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RA’s Daily Russia News Blast – July 20, 2020

Today in Russia: “The Kremlin is shocked” as Khabarovsk continues mass protests; Real wages fall the most since 1998; Russian Ambassador in UK rejects claims of hacking virus research; Russia trying to beat the West in vaccine race; Russian elite received experimental vaccine as early as April; $1.1 billion in tax breaks planned for tech companies; Bones in the forest are those of the last Tsar; Siberian heat wave “almost impossible” without climate change; Demand for Turkey tour package demand increases as the two countries open borders to each other; New charges against Baring Vostok’s Michael Calvey

Protests have continued in Khabarovsk over the arrest of Governor Sergei Furgal. A Moscow-based political analyst told RFE/RL, “The Kremlin is shocked. No one knows how to react.” Vedomosti wrote [in Russian] that the protests are only growing larger as they enter their second week. 50,000 people protested yesterday, nearly 10 percent of Khabarovsk’s population of 600,000. The Kremlin is searching for Furgal’s replacement as governor. There is a push for an appointment from Furgal’s party, the LDPR, and pressure to appoint a local candidate rather than a candidate shipped in from Moscow. Vedomosti quoted a person close to the Kremlin,

A person close to the presidential administration says that now there are two main candidates to replace Furgal – not Muscovites, but not from Khabarovsk. “In general, one should still take time with the appointment,” he said. “It is desirable that the president dismissed Furgal not in connection with the loss of confidence: given the protests, this may not be well received by the population. Therefore, it is desirable to postpone it with some other wording, and it would be better if Furgal himself wrote a statement.”

Real wages in Russia have fallen by more than any period since 1998 as a result of COVID-19 and the collapse in energy prices. Bloomberg wrote, “Real disposable incomes fell 8% between April and June compared with a year ago, the Federal Statistics Service reported Friday. Data for the first quarter, which earlier showed a drop, were revised up to a 1.2% increase.”

Russia’s Ambassador to the UK Andrei Kelin rejected claims by the UK, US, and Canada that Russian hackers are trying to steal COVID-19 vaccine research, retorting “I don’t believe in this story at all, there is no sense in it. I learned about their [the hackers] existence from British media. In this world, to attribute any kind of computer hackers to any country, it is impossible.”

Russia is trying to beat the West to a vaccine, setting September as its target. “Russia may be one of the first to produce a vaccine against the backdrop of the billions that are being invested in the U.S. and all the pharma companies working on it,’ said Kirill Dmitriev, the chief executive of the government-backed Russian Direct Investment Fund (RDIF), which is financing one of the the country’s efforts to devise a vaccine. ‘It’s a little bit of a shocking story.”

Dmitriev added that Russia had no need to steal vaccine research because it signed a deal with AstraZeneca to manufacture Oxford University’s vaccine at one of the largest pharma companies in Russia, R-Pharm. “He said AstraZeneca is transferring the entire technological process and all ingredients for the full reproduction of the vaccine in Russia,” Bloomberg wrote.

Bloomberg also reported that hundreds of elites in Russia were given early access to the vaccine in its trial phase back in April:

Top executives at companies including aluminum giant United Co. Rusal, as well as billionaire tycoons and government officials began getting shots developed by the state-run Gamaleya Institute in Moscow as early as April, the people said. They declined to be identified as the information isn’t public.

The Gamaleya vaccine, financed by the state-run Russian Direct Investment Fund and backed by the military, last week completed a phase 1 trial involving Russian military personnel. The institute hasn’t published results for the study, which involved about 40 people, but has begun the next stage of trials with a larger group.

Russia plans 76 billion rubles ($1.1 billion) in tax breaks for technology firms to lure them to the country in an effort to diversify the economy. “Support measures include reducing profit tax from 20% to 3% for software producers and electronics developers and halving social taxes to 7.6%, starting next year. The government claims the new tax regime will be more favorable for IT companies than in popular jurisdictions such as India and Ireland.

Bones discovered in a forest near the city of Yekaterinburg are confirmed to be those of the last Tsar, Nicholas II and his family. Senior investigator Marina Molodtsova told Russian newspaper Izvestia that, “Based on the expert molecular-genetic findings, the remains of the two people, discovered in the summer of 2007 near the burial site of nine other victims, belong to the daughter and son of Nicholas and Alexandra Romanov. Biological kinship with both parents has been established for both Alexei and Maria.”

“A recent heatwave in Siberia that saw temperature records tumble as the region sweltered in 38-degrees-Celsius highs was “almost impossible” without the influence of manmade climate change, leading scientists said Wednesday.” Researchers found that temperatures were more than 2 degrees Celsius higher than if humans had not warmed the planet through emissions and other climate-change inducing activities.

Russia and Turkey plan to resume flights next month. Russian tourists are flocking to tour websites to inquire about trips to Turkish seaside resorts. One tour site said 42 percent of all search queries were for Turkey, largely at the expense of domestic beach destinations in Russia, Vedomosti wrote [in Russian]. Kommersant reported [in Russian] that many Russian tourists are already making their way south to Turkey by way of Belarus, which currently operates flights to Turkey – a practice not strictly illegal but potentially a risky move given that the normally open border between the two countries has implemented controls. If flights resume fully, Turkey could see four million Russian tourists this summer, Kommersant wrote.

Michael Calvey, the American founder and CEO of investment firm Baring Vostok, faces new charges. Kommersant wrote [in Russian],

As Kommersant learned, the other day the Investigative Committee of Russia re-charged the defendants in the final case of embezzlement of 2.5 billion rubles. from the funds of Vostochny Bank, including the founder of the Baring Vostok fund, US citizen Michael Calvey and the adviser to the fund, French citizen Philippe Delpal. The classification of the crime and the circumstances of its commission have not changed. According to the defense, before sending the materials to the prosecutor’s office the investigators simply decided to clean them, eliminating minor factual errors and stylistic inaccuracies that were identified when the charges were brought at the end of December last year. However, lawyers seized the moment and petitioned for new documents to be attached to the case, in particular regarding the issue of a loan to Vostochny, which became the basis for the investigation.

PHOTO: Protests continued over the weekend in the far-eastern city of Khabarovsk over the arrest and replacement of Governor Sergei Furgal (Dmitry Morgulis/TASS).