September 20, 2022
Annexation is approaching?
The stick gets harsher
The President will decide
It’s all good. And period
Just a few facts
Annexation is approaching?
Russian presidential spokesman Dmitry Peskov has once again stated that continued war is the only scenario for the Kremlin.
At the moment, such prospects [for a political and diplomatic resolution of the situation in Ukraine] are not visible.
Lest anyone have any doubts that Vladimir Putin is targeting the annexation of the occupied part of Ukraine, the subject of a referendum on joining Russia has been revived in all regions under the boot of the Russian soldier.
First, the leaders of the self-proclaimed republics, the LNR and DNR, announced their intention to synchronize the referendums. Then, obscure public organizations in the territories of the Kherson and Zaporizhzhia Regions issued appeals to the occupation administrations to hold referendums. Then, almost simultaneously, it was announced that such referendums would be held in Zaporizhzhia, Kherson, Donetsk, and Luhansk Regions of Ukraine on September 23-27.
There should be no doubt that these decisions have been approved in the Kremlin, and that they signify Putin’s desire to increase the degree of aggression and further tighten the Gordian knot of problems he will leave as a legacy.
For several hours, Russian state TV channels announced President Putin's statement (probably regarding those referendums), but by the end of the day, announcements disappeared.
The stick gets harsher
The Russian authorities have found an asymmetrical response to the successful offensive of the Ukrainian military in the Kharkiv region: On Tuesday, the State Duma approved amendments to the Criminal Code, which obviously stem from the current military-political situation.
Traditionally, the adopted law contains vague definitions that allow for different interpretations. Thus, the Criminal Code now contains the terms “mobilization,” “martial law,” and “wartime” but does not explain them.
The law introduces penalties in the form of imprisonment for new corpus delicti, which causes me different emotions. I cannot but support the introduction of punishment for looting, which has become a characteristic feature of the Russian military (imprisonment up to 15 years); I am sure that this article will not really work during Vladimir Putin’s rule, but its presence in the Criminal Code should be an excellent warning to the Russian military fighting in Ukraine.
Two other norms aim to turn the Russian military into slaves, uncomplainingly obeying orders. On the one hand, criminal penalties are being introduced for refusing to follow orders or to refuse to participate in hostilities, which was the Kremlin’s reaction to the increasing number of cases of the Russian military refusing to participate in the war. They now face up to 10 years in prison. Another new measure, up to 10 years in prison for voluntary surrender, strongly reminds me of Stalin’s repression of Soviet soldiers taken prisoner during World War II and confirms that soldiers remain “cannon fodder” for the Kremlin and are faced with an existential choice: Surrender, live and go to jail for many years, or be killed.
A whole set of punishments is introduced for the heads of companies that will refuse to sign government contracts to produce armaments or violate their conditions. It should be remembered that a law under consideration in Parliament makes it mandatory to enter into such contracts at the insistence of the Ministry of Defense, which is not obliged to consider the commercial interests and capabilities of the state order performer.
By a strange coincidence, today, Vladimir Putin held a meeting with the heads of defense enterprises.
it is necessary to increase production capabilities as soon as possible, load equipment to the maximum extent possible, optimize technological cycles and, without reducing quality, reduce production terms.
I wonder if the Prosecutor’s Office will admit as a crime the fact of non-fulfillment of these requirements of the President.
The law shows that the Kremlin has no alternative to the choice between the carrot and the stick: The lack of a clear understanding of the meaning and purpose of the war means that coercion by force becomes inevitable.
The President will decide
Yesterday’s meeting with Vladimir Putin was devoted to the budget and turned out to be much tighter than I thought. The Finance Ministry failed to curb the budgetary appetites of ministries and companies and kept the budget deficit within 2% of GDP. As a result, a radical proposal to increase the tax burden was laid on the President’s desk, mainly in the oil and gas sector—over the three years the budget is planned for, the Treasury could receive almost 3 trillion rubles. The Finance Ministry intends to receive half of this money next year, which will increase budget revenues by 1% of GDP.
Some of these proposals look rational. Experts have long talked about the unequal burden on the oil and gas industry, but in previous years Vladimir Putin successfully defended the latter from encroachment by the Finance Ministry. This time, the Finance Ministry decided to use a “large caliber gun” and proposed that the President 1) raise the export duty on gas and 2) introduce an export duty on liquefied gas. To make it less painful for Gazprom, the Finance Ministry suggested that the export duty on oil should be increased one-and-a-half times. However, for oil producers, this will not be a serious problem: In 2023, the gradual transition from the export duty to the tax on added income will be completed, and the prime rate of the duty is at a low level; from 2024, the export duty on oil in Russia should come to an end.
At the same time, one of the fiscal ideas—to take away from Gazprom some of the revenues it receives from the annual indexation of domestic gas prices—looks more than controversial. In fact, the Ministry of Finance admits that Gazprom does not need the indexation of domestic prices, but instead of reducing the burden on the economy, it proposes replenishing budget revenues. It turns out that the Ministry of Finance is proposing to introduce a new tax, contrary to the strict norms of the Tax Code, which do not allow for this.
I’m not sure that Vladimir Putin will accept all the Ministry of Finance’s proposals—most likely, some of them will be rejected, but after that, he will have to take responsibility for either reducing spending or increasing the budget deficit.
It’s all good. And period
Vkusno - and dot, the fast-food chain that bought the McDonald’s business in Russia, has reopened more than 820 restaurants, according to Oleg Paroyev, the company’s General Director. According to him, the first hundred days of work under the new brand have been better than the expectations of the company’s management and all the open points “show excellent results.”
Paroyev attributed this to the fact that the company “managed to keep all the best that we had when we worked under the McDonald’s brand,” namely service and quality products.
As indicators of the restaurants’ success after the resumption of work, according to him, revenues are close to the indicators of points under the McDonald’s sign, and on some days the figures of comparable sales were higher. However, Paroyev did not disclose any specific indicators of the company.
Just a few facts
Despite the record grain harvest, grain exports from Russia in August were 18% lower than last year (5 million tons vs. 6.1 million).
Chinese customs reported a record high import of coal from Russia in August.
Vladislav Kurbatov, the general director of retailer Pyaterochka, said that the range of goods in the chain stores was reduced by 15% in eight months. According to him, the company is looking for suppliers and is considering the possibility of buying in Turkey, India, and Iran. However, also according to him, logistics from these countries is quite expensive, and the company is exploring the best options to make the price of goods on the shelf affordable.