on the bizarre autumnal scene, picture above, at the same corner yesterday evening, I was befuddled. What had happened here? I could not recall its having looked like this, as if a bomb had been dropped on it a month or two ago.

Fortunately, my friend AC came to the rescue, sending me the following, all-too-typical journalistic account of what happened on the corner of Kirochnaya and Novgorodskaya this past summer.

This is only a single episode in a much larger history of violence, the story of how Petersburg’s bureaucrats-cum-capitalist sharks-cum-property developers have demolished large parts of its historic center, a Unesco World Heritage Site, to satisfy their greed, and how the city has been turned ugly by their lawless exertions in so many spots that all of us who love Petersburg have long ago lost count of the dead and wounded. {TRR}

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Demolition of Garages near Nevsky Town Hall: As If a Mongol Horde Had Swept Through Petersburg
Have Officials of the Smolny Trashed a Car Park for War Veterans That Existed 60 Years on Behalf of Oligarch Samvel Karapetyan?
Nikolai Pechernikov
Interessant
August 31, 2018

A conflict over the car park on the corner of Kirochnaya and Novgorodskaya Streets that had lasted for years ended recently in a total victory of officials over ordinary citizens. The garages in the car park, allocated to World War Two veterans in the 1960s by the Smolny District Party Council, were not merely demolished. They were swept from the face of the earth, as if they had been located on enemy territory, in a fortified area that was finally mopped up by friendly forces.

Garage Owners? Get the Hell Out of Here!
In photos taken by an Interessant correspondent from a neighboring block of flats, the pogrom unleashed in the car park by the tough guys from the St. Petersburg Center for More Effective Use of State Property is apparent. A quiet corner in downtown Petersburg has been turned into gigantic rubbish heap. The pavement is chockablock with pieces of wrecked garage roofs, tires, car parts, and broken furniture.

The garage owners, who had not wished to exit their car park meekly, but had filed lawsuits, have been punished with all severity. Their belongings have been tossed out of the garages, broken, and dumped in heaps. The people who carried out this mopping-up operation had probably wanted it to be demonstrative: this is what happens to anyone in Petersburg who gets it in their head to take the moral high ground and try and defend their rights.

The rubbish heap that residents of Kirochnaya and Novgorodskaya Streets can see from their windows is a distressing sight. It looks as if Mamai and the Golden Horde had swept through Petersburg. Most important, over the last few days, it has occurred to none of the responsible parties to clean up the area they mopped up. Apparently, the rubbish heaps will now lie there for several more months.

This barbaric, shameful rubbish heap, the aftermath of a car park’s demolition, testifies to the fact that Petersburg city officials care not a whit for the city’s reputation or their own reputations. Photo courtesy of Interessant

There had been several previous attempts to squeeze out the war veterans and their heirs from the land plot on which the now-demolished garages had stood. In 2016, for example, a tractor demolished the entrance gate to the car park. When the gate was lying on the ground, the tractor drove back and forth over it, flattening the gate ever more convincingly, as if it were doing a victory lap. But the special op ended in mid-sentence as it were. Now, however, it has finally been completed.

Samvel Karapetyan? Welcome!
On whose behalf have officials of the Smolny [Petersburg city hall] been making such efforts? Who means more to them than the people who built garages on the plot back in the day on completely legal grounds?

Allegedly, the plot will be ceded to companies belonging to Samvel Karapetyan, president and founder of the Tashir Group, one of the largest property developers in Russia. Unlike the mopped-up veterans and their heirs, Mr. Karapetyan is quite wealthy. As of late 2017, according to Forbes, he had an estimated net worth of $4.5 billion. Bloomberg recently included him in its index of the world’s five hundred wealthiest people.

Petersburg officials cannot directly gift the plot on the corner of Kirochnaya and Novgorodskaya to Mr. Karapetyan, of course. According to our information, it will probably be transferred to Dargov Cultural Center LLC or Slovak House LLC, companies linked to a network of commercial organizations directly connected to RIO, a chain of shopping malls owned by Mr. Karapetyan’s business empire.

What Will Be Built on the Lot? A Shopping Center? Or a Huge Block of Flats?
The lot at the corner of Kirochnaya and Novgorodskaya would be a quite attractive site for yet another shopping center. It is literally a stone’s throw from Nevsky Town Hall [Nevskaya ratusha], where a considerable number of officials from Petersburg city hall will soon be moving. The entire neighborhood now consists of luxury blocks of flats in which only very wealthy people can afford to live. Thus, a RIO Shopping Center on Kirochnaya (if Mr. Karapetyan actually plans to build one) would not only be located close to city officials but would also be a kind of tool for influencing them.

According to other sources, the plot could be redeveloped into a huge block of flats. Officials, businessmen, and lobbyists no doubt would like to move in next door to Nevsky Town Hall. It would be a question of prestige to many of them.

Either project would be highly profitable to the people who implement it, and experienced officials are also probably eagerly poised to pounce on it. They have a nose for such deals.

When so much moolah is at stake, no one has the time of day for the rubbish heap left in the aftermath of the car park’s destruction, a sight that brings shame on Petersburg.

Translated by the Russian Reader

Sanktsionshchiki

sankts “Sanctioned product”

The Demand for Sanctions Specialists Has Grown in Russia
Svetlana Romanova
RBC
November 9, 2017

According to recruiting agencies and job search sites, he Russian job market has seen a growing demand for employees who understand the ins and outs of sanctions legislation.

According to Headhunter.ru, there were 27 published vacancies for sanctions specialists in October 2017; there were a mere nine vacancies in October 2014. Sberbank, VTB, UniCredit, Raiffeisen, Globex, and the Russian Regional Development Bank are among the companies now recruiting these specialists.

It is not only banks that have been generating the demand (they account for 44% of all vacanies) but also law firms (21%), accounting firms (11%), and insurance companies (10%). Starting pay is 250,000 rubles a month [approx. 3,600 euros a month], but experienced specialists can count on monthly salaries of 500,000 rubles, we were told by the personnel agencies we interviewed.

Vacancies advertised on websites are only the tip of the iceberg: headhunters are usually employed to find sanctions specialists. The first request for a sanctions specialist to the recruiting agencyHays was made by a major private Russian bank in late 2014, said Darya Anikina, managing consultant for financial institutions at Hays. Currently, the agency selects candidates for at least five positions a month at different companies. Our sources at the agencies Cornerstone, Kontakt, and Unity also told us about a deficit of sanctions specialists.

“The profession doesn’t exist officially. It’s not taught anywhere,” said Yuri Dorfman, a partner at Cornerstone.

Headhunters have to make compromises and use their imaginations. For example, Cornerstone recently succeeded in placing a specialist at a bank. At his previous job, he had been employeed preventing money laundering, and monitoring and stopping illegal financial transactions. Sanctions specialists are also aware of the demand and have been making the most of it. When moving to a new company, they ask for at least a thirty or forty percent raise, rather than the customary twenty percent raise.

Whereas sanctions specialists are sought out by banks and legal firms, the consumer goods retail sector has been vigorously looking for specialists to help it get round the Russian Federation’s countersanctions, meaning specialists in logistics and foreign trade. According to the website Superjob, the salaries for such vacancies increased by 18% in 2017.

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Sanktsionshchiki: Who Recruiting Agencies Are Hunting Nowadays
Svetlana Romanova
RBC
November 9, 2017

The Russian labor market’s demand for sanctions experts has been growing. People who practice this new, rare profession earn between 250,000 and 500,000 rubles a month, and employers have been headhunting them with a vengeance.

Since March 2014, the US, the EU, and other countries have been continously imposing more and more sanctions on Russian nationals, companies, and individual industries. This has provoked a demand for sanctions experts on the Russian jobs market. Some companies simply cannot do without their assistance. According to headhunters, there is a lack of such specialists. Employees who have improved their qualifications and learned how to deal with the restrictions and risks occasioned by sanctions can count on salary increases of thirty to forty percent.

Sanktsionshchiki
In March 2014, 46-year-old Artyom Zhavoronkov, a partner at the legal firm Dentons who specializes in mergers and acquisitions, was planning to travel to Washington, DC, to give a lecture to an American audience about how to build a business in Russia. But since the US had imposed the first set of sanctions against Russia [sic], the Americans cancelled the lecture. Zhavoronkov kept his head and suggested changing the subject of the lectures. He decided to talk about something more topical: the sanctions and their consequences. Ultimately, the lecture took place, and it was standing room only in the auditorium. It was then that Zhavoronko understood he had found a new business niche: legal advices on issues related to sanctions. Currently, he consults twenty to thirty international and Russian clients monthly.

Recruiting agencies received the first requests for sanctions specialists in the spring of 2014, but by the autumn of 2017 the demand for such specialists had become stable. The demand has grown not only for temporary consultants like Zhavoronkov: many companies seeks to hire in-house specialists. According to HeadHunter.ru, its website listed nine such vacancies in October 2014. By October 2017, that number had grown to 27. Candidates are usually expected to have degrees in law or finance, a good command of English, and a high tolerance for stress.

This is the tip of the iceberg, because companies usually employ headhunting agencies to find sanktionshchiki. Russian ompanies have realized no one is going to cancel the sanctions anytime soon, the lists of sanctioned companies and individuals have been expanding, and so the problem will not solve itself.

The first request for a sanctions specialist to the recruiting agency Hays was made by a major private Russian bank in late 2014, said Darya Anikina, managing consultant for financial institutions at Hays. Currently, the agency selects candidates for at least five positions a month at different companies. Compared with other professionals, this is a tiny figure, but for the time being they are all that is needed. In a company that employs a thousand people, there might be three or four such specialists, but they will earn more than their colleagues.

Who and What Banks Are Looking for

Vacancy: Specialist for international sanctions monitoring group

Duties: Vetting of bank clients and transactions against the lists of international sanctions, as imposed by the US, EU, UN, and other in-house lists. Search and analysis of additional information on the internet and the bank’s internal databases in order to analyze automatically generated warnings regarding the bank’s clients and transactions. Drafting of brief, well-argued analyses of automatically generated warnings. Filing of reports.

Requirements: Tertiary degree in economics, finance or law. No less than six months’ experience working in a credit institution. Experience working with automated banking systems. Command of written and spoken English at the intermediate level is obligatory. Ability to cope with large amounts of routine work. The candidate must be detail-oriented, focused, perseverant, able to learn quickly, proactive, diligent, and well-spoken.

Source: job listing on the website Headhunter.ru

Banks on the Hunt
Artyom Zhavoronkov provides sanctions-related legal services. He establishes whether the owner of a company with whom his client plans to make a business deal is not on the sanctions lists, and he drafts supply contracts that account for international restrictions. But he also provides more ambitious services. Recently, Zhavoronkov drafted a plan for an oil company: he conceived and drafted an in-house list of “sanctions” rules. For example, Zhavoronkov devised a special algorithm for sale managers that prevents them from making deals with companies and individuals on the sanctions list.

“If questions arise, sales managers contact legal counsel, and together they decide whether they can sign a contract,” Zhavoronkov explained.

Most of all, Zhavoronkov is proud he succeeded in getting a major company off the sanctions list. (He did not name the company, citing a nondisclosure agreement.) He conducted long negotiations with regulators, trying to prove to them that the circumstances that had led to his client’s ending up on the sanctions list had changed. Although the US Treasury Department’s Office of Foreign Assets Control (OFAC) has not made public a single instance in which the US has taken Russian companies off the sanctions lists, there have been precendents in other countries. In September 2014, Canada removed sanctions from two Russian banks, Expobank and Rosenergobank, acknowledging they had been placed on the sanctions list mistakenly.

The services of sanctions experts are needed by investment funds, including ones run by major banks, and the management companies of oligarchs who have been sanctioned, said Zhavoronkov. There is also demand from consulting companies. However, judging by job search websites, it is Russian banks that are most in need of employees versed in the ins and outs of sanctions. Since 2014, banks have accounted for 44% of such vacancies on HeadHunter.ru, with legal companies coming in second at 21%.

Recently, two vacancies were posted by the country’s largest bank, Sberbank. It seeks two experts for its international sanctions monitoring group. The specialists must prepare opinions on transactions and operations, that is, check whether they are covered by the sanctions imposed by international organizations and individual governments, consult with employees, and respond to their requests. Sberbank refused to tell us whether it had succeeded in filling the positions.

Other financial institutions have placed help wanted ads on HeadHunter.ru: VTB, UniCredit, Raiffeisen, Globex, and the Russian Regional Development Bank. None of them agreed to talk with us on the record. RBC’s sources at a major state bank confirmed they have a full-time sanctions specialist on staff. But the source refused to provide details, adding that no one wants to talk about it publicly, since the “topic is painful and nothing to brag about.”

Russian financial institutions that have been sanctioned need specialists to keep from having even more serious restrictions imposed on them and avoid jeopardizing their business partners.

Banks that have not been blacklisted need such specialists to avoid violating the sanctions by working with counterparties. Otherwise, they can also have their access to western loans cut off. Primarily, this concerns the top one hundred financial institutions in terms of assets. It is they who hire sanctions specialists, said Roman Kuznetsov, senior analyst at the investment company QBF. Each major bank has a few sanctions specialists, said Andrei Zakharov, director of the financial institutions personnel recruiting department at Kontakt.

Experience Is More Important than a Diploma
Of course, not a single Russian university educates sanctions specialists, nor are there any continuing education courses on the topic as of yet. Everything has to be learned on the job. Successful candidates for sanctions specialist jobs usually have three or four years’ experience working in legal compliance or auditing departments of banks. Candidates with other financial backgrounds are considered less often, said Darya Anikina.

Dentons employs 200 attorneys. Aside from Zhavoronkov, however, only two of his colleagues, both of them under thirty, deal with sanctions-related cases. Zhavoronkov is their mentor. He made it his goal to cultivate these unique specialists in firm. Currently, there are very few experienced employees who understand the intricacies of the sanctions. Three and a half years have passed since the first sanctions were imposed. This is too short a time to form a pool of specialists.

Unlike the Russian labor market, the specialization has existed on the American job market for several decades. Sanctions compliance in the US is an entire niche business, claimed Zhavoronkov. The staff of any American law firm usually has one such specialist. His or her work is considered routine.

According to Bloomberg, the demand for sanctions expertise in the US grew in 2014. American companies frequently hired former officials from the Treasury Department, who were involved in drafting most of the restrictions. For example, until 2014, Chip Poncy was head of the unit for combating the financing of terrorism and financial crimes at the Treasury Department, but after the first sanctions against Russia [sic] were imposed, Poncy founded Financial Integrity Network, which helps businesses deal with the restrictions.

The costs of making a mistake can be quite hefty. For example, the French bank BNP Paribas agreed to pay $8.97 billion in fines after it was discovered it violated sanctions regimes between 2004 and 2012, when it did business with individuals and companies from Sudan, Iran, and Cuba, which have been sanctioned by the US.

The Reverse Side of the Sanctions
Whereas banks and legal firms have been seeking sanctions specialists, the FMCG (fast-moving consumer goods) sector has been vigorously seeking people who can help them bypass the produce embargo imposed by Russia, that is, they have been seeking experts in logistics and foreign trade. According to the website Superjob, the job of foreign trade manager was among the top jobs in terms of salary increases in 2017. The starting salaries for such specialists have increased by 18% since the beginning of the year.

The Price Tag
None of the vacancies on HeadHunter.ru that RBC examined contained information on the salaries of sanctions specialists. However, recruiters says the starting salary of a specialist with little work experience is 250,000 rubles a month.

Nevertheless, it is difficult to fill the positions quickly, admitted Anikina. Nor is it always clear how and where to find the right people, Yuri Dorfman, a partner at the agency Cornerstone, agreed with Anikina.

“This is not marketing, where the process for filling jobs is clear and formalized. The profession doesn’t exist officially,” he said.

Recently, Cornerstone managed to find a specialist for the compliance department at a bank. At his previous job, he had been employeed preventing money laundering, and monitoring and stopping illegal financial transactions. Sanctions specialists, a new and rare breed, are also aware of the demand and have been making the most of it. When moving to a new company, they ask for at least a thirty or forty percent raise, rather than the twenty percent pay rise customary on the market.

Felix Kugel, managing director of the recruitment company Unity, sees an experienced attorney who has a thorough knowledge of corporate law as the perfect sanctions specialist. The salary of an employee like this could be around 500,000 rubles a month [i.e., over 7,000 euros; by way of comparison, according to the website Trading Economics, the average montly salary in Russia as of October 2017 was 38,720 rubles or 556 euros, although regular readers of this website will know that real monthly salaries are often much lower in particular occupations and regions—TRR].

It is unlikely sanctions specialists will be unemployed.

“I would be glad if the sanctions were lifted, despite the fact I earn money from them,” said Zhavoronkov, “but I am confident this won’t happen in the near future.”

Zhavoronkov recalls the Jackson-Vannick amendment to the Trade Act of 1974, which limited trade with countries that restricted emigration and violated other human rights, e.g., the Soviet Union, China, Vietnam, and Albania. It was officially abolished in 2012, although it had de facto ceased to function in 1987.

The new specialization will be in great albeit limited demand [sic] in Russia in the coming years, agreed Roman Kuznetsov. But additional knowledge about how the sanctions are structured would come in handy to all Russian banking, finance, and legal sector employees. Understanding the ins and outs of the sanctions means you have a good chance of increasing your salary by thirty to forty percent, we were told at Hays.

Restricted Area
The first set of sanctions, occasioned by the annexation of Crimea and the conflict in Donbass, were imposed by the US, EU, Australia, New Zealand, and Canada in mid March 2014. Since then, the black lists have expanded due to the inclusion of personal sanctions (directed at specific people and companies affiliated with them) and sectoral sanctions (directed against individual industries and activities), and other countries and international organizations have joined the sanctions regime. Currently, the US has sanctioned over one hundred Russian nationals and companies, not counting foreign companies connected with sanctioned Russians. The EU has sanctioned 149 individuals and 38 companies.

Five Russian banks with ties to the Russian state have been sanctioned: Sberbank, VTB, Gazprombank, Rosselkhozbank, and Vnesheconombank. These financial institutions are not eligible for long-term financing abroad, and US and European investors are forbidden from buying shares and Eurobonds from these banks. In addition, the US has banned doing business with 33 companies in the Russian military-industrial complex, including Kalashnikov, Almaz-Antey, Rosoboronexport, Rostec, United Aircraft Corporation, and Russian Helicopters. The oil and gas industry is represented in the black lists by Rosneft, Transneft, Gazpromneft, NOVATEK, Gazprom, and Surgutneftegaz. The US and UE have imposed sanctions not only on banks, military-industrial companies, and oil and gas companies but also on completely “peaceful” firms, for example, the drinking water and beverage manufacturer Aquanika, a subsidiary of Gennady Timchenko‘s Volga Group.

In 2016, [former Assistant Secretary of State for European and Eurasian Affairs at the US Department of State] Victoria Nuland said in Kiev that the sanctions would not be lifted until Russia returned Crimea to Ukraine.

Translated by the Russian Reader. Photo courtesy of Stringer

Nice Work If You Can Get It

Oleg Derispaska — Oleg Deripaska. Photo courtesy of deripaska.com

“I believe that it takes just 100 people to change a country for the better provided that these people are driven professionals capable of creating something new. I am sure that in Russia there are far more than 100 such people, so let’s join forces and work together.”
—Oleg Deripaska

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Deripaska’s Company Releases Sales Figures for “Olympic” Apartments
Natalya Derbysheva
RBC
May 27, 2016

sochi-olympic village marina — Mockup of the Sochi Olympic Village’s Coastal Cluster. Photo: Andrei Golovanov and Sergei Kivrin/TASS

Oleg Deripaska’s company RogSibAl has sold 20% of the luxury apartments it built on the Black Sea coast in Sochi for the Winter Olympics. The company believes this is a good result.

RogSibAl, a subsidiary of Oleg Deripaska’s Basic Element, built 2,700 luxury apartments on the Black Sea coast for the 2014 Winter Olympics in Sochi. Athletes lived in the apartments during the competition. According to Vnesheconombank, the project’s budget was 25.3 billion rubles, 22.3 billion rubles of which RogSibAl borrowed from Vnesheconombank.

The coastal Olympic Village is now known as the Imereti Resort District. It consists of four quarters, the Coastal Quarter, the Maritime Quarter, the Park Quarter, and the Reserve Quarter. Apartments are available for purchase in all four quarters. The price per square meter ranges from 152,000 rubles to 195,00 rubles [approx. 2,070 euro to 2,650 euros per square meter—TRR].

Since the apartments went on sale in 2013, 20% of them have been sold, a Basic Element spokesman told RBC, meaning that over 500 apartments in all have been sold. Basic Element’s spokesman added that the company had sold 118 apartments from January to May 2016. The company plans to have sold 350 apartments for a total area of 25,000 square meters on the year.

Basic Element has been renting out the unsold apartments. According to the company’s spokesperson, the rental demand for the 2016 summer season is 97–100%.

The sales figures are worse than what Basic Element had planned in 2011. Igor Yevtushevsky, RogSibAl’s general director, had then told Vedomosti that the company was planning to sell 50% of the apartments before the start of the Olympics, and the other half in 2014–2015.

Basic Element’s spokesman said it would be unfair to compare current sales figures with projections made in 2011.

“The project has undergone big changes,” he explained.

The company cites data from the MACON Realty Group, according to which 387 business- and luxury-class real estate transactions were concluded in Sochi from January to May 2016, meaning that the Imereti District’s share of this business was 23%.

The government has discussed the conditions of restructuring the loans issued by Vnesheconombank for building Olympic sites, RBC’s sources told it earlier this week. A federal official explained that Deripaska’s companies were in the most complicated circumstances in terms of loans, since the demand for apartments was not great.

Sochi Olympic Village. Photo courtesy of Nikita Kulachenkov

Basic Element has not disclosed the figures of the income from its sales of the properties. Its spokesman did say, however, that all the proceeds were being wholly turned over to Vnesheconombank in repayment of the loan and that RogSibAl had been fulfilling all its obligations to the bank.

Given that sales usually begin at the design and construction stage of a property, 20% sales in the second year after a property has been operation is hardly satisfactory, argues Marina Udachina, director of the Institute for Innovations, Infrastructure and Investments. According to her, the situation is partly due to a slowdown in economic growth and a reduction in the demand for luxury properties.

__________

Nikita Kulachenkov
Facebook
May 27, 2016

Only 20% of the apartments in the Olympic Village have been sold in two years.

Here is what we wrote about this a month before the Games:

“The site is being built by oligarch Oleg Deripaska, one of the few private investors in the Olympics. Only he is building with public money. Twenty-two of the twenty-five billion rubles in the project’s budget has been secured with a loan from state-owned Vnesheconombank. Derispaska’s company is planning to pay back this money by selling the village as a residential complex after the Games. It will be hard for them to find buyers. A single bed in the village costs as much as a two-room flat in Moscow.”

Of course, the crisis, sanctions, and being “surrounded by enemies” have inevitably led to a drop in demand for fairly pricey holiday apartments. On the other hand, this was offset by the fact that demand was supposed to shift to the domestic market from Greece, Cyprus, Turkey, and other countries where housing had become almost twice as expensive for Russians.

As a result, sales did not take off, which is a pity. I know that after the Games a good person, familiar to a lot of my people on my wall, worked on the project.

We can also add to this news the latest about Sberbank, which after agonizing for a long time has today finally sold the Mountain Carousel ski resort on the installment plan to the former governor and current minister Tkachyov* and his young but quite talented son-in-law. The joke there is that Sberbank invested 25 billion rubles into Mountain Carousel, while Vnesheconombank loaned it 55 billion rubles. Vnesheconombank fiercely resisted the sale, because it is one thing when Sberbank is in hock to you to the tune of 55 billion rubles, and quite another when it is Tkachyov and family. Apparently, Gref is tougher and stronger than the moribund Vnesheconombank, although it does not make our lives any easier.

Since for some reason business has not been booming at nearly all the former Olympic sites, the government has authorized the repayment of Olympic loans over a period of 25 years at a reduced 5% interest rate. And to keep Vnesheconombank from kicking the bucket altogether, the Finance Ministry will give it another 150 billion rubles straight from our pockets.

I probably do not need to remind you of the total amount that we, the taxpayers of the Russian Federation, paid for the construction of all these “great power” bells and whistles.

P.S. I’m going to do a little populism practice. Anyone in Russia want a twenty-five-year mortgage at five-percent interest? Ask Tkachyov, Potanin, Deripaska, and Vekselberg “how.” )))

Translated by the Russian Reader. Thanks to Alexei Navalny for the heads-up. This post should be read in tandem with my post for May 25, 2016, “The Decline Has Gone Uphill.”

* On August 2, 2012, Tkachyov announced plans to deploy a paramilitary force of Cossacks in Krasnodar Krai, beginning September 2012, as vigilantes to discourage internal immigration by Muslim Russians. In a speech to police, he stated, “What you can’t do, the Cossacks can. We have no other way—we shall stamp it out, instill order; we shall demand paperwork and enforce migration policies.”

Source: Wikipedia, New York Times

The Life of Eygeny

Evgeny Lebedev, publisher of The Independent

While having a gander this morning at how Novaya Gazeta, Russia’s premier liberal newspaper, has been covering the Syrian conflict in recent months, I stumbled across this op-ed piece, essentially an open letter to the British establishment, dated November 6, 2015. Published in the (mostly nonexistent) “English version” of the paper’s website and headlined “Britain must make Vladimir Putin an ally in the disaster that is Syria,” the piece is attributed to “Eygeny [sic] Lebedev, Publisher, The Independent, London.”

To cut to the chase, Evgeny Lebedev (his actual name) who has dual UK-Russian citizenship, it transpires in the piece, wants Britain to make common cause with Russia against the Islamic threat, to wit:

“There may be up to 7,000 Russian nationals who are in Syria as a result of being radicalized. Moscow, not a multicultural city in the way that London is, and run by an administration that is much more militarily decisive because it doesn’t put all big decisions to Parliament [sic], is clear: these terrorists must be killed, before they return to Russia to wreak havoc.

“On that point, Britain and Russia should be of like mind. We, too, know that there are many British citizens who have been radicalised and, for unfathomable reasons, decided to flee to this anarchic region and fight against all the things readers of this newspaper take for granted: democracy, peace, civilization.

“We have common cause with the Russians [sic], a common enemy. The biggest threat to humanity today is cancerous, Islamist ideology that is growing fast right across the world—one that claims, with what truth we don’t yet know, to be behind the weekend’s tragic plane crash in Egypt’s Sinai desert.

“Not for nothing did the head of our [sic] security services say last week that the terror threat in Britain is the highest it has been in his 32-year career.

“Destroying this cancer, or plague, at source could hardly be more worthwhile or urgent; and yet, rather than work with the Russians [sic] to do this, we seem intent on cutting ties instead.

“Britain should not be leaving it to the French to mediate between Russia and the West. For all the greatness of this island nation, for all its hard and soft power, there is a laxity in our [sic] approach to the Syrian crisis.”

If you want to find out more about the exciting life of the fine fellow who penned this, avail yourself of Wikipedia’s bio of the man.

I think your eyes should pop out of your head when you realize that the son of a KGB First Chief Directorate spy and Russian oligarch is nowadays a respectable man about town and media mogul in London, the exact same place where his wealthy dad used to do his spying back in the bad old days. But then again, neither you nor I are as worldly as publisher Lebedev and his dad, so what do we know?

Photo courtesy of Wikipedia