Russia on the Ground – January 2019

A young woman enjoys the holiday lights and snow in Moscow. Picture from Mos.ru.

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.

 

Polls

Only Three Percent of Young Russians Want to Work in Private Sector, Study Finds
Only three percent of young Russians want to work in the private sector with more than 60 percent saying they would prefer the stability offered by employment in major companies linked to the government or even the government itself, according to a new sociological study of young people in Tyumen.

Expectations for 2019 (Article in Russian)
Survey conducted on December 13–19, 2018 for a representative all-Russian sample of urban and rural population of 1600 people aged 18 years and older in 136 localities, 52 regions of the Russian Federation.

53% of Russians now favor a new government (Article in Russian)
Survey conducted on December 13–19, 2018 for a representative all-Russian sample of urban and rural population of 1600 people aged 18 years and older in 136 localities, 52 regions of the Russian Federation.

Holiday spending in Russia dips slightly year-on-year – poll
Russians spent an average of 13,870 rubles this holiday season, slightly less than in 2018 (14,195 rubles), the Russian Public Opinion Research Center (VCIOM) said on Monday.

Almost half of Russians ashamed of USSR’s collapse – poll
The number of Russians who feel ashamed of and sorry for the collapse of the former Soviet Union has grown from a third to 45% year-on-year, the Levada Analytical Center said in a statement seen by Interfax.

Russians Lead the World in Lack of Institutional Trust – Survey
Russians have one of the lowest levels of institutional trust in the world, including trust in NGOs, businesses and international organizations, according to a survey of 26 major economies published this week.

Trust in Putin slides to 13-year low of 33.4% in January
Trust in Russian President Vladimir Putin fell to a 13 year low in the first poll of 2019 by the state owned pollster, the Russian Public Opinion Research Centre (VTsIOM), slipping from 36.5% on December 29 to 33.4% on January 13. This was Putin’s lowest popularity level since January 2006.

 

Infrastructure

Vast Improvement in Living Conditions of Russian Provinces
It’s a good thing that Moscow and Saint Petersburg are no longer the only cities that are associated with high living standards.

Russia Eyes Island Storage for Arctic LNG Amid China Demand Boom
Russia’s Novatek PJSC is looking at storing liquefied natural gas produced in the Arctic on Japan’s southern island of Kyushu so it can better meet spot demand from China and cut shipping costs.

As Bad as Russian Roads are for Travel, Russia’s Waterways are Worse, Yemelchenkov Says
For most of Russia’s histories, rivers and later canals were the primary transportation network over that country’s vast roadless and largely railway-less areas. Its roads have remained notorious for their poor quality, and its railroads are suffering ever more accidents. But the state of its rivers and canals has largely been ignored in recent times.

Russia’s Periodical Press, in Free Fall Last Five Years, Continues to Contract
However measured – print runs, subscriptions, employment, kiosks, or advertising income – Russia’s periodical publications have been in free fall for the last five years and are declining in recent months at an accelerating rate, according to Oleg Falichev of Voyenno-Promyshlenny kuryer.

Putin Orders Creation Of National Waste-Collection System In Wake Of Landfill Protests
Russian President Vladimir Putin has ordered the creation of a national system of municipal waste disposal, a move the follows unusually strident protests over a leaky Moscow region landfill.

Construction of high-speed rail line approved
The Zheleznodorozhny-Gorokhovets section with traffic planning to Nizhny Novgorod should become the first stage of the Moscow-Kazan High-Speed Railway , which, in turn, is planned as part of the Eurasia High-Speed Railway , allowing to travel from Berlin to Beijing in 2.5 days.

 

Economy

Russian oil output reaches record high in 2018
Russian oil production rose to a post-Soviet record high of 11.16 million barrels per day (bpd) last year on an annual average basis, data from its energy ministry showed on Wednesday.

Russians Start Off 2019 Less Confident In Everything
It’s not even 48 hours into 2019 and the headlines in Russia paint the picture of a frustrated, unhappy place.

Russian social commerce generates $9bn per annum, 40% of e-merchants’ sales
No less than 39mn buyers and 22mn sellers – both companies (B2C) and individuals (C2C) – are involved in Russian social commerce, according to a study released last month by Yandex.Checkout and Data Insight, reports East-West Digital News (EWDN).

Sleeves Up at This Year’s Gaidar Forum
Russia’s banks and companies are back in profit, but the population are miserable and feel poor. Last year Russia earned a record current account surplus of $114.9 billion, but real incomes in 2018 fell for the fifth year in a row.

Russian Statistical Yearbook
“The book presents statistical data on the social and economic situation of Russia
in 2017 and in comparison with previous years. Most data are given since 2000, though a much longer time series is provided for a number of indicators.”

Russian budget policy may ease in 2019, budget break even price of oil falls to $49
Russia just brought in a record budget surplus partly thanks to increased efficiency in tax collection and a tighter run ship. The break even price of oil for the federal budget has dropped again to $49.

Fed up with SOEs, the Russian government proposes taking direct control over their investment programmes
Fed up with the wastage and on a campaign to improve the efficiency of state spending, the Russian government has proposed forcing all the state-owned enterprises (SOEs) to submit investment programmes for approval, and to tighten the reigns of control over its companies.

– Business

As Russia’s Food Prices Soar, Bakers Are Feeling the Squeeze
The costs of key ingredients like sugar and eggs have risen sharply in recent months.

Russia becomes Europe’s largest internet market
With 90mn users, Russia is Europe’s largest Internet market, East-West Digital News (EWDN) reported on January 16, 2019.

Russia’s food service market growth accelerated to 5% y/y in 2018, fast food is the leading sub-segment
The growth of the Russian food service market accelerated to 5% in 2018, from 2% in the previous year, according to NPD Group, VTB Capital (VTBC) said in a note on January 25.

Russian M&A flat y/y in 2018 due to sanctions pressure
Russia had to cope with four rounds of new US sanctions in 2018 as well as unstable oil prices and a general miasma that has fallen over the population as real incomes failed to rise for the fifth year in a row.

Russian food retail turnover growth accelerates 210bp to 5.3% y/y in 4Q18
Russian food retail turnover growth accelerated 210bp to 5.3% y/y in 4Q18 with the market leader X5 Retail Group’s share up to 11.8% for 2018, Rosstat reported on January 28.

– Banking and Finance

Russia De-Dollarizes Deeper: Shifts $100 Billion To Yuan, Yen, And Euro
The Central Bank of Russia has moved further away from its reliance on the United States dollar and has axed its share in the country’s foreign reserves to a historic low, transferring about $100 billion into euro, Japanese yen, and Chinese yuan according to a report by RT.

De-dollarization: Scholars on Why Russia Bought Quarter of World Yuan Reserves
Russia is shifting to the euro and yuan under its recent de-dollarization plan. Speaking to Sputnik, Ben Aris, editor in chief of Business News Europe and Madalina Sisu Vicari, managing director of Vocal Europe, explained why Moscow is boosting its yuan reserves and how it can speed up the de-dollarization of Russia’s economy.

Russian bank assets up 10.4% as loans grow 13.9% in 2018, banking sector recovery continues
The Central Bank of Russia (CBR) has published its FY18 banking sector statistics. Assets grew 10.4% y/y, supported by a 13.9% expansion of the loan portfolio. Profit increased 70% y/y to RUB 1.3 trillion ($19.7bn), with an implied ROE of 15% vs. 9% in 2017, VTB Capital (VTBC) analyst Svetlana Aslanova said in a note.

Green By Name, Green By Nature: The First Russian Green Bonds
In late December 2018, the Russian capital markets quietly passed a significant milestone: a refuse-processing company, Resursosberezhenie KhMAO, listed on the Moscow Exchange the first green bonds ever issued by a Russian company.

 

Policy and Conflict Post SovietPolitics

After the Crimean Consensus
Russia’s “managed democracy” is still far from competitive, but it’s experiencing increased political friction as stakeholders demand more concessions from the Kremlin.

Tax collection in Russia soars 22% in 2018 thanks to improved efficiency and shadow economy crackdown
The Russian government is on the hunt for new revenues to meet its ambitious RUB12 trillion ($180mn) spending plan.

The Vladivostok Phenomenon: Should Russia Eliminate Visa Requirements for Chinese Tourists?
In 2015, Russia introduced visa-free travel for South Koreans. Since then, Korean tourism to Vladivostok has skyrocketed, bringing an economic windfall to the city. That, in turn, has become an argument for lifting the visa regime with China. But several issues stand in the way.

Russia’s GMO debate looks a lot like America’s – with more geopolitics
Russians tend to be just as concerned as their Western peers about how genetic modification might affect food products. But Russia’s bans on GMOs have become a bone of East-West ideological contention.

Putin’s May Decrees and the 12 “national projects” take shape, but lacunae remain
These decrees are a series of objectives for the next six years, and have been published since 2012, but this time they were divided into 12 “national projects” with the aim of modernizing and revitalizing the Russian economy and society.

A Chechen Court Ruled To Forgive $135 Million In Gas Debt. Gazprom Isn’t Happy
A district court’s ruling that Chechnya’s $135 million gas debt should be written off because collecting it could lead to social unrest has left other Russian regions wondering why they shouldn’t get the same deal, and has prompted the local Gazprom affiliate to fight back.

 

Demographics

Real Incomes ‘Barely Budged’ in 2018, Chief Auditor Says
Russians saw virtually no change in their purchasing power as prices outpaced growth estimates in 2018, the country’s chief auditor has said.

Unemployment is mostly defeated but pay is not high enough
Transition from the socialist system has come at an enormous cost for most of the countries in Central and Eastern Europe (CEE): unemployment and poverty, but fight against unemployment is now almost won.

HEATMAP: bne IntelliNews Despair index
As part of the series of heatmaps to compare the macro fundamentals of the countries in New Europe, bne IntelliNews has updated its despair index that brings together inflation, unemployment and poverty.

Official Data Vastly Underestimates Russian Emigration – Report
At least six times more Russians are leaving the country than officially estimated, a comprehensive study conducted by the Proekt news outlet said on Wednesday.

The social triad: demography, employment, income
The social triad is among key issues of the implementation of the May Decree of the President of the Russian Federation “On national goals and strategic objectives of the development of the Russian Federation for the period up to 2024”.

The top 1% controls a third of the wealth, and the poor are getting poorer. How Russia became one of the most unequal places on Earth.
Since the 1980s, inequality has been growing everywhere on Earth, except in Western Europe. The rich own more and more, while the working class and middle class own less and less. This process is especially pronounced in Russia.

New Year Hangover Here to Stay for Troubled Russian Consumer
For the beleaguered Russian consumer, this month’s return to work after the New Year holiday came with an extra dose of pain, as a tax increase pushed up prices across a raft of everyday goods.

 

Daily Life / Civil Society

19 Events — Almost Certain to Occur — Russians Will Be Talking About in 2019
The events likely to be the most important in the coming year are likely to be things no one can predict accurately or with any degree of confidence, including the passing of leaders, the start of new wars, and developments that in and of themselves seem minor but nonetheless lead to radical transformations.

In former Soviet states, a new tech‑savvy resistance is stirring
From Russia to Armenia to Belarus there has been a surge in online justice campaigns. And it’s making a difference

The Russian town that might save the world
Torzhok is experiencing a resurgence because of one woman’s activism.

The revival of Russia’s cinema industry
Russia’s cinema business is growing three times faster than the real economy, but it’s a bumpy ride.

Russian Political Opposition, Russian Popular Protests Seldom Coalesce
The agendas of those typically identified as the Russian opposition and those of Russians angry enough to go into the streets seldom intersect, thus depriving the protesters of leadership and depriving the political opposition of the energy that the protesters could provide.

Activist Group Publishes ‘Hacked E-Mails’ From Russia
A self-described “transparency collective” has released a massive trove of hacked e-mails and leaked documents from what it describes as “Russian politicians, journalists, oligarchs, [and] religious, and social figures.”

Russian regulator demands Google filters search results
The Kremlin is demanding that Google route Russian citizen web searches through a government-controlled censorship system.

Russian Youth: How Are They Different from Other Russians?
The “digital gap” between the youth and other generations is quite significant, but this hardly means that young Russians are a substantively different constituency in terms of their political views or civic engagement, says Levada Center Sociologist Denis Volkov in an interview with Maria Lipman.

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.