Category Archives: Ukraine

One More Expert Analysis: What Putin “Really” Wants from the Ukraine Invasion

The Guardian — Mon 22 Aug 2022

After six months of bloody and terrible war, what exactly does Putin want from Ukraine?

Russia is trying to demonstrate that Nato is powerless to stop it. Whether it succeeds depends on the west’s political will as energy prices soar?

Nearly six months after Russia’s invasion of Ukraine, there is still widespread disagreement in the west on Vladimir Putin’s motives.

This is of more than academic interest. If we do not agree why Putin decided to invade Ukraine and what he wants to achieve, we cannot define what would constitute victory or defeat for either of the warring sides and the contours of a possible endgame.

At some point, like all wars, the present conflict will end. Geography condemns Ukraine and Russia to live beside each other and that is not going to change. They will eventually have to find a modus vivendi. That also applies to Europe and Russia, although it may take decades before the damage is repaired.

Why, then, did Putin stake so much on a high-risk enterprise that will at best bring him a tenuous grip on a ruined land? Continue reading One More Expert Analysis: What Putin “Really” Wants from the Ukraine Invasion

Gwynne Dyer: Dugina Assassination in Moscow

Gwynne Dyer —  Aug 22 2022

Was the killing of Darya Dugina an act of terrorism?

Darya Dugina, the daughter of Russan nationalist ideologist Alexander Dugin, the Russian nationalist ideologist often called "Putin's brain", was killed when her car exploded on the outskirts of Moscow, officials said Sunday. Russian authorities said the Saturday night blast was caused by a bomb planted in the vehicle driven by Dugina.
INVESTIGATIVE COMMITTEE OF RUSSIA/AP
Darya Dugina, the daughter of Russan nationalist ideologist Alexander Dugin, the Russian nationalist ideologist often called “Putin’s brain”, was killed when her car exploded on the outskirts of Moscow, officials said Sunday. Russian authorities said the Saturday night blast was caused by a bomb planted in the vehicle driven by Dugina.

Gwynne Dyer is a UK-based Canadian journalist and seasoned commentator on international affairs.

“I am a political observer of the International Eurasianist Movement and an expert in international relations… In this capacity, I appear on Russian, Pakistani, Turkish, Chinese and Indian television channels… The situation in Ukraine is really an example of a clash of civilisations; it can be seen as a clash between globalist and Eurasian civilisations.”

That’s how Darya Dugina, who was killed on Saturday evening outside Moscow by a car bomb, described herself last May in an interview with an obscure far-right Breton website, Breizh-info.com. (Globalist in far-right Russian circles means the United States, Nato or the West; Eurasian is just a more expansive way of saying Russian.)

The car-bomb that killed the 29-year-old philosopher and journalist was probably intended for her father Alexander Dugin, also a philosopher and sometimes called “Putin’s Brain” by the foreign media because of his alleged influence on the Russian president.

They had driven together to an event supporting the Russian invasion of Ukraine where Dugin spoke. He took another car home and so escaped the bomb, but they were very close.

“I have the honour of being in the same boat as my father (on the same existential ship), being the daughter of a great scholar and author of the 24-volume work Noomachia (‘wars of the mind’). The fact that we are under sanctions by the US, Canada, Australia and the UK is a symbol that we Dugins are on the path of truth in the fight against globalism.”

The ‘path of truth’ they were both on was Neo-Platonism, a style of early Christian mysticism so abstruse and absurd that I will not try to explain it here beyond saying it was big on ideal forms and not so keen on matter.

It remained fashionable in parts of the Orthodox church, and has recently found favour with Russian ultra-nationalists.

But Darya Neoplatonova (Dugina’s pseudonym as a writer) was not murdered for saying “The main line of thought in late Neo-Platonist political philosophy is the development of the idea of a homology of the soul and the state and the existence of a similar threefold order in both.”

Her father was not targeted for his dangerous ideas either.

I never met Darya Dugina, but I did once interview her father about a dozen years ago, when he was still believed to be close to Vladimir Putin. (He certainly isn’t now, and has even lost his job at Moscow State University.)

My Russian was pretty rusty by then, so I took an interpreter along to the interview in his modest flat.

Alexander Dugin proceeded to expand in great detail on the wrongs inflicted on the Russian soul by wicked foreigners and the need for an “existential politics” to counter them, but there were few concrete policy ideas amongst the shower of abstract nouns.

Neo-Eurasianist ideologue Alexander Dugin sits in his TV studio in central Moscow, Russia. Dugin is often called “Putin’s Brain” due to his influence on the Russian leader, but he had fallen out of favour with the Kremlin in recent months. The bomb that killed his daughter is believed to have been meant for him.
FRANCESCA EBEL/AP
Neo-Eurasianist ideologue Alexander Dugin sits in his TV studio in central Moscow, Russia. Dugin is often called “Putin’s Brain” due to his influence on the Russian leader, but he had fallen out of favour with the Kremlin in recent months. The bomb that killed his daughter is believed to have been meant for him.

I also noticed that the translator was leaving out quite a lot of what he was saying.

I thought he was just going too fast for her, but when I asked her afterwards she said she had been too embarrassed by some of what he said. He wasn’t ranting, exactly, but the nationalist paranoia was unrelenting and overwhelming.

The point is that neither father nor daughter was an important target in terms of their influence on Russian policy, which pretty much rules out any Russian motive for killing either of them.

Darya Dugina was an enthusiastic supporter of the attack on Ukraine – she even visited the conquered city of Mariupol – but she was just another cheerleader.

So who planted the bomb?

Almost certainly somebody Ukrainian who was part of that country’s extensive intelligence network in Russia, or some Russian underworld figure paid by the Ukrainians. (There are about two million Ukrainians living in Russia.)

Was either Alexander or Darya a legitimate target?

Neither of them was an entirely innocent bystander in the conflict, but they were certainly unarmed civilians so most people would say that the bombing was a crime.

Was it terrorism?

Yes, in the very specific sense that its motive must have been to show that Ukraine could strike anywhere in Russia with impunity, and thereby terrorise Russians into abandoning their invasion of Ukraine. (It probably won’t have that effect, but that’s the only plausible motive.)

Will it harm the Ukrainian cause in terms of public opinion elsewhere?

A little bit, maybe, because blowing young women up is never a good look, but probably only for a short time. It’s a war, and on the same day Russian shelling wounded twelve civilians, including four children, in the Ukrainian town of Vosnesensk.

What’s the difference, apart from the fact that the Russian gunners didn’t know the names of their victims, and the Ukrainian who planted the bomb that killed Darya Dugina didn’t wear a uniform?

Gwynne Dyer: Who Blew Up the Russian Airplanes in Crimea?

Russia and Ukraine step up propaganda war

This obviously does not happen because of a thrown butt,” said British Defense Minister Ben Wallace.

But the Russian Ministry of Defence insisted that the explosions that destroyed at least eight warplanes at Saki Air Base in Russian-occupied Crimea on August 9 were due to “a violation of fire safety requirements.”

The implication is that some careless Russian smoker tossed away his cigarette butt and caused a fire that set off explosions.

That’s hardly a testimonial to the discipline of the Russian air force’s ground crews, but it’s better than admitting that Ukrainian missiles have reached 225km behind Russian lines to destroy a whole squadron of Russian fighters.

Moscow also claimed that no Russian aircraft had been damaged by the explosions in Crimea, although the wreckage of the destroyed fighters was clearly visible on the ‘overheads’ from satellite observations. Continue reading Gwynne Dyer: Who Blew Up the Russian Airplanes in Crimea?

War Notes: Russian Recruitment Woes

AP News: Russia struggles to replenish its troops in Ukraine

The prisoners at the penal colony in St. Petersburg were expecting a visit by officials, thinking it would be some sort of inspection. Instead, men in uniform arrived and offered them amnesty — if they agreed to fight alongside the Russian army in Ukraine.

Over the following days, about a dozen or so left the prison, according to a woman whose boyfriend is serving a sentence there. Speaking on condition of anonymity because she feared reprisals, she said her boyfriend wasnt among the volunteers, although with years left on his sentence, he “couldnt not think about it.”

As Russia continues to suffer losses in its invasion of Ukraine, now nearing its sixth month, the Kremlin has refused to announce a fullblown mobilization — a move that could be very unpopular for President Vladimir Putin. That has led instead to a covert recruitment effort that includes using prisoners to make up the manpower shortage.

This also is happening amid reports that hundreds of Russian soldiers are refusing to fight and trying to quit the military.

“We’re seeing a huge outflow of people who want to leave the war zone — those who have been serving for a long time and those who have signed a contract just recently,” said Alexei Tabalov, a lawyer who runs the Conscript’s School legal aid group.

The group has seen an influx of requests from men who want to terminate their contracts, “and I personally get the impression that everyone who can is ready to run away,” Tabalov said in an interview with The Associated Press. And the Defense Ministry is digging deep to find those it can persuade to serve.”

Although the Defense Ministry denies that any mobilization activities” are taking place, authorities seem to be pulling out all the stops to bolster enlistment. Billboards and public transit ads in various regions proclaim, “This is The Job,” urging men to join the professional army. Authorities have set up mobile recruiting centers in some cities, including one at the site of a half marathon in Siberia in May.

Regional administrations are forming “volunteer battalions” that are promoted on state television. The business daily Kommersant counted at least 40 such entities in 20 regions, with officials promising volunteers monthly salaries ranging from the equivalent of $2,150 to nearly $5,500, plus bonuses.

The AP saw thousands of openings on job search websites for various military specialists.

The British military said this week that Russia had formed a major new ground force called the 3rd Army Corps from “volunteer battalions,” seeking men up to age 50 and requiring only a middleschool education, while offering “lucrative cash bonuses” once they are deployed to Ukraine.

But complaints also are surfacing in the media that some aren’t getting their promised payments, although those reports cant be independently verified.

In early August, Tabalov said he began receiving multiple requests for legal help from reservists who have been ordered to take part in a twomonth training in areas near the border with Ukraine.

The recruitment of prisoners has been going on in recent weeks in as many as seven regions, said Vladimir Osechkin, founder of the Gulagu.net prisoner rights group, citing inmates and their relatives that his group had contacted.

Its not the first time that authorities have used such a tactic, with the Soviet Union employing “prisoner battalions” during World War II.

Nor is Russia alone. Early in the war, Ukrainian President Volodymyr Zelenskyy promised amnesty to military veterans behind bars if they volunteered to fight, although it remains unclear if anything came out of it.

In the current circumstances, Osechkin said, it isnt the Defense Ministry thats recruiting prisoners — instead, it was Russia’s shadowy private military force, the Wagner Group.

Yevgeny Prigozhin, an entrepreneur known as Putin’s chef” because of his catering contracts with the Kremlin and reportedly Wagners manager and financier, brushed aside reports that he personally visited prisons to recruit convicts, in a written statement released by his representatives this month. Prigozhin, in fact, denies he has any ties to Wagner, which reportedly has sent military contractors to places like Syria and subSaharan Africa.

According to Osechkin, prisoners with military or law enforcement experience were initially offered to go to Ukraine, but that later was extended to inmates with varying backgrounds. He estimated that as of late July, about 1,500 might have applied, lured by promises of big salaries and eventual pardons.

Now, he added, many of those volunteers — or their families — are contacting him and seeking to get out of their commitments, telling him: I really don’t want to go.”

According to the woman whose boyfriend is serving his sentence at the penal colony in St. Petersburg, the offers to leave the prison are a glimmer of hope” for freedom. But she said he told her that of 11 volunteers, eight died in Ukraine. She added that one of the volunteers expressed regret for his decision and doesn’t believe he will return alive.

Her account couldnt be independently verified, but was in line with multiple reports by independent Russian media and human rights groups.

According to those groups and military lawyers, some soldiers and law enforcement officers have refused deployment to Ukraine or are trying to return home after a few weeks or months of fighting.

Media reports about some troops refusing to fight in Ukraine started surfacing in the spring, but rights groups and lawyers only began talking about the number of refusals reaching the hundreds last month.

In midJuly, the Free Buryatia Foundation reported that about 150 men were able to terminate their contracts with the Defense Ministry and returned from Ukraine to Buryatia, a region in eastern Siberia that borders Mongolia. [NOTE: Buryatia is more than 3500 miles away from Ukraine.]

Buryatia, eastern Siberia, in dark red. At far left, the dark blue dot is in Ukraine, approximately 3800 miles west.

Some of the servicemen are facing repercussions. Tabalov, the legal aid lawyer, said about 80 other soldiers who sought to nullify their contracts were detained in the Russiancontrolled town of Bryanka in the Luhansk region of eastern Ukraine, according to their relatives. Last week, he said that the Bryanka detention center was shut down because of the media attention.

But the parent of one officer who was detained after trying to get out of his contract told the AP this week that some are still being detained elsewhere in the region. The parent asked not to be identified out of safety concerns.

Tabalov said a serviceman can terminate his contract for a compelling reason — normally not difficult — although the decision is usually up to his commander. But he added: “In the conditions of hostilities, not a single commander would acknowledge anything like that, because where would they find people to fight?”

Alexandra Garmazhapova, head of the Free Buryatia Foundation, told the AP that soldiers and their relatives complain of commanders tearing up termination notices and threatening “refuseniks” with prosecution. As of late July, the foundation said it had received hundreds of requests from soldiers seeking to end their contracts.

“I’m getting messages every day,” Garmazhapova said.

Tabalov said some soldiers complain that they were deceived about where they were going and didn’t expect to end up in a war zone, while others are exhausted from fighting and unable to continue.

Rarely, if at all, did they appear motivated by antiwar convictions, the lawyer said.

Russia will continue to face problems with soldiers refusing to fight, military analyst Michael Kofman said, but one shouldnt underestimate Russias ability to “muddle through … with halfmeasures.”

“They’re going to have a lot of people who are quitting or have people who basically don’t want to deploy, said Kofman, director of the Virginiabased Russia Studies Program at the Center for Naval Analyses, on a recent podcast. And they’ve employed a lot of measures to try to keep people in line. But ultimately, there’s not that much that they can do.”

Russia, Sanctions, The War, and Sifting for Truth

Given that I’m but a humble news aggregator-blogger, sifting for truth in the reams and sheafs of claims and counterclaims about the Ukraine War is a never-ending chore:

> Ukraine is winning! Nope-Russia is winning.

> Putin will use nukes any minute! Relax; he wouldn’t dare.

> The Ukraine war is really helping China. Fuggedit — the war is hurting  China.

Etc.

My apologies, but I have no answers for these. The questions don’t away, and  maybe some clarity will come in time. As telephone operators said when I was a kid looking for a phone number (YES, there were such persons, and they really did that), “Still checking. . . .”

Today’s query is maybe second-tier in the continuing parade of headlines, but it’s important enough: Are the sanctions on Russia really crippling its economy and strangling the invasion war effort?

It’s easy to find overblown rhetoric about them:

Forbes: “the worst-ever sanctions against the country. . . ”

Bloomberg: “Russia Sanctions Deal Economy Worst Hit Since Covid Pandemic”

CSMonitor: Russia may be the most sanctioned country ever.

And so on.

And so it also is with gauging the effect of sanctions, which were sold to the publics in the U.S. and Europe as a meaningful, potent alternative to an actual land war with Russia there. Is it so? Has it been?

The bad news first, from across the pond:

The Guardian — The rouble is soaring and Putin is stronger than ever – our sanctions have backfired

Energy prices are rocketing, inflation is soaring and millions are being starved of grain. . . .

Western sanctions against Russia are the most ill-conceived and counterproductive policy in recent international history.

Military aid to Ukraine is justified, but the economic war is ineffective against the regime in Moscow, and devastating for its unintended targets. World energy prices are rocketing, inflation is soaring, supply chains are chaotic and millions are being starved of gas, grain and fertiliser. Yet Vladimir Putin’s barbarity only escalates – as does his hold over his own people.

To criticise western sanctions is close to anathema. Defence analysts are dumb on the subject. Strategy thinktanks are silent. Britain’s putative leaders, Liz Truss and Rishi Sunak, compete in belligerent rhetoric, promising ever tougher sanctions without a word of purpose. Yet, hint at scepticism on the subject and you will be excoriated as “pro-Putin” and anti-Ukraine. Sanctions are the war cry of the west’s crusade.

The reality of sanctions on Russia is that they invite retaliation. Putin is free to freeze Europe this winter. He has slashed supply from major pipelines such as Nord Stream 1 by up to 80%. World oil prices have surged and eastern Europe’s flow of wheat and other foodstuffs to Africa and Asia has been all but suspended.

Britain’s domestic gas bills face tripling inside a year. The chief beneficiary is none other than Russia, whose energy exports to Asia have soared, driving its balance of payments into unprecedented surplus.

The rouble is one of the world’s strongest currencies this year, having strengthened since January by nearly 50%. Moscow’s overseas assets have been frozen and its oligarchs have relocated their yachts, but there is no sign that Putin cares. He has no electorate to worry him.

The interdependence of the world’s economies, so long seen as an instrument of peace, has been made a weapon of war. Politicians around the Nato table have been wisely cautious about escalating military aid to Ukraine. They understand military deterrence. Yet they appear total ingenues on economics. Here they all parrot Dr Strangelove. They want to bomb Russia’s economy “back to the stone age”.

I would be intrigued to know if any paper was ever submitted to Boris Johnson’s cabinet forecasting the likely outcome for Britain of Russian sanctions. The assumption seems to be that if trade embargos hurt they are working. As they do not directly kill people, they are somehow an acceptable form of aggression.

They are based on a neo-imperial assumption that western countries are entitled to order the world as they wish. They are enforced, if not through gunboats, then through capitalist muscle in a globalised economy. Since they are mostly imposed on small, weak states soon out of the headlines, their purpose has largely been of “feelgood” symbolism.

A rare student of this subject is the American economic historian Nicholas Mulder, who points out that more than 30 sanctions “wars” in the past 50 years have had minimal if not counterproductive impact. They are meant to “intimidate peoples into restraining their princes”. If anything they have had the opposite effect.

From Cuba to Korea, Myanmar to Iran, Venezuela to Russia, autocratic regimes have been entrenched, elites strengthened and freedoms crushed. Sanctions seem to instil stability and self-reliance on even their weakest victim. Almost all the world’s oldest dictatorships have benefited from western sanctions.

Moscow is neither small nor weak. Another observer, the Royal United Services Institute’s Russia expert Richard Connolly, has charted Putin’s response to the sanctions imposed on him since his 2014 seizure of Crimea and Donbas. Their objective was to change Russia’s course in those regions and deter further aggression. Their failure could hardly be more glaring.

Apologists excuse this as due to the embargos being too weak. The present ones, perhaps the toughest ever imposed on a major world power, may not be working yet, but will apparently work in time. They are said to be starving Russia of microchips and drone spares. They will soon have Putin begging for peace.

If Putin begs, it will be on the battlefield. At home, Connolly illustrates how Russia is “slowly adjusting to its new circumstances”. Sanctions have promoted trade with China, Iran and India. They have benefited “insiders connected to Putin and the ruling entourage, making huge profits from import substitution”.

McDonald’s locations across the country have been replaced by a Russian-owned chain called Vkusno & tochka (“Tasty and that’s it”). Of course the economy is weaker, but Putin is, if anything, stronger while sanctions are cohering a new economic realm across Asia, embracing an ever enhanced role for China. Was this forecast?

Meanwhile, the west and its peoples have been plunged into recession. Leadership has been shaken and insecurity spread in Britain, France, Italy and the US. Gas-starved Germany and Hungary are close to dancing to Putin’s tune. Living costs are escalating everywhere.

Yet still no one dares question sanctions. It is sacrilege to admit their failure or conceive retreat. The west has been enticed into the timeless irony of aggression. Eventually its most conspicuous victim is the aggressor. Perhaps, after all, we should stick to war.

  • Simon Jenkins is a Guardian columnist

Hmmm. Haven’t worked; never worked anyway?
We’ll leave the past sanctions in the past. But some heavyweights in Foreign Policy magazine say, “rubbish and fiddlesticks” to Jenkins and his ilk. Rather, i these excerpts they insist:

Actually, the Russian Economy Is Imploding: Nine myths about the effects of sanctions and business retreats, debunked:

By , the Lester Crown professor in management practice and a senior associate dean at the Yale School of Management, and , the director of research at the Yale Chief Executive Leadership Institute.

JULY 22, 2022
Five months into the Russian invasion of Ukraine, there remains a startling lack of understanding by many Western policymakers and commentators of the economic dimensions of President Vladimir Putin’s invasion and what it has meant for Russia’s economic positioning both domestically and globally.

Far from being ineffective or disappointing, as many have argued, international sanctions and voluntary business retreats have exerted a devastating effect over Russia’s economy. The deteriorating economy has served as a powerful if underappreciated complement to the deteriorating political landscape facing Putin.

That these misunderstandings persist is not entirely surprising given the lack of available economic data. In fact, many of the excessively sanguine Russian economic analyses, forecasts, and projections that have proliferated in recent months share a crucial methodological flaw: These analyses draw most, if not all, of their underlying evidence from periodic economic releases by the Russian government itself. Numbers released by the Kremlin have long been held to be largely if not always credible, but there are certain problems.

First, the Kremlin’s economic releases are becoming increasingly cherry-picked—partial and incomplete, selectively tossing out unfavorable metrics. The Russian government has progressively withheld an increasing number of key statistics that, prior to the war, were updated on a monthly basis, including all foreign trade data. . . particularly with Europe; oil and gas monthly output data; commodity export quantities; capital inflows and outflows . . .[and much more].

Since the Kremlin stopped releasing updated numbers, constraining the availability of economic data . . . , many excessively rosy economic forecasts have irrationally extrapolated economic releases from the early days of the invasion, when sanctions. . .  had not taken full effect. Even those favorable statistics that have been released are dubious, given the political pressure the Kremlin has exerted to corrupt statistical integrity.

Mindful of the dangers of accepting Kremlin statistics at face value, our team of experts, using private Russian-language and direct data sources. . . have released one of the first comprehensive economic analyses measuring Russian current economic activity five months into the invasion. . . .

From our analysis, it becomes clear: Business retreats and sanctions are crushing the Russian economy in the short term and the long term. Based on our research, we are able to challenge nine widely held but misleading myths about Russia’s supposed economic resilience.

Myth 1: Russia can redirect its gas exports and sell to Asia in lieu of Europe.

This is one of Putin’s favorite and most misleading talking points, doubling down on a much-hyped pivot to the east. But natural gas is not a fungible export for Russia. Less than 10 percent of Russia’s gas capacity is liquefied natural gas, so Russian gas exports remain reliant on a system of fixed pipelines carrying piped gas.

The vast majority of Russia’s pipelines flow toward Europe; those pipelines, which originate in western Russia, are not connectable to a separate nascent network of pipelines that link Eastern Siberia to Asia. . . . Indeed, the 16.5 billion cubic meters of gas exported by Russia to China last year represented less than 10 percent of the 170 billion cubic meters of natural gas sent by Russia to Europe.

Long-planned Asian pipeline projects currently under construction are still years away from becoming operational, much less hastily initiated new projects, and financing of these costly gas pipeline projects also now puts Russia at a significant disadvantage.

Overall, Russia needs world markets far more than the world needs Russian supplies. . . . Indeed, the Russian state energy company Gazprom’s published data shows production is already down more than 35 percent year-on-year this month. For all Putin’s energy blackmail of Europe, he is doing so at significant financial cost to his own coffers.

Myth 2: Since oil is more fungible than gas, Putin can just sell more to Asia.

Russian oil exports now also reflect Putin’s diminished economic and geopolitical clout. Recognizing that Russia has nowhere else to turn, and mindful that they have more purchasing options than Russia has buyers, China and India are driving an unprecedented approximately $35 discount on Russian Urals oil purchases, even though the historical spread has never ranged beyond $5. . . . Furthermore, it takes Russian oil tankers an average of 35 days to reach East Asia, versus two to seven days to reach Europe, which is why historically only 39 percent of Russian oil has gone to Asia . . . .

This margin pressure is felt keenly by Russia, as it remains a relatively high-cost producer . . . with some of the highest break-evens of any producing country. . . . There is no doubt that, as many energy experts predicted, Russia is losing its status as an energy superpower, with an irrevocable deterioration in its strategic economic positioning as an erstwhile reliable supplier of commodities.

Myth 3: Russia is making up for lost Western businesses and imports by replacing them with imports from Asia.

Imports play an important role within Russia’s domestic economy, consisting of about 20 percent of Russian GDP, and, despite Putin’s bellicose delusions of total self-sufficiency, the country needs crucial inputs, parts, and technology from hesitant trade partners. Despite some lingering supply chain leakiness, Russian imports have collapsed by over 50 percent in recent months.

China has not moved into the Russian market to the extent that many feared; in fact. . . Chinese exports to Russia plummeted by more than 50 percent from the start of the year to April, falling from over $8.1 billion monthly to $3.8 billion. Considering China exports seven times as much to the United States than Russia, it appears that even Chinese companies are more concerned about running afoul of U.S. sanctions . . . reflecting Russia’s weak economic hand with its global trade partners.

Myth 4: Russian domestic consumption and consumer health remain strong.

Some of the sectors most dependent on international supply chains have been hit with debilitating inflation around 40-60 percent—on extremely low sales volumes. For example, foreign car sales in Russia fell by an average of 95 percent across major car companies, with sales ground to a complete halt.

Amid supply shortages, soaring prices, and fading consumer sentiment, it is hardly surprising that Russian Purchasing Managers’ Index readings—which capture how purchasing managers are viewing the economy—have plunged, particularly for new orders, alongside plunges in consumer spending and retail sales data by around 20 percent year-over-year. Other readings of high-frequency data such as e-commerce sales within Yandex and same-store traffic at retail sites across Moscow reinforce steep declines in consumer spending and sales, no matter what the Kremlin says.

Myth 5: Global businesses have not really pulled out of Russia, and business, capital, and talent flight from Russia are overstated.

Global businesses represent around 12 percent of Russia’s workforce (5 million workers), and. . . over 1,000 companies representing around 40 percent of Russia’s GDP have curtailed operations in the country, reversing three decades’ worth of foreign investment and buttressing unprecedented simultaneous capital and talent flight in a mass exodus of 500,000 individuals, many of whom are exactly the highly educated, technically skilled workers Russia cannot afford to lose. . . .

Myth 6: Putin is running a budget surplus thanks to high energy prices.

Russia is actually on pace to run a budget deficit this year equivalent to 2 percent of GDP, according to its own finance minister. . .thanks to Putin’s unsustainable spending spree; on top of dramatic increases in military spending, Putin is resorting to patently unsustainable, dramatic fiscal and monetary intervention, including a laundry list of Kremlin pet projects, all of which have contributed to the money supply nearly doubling in Russia since the invasion began. Putin’s reckless spending is clearly putting Kremlin finances under strain.

Myth 7: Putin has hundreds of billions of dollars in rainy day funds, so the Kremlin’s finances are unlikely to be strained anytime soon.

The most obvious challenge facing Putin’s rainy day funds is the fact that of his around $600 billion in foreign exchange reserves. . .  $300 billion is frozen and out of reach with allied countries across the United States, Europe, and Japan restricting access. There have been some calls to seize this $300 billion to finance the reconstruction of Ukraine.

Putin’s remaining foreign exchange reserves are decreasing at an alarming rate, by around $75 billion since the start of the war. . . .

Furthermore, although the finance ministry had planned to reinstate a long-standing Russian budgetary rule that surplus revenue from oil and gas sales should be channeled into the sovereign wealth fund, Putin axed this proposal . . . as Finance Minister Anton Siluanov floated the idea of withdrawing funds from the National Wealth Fund equivalent to a third of the entire fund to pay for this deficit this year. If Russia is running a budget deficit requiring the drawdown of a third of its sovereign wealth fund when oil and gas revenues are still relatively strong, all signs indicate a Kremlin that may be running out of money much faster than conventionally appreciated.

Myth 8: The ruble is the world’s strongest-performing currency this year.

One of Putin’s favorite propaganda talking points, the appreciation of the ruble is an artificial reflection of unprecedented, draconian capital control—which rank among the most restrictive of any in the world. The restrictions make it effectively impossible for any Russian to legally purchase dollars or even access a majority of their dollar deposits, while artificially inflating demand through forced purchases by major exporters—all of which remain largely in place today.

The official exchange rate is misleading, anyhow, as the ruble is, unsurprisingly, trading at dramatically diminished volumes compared to before the invasion on low liquidity. By many reports, much of this erstwhile trading has migrated to unofficial ruble black markets. Even the Bank of Russia has admitted that the exchange rate is a reflection more of government policies and a blunt expression of the country’s trade balance rather than freely tradeable liquid foreign exchange markets.

Myth 9: The implementation of sanctions and business retreats are now largely done, and no more economic pressure is needed.

Russia’s economy has been severely damaged, but the business retreats and sanctions applied against Russia are incomplete. Even with the deterioration in Russia’s exports positioning, it continues to draw too much oil and gas revenue from the sanctions carveout, which sustains Putin’s extravagant domestic spending and obfuscates structural economic weaknesses.

The Kyiv School of Economics and Yermak-McFaul International Working Group have led the way in proposing additional sanctions measures across individual sanctions, energy sanctions . . . . Looking ahead, there is no path out of economic oblivion for Russia as long as the allied countries remain unified in maintaining and increasing sanctions pressure against Russia.

Defeatist headlines arguing that Russia’s economy has bounced back are simply not factual—the facts are that, by any metric and on any level, the Russian economy is reeling, and now is not the time to step on the brakes.

So — which is right? Sanctions are a boomerang failure, hurting the West and U.S. as much as or more than Putin’s Russia? Or behind a propaganda smokescreen, they’re taking him and “his” economy down rapidly?

I hope it’s the latter, but the work of following the war’s impact within Russia and in the rest of the world is up to those of us who are trying to make sense of this turbulent, dangerous scene.

And what should we look for from  our own policymakers?

Maybe the wisest summary was this offhand remark by a supposedly canny business journal:

Forbes: What comes next is anybody’s guess.

 

 

War Notes: Russian Jewish Community facing “dark clouds” over Ukraine war

Moscow’s ex-chief rabbi warns of ‘dark clouds’ for Russian Jews

Issued on:


Jerusalem (AFP) –
Moscow’s former chief rabbi now living in exile in Israel warned Thursday of “dark clouds on the horizon” for Russian Jews, as ties between the two countries deteriorate over the Ukraine war.

Pinchas Goldschmidt, who left Russia in March over opposition to the conflict, told reporters that “the Jewish community was pressured… to openly support the war. Our community did not support the war.”

“The situation is worrying” and there are “many dark clouds on the horizon” for Russian Jews, he said, adding that their “security and future… is dependent on Israel-Russia relations”.

Israel has been trying to walk a cautious line in order to maintain ties with Moscow — seen as crucial to preserving the Jewish state’s ability to carry out air strikes in neighbouring Syria, where Russian forces are present.

“Right now, it would be impossible for me to return,” the Swiss-born rabbi told an online briefing, adding: “If I would have (remained) the chief rabbi of Moscow, I wouldn’t be able to speak out openly without endangering my community.”

“I decided to stay in exile until the political situation will change.”

Following the February 24 invasion, then Israeli premier Naftali Bennett withheld criticism of Russian President Vladimir Putin’s actions and stressed the need for close ties with Moscow.

But Bennett’s successor Yair Lapid has condemned the Russian invasion.

Analysts say Lapid’s rhetoric has partly driven Moscow’s move to close the Russian branch of the Jewish Agency, which processes the immigration of Jews from the diaspora to Israel.

Lapid has warned Moscow that the closure would be a “serious event” threatening bilateral ties.

The Kremlin has said the move should not be “politicised”, calling it a purely legal matter.

According to the Jewish Agency, 16,000 Russian Jews have immigrated to Israel since the invasion began.

‘Fear of rising anti-Semitism’

Goldschmidt estimated that more than 30,000 other dual passport holders had left Russia for Israel since February 24.

Jews were leaving Russia in high numbers partly over fears of a new “Iron Curtain — that one day (it) will be impossible to leave”, the rabbi said, articulating what he described as concern among Jews that Putin’s government could ban outbound travel.

He said Moscow’s moves against the Jewish Agency, among other incidents, had fostered “fear of rising anti-Semitism”.

Some experts have attributed Russia’s threats against the agency as part of an attempt to slow mass emigration.

“If Russia wants to stop the brain drain of its best scientists and creative class, the best way to do this is not by closing the Jewish Agency, but by stopping this war,” Goldschmidt said.

At a preliminary hearing on Thursday, a Moscow court set an August 19 trial date for the Russian justice ministry’s case against the agency, which has been accused of unspecified legal violations.

The Jewish Agency began working in Russia in 1989.

More than one million of Israel’s 9.4 million residents today have roots in the former Soviet Union.

Benched: Ukraine’s Oligarchs Are Waiting for a Break

The Guardian: How the war has robbed Ukraine’s oligarchs of political influence
Analysis: Five months since Russia’s invasion started, Ukraine’s wealthiest have gone quiet – but for how long?

Isobel Koshiw in Kyiv — Sat 23 Jul 2022

Ukraine’s richest people, known in the country as oligarchs, are used to dominating political and economic life. But in the five months since Russia’s full-scale invasion started, they have gone quiet.

Political analysts and experts attribute this loss of influence to the fact that oligarchs and their businesses – like all Ukrainian citizens – need protection in the form of the military and diplomacy, state functions they have no control over.

Mykyta Poturyaev, an MP and former election campaign adviser to several Ukrainian oligarchs and politicians including the president, Volodymyr Zelenskiy, said oligarchs are in the unusual position of not being able to influence the country at the moment.

“Unlike in 2014, when [Ukrainian oligarch Ihor] Kolomoisky, for instance, was involved in defending Dnipropetrovsk region, there is someone to do that now – the state, the regional administration,” Poturyaev said.

The war has seemingly enabled Zelenskiy to become the first Ukrainian president to sideline the oligarchs, who have traditionally competed to control the country’s political leadership.

But analysts say that only once the war is over will it be clear if Ukraine’s oligarchic era has ended or if the oligarchs will try to regain their influence. Continue reading Benched: Ukraine’s Oligarchs Are Waiting for a Break

Three-Part Thinkpiece: Putin, His War, And Ours?

Here are three analyses of how the Ukraine war is unfolding, especially from Vladimir Putin’s perspective.

The first is by Tatiana Stanovaya, a U. S.-based scholar who has observed Putin and tracked his thinking and actions for twenty years.

She argues, in sum, that Putin has a plan for conquering and absorbing/erasing Ukraine, and despite what seem to westerners like major setbacks he thinks the plan is working out fine, even if it may take a few more years to meet its goals. Along the way, he expects it to roll back NATO and promote the rise of a broader authoritarian world order, in which a renewed Russian empire will be a central player.

The second is by Simon Tisdall, a columnist for The Guardian in London. Tisdall has called repeatedly for escalation of NATO direct actions in the war, insisting that NATO governments have not faced up to the magnitude of actual peril facing them in Putin’s imperial drive.

And finally, we hear from Putin directly, in excerpts from his address to the Russian public on the eve of the invasion. (The complete official English text of this February 22 address, from the Kremlin website, is here.)

All these writers foresee a war that will be extended, and pose much risk of escalation and expansion. One, at least, openly calls for the latter. Two seem to agree that the impact of the war on NATO and many other countries, even if it stays non-nuclear, will be huge, and perhaps catastrophic. How should thoughtful and concerned readers respond?

New York Times: Putin Thinks He’s Winning

By Tatiana Stanovaya  —  July 18, 2022

Ms. Stanovaya is a nonresident scholar at the Carnegie Endowment for International Peace. She writes about Russian domestic politics and foreign policy.

Everything is going according to plan.

That’s the line from President Vladimir Putin. The war in Ukraine, in its fifth month and with no end in sight, may be grueling. But senior Kremlin officials keep repeating that Russia, gaining the upper hand in Ukraine’s east, will achieve all its goals.

That might seem hard to believe. After all, Russia has been forced to retreat from Kyiv, experienced several military reversals, faced sanctions on an unprecedented scale and been subjected to a chorus of international condemnation. To call such a litany of difficulties and outright failures a success may be to court the charge of propaganda, hypocrisy or even self-delusion.

But it’s what the Kremlin seems to believe. Over two decades I have closely followed Mr. Putin’s words, behavior and decisions, forming a comprehensive picture of the president’s calculations. Based on his public rhetoric and policy moves and informal discussions with insiders, I have been able to work out — as far as is possible — the contours of the Kremlin’s current thinking. What is very clear is that in late May, the Kremlin came to the firm conclusion that it is winning this conflict in the long run. And Mr. Putin, in contrast to the early chaotic months, now has a clear plan.

Consisting of three main dimensions, the plan is a kind of strategic Russian doll. Each aspect fits within another, amounting to a grand scheme that goes far beyond Ukraine yet centers on it. It may sound extremely fanciful, and it certainly reveals how divorced from reality — to put it mildly — Mr. Putin is. But it’s important for the West, whose response has wavered between confrontation and acquiescence, to understand the full scope of Mr. Putin’s hopes as it continues to assess its role in defending Ukraine against Russian aggression. Continue reading Three-Part Thinkpiece: Putin, His War, And Ours?

The Colors of Courage: Underground Russian War Protests:

Art of dissent: How Russians protest the war on Ukraine

They risk jail, stigma and fines. But Russian protesters are finding creative ways to get their message out.

Washington Post: By Robyn Dixon, Mary Ilyushina and Natalia Abbakumova — July 7, 2022

It was 4 a.m. on Moscow’s second ring road. Early light bathed the empty street.

Lyudmila Annenkova and Natalia Perova remember stepping out of a taxi, draped in blankets to hide white dresses splashed with red paint, like blood. They were terrified of arrest, they said, so they worked quickly.

They flung off the blankets, posed, held hands and gazed into a smartphone lens. Snap, snap, snap. Three photos and they fled. The images went viral on independent and activist Telegram channels and social media pages.

Russia’s antiwar movement has found creative ways to express dissent despite President Vladimir Putin’s hard line crackdown.

Protesters are arrested for crimes as trivial as holding up a blank sheet of paper, merely implying opposition to the war.

“You have about 30 seconds to show what you want and then you will be arrested,” said Annenkova, a photographer.

“We were very afraid. We had so much adrenaline,” Perova said.
The red splashes on white dresses symbolized the killings of innocent people, especially women and children. They held hands to send a message to Ukrainians “that we want to hold the hands of everyone who is there and who is in trouble now,” Annenkova said. Continue reading The Colors of Courage: Underground Russian War Protests:

Quotes for Tuesday: supreme hypocrisy, hanging on too long, Gas & (as usual) Guns . . .

New York Times: In its joint dissent [from the supreme court decision to overthrow Roe] in Dobbs, the court’s three-member liberal wing wrote, “Either the mass of the majority’s opinion is hypocrisy, or additional constitutional rights are under threat. It is one or the other.”
Actually, it’s worse than that. It’s both.

— Harry Litman, Harry Litman, UCLA law professor, former U.S. attorney and deputy assistant attorney general

Michelle Goldberg: As a recent New York Times/Siena College poll found, 64 percent of Democrats want a different presidential nominee in 2024. Those Democrats cite Biden’s age more than any other factor, though job performance is close behind. Their concern isn’t surprising. . . .
There’s a problem here that goes beyond a shortage of presidential speeches and media appearances, or even Biden himself. We are ruled by a gerontocracy. Biden is 79. Speaker of the House Nancy Pelosi is 82. The House majority leader, Steny Hoyer, is 83. The Senate majority leader, Chuck Schumer, is 71. Often, it’s not clear if they grasp how broken this country is.

They built their careers in institutions that worked, more or less, and they seem to expect them to start working again. They give every impression of seeing this moment, when the gears of government have seized and one party openly schemes against democracy, as an interregnum rather than a tipping point. . . .

If there’s one consolation in Biden’s age, it’s that he can step aside without conceding failure. There’s no shame in not running for president in your 80s. He emerged from semiretirement to save the country from a second Trump term, and for that we all owe him a great debt. But now we need someone who can stand up to the still-roiling forces of Trumpism.

There are plenty of possibilities: . . . Biden said, during the 2020 campaign, that he wanted to be a “bridge” to a new generation of Democrats. Soon it will be time to cross it.
—- Michelle Goldberg, New York Times

Bloomberg: A year into Russia manipulating European gas supplies, the market is finally convinced that Moscow will continue to do so, and perhaps with greater intensity.

The first test comes in the next two weeks. The Nord Stream 1 pipeline, the most important gas link between Russia and the European Union, undergoes annual maintenance from July 11 to July 21. Berlin fears that Moscow will find an excuse to keep it closed for good, cutting gas supplies to Germany completely. After all that Moscow has done, the German government is right to be concerned.

Yet, Russia may want to keep some gas flowing to preserve its long-term leverage. From a game-theory point of view, that makes sense. Once Russia stops shipments completely, it can no longer apply pressure. Tactically, Moscow is likely to keep some gas moving, retaining the option of cutting or slowing flows whenever it chooses.

The Guardian: The US president was delivering a speech on the South Lawn on Monday when he was interrupted by Manuel Oliver, whose 17-year-old son, Joaquin, was among 14 students and three staff members killed at a high school in Parkland, Florida, in 2018.

“We have to do more than that!” Oliver shouted, among other remarks, while standing up and wearing dark sunglasses, grey beard and purple jacket.

At first Biden told him, “Sit down, you’ll hear what I have to say,” but then the president relented and said, “Let him talk, let him talk, OK?”

By then, however, security had already stepped in to take Oliver away.

Earlier on Monday, Oliver had made clear that he objected to the event being billed as a celebration in the aftermath of a mass shooting that killed 19 children and two teachers at an elementary school in Uvalde, Texas, on 24 May.

He wrote on Twitter: “The word CELEBRATION has no space in a society that saw 19 kids massacred just a month ago.”

The confrontation underlined simmering frustration with Biden, accused of failing to meet the moment not only on guns but abortion, climate and other issues. . . .

The White House gave Biden an opportunity to respond to the critics by showcasing the first major federal gun safety bill in three decades, which he signed into law last month. He was joined in bright summer sunshine by survivors and family members of those slain during mass shootings at Columbine, Virginia Tech, Aurora, Tucson, Sandy Hook, Parkland, Santa Fe, Uvalde, Buffalo, Highland Park and others. . . .

man in sunglasses points finger
Manuel Oliver interrupts Biden on the White House’s South Lawn. Photograph: Shawn Thew/UPI/Rex/Shutterstock

But the scale of the challenge was laid bare when, just 16 days after the law took effect, a gunman in Highland Park, Illinois, killed seven people and wounded more than 30 others at an Independence Day parade, fueling the discontent of Oliver and other activists who want to see Biden move faster and further.

Biden hailed the law as “real progress” and said “lives will be saved today and tomorrow because of this” but acknowledged that “more has to be done”. He said: “It matters, it matters, but it’s not enough and we all know that.”. . . .

“We are living in a country awash in weapons of war,” Biden said with palpable anger. “Guns are the number one killer of children in the United States, more than car accidents, more than cancer.”

He earned applause as he insisted that the second amendment to the federal constitution, which protects the right to bear arms, should not supersede others.

Among the hundreds of guests on the south lawn were a bipartisan group of senators who crafted and supported the legislation, as well as local-level officials including the Illinois governor, JB Pritzker, and Highland Park mayor, Nancy Rotering.

But the director of the campaign group Guns Down America, Igor Volsky, wasn’t wholly impressed by the White House’s framing of the gathering.

Volsky told the Associated Press news agency: “There’s simply not much to celebrate here. It’s historic, but it’s also the very bare minimum of what Congress should do.

“And as we were reminded by the shooting on July fourth, and there’s so many other gun deaths that have occurred since then. The crisis of gun violence is just far more urgent.”