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RA’s Daily Russia News Blast – February 18, 2022

Today in Russia/CIS: Number two US diplomat in Moscow expelled; Russian response to US security proposal; Support in Ukraine for NATO membership at record high; Ukraine on the agenda at UN; Sberbank raises deposit and mortgage rates for second time in a month amid central bank rate rises; Enough with the Georgia-Ukraine comparisons; Turkmenistan’s President might be passing the reigns to his son next month, who is he and why now?

Get out and stay out. Russia unexpectedly expelled the number two diplomat at the US Embassy in Moscow, Deputy Chief of Mission Bart Gorman. Gorman apparently was expelled last week, and it was not clear why his departure was not made public until yesterday. Foreign Ministry spokesperson Maria Zakharova explained that Russia expelled Gorman in retaliation for expelling Russia’s envoy-counselor in Washington. Zakharova declared that the US State Department “defiantly ignored” Moscow’s request to extend his stay at least until the arrival of the “replacement.” The US called the expulsion “unprovoked” and an “unreasonable expulsion.”

Give us the whole package or don’t waste our time. On Thursday, Russia responded (full text in Russian here) to the US/NATO proposal sent to Russia last month (which was leaked in full to Spanish newspaper El Pais). Long story short, Moscow is not pleased with the lack of a constructive response to key questions, including halting NATO enlargement and making guarantees that Kyiv will never join NATO. Moscow declared that the proposal cherry-picked “convenient” topics, ‘twisting” them to advantage the West, while ignoring more vexing concerns, demanding instead that Russian demands be considered as a whole package, rather than à la carte.

What’s more, the statement declared that US claims that Russia “ignited the conflict in the Donbas” is false, there is no Russian invasion of Ukraine, and any troop movements inside Russia’s borders are not a US security concern and should not be hyped. And of course, the statement repeated Russia’s accusation that Ukraine is in violation of the Minsk Agreements.

The Kremlin isn’t going to like this. As Russia tries to force the West to categorically state that Ukraine will never join NATO, and makes threatening troop movements around Ukraine’s borders to make this point clear, public opinion in Ukraine appears to be going in the opposite – albeit highly predictable – direction. A recent poll found that support in Ukraine for NATO membership has reached an all-time high, with 62% of those surveyed by polling organization Rating Group voicing support for eventual membership, “The highest indicator of positive perception of Ukraine’s integration into NATO in the history of observations since 2014.”

Let’s talk Ukraine. The UN Security Council – which Russia currently chairs – held a meeting about the situation in Ukraine. Secretary of State Antony Blinken accused Russia of planning to manufacture a pretext for an attack on Ukraine that could include “a fake, even a real, attack using chemical weapons,” and said: “Russia may describe this event as ethnic cleansing or a genocide.” Russia’s Deputy Foreign Minister Sergei Vershinin called these remarks a“regrettable” and “dangerous” move that further fuels tensions. Vershinin said Russian forces remain on Russian territory and some units were already returning to their bases following exercises.

Blinken’s accusations gained some credence when Russia put forth a document at the UN which accused Ukrainian authorities of “exterminating the civilian population” in Eastern Ukraine, which came the same day as Russian media covered their front pages with reports about an apparent shelling and ceasefire violation in Donetsk (which we wrote about yesterday).

That house is gonna cost you. Sberbank, Russia’s largest bank, hiked its interest rates for deposits and loans. With the current increase, the minimum mortgage rate is a hefty 11.3 percent (up from 10.3%), and the maximum deposit rate is 9.5 percent – in line with the Central Bank’s main interest rate after it sharply increased rates last week and warned more rate rises were likely.

High inflation, higher rates. The move by Russia’s Central Bank last week to hike its key rate to 9.5 percent is a reflection of the increasing macroeconomic instability resulting from both the Ukraine situation and subsequent sanctions risk, as well as uncertainty as to where the US Federal Reserve is headed in terms of rate rises, which will likely force emerging markets to respond with rate rises of their own. Furthermore, the rate rises are an effort to control galloping inflation in the country – something much of the world is currently grappling with. For comparison’s sake, the Central Bank’s key rate at its lowest last year was a mere 4.25 percent (see graph below).

Enough with the comparisons, thx. As the standoff over Ukraine escalates and the US repeatedly warns of an imminent invasion by Russia, comparisons are often drawn between the current situation and that of 2008 in Georgia, in a war between Georgia, Russia, and the unrecognized enclave of South Ossetia. Eurasianet wrote “Many Georgians will say they have seen this story before. A small former Soviet republic chooses to set itself on a path toward Euro-Atlantic institutions, only to be set upon by the neighborhood bear. Using deception and disguise, the bear baits the plucky state into a fight it cannot win. In the end, the smaller state is battered and partially eaten.”

But do the comparisons work? Maybe not quite. Eurasianet argues they fail in two ways:

The first is that the August 2008 war, as a large inter-state war, was precipitated by the decision of the Georgian President Mikheil Saakashvili to launch a planned military assault [in] Tskhinvali, the de facto capital of South Ossetia.

This brings us to the second way in which the comparison to August 2008 fails. For many, the August 2008 War was not a contingent event but the unfolding of a previously drawn up Russian plan. Using tactics and strategies from the “Kremlin playbook,” like “maximum pressure” and “reflexive control,” Russia’s leadership baited Georgia into a war that Russia wanted; everything pretty much worked out the way the Kremlin had planned. This perspective is that of history as the unfolding of conspiratorial plots and designs by one’s enemies. Russia had war contingency plans and pre-positioned equipment in South Ossetia: therefore, it wanted war. Russia certainly was ready for war: It saw Saakashvili’s military buildup and took his territorial revanchism seriously.

A new boss in town? The ever-reclusive Turkmenistan and its flamboyant strongman, President Gurbanguly Berdimuhamedov, is increasingly showing signs that he may be ready to step down and pass the family dynasty onto his son. The President said over the weekend in an extraordinary session of the upper house of Turkmenistan’s parliament that early elections would be held on March 12. His son, Serdar Berdimuhamedov, intends to run for office.

The timing is no coincidence. The Diplomat noted that the timing of the special session which set early elections comes on the heels of serious instability in one of its regional neighbors, Kazakhstan. “The February 11 special session was called for by the elder Berdimuhamedov, 64, last month in the wake of the unrest in neighboring Kazakhstan. The January violence in Kazakhstan was, at least in part, rooted in the country’s incomplete political transition from Nursultan Nazarbayev to Kassym-Jomart Tokayev; that may have prompted Berdimuhamedov to pull the trigger on what many observers have long believe were ambitions for a dynastic succession of power.”

Who is Serdar? Serdar Berdymukhamedov, the son of Turkmenistan’s President, is a “notably dour character,” which means that massive bike rides and Guinness World Record-setting may be brought to a halt when he takes office. But “little is known with certainty about the 40-year-old’s character. He barely ever speaks in public. On the few occasions he has delivered speeches overseas, he has read slavishly from his notes.”

What we do know is that Serdar worked at the Turkmen Embassy in Moscow from 2008-2011, and studied at the Russian Foreign Ministry’s Diplomatic Academy, followed by “a rapid trot through a series of jobs that look specifically designed as preparation for Serdar to one day serve as ruler of the country,” including stints at the state agency overseeing energy, the Foreign Ministry’s information department, serving as a member of parliament, becoming Deputy Foreign Minister in 2018, governor of his home province, Industry Minister, as well as head of the ominously named Supreme Control Chamber, member of the State Security Council, and Deputy Prime Minister, where he “has increasingly served as his father’s de-facto proxy.”

PHOTO: The UN logo in the General Assembly Hall in New York (Retuers/Eduardo Munoz/Pool).