RA’s Daily Russia News Blast – August 8, 2014

TODAY: Putin’s import ban anticipated to hurt Russian economy, prices to rise, restaurant market to be hit; U.S. poultry, nut, and soy bean markets to suffer; racist Moscow projection marks Obama’s birthday; United Airlines concerned over airspace ban; Nato calls for Russia to withdraw from Ukraine border.

President Vladimir Putin’s ban on $9 billion worth of food imports from the West (listed in detail by Reuters here, and in Russian here) will not affect his current record levels of popular support, analysts say – negative reactions are ‘limited to an exclusive and politically conscious audience’ that is already critical of the government.  But the ban is widely anticipated to hit Russian consumers hard with higher prices and accelerated inflation, and will pose challenges to the restaurant market as ‘about 50% of ingredients are imported’.  The Independent says the Kremlin is ‘not acting rationally’.  But Russia’s E.U. Ambassador Vladimir Chizhov defended the import ban, arguing that it is based on the same logic used by Europe in attempting to diversify its energy supplies away from the Russian market.  90 new meat plants in Brazil have already been approved to export beef, chicken, and pork to Russia.  This New Republic piece argues that the likely outcome of Putin’s import ban will not look totally unlike the fallen Soviet Union that brought him to rule.

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RA’s Daily Russia News Blast – August 7, 2014

TODAY: Nato warns of Russia threat; Putin announces plans to ban Western agricultural products, Brazil and Argentina step up to replace supplies; Putin support at new high; hacker group in spotlight; American NGO worker to be deported without clarification; strip search at World Cup city stadium.

Nato has warned of an imminent Russian invasion of Ukraine, stating that there are roughly 20,000 combat-ready troops on the border. ‘[W]hat Russia is doing on the ground […] is of great concern.’  Following through on statements he made earlier this week, President Vladimir Putin has signed a decree limiting and in some cases banning imports of agricultural products from all countries that have imposed sanctions on Russia, for up to one year.  All U.S. agricultural products may be banned, as well as all fruits and vegetables from the E.U.  The decree also instructs officials to investigate measures for stabilising commodity markets and preventing food price hikes, ‘in tacit recognition that Russian consumers will bear the cost of the import ban’.  Deputy Prime Minister Dmitry Rogozin says that, in the long-term, it is the West that will suffer: ‘You may lose a market in an hour but it may take decades to restore.’  State-run Russia Today published a defence of the announcement as a much-needed act of protection against ‘Western economic aggression’.  Brazilian poultry exporters say they are ready to replace U.S. supplies by adding 150,000 tons yearly to their current volume; and Argentina’s meat producers are also interested in plugging market gaps.  Former U.S. Ambassador to Russia, Michael McFaul, writes in the New York Times says Western military support for Ukraine is the best bet to defend against Russian aggression.  Read More »

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Defning Modern Authoritarianism

Writing in Bloomberg View, Leonid Bershidsky argues that more and more emerging economies are led by people modelling themselves after the leadership style of Vladimir Putin – Narendra Modi, Najib Razak, Recep Tayyip Erdogan, to name a few.

Bershidsky ventures into the phenomenology of modern authoritarians – which, contrary to old school dictators, rely on a combination of selective freedoms and selective repressions:

It’s not that Putin himself is inherently evil or contagious. The crucial similarities are not really among the leaders themselves but among all authoritarian regimes regardless of the continents on which they operate. The most typical ones:

  1. The leader’s personal power either exceeds the legal allotment or allows the leader to change the law when needed;
  2. Justice is selective and politically motivated (“For my friends, everything, for my enemies, the law”), often in the guise of anti-corruption campaigns;
  3. Censorship of the media falls short of totalitarian repression but stifles dissenting opinions;
  4. The regime associates itself with “traditional values,” revisionist history and strong nationalist rhetoric (and, sometimes, action);
  5. Leaders express irritation with Western “double standards” and “preaching,” believing that the West operates just as cynically, only less openly.

(…) The West squandered its opportunity by cynical and self-serving interference in the emerging world’s affairs. It botched democracy’s marketing campaign: While democratic values themselves are hard to tarnish, the politicians who put themselves forward as their champions did not live up to the task.

A vast generalization perhaps, but Bershidsky has a point – more and more of the world’s emerging economic powers are deficient in rule of law and guided by the “strong hand” approach to state security. But it’s going to take more than just “good examples” to turn this trend around, I would suggest.

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RA’s Daily Russia News Blast – August 6, 2014

TODAY: Putin calls for retaliatory measures against sanctions; Aeroflot tumbles over airspace concerns; Russia to sue Germany’s Rheinmetall; Kremlin blocked BBC interview about Siberian independence; Poland warns of imminent invasion of Ukraine; Khodorkovsky to miss mother’s funeral.

President Vladimir Putin made a public call for Russia to retaliate against the economic sanctions imposed by the West over the Ukraine crisis, suggesting measures such as banning Western firms and banning European airline flights over Russian airspace.  His comments immediately caused Aeroflot’s share price to drop 6%, amid concerns that such a measure could cost the firm $300 million in annual flyover fees.  But it also has the potential to negatively impact numerous European firms by forcing them to fly longer routes.  According to a Vedomosti report, the foreign and transportation ministries are already discussing taking action on Putin’s proposal.  Norwegian investment firm Kon-Tiki says this is not the time to abandon Russian stocks.  The New York Times discusses Japan’s latest somewhat half-hearted anti-Russia sanctions.  Russia is planning to sue Germany’s Rheinmetall for pulling out of a contract to supply combat simulation and training equipment to its military.  Russia is on the verge of finalising a five-year, $20 billion trade deal with Iran.

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RA’s Daily Russia News Blast – August 5, 2014

TODAY: Sanctions hit hard, but unlikely to influence Moscow; Russia begins military exercises near Ukraine border; 400 troops leaving Ukraine for Russia ‘are PoWs’; inflation finally decreasing, but still higher than targets; Kasparov, Gessen, Putin video hoax.

In retaliation for Western sanctions against Russia, Deputy Prime Minister Dmitry Rogozin wants Russia to issue a full import replacement to help it ‘become completely independent’, and slammed ‘unprecedented pressure on our country’, as more U.S. products were added to Russia’s blacklist, including America’s Kentucky Gentleman bourbon.  But despite palpable effects on the Russian economy, U.S. sanctions have not led to any policy changes in Moscow, noted a White House spokesperson – and they aren’t likely to in the future, either; Putin ally Gennady Timchenko says business leaders in Russia will not put pressure on their president to change course; and analysts agree that those close to Putin are too dependent on him to revolt.  Sanctions caused tour operator Labyrinth to collapse this week, leaving 27,000 of its Russian clients stranded in foreign resorts.  But Europe’s energy sanctions, at least, are more theatrical than anything else, says Reuters, and are primarily aimed at keeping costs to EU energy firms as low as possible.  Japan has approved additional sanctions, including individual asset freezes, and a ban on Crimean imports; and Kiev is preparing a list of 500 Russian cultural figures who will be banned from its territory.

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RA’s Daily Russia News Blast – August 4, 2014

TODAY: Obama dismisses Russia; sanctions affecting economic sectors; oil price keeps Russia afloat; Germany pulls out of military deal; Russia bans Polish produce; Navalny trial begins; Marina Khodorkovsky dies.

In an interview with the Economist, U.S. President Barack Obama painted a grim picture of Russia, dismissing it as a nation that ‘doesn’t make anything’, and noting its dwindling population and lack of opportunities. Indeed, Russia’s economic sectors will be those hardest hit by Western sanctions, because they are largely dependent on foreign technology.  The strain is showing in the new Putin-approved sales tax, a 3% levy that will help regional governments to cover budget shortfalls; Bloomberg reports that no Russian companies received U.S. dollar, Swiss franc, or Euro loans last month, for the first time in five years.  But provided the price of oil stays above $104, Russia will not have to worry, says the Moscow Times, estimating that it has two years to survive on current reserves.  Germany is pulling out of a $134 million military deal to provide Russia’s military with a combat-training camp.  In retaliation for sanctions, Russia has introduced a ban on imports of fruit and vegetables from Poland – a $1.3 billion annual trade.  Rusal won support from all of its lenders in a $5 billion loan restructuring.

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RA’s Daily Russia News Blast – August 1, 2014

tefft-ambassadorTODAY: Russia hit with second major Yukos ruling; law restricting bloggers comes into effect; new U.S. ambassador John Tefft.  Sberbank hit by E.U. sanctions; social optimism reportedly reaches a new high; the power of propaganda.

Following on from Monday’s order to pay $50 billion in a ruling at the Hague, the ECHR has now ordered Russia to pay €1.9 billion in compensation to former shareholders of one time oil giant Yukos, a record sum for the Strasbourg court.  The court found that Russia had failed to ‘strike a fair balance’ in its treatment of the company founded by Mikhail Khodorkovsky, confiscated by the Kremlin.  Ex-shareholders in the corporation are looking to assets of Rosneft and Gazprom to recuperate their losses.  Russia may appeal the ECHR’s decision and its discontent indicates it will.  Today, ‘big brother is watching you‘, says one online editor discussing the new law obliging bloggers with more than 3,000 daily readers to register with a mass media regulator, which comes into effect today.  Prosecutors are threatening to shut down a Russian-language gay news website on the basis of breaching the gay propaganda law.  A Russian rights ombudsman has taken the U.S. to task over ‘illegal human experiments‘.  The U.S. Senate has voted for John Tefft to become the country’s new ambassador to Russia.  A U.S. senator wants Putin’s former press secretary Mikhail Lesin investigated on suspicions of using illegally obtained funds to purchased $28 million worth of real estate in California.

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RA’s Daily Russia News Blast – July 31, 2014

BN-DX037_rusban_G_20140730072627TODAY: Kremlin launches ban on Polish food imports in apparent tit-for-tat; slams new sanctions. German-brokered plan to solve Ukraine crisis afoot?  NATO badly positioned to counter Russia threat, report says; Moscow denies U.S. claim it violated missile treaty; Voina back to Russia? 

Russia has announced a ban on most fruit and vegetable imports from Poland, along with Ukrainian juice, and said it may extend the restrictions to the rest of the European Union, in apparent retaliation for sanctions it has called ‘destructive and short-sighted‘.  The Foreign Ministry has said that measures against it by the EU indicate a ‘lack of political will‘ to reach a solution on Ukraine.  Whilst symbolically sanctions are punitive, ‘immediate impact is likely to be relatively muted‘ argues the WSJ, although VTB’s share prices have taken a major hit.  Russia’s central bank has pledged it is on hand to help out its lenders. With regards to the EU sanctions, ‘great care has been taken to avoid damaging the energy industry‘, notes the Moscow Times.  Rosneft, however, seems to have some cause for concern.  Norway, which exports oil and gas technology to Russia, has stated it will also participate in sanctions.  The Independent reports that Germany and Russia have been working on a secret plan to broker a peaceful solution to the Ukraine crisis, which would, controversially, involve the international community recognising Crimea’s independence. Read More »

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RA’s Daily Russia News Blast – July 30, 2014

TODAY: U.S. and E.U. broaden sanctions hitting banks and energy companies; Obama denies new Cold War; Moscow vows retaliation; Russia may abandon ‘unfair’ U.S. nuclear treaty; Yukos former VP satisfied with ruling; Russians blame West over Ukraine; new giant holes discovered.

New sanctions announced yesterday will see Europe clamping down on Russia’s state-owned banks and oil firms in ‘the toughest sanctions since the Cold War’, anticipated to cost Russia billions of euros. President Barack Obama denied the onset of a new Cold War, but the U.S. was quick to follow followed Europe with its own set of sanctions, vowing to make the country’s ‘weak economy even weaker’, and adding VTB, the Bank of Moscow, and the Russian Agriculture Bank to its blacklist.  The sanctions against the banks will be key, says The Independent, as they will block them from selling securities to the world.  In general, the new sanctions effectively cut Russia off from international capital markets capable of providing hundreds of billions of dollars worth of debt. ‘It’s highly unlikely Russia would be able to replace borrowing and equity issuance in global capital markets with other sources of funds.’  Moscow has hinted that it will retaliate economically by targeting Western companies that do business in Russia.  In the mean time, so much for BP’s bright Russian future…  Japan’s plans to impose its own sanctions are ‘unfriendly’, says the Foreign Ministry.

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RA’s Daily Russia News Blast – July 29, 2014

TODAY: Hague tribunal orders $50bn Yukos payout, Lavrov hints at appeal; U.S. accuses Russia of violating Cold War nuclear arms treaty; Pussy Riot seek compensation; West expected to issue further sanctions in wake of MH17 crash; British lawyers preparing to sue Putin; geckos found in space.

As expected, a tribunal in the Hague ordered Russia to make a $50 billion payout to former shareholders of oil company Yukos, having ruled that the state had purposefully sought to bankrupt it. Mikhail Khodorkovsky, the company’s former CEO, welcomed the ruling as ‘fantastic, but said he hoped the money would come from the state, and not from ‘the pockets of mafiosi linked to the powers that be’.  The ruling saw a decline in Russia’s RTS index; oil major Rosneft says the case will not affect it or its assets.  Foreign Minister Sergei Lavrov says Moscow may launch an appeal of the decision.  A legal academic in the UK told RFE/RL that there is no appeal mechanism for the decision, only a possibility to challenge the final sum; he also said that ruling could take at least ten years to enforce.  The U.S. has accused Russia of violating a 1988 Cold War treaty regulating nuclear weapons, and is calling for Russia to ‘eliminate any prohibited items’ and engage in immediate bilateral talks. It remains unclear which terms of the treaty have been violated.  Pussy Riot members Nadezhda Tolokonnikova and Maria Alyokhina are seeking damages from Russia in their case before the European Court of Human Rights – in the sum of €120,000 each, plus legal fees – in compensation for their two year imprisonment.

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