How Don Trump Gave the Russian Economy a Leg Up

Brent-Crude

Buying Dollars No Way to Stop: Russian Finance Ministry Purchasing Foreign Currency at Record Pace in Aftermath of Putin’s Announcements
Alexander Pirozhkov
Delovoi Peterburg
May 10, 2018

As of today, the Russian Finance Ministry will be buying dollars at a record pace over the next four weeks. It will spend a total of ₽323 billion on these deals during the period. Since the start of the year, the Finance Ministry has spent nearly ₽3 billion on replenishing its foreign currency reserves. If we take into last year’s transactions, it has spent a total of ₽1.8 trillion.

High oil prices have made it possible to buy up foreign currency aggressively. This week, the price of Brent crude jumped above $76 a barrel, its highest price in three and a half years. Russian Urals crude, which is traded at a discount of several percentage points to Brent, exceeded $70 a barrel. The price rise has continued for several months, producing a huge surplus in the federal budget (₽344.35 billion in the first quarter of 2018), since budget revenues had been planned based on a Urals price of $40 a barrel. Thanks to favorable trends in extractive resources markets, both President Putin and Prime Minister Medvedev cheerfully announced earlier this week that finding an additional ₽8 trillion to implement the president’s so-called May decree would not be a problem.

In turn, oil prices have been conquering new heights not only due to the efforts of OPEC and the countries allied to it. Quoted prices for black gold flew up an additional five to seven dollars thanks to statements by US President Donald Trump, who has been trying to dissolve the nuclear deal with Iran while blaming OPEC for high oil prices on his Twitter acccount for appearance’s sake. The US’s exit from the nuclear deal means sanctions cancelled under the previous US leader, Barack Obama, would be reintroduced against Iran, thus removing from the market, according to various estimates, 500,000 to 700,000 barrels of Iranian oil a day.

While Trump has been bending over backwards to give the Russian economy a leg up, Putin has spoken of the need to “untie” it from the US dollar in order to boost economic sovereignty. Perhaps these are mere words, not backed by real intentions, especially since they are at odds with the Finance Ministry’s actions. However, Iran itself earlier took certain steps in the same direction as it faced the threat of renewed sanctions. There is a risk the example of our Middle Eastern neighbor will prove contagious.

Translated by the Russian Reader. Image courtesy of Business Eye

Advertisements

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.

______________________________

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.

Sourcejob 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

This Is Russia

DSCN0810

“This is Russia. This is the Russia that Americans are so scared of.”

In the background of this photo, you can make out the Galeria Shopping Center, located in downtown Petersburg. It’s gigantic, covering the land once occupied by five or six graceful tenement buildings and a cultural center and cinema. They were demolished in the mid 1990s, not to make way for the shopping mall, but so a new train station could be built there, jeek by jowl with the existing Moscow Station, because federal and regional officials wanted to build a high-speed train line between Petersburg and Moscow. Millions of dollars were allocated for the project, but ultimately, the train line was never built nor was the new station erected. No one knows what happened to the millions of dollars allocated for the project. They simply vanished into thin air.

The site of the former-future high-speed train station sat vacant for many years behind a tall, ugly construction-site fence. No one could figure out what do to with all that wasteland, which was in the very heart of the city, not in some forgotten outskirts. However, before the money had vanished, and the project was abandoned, construction workers had managed not only to demolish all the tenement buildings on the site but had also dug a foundation pit. Over the long years, this pit filled up with water. Some time after Google Maps had become all the rage, I took a look at our neighborhood via satellite, as it were, and discovered to my great surprise it now had a small lake in it. It was the foundation pit of the former-future high-speed train station, filled to the brim with water.

Good times came to Petersburg in the 2000s, when the country was flush with cash, generated by high oil prices, a flat tax rate of 13%, and runaway corruption. It was then the city’s mothers and fathers (I’m not being ironic: most of Petersburg’s “revival” was presided over by Governor Valentina Matviyenko, a former Communist Youth League functionary who had converted to the gospel of what she herself called “aggressive development”) decided that Petersburg, one of the world’s most beautiful, haunting, enchanting cities, should be extensively redeveloped, despite its status as a UNESCO World Heritage Site, into a mecca of consumerism that would give pride of place to cars and new highways, since cars had become the new status symbol among the city’s rich and poor alike. They also decided that, since other big cities in the world had lots of high-rise buildings, their city, which did not have almost any high-rise buildings, should have lots of them, too.

Basically, they decided to demolish as much of the inner and outer city as they could get away with—and they could get away with a lot, because they had nearly unlimited political power and lots of the country’s money at their disposal—and redevelop it with high-rise apartment buildings, superhighways, big box stores, and shopping and entertainment centers, each one uglier and bigger than the last. Thanks to their efforts, in a mere fifteen years or so they have gone a long way toward turning a Unesco World Heritage Site into an impossible, unsightly mess.

But let’s get back to our miniature inner-city lake. Finally, developers came up with a plan to convert the site into a giant shopping mall. Even better, the architects who designed the mall were clearly inspired by Albert Speer, Hitler’s favorite architect and a leading Nazi Party member, to turn a rather oversized mall into a celebration of kitsch faux-neoclassicism, precisely the sort of thing Speer had championed in his projects. This, indeed, was a bit ironic, because Petersburg, then known as Leningrad, had survived a 900-day siege by the German army during the Second World War. Considered the longest and most destructive siege in history, it killed at least 800,000 civilians, that is, it killed the grandparents and great-grandparents of many of the people who now enjoy visiting this mall, with its distinctly neo-fascist aesthetic.

Along the sides of the street running down towards the photographer from the Albert Speer Memorial Shopping Center, you see lots of shiny new, fairly expensive cars, parked bumper to bumper. In fact, the Albert Speer has a huge underground car park where you can park your car relatively inexpensively (our neighbor lady, a sensible woman, does it), but most Petersburg car owners actually think parking their cars wherever they want—especially either right next to their residential buildings or, worse, in the tiny, labyrinthine, incredibly charming inner courtyards of these eighteenth- and nineteenth-century buildings—is their legal right. It isn’t, but they don’t know it or don’t want to know it. I know they think this way because many Petersburg car owners have told me so.

To my mind, the precipitous rise in personal car ownership in Petersburg has done more to degrade the city’s beauty than all the underinspired colossal high-rises put together, because the city was purposely designed by its original builders, beginning with Peter the Great, to have a good number of intersecting and radiating, awe-inspiring, long and clear sightlines or “perspectives.” Hence, many of the city’s longest avenues are called “prospects,” such as Nevsky Prospect (the title of one of Nikolai Gogol’s best stories) and Moskovsky Prospect. Nowadays, however, you gaze down these “perspectives” only to see traffic jams and hectares of other visual pollution in the shape of signs, billboards, banners, and marquees. It’s not a pretty sight.

On the right of the picture, somewhere near the middle, you should be able to spot a small shop sign with the letters “AM” emblazoned on it. It’s one of the dozens of liquor stores that have popped up in our neighborhood after the Kremlin introduced its countersanctions against US and EU sanctions, which were instituted in response to Russia’s occupation of Crimea and invasion of Eastern Ukraine. The US and EU sanctions targeted individuals and companies closely allied with the regime. Putin’s countersanctions, in a manner that has come to seem typical of how the Russian president for life’s mind works, were targeted against Russian consumers by banning the import of most western produce into the country. An exception was made for western alcoholic beverages, especially wines and beers, and this meant it was suddenly profitable again to get into the liquor business. The upshot has been that you can exit our house, walk in any direction, even putting on a blindfold if you like, and you will find yourself in a liquor store in a matter of minutes, if not seconds.

Last summer, I tried painting a little verbal and photographic sketch of the effect this massive re-alcoholization has had on our neighborhood, along with other, mostly negative trends in the use and abuse of commercial space in the city.

Finally, there is one other thing you should know about all those new, mostly oversized cars parked on the street. Since the average monthly salary in Russia barely crawls above 600 or 700 euros a month, even in a seemingly wealthy city like Petersburg, most of those gas-guzzling, air-polluting status symbols were bought with borrowed money.

Just the other day, in fact, I translated and posted a tiny article, originally published in the business daily Kommersant, about how people in the Voronezh Region currently owed banks approximately two billion euros in outstanding loans. In 2015, the region’s estimated population was around 2,300,000, so, theoretically, each resident of Voronezh Region now owes the banks 870 euros, which I am sure is more than most people there earn in two or three months. Of course, not every single resident of Voronezh Region has taken out a loan, so the real damage incurred by real individual borrowers is a lot worse.

I could be wrong, but I think what I have just written gives you a rough idea of how you go about reading photographs of today’s Russian cities, their visible aspect in general, turning a snapshot into something meaningful, rather than assuming its meaning is obvious, right there on the surface. You don’t just tweet a photo of a new football stadium or fancy restaurant or street jammed with expensive cars and make that stand for progress, when progress, whether political, economic or social, really has not occurred yet in Russia, despite all the money that has been sloshing around here the last fifteen years. Instead, you talk about the real economic, political, and social relations, which are often quite oppressive, murky, and criminal, that have produced the visible reality you want to highlight.

Doing anything less is tantamount to engaging in boosterism, whataboutism, Russian Worldism, and crypto-Putinism, but certainly not in journalism. That so many journalists, western and Russian, have abandoned real journalism for one or all of the isms I have listed is the really scary thing. TRR

Photograph by the Russian Reader

 

 

 

Bhaskar Sunkara: “You Say East Ukraine, I Say West Russia”

Has Bhaskar Sunkara ever been to “West Russia”?

west-russia

Source: Facebook

bhaskartwitter-660x440
Bhaskar Sunkara. Photo courtesy of Magculture

Bhaskar Sunkara (born June 20, 1989) is an American political writer, editor and publisher of Jacobin magazine.

The son of immigrants from Trinidad and Tobago, Sunkara described Jacobin as a radical publication, “largely the product of a younger generation not quite as tied to the Cold War paradigms that sustained the old leftist intellectual milieus like Dissent or New Politics.”

The New York Times interviewed Sunkara in January 2013, commenting on Jacobin’s unexpected success and engagement with mainstream liberalism. In late 2014, he was interviewed by New Left Review on the political orientation and future trajectory of the publication and in March 2016 was featured in a lengthy Vox profile.

Sunkara writes for Vice magazine, Washington Post and The Nation, among other outlets. He has appeared on the PBS Tavis Smiley program, MSNBC’s Up w/ Chris Hayes and the FX show Totally Biased with W. Kamau Bell.

Source: Wikipedia

________________________

Residents in eastern Ukraine face worst fighting in years in war with Russian-backed separatists
Sabra Ayres
Los Angeles Times
February 15, 2017

The news reached Mariupol Mayor Vadim Boychenko via a morning phone call from an assistant: A rocket attack damaged 11 houses on the outskirts of the Ukrainian city.

There were no casualties, but a major concern had become a reality: The escalation of fighting elsewhere in the nation in recent weeks had reached the industrial city, a key component in southeast Ukraine’s struggling economy.

“We’ve gotten used to a peaceful life,” Boychenko said during a recent interview at his office. “I really don’t want to return to the problems we had started to forget.”

Ukraine’s nearly three-year battle against Kremlin-backed separatists in the east erupted into the worst fighting in two years in late January. Exactly why the fighting intensified recently remains unclear, though such encounters have occurred with some frequency during unrest that included Russia’s annexation of Crimea in March 2014.

The small city of Avdiivka, 90 miles north of Mariupol, became the epicenter of the recent violence. The fighting quickly spread along a 300-mile line separating the Ukrainian government-controlled lands and those claimed by separatists in the Donetsk and Luhansk regions.

Mariupol had seen only sporadic fighting over the last two years, primarily in the region’s eastern villages. But as news trickled in about the bombardment of Avdiivka, Mariupol began again hearing the deep rumble of explosions and heavy artillery fire less than 10 miles away.

The fighting halted vital shipments from Avdiivka’s coal processing plant to Mariupol’s massive iron and steel works plants, jeopardizing production at one of the region’s biggest employers.

Many local residents said they feared the renewed violence could quash the growing sense of confidence in Mariupol after nearly two years of relative stability.

One concern in the region is that President Trump and Russian President Vladimir Putin could strike a deal that would lift U.S. sanctions on Russia or force Ukraine to make painful compromises with Moscow. Ukrainian President Petro Poroshenko has urged Western leaders to keep sanctions in place.

“Sanctions are the only way to get Putin to the table,” he said last week in an interview with journalists and academics in Kiev, the capital.

Nationally, there is little faith in the Minsk agreements, a road map to peace brokered in 2014 by European leaders between Ukraine, the Kremlin and the separatist rebel leaders. Poroshenko maintains that Ukraine is committed to its obligations to the agreements.

“Minsk is my plan. Putin accepted it. His signature is there,” he said.

Mariupol has gone through a noticeable transformation since war erupted in eastern Ukraine in the spring of 2014. Once the epitome of a run-down, Soviet industrial port city with two massive metallurgy plants puffing out pollution day and night, Mariupol in the last two years has emerged as a center of civic activism in Ukraine’s southeastern battlefront.

The city was the center of several violent outbreaks in spring 2014, when Ukrainian forces and supporters of the pro-Russian separatist groups fought gun battles in the downtown streets. The charred former police headquarters and city council buildings still stand as reminders. On Jan. 24, 2015, a missile attack hit an eastern region of Mariupol dense with Soviet-era concrete housing blocks, killing at least 30 people.

The previously politically passive, mostly Russian-speaking city created community groups that mobilized to gather whatever money they could to buy medical kits, food, and flak jackets and helmets for Ukraine’s ill-prepared military. The fighting displaced 1.75 million eastern Ukrainians, but locals opened their homes and about 56,000 newcomers settled in Mariupol.

“We don’t call them refugees anymore,” Boychenko said. “They are ‘new Mariupolites’ and have already become part of our city.”

Once-thriving Donetsk is now occupied by rebel forces, so Mariupol, the largest city in the Donetsk region under Ukrainian control, became the de facto cultural hub of the eastern industrial area along the Don River basin, known as the Donbas.

Displaced activists from Donetsk opened an avant-garde theater and creative space that has hosted some of the country’s big names in modern talent.

Small businesses — grocery stores, small restaurants and mom-and-pop shops — whose owners fled the fighting returned, and new cafes have opened. Ukraine’s most popular music group, Okean Elzy, gave a free concert in May attended by more than 30,000 people.

“We’ve been working all year to create a positive mood in the city,” Boychenko said.

Alex Ryabchyn, a deputy in Ukraine’s parliament who was born in Mariupol, said the city is in the early stages of reinvention.

“The population is starting to think of themselves as being the center of southeastern Ukraine. That’s new, “ said Ryabchyn,  who was an economics professor in Donetsk State University before fleeing to Kiev after the pro-Russia rebel takeover.

Mariupol faces major challenges, particularly in the economic sphere. Ukraine’s economy has been battered since protests ousted a Moscow-friendly president, Viktor Yanukovich in 2014. The war ripped apart the country’s coal mining and steel processing industry, destroying many plants and severely curtailing production in those that survived.

The aging steel plants need modernization and the economy needs diversification to revitalize the region. Highways linking Mariupol to other cities are so bad that drivers are forced to reroute to avoid the worst sections. Train rides from Kiev to Mariupol, about 500 miles, take 18 hours, and the airport cannot accept commercial flights because of its location near the front lines of fighting.

Mariupol can feel like an isolated peninsula in Ukraine, an image many hoped was changing.

“You can see why [an increase in fighting] is a problem,” Irina Chirkova, 24, a waitress in Mariupol, said as a series of explosions pierced the cold air. “We have a lot of potential here — a big port, an airport and nice beaches. But our infrastructure needs investment, and who is going to invest in us now with this war?”

Where’s the Beef?

“But People Cannot, Excuse My Expression, Chow Down Normally”
The Russian government concludes beef too expensive for Russians
Irina Shcherbak
Znak
June 9, 2016

The Russian government argues that beef has become too expensive for Russians. These are the findings of an analytical report on the outcome of the produce embargo in 2015.

“Due to a shift in demand for cheaper produce, beef will taken on the characteristics of an expensive niche product, so massive support of this segment is inexpedient,” says the report.

The report likewise notes that the anti-sanctions have had no negative consequences. On the whole, however, “downward trends in the quality of consumption have been observed, including in response to the population’s falling real incomes.” This, the authors of the report argue, takes the shape of “switching to goods in a lower price segment.”

“The situation in the economy does not allow for a quick recovery of demand in produce markets, which will be accompanied both by a further shift in demand towards the cheaper segment in each segment [sic] and by a shift in demand from fish to meat, as well as the revival of significant subsistence production for personal consumption in the fruit and vegetable sectors,” says the report.

“We got up off our knees and have been threatening the west. We are in a confrontation with America, you see. We are paying for the restoration of Palmyra. 30% of the budget goes to defense spending. But people cannot, excuse my expression, chow down normally. In the next report, the government will probably recommend moving beef to the desserts and sweets section,” commented opposition politician Alexei Navalny.

Farewell, Beef Stroganoff?
Farewell, Beef Stroganoff? Image courtesy of Viator Things to Do: Russia

According to a recent study by the Analytical Rating Agency, consumers currently are showing a marked preference for bread, potatoes, and dairy products over vegetables, fruits, fish, seafood, and alcohol.

“In the future, a further shift in consumer preferences towards cereals, flour, oil, seasonal vegetables, and sugar is possible,” the analysts predicted.

The Russian food embargo was introduced in August 2014 in response to sanctions against Russia [sic] by western countries. A ban on the import of beef, pork, fruits and vegetables, poultry, fish, cheese, milk, and most dairy products from the US, the EU, Canada, Australia, and Norway was imposed. Subsequently, Russia has combated the re-export of banned European produce, introducing restrictions on imports from Belarus and Serbia. In addition, on May 1, 2015, the import of peanuts and, on May 26, 2015, live poultry from the US was banned.  On June 4, 2015, imports of canned fish from Latvia and Estonia were banned.

On June 24, 2015, Vladimir Putin signed a decree extending the food embargo until August 5, 2016.

Translated by the Russian Reader. Thanks to Valentin Urusov for the heads-up

Two Years Later

234A871500000578-2848959-Boosting_trade_Abizarre_set_of_British_style_saucy_seaside_postc-24_1417128651849
“Miss Koktebel recommends avoiding UV rays by wearing a hat, since you don’t have any other clothing.”

Sergey Abashin
Facebook
March 16, 2016

Now, two years later, it is clear the annexation of Crimea has had only negative consequences for Russia. Crimea set off a chain reaction that gave rise to the war in eastern Ukraine (which would never had happened if not for the annexation) and, later, the military action in Syria, leaving thousands of people killed and producing hundred of thousands of refugees. Ukraine, Russia’s closest neighbor, has been made an enemy for years to come. Nobody in the world has publicly supported the annexation. In fact, most countries in the world have condemned it. Russia has been excluded from a number of international organizations and clubs, where its voice is no longer taken into account, meaning a huge blow has been dealt to the country’s image and its international status. The sanctions have greatly exacerbated the economic crisis, which has hit the quality of life in Russia hard. The number of poor people has increased, investments have decreased, and future prospects have worsened. The annexation has opened the way for the rise of hysteria and aggression and a political clampdown at home. This has had a devastating effect on culture, human relations, and human rights, and has generated all the conditions for Russia’s political self-destruction. The negative consequences are so numerous that it will be difficult to turn the situation in a positive direction. If the annexation continues, however, these negative effects will continue to grow. In terms of Russia’s interests, it was definitely a rash, mistaken, and criminal move.

Sergey Abashin is British Petroleum Professor of Migration Studies at the European University in Saint Petersburg. His most recent book is Sovetskii kishlak: Mezhdu kolonializmom i modernizatsiei [The Soviet Central Asian village: between colonialism and modernization], Moscow: Novoe literaturnoe obozrenie, 2015. Translated by the Russian Reader

src.adapt.960.high.crimea10_a.1394061743722
A man with a Russian flag greets armed men in military fatigues blocking access to a Ukrainian border guards base not far from the village of Perevalne near Simferopol on March 3, 2014. Alexander Nemenov/AFP/Getty Images

EU urges more countries to impose sanctions on Russia over Crimea
Robin Emmott and Dmitry Solovyov
Reuters
March 18, 2016

BRUSSELS/MOSCOW (Reuters) – The European Union called on Friday for more countries to impose sanctions on Russia over its annexation of Ukraine’s Crimean peninsula two years ago, but the Kremlin said Crimea was Russian land and its status non-negotiable.

In a statement issued on the anniversary of the formal absorption of Crimea into Russia, the 28-nation EU said it was very worried about Moscow’s military build-up in the region.

The EU also said it would maintain sanctions that ban European companies from investing in Russian Black Sea oil and gas exploration.

“The European Union remains committed to fully implementing its non-recognition policy, including through restrictive measures,” the European Council, which represents EU governments, said in its statement. “The EU calls again on U.N. member states to consider similar non-recognition measures.”

The Kremlin responded by saying the issue of Crimea could not be “a matter of negotiations or international contacts”.

“Our position is known: this is a region of the Russian Federation. Russia has not discussed and will never discuss its regions with anyone,” President Vladimir Putin’s spokesman Dmitry Peskov said in a teleconference with reporters.

“In this case we should treat with respect the expression of the will of Crimean residents and the decision which was taken two years ago,” he said.

Peskov was referring to Crimea’s referendum on secession from Ukraine in March 2014, which was followed by a formal request from the local parliament to the Russian Federation to admit it as a new subject with the status of a republic.

On Friday Putin will visit the construction site of a bridge being built to Crimea across the Kerch Strait to connect the Russian mainland with the peninsula, Peskov added.

NATO and the EU are concerned by Russia’s military build-up in Crimea, which they say is part of a strategy to set up defensive zones of influence with surface-to-air missile batteries and anti-ship missiles.

As well as the EU, the United States, Japan and other major economies including Australia and Canada have also imposed sanctions on Russia over Crimea, but others including China and Brazil have avoided direct criticism of Moscow.

The 28-nation EU imposed its Crimea sanctions in July 2014 and then tightened them in December 2014, banning EU citizens from buying or financing companies in Crimea, whose annexation has prompted the worst East-West stand-off since the Cold War.

After Russia’s annexation of Crimea, an armed separatist revolt erupted in mainly Russian-speaking eastern Ukraine that Kiev and its Western backers said was fueled and funded by Moscow. Russia denies the charges.

Images, above, courtesy of the Daily Mail and Al Jazeera America 

“To be honest, I hate Putin and I hate everything he does”

Slate‘s Joshua Keating has done a good job of reporting this past Sunday’s anti-war march in Moscow. This comment by one of the marchers he spoke with rings especially true on many levels:

Andrei Hartley, pushing an infant in a stroller along the march route, told me he believes the support for Putin may be “30 percent less” than has been reported because people are “afraid to answer the question.” But, he conceded, Putin “still has quite a lot of support because many Russians want to be brave and be proud of the Russian empire. To be honest, I hate Putin and I hate everything he does.”

Hartley, who works in food distribution, told me that “we’ve felt the effects of consumer behavior” as the state of the economy has worsened and sanctions have started to bite. Nonetheless, he feels there’s no hope of the government changing its actions until the “economy is two or three times worse than it is now; then the people will react. People live pretty well right now, so that’s why they’re not willing to go against Russian policy.”

putin plan 2008
“Putin’s plan is Russia’s victory.” Petrograd, 2008, Photograph by the Russian Reader