By Septimus Knox, Alaco
Remote, long-forgotten industrial towns rarely make the front pages in Russia, never mind internationally. But for a few days in September Norilsk, home to the world’s largest producer of nickel and palladium, hit the headlines, although for all the wrong reasons.
A chemical spill turned the Daldykan River red, and photographs of the contamination went viral. Norilsk and other so-called monotowns are located in some of the most inhospitable parts of the country. Centred on a single factory, plant or mill, they fuelled Soviet-era industrialisation.
They remain key to Russia’s economy, yet many are now in terminal decline. Read more
By Henry Mance
In an attempt to avert another cold war, Russian president Vladimir Putin invites European leaders to his dacha for an informal Christmas dinner.
Putin: Come in, my adorable Brussels sprouts! You must be colder than a Ukrainian gas power station in 2017. Don’t just stand there waiting – this isn’t Heathrow arrivals.
David Cameron: Talking of Heathr-
Putin: Oh, David, I’m so glad you made it. Such a long journey, and they say you are not a fan of the free movement of people?… Angela! Read more
By Taras Kuzio of the University of Alberta
Vladimir Putin’s strategy of creating a “New Russia” from eight Russian-speaking regions in Urkaine has failed. Russia’s president has covertly and overtly supported violent separatism in Donetsk and Luhansk (known collectively as the Donbas), where over 10,000 combatants and civilians have died, with the aim of controlling eight Ukrainian regions. Yet Putin currently controls only a third of the Donbas that was never part of historic, Tsarist “New Russia”.
Putin faced – and continues to face – five obstacles to his initial goals. Read more
By Danylo Lubkivsky, deputy foreign minister of Ukraine
Putin’s aggression against Ukraine had the same effect on the world as the recent Ebola outbreak had on Africa. Everybody knew it was possible but nobody really saw it coming. Once it happened and the initial shock passed, efforts ensued to localise the pandemic. They are scattered at first, and then more sophisticated, but mostly beside the point, for one reason: Russia’s actions are even more irrational than Ebola. Read more
By Ben Aris of bne
When he first assumed power in 2000, the press corps spent the first six months asking one question: “Who is Vladimir Putin?”
At first the media assumed he was a puppet of the oligarchs, handpicked by Roman Abramovich and Boris Yeltsin’s daughter Tatyana Dyachenko, who at the time were effectively running the country. But after Putin moved forcefully to sweep business from the corridors of power and return control of Russia to the centre, everyone had to recalibrate. Read more
The Ukraine crisis has entered its “wait and see” phase. Does this mark the beginning of a peaceful resolution or is it the calm before the storm? Have investors embarked on a relief rally, or is the dead cat bouncing?
There were opinions to match all tastes from market analysts on Wednesday. Here is a beyondbrics summary of those views, from “Crisis? What crisis?” to “Cold War 2.0″. Read more
In a news briefing aired Tuesday on Russia Today, Vladimir Putin, Russia’s president, retaliated against Ukrainian billionaire Igor Kolomoisky who on Monday described him as a “schizophrenic of short stature” for bringing Russia and Ukraine to the verge of war.
Putin said: “What we see in the east [of Ukraine] now is that billionaires are being installed as governors. We understand that these people gained their fortunes through loans and shares. One of these oligarchs cheated Roman Abramovich. Abramovich lent him several billion dollars, and he just pocketed the money. He is now governor of Dnepopetrovsk.” Read more
Ukrainian billionaire Igor Kolomoisky, who this weekend agreed to become governor of his native Dnipropetrovsk region as the country braces for a broader Russian invasion into eastern Ukraine, described Russia’s president Vladimir Putin as a “schizophrenic of short stature” for putting Russia and Ukraine on the verge of war.
“I don’t understand how Ukrainians and Russians can fight,” he said in an online video. Read more
By Timothy Ash of Standard Bank
Vladimir Putin has been acclaimed by many as the man of 2013. He outmanoeuvred the west first on Syria and then on Ukraine. He has tried to show a softer side with recent high-profile pardons, from Khodorkovsky to Pussy Riot and Greenpeace campaigners. Now momentum is building up to the Sochi Winter Olympics, which will be presented as a show case for Russia and the Putin regime.
It will be interesting to see if he remains at his peak in 2014, post-Sochi. Read more
The 5th in our series of guest posts on the outlook for 2014 is by Chris Weafer of Macro-Advisory
In economic terms 2013 was Russia’s Annus Horribilis. From growth of 3.4 per cent in 2012, and early expectations of a repeat performance this year, the economy is much more likely to report growth of only 1.3 per cent. That is still a good number in global terms but a long way off the 4 to 5 per cent growth that the country actually needs. A second consecutive year of poor growth will feel like stagnation and lead to a raft of earnings forecast downgrades in companies exposed to the domestic economy.
The good news is that the President and his Kremlin advisors are finally starting to pay attention. Read more
Micex index | Source: Reuters
It’s just under 5,000 miles from Washington DC to Moscow, but two very different press conferences caused Russia’s Micex index to spike on Wednesday. Read more
Russia's President Vladimir Putin (R) and Ukrainian President Viktor Yanukovich shake hands after signing documents during their meeting in the Kremlin in Moscow, on December 17, 2013.
Bonds, gas – but what about the Customs Union?
As the FT reports, Russia has agreed to send cash and cheaper gas to Ukraine. Moscow said it would convert $15bn of reserves in its national welfare fund into Ukrainian securities. It also said it would cut prices for natural gas from more than $400 per thousand cubic metres to $268.50. There was no mention of any agreement to join the CIS Customs Union.
The question is: what does Russia get in return? Read more
Russian President Vladimir Putin may have physically left Ukraine on Sunday, after wrapping up a two-day visit during which he pressured Kiev to choose Moscow over the EU as a closer economic partner. But upon waking up the next day Ukrainian leaders were vividly reminded of what may follow if they ignore Putin’s words – most likely a trade war.
In an early Monday report, news agency Interfax revealed that Russian regulators decided to ban imports of chocolates and other sweets produced by Ukrainian confectionary giant Roshen. Read more
Russia’s president Vladimir Putin has been clamping down on dissent more decisively than before. FT comment and analysis editor Frederick Studemann, James Nixey of Chatham House’s Russia and Eurasia Programme and the FT’s Eastern Europe editor Neil Buckley discuss the future of Putinism.
Mikhail Prokhorov, the billionaire Russian businessman and politician, reckons the Kremlin should help rescue Cyprus from financial collapse. But Vladimir Putin does not appear to be listening. Here’s why. Read more
The Cyprus crisis has angered the island’s bank depositors, rattled markets and prompted furious arguments about the sacrifices involved in the planned EU/IMF-led rescue.
Trouble all around, not least among the banks’ many Russian clients. But there is a silver lining: Russia’s president Vladimir Putin now has a golden opportunity to impress the world with his generosity and far-sightedness. He should volunteer to cover Russian depositors’ losses – but only on condition they identify themselves and their sources of funds. Moscow would get kudos for contributing to a high-profile international rescue, supporting its citizens, and promoting financial transparency. What could be better than that? Read more
President Vladimir Putin on Tuesday nominated Elvira Nabiullina, his chief economic adviser (pictured), as head of Russia’s central bank, in a move which raises concerns about the institution’s independence.
While Nabiullina is seen an ultra-bright economist/technocrat, she has little personal political clout and won’t be well-placed to resist Kremlin pressures. Investors might have preferred Alexei Ulyukayev, the bank’s hawkish first deputy governor, who has a strong record for sticking to his guns. But they didn’t get a say. Read more
The seventh in our series of guest posts on the outlook for 2013 is by Sergey Aleksashenko of Moscow’s Higher School of Economics
President Vladimir Putin has for more than a decade run the Russian economy through a combination of resurgent state power and crony capitalism.
Driven by higher oil prices, GDP has recovered rapidly since he first took power in 2000, but economic growth has come at a high price. As the state has become stronger in the economy, the institutional framework has become weaker: trust in the courts has plunged, bureaucratic corruption has mushroomed and officials have taken to milking money even from small companies.
Buoyed by his return to the Kremlin in 2012, Putin has now pledged to improve the business climate. But can a leopard change his spots? Read more
Is Vladimir Putin finally getting serious about corruption? The president on Tuesday dismissed defence minister Anatoly Serdyukov following an investigation into an alleged $95m fraud at his ministry.
The televised announcement was clearly designed to send a strong message about Putin’s intentions. Even if he limits his attentions to the defence ministry – as opposed to launching a wider clean-up campaign – it would be a huge undertaking. The military-industrial complex is among the least transparent and most inefficient sectors of the Russian economy. But Putin’s real intentions aren’t clear. Read more
Rosneft‘s proposed $50bn-plus takeover of TNK-BP, buying out BP and its Russian oligarch partners, will turn the state-run group into one of the world’s largest oil producers controlling nearly half Russia’s output.
For those who believe that bigger is better, including Rosneft chief executive Igor Sechin and his political master president Vladimir Putin, this is a triumph. For BP and its partners, the end of a troubled, if profitable, relationship will come as a relief.
But for Russia as a whole – and for the global oil industry – Rosneft’s coup is, at best, a mixed blessing. Read more