July 13, 2022
What cannot wait?
Main beneficiary
Alas, the prognosis is coming true
Direct quote
The “pivot to the East” did not happen
China participates in the blockade
The main threat to elections
Another step backward
No place for science
Seizure of property as a tool of annexation
… and gas too
What cannot wait?
Late last night, the Kremlin lifted the veil of secrecy over the reason for the Duma’s special session: President Putin signed a decree introducing an additional deputy prime minister position in the Russian government which, according to the Constitution, must be approved by the lower house of Parliament. Of course, there is no objective urgency in convening a session of the State Duma, unless one thinks that this was a personal decision by Vladimir Putin.
The new Deputy Prime Minister likely will be Denis Manturov, currently the Minister of Industry (a position he will retain). Manturov has been in his current position since February 2012—i.e., since Vladimir Putin’s actual return to the presidency, demonstrating the Russian leader’s trust in him. In Putin’s eyes, Manturov is an effective manager who was able to force global automobile companies to increase the level of localization of production in Russia (which, however, did not allow them to remain operational) and who was able to convince the President that the import substitution tasks set by the latter after the annexation of Crimea were successfully fulfilled.
After the invasion of Ukraine and the imposition of extensive export restrictions by Western countries, import substitution became an even-more-pressing problem. Who better than Denis Manturov to solve it?! From the bureaucratic point of view, Manturov’s elevation looks quite logical: He will be responsible for coordinating the positions of the various departments, which means the process of making managerial decisions will be accelerated. And this is very important for the Russian President, who is sure that any problem can be solved. The main thing is to make the right decision and get it implemented.
Main beneficiary
There is another vital point in Denis Manturov’s biography: His real patron is Vladimir Putin’s old friend Sergey Chemezov, head of the Rostec state corporation. This corporation is the largest arms manufacturer in Russia, which did not prevent Chemezov from taking control of civilian sectors of industry (civilian aircraft construction, microbiology, construction of waste-processing plants, etc.).
Vladimir Putin’s decision to promote Denis Manturov undoubtedly shows that Sergey Chemezov’s position is getting stronger. But more important is the information about the possible resignation of another Deputy Prime Minister, Yuri Borisov, who since 2011 has been involved in arms procurement for the Russian army, having been Deputy Defense Minister from 2012 to 2018, and after 2018 becoming Deputy Prime Minister and First Deputy Chairman of the Military-Industrial Commission, a particular body under the President that distributes budgetary funds for arms procurement.
If the information about Borisov’s resignation turns out to be accurate, it would indicate Vladimir Putin’s intense irritation with the situation of arms in the Russian army. We do not know the reasons for this irritation: Insufficient quantity or inadequate quality or the inability of defense enterprises to quickly repair damaged hardware. But over his 23 years in power, Vladimir Putin has rarely decided to dismiss high-ranking officials without waiting for a legal reason (usually a presidential election).
It is unknown who might replace Yuri Borisov in the Military-Industrial Commission. Still, in my opinion, the chances are very high that it would be Sergei Chemezov’s protégé, who would have the opportunity to consolidate control over the entire Russian defense industry in his own hands.
Alas, the prognosis is coming true
On June 28, just before his birthday, prominent Russian opposition politician Ilya Yashin was sentenced to 15 days for a “fake news” article. As I told you about this, I mentioned that Yashin had been the subject of four reports of similar violations. Under Russian law, a repeat offense can result in criminal penalties in the form of imprisonment. Alas, my bleak prognosis is coming true...
Yesterday, as Yashin’s administrative detention was about to expire, he was criminally charged and taken home from prison for a search. A court session was held today in Moscow, which was closed to the public at the request of the investigation “because the investigation has just begun. At this point, not all witnesses have been identified; [an open hearing] could result in the loss of evidence.” Although Russian law does not provide such grounds for closing the trial, Judge Natalia Dudar agreed with the investigator. She classified the court session “to avoid disclosing state and other secrets protected by law.”
According to the Agora human rights center, Russia has already opened 71 criminal cases on charges of “discrediting the Russian army”—all of the defendants’ guilty offense is that they called the war war.
Direct quote
From a post by Ilya Yashin published after the trial was over.
...The court sent me to prison for anti-war speeches.
Let’s be honest: As of February 24, I knew full well that I would be arrested. Everybody knew it. Yesterday in a “confidential conversation,” operatives asked me several times: ‘Why didn’t you leave? You were given four months of freedom. It would have been easier for everyone if you had left...’
Okay, I’ll explain.
I don’t want it to be easier for them. I don’t want to run and hide from people I despise. I don’t want to humiliate myself in front of war criminals and lower my eyes in front of them...
When the war started, I promised I wouldn’t run anywhere and speak the truth loudly for as long as possible. And when they arrest me, I will take the blow with dignity. I keep my word.
Don’t worry about me, friends. And I beg you, don’t let yourself be intimidated.
I’m not afraid, and neither should you be.
No war.
The “pivot to the East” did not happen
Alexei Chekunkov, Minister for the Development of the Far East and the Arctic, gave an interview to Kommersant in which he admitted that there has been no “pivot to the East” and that the prospects for future economic cooperation with Asian countries, especially China, remain unclear.
- How do you assess the prospects for a pivot to the East in the current situation?
- There are two aspects in the economy related to the reaction of our partners [companies from Asian countries]: ...the unprecedented response of a large number of traditional economic partners, the suspension of their work has an impact... [at the same time] they want to work [with Russia], so having rolled back the mandatory sanctions program imposed on them from the outside, they will eventually return to dialogue. Not all of them and not on the same terms, nevertheless.
...The public part of our relations with China was ahead of their practical implementation. If you count the projects in Russia in which major Chinese investors actually participated, it would be enough on the fingers of one hand.
- What is the situation with the participation of foreign investors in joint projects?
- For the most part, we observe a wait-and-see attitude. We believe that most of the Asian investors who are already participating in critical projects in the Far East and the Arctic will try to maintain their strategic involvement. This is why all the key projects are continuing, but the main challenge is finding internal resources... Now the question is not how to replace the Europeans or Americans with the Chinese, but how to build up your own competencies.
- How do you assess the prospects for attracting financing in the Asian markets?
- In China... the role of the state is crucial because the most significant Chinese companies are companies with state participation, and they work strictly according to their government’s guidelines and the committee for the development of reforms. This is work that only the state can do; private business with a partner like the PRC will not be able to agree on the whole front of issues.
China participates in the blockade
According to the General Administration of Customs of China in June, the volume of Chinese export to Russia was 17% less than a year ago. On the one hand, it is possible to discuss some improvement—in the previous two months, the figure was minus 25%. On the other hand, taking into account that 58% of the Chinese export to Russia is machinery and equipment, we can say that China is implicitly participating in the technological blockade of Russia.
The main threat to elections
The parliamentary elections in Russia in December 2011 caused mass political protests, triggering numerous fraud cases and falsifications. Vladimir Putin, who was then Prime Minister and a candidate in the presidential election the following March, wanted his election to be free of such accusations. To this end, he proposed organizing an online voting broadcast at all polling stations in the country.
I propose and ask the CEC [ Central Electoral Comission] to install webcams at all polling stations in the country; we have more than 90,000 of them. At all of them. Let them work 24 hours a day and night. To put everything on the internet so the country can see what is happening at a particular box. To take away all the falsifications.
Surveillance cameras were installed, online broadcasts were organized and... in March 2012, the accusations of fraud and falsification were overwhelmingly confirmed by video. Russian courts refused to accept these videos as evidence, but this did not make Putin’s victory blameless. Experts estimate that Vladimir Putin received about 11 million extra votes.
Convinced that the video broadcast system was undermining the myth of honest elections in Russia, the Kremlin began gradually restricting the use of video cameras in polling stations. Now, at last, the time has come to put an end to this “vicious practice.” At a meeting at the CEC, which discussed preparations for Election Day in September, Commission Chair Ella Pamfilova categorically forbade video surveillance.
“By openly broadcasting on the internet, you are putting [the elections] in jeopardy,” she said.
Another step backward
As soon as Western sanctions seriously start causing problems for Vladimir Putin, the sanctions evaporate in one form or another.
The first example was the embargo on imports of Russian oil products. As soon as talk about this began in the corridors of the European Commission, the largest oil traders reduced the volume of purchases of Russian oil products for their delivery to Europe. As a result, the amount of oil refining in Russia began to decline gradually and, by early May, fell by 10%. But... the time came for adopting the sixth sanctions package, and the embargo on imports of petroleum products from Russia was postponed until February 2023. Business as usual! And Russian refineries returned to work at full capacity.
I told you about the second example, the turbines for the Nord Stream gas pipeline, two days ago. Today, the Canadian government announced that turbines from Nord Stream are free to come to Canada for repairs until December 2024.
The third example is today’s clarification from the European Commission, which lifts the partial transport blockade of the Kaliningrad region concerning the delivery there of goods subject to European sanctions.
Once was an accident. Twice—coincidence. Three times—a pattern.
No place for science
When war is the only raison d'être of a state, reducing expenses on peaceful programs should not surprise.
“Roskosmos” announced the cessation of work preparing a crewed flight to the moon. Alexander Bloshenko, the state corporation’s executive director for science, said that the corporation does not have the resources to build the superheavy rocket needed.
“So far to the right has shifted the superheavy [rocket] issue, as has the lunar program. We are prioritizing more pressing matters—remote sensing of the Earth, communications, which everyone needs, both civilian and military. So science space has shifted.”
Seizure of property as a tool of annexation
Yevgeny Balitsky, head of the Russian civil-military administration of the occupied Zaporizhzhia region of Ukraine, described the massive expropriation of property in the occupied territories and said that the region would not return to Ukraine.
“Enterprises are transferred to the state administration temporarily; if the owner returns to our territory, ready to undergo complete control in special security bodies, that he is not and was not the person who financed or will finance the nationalist battalions, he will return his enterprises...
“There can no longer be any return to Ukraine. There are already Russian flags, Russian passports, Russian ideology and our philosophy, the philosophy of humanity, not the beastly, fascist attitude that was here when you could beat a man with a stick and take anything from him. Russia has shown with every fiber that there will be no Ukraine here.”
It is not difficult to understand Balitsky: Having obtained control of the whole regional economy in his hands, he is not ready to part with this gift of fate.
...and gas too
On July 12, Marat Khusnullin, Russian Deputy Prime Minister, said that he instructed the Ministry of Energy to develop a gas supply scheme to the occupied part of the Zaporizhzhia region. For this purpose, the Soviet-era Taganrog-Mariupol-Berdyansk gas pipeline will likely be restored. Today this pipeline is already in operation, and Russian gas is supplied to Berdyansk. But to provide the Zaporizhzhya region with gas, it is necessary to build about 100 km of new gas pipeline and modernize the old one.
According to experts of the Ministry of Energy, in the future, there may be an extension of the gas pipeline to Kherson and connecting it with gas pipelines in the territory of Crimea.