Russia Aiming For Zero Percent Growth – Live Updates

January 18, 2016
Today the ruble took a tumble, reaching near-historic lows | Bloomberg

LIVE UPDATES: With Iran’s appearance on the oil market the price of energy is plummeting to record lows, and the ruble is following suit.

Welcome to our column, Russia Update, where we will be closely following day-to-day developments in Russia, including the Russian government’s foreign and domestic policies.

The previous issue is here.

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Kadyrov Clarifies Remarks About Opposition – And Makes Worse Threats to Put Dissenters in Psychiatric Hospitals

Chechen leader Ramzan Kadyrov took to Instagram today to clarify his remarks attacking the opposition — only to imply that dissenters should be put in psychiatric hospitals as in the Soviet era.
Kadyrov was reacting to an outpouring of condemnations of his remark, a Twitter hashtag campaign saying he was “the disgrace of Russia,” statements by various prominent officials against his call for the arrest of opposition figures, and the apology by one Krasnoyarsk deputy after a prominent Chechen urged him to be more understanding.

According to a TASS report, Kadyrov said he didn’t mean to speak against the “lawful” opposition:

“I made a firm statement about those who have left Russia, and from there sling mud and slander our country. They threaten Russia, they travel to the USA, the capitals of the countries of Europe, they hint what kind of sanctions should be imposed to undermine the economy, security and stability of Russia. They also threat to return to Crimea in 30 seconds. It’s incomprehensible where! They and their accomplices inside the country are the ones I meant, speaking of prosecuting the non-system opposition. Moreover, this was not a reference to the lawful opposition which raises social, econolic problems, housing problems and others.”

He said he didn’t understand why Ella Pamfilova, the human rights ombudsperson, made such a sharp statement in reaction to his statement, when she had not done so before.

“I personally know these people who are eternally looking toward the west, and do not consider them a part of our society. They immediately began making loud statements about threats and so on. I will say outright, I did not threaten!  If they perceive my opinion as a threat, that means they understand that we are for Russia, we died for our Fatherland and are ready to do everything to defend our Motherland. And a healthy society, which the more than 146 million citizens of Russians are, should not allow itself to be dragged into a slander campaign.”

Kadyrov said he had asked the heads of the Gudermess and Achkoy-Martanovsky districts in Chechnya to prepare “VIP places” in local psychiatric hospitals.

“If the intervention of psychiatrists is needed, we are prepared to provide it to those who harm Russia, we have decent wings and experienced doctors. And specialists maintain that even from a photo of this bunch of people it is clear that they really need urgent treatment and rehabilitation. Once again I declare, they can’t do anything against Russia and personally against me. As the Eastern saying says, the dog barks, the caravan moves on!

Yevgeniya Bobrova, deputy  head of the Presidential Council on Human Rights, said her organization had sent an appeal to President Vladimir Putin regarding a number of harsh statements that Kadyrov has made, urging him to tell Kadyrov to stop making such remarks — or fire Kadyrov, Novaya Gazeta reported.

The activists also urged that the prosecutor general of Russia investigate his remarks; St. Petersburg legislator Maksim Reznik also issued such an appeal.

The Congress of the Intelligentia also issued a statement calling for Kadyrov’s dismissal.

— Catherine A. Fitzpatrick

Russian Delegation to Skip Next PACE Session
TASS reported that the Russian parliamentary delegation to PACE, the Parliamentary Assembly of the Council of Europe, will not attend the winter session, according to Leonid Slutsky, chairman of the State Duma’s Committee on CIS Affairs, Eurasian Integration and Liaison with Compatriots, and deputy head of the Russian delegation to PACE.

January 15 was the deadline for delegations to send a list of their members in order to participate in the first 2016 session, and Russia missed it, a source earlier reported to TASS.

Slutsky said Russia would come back to Strasbourg only if the Russian delegation was restored its rights which were suspended in 2014 by other members after the annexation of the Crimea.

Russia lost the right to vote and also take part in PACE bodies and monitoring missions. In 2015, the sanctions were extended and there was discussion of putting to a vote Russia’s continued membership, reported.

PACE president Ann Brasseur warned that Russia’s rights would not automatically be restored unless there were changes in behavior, particularly on such issues such as the ceasefire in Ukraine. Last fall, she said it was unlikely that a majority of members would be found to vote against removing Russia’s right to vote.

Russia will only pay a third of its annual dues to the Council of Europe, reported, citing speaker Sergei Naryshkin. He said the Russian delegation would be watching developments closely and decide accordingly.

— Catherine A. Fitzpatrick 

Russian Opposition Plans March in Moscow to Commemorate Nemtsov’s Assassination; Rally in Support of Kadyrov Planned in Grozny
Mikhail Kasyanov, leader of the opposition’s Parnas party, sent a memorandum to Moscow Mayor Sergei Sobyanin notifying him of the intention to conduct a march on February 27 in memory of Boris Nemtsov on the anniversary of his assassination, reported, citing Kasyanov’s Facebook page.
Kasyanov wrote:

The identification of the organizers and masterminds of the murder has been unsatisfactory. Pressure on the opposition and civil society is rapidly growing, a war on dissent is being unleashed and incitement of hatred to those who disagree. We demand intensive investigative actions to establish the real oranizers and masterminds of the political persecution of Boris Nemtsov.

We must demonstrate our resolve in defending our constitutional right and stopping the slide of the country into the abyss.

The organizers want to take the same route as they did last year, from Slavyanskaya Square to Bolshou Moskvoretsky Bridge, where Nemtsov was killed, near the Kremlin and Red Square.  

The groups participating besides Parnass are Party of Progress, Democratic Choice, December 5 Party, Libertarian Party and also the Solidarity movement and the Committee of Protest Actions. Kasyanov indicated about 1,000 people would take part; at the time of Nemtsov’s death, tens of thousands participated. Two of the groups, the Committee of Protest Action, led by Aleksandr Ryklin, and Democratic Coalition which unites several of the parties, had a conflict about the route as they had each planned their own actions, said

For some reason the Mayor’s office told Interfax they had not seen the letter and therefore a decision about a permit has not yet been made.
Meanwhile, TV Rain reports that a rally in support of Chechen leader Ramzan Kadyrov is planned for January 22, citing Kaim Abuyev, a youth leader from the Akhmat movement and human rights lawyer Igor Kalyapin.

A government-sponsored “flash mob” with the slogan “Ramzan Kadyrov is the pride of Russia” has been organized to counter a Twitter hashtag campaign last week from liberal journalists and bloggers that “Kadyrov is the disgrace of Russia.”

Last year, Kadyrov turned out nearly a million Chechens on January 19 to promote Islam and condemn the defamation of the prophet Muhammed by Charlie Hebdo cartoonists assassinated on January 7 by terrorists.

— Catherine A. Fitzpatrick

Chechen Speaker of Parliament and Senator Continue Attacks on Liberal Opposition; Ekho Moskvy, TV Rain Respond
Last week’s scandal, whereby Chechen leader Ramzan Kadyrov called the liberal opposition of Russia “traitors” and urged that they be arrested, followed by Krasnoyarsk deputy Konstantin Senchenko’s denunciation of Kadyrov — and then apology — continues to reverberate as TV Rain parodied Kadyrov’s threat and the head of the Chechen parliament mocked opposition leaders.
According to Interfax, Magomed Daudov, now the speaker of the Chechen parliament and a long-time close associate of Kadyrov, known by his nom de guerre as “Lord,” published a satirical post on Instagram with a picture of Kadyrov and his Caucasian shepherd dog with thinly-disguised references to various opposition figures described as “dogs” (translation by The Interpreter):

This is Tarzan. Our old friend. Cheerful in measure, serious in measure. He does not wag his tail upon seeing a bone, only sometimes, if you come up to him with good will, and sincerely. He rapidly identifies hypocrites, and jackals, he ignores yelping somewhere very far away, because he only fights one on one as an equal with wolves.. And even there, only with the inveterate ones. He terribly dislikes dogs of every foreign stripe. Especially Americans… Various Staffords [staffordshire terrier – The Interpreter], dark-furred pit bulls. European breeds also irritate him…Especially those who until recently were sitting on a chain here under the master’s From their behind-the-scenes fuss, some mongrels, poor things, have gone crazy with constant barking.

Some of these “pug dogs” have barked so loud that the “Ekho” can be heard even from Moscow!   We have some “serious” male dogs which make the peace-loving Tarzan’s fangs itch hard. They are for example the Pekinese Kalyapa, who defends the rights of those Pit Bull tells him too; the dachshund “Venya,” with the resounding, foul-mouthed throat and loud “Ekho,” the Moscow mutt “Ponomar” (arrogantly calling himself Lev [Lion]); who lives in a garbage can near the State Duma, creating discomfort from his stink in the very center of our capital; “Yashka” the mongrel. 

On the whole, our friend doesn’t like these male dogs, mainly because they strongly remind him of wayward bitches. Unlike them, he is firmly convinced that a male dog should remain a male dog and not turn into a bitch, even if it seems to him that life in the yard will becomes very doggy.

Shameless, pathetic mongrels, they think that some “reliable lions” stand behind them…Tarzan is good in measure, patient in measure, and he is able to wait for a long time…He knows the main rule of this brutal world: if you tear the guts from a wolf, the jackals fade away, hurriedly going deeper into the forest; if you rip the throat of a pit bull, the mongrels will lie on their backs and beat their tails on the pavement in revenge, squealing from happiness at the sight of a new leader…Tarzan has become very frisky. We barely restrain him. Oh, what could happen…If there weren’t…Democracy! And anyway, Tarzan is good.

He also published a formal statement on the government portal in which he blamed “North Atlantic intelligence service through various Wahabbi foundations, non-governmental and “human rights” organizations from America and Europe to destabilize the situation in the republic and not give us a chance to end the war and move to a civilian life.”

Daudov writes:

A subversive information and terrorist war has been unleashed against the leadership of the country and its people, as yet unseen in its scale and cunning. Paid pocket puppets like Navalny and Khodorkovsky began to appear whose names have become famous thanks to their unlawfully obtained estates and the open treason against state interests.

We don’t understand why such openly hostile headquarters of the fifth column like Ekho Moskvy and TV Rain are conducting experiments on the consciousness of Russian citizens which are monstrous in their cynicism and hatred of Russia.

We cannot comprehend why sell-out “figures of contemporary culture, politics and journalism” which we have fed, like the Shenderoviches, the Venediktovs, the Ponomarevs, the Kalypins, the Merzlikins or Yashins may mock the customs and traditions of various peoples of Russia with impunity, calling them wild or medieval?!  Who gave these hypocrite liberals the right to place in doubt the blood which we and thousands of our comrades together with federal divisions spilled for Russia’s integrity?

His references are to Viktor Shenderovich, writer and radio host; Aleksei Venediktov, editor-in-chief of Ekho Moskvy; Lev Ponomarev, director of For Human Rights; Igor Kalyapin, a human rights lawyer who has worked in Chechnya; and Konstantin Merzlikin and Ilya Yashin, members of the Parnas party.

Delimkhanov also made a statement even more paranoid than Daudov’s.

Today we observe how some satanic figures — the fifth column — are actively destabilizing the political and civic situation in society at a difficult time for our country. Western countries frighten our strong State, they see an economic and political rival in Russia which must be weakened at any price. We see how false journalists, civic and political figures have unleashed an active, open war on the current government. They hate our country and the main task of these interventionists in the destruction of the Russian state. They are united by their common sponsors of foreign origin. They have received assignments to incite dissatisfaction of our citizens along the lines of ethnic and religious hatred and have chosen for the object of their dirty harassment the true patriot of Russia, RAMZAN AKHMATOVICH KADYROV , the faithful and true comrade-at-arms of our Supreme Commander-in-Chief Vladimir Putin.

Not stopping at anything, they have unleashed political sabotage mainly against Russia, against the Chechen people. The purpose of this dirty campaign is the collection of masses, ensuring that people will be brought out on the streets for the start of a “color scenarios.” They try to sow hatred and panic in society in the ranks of the young generation. At a difficult period for Russia, they are playing into the hands of international terrorists and trying to make Russia independent, weak and controlled. 

Ekho Moskvy’s editor-in-chief Venediktov told Interfax he was reinforcing security for his radio station after Daudov’s threats:

I regard his words as a reaction to our questions about the investigation of the murder of Boris Nemtsov.

I think this inappropriate reaction is obvious, apparently we stepped on a sore spot.

We aren’t ‘satans,’ we’re a radio station which gives interviews of the top leaders of our country, including the president of the Russian Federation.

We will go on asking uncomfortable questions about the murder of Nemtsov and the investigation, of Chechen authorities.

Pavel Gusev, head of the Union of Journalists, said the Russian government should give an appraisal and stop the attacks on opposition journalists by Chechen politicians.
Ella Pamfilova, the Presidential Ombudsperson for Human Rights criticized Kadyrov’s remarks, calling them “harmful.”

“If political activity, no matter whose it is, even our so-called non-system opposition which is so small in number, is done within the framework of the Constitution, no one has the right to apply administrative, judicial or other abuse of them.”

Chechen deputy Shamsaul Saraliyev demanded she “calm down,” “drinks some valerian” and apologize to Kadyrov. She said it was inappropriate to do so. 

The Presidential Council for Human Rights said Kadyrov’s statements were “unconstitutional,” reported, since the constitution forbids restricting human rights due to group affiliations. 

TV Rain responded to Lord’s diatribe with a broadcast showing bloggers mockingly pretending to apologize to Kadyrov (the link is to a short excerpt of a broadcast behind a pay-wall).

Lev Ponomarev, one of the opposition figures scored by Kadyrov told TV Rain that the attacks by Kadyrov, Adam Delimkhanov, a Chechen senator and Magomed Daudov regarding the “fifth column” affects “thousands” of people critical of the government, whether in opposition parties or in movements like that of the long-distance truckers seeking to end heavy fines and tolls or pensioners demanding the return of their public transport passes.

“All of these people were sent a message: stop going out on the street, stop blocking roads, we will put all of you in your place. And since the threats from Ramzan Kadyrov and his entourage are perceived as physical, then they are threats outside the law.”

By remaining silent in the face of Kadyrov’s and others’ threats, the Kremlin leadership can both fuel the impunity for their Chechen “attack dogs” and feign plausible deniability that they are behind such threats. 

— Catherine A. Fitzpatrick 

Ruble Hits Record Lows As Oil Prices Tumble

The Russian ruble has taken a large tumble today as oil prices have fallen below $29 a barrel.

ABC reports:

The national currency was down 1.8 percent at 79 rubles to the dollar by 5 p.m. Moscow time (1400GMT), its lowest mid-trading level since December 2014.

The ruble fell to an all-time low against the euro as the Central Bank set the official exchange rate at over 85 rubles to the euro on Monday.

At time of writing, the price of a barrel of Brent Crude oil is $28.79, up from $28.03 which it hit at 6:10 GMT this morning according to Bloomberg. Here is oil’s performance over the last month:

2016-01-18 16:18:51

For comparison, here’s the ruble’s performance against the dollar over the last month:

2016-01-18 16:21:19

Bloomberg reports that Iran’s arrival on the oil market, and an American bank holiday, are both contributing to this volatility.

Russia relies on the oil and natural gas industries for almost half its budget revenue and collapsing crude prices have weakened the ruble 6.9 percent versus the dollar this year, the most among developing nations after South Africa’s rand. The Russian currency retreated 1.9 percent to 79.1120 against the dollar by 4:25 p.m. in Moscow, its lowest intraday level since Dec. 16, 2014, when falling energy prices and the conflict in Ukraine drove the ruble to a record low.

The lifting of international sanctions on Iran has helped raise the correlation between Brent and the ruble toward its strongest since October. Crude sank below $28 per barrel on Monday, extending declines and trading at a 12-year low. Trading will be more volatile today because of public holidays in the U.S., according to Danske Bank A/S.

While Iran’s return to the market is “broadly priced in,” a “big question is how much Iran is able to deliver in the mid-run,” Vladimir Miklashevsky, strategist at Danske, said in e-mailed comments. “With the U.S. closed today the ruble market will stay rather thin and volatile.”

As we see, the Russian currency and the price of oil are related, but they do not track perfectly. In fact, while Brent has rallied from it’s early-morning low today, the ruble has only gotten worse.

Today’s performance of Brent Crude:

2016-01-18 16:24:17

Today’s performance of the ruble:

2016-01-18 16:24:55

In other words, it appears that investor confidence in the ruble is falling despite market fluctuations in the ruble.

Because of the bad economic forecast, and the fact that the Russian budget was calculated with oil at $50, Russian Deputy Prime Minister Arkady Dvrokovich told reporters today that the government’s goal is to reach “at least zero” economic growth in 2016. The state-owned TASS agency reports:

“We are holding consultations with the Central Bank of Russia and Finance Ministry. The financial authorities and the Finance Ministry should be more conservative than other members of the cabinet, but we believe that we will be able to find a balance in the fiscal policy and possibilities to boost industries and agriculture and to ensure at least a zero economic growth in 2016 in the current conditions,” – Dvorkovich said.

But with the price of oil dropping and China’s economy struggling, even reaching zero economic growth might be nearly impossible this year.

James Miller