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The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russia Update: December 4, 2014

Publication: Russia Update
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The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russia Downgraded Even Further to 136th Place by Transparency International

Russia has been downgraded from the 127th to 136th place in the Corruption Perceptions Index posted by anti-corruption group Transparency International yesterday December 2, Russia Beyond the Headlines reported.

Russia demonstrated a one-point drop to 27 points in 2014 and occupied the 136th place sharing it with Nigeria, Lebanon, Kyrgyzstan, Iran and Cameroon, Transparency International said.

Russia ranked 127th with 28 points in the 2013 survey of the organization.

Ukraine is in the 142th place. Georgia, at 50th place, is the best, and Turkmenistan, at 169th place, is the worst in the Eurasian region.

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Opposition Leader Boris Nemtsov Analyzes Putin Speech; 'He Did Not Say a Word About Corruption'

Opposition leader Boris Nemtsov had a short analysis of Putin's speech today to the Federal Assembly. The Interpreter has a translation:

1. The cold war is a new reality in which Russia will live while Putin is in power.

2. The aggression and arms race will continue.

3. The amnesty for capital will not lead to a return of money to Russia. In order for money to return, there has to be trust between the governmentn and business. It is equal to zero. therefore money will flee from Russia, and in fact in large quantities. $130 billion has fled even in 2014 alone.

4. Taxes will not be raised further for 4 years and business will not be tormented by inspections. Good news. To be sure, this was said when taxes on small business were already introduced.

5. Inflation at 4%. Stupidity. This year there is a minimum of 10%, next year 7.5% according to forecasts from the Central Bank and government.

6. Putin will give money to Sechin, Miller, Yakunin and Timchenko [CEOS of Rosneft, Gazprom, Russian Railways and owner of Volga Group, respectively ] through state banks from the Fund for National Welfare. Whoever doubted it.

7. Labor productivity will grow by 5%. Usually productivity grows by increasing competitiveness, or through reducing wages. Under Putin, competitiveness is destroyed everywhere, so expect reduction in real wages.

8. He did not say a word about corruption. Rotenberg, Yakunin, Miller and Kovalchuk sat in the room. It was awkward in front of the guys...

And it's a severe  problem. Putin's Russia is at 136th place in the world [in Transparency International's latest survey, which further downgrades Russia this year]. It is alongside Nigeria and Cameroun. Belarus and Kazakhstan look better.

God save Russia.

Nemtsov published a screenshot of the TV while Putin was speaking, which featured a ticker tape saying the ruble rate was improving as Putin spoke. Then he showed a chart where the ruble went up slightly today.


It's hard to know whether the content of Putin's speech actually affected the market, or whether the advertising that it should affect it made it actually work.

Ruble-and-Speech.jpg Nemtsov's comment that Putin didn't speak about corruption was interesting.

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Body of Civilian Found in Press House Rubble in Grozny Following Police Storm on Terrorists

Chechen President Ramzan Kadyrov has declared the counter-terrorism operation (CTO) in response to an attack by Chechen insurgents last night "over," with nine terrorists killed, 10 policemen killed, and 28 police wounded. Yet there are reports of continued fighting and the city entrances are closed.

The body of a civilian has been discovered under the ruins of the Press House in Grozny, which was blasted by police troops firing on terrorists hold up in the building since last night, Caucasian Knot reported, citing a source in law-enforcement.

A source close to the Association of Young Entrepreneurs of Chechnya which was on the 9th floor of the Press House said their group's chairman, Vladislav Vorobyov, was killed in the storming of the building.

Vladislav Vorobyov, Russian business owner killed in Grozny.

Association of Young Entrepreneurs of Russia, the national organization, later published a message of condolence about the killing of the leader of their local chapter, but the Grozny chapter still has no comment.

Vorobyev, an ethnic Russian, managed a furniture store in Grozny. He was said to have suffocated when the building collapsed after police fired on terrorists inside.

Colleagues are worried that other entrepreneurs who had come to an exhibit titled "Franchising: New Opportunities for Business" held yesterday could also be trapped or dead in the building.

Caucasian Knot reports that forces from the Federal Security Service (FSB), the Interior Ministry and the Emergencies Ministry have been involved in the counter-terrorism operation in Grozny. Several fighters took over School No. 20 and were blocked there.

Bodies of policemen killed have been brought to the Interior Ministry building and are to be turned over to relatives for burial, a source from the Interior Ministry said. Each family will receive one million rubles in assistance (US $18,380).

Little information about the incident and response has been available. Some residents of downtown Grozny say that Chechen forces were firing indiscriminately, and brought BTRs and heavy weapons to the scene, in their battle with the terrorists, who were said to be from the Caucasus Emirate group.

One resident who gave only her first name, Kheda, told Caucasian Knot the following (translation by The Interpreter):

At first we heard an explosion, and then in a little while the gunfire started. Then BTRs were brought to the center and large-caliber cannon to the Press House. They used everything they could, mortar launchers, grenade launchers and machine guns. The gunfire was so intense and indiscriminate that the bullets were ricocheting into other buildings. We live in a building that is next to Journalists' Square, which is right opposite the Press House. So we couldn't even go to the window, let alone get up from the floor. That is how we spent the night until morning, lying on the floor.

Another Grozny resident who gave his name as Mokhmad I. said:

The authorities say there are only killed fighters and police. But today at dawn a friend and I drove across Zavodskoy District, and there, on the road, stood a shot-out Toyota. The car had its glass broken on the left side, and inside sat a killed man in civilian clothing.

Caucasian Knot was unable to get information from either the Grozny emergency rooms or the Health Ministry about casualties.

School classes were cancelled today and tomorrow December 5, although some parents discovered this only after they had sent their children to school.

Entrances to the capital remain closed. Another man attempting to go to a funeral told Caucasian Knot that he encountered a checkpoint at Pervomayskoye where they were delayed for an hour and a half and were not allowed through. They had to make their way to their destination by circuitous routes.

Police have also set up a checkpoint at Khankala, the site of the Russian military base, as well as in Argun. Taxi drivers are revising to take fares into Grozny saying they cannot then leave the city.

Yet the Interior Ministry department in Chechnya is claiming that the CTO is only to affect the center of Grozny near the Press House and School No. 20, not surrounding towns, but eye-witness reports contradict this.

-- Catherine A. Fitzpatrick

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Head Of Coca-Cola Factory Murdered In St. Petersburg

The Investigative Committee of Russia reports that Dmitry Soshnev, the head of a Coca-Cola plant in St. Petersburg, has been murdered. Kommersant reports that the agency has arrested two men on suspicion of murdering the 37-year-old businessman.

Dmitry Soshnev, father of two, went missing on November 28. reports that he was last seen leaving the factory compound on his BMW. The police found the car in the Frunzensky neighborhood during the investigation which started after the victim's mother reported Soshnev's disappearance,  writes Interfax. Soshnev's body was discovered soon after.

The Investigative Committee has arrested two men over the businessman's murder. One is a 28-year-old Azerbaijani citizen Denis Chkhitauri, who the agency believes was previously acquainted with Soshnev. The other is  46-year-old Vyacheslav Finogenov, who in 2007 was already sentenced to seven years in prison for murder.

The agency says that the two men arranged to meet Soshnev near Frunzensky garages. After murdering the man, the suspects took 150 thousand rubles (approximately US $2,800) and the car title from his BMW, which they intended to sell.

It is unclear why Soshnev came to the meeting with such a large amount of money. Several publications claim that he was looking to buy drugs from Chkhitauri. However, the Investigative Committee "categorically" insists that they do not confirm this version. The agent interviewed by Kommersant says that Soshnev may have intended to conduct a car deal with Chkhitauri and Finogenov, adding that this version has also not yet been confirmed.

Interfax reports that the Oktyabrsky District court of St. Petersburg has moved to keep Finogenov in custody pending further investigation. The Investigative Committee expects the court to take a similar decision with Chkhitauri. According to the investigators, both men have fully admitted their guilt and have cooperated by providing detailed accounts of the murder.

-- Anton Melnikov

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Putin Downplays Economic Crisis, Chechen Terrorism; Ignores War on Ukraine in Address to Federal Assembly

Russian President Vladimir Putin gave his annual address today, December 4, to the Federal Assembly, the national parliament which consists of the State Duma (lower chamber) and the Federation Council (upper chamber.)


The presence in the front row of the audience of the Moscow Patriarch illustrates the continued stress on the importance of the Russian Orthodox Church.

Putin's target audience was summed up by the top photo today on RIA Novosti's Instagram feed, showing Putin's typical demographic:

Translation: Woman in Chelyabinsk watches a TV broadcast of Vladimir Putin's address to the Federal Assembly. Did you watch the president's speech? Photo by Aleksandr Kondratyuk/RIA Novosti.

Translation: This was an address not to the Federal Assembly (the elite, which everyone understands), it was an address to the Russian television viewer. So everything is without changes.

Gudkov is one of the few remaining opposition leaders in the State Duma.

TASS had a summary of Putin's remarks, which The Interpreter has summarized in translation, with quotations:


This is an "inalienable part" of Russia and a historical moment. It was in Kherson that Prince Vladimir accepted Christianity who then Christianized all of Rus', so it is the "spiritual source of the formation of a multifaceted but monolithic [ethnic] Russian nation and Russian [civic] state."


The Ukrainian people are a "fraternal people."

"Each people have an inalienable right to their own path of development, to the choosing of their allies, to the forms of political organization of their society and the construction of their economy and guaranteeing of their security. Russia will always regard with with respect."

But it is "hypocritical" to talk about human rights which was a cover for the "coup" in Ukraine.


"If it weren't for the situation in Ukraine, the West would think up some other excuse to contain Russia's growing abilities."

Counter-Terror Operation in Grozny

TASS has reported at least 10 policemen have been killed and 28 wounded in Grozny, and described the operation as "nearing completion" although battles continue throughout today.

"The attempt to speak to Russia from a position of strength is pointless, and didn't work even with the difficulties of the 1990s and 2000s."

"These 'rebels' have once again shown themselves in Chechnya. I'm certain that the local guys, the local law-enforcement agencies will cope with this decently. They are the ones today working on the liquidation of the latest sally of the terrorists. We support them."

Economic Liberalization

No changes to the tax system are planned for four years, and a complete amnesty for offshore capital is promised if the business returns to Russia.

"If a person legalizes his funds and property in Russia, he will receive firm legal guarantees that he will not be dragged through various agencies including law-enforcement, nor be 'shaken up' here and there; he will not be asked about the sources and means of obtaining his capitals; he will not encounter criminal or administrative persecution and there will be no questions on the part of the tax services and law-enforcement agencies."

Putin also mentioned "tax holidays" for small business; if an enterprise has a reliable reputation and has no significant reprimands for 3 years, then there will be no inspections from the state and municipal level.

Balance of Forces

After the US withdrew from the ABM treaty, there has been a violation of the strategic balance and frequently "ill-conceived decisions". Russia doesn't intend to get dragged into a long arms race but Russia's defense will be ensured under these new circumstances.

"Our army is modern and battle-ready. As they say now, it is polite, but threatening. We have the forces, the will and the courage to defend our freedom."


Putin called on the Bank of Russia and government to discourage speculators from exploiting the current "fluctuations." Putin acknowledged a "short-term burst of inflation". Citizens with small incomes "must be protected." The Cabinet of Ministers and the regional governments must control prices on food, medications and necessities.

The fall of the ruble increases the competitiveness of domestic companies. And this must be used to exchange domestic medicines and food for imported ones.


Putin said Russia could "break out of the trap of zero growth rates" and go to 5% growth and keep inflation at 4% -- by only making purchases abroad of things for which there is nothing analogous in Russia. The government will make a special purchase coordinating center to get large projects to procure goods from Russian enterprises. More state orders should go to small and medium businesses.


The UN projected Russia's population to drop to 136 million at the end of 2013. But as of January 1, 2014, it was nearly 144 million, 8 million more than the forecast, and a natural growth of the population has been noted for 2 years. With the addition of Crimea and Sevastopol, the population will grow to 146 million. The life expectancy is now over 71.


Putin wants to make 2015 the year to combat cardiac disease. The health system is moving to an insurance system. Doctors must be provided with a certificate to enable them to increase their qualifications or re-train.


Russia should "stop chasing quantity and concentrate on quality" to prepare engineers. Programs to support gifted children are to be encouraged with grants.

Some comments:

o Putin's remarks on Ukraine seem to be a typical example of the Kremlin's "hybrid war" prevarication -- there was nothing specific said about the ceasefire -- or actual lack thereof -- or relations in the future.

o Putin seems keen for now to downplay the threat of domestic terror and leave the handling of the sudden re-emergence of Chechen terrorists to Chechen strongman Ramzan Kadyrov and not specify any new federal involvement -- this enables him to look the other way while mass human rights violations are made on the way to stopping remaining insurgents in the North Caucasus.

o The plan to exonerate all offshore business and guarantee freedom from persecution remains to be tested, but it's also forgiveness for what in some cases is criminal, and related to Putin's cronies. How is this different than the windfalls for oligarchs criticized under Yeltsin's "loans for shares" program?

o Putin seems to be making lemonade out of lemons with the ruble crash -- he never uses the word "drop" but only "fluctuations" -- but it remains to be seen if domestic products will actually become more popular with enforced bans or discouragements on imports, or whether a black market will surge as was the case in Soviet times.

o It isn't clear how Putin can combine both a crackdown on corruption involving more inspections, with encouragement of business. The "tax holiday" isn't well-defined as it applies to those who "keep a good reputation" for 3 years. It is thus subject to arbitrary bureaucracy and cronyism. And nothing was said about tax hikes actually slated for 2015 on small businesses.

o Putin had nothing to say about striking medical workers losing their jobs, or slashes in health care. The campaign against cardiac disease is welcome, but Putin had nothing to say about combating alcoholism or drug abuse.

o One thing Russia has never been short of is engineers, so encouraging more of them may not help the economy. Putin didn't mention Internet business and specifically computer professionals, but then he cost his leading domestic search engine company, Yandex millions of losses on the stock market over the summer when he called the Internet a "CIA invention" and said the presence of foreigners on Yandex's board made it suspect.

With restrictions on bloggers, demands to make Internet providers do more monitoring of customers on behalf of state intelligence and the blocking of sites, Putin has been harming Internet business, not encouraging this sector where Russia could excel with its educated specialists. Silicon Valley is filled with numerous Russian ex-pats who find better-paying jobs and freedom for entrepreneurs in the US. Putin didn't mention the failed project of Skolkovo or other modernization efforts.

Medvedev, once curator of Skolkovo and other scrapped modernization projects was caught napping by Unian on RT footage:


The one thing not falling too much, despite the fall in oil prices and the value of the ruble, is Putin's approval rating:

-- Catherine A. Fitzpatrick