September 14, 2022
Ambition and ammunitions
Let’s not be too principled
Brainwashing
Many a little makes a micke
Gone. But not all the way
Going to jail for a song
Life comes only once
Just a fact
Ambitions and ammunitions
While the Kremlin is trying to expand its sphere of influence in Ukraine, it is rapidly losing its historical position in Transcaucasia.
From September 12 to 13, the conflict between Armenia and Azerbaijan sharply escalated: The parties began mutual firing of territories—i.e., the military conflict went beyond Nagorno-Karabakh. As a result, about 100 people from both sides were killed. The initiator of the escalation was Azerbaijan, which, unexpectedly for everyone, including Russia, accused Armenia of failing to comply with the peace agreement signed two years ago.
Two days before the escalation, Igor Khovayev, a special representative of the Russian foreign minister for the normalization of relations between Armenia and Azerbaijan, was in Baku and did not receive any signals from his negotiating partners about discontent that could provoke the start of military action. On the eve of the previous escalation of the conflict in early August, Azerbaijan communicated its demands to Armenia in advance, including through Russian peacekeepers, and threatened that it would take action if they were not met. From this we can conclude that Azerbaijan does not regard Russia as a neutral mediator and does not intend to discuss its policy with Moscow.
Hostilities affected Armenian territory for the first time in the history of the conflict, giving that country the right to request assistance from its partners in the Collective Security Treaty Organization (CSTO). However, the organization limited itself to stating that the use of force by the parties to the conflict was unacceptable, expressing its condolences to the families of the dead and wishing a speedy recovery to the wounded. In an overnight online meeting of CSTO leaders, it was decided to send a secretary of the organization to the conflict area to report on the situation.
Azerbaijan receives substantial military and political support from Turkey, which intends to get its benefits from the strengthening of its satellite: The expansion of oil and gas transit opportunities from Azerbaijan to Europe, as well as gaining access to Central Asian countries across the Caspian Sea, which Istanbul sees as a space for its economic expansion. Vladimir Putin does not want to aggravate relations with President Erdogan and Turkey, which is an essential element in constructing new supply chains and a window for a soft circumvention of Western sanctions. In addition, the clash of Russian and Turkish interests in Syria showed that Istanbul was ready for a forceful confrontation with Moscow. In this situation, the withdrawal of support for Armenia looks inevitable for Moscow, just as the drift of Yerevan into the orbit of influence of Iran, the only player in the region ready to confront Armenia’s enemies, looks inevitable after this.
Let’s not be too principled
The Bank of Russia has proposed a new way around Western financial sanctions, which complicate international settlements for Russian companies: Foreign banks may be allowed to open branches in Russia. But, of course, such an opportunity will be given only to banks from friendly countries.
After the collapse of the USSR, the Bank of Russia opposed the creation of branches of foreign banks in the country, arguing that they would not be accountable to the Bank of Russia and would not fall within the control zone, which would lead to hidden risks to the stability of the financial system. Although the notion of a “branch of a foreign bank” existed in Russian legislation until 2013, the Bank of Russia did not issue a single permit for its establishment.
So far, this proposal has not yet taken the form of law, and it is not clear whether any restrictions will be set for such cases, but it is obvious that if this idea is implemented in Russia, a new channel for the outflow of capital from the country will arise.
Brainwashing
The Ministry of Education has introduced amendments to the Federal State Educational Standard (FSES), according to which students of the 10th and 11th grades will be taught a special military operation in Ukraine in history classes. Now students will learn about the rebirth of Russia as a world power and the anti-Russian policy of the U.S. and NATO from 2000 to the 2020s. High school students will be taught to “rebuff falsifications of Russian history” and “defend the historical truth in discussions.” The students themselves will be required to know the reasons for, and forms of, Russia’s “humanitarian and military-political support” of the DNR and LNR, as well as to “present assessments of Vladimir Putin’s personality and activities from Russian and foreign media, expressing and arguing their attitude toward them.”
Many a little makes a micke
The day before, I said that the federal budget began to feel problems with revenues, and today my thesis has received new confirmation: The Russian government is considering the introduction of export duties on all types of fertilizers. The Finance Ministry estimates it will increase budget revenues by 100 billion rubles annually. From the view of budget sustainability, this amount is only 0.4% of annual revenues and will not significantly affect the stability of public finances. At the same time, it will lead to the loss of 10%-12% of export revenues of fertilizer-producing companies, which have come under pressure from sanctions and logistics problems.
The decision to introduce the export duty will be formalized as a government decree for six months to avoid coordination of the issue within the Eurasian Union, which allows the unilateral introduction of duties for no more than six months. The main problem, the solution of which has not been found yet, is to find an optimal combination of simplicity of duty collection and equality of conditions for different companies. The Ministry of Finance’s initial proposal was to introduce a single duty rate, but this idea ran up against resistance from companies, which said they needed to consider the difference in supply prices between different types of fertilizers and the conditions of supply to different countries.
Gone. But not all the way
The world’s largest soda manufacturers, Coca-Cola and PepsiCo, are considering changing the brand and appearance of their branded soft drink refrigerators in Russian stores. In Russia, about 1 million refrigerators are established in trading premises, of which 400,000 belong to Coca-Cola and 200,000 to PepsiCo. Because this is a sustainable business, the companies do not intend to sell it—we are talking about refusing to use global brands as advertising in Russia.
In March, Coca-Cola and PepsiCo began reducing their presence in Russia: The companies suspended investments in marketing. They refused to produce or sell their global beverage brands Coca-Cola, Fanta, Sprite and Pepsi, 7UP, and Mirinda, respectively, on the Russian market. Both companies’ plants were limited to producing and selling local milk, juice, and soda brands.
Coca-Cola Hellenic Bottling, a Swiss company in which Coca-Cola Co. owns 21% and produces beverages in Europe and Africa, said its April-June 2022 production in Russia declined 46%. The company expects further production declines in the second half of the year. But the throne is never vacant: instead of the original Coca and Pepsi, multiple substitutes have appeared on Russian shelves.
Going to jail for a song
In the Crimean city of Bakhchisarai, the court punished wedding participants for singing “Chervona Kalyna” (Red Viburnum) under the articles on “demonstration of Nazi symbols and discrediting the army.” The court reported that, according to the conclusion of an expert, the work “is the attributes (fight song) used by the Organization of Ukrainian nationalists (OUN), whose activities are recognized as extremist and prohibited on the territory of the Russian Federation. The owner of the banquet hall where the wedding took place got 15 days in jail, the DJ and the dancer each got 10 days, the groom’s mother got five days, the mother of the bride got a fine of 40,000 rubles, and the restaurant owner’s wife got 50,000 rubles.
The song “Chervona Kalyna” was written in 1914 by the poet, director, and director of the Ukrainian theater “Ruska beside,” Stepan Charnetsky, who used it in a play about Hetman Doroshenko. There are several versions of the text of this song. One of them, which mentions “liberation from Moscow’s fetters,” became widely used, including on social media, after February 2022.
Life comes only once
Russian road racer Konstantin Zhiltsov said he changed his citizenship to compete in the Dakar Rally:
I made myself a set of documents. And I will already compete as a foreign athlete at the Russian Championship in Ulyanovsk. It is necessary to race; otherwise, you lose your skills, and then you have to stop all this. A career in professional sport is relatively short-lived, so you have to make some ‑cardinal decisions.
Zhiltsov, 57, is a rally-raid navigator competing in the Dakar since 2006. In 2013, with pilot Leonid Novitsky, he became third in the overall classification in the “cars” class.
On March 1, FIA prohibited Russian and Belarusian athletes from competing under the flags of their countries, and on March 4 stated that Russian and Belarusian racing drivers would not be able to compete under the auspices of the organization unless they signed a declaration of commitment to the principles of peace and political neutrality.
Just a fact
The Tverskoi court in Moscow imposed administrative arrest for 15 days on Leonid Gozman, who was found guilty of identifying the Soviet leadership with the leadership of Germany.
A group of State Duma deputies decided to enrich the Russian legislation on foreign agents and proposed introducing a new category: “a person intending to act as a foreign agent.”