Russia on the Ground – December 2018

A monument to Alexander Solzhenitsyn was unveiled in Moscow’s Tagansky District on the 100th anniversary of the writer’s birth. Photo from the Kremlin.

This resource serves to track domestic news inside Russia – focusing primarily on demographics, public opinion, economy, and major domestic political events inside Russia.

It is intended to give students who are otherwise following major issues and events within Russia greater context from which to view those issues and events. This resource lists useful but often under-reported information that can help build a pragmatic and objective view of Russia’s domestic situation.



Nearly half of Russians don’t like Trump
Russians have greatly changed their opinion of US President Donald Trump over the past year, with nearly a half of them now thinking negatively of him, Russian sociologists have found.

Putin’s Ratings in 2018, a Sign of Things to Come? An Interview With Alexei Levinson
Alexei Levinson, the Levada Center’s head of research, discusses the science behind Vladimir Putin’s ratings.

In army & church we trust, Russians tell state pollster
The Christian faith and military might have been among the cornerstones of Russian national identity for centuries. And it’s still the case at the end of 2018, a fresh poll reveals.



Russia’s Relationship With China Will Change Northeast Asia
Beijing and Moscow are building up trade, infrastructure, and living standards in long-neglected regions.

Siberian region fights to preserve permafrost as planet warms
In Russia’s Siberian city of Yakutsk, one of the coldest on Earth, climate change is causing dangerous melting of the frozen ground, or permafrost, on which the buildings stand.

The Battle To Control Russia’s Pipelines
The first official shot in the Rosneft-Transneft standoff was fired in early 2017 when Rosneft and its newly acquired subsidiary Bashneft filed a claim against Transneft for process losses during pipeline transportation.

Russia’s New Arctic Drones Are Built to Spot Ships
Russia has developed drones to patrol the Arctic — or at least the areas around its oil and gas facilities. They’ll also be used to monitor ice levels, according to a report in the state media outlet Tass.

Based on new draft legislation, here’s how Russia would actually build its own, autonomous Internet
Under the law, Russia would create a national domain name system and develop special rules for Internet traffic routing. Having its own domain name system (which translates more easily memorized domain names to resources’ numerical IP addresses) is supposed to guard against the potential seizure of Russia’s .ru and .рф domains, and developing its own routing system would protect Internet providers against the seizure of the IP-address blocks allocated to them.



Russian private pension funds consolidate around state groups
Ongoing consolidation of the non-state pension funds (NPFs) has reached its final stage with four largest NPF groups (assets over RUB500bn or $7.5bn)) already accounting for 77% of all pension fund assets, Kommersant daily estimated in a sector overview published on November 30.

Russia’s inflation accelerates to 3.8% ahead of CBR meeting
Russia’s Consumer Price Inflation (CPI) continued to accelerate, registering 3.8% year-on-year in November 2018, up from 3.5% y/y in October 2018, and gaining 1.3pp since 2.5% seen in July, according to a report by Rosstat statistics agency. The inflation reading in November came close to the Central Bank of Russia’s (CBR) target rate of 4%.

Russia Can Withstand Oil Price Volatility In 2019
Russia is well-positioned to withstand external shocks, The World Bank said today in its most recent version of Russia Economic Report, cited by TASS.

Russia’s reserves, National Welfare Fund are high, but dip slightly in last months of 2019
Russia’s gross international reserves (GIR) fell slightly as of the end of November to $379.2bn from this year’s peak of $383.4bn set in September, but the sovereign rainy day fund, the National Welfare Fund (NWF), fell more heavily from this year’s peak of $77.16 set in August to $68.55bn as of the start of December.

These are the Best and Worst Emerging Markets
“A closer attention is now paid to economic growth outlooks of each emerging economy amid successive rate hikes,” said Tsutomu Soma, general manager of the investment trust and fixed-income department at SBI Securities Co. in Tokyo.

Russia’s GDP posts 1.5% growth in 3Q18
Russian statistics agency Rosstat has revised the flash estimate of GDP growth in 3Q18 from previous 1.3% y/y to 1.5% y/y. The accompanying GDP breakdown by industry showed that the financial sector, trade, transportation, and extraction remaining the main growth contributors.

Russia faces higher inflation, economic slowdown in 2019
Russia’s economy will hit some speed bumps in 2019 and inflation will rise, a Reuters monthly poll showed on Thursday, due to risks of new sanctions, a weaker rouble and a planned tax increase.

What to Expect From 2019
In 2019, the Russian economy is expected to grow by 1.5 percent, with a slight increase in oil prices.

Putin says Russia to enhance economic competitiveness in response to sanctions
Russia needs to improve the competitiveness of its economy on a global scale in response to Western sanctions, Russian President Vladimir Putin said Wednesday.

OUTLOOK 2019 Russia
Russian politics are dominated by the threat of new “crushing” sanctions from the US that were due in the autumn, but now have been put off until the first quarter of 2019. However, the consensus is new sanctions are on the way in 2019 and their nature will have a large impact on how the year unfolds.

– Sectors

Russia Rises To Second In Global Arms Sales, With U.S. Still At No. 1
The United States remains the global leader in arms sales, while Russia has surpassed Britain to take the No. 2 spot as it attempts to modernize its military, a leading research group says.

Russia has emerged as an agricultural powerhouse
Enterprising farmers have overcome the legacy of Soviet collectivization.

Factory demise symbolizes rot at core of Russian economy
Chronic under-investment, sanctions and lack of reform hold back wages and growth.

Plastics in the snow: Sibur takes the lead in Russia’s burgeoning petrochemical sector
Tobolsk was revived by the oil industry and it is now going through a second renaissance as it is rapidly becoming the epicentre of Russia’s burgeoning petrochemical industry.

Russians buy half of their consumer goods online
Russians buy half of all their consumer goods online, RIA Novosti reported on December 12 citing a study by Romir holding. The share of the online purchases jumped by 32% y/y in 2018, with the frequency up by 21%.

Russia’s domestic e-commerce market up by 19% in 2018
Russia’s e-commerce market in 2018 could reach RUB1.5 trillion ($22.8bn), according to the estimates by Data Insight cited by Vedomosti daily on December 17. Sales in Russian online stores are expected to increase by 19% to RUB1.15 trillion and in foreign by 29% to RUB348bn.

   – Banking and Finance

Piggy Banks and Punishment: How the Ruble’s Oil Link Came Apart
The last time crude fell off a cliff in late 2015, it took the currency of the world’s biggest energy exporter along for the ride. As Brent lurched below $30 a barrel, Russia’s ruble plummeted to its weakest level on record.

Central Bank of Russia cuts the number of bank supervisors almost in half
The Central Bank of Russia (CBR) has cut the number of bank supervisors almost in half as the number of banks in Russia drops below 500 and the clean-up comes into the end game.

Kremlin to buy Alfa Bank from oligarch Fridman
The Kremlin is lining up an audacious deal for one of its proxies to acquire Alfa Bank, Russia’s largest private lender by assets and a vital cornerstone of the nation’s financial scene since the early 1990s, bne IntelliNews can reveal.

The state is back in the banking business in Central and Eastern Europe
Calls for more national ownership in local banking sectors have been bolstered by the increasing anti-capitalist and anti-globalist mood worldwide.


Policy and Conflict Post SovietPolitics

The People vs. the President: United Russia’s Survival Strategy
The United Russia elite will now be caught between two voters: Vladimir Putin, on whom domestic policy managers are oriented, and ordinary people, who increasingly express their discontent through protest voting. The more efforts the Kremlin makes to turn United Russia into a corporation, the more often United Russia politicians will look to voters, who have already proved quite capable of teaching the regime a lesson.

Moscow’s man triumphs in Russia’s Far East
On December 16, Russia’s Primorsky Krai held another gubernatorial election. This was the third vote in the past four months: officials threw out the last results due to mass falsification in favor of United Russia’s candidate, then acting Governor Andrey Tarasenko, who was promptly replaced with Oleg Kozhemyako.

Russia passes law to tackle foreign meddling in its elections
The Russian parliament has passed a law which says foreign organizations meddling in any kind of election in Russia may be declared ‘undesirable’ and ousted from the country. Election observers are exempt.

Vladimir Putin’s annual news conference
The President’s news conference was broadcast live by Rossiya 1, Rossiya 24, Channel One and NTV, as well as Mayak, Vesti FM and Radio Rossii radio stations.

Russian Constitutional Court Says Controversial Chechen-Ingush Border Deal Legal
Russia’s Constitutional Court has upheld the legality of a law designed to support a controversial border agreement between the Russian republics of Ingushetia and Chechnya.

Putin press conference: A man with a plan for 2019
Russian President Vladimir Putin kicked off his marathon annual end of year press conference with the usual rundown of macroeconomic results for the year. The agenda was very full at this year’s conference, and it was a mixed bag.



Every fifth Russian worker earns less than $250 per month
Every fifth Russian worker earns less than RUB15,000 ($250) per month, according to the results of a study by the RIA Rating agency, which RIA Novosti cites.

Diseases caused by bad nutrition cause 63% of deaths in Russia
Over half of all deaths in Russia are associated with eating low-quality food and the wrong nutrition, Rospotrebnadzor said in a report released on Thursday.

Russians spend a third of their income on food
Russian spend a third of their income (31.2%) on food, according to RIA Rating, which studied the cost structure of citizens of 40 countries of Europe, as well as Russia, Kazakhstan and Turkey.

Russians’ Real Incomes Set to Fall Again in 2019
Real incomes are set to drop once more next year, dragged by slower growth in real wages and higher spending, according to the latest forecast from Moscow’s Higher School of Economics (HSE).

Over 60% of Russians use Internet every day, research shows
More than a half of Russian users are 40 years old and younger, the Higher School of Economics’ Institute for Statistical Studies and Economics of Knowledge reported

‘We are new Russians’: How a hard-drinking nation curbed its alcohol use
Russia now ranks 14th in terms of alcohol consumption globally, and is comparable to France and Germany.


Daily Life / Civil Society

Meduza follows up on the best investigative reports of 2018
All year long, there are stories about people and events, and then the public’s attention moves on, and neither readers nor journalists ever look back. But not here. Before the year is up, Meduza returns briefly to the biggest news of 2018, selected by our own correspondents, to find out what happened after reporters swooped in to cover these stories and then left.

Monument to Alexander Solzhenitsyn unveiled in Moscow
The President attended the unveiling ceremony for a monument to Alexander Solzhenitsyn in Moscow’s Tagansky District on the 100th anniversary of the writer’s birth.

Russia Outlaws Animal Cruelty
Russia has banned petting zoos, animal cafes and the killing of stray dogs and cats under a new law submitted eight years ago that dramatically overhauls rules overseeing the treatment of domestic and wild animals.

Average Russian bribetaker is educated and diligent
Despite the popular image of being greedy and power-hungry, the average Russian bribe-taker is an active, energetic, and entrepreneurial person, a study by the Academy of the Prosecutor General’s Office cited by Vedomosti daily on December 6 claims.

Average bribe in Russia for 2018 is $9,000
Average bribe in Russia is estimated by the Public Prosecution Service at RUB609,000 ($9,000), while the total amount of uncovered bribes in January-September 2018 stood at RUB1.8bn ($26.7mn), as reported by Vedomosti daily.

Putin decries prosecution of Jehovah’s Witnesses in Russia
Russia officially banned the Christian denomination last year and declared the religious group an extremist organization. Nearly 100 Jehovah’s Witnesses face charges in Russia, and 25 of them are in jail awaiting trial.

“We aren’t just suffering”
The “O” in O-zine, the title of a new queer Russian magazine, stands for “open” — not a state of being often associated with LGBTQ people in Russia’s political climate.

How Russia’s military intelligence agency became the covert muscle in Putin’s duels with the West
As Russian President Vladimir Putin tightens his grip at home and asserts Russian influence abroad, the country’s military intelligence agency — a worldwide network of thousands of officers, special-forces troops and spies — is emerging as one of his most powerful tools.

About the Author

Gregory Tracey

Greg Tracey is a junior at the University of Nebraska – Lincoln. He is studying economics and international relations, as well as minoring in mathematics and Russian. As a Home and Abroad Scholar, he is focusing on business and economic issues in Russia and surrounding countries. The related scholarship will help fund his participation in SRAS's Russian as a Second Language program at St. Petersburg State University of Economics during the Spring 2019 Semester. In his free time, he enjoys reading and soccer.