Funny Things Happened at the Forum

The phenomenal Petersburg photographer Alexander Petrosyan snapped this hyperrealist folk-conceptual photo at this week’s international economic forum in Petersburg, where the honored guests include the Taliban and the “president” of one of the fake Donbas “people’s republics.” There has been a lot of coverage of the remarks made at the forum by this snapshot’s ostensible subject. I have excerpted one article about them, below. This excerpt is followed by my translation of an interview with Sergei Khestanov about the forum and the broader Russian economic outlook in the light of the war and western sanctions.


As is traditional, the forum was dominated by a plenary session involving Putin. Earlier in the week, Peskov announced that Putin would make “an extremely important speech”. A couple of days later, he went out of his way to insist that the president was not about to announce a mobilization. It’s unclear why this was necessary – it’s no longer early March when this rumor was widespread.

The speech itself (which lasted for almost 90 minutes) contained no surprises. Putin spoke Friday about how “crazy sanctions” were not hurting the Russian economy, but, instead, causing pain for the Western countries as they wrestle with a crisis caused by an ill-conceived coronavirus response. “Our special military operation has nothing to do with it,” Putin said. More than once, Putin insisted the Russian economy remained open for business and reaffirmed his belief that the West would come to its senses and that Western companies would soon return to operating in Russia as normal.

But the most interesting part was when the moderator, Margarita Simonyan (head of state-owned RT and a prominent hawk on Ukraine) began putting questions to Putin and Tokayev. Along with the president of Armenia, Tokayev was one of only two heads of state to travel to the forum. It was painfully clear that Tokayev’s presence was repayment for Putin’s support back in January when troops from the Russian-led Collective Security Treaty Organization (CSTO) helped to re-impose order in Kazakhstan and, at the same time, marginalize Tokayev’s predecessor, Nursultan Nazarbayev.

However, Tokayev’s gratitude knows some bounds. That was apparent two days before he shared the stage with Putin when he gave an interview to state-owned Rossiya 24 in which he confirmed that his country would fully comply with Western sanctions on Russia.

Judging by what followed, Putin was aware of that interview. The highlight of the session was Putin’s attempt to pronounce his colleague’s name and patronymic – Kassym-Jomart Kemelevich. In January, when Kazakhstan was at the center of international attention as a result of civil unrest, Putin was already struggling with this difficult – but not impossible – name and twice uttered something incoherent. This time, at the start of his speech, Putin got it right – but during the Q&A session he again referred to Tokayev as “Kemel-Zhemelevich”, prompting a highly suspicious look from his supposed ally (this is clearly visible in the video).

Tokayev’s answers to Simonyan’s questions were far from the platitudes of an ally and some of what he said ran directly counter to Putin’s position. Diplomatic and courteous (Tokayev is a former UN Deputy General Secretary), the Kazakh president told Putin:

  • Kazakhstan “takes sanctions into account” (a response to a question from Simonyan suggesting the West must be pushing Kazakhstan to stop cooperation with Russia).
  • No economy can successfully pursue a policy of self-reliance and import substitution.
  • Ukraine’s accession to the European Union must be accepted as a new reality, even though its economy is in a dreadful condition.
  • The U.S., and the West in general, are not in the throes of a major crisis. At present, the U.S. economy is “modern and dynamic.”
  • That there are some Russian politicians, journalists and cultural figures who make “absolutely incorrect statements about Kazakhstan” and other states and “sow discord between our peoples.” This is likely to refer to occasional calls in the Russian parliament to protect the Russian-speaking population of Kazakhstan, which is concentrated in the north of the country. Such pronouncements are very reminiscent of the rhetoric in Russia about the Donbas region of eastern Ukraine.
  • Finally, without prompting, Tokayev dismissed the possibility of Kazakhstan recognizing the People’s Republics of Donetsk and Luhansk. He dismissed the republics – recognized by Russia – as “quasi-state entities.”

You can watch the whole of the plenary session here, or read a transcript here.

The scandal continued Saturday when Kazakh media reported Tokayev had turned down the Order of Alexander Nevsky bestowed on him by the Russian government. The official reason was that Kazakhstan’s president is not permitted to accept honors from foreign countries while in office – Russian state-owned media devoted half a day to reporting this explanation.

Source: “Showcasing Isolation,” The Bell, 19 June 2022


The St. Petersburg International Economic Forum (SPIEF) wrapped up this weekend. The feelings it generated are complicated. On the one hand, there was a heated discussion of the forum in social media; on the other hand, it was mainly not economic news that was discussed, but the juicy scandals that happened at the forum. Does the international forum have a future in the face of total western sanctions? And have the speeches at the SPIEF made it clearer what will happen next with the Russian economy? We talked about this with Sergei Khestanov, a well-known economist who has developed dozens of financial theories and techniques. He also serves as an adviser on macroeconomics to the CEO of Otkritie Investments.

Judging by the discussion of SPIEF on social media, the hottest guests were the Taliban (an organization that is banned in Russia) and Philipp Kirkorov. Is this due to the exoticism of their being at the economic forum or the absence of significant guests?

— The Taliban were just a kind of exotic highlight, I think. By the way, they were not particularly visible in the latter part of the forum. There weren’t many notable guests, really, but then again there hasn’t been an abundance of such guests for many years. What was unusual was that some guests of the forum (Russians, by the way) were asked not to advertise their participation and to wear name tags that did not spell out their companies and positions, lest they be hit by sanctions. From the economic point of view of, it doesn’t mean anything, but it is a quite interesting reflection on how the forum is seen.

Was western business represented at the forum in general?

— It was practically absent. Many [western businessmen] simply cannot attend without spoiling their reputations, even those who have not yet abandoned the Russian market.

And what was interesting from a substantive point of view?

— In terms of the forum’s substance, I would draw attention to the statement made by [Sberbank chief] Hermann Gref that the Russian economy would be able to reach the level of 2021 in ten years. That’s quite a frank recognition of the state of our economy. Vladimir Putin’s statement about banning audits of businesses is also welcome if the number of such audits is really reduced. However, it bothers me that they have been talking about this for so many years [without doing anything about it.]

Putin also announced a reduction in the preferential mortgage rate to seven percent.

— Volumes of orders have been falling in the construction industry, so we need to support it. And since, as a rule, the construction industry is closely affiliated with local and, sometimes, regional authorities, the desire to support it is quite understandable. Plus, the industry is a multiplier, so helping it helps the metals industry, manufacturers of cement, lumber, and so on. However, the decline in volumes is not yet tremendous, so nothing terrible would happen without help, but nor do I expect the support to trigger a boom.

There is another danger here: real estate prices in Russia, especially in the megacities, are overheated. if the decrease in mortgage rates is not coupled with an increase in down payments, we could end up with a mortgage bubble. And then, under certain unfavorable circumstances, of which there might be many going forward, we could face a terrific downturn in prices and a serious mortgage crisis. I would not say that the danger is great now, but it cannot be ignored.

Wait, what collapse? What crisis? It followed from Vladimir Putin’s speech that we have been successfully coping with western sanctions. Supposedly, foreign exchange earnings are so great that they almost equaled the volume of the frozen portion of Russian gold and foreign exchange reserves.

— Russia is bursting with money that it cannot digest because of import restrictions and the threat of frozen accounts. It turns out that money has been earned, but what to do with it? It isn’t possible to use it constructively. And this madness with shoring up the ruble is due to the fact that there is no demand for non-cash payments: exporters need controls, but they cannot sell currency. So, it’s like a pear is dangling in front of you, but you can’t eat it.

But Central Bank head Elvira Nabiullina in her speech suggested a way out for exporters: they should focus on the domestic market.

— Those are pretty words, but most exporters have been working for the domestic market for a long time. The problem is that the domestic market’s capacity is limited. For oil and petroleum products, for example, domestic demand accounts for about a quarter of current production. That is, if we refocus on the domestic market, we need to cut production threefold. Will that make things better?

Export industries perfectly satisfy domestic demand, and everything else is exported. This also applies to the metals industry, both ferrous and non-ferrous metals, and the oil industry, and the petrochemical industry. Nizhnekamskneftekhim, the world’s largest producer in its class of raw materials for plastics, supplies its products to both the domestic and foreign markets, but only a very small portion of what it produces goes to the domestic market, because such is the demand.

And, for example, aluminum and titanium are used mainly in aircraft construction. Given current conditions in the domestic market, they can be used, at best, to make kvass cans.

— Exactly. The domestic Russian market is simply not able to absorb everything produced by exporters. So, this call to pivot to the domestic market is like that joke. “Bunnies, become hedgehogs, so the foxes won’t eat you.” “Great, but how do we do it?” “I don’t know — I’m a strategist, not a tactician.”

To be fair, Nabiullina had also talked about structural adjustment in the past.

— What the Central Bank head said about structural adjustment is right, but it doesn’t make much sense yet. Unless we note the speech made by [Alexei] Kudrin, who said that it would take two to three months to develop a strategy. I consider him one of the most serious public figures in terms of macroeconomic analysis, so his words carry a lot of weight for me. Two or three months is a realistic amount of time, I think. It would bring us to the beginning of autumn, and all over the world at this time, business picks up after the summer lull. Plus, statistics for macroeconomic indicators will have been reported, and the relevance of the data will have increased. So I’m eighty to ninety percent in agreement with him.

 But what don’t you agree with?

— My main disagreement is that, since the sanctions have not yet ended, the effectiveness of strategies is low. No matter how good a plan is, it will have to be changed quickly and often. Moreover, so far most of the sanctions have impacted imports, and that is not so terrible. Of course, it’s sad that Ivan Sixpack can no longer buy a new smartphone, but this has little effect on the economy. Export sanctions are much more serious when it comes to filling the state coffers. But I think it’s too early to talk about them before next year.

Well, so far, Ivan Sixpack does not seem to be suffering much. Many people say that the sanctions are not really hurting us.

— Since demand has dropped a lot, people are under the illusion that nothing terrible has happened. But by the second half of September, I think that stocks in the warehouses will be exhausted, and it will become clear what is happening with durable goods.

— Especially with spare parts for cars. This topic is now of concern to many people. A friend of mine is now glad that she didn’t buy a foreign car, as she had originally wanted, but a Russian-assembled Renault.

— She shouldn’t be too glad. Some of the spare parts for inexpensive Russian-assembled foreign cars are made in Russia, but only some. The rest are imported.

— So, we will have to establish a shuttle trading business for the delivery of spare parts.

— Maybe, but the whole business will be tedious, time-consuming and, accordingly, much more expensive. As in the 90s, people will have to buy cars that Russian spare parts fit. They will have to learn how to do their own repairs. In Soviet times, I went abroad to buy a used car with cardboard templates in tow to determine whether the wheels from a Lada would fit it, whether the filters would fit. I knew how to re-rivet brake pads. Basically, I can fix anything on a car, except the carburetor. Most of the motorists of that time could do the same. Maybe they couldn’t do everything, but they could do the most basic things like cleaning the spark plugs and changing the oil and filters. Those were the necessary skills. But nowadays, many people don’t even know how to change tires.

— They’ll have to learn. Once again the menfolk will gather in garages on weekends, although many people don’t have their own garages anymore. They only have spaces in multi-story parking lots, and you can’t repair a car there.

— And the skills have been lost. Of course, a parallel import market will be established, and people will learn how to do repairs, but it will be difficult for motorists. It will become immensely more expensive and more difficult to maintain a car.

— Speaking of cars. Industry and Trade Minister Denis Manturov announced plans to resume production not only of the Moskvitch, as discussed by Moscow Mayor Sergei Sobyanin, but also of the Volga and even the Pobeda. The latter, by the way, was produced in the 50s. Is the [Russian] car industry really that bad off? What about the Chinese? Wouldn’t they help us? After all, they are switching to electric vehicles. Could they transfer the production of internal combustion engines to Russia?

— As I understand it, Manturov was actually talking about reviving the brands, not the cars of that generation themselves. Because if there is a demand for classic Ladas now, it’s not very big. In the back country, the fact that they can be repaired easily is appreciated. But all the other cars [of the period] were total tanks. I used to drive a Pobeda back in the day. It really, you know, encourages you to develop your shoulder muscles, because turning the steering wheel involves great physical exertion. The brakes are the same way.

But what they probably have in mind is producing new models under those brands, maybe even stylized to look like the old ones. Aesthetically, the Pobeda is beautiful — it’s just hard to drive it. The Volga 21 is beautiful, and so are the Moskvitches up to the 412 model. And if you also give it a two-tone paint job, like the Moskvitch 403, you could make a very popular model. Volkswagen also produced an updated replica of the Beetle.

 And how will they make them?

— They will probably buy the platforms from the Chinese, or [the Chinese] will even supply the assembly lines. Then designers will be commissioned to come up with designs, maybe even stylized to look like Soviet cars. And so the brands will be reborn.

— In conclusion, let’s return to the guests at SPIEF. In terms of foreign leaders, Kazakhstan President Kassym-Jomart Tokayev attended the forum. Chinese President Xi Jinping also made a short speech via video link. There is probably no point in asking whether SPIEF can now claim the role of the “Russian Davos.” I wanted to ask you abpit something else. Given the current conditions, is there any point to this event?

— Tokayev, I think, just couldn’t help but show up. Everyone paid attention to how he spoke relatively harshly about the DPR and the LPR. Of course, he is a professional career diplomat and spoke in such a way that you can’t find fault with him, so it’s quite difficult to extract any one definite message from his speeches.

— What about when he said that Kazakhstan had no choice but to support western sanctions?

— But this is quite obvious: he didn’t say anything new. It is clear that the economy of Kazakhstan cannot fight a consolidated decision by the western economies. This would not only be difficult, but also not really necessary. So, where its own interests are not affected, Kazakhstan can help Russia — but no more than that. By the way, the Chinese have the same attitude towards us.

Is that why Xi Jinping not only did not come to SPIEF, but was also brief in his video message?

— There is not much to talk about in the current circumstances. So it’s not that Xi didn’t want to talk. There was nothing in particular for him to talk about. It is clear to everyone that the Russian economy is not doing very well. So, our corporations signed contracts with each other, which they happily reported before going their separate ways.

The question of whether SPIEF should be held is another matter: the degeneration of such forums is not only a Russian problem. The Davos forum has also been experiencing a lack of serious ideas. Ten years ago, the substantive part of it was much larger, but nowadays everyone is for all the good things and against all the bad things. And all other [economic] forums face similar problems: a lack of substance and a focus on narrow subjects. So, what is happening with the Petersburg Forum is not unique.

Russian pop singer Philipp Kirkorov at the 25th St. Petersburg International Economic Forum
Photo: Maksim Konstantinov/Global Look Press. Courtesy of Republic

It’s hard to say what the reason is for this. Maybe the format has worn out its welcome. As in art, there is a fashion, a trend, and then times, traditions, and tastes change, and the format goes away. Maybe it is due to the fact that the world economy has been slowing down. When the forums were interesting, the economy was growing; intense economic processes were underway, and reforms were being undertaken in the countries of the former USSR and Eastern Europe. But now there is stagnation everywhere, even in the IT field, about which I know a thing or two. What can I say? Moore’s law has been disproven! The number of transistors on a single chip no longer doubles every eighteen months. So, this is a universal problem. I don’t know whether this trend is reversible or permanent, but for the time being it’s like this. Do you remember the Central Committee plenums in Soviet times? The “resolutions” that were “submitted for consideration” and instantly “approved”? The long tedious speeches about nothing? It’s all coming to look a lot like that.

Source: Tatyana Rybakova, “‘Do you remember the Central Committee plenums in Soviet times? It’s all coming to look a lot like that’: Sergei Khestanov on the St. Petersburg Economic Forum and the future of the economy,” Republic, 19 June 2022. Translated by the Russian Reader

Pioneer

The withdrawal of the American company Corteva Agriscience (Pioneer) from the Russian market may trigger problems in the country’s agriculture. Experts are already warning about a shortage of seeds for certain crops.

Marina Petrova, deputy chair of the Moscow Chamber of Commerce and Industry’s committee for entrepreneurship development in the agro-industrial complex and CEO of Petrova 5 Consulting, told Delovoi Peterburg that while the level of self-sufficiency with domestic grain seeds exceeds 75%, import dependence remains high for sunflower, at about 70%, and for corn, at more than 50%. Leftover seeds held by suppliers and Russian-produced varieties and hybrids are an alternative source.

“Domestic seeds often have poorer traits than foreign varieties. But Russia has a scientific base and decent domestic wheat, oat, rice and buckwheat seed products,” says Petrova. In her opinion, domestic selection and seed production is in need of structural transformation and state support. Over the past decade, the share of foreign seeds has increased significantly in Russia. This is primarily due to their higher yields. The largest players also offered package solutions involving seeds, agrochemicals, and management via digital platforms. Third-party designs may thus often be incompatible with existing ones.

Corteva Agriscience is a well-known producer of alfalfa, rapeseed, corn, cotton, rice, sorghum, soy, sunflower and wheat seeds, as well as plant protection products (including herbicides, fungicides and insecticides). According to the Leningrad Regional Committee for the Agro-Industry Complex and Fisheries, the region does not depend on Corteva Agriscience’s seeds. The committee’s press service clarified, however, that rapeseed, which is cultivated in the region, is actually grown from imported seeds. But corn and wheat seeds are domestically produced, while wheat seed is produced in the Leningrad Region itself.

Prinevskoye Breeding Farm CJSC (which grows rapeseed, among other things) reported that they had managed to purchase all the seeds they needed for the 2022 sowing campaign. “If there is no possibility of sourcing foreign rapeseed hybrids, we have a domestic analogue, Oredezh 6, which at the moment we can use to cover the needs not only of our farm, but also of the region,“ says Alexander Peretyatko, deputy general director for commercial affairs at Prinevskoye.

According to experts at the Agrophysical Research Institute, Russia has the potential to replace imported corn and rapeseed. This can also be said about wheat, which Crimea supplies in fairly large volumes. At the same time, seeds for protected soil (tomatoes, cucumbers, greens) are limited on the market. The chief researcher at the Institute’s Laboratory for Plant Biophysics, Professor Mikhail Arkhipov, recalls that back in 2016, a decree was issued ordering the production of original and elite agricultural plant seeds in the areas of domestic crop production that were highly dependent on foreign-made seeds. According to Arkhipov, the decree has still not been properly implemented.

“75% of the agricultural holdings that produce grain are owned by foreign companies. Foreign seed companies also continue to be actively involved in the Russian market. However, domestic seed growers can also solve the issue of supplying grain-growing areas with domestic wheat seeds. We have the necessary agricultural resources to produce our own seeds,” the expert notes.

In late 2021, President Vladimir Putin said that within a decade the country would be able to provide farmers at least 75% of the seeds they required. Arkhipov believes that this is a real prospect in the seed market for most agricultural crops. Petrova points out that many seed-growing enterprises need to improve their physical facilities and increase their technologization. Another problem that hinders the industry’s development is a shortage of personnel.

Source: Darya Dmitrieva, “Fresh ground: farmers prepare for shortage of imported seeds,” Delovoi Peterburg, 11 May 2022. Translated by the Russian Reader, who grew up on a farm in the Upper Midwest.


Corteva to Withdraw from Russia

Corteva has made the decision to withdraw from Russia and, having already paused new sales, is initiating a plan to stop production and business activities.

Our priorities remain the safety of our employees and global food security. Since the onset of this tragic war, we have taken all possible action to support and protect our Ukrainian colleagues and their families, our customers, and the communities in which we operate, including through direct and indirect aid to address the immediate humanitarian needs.

We have also put in place direct action to help assure as normal as possible 2022 growing season in Ukraine.

Given the war’s impact on global food security, the Company will donate seeds to Ukraine, Africa, and the Middle East region for the 2023 growing season, to lessen the impact on global food production.

Corteva joins with many others around the world in advocating for peace.

Source: Corteva.com, 28 April 2022

Annals of Import Substitution: Khudi Zarina, Etc.

“Our everything: a huge selection of goods from Russia! Even more goods from Russia – look! [1.] Zarina hoodie, 1,689 rubles [approx. 21 euros]. [2.] Vasilisa Botanika bedding set, 1,571 rubles. [3.] Tech Team Comfort urban scooter, 3,990 rubles.” Source: Ozon email advertising circular, 2 May 2022. Ozon is a major Russian online retailer and is sometimes referred to as “the Amazon of Russia.” When I still lived in Russia, I regularly ordered books from them. In the first weeks of the war, they were pushing the imported western goods they still had in stock. ||| TRR

We’ll Replace You

“We’ll replace [them, you, etc.]”

An art installation about import substitution has appeared in the center of St. Petersburg today. While some are recalculating advertising budgets and monitoring news about global brands resuming operations in Russia, others are replacing [them]. 👀

Source: Sostav.ru: Advertising and Marketing in Russia, Facebook, 27 April 2022, via Five Corners community page. Translated by the Russian Reader

The Show Must Go On

A warehouse in the Edelweiss (Stroybat) hardware store chain in Petersburg. Photo: Sergei Yermokhin/Delovoi Peterburg

Good day!

Skimping on bags and paper, problems with electric cars, and the rise in price of coffee beans

Skimping on little things. Retailers and catering are reducing the use of certain types of packaging, containers, and consumables. Some things you have to give up against your will.

Tired of waiting for guests. The travel industry wants to get a tax exemption from Petersburg city hall, an extension of cashback, and a new version of Booking.com.

Russians charge slowly but drive fast. Sanctions have blocked the way to Russia for foreign electric cars, but import substitution is already being readied.

Pecking like a bird. Petersburg coffee roasters have faced logistical problems. Green coffee beans have risen in price by 15-50%, which has already affected retail prices.

They keep well. In the current situation, warehouses remain the most stable segment of the commercial real estate market, experts argue.

Have a good day!

Source: Delovoi Peterburg, daily email newsletter to subscribers, 7 April 2022. Photo by Sergei Yermokhin for Delovoi Petersburg. Translated by the Russian Reader


Queen’s hits as played by a symphony orchestra

Show must go on? [sic in English] We agree! Great news for everyone who has dreamed of going to a concert by the legendary Queen. On April 21, the group’s international hits will be performed at Tinkoff Arena by the IP Orchestra under the direction of the brilliant Igor Ponomarenko.

Queen is one of the greatest bands in history: their cultural legacy has changed the world of music forever.

The supremely rich acoustic palette of a symphony orchestra, new arrangements of classic Queen compositions, the wild drive of the musicians on stage, and the charming voice of the soloists — all this is part of the patented “Queen Show. Show Must go on” [sic in English].

The IP Orchestra performing Queen Show. Show Must go on. Tickets for their April 21 performance cost between 1,500 and 2,500 rubles [approx. 17-28 euros]. Subscribers to Bileter.ru’s newsletter get a 10% discount

The IP Orchestra has long established itself as a brand not only in Russia, but also in the countries of the near and far abroad. The band has toured on five continents, performed at the world’s best venues, and has thousands of admiring viewers and loyal listeners.

To attend this event, you will need a QR code showing that you have been fully vaccinated or have had the disease, or a certificate showing that you have had a full course of a vaccine, or a document confirming that you have been granted a medical exemption from vaccination along with a negative PCR test for participants and guests over eighteen years of age.

Source: Bileter.ru. Translated by the Russian Reader


Unfortunately, for reasons beyond our control, all parts of J. K. Rowling’s famous saga about the boy wizard will be unavailable on LitRes in three days. Only now can you buy them in time with a 25% discount! It is important that every book remains in your personal library forever.

“Unfortunately, the Harry Potter series will disappear from the LitRes shelves at 23:59 p.m. on 8 April 2022. Buy the books in time and they will remain with you forever.”

To activate the discount, follow this link or enter ACCIO on the promo code page. The offer is valid until April 8.

Source: LitRes email newsletter for customers, 6 April 2022. Image, above, captured on this page on their website. Translated by the Russian Reader

Teach Your Children Well: Import Substitution

As Kommersant has learned, Russian schools have received new recommendations on teaching special lessons in the light of the “special military operation” in Ukraine. In this case, teachers must organize classes for students in grades 5-9 and 10-11 on the topic of “anti-Russian sanctions and their impact on the domestic economy.” In the training manual, this “impact” is depicted rather positively: schoolchildren are told about the growth of the share of Russian-made products in several sectors, and then they are asked to assess which countries would suffer great economic losses from sanctions. Economists interviewed by Kommersant point out the mistakes made by the manual’s authors and warn that Russian schoolchildren will soon see the effect of sanctions themselves.

Materials for the “sanctions” lesson were handed over to Kommersant by a teacher in the Moscow Region. We found reports on such lessons on the websites of a number of schools in the Moscow, Oryol and Samara regions. As stated in the manual, teachers should “show Russia’s capacities for overcoming the negative consequences of the sanctions pressure brought by western countries on our society’s economy [and] give [pupils] an idea of the main vector of anti-sanctions policy in the Russian Federation.” The classes are to be held as part of social studies courses.

At the beginning of the lesson, teachers must quote President Vladimir Putin that “unprecedented external pressure has been exerted on Russia.” They must then ask schoolchildren whether they know “what the priority measures of our state’s anti-sanctions policy are.”

“Thus, as the photo from Lyceum No. 3 (Opornaya, 4) shows, as prescribed in the methodological recommendations, the lesson began with a quote from the head of state that “unprecedented external pressure has been exerted on Russia.” Vladimir Putin then invites teenagers to familiarize themselves with the resources that the country has in the face of western sanctions. Source: “Children in Vladivostok schools are told about western sanctions and the benefits of import substitution,” vl.ru, 5 April 2022

Only then should teachers tell their pupils what sanctions are: “Restrictions designed to ‘punish’ a country for its actions.” At this point, they must also clarify what “actions” are meant: “the special military operation being conducted by Russia in Ukraine, occasioned by the need to protect the population of Donbas.” Examples of sanctions include the freezing of assets of state corporations and banks, as well as a portion of Russia’s gold and foreign exchange reserves. Another example is the departure of foreign companies.

Teachers should then tell pupils that Prime Minister Mikhail Mishustin “has identified protecting the domestic market and keeping the able-bodied population employed as the most important focus of the anti-sanctions policy.” And students have to answer the question “Why exactly are these areas a priority?”

The manual also contains a link to a video about the benefits of import substitution.

The video explains that, in the 1990s and early 2000s, imported products prevailed over domestic ones. “Active advertising of foreign goods” and “the idea of the superiority of imported products and the inability of Russian manufacturers to bring similar products online” were pushed. But by 2022, the situation had changed dramatically, says the voice-over: the share of Russian-made products had grown in food production machinery (from 12% to 45%), agricultural machinery (from 24% to 55%), and machine tool construction (from 18% to 38%). It is also suggested that teachers show pupils statistics from the Ministry of Industry and Trade during the lesson. The statistics purportedly show that the share of Russian goods across the entire civilian range of commodities has increased many times in the field of mechanical engineering since 2014.

“Together with pupils, the teachers conclude that economic policy in recent years has been aimed at increasing protections for domestic producers and ensuring their sustainability in the face of external crises,” the lesson script says. At this point, students in grades 5-9 are asked to list the set of measures taken to support the Russian economy and citizens in “conditions of increased pressure from sanctions,” while high school students have to describe their intended effect.

At the end of the lesson, students must fill out a feedback form. They have to answer the following questions: “Are the sanctions against Russia fair?”, “Will the sanctions lead to a strengthening of the Russian economy?”, and “Who will suffer great economic losses?”

There are three possible answers to the last question: Russia, the NATO countries, or all countries of the world.

The Education Ministry confirmed to Kommersant that it had sent methodological recommendations to schools. They were developed by the Institute of Education Development Strategies, which is subordinated to the Ministry. The Ministry noted that “leading third-party experts” from different industries had been involved in developing the lesson scenario. “The lesson materials offer schoolchildren the chance to familiarize themselves with the measures taken by the president and the government to counteract sanctions by unfriendly countries,” the Ministry told Kommersant. “The lesson materials specially emphasize the characteristics of the import substitution policy that has been implemented in Russia in recent years. The lesson assumes the active involvement of students when working with documents and interactive materials containing important information about the Russian economy’s achievements in various sectors and its readiness to resist sanctions,” they said.

Teachers from schools in Crimea and Sevastopol confirmed to Kommersant that they would have to give such lessons. And yet, they refused to give a personal assessment of the lessons, explaining that they were afraid of violating the laws on disrespect for the authorities and discrediting the armed forces. The Irkutsk Regional Ministry of Education said that lessons on import substitution had already been conducted (as extracurricular classes) for 85,000 students in 154 schools. “Children have generally shown an interest and reacted positively to the information,” they noted.

Kommersant asked economists to comment on the manual. Natalya Zubarevich, a specialist in regional socio-economic development, refused to look at it. “Why should I read this manual? It’s already clear as it is that we will lose the most advanced technology industries,“ she told Kommersant. “There is no need to hurry. Even if this manual is read aloud to children, life will show them how things really stand. In the summer, or certainly in the autumn, the children will come home and see for themselves that their families have no money, and that there is no way to buy certain goods.”

The manual’s specialized language is too complicated for both schoolchildren and teachers, says Vladimir Salnikov, an expert at the Center for Macroeconomic Analysis and Short-Term Forecasting.

“Many points [in the manual] are quite correct at the qualitative level, but you can argue with individual figures,” says Salnikov. “For example, according to our estimates, the share of imports in certain industries is slightly higher [than indicated in the lesson materials]. Mr. Salnikov considers it an incorrect decision to present mechanical engineering as a good example of import substitution. “Things were going much better in the Russian food industry and in a number of segments of the chemical industry. And things have been quite good in some parts of light industry,” the expert says, “but the progress has been worse in mechanical engineering.”

The presentation states that “the share of Russian-made goods in the automotive industry” increased from 7% in 2014 to 86.3% in 2020. Kommersant‘s sources in the automotive industry confess that they do not understand where these figures came from: “Probably, the figures for 2020 include Russia’s entire production of cars, regardless of localization. But in this case, it is wrong to call the goods absolutely domestic. It’s also unclear why the manual’s authors cite the figure of 7% for 2014. In fact, at that time, Russian production’s share in the car market was about 75%. It’s a shame that schoolchildren will receive distorted information,” they said. Our sources also reminded us that the only automotive plants currently operating in Russia are those belonging to GAZ, UAZ, KamAZ, Mazda Sollers, and the Chinese brand Haval. The rest have been idled due to sanctions.

In early March, the Education Ministry recommended that schools hold a special history lesson (see Kommersant, 2 March 2022). Its goal was to “shape” an adequate stance among high school students on the issue of the special peacekeeping operation by the armed forces. Later, classes devoted to fake news were held in schools, in which students were urged not to believe the reports of the Ukrainian authorities about the number of Russian soldiers who had been killed (see Kommersant, 11 March 2022). Finally, during the “Brotherhood of Slavic Peoples” lesson, schoolchildren were told about the kindred cultures of Russia, Belarus, and Ukraine, “who should remain a single people today and not succumb to the provocations of those trying to divide them.”

Source: Anna Vasilyeva, Maria Starikova, Olga Nikitina; Vlad Nikiforov (Irkutsk); and Alexander Dremlyugin (Simferopol), Kommersant, 5 April 2022. Translated by the Russian Reader

Fyodor Krasheninnikov: Russian History According to the Crimean Calendar

brickwall faceThe writing is on the wall.

Russian History According to the Crimean Calendar
A New Period of Russian History Kicked Off in 2014, But There Is No Proof It Will Last for Centuries
Fyodor Krasheninnikov
Vedomosti
April 11, 2018

In a recently published article, Vladislav Surkov argues we should regard 2014 as the first year of a new calendar, the beginning of a centuries-long era of “political solitude” that emerged after a long period of ambivalence on Russia’s part. Although the thoughts outlined in the article are primarily Mr. Surkov’s personal convictions, they do in some way describe the outlook of Russia’s supreme political elite, to which Mr. Surkov certainly belongs, and they are interesting only in this sense. Among other things, his take suggests that, after 2014, nothing comparable in importance to the events in Crimea has happened nor will happen, meaning Russia seemingly experienced the “end of history” in 2014.

2014 will undoubtedly go down in history as the year of Vladimir Putin’s most memorable achievement. Russia’s annexation of Crimea led to many changes both at home and abroad, but what mattered most was that it was accomplished easily, quickly, and bloodlessly, and led to an incredible surge in the president’s popularity due to the fact that a large segment of society rallied around him. The more alarming the circumstances of spring 2018, the dearer to the president and his entourage are the memories of the happy spring of 2014. Surkov’s article can read as a belated reiteration of Faust’s “Stay a while, you are so beautiful,” as a reluctance to accept the inevitability of change and the ephemerality of all “forevers.”

The flip side of the myth of a new era’s beginning is the fear 2014 was actually the culmination of modern Russian history and things will only get worse in the future. The tendencies of recent years have fully confirmed this fear. Only four years have passed, but the spring of 2018 is nothing like the spring of 2014 in terms of feeling and mood. Russia is not on the offensive; instead, it is on the defensive. The west’s pressure on it has been multiplying and causing palpable problems for the economy. For the first time in four years, the country’s leaders have been forced to acknowledge the dangers posed by US sanctions and give up repeating the argument that all sanctions are a boon to the economy. It is no wonder. In 2014, the sanctions were much weaker, and given the euphoria in the air, they went almost unnoticed. Besides, in 2014, it was still possible to believe the sanctions were temporary. They would be lifted in the very near future, the west would swallow what had occurred, and everything would go back to what it had been. In 2018, the euphoria has long vanished, and if there is still talk the sanctions will soon be lifted, it should be put down more to inertia and confusion than anything else. Although it was intentionally timed to coincide with the fourth anniversary of the Crimean triumph, the presidential election did not produce anything comparable to the inspiring impression generated in the wake of Crimea’s annexation. The celebration of Putin’s electoral victory lasted only ten days, cut short by the disastrous shopping mall fire in Kemerovo and the official day of mourning announced in its aftermath.

Russia cannot look forward to proud “political solitude” in the coming years or at any other time. The modern world is too small for anyone to isolate themselves, especially on their own terms and inside borders of their own choosing. At home, especially among the elite, one can still live in the past for a time and pretend this is still the triumphant year of 2014. One call still pretend Russia is threatening everyone, denouncing everyone, and demanding a reaction from everyone, and that it has centuries and millennia ahead of it. In fact, however, it is Russia that is threatened, Russia that is denounced, and Russia from whom everyone demands a reaction. There are no grounds for supposing this onslaught will wane in the foreseeable future instead of intensifying. Russia’s main trump card in 2014 was its willingness to engage in confrontation and brinksmanship, which the west was not willing to do. That card has now been trumped in turn. After a long period of wavering, the leaders of the Nato countries have also proven capable of engaging in deliberate escalation and frightening their opponents with determination. This seems to have been a major surprise to the current regime in Russia.

A new phase in modern Russian history undoubtedly began in 2014, but there is no proof it will last for centuries and be a time of endless rapture over the annexation of Crimea. For the time being, everything points to the fact it will end much more quickly than many of us would imagine and in such a way that we shall not want to remember 2014 at all.

Fyodor Krasheninnikov is a political scientist who lives in Yekaterinburg. Translation and photo by the Russian Reader