Russia in Review, March 6-13, 2020

This Week’s Highlights

  • Both houses of Russia’s parliament overwhelmingly approved a bill containing constitutional amendments that will allow Vladimir Putin to run for two more terms in 2024 and 2030, RFE/RL reports. The amendment, introduced by MP Valentina Tereshekova was endorsed by Putin, and is to be vetted by the Constitutional Court and by Russians in a nation-wide referendum on April 22. All of Russia's 85 regional parliaments voted in favor of the package of amendments, according to The Moscow Times.
  • Turkish and Russian officials have agreed on the details of a ceasefire in Syria’s Idlib and joint patrols along the key M4 highway will begin on March 15, Turkish Defense Minister Hulusi Akar said, Reuters reports.
  • With a budget break-even oil price of $42 a barrel, about half Saudi Arabia’s reported break-even point, Russia believes it can weather the sharp fall in crude prices for longer than rival producers such as Saudi Arabia and the U.S. shale industry. The Russian government said March 9 it would draw from its $150 billion national wealth fund in order to boost budgetary spending, and that it could maintain that level of support for the next six to 10 years, the Financial Times reports. Meanwhile, Russian Energy Minister Alexander Novak said that Russia sees no grounds for returning to discussions with its OPEC+ partners, according to Interfax.
  • In a new report, SIPRI said that global volumes of arms transfers increased by nearly 6 percent in the 2015-19 period, compared with 2010-14, RFE/RL reports. Russia was the world's second-largest exporter with 21 percent of global arms deliveries, but Russian exports were 18 percent lower than in 2010-14.
  • Almost the entire page of stock prices reported by Alfa Bank in its weekly wrap was red, according to bne Intellinews, meaning shares were down over the last 24 hours, last month, since the beginning of the year and over the last 12 months. Russian state-backed lenders Sberbank and VTB both plunged by more than 20 percent when European markets opened on March 9. Rosneft, also state-owned, recorded a 20 percent drop—equivalent to a $15 billion fall in value—while Gazprom shares crashed by almost 25 percent initially, before recovering slightly to stand 15 percent down, The Moscow Times reports.
  • Britain said it supports Putin’s idea to hold a summit between the leaders of the permanent members of the U.N. Security Council to discuss international peace and security measures, Reuters reports.

 

I. U.S. and Russian priorities for the bilateral agenda

Nuclear security:

  • No significant developments.

North Korea’s nuclear and missile programs:

  • No significant developments.

Iran and its nuclear program:

  • The Iranian Civil Aviation Organization has agreed to send the flight recorders from a downed Ukrainian passenger plane to Kyiv for analysis. (RFE/RL, 03.11.20)
  • In a sharp rebuke to U.S. President Donald Trump, the U.S. Congress has given final approval to a measure to limit Trump’s authority to order a military attack on Iran—a resolution sure to be vetoed by the U.S. leader. (RFE/RL, 03.12.20)

New Cold War/saber rattling:

  • Unless a new arms reduction agreement is reached in the near future, the shrinking of Russia’s strategic nuclear arsenal that has characterized the past two decades will likely come to an end, with the force leveling out at around 530 launchers with roughly 2,500 assigned warheads. (Russian Nuclear Forces, 2020)

NATO-Russia relations:

  • No significant developments.

Missile defense:

  • No significant developments.

Nuclear arms control:

  • An extension of New START should include new weapons systems that Moscow is developing, a U.S. State Department official said. The treaty is scheduled to expire in February 2021 and Washington has said a new accord should encompass "slightly exotic new systems such as the nuclear-powered, underwater, nuclear-armed drone called Poseidon; the nuclear-powered, nuclear-armed cruise missile, air-launched ballistic missile and that sort of thing," the official said. (RFE/RL, 03.10.20)

Counter-terrorism:

  • No significant developments.

Conflict in Syria:

  • Turkish and Russian officials have agreed on the details of a ceasefire in northwest Syria’s Idlib region and joint patrols along the key M4 highway will begin on March 15, Turkish Defense Minister Hulusi Akar was cited as saying March 13. Turkey and Russia will establish joint coordination centers to monitor implementation of the agreement after the conclusion of talks with Russian officials in Ankara. (Reuters, 03.13.20)
  • Turkey's military will patrol to the north of a security corridor being set up around a highway in northwest Syria's Idlib province and Russian forces will patrol the southern side, Turkish Foreign Minister Mevlut Cavusoglu said March 10. (Reuters, 03.10.20)
  • Kazakh Foreign Minister Mukhtar Tileuberdi says it's unlikely the so-called "Astana format" peace talks on Syria in the Kazakh capital will happen this month as planned. A suggestion to hold the talks in March "was made in December, but now the situation has changed. … It is very likely that the talks will not be held" in March, Tileuberdi said, without giving any other details. (RFE/RL, 03.10.20)

Cyber security:

  • U.S. authorities have arrested Russian national Kirill Victorovich Firsov, who ran a hacker "storefront" that took in at least $17 million by selling stolen personal data and other illegal products and services. (AFP, 03.11.20)
  • Microsoft organized 35 nations on March 10 to take down one of the world's largest botnets—malware that secretly seizes control of millions of computers around the globe. The action, eight years in the making, was aimed at a criminal group called Necurs, believed to be based in Russia. (New York Times, 03.10.20)
  • Facebook and Twitter said March 12 they had taken down a network of Russian-linked fake accounts operated out of Ghana and Nigeria which targeted the United States. (Reuters, 03.13.20)

Elections interference:

  • The Russian government has stepped up efforts to inflame racial tensions in the U.S. as part of its bid to influence November’s presidential election, including trying to incite violence by white supremacist groups and to stoke anger among African-Americans, according to seven American officials briefed on recent intelligence. (New York Times, 03.10.20)
  • Trump attacked a leading House Democrat on March 10 over upcoming classified intelligence briefings by members of his own administration on the issue of election interference, suggesting his political opponents were exaggerating the threat from Russia. (New York Times, 03.10.20)
  • The U.S. House of Representatives has a right to see secret grand-jury evidence gathered in the Russia investigation, an appeals court ruled on March 10 in a victory for Congress’ power to gather information for an impeachment inquiry. (New York Times, 03.10.20)

Energy exports from CIS:

  • Armed with a $570 billion foreign reserves war chest, a floating exchange rate and an economy that relies far less on foreign capital and imports, Russia believes it can weather the sharpest fall in crude prices since 1991 for longer than rival producers such as Saudi Arabia and the U.S. shale industry. The country’s budget break-even oil price has fallen to $42 a barrel—about half Saudi Arabia’s reported break-even point. The Russian government said March 9 it would draw from its $150 billion national wealth fund in order to boost budgetary spending, while oil prices remained at between $25 and $30 a barrel. It said it could maintain that level of budgetary support and cover the lost revenue for the next six to 10 years. U.S. shale will start to show the strain even if prices remain depressed for just six to 12 months, analysts said. (Financial Times, 03.12.20, Financial Times, 03.10.20, Financial Times, 03.10.20)
  • Russian Energy Minister Alexander Novak said March 13 that Russian oil producers will meet next week to discuss oil production prospects and that Russia sees no grounds for returning to discussions with its OPEC+ partners, Interfax reported. Novak said oil prices could rise to $40-45 a barrel in the second half of the year and that Russia can increase its oil production by 200,000 barrels per day in April. (Reuters, 03.13.20, Reuters, 03.13.20)
  • Saudi Arabia is flooding Europe with oil at prices as low as $25 per barrel, specifically targeting big refiners of Russian oil in an escalation of its fight with Moscow for market share, five trading sources said March 13. (Reuters, 03.13.20)

U.S.-Russian economic ties:

  • No significant developments.

U.S.-Russian relations in general:

  • The Kremlin says Trump has said he will not attend the 75th anniversary of the end of World War II celebrations in Moscow. Moscow continues preparations for the arrival of foreign guests to attend the Victory Day parade on May 9. However, it will take into account the coronavirus situation, Kremlin spokesman Dmitry Peskov said. (RFE/RL, 03.10.20, TASS, 03.12.20)
  • Rinaldo Nazzaro, the American founder of a U.S.-based militant neo-Nazi group who reportedly left New York for St. Petersburg less than two years ago, has acquired Russian citizenship, according to Fontanka.ru. He applied for it no later than in 2017, citing his marriage to a Russian citizen, and received it via a Russian consulate in the U.S., according to this news outlet. (Russia Matters, 03.12.20)
  • A U.S. ex-marine stood trial in Moscow March 11 on charges that he had attacked police officers. Trevor Reed faces up to 10 years in prison if convicted for allegedly attacking police called by friends after he became very intoxicated and risked walking into traffic. (RFE/RL, 03.12.20)

 

II. Russia’s domestic policies

Domestic politics, economy and energy:

  • Both houses of Russia’s parliament overwhelmingly approved on March 11 a bill containing constitutional amendments that will allow Russian President Vladimir Putin to run for two more terms in 2024 and 2030. The amendement was introduced by pro-Kremlin MP Valentina Tereshekova on March 10 and then endorsed by Putin, who visited the lower chamber on the same day to weigh in on the issue, agreeing on the condition that the amendment is also vetted by the Constitutional Court and by Russians in a nation-wide referendum on April 22. “If the Constitutional Court gives an official ruling that such an amendment would not contradict the principles and main provisions of the constitution," Putin said. In his address to the Duma, Putin cited the importance of stability; however, he  did not state explicitly that he would run for president in 2024. Despite supporting the decision to allow two more presidential terms for himself, Putin said that future presidents should abide by a two-term limit. All of Russia's 85 regional parliaments have voted in favor of the package of constitutional amendments that would allow Putin to remain president until 2036. (RFE/RL, 03.11.20, RFE/RL, 03.10.20, RFE/RL, 03.10.20, The Moscow Times, 03.10.20, Foreign Policy, 03.11.20, The Moscow Times, 03.13.20)
    • When the constitutional changes were proposed in January, analysts speculated that they could be an avenue for Putin to retain influence past his current presidential term. One of his suggestions was "enshrining" the State Council. But in a recent visit to Ivanovo, Putin rejected that notion. "It will amount to the situation of diarchy in our country. Such a situation is absolutely fatal for Russia," Putin said on March 9. “To resort to some sort of power scheme to preserve my mandate—that would be unacceptable for the country or destroy it—that's what I am afraid of, that's what I don't want to do,” he said. Waxing lyrical, he also said that he saw the presidency not as a job but as his "destiny." (The Washington Post, 03.10.20, AFP, 03.06.20)
    • According to the Levada Center, 44 percent of voters want Putin to quit in 2024, while 45 percent believe he should stay. As for the Constitutional Court, which critics see as beholden to the Kremlin, political consultant Yevgeny Minchenko told The Moscow Times he couldn’t see a scenario in which it wouldn’t uphold the proposal. (The Moscow Times, 03.10.20)
    • “You and I don’t know what we’re going to do tomorrow, and we’re trying to guess what Putin’s going to do in 2024. It’s ridiculous,” Andrei Klishas, co-chair of Putin’s hastily assembled constitutional commission, said. (Financial Times, 03.11.20)
    • “The [changes] will make it better organised but won’t change the core of the system,” said a person who meets Putin regularly. “The priority is stability, keeping everything the way it is, like in the 1970s and 1980s.” (Financial Times, 03.11.20) 
  • “It would be very disturbing to return to the situation of the mid-1980s," Putin said in January. "With the leaders of the state, one by one, staying in power until the end of their days." He was right at the time, but this week Putin nonetheless cleared the way to rule Russia past his 83rd birthday. No one anywhere is surprised. (Wall Street Journal, 03.11.20)
    • Putin, 67, is Russia’s longest serving leader since Josef Stalin. He would be 83 when his potential sixth presidential term would end in 2036, making him older than Leonid Brezhnev was when he died in power at 75. He would also have served longer than Stalin. (The Moscow Times, 03.10.20)
    • Russian opposition leader Alexei Navalny offered his own interpretation. “All is clear,” he wrote on Twitter. “Putin will be president for life.” (The Moscow Times, 03.10.20)
    • Konstantin Gaaze, a Moscow-based political analyst, said that "Putin is convincing himself that he is irreplaceable. So he re-established himself as a personal guarantor of the elite's future." (Wall Street Journal, 03.10.20)
    • One of Russia's most influential business magnates, Konstantin Malofeev, said on March 11 the country has become a ''quasi-monarchy.” (New York Times, 03.12.20)
    • Russia’s greatest advantage in forging a new future is none other than Putin himself, State Duma Speaker Vyacheslav Volodin said March 12. (The Moscow Times, 03.12.20)
    • Valentina Matvienko, the speaker of Russia's upper chamber of parliament and a member of Putin's United Russia party, said March 10 that the constitutional changes would help counter foreign attempts to undermine and weaken Russia. (Wall Street Journal, 03.11.20)
    • Putin's move to stay in power "will further solidify the tension between Russia and Western governments, particularly the U.S.," analyst Alex Brideau wrote. (Wall Street Journal, 03.11.20)
  • In his adress to the State Duma on March 10, Putin said he saw no need for early elections to the Duma, rejecting another MP's proposal. (BBC, 03.10.20)
  • Moscow authorities have banned all mass public events of more than 5,000 people for a month to fight the coronavirus. Moscow also plans to earmark 8.5 billion rubles ($135.7 million) for the construction of a new coronavirus hospital as the Russian capital continues to detect new cases. (The Moscow Times, 03.11.20, RFE/RL, 03.11.20)
  • Russians are less likely to take to the streets today than they were a year ago as their living standards gradually improve, the Levada Center pollster has said. Twenty-six percent of Russian respondents said mass protests are “quite possible,” according to the Levada Center’s results. This is an 8 percent decrease from February 2019, when 34 percent of Russians said mass protests were likely (The Moscow Times, 03.12.20)
  • Almost the entire page of stock prices reported by Alfa Bank in its weekly wrap was red. That means shares were down over the last 24 hours, last month, since the beginning of the year and over the last 12 months. The RTS closed under the important 1,000-mark on March 12, down 38 percent—making it Russia’s third biggest selloff since the market was established in 1996. Oil and gas companies have obviously taken the brunt of the selling following the collapse of the oil prices and the sector as a whole was down 44 percent as of March 12, according to BCS Global Markets. (bne Intellinews, 03.13.20)
  • Leading Russian firms saw their share prices collapse March 9, as the fallout from Moscow rejecting an oil production pact with Saudi Arabia rocks global financial markets. Among the biggest losers were state-backed lenders Sberbank and VTB, which both plunged by more than 20 percent when European markets opened. Oil major Rosneft, also state-owned, recorded a 20 percent drop—equivalent to a $15 billion fall in value—while Gazprom shares crashed by almost 25 percent initially, before recovering slightly to stand 15 percent down. (The Moscow Times, 03.09.20)

Defense and aerospace:

  • In a report published on March 9, SIPRI said that global volumes of arms transfers increased by nearly 6 percent in the 2015-19 period, compared with 2010-14. Exports of weapons from the U.S. grew by 23 percent during the latest period, raising its share of total exports to 36 percent. Russia was the world's second-largest exporter with 21 percent of global arms deliveries, but Russian exports were 18 percent lower than in 2010-14. (RFE/RL, 03.09.20)
  • Indonesian authorities have decided against moving ahead with a plan to purchase 11 Sukhoi Su-35 fighter jets from Russia for about $1.1 billion. (TASS, 03.12.20)
  • The Russian and European space agencies have postponed their joint mission to Mars, citing technical difficulties and the coronavirus pandemic. Russia has detected defective parts in its Proton-M rockets that were set to launch Europe’s first rover on Mars and two communications satellites. (RFE/RL, 03.12.20, The Moscow Times, 03.11.20)
  • The Russian Defense Ministry considered the activities of the Northern fleet in 2019-2025 and Defense Minister Sergey Shoigu said it had been reinforced by another air defense division to defend the Arctic and the Northern Sea Route. (TASS, 03.12.20)
  • Russia’s Beriev has registered an industrial design patent for a “carrier aircraft for [an] airborne laser system.” (Jane’s, 03.10.20)
  • "Crews of heavy flamethrowers from the NBC protection regiment of the Central Military District’s 41st Combined-Arms Army fired advanced 220mm rockets to hit manpower, armor and communication centers of the simulated enemy," the Russian Defense Ministry’s press office said. (TASS, 03.12.20)

Security, law-enforcement and justice:

  • In his presidential decree “On Certain Issues of the Security Council of the Russian Federation,” Putin outlined the roles and responsibilities of the deputy chair of the Security Council. Dmitry Medvedev will have a role in the “development and implementation of foreign policy,” prepare an annual report on the state of national security and monitor the implementation of presidential instructions. Medvedev acquires the right to appoint a range of officials, including the first deputy secretary. These were previously Putin’s gifts, but in practice were Nikolai Patrushev’s hires. (The Moscow Times, 03.10.20)
  • A Moscow court has sentenced the former deputy chief of Russia's Federal Penitentiary Service (FSIN) to nine years in prison for embezzlement. Oleg Korshunov, who was responsible for the FSIN's contractor services, was found guilty by a judge of misappropriating state funds allocated for the purchase of sugar and fuel. (RFE/RL, 02.12.20)

 

III. Russia’s relations with other countries

Russia’s general foreign policy and relations with “far abroad” countries:

  • Britain said March 13 it supported Putin’s idea to hold a summit between the leaders of the permanent members of the U.N. Security Council to discuss international peace and security measures. (Reuters, 03.13.20)
  • The Russian government has allegedly hired British politicians, former intelligence officers and PR firms to advance its interests in Britain’s politics and form a "western buffer network," The Guardian reported March 9. (The Moscow Times, 03.10.20)
  • The Czech Republic’s authorities are ready to hold talks with Russia in order to break the impasse in relations, says a statement posted on Czech President Milos Zeman’s website following his meeting with the country’s senior officials. (TASS, 03.12.20)
  • Two Russian citizens have been arrested in Sweden suspected of an attack last month on a blogger critical of Chechen leader Ramzan Kadyrov. A district court in the central Swedish town of Gavle on March 6 ordered a Russian woman in her thirties held in custody, suspected of being an accessory to the attempted murder of Tumso Abdurakhmanov on February 26. (AFP, 03.07.20)
  • Polish President Andrzej Duda will not travel to Russia next month due to the coronavirus outbreak. (Reuters, 03.13.20)

China-Russia: Allied or Aligned?

  • No significant developments.

Ukraine:

  • A new mechanism for settling the conflict in Ukraine envisions setting up a platform for talks that will involve the Normandy Four and the conflict sides, deputy head of the Russian presidential administration Dmitry Kozak said in Minsk on March 11. (Interfax, 03.12.20)
  • Moscow has sought to undermine the investigation into the downing of Malaysia Airlines Flight 17 over eastern Ukraine in 2014 and poses a threat to witnesses, Dutch prosecutors said on the second day of pre-trial hearings in the case of four Russia-linked suspects. The presiding judge in the MH17 murder trial on March 10 postponed the hearings until March 23, when the court will decide on how the trial should proceed following judical requests from the defense and relatives of the victims of the plane crash. (The Moscow Times, 03.10.20, Financial Times, 03.10.20)
  • Two Ukrainian soldiers were killed and eight wounded from projectile fire on March 10 in the eastern part of the country.  (RFE/RL, 03.11.20)
  • The conflict in Donbass cannot be viewed as a legal impediment to Ukraine's entry into NATO, Ukrainian Deputy Prime Minister for European and Euro-Atlantic Integration Vadym Prystaiko said. "There is no provision in the alliance's founding documents prohibiting a country which is in the midst of a military conflict from joining NATO. Therefore, from a legal standpoint, Ukraine has an equal chance with non-fighting countries," Prystaiko's office quoted him as saying. (Interfax, 03.12.20)
  • Andriy Kobolyev, CEO of Ukraine's state-owned gas giant Naftogaz, traveled to the U.S. in early March to lobby for measures to further stall the $11 billion Nord Stream 2 pipeline. (RFE/RL, 03.08.20)
  • The Ukrainian government has decided to ban mass gatherings and to close schools and universities for three weeks in a bid to prevent the spread of the novel coronavirus. (RFE/RL, 03.11.20)

Russia's other post-Soviet neighbors:

  • The EU plans to better tie financial assistance to the six nations of its Eastern Partnership program to improvements in their rule of law and may increase funding for alternative energy to wean them off Russian fossil fuels. In a leaked draft of its joint communication about the future of the Eastern Partnership, Brussels also said it wants to step up the fight against economic crime in the six countries, including the recovery of stolen assets. The paper will form the basis of discussion when EU and Eastern Partnership leaders meet for their next summit in Brussels, tentatively scheduled for June 18. (RFE/RL, 03.10.20)
  • Kazakh President Qasym-Zhomart Toqaev has ordered the resource-rich Central Asian nation's government to cut spending following a sharp drop in the price of oil. Kazakhstan's national currency, the tenge, lost 4.5 percent of its value to trade at 382 tenges to the U.S. dollar after Saudi Arabia enacted its biggest cut in its prices in two decades. (RFE/RL, 03.09.20)
  • Kazakhstan has launched preventive measures against possible coronavirus spread, including canceling Norouz holiday celebrations and a military parade devoted to the 75th anniversary of the victory over Nazi Germany. (RFE/RL, 03.12.20)
  • Armenian Prime Minister Nikol Pashinian has urged voters to back proposed changes to the constitution that would lead to the removal of a majority of Constitutional Court judges. (RFE/RL, 03.10.20)
  • Armenia’s former President Robert Kocharian, who is currently in pretrial detention, has been hospitalized to undergo medical examinations, according to his lawyer and one of his aides. (RFE/RL, 03.10.20)

 

IV. Quoteworthy

  • Fiona Hill said: Russians “don't invent our divisions. They don't create the partisan divides. And when we try to do this negative political research on opposing candidates and we treat every political race like some kind of version of ‘Mortal Kombat’ in which we have to destroy our enemy, then it makes it extremely easy for the Russians to bring everyone down.” (NPR, 03.10.20)