Perspective on current Russia

The Saker

February 03, 2020

by Alexey Mineev (Проект Кино telegram in Russian) for the Saker’s blog.

“It is the economy, stupid.” It is the corruption, stupid.

The reason that President Putin just undertook the major government shake-up axing PM Medvedev, his economy handling deputies and the minister, as well as several underperforming ministers, is undoubtedly the government’s failure to invigorate economic growth in last years. The plague of the country’s poverty is only the consequence of the government’s impotence in turning around the prolonged under-par economic growth.

Russia’s business environment has indeed made considerable progress evidenced by the World Bank’s ease of doing business rankings. In 2019 Russia made the 28th place, rising from #124 back in 2010.

Inflation went down from 6+% to lower than the targeted 4% level.

However, surprisingly the real growth did not pick up. Instead, the economy slowed down from longer-term annualized 2% real GDP growth to around 1% level.

Although one might attribute the economy’s underperformance to the Western sanctions, this is hardly the primary reason.

Admittingly, Russia had to pay dearly for the reuniting with Crimea. The Rouble lost 50% of its value at the end of 2014. However, inflation did not spike accordingly. It remained lower than 13% annually in both 2014 and 2015. The explanation is that newly built domestic manufacturing had already been in place, ready to meet the increased demand for the locally produced goods driven by the cutting down on expensive imported ones. Here comes the failure. Instead of building upon the improved ease of doing business and capitalizing on the advantage in the form of weak local currency for local manufacturing, Russia continued growing tepidly – lower than 2% annually.

Besides, the highly touted 26 T RUB. (~0.4 T USD) National Projects program turned out to be just minor if any help to the economy in 2019. The government had developed the six-year plan 2019 – 2024 to meet the economic targets, envisioned by President Putin in his annual address to the Federal Assembly in May 2018. The 2024 objectives are as follows:

  1. Stable population growth (As of December 2019, in 2020-2035 annualized 0.5% decrease as low case and still negative 0.2% for mid case in the Russian population is officially forecasted. The high case is estimated as +0.1% annualized growth);
  2. Increased life expectancy to 78 years from the current 74 years (As of December 2019 for 2024 low, mid, high cases officially are: 47.1, 75.5, 76.8 — still short of the target);
  3. A meaningful increase in real income and pensions (basically, the failure of the 20-year term of President Putin);
  4. Decrease twofold in the poverty level;
  5. Improved housing for 5 million households annually;
  6. Accelerated technological innovation;
  7. Digitalization of the economy and social services;
  8. Making #5 largest world economy and keeping inflation at lower than the 4% level;
  9. Creating the export-oriented sectors in the selected core industries of the economy by ensuring the availability and use of modern technology and top-notch professionals.

2019 was the first year of National Projects. The economy is not picking up.

No wonder, though. Because the federal budget remains flattish in real terms over ten years, indeed, we can hardly talk about any meaningful growth driven by government spending.

To this end, in December 2019, Alexey Kudrin, Head of Accounts Chamber of the Russian Federation – government-sponsored auditor of the countrywide finances accountable to the Federal Assembly of Russia, eloquently articulated: “The execution of National Projects is not going to translate to the meeting of the national targets.” This clearly is indicative of a significant disconnect between, on the one hand, the 3+% target real GDP growth and the 25% off the GPD level for capital investments and, on the other, the current level of the budgeted government spending. This disconnect is the real cause of the replacement of the economic block of the Russian Federation government.

The negative slope of IHS’s Purchasing Managers Index (Manufacturing) over the last two years currently diving deep below the 50% level could also evidence the seemingly unreasonably swollen expectation of the effect on the economy from the National Projects effort.

The above discussion of the travails of the Russian economy by no means tells us about any upcoming recession. A lot of factors will likely be shoring up the GDP growth just above the 2% level:

  1. Ongoing infrastructure development countrywide;
  2. Inflation in check, improved access to finance;
  3. Likely improvement of meeting the budget spending targets (a current issue), and the implementation of KPI-based performance accountability for governors;
  4. Ample room for an increase in federal budget spending to meet the additional social measures promised by President Putin in the last address to the Federal Assembly on January-15th 2020;
  5. The expected extra effort to revitalize large-scale corporate investment programs (“the list of Belousov” — in the name of the newly appointed first deputy PM Belousov) through custom-tailored government support.

The above analysis leads up to the conclusion that there must be something more than the purely economic factors that have been in play all-time long, making Russia undergo clearly under-par growth last ten years.

The impotent government had been kicking the can down the road too long, doing little to fight corruption. In the meantime, the elites also grew impotent delivering scarcity of meaningful accomplishments in their homeland to be really proud of but enjoying hundreds of million dollars worth yachts, contently presuming that their money was good enough for the West. The abundance of second citizenship or green card among not only business elites but across all elites, including the top government officers, has become a national threat. However, geopolitics took over in 2014. In West’s books, Russia crossed the red line with the reuniting with Crimea and the military involvement supporting the rebels in Eastern Ukraine. The Russian elites were caught off guard. It is really excruciating now for the government to play a catch-up game wrestling the entrenched corruption.

The January 2020 reshuffling of Russia’s government has a clear economic underlying rationale — to turn around the years-long underperformance of the economy. However, looking forward, the country faces the problem that dwarfs the challenge of the ongoing structural economic revamp, which so far gains little traction with investors and entrepreneurs investments-wise.

It is corruption and the lacking-in of law enforcement that, in the long term, drag the economy down, providing breeding soil for groupthink in government ranks, self-censorship in media, brain drain, and messed up social values rather than just taking away from investments.

One might think that the change of Russia’s tack is part of the 2024 presidential election game. While this is undoubtedly the case, this all is merely part of ongoing Russia’s wakening and finally dealing with the economic policy execution issues.

More importantly, though, it is the end of the government’s impotence. Targeting 3+% GDP growth, the government is in dire need to strike a long-term deal with Russian businesspeople, making them start investing to reach the 25% off GDP target for capital investments. The government is to offer a substantial increase in government spending, effectively guaranteeing the investment returns.

In the way stands Russian-style “business as usual”- embezzlement. It will be dealt with, as this is a must. Yet, this is not enough. The eradication of corruption is the most significant moving part in the longer-term country’s fate-defining question about whether Russia manages to defend its sovereignty or, otherwise, Russia is bound to be subdued by the technologically more developed part of the world.

Erdogan Urges Russia to ‘Assume Obligations’ in Idlib, Says Crimea Annexation ‘Illegal’

 February 3, 2020

President Recep Tayyip Erdogan called Monday for Russia to honor its pledges under a 2018 agreement after five Turkish soldiers were killed in shelling by Syrian government forces in northwestern Syria.

“I hope that everyone will assume their obligations under the Astana and Sochi agreements,” Erdogan told a news conference in the Ukrainian capital Kiev, in an implicit reference to Russia.

Syrian forces killed five Turkish soldiers and three civilians in shelling in Idlib, the last opposition bastion in northwestern Syria, early on Monday, according to Erdogan.

“It cannot continue like this and a response has been given,” Erdogan said. “We will make them pay the necessary price and will continue to do so.”

Crimea Annexation ‘Illegal’

He was speaking on a visit to Ukraine, where he also reiterated his opposition to the “illegal” Russian annexation of Crimea.

Turkey does not recognize Russia’s ‘illegal’ annexation of Crimea, Erdogan told the joint news conference with his Ukrainian counterpart Volodymyr Zelensky.

The Turkish president expressed Ankara’s “ongoing support for the sovereignty and territorial integrity of Ukraine,” as quoted by Anadolu news agency.

Last week, Erdogan accused Moscow of “not honoring” agreements made with Ankara in Idlib, where Russian and Syrian forces have stepped up an offensive in recent weeks.

As part of the Sochi deal, Turkey set up 12 observation posts, one of which was surrounded by Syrian government forces in December.

Erdogan said Turkey had been ‘too patient’ in Idlib.

Turkey, which already hosts more than 3.7 million Syrians, fears a further influx of refugees fleeing violence in Idlib.

Meanwhile, Turkish Foreign Minister Mevlut Cavusoglu spoke by phone with his Russian counterpart Sergei Lavrov, and the two sides agreed to “look in detail” at the situation in Idlib, according to the Russian foreign ministry.

Source: AFP and Anadolu

Russia Challenges Turkish Narrative on Idlib Fire Exchange

February 3, 2020

Confusion reigns over what has happened in the past few hours between the Turkish army and the Syrian government forces in Syria’s Idlib province, where the military campaign against Takfiri terrorists continues.

AFP news agency cited Turkish media as saying that Turkey raided Syrian Army positions in Idlib Monday, in response to the Syrian fire that claimed lives of Turkish soldiers.

Five Turkish soldiers and a civilian attached to the army were killed on Monday by Syrian forces’ shelling in the northwestern province.

“Our F-16 aircraft and artillery are currently bombing targets defined by our intelligence services” in response to the Syrian shelling, said Turkish President Recep Tayyip Erdogan at a press conference in Istanbul.

Meanwhile, reports on the number of casualties among the ranks of the Syrian Army were conflicting. AFP reported that 30 to 35 Syrian soldiers were killed, while the Syrian Observatory for Human Rights put the number at 13.

However, the Russian Defense denied there have been Turkish air raids against Syrian Army positions, assuring that Turkish planes have not violated Syrian airspace over IdlIb province which is under control Russian forces.

This narrative is close to that of SANA news agency which reported that there was sporadic fire between the Syrian and the Turkish sides, but denied there were casualties among the ranks of the Syrian Army.

The exchange of fire comes as the Syrian Army has intensified for several weeks their offensive in this province and in the western regions of the province of Aleppo, to clear the area of Nusra Front terrorists.

After having liberated the key town of Maarat al-Noaman, then that of Khan Touman, the Syrian Army is now advancing towards Saraqeb.

Source: Agencies

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LIVE: Putin holds annual press conference in Moscow

December 19, 2019

The version from RT on Twitter is the best one available currently:

https://twitter.com/i/broadcasts/1dRKZLQDDYDJB

English Soundtrack:

Putin holds annual press conference in Moscow

Vladimir Putin addressed State Duma deputies, Federation Council members, heads of Russian regions and civil society representatives in the Kremlin.

Dear friends, we have gathered here today in connection with an issue that is of vital, historic significance to all of us. A referendum was held in Crimea on March 16 in full compliance with democratic procedures and international norms.


More than 82 percent of the electorate took part in the vote. Over 96 percent of them spoke out in favour of reuniting with Russia. These numbers speak for themselves.

To understand the reason behind such a choice it is enough to know the history of Crimea and what Russia and Crimea have always meant for each other.

Everything in Crimea speaks of our shared history and pride. This is the location of ancient Khersones, where Prince Vladimir was baptised. His spiritual feat of adopting Orthodoxy predetermined the overall basis of the culture, civilisation and human values that unite the peoples of Russia, Ukraine and Belarus. The graves of Russian soldiers whose bravery brought Crimea into the Russian empire are also in Crimea. This is also Sevastopol – a legendary city with an outstanding history, a fortress that serves as the birthplace of Russia’s Black Sea Fleet. Crimea is Balaklava and Kerch, Malakhov Kurgan and Sapun Ridge. Each one of these places is dear to our hearts, symbolising Russian military glory and outstanding valour.

Crimea is a unique blend of different peoples’ cultures and traditions. This makes it similar to Russia as a whole, where not a single ethnic group has been lost over the centuries. Russians and Ukrainians, Crimean Tatars and people of other ethnic groups have lived side by side in Crimea, retaining their own identity, traditions, languages and faith.

Incidentally, the total population of the Crimean Peninsula today is 2.2 million people, of whom almost 1.5 million are Russians, 350,000 are Ukrainians who predominantly consider Russian their native language, and about 290,000–300,000 are Crimean Tatars, who, as the referendum has shown, also lean towards Russia.

True, there was a time when Crimean Tatars were treated unfairly, just as a number of other peoples in the USSR. There is only one thing I can say here: millions of people of various ethnicities suffered during those repressions, and primarily Russians.

Crimean Tatars returned to their homeland. I believe we should make all the necessary political and legislative decisions to finalise the rehabilitation of Crimean Tatars, restore them in their rights and clear their good name.

We have great respect for people of all the ethnic groups living in Crimea. This is their common home, their motherland, and it would be right – I know the local population supports this – for Crimea to have three equal national languages: Russian, Ukrainian and Tatar.

Colleagues,

In people’s hearts and minds, Crimea has always been an inseparable part of Russia. This firm conviction is based on truth and justice and was passed from generation to generation, over time, under any circumstances, despite all the dramatic changes our country went through during the entire 20th century.

After the revolution, the Bolsheviks, for a number of reasons – may God judge them – added large sections of the historical South of Russia to the Republic of Ukraine. This was done with no consideration for the ethnic make-up of the population, and today these areas form the southeast of Ukraine. Then, in 1954, a decision was made to transfer Crimean Region to Ukraine, along with Sevastopol, despite the fact that it was a federal city. This was the personal initiative of the Communist Party head Nikita Khrushchev. What stood behind this decision of his – a desire to win the support of the Ukrainian political establishment or to atone for the mass repressions of the 1930’s in Ukraine – is for historians to figure out.

What matters now is that this decision was made in clear violation of the constitutional norms that were in place even then. The decision was made behind the scenes. Naturally, in a totalitarian state nobody bothered to ask the citizens of Crimea and Sevastopol. They were faced with the fact. People, of course, wondered why all of a sudden Crimea became part of Ukraine. But on the whole – and we must state this clearly, we all know it – this decision was treated as a formality of sorts because the territory was transferred within the boundaries of a single state. Back then, it was impossible to imagine that Ukraine and Russia may split up and become two separate states. However, this has happened.

Unfortunately, what seemed impossible became a reality. The USSR fell apart. Things developed so swiftly that few people realised how truly dramatic those events and their consequences would be. Many people both in Russia and in Ukraine, as well as in other republics hoped that the Commonwealth of Independent States that was created at the time would become the new common form of statehood. They were told that there would be a single currency, a single economic space, joint armed forces; however, all this remained empty promises, while the big country was gone. It was only when Crimea ended up as part of a different country that Russia realised that it was not simply robbed, it was plundered.

At the same time, we have to admit that by launching the sovereignty parade Russia itself aided in the collapse of the Soviet Union. And as this collapse was legalised, everyone forgot about Crimea and Sevastopol ­– the main base of the Black Sea Fleet. Millions of people went to bed in one country and awoke in different ones, overnight becoming ethnic minorities in former Union republics, while the Russian nation became one of the biggest, if not the biggest ethnic group in the world to be divided by borders.

Now, many years later, I heard residents of Crimea say that back in 1991 they were handed over like a sack of potatoes. This is hard to disagree with. And what about the Russian state? What about Russia? It humbly accepted the situation. This country was going through such hard times then that realistically it was incapable of protecting its interests. However, the people could not reconcile themselves to this outrageous historical injustice. All these years, citizens and many public figures came back to this issue, saying that Crimea is historically Russian land and Sevastopol is a Russian city. Yes, we all knew this in our hearts and minds, but we had to proceed from the existing reality and build our good-neighbourly relations with independent Ukraine on a new basis. Meanwhile, our relations with Ukraine, with the fraternal Ukrainian people have always been and will remain of foremost importance for us.

Today we can speak about it openly, and I would like to share with you some details of the negotiations that took place in the early 2000s. The then President of Ukraine Mr Kuchma asked me to expedite the process of delimiting the Russian-Ukrainian border. At that time, the process was practically at a standstill. Russia seemed to have recognised Crimea as part of Ukraine, but there were no negotiations on delimiting the borders. Despite the complexity of the situation, I immediately issued instructions to Russian government agencies to speed up their work to document the borders, so that everyone had a clear understanding that by agreeing to delimit the border we admitted de facto and de jure that Crimea was Ukrainian territory, thereby closing the issue.

We accommodated Ukraine not only regarding Crimea, but also on such a complicated matter as the maritime boundary in the Sea of Azov and the Kerch Strait. What we proceeded from back then was that good relations with Ukraine matter most for us and they should not fall hostage to deadlock territorial disputes. However, we expected Ukraine to remain our good neighbour, we hoped that Russian citizens and Russian speakers in Ukraine, especially its southeast and Crimea, would live in a friendly, democratic and civilised state that would protect their rights in line with the norms of international law.

However, this is not how the situation developed. Time and time again attempts were made to deprive Russians of their historical memory, even of their language and to subject them to forced assimilation. Moreover, Russians, just as other citizens of Ukraine are suffering from the constant political and state crisis that has been rocking the country for over 20 years.

I understand why Ukrainian people wanted change. They have had enough of the authorities in power during the years of Ukraine’s independence. Presidents, prime ministers and parliamentarians changed, but their attitude to the country and its people remained the same. They milked the country, fought among themselves for power, assets and cash flows and did not care much about the ordinary people. They did not wonder why it was that millions of Ukrainian citizens saw no prospects at home and went to other countries to work as day labourers. I would like to stress this: it was not some Silicon Valley they fled to, but to become day labourers. Last year alone almost 3 million people found such jobs in Russia. According to some sources, in 2013 their earnings in Russia totalled over $20 billion, which is about 12% of Ukraine’s GDP.

I would like to reiterate that I understand those who came out on Maidan with peaceful slogans against corruption, inefficient state management and poverty. The right to peaceful protest, democratic procedures and elections exist for the sole purpose of replacing the authorities that do not satisfy the people. However, those who stood behind the latest events in Ukraine had a different agenda: they were preparing yet another government takeover; they wanted to seize power and would stop short of nothing. They resorted to terror, murder and riots. Nationalists, neo-Nazis, Russophobes and anti-Semites executed this coup. They continue to set the tone in Ukraine to this day.

The new so-called authorities began by introducing a draft law to revise the language policy, which was a direct infringement on the rights of ethnic minorities. However, they were immediately ‘disciplined’ by the foreign sponsors of these so-called politicians. One has to admit that the mentors of these current authorities are smart and know well what such attempts to build a purely Ukrainian state may lead to. The draft law was set aside, but clearly reserved for the future. Hardly any mention is made of this attempt now, probably on the presumption that people have a short memory. Nevertheless, we can all clearly see the intentions of these ideological heirs of Bandera, Hitler’s accomplice during World War II.

It is also obvious that there is no legitimate executive authority in Ukraine now, nobody to talk to. Many government agencies have been taken over by the impostors, but they do not have any control in the country, while they themselves – and I would like to stress this – are often controlled by radicals. In some cases, you need a special permit from the militants on Maidan to meet with certain ministers of the current government. This is not a joke – this is reality.

Those who opposed the coup were immediately threatened with repression. Naturally, the first in line here was Crimea, the Russian-speaking Crimea. In view of this, the residents of Crimea and Sevastopol turned to Russia for help in defending their rights and lives, in preventing the events that were unfolding and are still underway in Kiev, Donetsk, Kharkov and other Ukrainian cities.

Naturally, we could not leave this plea unheeded; we could not abandon Crimea and its residents in distress. This would have been betrayal on our part.

First, we had to help create conditions so that the residents of Crimea for the first time in history were able to peacefully express their free will regarding their own future. However, what do we hear from our colleagues in Western Europe and North America? They say we are violating norms of international law. Firstly, it’s a good thing that they at least remember that there exists such a thing as international law – better late than never.

Secondly, and most importantly – what exactly are we violating? True, the President of the Russian Federation received permission from the Upper House of Parliament to use the Armed Forces in Ukraine. However, strictly speaking, nobody has acted on this permission yet. Russia’s Armed Forces never entered Crimea; they were there already in line with an international agreement. True, we did enhance our forces there; however – this is something I would like everyone to hear and know – we did not exceed the personnel limit of our Armed Forces in Crimea, which is set at 25,000, because there was no need to do so.

Next. As it declared independence and decided to hold a referendum, the Supreme Council of Crimea referred to the United Nations Charter, which speaks of the right of nations to self-determination. Incidentally, I would like to remind you that when Ukraine seceded from the USSR it did exactly the same thing, almost word for word. Ukraine used this right, yet the residents of Crimea are denied it. Why is that?

Moreover, the Crimean authorities referred to the well-known Kosovo precedent – a precedent our western colleagues created with their own hands in a very similar situation, when they agreed that the unilateral separation of Kosovo from Serbia, exactly what Crimea is doing now, was legitimate and did not require any permission from the country’s central authorities. Pursuant to Article 2, Chapter 1 of the United Nations Charter, the UN International Court agreed with this approach and made the following comment in its ruling of July 22, 2010, and I quote: “No general prohibition may be inferred from the practice of the Security Council with regard to declarations of independence,” and “General international law contains no prohibition on declarations of independence.” Crystal clear, as they say.

I do not like to resort to quotes, but in this case, I cannot help it. Here is a quote from another official document: the Written Statement of the United States America of April 17, 2009, submitted to the same UN International Court in connection with the hearings on Kosovo. Again, I quote: “Declarations of independence may, and often do, violate domestic legislation. However, this does not make them violations of international law.” End of quote. They wrote this, disseminated it all over the world, had everyone agree and now they are outraged. Over what? The actions of Crimean people completely fit in with these instructions, as it were. For some reason, things that Kosovo Albanians (and we have full respect for them) were permitted to do, Russians, Ukrainians and Crimean Tatars in Crimea are not allowed. Again, one wonders why.

We keep hearing from the United States and Western Europe that Kosovo is some special case. What makes it so special in the eyes of our colleagues? It turns out that it is the fact that the conflict in Kosovo resulted in so many human casualties. Is this a legal argument? The ruling of the International Court says nothing about this. This is not even double standards; this is amazing, primitive, blunt cynicism. One should not try so crudely to make everything suit their interests, calling the same thing white today and black tomorrow. According to this logic, we have to make sure every conflict leads to human losses.

I will state clearly — if the Crimean local self-defence units had not taken the situation under control, there could have been casualties as well. Fortunately this did not happen. There was not a single armed confrontation in Crimea and no casualties. Why do you think this was so? The answer is simple: because it is very difficult, practically impossible to fight against the will of the people. Here I would like to thank the Ukrainian military – and this is 22,000 fully armed servicemen. I would like to thank those Ukrainian service members who refrained from bloodshed and did not smear their uniforms in blood.

Other thoughts come to mind in this connection. They keep talking of some Russian intervention in Crimea, some sort of aggression. This is strange to hear. I cannot recall a single case in history of an intervention without a single shot being fired and with no human casualties.

Colleagues,

Like a mirror, the situation in Ukraine reflects what is going on and what has been happening in the world over the past several decades. After the dissolutionof bipolarity on the planet, we no longer have stability. Key international institutions are not getting any stronger; on the contrary, in many cases, they are sadly degrading. Our western partners, led by the United States of America, prefer not to be guided by international law in their practical policies, but by the rule of the gun. They have come to believe in their exclusivity and exceptionalism, that they can decide the destinies of the world, that only they can ever be right. They act as they please: here and there, they use force against sovereign states, building coalitions based on the principle “If you are not with us, you are against us.” To make this aggression look legitimate, they force the necessary resolutions from international organisations, and if for some reason this does not work, they simply ignore the UN Security Council and the UN overall.

This happened in Yugoslavia; we remember 1999 very well. It was hard to believe, even seeing it with my own eyes, that at the end of the 20th century, one of Europe’s capitals, Belgrade, was under missile attack for several weeks, and then came the real intervention. Was there a UN Security Council resolution on this matter, allowing for these actions? Nothing of the sort. And then, they hit Afghanistan, Iraq, and frankly violated the UN Security Council resolution on Libya, when instead of imposing the so-called no-fly zone over it they started bombing it too.

There was a whole series of controlled “colour” revolutions. Clearly, the people in those nations, where these events took place, were sick of tyranny and poverty, of their lack of prospects; but these feelings were taken advantage of cynically. Standards were imposed on these nations that did not in any way correspond to their way of life, traditions, or these peoples’ cultures. As a result, instead of democracy and freedom, there was chaos, outbreaks in violence and a series of upheavals. The Arab Spring turned into the Arab Winter.

A similar situation unfolded in Ukraine. In 2004, to push the necessary candidate through at the presidential elections, they thought up some sort of third round that was not stipulated by the law. It was absurd and a mockery of the constitution. And now, they have thrown in an organised and well-equipped army of militants.

We understand what is happening; we understand that these actions were aimed against Ukraine and Russia and against Eurasian integration. And all this while Russia strived to engage in dialogue with our colleagues in the West. We are constantly proposing cooperation on all key issues; we want to strengthen our level of trust and for our relations to be equal, open and fair. But we saw no reciprocal steps.

On the contrary, they have lied to us many times, made decisions behind our backs, placed us before an accomplished fact.This happened with NATO’s expansion to the East, as well as the deployment of military infrastructure at our borders. They kept telling us the same thing: “Well, this does not concern you.” That’s easy to say.

It happened with the deployment of a missile defence system. In spite of all our apprehensions, the project is working and moving forward. It happened with the endless foot-dragging in the talks on visa issues, promises of fair competition and free access to global markets.

Today, we are being threatened with sanctions, but we already experiencemany limitations, ones that are quite significant for us, our economy and our nation. For example, still during the times of the Cold War, the US and subsequently other nations restricted a large list of technologies and equipment from being sold to the USSR, creating the Coordinating Committee for Multilateral Export Controls list. Today, they have formally been eliminated, but only formally; and in reality, many limitations are still in effect.

In short, we have every reason to assume that the infamous policy of containment, led in the 18th, 19th and 20th centuries, continues today. They are constantly trying to sweep us into a cornerbecause we have an independent position, because we maintain it and because we call things like they are and do not engage in hypocrisy. But there is a limit to everything. And with Ukraine, our western partners have crossed the line, playing the bear and acting irresponsibly and unprofessionally.

After all, they were fully aware that there are millions of Russians living in Ukraine and in Crimea. They must have really lacked political instinct and common sense not to foresee all the consequences of their actions. Russia found itself in a position it could not retreat from. If you compress the spring all the way to its limit, it will snap back hard. You must always remember this.

Today, it is imperative to end this hysteria, to refute the rhetoric of the cold war and to accept the obvious fact: Russia is an independent, active participant in international affairs; like other countries, it has its own national interests that need to be taken into account and respected.

At the same time, we are grateful to all those who understood our actions in Crimea; we are grateful to the people of China, whose leaders have always consideredthe situation in Ukraine and Crimea taking into account the full historical and political context, and greatly appreciate India’s reserve and objectivity.

Today, I would like to address the people of the United States of America, the people who, since the foundation of their nation and adoption of the Declaration of Independence, have been proud to hold freedom above all else. Isn’t the desire of Crimea’s residents to freely choose their fate such a value? Please understand us.

I believe that the Europeans, first and foremost, the Germans, will also understand me. Let me remind you that in the course of political consultations on the unification of East and West Germany, at the expert, though very high level, some nations that were then and are now Germany’s allies did not support the idea of unification. Our nation, however, unequivocally supported the sincere, unstoppable desire of the Germans for national unity. I am confident that you have not forgotten this, and I expect that the citizens of Germany will also support the aspiration of the Russians, of historical Russia, to restore unity.

I also want to address the people of Ukraine. I sincerely want you to understand us: we do not want to harm you in any way, or to hurt your national feelings. We have always respected the territorial integrity of the Ukrainian state, incidentally, unlike those who sacrificed Ukraine’s unity for their political ambitions. They flaunt slogans about Ukraine’s greatness, but they are the ones who did everything to divide the nation. Today’s civil standoff is entirely on their conscience. I want you to hear me, my dear friends. Do not believe those who want you to fear Russia, shouting that other regions will follow Crimea. We do not want to divide Ukraine; we do not need that. As for Crimea, it was and remains a Russian, Ukrainian, and Crimean-Tatar land.

I repeat, just as it has been for centuries, it will be a home to all the peoples living there. What it will never be and do is follow in Bandera’s footsteps!

Crimea is our common historical legacy and a very important factor in regional stability. And this strategic territory should be part of a strong and stable sovereignty, which today can only be Russian. Otherwise, dear friends (I am addressing both Ukraine and Russia), you and we – the Russians and the Ukrainians – could lose Crimea completely, and that could happen in the near historical perspective. Please think about it.

Let me note too that we have already heard declarations from Kiev about Ukraine soon joining NATO. What would this have meant for Crimea and Sevastopol in the future? It would have meant that NATO’s navy would be right there in this city of Russia’s military glory, and this would create not an illusory but a perfectly real threat to the whole of southern Russia. These are things that could have become reality were it not for the choice the Crimean people made, and I want to say thank you to them for this.

But let me say too that we are not opposed to cooperation with NATO, for this is certainly not the case. For all the internal processes within the organisation, NATO remains a military alliance, and we are against having a military alliance making itself at home right in our backyard or in our historic territory. I simply cannot imagine that we would travel to Sevastopol to visit NATO sailors. Of course, most of them are wonderful guys, but it would be better to have them come and visit us, be our guests, rather than the other way round.

Let me say quite frankly that it pains our hearts to see what is happening in Ukraine at the moment, see the people’s suffering and their uncertainty about how to get through today and what awaits them tomorrow. Our concerns are understandable because we are not simply close neighbours but, as I have said many times already, we are one people. Kiev is the mother of Russian cities. Ancient Rus is our common source and we cannot live without each other.

Let me say one other thing too. Millions of Russians and Russian-speaking people live in Ukraine and will continue to do so. Russia will always defend their interests using political, diplomatic and legal means. But it should be above all in Ukraine’s own interest to ensure that these people’s rights and interests are fully protected. This is the guarantee of Ukraine’s state stability and territorial integrity.

We want to be friends with Ukraine and we want Ukraine to be a strong, sovereign and self-sufficient country. Ukraine is one of our biggest partners after all. We have many joint projects and I believe in their success no matter what the current difficulties. Most importantly, we want peace and harmony to reign in Ukraine, and we are ready to work together with other countries to do everything possible to facilitate and support this. But as I said, only Ukraine’s own people can put their own house in order.

Residents of Crimea and the city of Sevastopol, the whole of Russia admired your courage, dignity and bravery. It was you who decided Crimea’s future. We were closer than ever over these days, supporting each other. These were sincere feelings of solidarity. It is at historic turning points such as these that a nation demonstrates its maturity and strength of spirit. The Russian people showed this maturity and strength through their united support for their compatriots.

Russia’s foreign policy position on this matter drew its firmness from the will of millions of our people, our national unity and the support of our country’s main political and public forces. I want to thank everyone for this patriotic spirit, everyone without exception. Now, we need to continue and maintain this kind of consolidation so as to resolve the tasks our country faces on its road ahead.

Obviously, we will encounter external opposition, but this is a decision that we need to make for ourselves. Are we ready to consistently defend our national interests, or will we forever give in, retreat to who knows where? Some Western politicians are already threatening us with not just sanctions but also the prospect of increasingly serious problems on the domestic front. I would like to know what it is they have in mind exactly: action by a fifth column, this disparate bunch of ‘national traitors’, or are they hoping to put us in a worsening social and economic situation so as to provoke public discontent? We consider such statements irresponsible and clearly aggressive in tone, and we will respond to them accordingly. At the same time, we will never seek confrontation with our partners, whether in the East or the West, but on the contrary, will do everything we can to build civilised and good-neighbourly relations as one is supposed to in the modern world. 

Colleagues,

I understand the people of Crimea, who put the question in the clearest possible terms in the referendum: should Crimea be with Ukraine or with Russia? We can be sure in saying that the authorities in Crimea and Sevastopol, the legislative authorities, when they formulated the question, set aside group and political interests and made the people’s fundamental interests alone the cornerstone of their work. The particular historic, population, political and economic circumstances of Crimea would have made any other proposed option — however tempting it could be at the first glance — only temporary and fragile and would have inevitably led to further worsening of the situation there, which would have had disastrous effects on people’s lives. The people of Crimea thus decided to put the question in firm and uncompromising form, with no grey areas. The referendum was fair and transparent, and the people of Crimea clearly and convincingly expressed their will and stated that they want to be with Russia.

Russia will also have to make a difficult decision now, taking into account the various domestic and external considerations. What do people here in Russia think? Here, like in any democratic country, people have different points of view, but I want to make the point that the absolute majority of our people clearly do support what is happening.

The most recent public opinion surveys conducted here in Russia show that 95 percent of people think that Russia should protect the interests of Russians and members of other ethnic groups living in Crimea – 95 percent of our citizens. More than 83 percent think that Russia should do this even if it will complicate our relations with some other countries. A total of 86 percent of our people see Crimea as still being Russian territory and part of our country’s lands. And one particularly important figure, which corresponds exactly with the result in Crimea’s referendum: almost 92 percent of our people support Crimea’s reunification with Russia. 

Thus we see that the overwhelming majority of people in Crimea and the absolute majority of the Russian Federation’s people support the reunification of the Republic of Crimea and the city of Sevastopol with Russia.

Now this is a matter for Russia’s own political decision, and any decision here can be based only on the people’s will, because the people is the ultimate source of all authority.

Members of the Federation Council, deputies of the State Duma, citizens of Russia, residents of Crimea and Sevastopol, today, in accordance with the people’s will, I submit to the Federal Assembly a request to consider a Constitutional Law on the creation of two new constituent entities within the Russian Federation: the Republic of Crimea and the city of Sevastopol, and to ratify the treaty on admitting to the Russian Federation Crimea and Sevastopol, which is already ready for signing. I stand assured of your support.

Ukraine Peace Hostage to Washington’s Russophobia

Image result for Ukraine Peace Hostage to Washington’s Russophobia

December 15, 2019

After Ukraine’s president Volodymyr Zelensky finished multilateral peace talks in Paris, the emphatic media message was that “no red lines had been crossed” in negotiations with Russian leader Vladimir Putin. It sounded like Zelensky was far more concerned with trying to reassure observers he hadn’t “capitulated” to Putin, rather than engaging in a genuine dialogue to resolve his country’s conflict.

The so-called Normandy Four format of France, Germany, Russia and Ukraine is scheduled to meet again in four months. The meeting in Paris on December 9 was the first time leaders had convened after nearly a three-year hiatus. It is to be welcomed that President Zelensky, who was elected in April, shows a willingness to engage with Russia, unlike predecessor Petro Poroshenko, in order to bring peace to eastern Ukraine. The region has been mired in nearly six years of civil war.

During the Paris talks, there was agreement to uphold a ceasefire in Ukraine’s Donbas region, and to extend deconfliction zones by withdrawing troops and artillery. There was also agreement on the exchange of all prisoners between Ukraine government forces and the pro-Russia rebels in Donbas. All very good. But what about the full implementation of the Minsk Accord signed back in 2015?

That accord obliges the government in Kiev to permit elections and regional autonomy in the Donbas. It also obliges a full amnesty for rebels who took up arms against the Kiev administration, which came to power through an illegal US-backed coup in February 2014. The Kiev power grab ushered in an ultra-nationalist Russophobic regime intent on dominating the pro-Russian eastern region. The dramatic shift in power in Kiev towards Neo-Nazi demagogues and paramilitaries was the decisive factor in Donbas taking up arms and also in pro-Russia Crimea seceding in March 2014 and joining the Russian Federation.

Regrettably, President Zelensky appears unwilling to implement the Minsk deal which his predecessor signed up to. In fact, at the concluding press conference jointly held by the four leaders at the Paris talks, Zelensky was given to trying to re-write Minsk. He insisted on “security issues” being settled before political issues. That suggests he wants rebels in Donbas to disarm without Kiev recognizing the region’s autonomy. Zelensky also insisted on “not giving up Donbas and Crimea”, and of regaining control over all of Ukraine’s borders, including those adjacent to Russia.

The Minsk deal – which France, Germany and Russia are in concurrence on as being the only viable way forward to peace – does not say anything about Crimea “being returned” to Ukraine. The accord does not precondition autonomy in the Donbas on a prior disarmament.

In other words, Zelensky is going off script on the Minsk terms for finding a peace settlement. His position is still not adhering to the obligations his government signed up to. Perhaps over the coming months, the Ukrainian president may come round to fulfilling responsibilities as stipulated by the Minsk accord.

But there are, unfortunately, reasons to be skeptical. That’s because the relentless Russophobia residing in Washington leaves Zelensky with little room for maneuver. The shaky Kiev regime is totally reliant on Washington’s patronage for its IMF financial life-line, as well as for military support. Zelensky is the president of a vassal state. Washington calls the tune and the tributes.

As could be seen more than ever during the recent impeachment hearings on President Trump, the consensus in Washington is that Ukraine is “at war with Russia”. American politicians and media are convinced in their Cold War delusions that Russia has invaded Ukraine and is the “aggressor” against a “freedom-loving nation”. That propaganda narrative, of course, reinforces the delusions of the Russia-hating ultra-nationalists in Ukraine who have threatened Zelensky’s life if he “surrenders” to Russia.

Hence, the conflict in Ukraine is not being addressed as the internal one that it really is. Instead, it is being viewed through the Russophobic lens as an external problem, allegedly created by Russian aggression. That means the “solution” is about standing up to Russia with lots more US military aid, rather than addressing the core issues of Kiev’s toxic politics and policies towards its separatist regions.

Russia is a guarantor of Minsk, just like France and Germany are. It is not a party with obligations to fulfill. Those obligations are on the politicians in Kiev and the rebels in eastern Ukraine.

With Washington pressing Zelensky to stand up to non-existing “Russian aggression” that means the search for peace in Ukraine will remain elusive. Peace will only come to Ukraine when Washington stops kicking Kiev around like a political football to gratify its Cold War hostility towards Russia. That’s unlikely to happen in the near future.

When Zelensky seeks to reassure that “no red lines” have been crossed, his mind is not on genuine peace negotiations. Rather, he is seeking to placate Ukraine’s hostage-takers in Washington.

The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation.

MintPress Sits Down with Russia’s Foreign Ministry Spokesperson Maria Zakharova

MintPress Sits Down with Russia’s Foreign Ministry Spokesperson Maria Zakharova

Russia’s Foreign Ministry Spokesperson Maria Zakharova weighs in on Syria, Crimea, the Moscow protests and more.

Moscow — In a simple meeting room at the Russian Foreign Affairs Ministry building, Russia’s Foreign Affairs Ministry spokesperson Maria Zakharova gave me a generous hour of her time in a conversation peppered with bemused laughter at Western allegations about Russia and clear frustration at the West’s incessant vilification of all things Russia.

I traveled to Moscow in August, where to my delight I had the opportunity to interview Zakharova. Given that Russia is the focus of obsessive and largely negative Western media reporting, and also the country’s role in eliminating the proliferation of terrorist groups that once controlled large swaths of Syria, I wanted to ask Zakharova for her take on a variety of topics related to both Russia and Syria.

In our wide-ranging discussion, Zakharova spoke of the U.S. sanctions regime against Russia and of the Western interference in Russian domestic issues — such as the protests seen in Moscow in July and August.

On Syria, she addressed the issue of exploitation of children in propaganda against Syria and Russia — notably Omran Daqneesh, a child whose image was splashed across newspapers and screens worldwide in 2016, incriminating Russia and Syria in an airstrike that was later proven to have never happened. An official apology from one of the most adamant perpetrators of that narrative, CNN’s Christian Amanpour, also never happened.

One cannot discuss the war in Syria and related propaganda without addressing the massively-funded White Helmets. In discussing the group, Zakharova gave examples of its role in fomenting support for Western military intervention, including in pushing responsibility on the Syrian government for the alleged but unproven and, by most honest accounts, staged chemical attack in Douma, eastern Ghouta, in 2018. Footage of the attack included video starring the White Helmets and another exploited Syrian boy, Hassan Diab, whose testimony of the events ran in stark contrast to the allegations against the Syrian government that were being circulated in the Western media.

Zakharova also addressed the inconsistencies around the Skripal case, the historic importance of Crimea’s referendum, and the U.K. “media freedom” conference of July 2019, where cases of imprisoned journalists like Julian Assange and Kirill Vyshinsky were notably not part of the conference program.

In an unexpected development since my discussion with Zakharova, Ukrainian-Russian journalist and editor Vyshinsky was released from his over 15 months of imprisonment without trial by Ukraine. Referring to his imprisonment, Zakharova described him as a hostage.

The interview took place at a time when Western media reporting would have one believe that the streets of Moscow were full of chaos and unrest with the protests. In fact, contrary to media reporting, Moscow was calm, as were the protests I attended on August 10. Once again, it seemed, the media was hyping and distorting reality, as they have so often done elsewhere in the world.

Zakharova’s words are a reality check and offer an informative insight into the Russian perspective on Russian, Syrian, and global events.

Feature photo | Maria Zakharova sits down with Eva Bartlett at a Russian Foreign Affairs Ministry building in Moscow, Russia in August, 2019.  Eva Bartlett | MintPress News

Eva Bartlett is a Canadian independent journalist and activist. She has spent years on the ground covering conflict zones in the Middle East, especially in Syria and occupied Palestine, where she lived for nearly four years. She is a recipient of the 2017 International Journalism Award for International Reporting, granted by the Mexican Journalists’ Press Club (founded in 1951), was the first recipient of the Serena Shim Award for Uncompromised Integrity in Journalism, and was short-listed in 2017 for the Martha Gellhorn Prize for Journalism. See her extended bio on her blog In Gaza

Booming Sochi – Debunking the $50-billion Olympic Expenditure Hoax

September 10, 2019

by Jon Hellevig for The Saker Blog

Booming Sochi – Debunking the $50-billion Olympic Expenditure Hoax

It’s a two and a half hour flight from Moscow to Sochi and when you land you are in another world. Sochi is absolutely unique and like no place else in Russia, a gem in its own right. Sheltered by the Caucasian mountains from the severe northern winds which sweep over most of Russia in wintertime and tempered by the Black Sea breezes the summer, Sochi has a pleasant climate all year round. While the other resorts to the west on the same Russian Black Sea coast may get winter peak colds of -10 degrees and below, Sochi could see morning frosts but daily temperatures rarely drop below +10. There’s a reason the climate is characterized as subtropical.

Leaving Moscow birch trees and Siberian pines behind, the traveler when he emerges from the airport is amazed to be welcomed by swaying palm trees. And, above the palms, you will behold the snowcapped peaks of the guarding mountains lit by the sun.

It’s not only the nature and climate that make Sochi special, the man-made environment is also unique for Russia and at the highest global levels. Russia went through some rough times in the 20th century, which set a mark on most its cities, but in Sochi there is not a trace of bygone Soviet decay. Everything is as neat as we would think of countries like Switzerland. At the same time, we see stunning new Miami-style high-rise buildings perfectly placed among the lush scenery. A lot of that marvel came courtesy of Vladimir Putin’s bold decision to transform Sochi into a world-class all-year tourist destination in the run-up to the 2014 Winter Olympics.

The Sochi hoax just won’t go away

I was reminded of this just recently, when in my research on the Russian economy I plowed through a couple of grant-fueled Western accounts of the economic history of the Putin years. One was Chris Miller’s book (2018) with the ridiculous title “Putinomics” (as unfit as they come for a book purporting to be academic research). The other one, a 2019 book from the Atlantic Council’s fiction department hack Anders Aslund – of Russian shock therapy fame – with the no less bizarre title “Russia’s Crony Capitalism.” In the case of Aslund and his employer, I am sure nobody would have expected anything else.

Miller unilaterally declared: “What is clear, however, is that a significant share of the funds invested [in Sochi] were wasted or stolen.” For evidence he refers to Navalny’s fraudulent pamphlet in addition to all the other propaganda clichés. (*1). In his book, Aslund in turn returns time after time – without any justification – to Sochi as an alleged hotbed of corruption and waste and one of the alleged original sins of Putin.

As these fellows cannot in the real Russia detect, no matter how hard they try, any Putinomics and not much of crony capitalism either, they just make it up. One of the favorite clichés such sham analysts resort to in order to back up their agenda-driven narratives about Russia is the supposed corruption and lavish spending in connection with the Olympic Games, trying to convince their readers that it was all nothing but “Putin’s vanity project.”

This line of attack was first developed in a desperate attempt to destroy the reputation of the Russian Olympic games even before they were held. Another topic on the anti-Sochi black agenda centered around the fake claims that gay people were supposedly persecuted in the country. And everything culminated just a couple of days before the games started in the wacky claim going viral in Western media that the Russians had built “twin-seat toilets,” toilets designed to have two people doing their business next to each other in one cubicle. In reality, the photos were from work in progress just before the partition walls and cubicle doors were being installed.

The Nemtsov report

The original raw material for the corruption and overspending narrative was delivered by late rabid opposition activists – derailed presidential hopeful from the anarchy of the 90s – Boris Nemtsov. It was a shamelessly forged report titled “Winter Olympics in the Subtropics: Corruption and Abuse in Sochi” (2013). (*2). Nemtsov as a sworn nemesis of Putin was a totally unreliable witness to start with, it was clear that he would have no intention to render an honest and fair account of what was going on. All he wanted to do was to destroy the Games and deny millions of Russians, whose lives he had already conspired to wreck in the 1990s, to take pride in the Olympic Games which symbolized the national awakening and resurrected prosperity. – But the Western press sucked it all up – of course, because they were part of it.

Nemtsov’s report was rehashed in January 2014, just before the games were set to open, by another frenzied one-cause anti-Putin activist, Alexey Navalny, who basically plagiarized Nemtsov’s report with an added portion of hyperbole. (*3). This with the predictable and orchestrated knee-jerk reactions of the combined Western media.

The central claim and giant falsehood in these reports was the contention that the $50 billion dollar budget for the Sochi region in the run-up to the Olympics would have been event-based, that is, supposedly been spent on organizing the Games with a zero residual value. Following this blatantly false argument, the critics then pushed the meme that the Sochi Olympics would have been by far the most expensive in history. In reality, the actual organizing costs of hosting the Games, including the construction of all the sporting facilities was $10.6 billion, while the resting $39 billion were investments in the Sochi urban infrastructure. This infrastructure spending was related to the Games only insofar as Putin had wanted to take the chance of upgrading at one fell swoop Sochi into a modern urban area and world-class resort, a first for Russia. It was an investment for the future. Real experts never doubted the wisdom of that decision, but today only the most diehard lying propagandist could argue against it, as it is shown in the present report.

The $10.6 billion spent on Sochi is perfectly in line with other recent Games. The cost of London 2012 Olympics was $13.9bn, and that is a city which even from before had all the sporting infrastructure you could wish for. Sochi had none. Vancouver in 2010 coughed up $8.9bn. Pyeongchang 2018 had a cost of $13.1bn.

With the $40 billion, which did not form part of the organizational costs, Sochi has indeed been transformed into a top destination for both winter and summer tourism as well as business travel with amazing congress facilities and a solid offering of high-class hotels.

This is what Sochi in reality got with that money

Let’s see what Sochi in reality got for that money in addition to the amazing sports facilities:

  • A state-of-the art modern airport
  • A new seaport for cargo, passenger liners, ferries and personal boats
  • Several new railway stations, among them the Adler station which is one of the biggest in Russia (not known for its miniscule rail stations
  • 367 km of roads and bridges
  • 967,400 square meters of road surface and pavements
  • 200 km of railways, with 22 tunnels, 54 bridges and several multi-level junctions
  • Two thermal power plants and one gas power plant with a combined capacity of 1200 MW, and four electric substations
  • 480 km of low-pressure gas pipelines
  • 550 km of high voltage power lines
  • A new water and wastewater treatment facility
  • Three new sewage treatment plants
  • A new graduate-level Russian International Olympic University
  • 60 new educational, cultural and health facilities
  • Two hospitals
  • A fascinating cluster of mountain villages built from scratch in the Krasnaya Polyana area (Gorky Gorod, Rosa Khutor, and others)
  • 25,000 additional hotel rooms, with 56 hotels rated four-star and above
  • A new theme park (Sochi Park)
  • A Formula 1 racing track (not an Olympic sport)
  • Renovation of a huge number of residential houses and public space
  • Barrier-free accessibility to public and commercial buildings for disabled persons
  • A 7-kilometer pedestrian and bicycle seaside boardwalk, Russia’s coolest along the newly created impressive beach down at the Olympic Village in the Imereti Lowlands

Most of the details for the above list were derived from Oleg Golubchikov’s marvelous report on the actual costs of the Sochi investments. (*4). Golubchikov provides transparent and detailed costs on each investment category with a division of the costs on organizational costs and investments in sporting facilities, and the Sochi urban infrastructure. Incidentally, he reaches the same grand total of $50 billion ($49.5bn, to be precise) for the combined costs as the propagandists announced, but with the difference that he shows where the funds in reality went. According to Golubchikov, the direct costs for holding the Games amounted to $10.75bn, whereas the infrastructure costs were $38.76bn. There is a break-down of both cost groups in his report, while the below table focuses on the infrastructure costs, which were the objects of the fabricated scandal.

This data on the costs and the infrastructure investments that they went into should convince anybody who is interested in the truth that there has absolutely been no squandering of funds and that $39 billion of the alleged “most expensive Olympics ever” in fact were investments in the Sochi urban infrastructure. Nevertheless, we will proceed below with exposing some more details, which should finally put the Nemtsov hoax to rest.

Nemtsov’s calculations just don’t hold water – and were never meant to

Nemtsov’s and Navalny’s propaganda pamphlets were masquerading as sound economic analysis based on global comparisons of alternative costs. Their findings then purported to show that Russia had built the Sochi objects significantly more expensively than global best practices would have it. As those reports are nothing but blatant propaganda and the calculations without merit, it would not make any sense to try to decipher them in detail. Just one example, concerning road and railroad works, the most expensive objects, will suffice more than enough.

I remind, 367 km of roads and bridges and 200 km of railways were constructed with 22 tunnels, 54 bridges and several multi-level junctions. These included, among other things, a new elevated road passing through the whole city of Sochi (the Kurortny Avenue bypass road), an extension of the Sochi ring road, and the combined railroad and highway connecting the sporting cluster down at the Adler coastal area with the skiing cluster up in the mountains at Krasnaya Polyana. The latter was by far the most expensive individual investment. The railroad and highway are each 48-kilometer long and include 10.3 km of railroad tunnels, 6.7 km of highway tunnels and 6.7km of escape tunnels, in addition to 40 highway and 37 railway bridges and overpasses with a combined length of 35 km.

The total cost for these were $10.3. In Nemtsov’s account the cost was $9.404. The difference may be explained by the additional stretch of railroad going from the Adler railway station to the airport. Nemtsov claimed that the expenditure on the road would normally buy 940 kilometers of highway. That is a highly dubious claim in itself, but most importantly, Nemtsov is here cutting corners and straightening the bends by comparing flatland highway with a mountainous road with tunnels, bridges and underpasses. But those were precisely the challenging and costly parts of the entire combined highway and railroad.

Instead of minding the Nemtsov antics, we can just look at a very transparent comparative project cost from the United States. In 2013, construction began on the Alaskan Way Viaduct replacement tunnel, a bored highway tunnel in the city of Seattle, Washington. It is a 2-mile (3.2 km) tunnel under Downtown Seattle. The construction cost was estimated at $3.3 billion. (*5).

Once again, this is a 3.2 km tunnel that cost $3.3 billion. But the Adler-Krasnaya Polyana highway had 6.7 km of automotive road tunnels, 10.3 km of railroad tunnels, 6.7km of escape tunnels, and 77 bridges and overpasses. Now, compare that with the total price of the merely 3.2-km Seattle tunnel. What can you say, glaring economy in favor of Russia here. With the Seattle cost level, the expenditure on tunnels alone would have been $17.5 billion, not counting the escape tunnels, bridges, overpasses and the surface parts of the 48-km four-lane road and 48-km railroad.

There is no reason to refrain from spelling it out: Nemtsov was not mistaken here, he was lying. His narrative is full of holes and deliberate attempts to confuse the reader. (He would not have fooled anybody, hadn’t it been for the orchestrated media propaganda). In his scandalous report, Nemtsov claimed that the combined “highway/railroad” had cost $9.404 billion. But immediately in the next paragraph, the activist dropped the railroad part and pretended that the expenditure was exclusively for the highway, to quote: “For 266 billion rubles, you could build 940 kilometers (and they only built 48 kilometers!) of high-quality four-lane highway in Russia…” (*6). Thus the 48 km railroad – which made up at least half of the cost – was magically made disappear from the comparison.

But that’s not all, next Nemtsov spirited away the tunnels, bridges and overpasses. Quote: “To estimate the cost of the 35-kilometer portion of the four-lane highway, we will use the average European cost – $10 million per kilometer. Thus, the price of the automobile road without the bridges and tunnels would be $350 million. One kilometer of high-speed railroad track, according to average European standards, is $45 million. Thus, the 25.7 kilometers of regular rail track should cost $1.156 billion.” – Here the railroad is back in the narrative, but the items that objectively carry a high cost – tunnels, bridges, overpasses – were all wiped out and never returned into Nemtsov’s mendacious narrative. Interestingly enough, there was that admission of those costly items being omitted. That is a common propaganda ploy, the fabulists mining their narratives with half-truths to gain tools to deflect criticism.

The above exposure of the Nemtsov bluff has clearly shown that the intention was just that: to bluff, to create a giant propaganda hoax aimed at spoiling the Games and sullying the reputation of Russia and its president.

There’s another giant transparent con right in the introduction of the Nemtsov travesty. Although he proceeds further down in the report to discuss the cost of the road building, Nemtsov pretends in the introduction that the $50 billion was all spent on sporting facilities. Quote: “With over $50 billion already spent, it is more expensive than the sports buildings of all 21 other Winter Olympics combined.” (*7). – He compares the cost for an airport, a seaport, several railway stations, power plants, power lines, gas pipelines, all those 367 km of roads and bridges, 25,000 hotel rooms, etc. etc. with previous costs on sports building. Give me a break and STFU.

Spinning the facts, he tells that the original budget for the sporting facilities and organization costs were $12 billion, but then allows (referring to the experience from previous Games) for regular Olympic cost overruns and inflation (from 2007 to 2013) and concludes that $24bn would have been the fair price. Therefore, Nemtsov fancies, the remaining $26bn would consists of nothing but “embezzlement and kickbacks.” (*8). This ridiculous postulation amounts to saying that the real price of organizing the Games and getting all that amazing infrastructure – of which only the Adler-Krasnaya Polyana combined highway and railroad had a fair cost, by global comparison, of at least $25bn – would have been only $24bn.

The Sochi Olympic expenditure also compares favorably with the Berlin Brandenburg Airport (in construction since 2006 and still unfinished, sic!) with a present price tag of 10.3 billion euro. (Approximately USD 13 billion). (*9).

A good gauge is also the approximately $3 billion that Toronto is planning to invest in just one subway station. (*10).

Enough of the fairy tales, now let’s return back to the real Sochi.

Tourists are Flocking to Sochi

All these infrastructure goodies obviously remained in Sochi after the Olympics. They were not dismantled and tucked away after the Games as the brothers-in-arm Nemtsov and Navalny and their cheerleaders in the Western media insinuated. They are there for the millions of visitors and the population of Sochi to enjoy. Notably, the population has grown with one fifth, up from the pre-Olympic 368 thousand to present day 450 thousand.

In the same period from 2013 to 2018, the number of visitors has nearly doubled from 3.8 million to levels around 7 million. It is difficult to pinpoint an exact figure for visitors as many stay in private accommodation, rented or owned, but that must be the level. A foolproof indicator is the number of passengers travelling through Sochi airport. It has grown 150% from 2.4 million in 2013 to 6.3 million in 2018. (Note, both arrivals and departures are counted in airport statistics). A further 10% growth has been reported for first half of 2019.

Obviously, this tremendous growth in population and visitors would not have been possible without the $40 billion investment in Sochi’s infrastructure.

It has been established that 25,000 additional hotel rooms where built for the Olympics, of these 12,000 in 56 new world class hotels rated four-stars or above. This practically doubled the pre-Olympic capacity to a total of 55,000 rooms. Before the Olympic boom, Sochi had only one single hotel conforming to international standards, a Gazprom owned Radisson establishment with 200 rooms.

There’s more devastating news in store for the propagandists. The Olympic constructions did not result in any overcapacity, far from it, on the contrary the number of hotel rooms has significantly further risen since then. Reporting on the results of completing the new mandatory star rating procedures for hotels, the Sochi city administration told in February 2019, that the city now possessed a total capacity of 84 thousand rooms combined in 2,387 hotels, guest houses and hostels. (*12). On top of that comes the huge number of private accommodation.

This means that there has been a major shift towards more value-added visitors. With this total capacity, Sochi was ready to accommodate 200 thousand guests simultaneously in one day during the FIFA football world cup.

For sake of comparison, Helsinki (Finland) has built only 63 hotels with a combined 9,373 rooms in its entire history. (*12). Sochi then built 5 times more in just a couple of years before and after the Olympics than one of Europe’s major capital cities managed in over 100 years.

Interestingly, due to good bookings, the mountain resort hotels also get guests in the summer, and the coastal hotels in the winter.

Western wishful predictions of doom and gloom failed to materialize

Right after the Olympic games, the Western media kicked off a follow-up campaign designed to convince that all the investments actually had been in vain. Sochi is “Deserted and already falling apart,” The Daily Mail gleefully declared. (*13). A “ghost town,” announced the spooks at The Guardian (*14). “A $51 billion ‘ghetto’: Extraordinary images show Vladimir Putin’s Sochi Olympic park lying desolate and abandoned one year after most expensive games in history,” more lies from London. (*15). I cannot even get worked up about these claims — they are so ludicrously flawed — just what one would expect from the London fiction factory.

As there simply was nothing real to complain about, what the Western reporters did was to go up to the mountain winter sport cluster in summertime to report that no skiers were spotted, as the CNN did (*16), and then descend onto the coastal beach resort in wintertime (*17) to share their amazement over the empty beaches, as The Daily Mail did. (*18). The winter is mild down there, rarely cooler than 10°C in daytime, but it hardly qualifies for a beach season.

As post-Olympic Sochi really has been a resounding success, this line of attack is largely dead in the media. My impression is that the only ones who are trying to rehash the scandals are Moscow based correspondents of Western media who want to take a long weekend off and travel over to Sochi to enjoy some nice days in the sun during the Moscow winter gloom. It’s a surefire trick to get your employer to pay for it by promising a report about the “post-Olympic decay of Putin’s vanity project.” But even so, they seem not to be able to deliver, as for example was the case with Marjo Nakki from Yle, Finland’s state broadcasting corporation. She enjoyed her free meal but really had nothing to complain about. (*19).

For those who are interested to see how the real Sochi looks like, I refer to an article which I wrote back in 2017. It has a lot of pictures displaying the beauty of Sochi. Here is the link https://russia-insider.com/en/society/sochi-sunny-side-reality/ri4658

White Elephants Live and Kicking

What about the claims that the Olympic sporting arenas stand out like white elephants – unfinished, useless and abandoned? Already a few days before the games even took off, Voice of America declared that “Sochi Facilities Will Not Be Used After Olympics.” (*20). Alas, this wish did not come true; far from it.

These sporting facilities are surrounded on a large territory by hotels, convention centers, and various clusters of housing developments originally built to accommodate the Olympic teams, support staff, organizers and media. The result is an extraordinarily vibrant residential and recreational area with a gorgeous beach on one side and snowcapped mountains on the other. This area will for sure provide for some of the best quality of life in Russia, and a good one by any global standards.

And the venues are bustling with activity. One of the ice rinks is the busy home rink of the new Sochi Hockey Club, debuting in Russia’s prestigious KHL league right after the Olympics in 2014. The club draws between six to ten thousand spectators per game. Another ice rink is being used for various figure skating activities and ice shows. A third one has been converted into a Russian central facility for child health and sports activities. The speed skating arena was turned into a tennis center with nine courts under roof and 15 open-air courts. The Fisht Stadium, the central stadium of the Sochi Olympics, which hosted the opening ceremony of the Olympic Games, was fast reconstructed to serve as one of football stadiums for the FIFA World Cup in Russia 2018. In 2014 Sochi hosted its first annual Formula One race on a street circuit built around these venues of the Sochi Olympic Park.

The sporting venues and adjacent hotels and congress centers have also been busy with continuously hosting one or another top level conference or summit.

President Putin has practically transformed Sochi into the country’s summer capital, where he frequently meets with foreign dignitaries during the sunnier half of the year. This also tallies with Russia’s pivot to Asia as Sochi is much closer to those countries.

Real Estate

Sochi saw a lot of real estate development – not included in the famous $50 billion price tag – across the city in the years leading up to the Olympic Games. After the sharp devaluation of the Russian ruble in 2014/2015 in the wake of the Western-imposed sanctions and the decline of the oil price, the Sochi real estate prices initially declined in in dollar terms. But since the decline the prices have surged by more than 100 to 200%. Premium category apartments with a sea view currently sell at a level of five to ten thousand dollars per square meter.

Concluding remarks

The present report should serve to convince the skeptic that without even a glimmer of doubt the bulk of the much touted Sochi $50 billion investment budget went towards a regional transformation and a thorough infrastructural overhaul of Sochi with a lasting impact. The reports about vanity spending and corruption can be firmly put down to malicious propaganda aimed at destroying Russia’s and its presidents external image, wipe out national support for the Games, and destabilize Russia’s political system.

Now, we are not saying that there would not be any legitimate concerns about the Sochi spending, there always are in connection with such huge projects, in all countries of the world. And while Russian law enforcement and the president have addressed some of them, the so-called opposition and their foreign cheerleaders have done nothing to expose any kinds of real misallocation of funds, solely concentrating on an entirely fictious propaganda narrative.

In addition to the impressive data evidencing the permanent economic boost that those investments delivered to Sochi, we may look at this from the point of view of the national economy. After the Sochi investments and the reunification of Crimea with Russia, the nation’s current account surplus got a $20 billion boost in form of a much lower capital outflow on foreign travel. In 2013, Russians spent $53 billion on travel abroad, but by 2018 the figure was down at $34 billion. Obviously, not all that money saved from foreign travel was spent in Sochi and Crimea, but these places sure made an enormous contribution towards it.

Finally, let’s see how miniscule the alleged scandal would be in an international comparison, even if the whole propaganda lie had been true. In the wake of the 2008 financial crisis, the United States spent on entirely murky bailouts of the country’s banks and largest corporations 475 billion on the federal TARP bailout program. In addition to that the Federal Reserve’s own bailout program regaled the banks and corporations with $1.2 trillion in the immediate aftermath of the crisis (*21) without any oversight in blatant corruption schemes. (*22). These were followed by more venal schemes in form of Fed’s program to pump $3.5 trillion of virtually interest free money to those private entities belonging to the American financial aristocracy. (*23). Those funds were further contributed by the highly contentious $787 billion Obama stimulus package. Independent analysts have shown that, Obama’s stimulus package resulted in nothing else but “waste, fraud and abuse as well as highly questionable projects.” (*24).

I bring up the American corruption here, because the fabricated Sochi spending scandal was aimed at portraying Russia as a particularly corrupt country. Without any evidence and distorted facts and outright lies the propaganda media indeed managed to convince a substantial majority of the Western populations that this was the case. Therefore, I find it very opportune to remind where the real corruption and waste resides. After all, those people, and types like above referenced Chris Miller and Anders Aslund, especially designed their narratives to convince the public how a supposed byzantine Russian government was the epitome of crony capitalism in comparison with the shining city upon a hill that their America is supposed to be.

FOOTNOTES:

*1. Chris Miller (2018). Putinomics. Pages 139 and 140.

*2. Boris Nemtsov and Leonid Martynyuk (2013). Winter Olympics in the Subtropics: Corruption and Abuse in Sochi” (2013). https://www.putin-itogi.ru/cp/wp-content/uploads/2013/05/Report_ENG_SOCHI-2014_preview.pdf

*3. Alexey Navalny (2014). Sochi 2014: The Comprehensive Report. https://sochi.fbk.info/en/report/

*4. Oleg Golubchikov (2017): From a sports mega-event to a regional megaproject: the Sochi winter Olympics and the return of geography in state development priorities, International Journal of Sport Policy and Politics https://www.tandfonline.com/doi/full/10.1080/19406940.2016.1272620

*5. https://en.wikipedia.org/wiki/Alaskan_Way_Viaduct_replacement_tunnel

*6. Nemtsov report, pages 23 – 25.

*7. Nemtsov report, page 6.

*8. Nemtsov report, page 6 and 7.

*9. https://en.wikipedia.org/wiki/Berlin_Brandenburg_Airport

*10. https://www.theguardian.com/cities/2017/nov/24/3bn-subway-station-toronto-alaska-bridge-pyongyang-hotel-valencia-city-arts-sciences

*11. https://ria.ru/20190219/1551082088.html

*12. https://www.stat.fi/til/matk/2018/12/matk_2018_12_2019-02-07_tau_005_fi.html

*13. https://www.dailymail.co.uk/news/article-2589194/How-Sochi-ghost-town-just-weeks-Olympics.html

*14. https://www.theguardian.com/sport/2014/dec/17/sochi-olympics-legacy-city-feels-like-a-ghost-town

*15. https://www.dailymail.co.uk/news/article-2941216/Extraordinary-images-Vladimir-Putin-s-Sochi-Olympic-park-lying-desolate-abandoned.html

*16. https://edition.cnn.com/videos/world/2014/10/13/bizview-davies-rus-ghosts-of-sochi.cnn

*17. https://edition.cnn.com/videos/world/2014/10/13/bizview-davies-rus-ghosts-of-sochi.cnn

*18. https://www.dailymail.co.uk/news/article-2589194/How-Sochi-ghost-town-just-weeks-Olympics.html

*19. https://yle.fi/uutiset/3-10380886

*20. https://www.voanews.com/content/expert-worry-sochi-facilities-will-not-be-used-after-olympics/1844282.html

*21. https://www.forbes.com/sites/mikecollins/2015/07/14/the-big-bank-bailout/#482128b32d83

*22. A fantastic description about the bailout and Federal Reserve quantitative easing frauds and corruption schemes is provided by David Stockman in his The Great Deformation (2013).

*23. https://www.awaragroup.com/blog/with-global-recession-looming-russia-looks-strong/

*24. https://www.judicialwatch.org/corruption-chronicles/more-stimulus-fraud-waste/

 

LOVELY ENCOUNTERS IN SEVASTOPOL, CRIMEA

Source

Eva Bartlett

I have a lot to update on from various areas of Russia over the past few weeks, but have been working hard on a special project that takes priority over all my other work and over even simple updates (and which unfortunately two days ago I had to re-start from the beginning when my project and backup project inexplicably failed).

Yesterday was one of the few exceptions to me taking time from that project to post an update, because it’s just too lovely to not post while still buzzing from the happiness of the encounters I had in Crimea today, again.

Yesterday afternoon, I walked 25 minutes or so from my Simferopol hotel to the train station, managed to buy a ticket thanks to translation app (119 Rubles, several hundred fewer than the bus prices I was seeing online), and had a delightful train ride in a slow train filled with locals getting off/on the train periodically over the two hours of the journey.

Wooden seats, chug chugging, sun beating down on me whichever side I moved to. Authentic simple travel that I love.

Aside from the lovely countryside, what I kept noticing was that on either side of the train I saw every so often more construction, improving the infrastructure.

20190827_164259

After arriving in Sebastopol, I realized I needed to find a cafe or somewhere I could sit and charge my phone enough to navigate to the room I thought I’d successfully booked for a few nights.

As I stood orienting the map route (on mobile)and zooming in to see if any signs of cafes or other popped up, a woman walked by me and said with a smile something with the word “shto”, which I think means ‘what’. When I replied in English, she laughed sweetly and flagged down another woman who spoke English.

That woman at first was suggesting I take one of the trolley-buses into the centre of the city, but when I showed the map and my destination, she said she and her husband would take me instead. I normally walk wherever I can, but this was a pretty great offer…one which I appreciated even more when the road became a slow and long incline which would have been a pain with the suitcase and laptop backpack.

I’d expected to walk only a few kilometers but by the time their car arrived at the guesthouse, I was relieved they’d offered to drive me: it was further than I had expected to walk.

As we drove, we chatted. At one point, I asked her about the referendum. I mentioned that some in Canada and elsewhere have the notion that it was done under duress, with a heavy military presence to influence the vote. She laughed, saying, “We are now under the wing of Russia.”

“There were no troops, no military, around us during the referendum.”

She spoke of the joy of Crimeans to vote.

She said that 98% of Sevastopol had voted in favour.

I asked about positive developments since then. She mentioned the improvements in roads, the opening of kindergartens and schools. Free courses (like music) for children.

I’d heard some of these points a few nights ago in Yalta (I have a very interesting, very informative, audio to post of a woman in Yalta speaking at length, but again I have to prioritize for now the project I’m working on, especially since all my work was inexplicably lost [corrupted?] the other day and I had to start over.).

The woman in Yalta mentioned (correct my memory if its wrong) 200 new kindergartens since the referendum. I jotted a couple notes on my mobile as she spoke, including that when she moved to Crimean in October 2012, everything was ‘dilapidated and run down’.

“The nice roads you were driving on, they didn’t exist when we were a part of Ukraine.”

As I stood inside the guesthouse I’d tried to book a room in, waiting for someone to greet me and sort the room, the woman who’d offered to drive me mentioned her parents have a guesthouse overlooking the bay. Ding dong! When nobody materialized after around 10 minutes, I took her offer to rent from her parents instead.

What a fantastic happenstance. Beautiful home, little apartment setup, 2 minute walk to a lookout of the bay, or 30 second walk if I go up to their balcony. They are lovely, so hospitable, have a fig and pear tree (and I consequently have a brimming bowl of fruit).

I have a pair of sandals I bought from a shoe-maker in Beirut. They’re comfortable and nice, but while walking, one of them became a flip-flop, the glue unstuck. Guesthouse owner had repaired it for me while I was walking back from the grocery store.

They invited me for dinner and also suggested I cool off in their little pool, but I had to politely decline in order to get back to my work. But I did take a few minutes just now to enjoy their pool, and the stars, the silence, and the incredible fragrance of some night blossoms.

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