Running: the Numbers

Istanbul, December 2022. Photo courtesy of *Republic*

[…]

500 vacancies for military registration specialists were advertised from late September to last December last year, according to HeadHunter. Previously, this specialization was considered a rather rare and generally not very sought-after profile in the personnel departments of Russian organizations (private and public). For comparison: only 145 such vacancies were advertised in the whole of 2021. The military mobilization has changed the situation: since September — that is, in just three months — the number of such offers on the labor market has increased by about two and a half times (Superjob’s data also show the same thing). The reasons? One of them (apparently, the main one) is an increase in fines for lapses in paperwork: to avoid them, employers are willing to pay applicants for the popular vacancy 70-80 thousand rubles a month. And this is despite the fact that there is a shortage of a number of other specialists on the labor market (and, presumably, they are no less valuable than SMO-era personnel officers). The number of vacancies on Avito Jobs alone, according to a recent company study, increased by 69% in 2022. Most likely, the trend will continue, serving as a natural continuation of the outflow of people and, ultimately, personnel.

50% — the percentage of last year’s sales of existing housing in the Russian Federation made through a notarized power of attorney. This record figure for the entire observable history of the market, as calculated by investment company Flip, who were commissioned by Kommersant, clearly indicates that the sales trend was primarily shaped by property owners who had emigrated. The high volume of such transactions seems to be an anomalous phenomenon. In 2021, a power of attorney was the basis for sale in no more than 20% of deals. In 2020, this figure was 15%. It was 8% in 2019, and 5% in 2018. You ain’t seen nothing yet, though: the ongoing controversy over whether to confiscate the property of openly anti-war Russians who have left the country must be making an additional contribution to the process of selling apartments and houses, which was gaining momentum as it was.

$81.69 billion — the total amount of deposits by Russian nationals in foreign banks as of the end of November of last year, according to the latest data from the Russian Central Bank. (4.989 trillion rubles were recalculated at the exchange rate in effect on that date.) Over the past eleven months, the amount has more than doubled — and this is even if we rely entirely on the statistics of the Central Bank, which may not have a complete picture of what is happening. (Russian laws oblige citizens to report when they open accounts in foreign banks and move funds in them, but we cannot be absolutely sure that everyone strictly obeys them.) While one part of these funds remains in these bank accounts, the other goes to the purchase of real estate that, for the most part, is also located outside the Russian Federation.

16,300 houses and apartments in Turkey were purchased by Russian nationals in 2022, according to data published by the Turkish Statistical Institute (TurkStat), as studied by RBC. This is not just three times more than in 2021 (when Russian nationals purchased 5,400 housing units in the Turkish Republic), but also more than the total volume of such transactions over the past six years (16,200). It is not surprising that last year, for the first time, Russians took first place among foreigners in buying housing in Turkey, producing almost a quarter of the corresponding demand with their money. Earlier, we wrote that our compatriots purchased two thousand houses and apartments in Turkey in October 2022 alone, overtaking all other foreign home buyers in that country, as reported by TurkStat.

At first glance, the advantages of investing in Turkey are not entire obvious. Inflation in the country, according to TurkStat, exceeded 84% in November, once again breaking records previously established in the autumn of 1998. The Inflation Analysis Group, an independent Turkish entity, estimated that inflation had reached a whopping 170.7% . In addition, prices for real estate, which have rising robustly, can at any moment just as vigorously drop, taking into account, in particular, the rather murky prospects for “Erdonomics,” depending on the results of the upcoming presidential and parliamentary elections. According to Endeksa, in September, the average price for one square meter of housing in Turkey was about 12 thousand Turkish lira (approx. $644), while the average price per housing unit was just over 1.5 million Turkish lira (approx. $83,700). The term of return on investment in housing is estimated at nineteen years, although in the summer this figure was recalculated to seventeen years.

The intense interest on the part of Russian nationals in buying real estate in Turkey is primarily related to the prospect of obtaining Turkish citizenship, Anna Larina, head of the foreign real estate department at NF Group, explained to Republic. (In turn, having a Turkish passport makes it possible to obtain an American E-2 visa, which speeds up the process of immigrating to the United States.) In this sense, it is logical that Russians have become leaders in terms of the number of residence permits issued in Turkey — 153,000, of which, however, as the Turkish Ministry of Migration clarified, 132,000 are short-term tourist residence permits, which are valid for two years.

Turkey is one of the few countries (but not the only country) that is still open to Russian nationals and their private capital. Thus, as 2022 came to a close, Russian citizens took first place among non-residents in buying real estate in Dubai, Bloomberg recently reported, citing figures provided by the brokerage firm Betterhomes.

Withdrawing funds and setting up a new life abroad eloquently testify to the sentiments prevailing among the Russian urban middle class, primarily. Not all people who sell Russian real estate and buy foreign real estate are necessarily irreconcilable opponents of the regime. And yet, it is clear that the vast majority of these people do not want to live and raise children in Putin’s version of the future, which is practically incompatible with modern civilization. In its own way, it is symptomatic that Russians who support the government and dutifully follow it into its deadly adventures are also dissatisfied with what is happening. If it were possible, they would rather return to the past, to a point in time thirty, forty, or fifty years ago.

63% — the percentage of Russians, according to a December poll conducted by the Public Opinion Foundation (FOM), who regret the collapse of the USSR — that is, more than three decades after the event known in Kremlin mythology as “the greatest geopolitical catastrophe of the twentieth century.” Strictly speaking, the current longing for Soviet times cannot be considered a record: after the August 1998 ruble default, there were noticeably more Russians nostalgic for the Soviet Union — 85%. Nevertheless, an important indicator of public attitudes (as recorded, we should underscore, by a quasi-state polling service) is on the rise again, having increased by twelve percentage points since 2011.

It is clear that this sentiment is primarily voiced by the 46–60 age group (88% of whom are “nostalgic”) and to some extent, people aged 31–45 years (79% of whom are “nostalgic”), assuming that a considerable portion of these people associate the late USSR with their happy childhoods and wild youths. However, according to the poll, even today’s Russian youth, that is, people aged 18–30, mostly (64%) consider the Soviet era “generally a good time.” Of course, their judgments are based on the stories of older generations, and most importantly, on the inevitable comparison with what is happening with the largest post-Soviet country right now.

Source: Yevgeny Karasyuk, “Salvation in foreign real estate and a new bout of nostalgia for the USSR: timely numbers from Russia… and a few from Turkey,” Republic, 20 January 2023. Translated by Hambone Brewster, who is still implacably opposed to the Russian “pollocracy” and continues to be surprised that even otherwise smart cookies like Mr. Karasyuk continue to cite Russian “public opinion polls” as reliable sources of real information — rather than, at best, records of sustained trauma and unfreedom.

“I Felt Like Going Up to Him and Spitting in His Face”

“I Felt Like Going Up to Him and Spitting in His Face”
Yevgeny Karasyuk
Republic
July 2, 2019

Torrential rains began falling in the western part of the Irkutsk Region early last week. When they were over, there was no doubt the bad weather had caused local rivers to rise, producing a major flood involving human casualties and large-scale damage.

The flood, which affected over ninety towns and destroyed at least a thousand homes, has been declared the most powerful in the region in the one hundred some years since the weather there has been systematically observed and recorded.

The flood put a crimp in President Putin’s schedule, probably even as he was attending the G20 summit in Japan, which wrapped up on Saturday.

He visited the flooded region the same day, but he had no intention of staying there for long. He never left the airport in Bratsk, a city that had also suffered from the flood, but which had not been inundated as disastrously as other cities and towns.

Putin’s visit to Bratsk on his way home to Moscow from Osaka was a logistical opportunity he could not pass up, of course. The Russian regime’s personification has long ago reached the point the populace regards the president as morally responsible for any high-profile disaster anywhere in the country.

Going where disaster has struck is thus a matter of political instinct. The president last showed his trust in it only six months ago in Magnitogorsk. The critics can accuse Putin of arriving at the sites of tragedies after they are over and visiting fake patients with arms demonstratively in slings, but he knows what he is doing.

He still finds the strength to board a plane so that, a few hours later, he can appear, stern-faced, before the cameras and issue orders at emergency meetings of local and federal officials. This is exactly what the president did late at night in Bratsk.

The speed with which Putin arrives at the epicenter of events, like the amount of time he spends there, matches the alacrity with which Russia’s press reports the news.

“Putin instructed the head of the Emergencies Ministry to fly immediately to Kemerovo.”

“Putin was informed about the tragedy in Magnitogorsk immediately.”

“Putin demanded that immediately, as of today, compensation be paid to the victims [i.e., the residents of the affected districts in the Irkutsk Region] and that an action plan for rebuilding housing and doing it as quickly as possible be outlined without delay.”

All the fuss testifies not to the might of the so-called power vertical Putin has fashioned but, on the contrary, to its weakness. It produces nothing remotely resembling independence, flexibility, and responsibility on the part of local authorities, especially when it comes to the safety of ordinary Russians. Putin continues to run our vast country manually, but the outcome of his administration is quite deplorable, as we can see.

A satellite image, provided by Roskosmos, shows the parts of the Irkutsk Region affected by the flooding. Courtesy of Republic

It does not matter a whit where and when the president arrives, and how long he stays there because it happens after the fact. Russian authorities usually do nothing at the most crucial moments. In a country run by the security services [siloviki], a country where there are more experts in security than anywhere else, a country with a whole emergencies ministry, it can easily happen that you would not be warned of impending disaster.

According to the Emergencies Ministry, four out of ten Russians are still not covered by the early warning system. Its absence goes a long way toward explaining the disaster in Krymsk in July 2012 in which entire houses and their sleeping owners were swept away by flood waters in the middle of the night. While Moscow was fiddling around with modernization and digitalization, towns in Krasnodar Territory did not have radio transmitters at their disposal to sound warning signals and inform residents of the approaching flood.

Seven years have passed since the disaster in Krymsk, and what happened there has happened again in Eastern Siberia. Residents of the town of Tulun, in the Irkutsk Region, have claimed they were not warned about the impending flood, and so they did not have time to gather their belongings and flee their homes. Local officials, however, assured Putin everyone had been warned.

“I watched our mayor giving his report to Putin and I felt like going up to him and spitting in his face,” a local woman who could not contain her emotions told journalists.

Officials now say they knew nothing. Irkutsk Region Governor Sergei Levchenko said regional authorities were not informed of the dangerous rise in the levels of water in local rivers, while the Emergencies Ministry has claimed the opposite.

Officials argue nature is capable of catching anyone by surprise, including the Russian state. At Irkutsk State University, scientists said global climate change had caused the flooding. Arctic and subtropical air masses had mixed with humid air from the Pacific Ocean, something quite rare for the region, to produce the atmospheric anomaly that led to the disaster.

In fact, all that is required in such circumstances is that officials pretend they sympathize with the populace in its plight and are ready to help. But the authorities, disinclined by habit from bowing to public pressure, could not make such a sacrifice.

“What do you want me to say? Do you want me to complain? I can complain to you, too,” Alexander Uss, head of Krasnoyarsk Territory, retorted to local residents upset by their governor’s passivity.

Krasnoyarsk Territory was next in the flood’s path after the Irkutsk Region, but the floodwaters have begun to subside.

You can relax. Putin will not be paying you a visit.

Translated by the Russian Reader

Buggered

rossiya This bankrupt agribusiness was called Rossiya (“Russia”). Photo courtesy of Maxim Kemmerling/Kommersant and Republic

“The Data Leaves Us at a Loss”: A Few Figures That Might Surprise the Kremlin
Yevgeny Karasyuk
Republic
April 4, 2019

“Why on shoes? Why a third? Where did they get these figures?”

Dmitry Peskov, President Putin’s press secretary, responded with questions to journalists who questioned him yesterday about Rosstat’s depressing report for 2018.

According to Rosstat’s study, in which sixty thousand Russian households were surveyed, every fifth Russian skimps on fruits and vegetables. Every other Russian family cannot afford to travel anywhere when they have a week’s vacation, while every fourth family does not have enough money to invite people over to celebrate birthdays and the New Year’s holiday.

And, indeed, the report does conclude that 35% of Russians are unable to purchase each family member two pairs of seasonally appropriate footwear.

“I would be grateful to Rosstat if they clarified these figures. The data leaves us at a loss,” Peskov added.

Meanwhile, there are other figures—lots of figures—that would probably also bedevil the Kremlin if they were aired in public. Let us recall a few of them.

Nutrition
Consumer watchdog Rospotrebnadzor concluded that 63% of deaths in Russia were associated with bad food and poor nutrition. According to official figures, Russians spend approximately 35% of their household budgets on food, while independent researchers put that figure at over fifty percent. However, the average Russian household skimps on all purchases and tries to do without everything it can, claim the researchers behind Romir’s Coffee with Milk Index, which charts the quantities of chocolate, coffee, milk, and bottled water purchased by Russians. Researchers at RANEPA recently described the diets of Russians as unhealthy, unbalanced, and lacking in energy.

Health
According to a report by RANEPA’s Institute for Social Analysis and Forecasting, 22% of Russians who live in straitened circumstances face the stark choice of whether to buy the bare minimum of the cheapest produce or the cheapest drugs, drugs they need to survive. It is typical of Russians, not only those below the poverty line, to postpone going to the doctor, if it involves costs, noted researchers at the Institute for Health Economics at the Higher School of Economics.

Education
According to the pollsters at VTsIOM, fifty percent of Russian parents experience serious financial difficulties when getting their children ready for the first day of the school year. Over the past five years, the average sum of money Russians claim to spend getting children ready for school has increased by sixty percent, rising from 13,600 rubles to 21,100 rubles.

Housing
According to the Construction Ministry, the Russian populace’s debts for utilities and housing maintenance bills have grown by five and a half times since 2015. The ministry reported that, as of the end of last year, the total amount of this debt was 1.2 trillion rubles [approx. 16.34 billion euros]. The rates for water, electricity, gas, and other utilities and services increase rhythmically year after year, and yet the real incomes of Russians have continued to fall five years in a row.

Transportation
Forty percent of Russian car owners “try not to use their own vehicles, taking public transport instead.” Another 22% of car owners follow their lead, but do it less frequently. VTsIOM has explained the outcome of its January opinion poll by citing the concern of Russians for the environment while failing to note that the price of petrol has skyrocketed in recent years. Last year, a liter of AI-95 rose in price three times faster than inflation. The government has resorted to artificial, decidedly non-market measures to depress prices, and yet petrol in Russia is now twice as expensive as it was when the decade kicked off.

Only twelve percent of Russians believe that, when it describes the economy and the social sector, the Russian regime always or mostly tells the truth. The Levada Center has done polls on the same subject since 2010. Russian society’s confidence in what the country’s leaders and senior officials say has never been as low as it is now.

By voicing surprise at Russia’s poverty, at least on paper, the Kremlin is, apparently, determined to convince people it inhabits a parallel reality in which Russia makes one breakthrough after another, and the rank and file enjoy “stability” by way of spiting the country’s numerous enemies. Peskov seemed genuinely puzzled by Rosstat’s claim that Russian families have trouble buying shoes, but he probably had not yet read the government’s report on the increase in mortality rates in every third region of Russia. Clearly, something is wrong with the figures. In short, we expect a reaction.

Translated by the Russian Reader

Postage Stamps and Gunpowder: Syria and the Russian Economy

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Postage Stamps and Gunpowder: How Important Is Syria to the Russian Economy?
The Kremlin has been trying—unconvincingly—to repackage its military campaign in this devastated country as a long-term investment project.
Yevgeny Karasyuk
Republic
February 27, 2019

The economy was probably the last thing on the Kremlin’s mind when it decided to get involved in a civil war in the heart of the Arab world. But now that Russian military forces have been in the region for several years, the Kremlin has been increasingly trying to spin its support for Bashar Assad’s regime as a sound investment, a contribution to a prosperous trading future between the two countries.

Russia has claimed it is willing to export to Syria anything it can offer in addition to weapons, from wheat to know-how for preventing extremism on the internet. Along with Iran, the country has big plans for taking part in the postwar restoration of Syrian cities and Syrian industry, including the energy sector. Russia’s governors speak touchingly of their readiness to go to Damascus at the drop of a hat to negotiate with the Syrian government.

“When the talk turns to Syria, I immediately catch myself thinking I need these meetings, I need to see those people again and again, and I need to be useful,” Natalya Komarova, head of the Khanty-Mansiysk Autonomous District said at the Russian Investment Forum in Sochi two weeks ago.

The expenses Russia has incurred during the Syrian campaign are shrouded in mystery. Analysts at IHS Jane’s calculated in October 2015 that Russia could have been spending as much as $4 million a day. In July 2017, the opposition Yabloko Democratic Party published its estimate of the overall bill: as much as 140 billion rubles [approx. 1.87 billion euros], but this total did not include associated costs, including humanitarian aid. In 2017, according to RANEPA, 84% of Russia’s official total of disbursed humanitarian aid ($19.6 million) went to Syria. What kind of economic cooperation could justify such figures?

It would be pointless even to try and find an answer in recent trade trends between the two countries. Its volumes are negligible. During the first nine months of 2018, Syria’s share of Russia’s exports was 0.09%, while Syria accounted for 0.002% of imports to Russia during the same period. This has always been more or less the case.

trade

“Trends in Russia’s trade with Syria (in billions of US dollars).” The pale violet line indicates Russia’s exports to Syria, while the blue line indicates Russia’s imports from Syria. The data for 2018 is only for the first nine months of the year. Source: Russian Federal Customs Service. Diagram courtesy of Republic

The largest transaction in the history of the economic partnership between the two countries was Moscow’s cancellation of $9.8 billion dollars in debt, 73% of what Syria had owed the Soviet Union. At the end of the 2005 meeting at which this matter was decided, Bashar Assad and Vladimir Putin also spoke publicly of the idea of establishing a free trade zone. Subsequently forgotten, the undertaking was mere camouflage for the political bargain reached by the two men, which was and remains support for the Syrian dictator’s regime in exchange for the dubious dividends the Kremlin has received by increasing its influence in the region. It is believed Russian strategic bomber saved Assad, who had already been written off by the west. But explanations of what Russia has ultimately won for its efforts and what its economic strategy might look like have been more muddled and contradictory than before.

In an October 2018 interview with Euronews, Russian Foreign Secretary Sergei Lavrov avoided directly answering a question about joint economic projects. During his tenure as head of the Russian Export Center, Pyotr Fradkov (not to be confused with his father former PM Mikhail Fradkov, the current head of the Russian Foreign Intelligence Service or SVR) talked about Russia’s potential involvement in developing the “high-tech segments of Syria’s economy.” A month ago, however, the selfsame Russian Export Center placed Syria at the bottom of its ranking of 189 countries in terms of their favorability for foreign trade.

The Syrian economy, in turn, can currently offer Russia even less. Mainly, its exports boil down to fruit, but in such small and unstable quantities that they cannot seriously compete with deliveries from Turkey. Russia has been promised priority access to the development of natural resource deposits in Syria, which are teeming with oil, natural gas, and phosphates. But the smoldering war and the lack of security guarantees for investments have hampered implementing these plans.

Russian experts pin their hopes on the surviving remnants of industry in the government-controlled areas of Latakia, Tartus, and Damascus. Based on the fact that “the level of production that survived has enabled Assad to almost fully provide himself [sic] with food during five years of war,” Grigory Lukyanov, a political scientist at the Higher School of Economics has concluded the Syrian government “depends on a well-developed business community.”

Syria, however, seemed like a nightmare for investors well before the country was turned into an open wound. “Only a crazy person would go into Syria at his own behest,” Vedomosti quoted a source at a major company that was involved in negotiations with the Syrian government in the summer of 2012. Suffering from international sanctions, Syria proposed that Russian companies take part in construction of a thermoelectric power station in Aleppo. Four years later, one of Syria’s largest cities had been turned into ruins by heavy bombardment.

The Rothschilds [sic], who made fortunes on wars, thought the best time to invest was when blood was flowing in the streets. Their approach might seem to resemble the Kremlin’s strategy. But let’s not kid ourselves: unlike the famed financiers, President Putin is completely devoid of insight when it comes to the economic consequences of his military escapades. Business plans are not his strong suit.

Photo courtesy of Mikhail Klementyev/AP and the Washington Post. Translated by the Russian Reader

Are Russians Eating Well?

A fruits and vegetables stall at the famous Hay Market (Sennoy rynok) in downtown Petersburg, September 29, 2018. Photo by the Russian Reader

Eating Their Fill: Russia’s Food Security in the Wake of Crimea
Have Russians Eaten Better After the Government Moved to Defend Them from Western Food?
Yevgeny Karasyuk
Republic
December 6, 2018

Soon after the embargo that was imposed four years ago in response to the stance of western countries on Crimea, analysts warned Russia itself would primarily suffer from food anti-sanctions.

“We won’t heighten the Russian Federation’s food security at all. In fact, we will reduce it,” Natalya Volchkova, a professor at the New Economic School, said at the time.

Of course, the criticism of the experts was ignored. No one in government questioned the policy of forced import substitution. Most Russians even imagined it was a rare instance when the government made a good decision. Only a few years ago, 71% of the populace [sic] spoke in favor of limiting imports.*

Time has passed, and the experts to whom no one listened have compiled figures showing where the policy has taken the country. A recent report, authored by a group of researchers from RANEPA, provides an analysis of its consequences.

Import substitution in the food sector was an obsession and, at the same time, a source of pride for ex-agriculture minister Alexander Tkachov. His replacement, Dmitry Patrushev, son of the Russian Security Council’s secretary and a none-too-successful state banker, has changed little in the government’s take on the situation. The new minister is certain Russia has reached a level of self-sufficiency above 90% in terms of basic food staples. Thus, Alexei Gordeyev, deputy prime minister for agriculture and an ex-agriculture minister himself, is convinced Russia has successfully carried out import substitution.

Food imports actually did slump sharply—by 46%—from 2013 to 2016. Although an unbiased analysis if how Russian producers succeeded in turning the tables and quickly saturating the market with their own products would point to the ruble’s sudden devaluation, rendering foreign imports uncompetitive, as had already happened in recent history, rather than to the success of the anti-sanctions.

Whatever the cause of Russia’s newfound food independence, however, it has not lead to food security. Citing the international standard, the authors of RANEPA’s report define food security as “the physical and economic availability of safe nourishment, sufficient for an active, fulfilling life.” In other words, there really are more domestically grown and produced food items in Russia nowadays, but the bulk of the populace has less and less access to them.

“Caloric Value of the Russian Diet.” The blue line indicates caloric value, while the dotted line indicates the recommended daily caloric intake per family member in kilocalories. The light purple area indicates the number of Russians who suffer from obesity, in thousands of persons, while the shaded dark purple area indicates the number of Russia who suffer from anemia, also in thousands of peoples. Source: Rosstat and RANEPA. Courtesy of Republic

Last year, Russia was ranked forty-first in the Global Food Security Index, compiled by the Economist Intelligence Unit, meaning that it ranked lower than it had in 2013, when it ranked fortieth. This was due, among other things, to insufficient funding of research and a reduction in the variety of food products.

According to official statistics, food accounts for approximately 35% of expenses in Russian household budgets, which is a high proportion when compared with the OECD countries, among which even the highest percentages, achieved by Poland and Mexico, fall short of 25%. Independent evaluation of spending on food, however, claim that the proportion of Russian family budgets spent on food is actually over fifty percent. Given the almost continuous drop in the real incomes of Russians, the selection of products has declined in quality and abundance. On average, Russian households continue to skimp on everything they can do without, as confirmed by the compilers of the Coffee and Milk Index, as published by Romir, a Russian marketing research company. (The index tracks sales of chocolate, coffee, milk, and bottled water.) RANEPA’s researchers noted the discrepancy between the excess fat in the food and bread Russians eat and the low number of calories in their diets.

By closing the borders to imports and showering the domestic agro-industrial complex with generous state subsidies—1.2 trillion rubles [approx. 15.9 billion euros] in the past six years from the federal budget alone—the regime has persuaded itself it has been filling the nation’s bellies and improving its health. Its expectations were exaggerated, however. Oversaturated with cheap carbohydrates, the standard fare eaten by many Russians remains unbalanced and low on energy. “This is borne out by widespread anemia among the populace as a whole and children in particular,” RANEPA’s researchers write. The number of Russians who suffer from obesity has grown for the same reason.

Obviously, these problems cannot be written off as temporary glitches in demand in the domestic food market, whose revival has been unanimously trumpeted by former agriculture ministers and the current agriculture minister. Rather, they are the natural consequence of systemic problems with the natural resources economy that shoulders the burden of the Kremlin’s geopolitical capers. The average Russian family often simply cannot afford a plentiful variety of healthy, high-quality food.

The authors of RANEPA’s report have emphasized this.

“Neglecting this fact can lead to a distorted picture of the state of food security,” they write.

However, there is still very little chance the alarming conclusions of the experts will be heard this time around, forcing the government to make adjustments to its food policy.

* How did they do that? Was a nationwide referendum held? The author, of course, is referring to a so-called public opinion poll in which, at best, a thousand or two “ordinary” Russians were asked loaded questions, to which they gave the “right” answers. {TRR}

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Russians Spend 30% of Their Budgets on Food
Georgy Tadtayev
RBC
December 17, 2018

Russians spend nearly a third of their household budgets on food. Russia lags behind Montenegro, Latvia, and Turkey in this sense. Russians spend less than seven percent of their budgets on culture and leisure.

According to RIA Rating, as reported by RIA Novosti, Russians spent 31.2% of their household budgets on food in 2017.

The estimate of the percentage of their household budgets people in forty European countries, Russia, Kazakhstan, and Turkey spend on food was based on information from the IMF and national statistics agencies. Russia ended up in the bottom ten of the ranking, ranking 31st. Its nearest neighbors were Montenegro (29.7%) and Latvia (31.7%).

Ukrainians spend the greatest portion of their household budgets on food: 50.9%. People in Kazakhstan (46%, 39th place) and Moldova (43.4%, 38th place) also spend more than 40% of their budgets on food.

Western European countries topped the rating. Luxembourg came in first place. Residents of the duchy spend a mere 8.7% of their money on food. Close behind Luxembourg were Great Britain (10%) and the Netherlands (10.6%).

The agency also ranked countries according to percentages of income spent on alcohol and cigarettes. Residents of three Balkan countries—Romania (8.2%), Bulgaria (5.1%), and Serbia (4.7%)—spend the most on bad habits. Luxembourg (1.3%), Moldova (1.5%), and Cyprus (1.6%) spend the least on alcohol and cigarettes. Russia ranked 24th: Russians spend 3% of their househould budgets on bad habits.

Sweden was the top-ranked country in terms of spending on culture and leisure: Swedes spend 18.7% of their budgets for these purposes. Moldovans spend the least on leisure and culture: 1.3%. Russia ranked 21st: Russians spend 6.9% of their money in this category.

Translated by the Russian Reader

Squandering Its Way to Superpowerdom

“Squandering”: Did the US Secretary of State Grasp the Russian Approach to Budget Spending?
The Kremlin Accused the State Department of Tactlessness and Unprofessionalism, Yet Pompeo’s Remarks Were on the Mark
Yevgeny Karasyuk
Republic
December 13, 2018

Venezuelan Defence Minister Vladimir Padrino gives his thumb up as he sits on the cockpit of a Russian Tupolev Tu-160 strategic long-range heavy supersonic bomber after it landed at Maiquetia International Airport, north of Caracas, on December 10, 2018. Courtesy of Federico Parra/AFP/Getty Images

Russian’s decision to send strategic bombers on a junket to an airport near Caracas elicited a curious reaction from US Secretary of State Mike Pompeo, who publicly expressed his pity for Russian taxpapers, whose money the Kremlin, habitually disregarding the costs, has been spending on its geopolitical moves.

“The Russian and Venezuelan people should see this for what it is: two corrupt governments squandering public funds, and squelching liberty and freedom while their people suffer,” Pompeo wrote.

The Russian Foreign Ministry responded by calling Pompeo’s statement “utterly unprofessional” and even “villainous.” Pompeo’s remarks, which the Kremlin, in turn, dubbed “inappropriate” and “undiplomatic,” were apparently really lacking in nuance: the hardships of Russians, fortunately, cannot yet be compared with the suffering of Venezuelans. But, hand on heart, was Pompeo so wrong when he talked about the losses to the Russian federal budget and lack of oversight?

Russian society has an extremely vague notion about how much the Kremlin’s expansionism has ultimately cost the country. According to calculations made by IHS Jane’s at the outset of Russia’s operations in Syria in autumn 2015, Russia could have been spending as much as $4 million a day. Later, the Yabloko Democratic Party, which is not seated in the Russian parliament, estimated the Kremlin had spent a total of 108–140 billion rubles [between $1.6 and $2.1 billion] on Syria. A more accurate assessment would be difficult to make. Experts doubt that anyone, including the Finance Ministry, keeps tabs on such expenditures. Thus, nobody knows the real cost of Russia’s involvement in the Syrian conflict, argues the Gaidar Institute’s Military Economics Laboratory.

The budget’s fading transparency has been a trend in recent years. In 2016, secret and top-secret allocations accounted for 22% of total federal budget expenditures, a record for the entire post-Soviet period, and much higher than secret allocations in comparable countries, according to RANEPA’s March 2015 report on the Russian economy.

Quite naturally, this state of affairs has not improved the quality of the state’s financial decisions. In terms of effective state spending, Russia ranked nineteenth in a new rating of twenty-five countries, compiled by the Higher School of Economics using data from the World Bank and OECD. Since they are not priorities for the current regime, problems with child mortality and life expectancy were among the reasons Russia ranked so low in the survey: the government spends more on the army than on healthcare—4.3% of GDP versus 3.8% of GDP, respectively. In these circumstances, the chances the Kremlin’s strategic projects in the Middle East and Africa (e.g., the Central African Republic, Burkina Faso, the Democratic Republic of the Congo, and Mozambique) will be decently funded are always much greater than the national healthcare project, which stipulated increased government spending on cancer treatment. The government nixed the plan over summer.

Since it remains largely Soviet in spirit, Russia’s foreign policy has been categorically blind to history’s lessons. The Soviet Union’s exorbitant geopolitical ambitions and support for fringe regimes around the world left the country with a legacy of mostly toxic multi-billion-dollar debts. The process of writing them off has been disguised as a form of international charity or, speaking diplomatically, official development assistance (ODA). According to RANEPA, writing off the debts of developing countries accounted for 35% of all such “international aid” last year or $425 million. It has been the Russian government’s usual way of doing business. Previously, the Russian government wrote off the debts of Nicaragua ($6.3 billion), Iraq ($21.5 billion), North Korea ($10.9 billion), Syria ($9.8 billion), Afghanistan ($11 billion), and Cuba ($29 billion), among other countries. Venezuela risks joining this sad list. Over the past twelve years, Russia has invested a total of $17 billion in the country.

Russia’s Expenditures on Official Development Assistance (Excluding Humanitarian Aid), 2005–2017, in Millions of Dollars. Sources: OECD, Russian Finance Ministry. Courtesy of Republic

Since it was paid for by the Russian federal budget, which has been running a deficit for the last seven years, Russian officials probably did not see the transatlantic flight of its strategic bombers as too expensive. On the contrary, they saw it as a flashy display of Russia’s military prowess and proof of its influence in the region. However, the government of Nicolás Maduro signed off on the stunt. Subject to growing pressure from creditors and an angry, desperate population, it lives day by day. In all likelihood, it will soon collapse, leaving behind a mountain of unpaid bills and unfulfilled obligations to its allies. If this is the case, can we evaluate the Russian government’s action better than the tactless Mike Pompeo did? Probably not.

Translated by the Russian Reader