Yes, he can! The government failed to deliver again. Are the Taliban preparing to cross the border?

December 7, 2021

Yes, he can!

So, Vladimir Putin’s blackmail, which followed an already well-known scenario—to gather troops near the Ukrainian border—led to the desired result. On Tuesday, at about 18.00 Moscow time (10 a.m. EST), an online meeting of the two presidents will start. According to the Kremlin’s press secretary Dmitry Peskov, Putin and Biden will discuss bilateral relations “which continue to be in a deplorable state.” For Putin, the key issue will be the discussion of “reliable and long-term security guarantees” for Russia. These guarantees—non-expansion of NATO to the East—should be legal in nature because “the Western countries do not fulfill their verbal commitments.” Peskov noted that Russia, for its part, is ready to make similar obligations. “Security guarantees cannot be one-sided; it is obvious. They are only in both directions.”

The Kremlin does not expect a breakthrough from the negotiations. “It is complicated to expect breakthroughs from conversations. We have such huge “Augean stables “in our bilateral relations now that it is hardly possible to clear them in a few hours of conversation,” Peskov said. And if so, then in a few months, Russia will again start knocking loudly with its forged boots on the Ukrainian door. So that Washington will hear and arrange a new meeting.

Wonderful project

The LSR Group developer has received permission to build a branch of the Hermitage museum complex on the former ZIL automobile plant in Moscow. The area of ​​the building will exceed 12.1 thousand square meters; it will be a five-story cube building with an underground floor. Its facades will be made of a grid of copper-like metal structures. All exhibition floors will be visible from the entrance hall.

Great idea! The Hermitage has huge storehouses, which are enough for the full-fledged collections of several other museums. The only pity is that the branch will be built in Moscow. I would choose another city to create a center of attraction for tourists and businesses there. As the Guggenheim Museum in Bilbao did.

Coerced shareholder

The founder and main shareholder of the Russian internet giant, Yandex, Arkady Volozh, who controls 45.3% of the company’s voting shares, agreed not to sell his shares for another two years, Yandex reported. In November 2019, Volozh and Yandex entered into an agreement, according to which neither Volozh himself nor his trust could sell shares until the end of 2021.  

The deal goes in line with the just-announced deal to transfer control of another Russian internet giant, VK.COM, into the hands of Putin’s friend Yuri Kovalchuk. (It was announced over the weekend that the son of the first deputy head of the Kremlin administration, Sergei Kiriyenko, would become the CEO of this company.) Yandex is registered in the Netherlands; its shares are traded on NASDAQ; 45.9% of the voting shares are controlled by minority shareholders. Its market cap is $24.5 bln, plummeting by 20% in the past four weeks.

The Kremlin is well aware of the principal rule of the Russian corporate culture: “51 = 100, 49 = 0.” According to this logic, the sale of 10% of Volozh’s shares will move control over the company out of Russia, which, of course, cannot be allowed. The ideal option for the Kremlin would be Volozh’s sale of all his shares to whomever the Kremlin decides as the buyer. But the very rumors of such a plan will bring down the company’s shares and provoke an exodus of its key employees. Therefore, the Kremlin has to forget about this plan (for a while) and maintain the status quo.

Pandemic news

1) 10 Russians who returned last week from South Africa and neighboring countries, and were placed under observation, have been diagnosed with COVID. Two of them have the Omicron strain.

2) The Russian Ministry of Health has approved the “Sputnik M” vaccine for children aged 12 to 17 years. The production of the vaccine has been launched, and the first vaccinations take place in mid-December. In early 2022, clinical trials of a vaccine for children from 6 to 11 years old will begin, said the Russian Minister of Health, Mikhail Murashko. 

3) The excess mortality in November, according to Rosstat data (compared to the level of 2019) was 96,000 people. Deputy Prime Minister Tatyana Golikova said that according to express data, the number of deaths in Russia increased in November by 3.4%, compared to October. This means that the excess death mortality in November exceeded 120,000. According to my estimates, the excess mortality in Russia from April 2020 to November 2021 amounted to 810,000 people (compared to the level of 2019). This number will come close to 1 million by the end of December.

International bureaucracy vs. propaganda

The World Health Organization (WHO) will reconsider the Russian Sputnik V vaccine certification no earlier than January 2022. “WHO and RDIF (Russian Direct Investment Fund)¹ met at the end of November to discuss the need for additional data on the quality, safety, and efficacy of the vaccine. The company (RDIF) has pledged to provide a detailed data submission roadmap so that WHO can expedite vaccine evaluation. Data are expected to be released by the end of December 2021. Inspection cannot be expected before data is submitted and evaluated,” WHO said. The statement came in response to Kirill Dmitriev, head of the RDIF, who accused WHO of bureaucratic delays. “We see little reason for WHO to delay approval of the vaccine… We understand that the remaining obstacles are minor and purely bureaucratic” Dmitriyev told Argentina’s La Nacion daily in an interview.

The certification process for the Russian vaccine was stopped in September after WHO experts discovered violations at one of the four enterprises where the vaccine is produced—Pharmstandard-Ufa Vitamin. WHO experts expressed concerns about implementing “adequate measures to reduce the risk of cross-contamination of the vaccine” and about the “control of aseptic conditions on its filling lines” and adherence to production standards. In addition, deficiencies were identified in the way the identification and tracking of the batch history of the vaccine is produced and the two medicinal components labeled “Component I” and “Component II” is organized, as well as the “integrity of data and test results from microbiological and environmental monitoring.” 

The Kremlin and RDIF have been looking for participants in a political and commercial conspiracy against Russia for several months now, accusing Western countries of not wanting to put the Russian vaccine on their markets. At the same time, they do not pay attention to those of another competitor—Chinese vaccines—that have long been recognized by WHO.

The government failed to deliver again

During the past week, the export of fertilizers from Russia was put on hold. Starting December 1, export licensing was introduced; however, as often happens, the bureaucracy could not prepare. No licenses were issued, and export stopped on December 1. “Shipments have been stopped; declarations have been canceled. Those who did not register the goods by December 1 cannot send ships... The ships stand at the approaches to the ports, cannot load. The consignments accumulate in seaports,” as the sources of the Interfax news agency described the situation.

On December 1, the Minister of Agriculture, Dmitry Patrushev, held a special meeting on this issue; however, the first licenses were issued only four days later.

Car sales are collapsing

The dynamics of new passenger car sales in Russia remain negative. The market showed steady growth in the first half of the year—plus 36.9% compared to 2020 and 5.1% compared to 2019. Then, starting in July, the number of new cars sold has been less than last year’s levels for five consecutive months. In November, they fell by 20.4% compared to the same month the previous year; over the past five months, they fell by 17.1%.

All cars sold in Russia are imported or assembled in Russia, with many imported components. Disruptions in supplies and a global shortage of chips have led to enterprises often working less than an entire week, and experts do not yet see the “light at the end of the tunnel.” “Usually, December is a good month for car sales, but this year is different. It seems to us that next year the existing trend will continue; in the coming months, the numbers will worsen even more,” says the head of the Committee of Automakers of the Association of European Businesses in Russia, Thomas Stärzel.

Property prices are rising rapidly

According to Sberbank estimates, in October 2021, the median cost of a square meter of housing in the Russian market was 65 thousand rubles ($80.5/sq ft). This is 19% higher than in October 2020. In Moscow, the median cost in October 2021 was 237 thousand rubles ($293.6/sq ft), which is almost 24.5% higher than last year.