Welcome to our new 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, and see also our Russia This Week and feature Is Putin Really Reining in Hard-Liners? Fact-Checking Gordon Hahnâs Article In The Moscow Times
Last night gunmen reportedly from the terrorist group Caucasus Emirates have taken over the Press House in Grozny, the capital of Chechnya and this morning have occupied a school. It is the first terrorist attack in the capital since 2011. At least 6 terrorists have reportedly already been killed, and at least 10 law-enforcers have been killed and 20 wounded.
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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.
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.
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.
Nemtsov’s comment that Putin didn’t speak about corruption was interesting.
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 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. Vesti.ru 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
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.”
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.
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
According to their report, at 13:22 (10:22 GMT), the deaths of seven militants and 10 law enforcement officers have been announced. 20 security officers were reportedly wounded.
Footage of burning buildings in the market area has been uploaded to YouTube:
Ruptly, a video news agency created by the Kremlin-run RT, has video from a cameraman working alongside security forces:
The state-owned TASS news agency reports that the minister for the North Caucasus, Lev Kuznetsov, has said that he cannot exclude the possibility that foreign fighters may be involved in the attack.
Kuznetsov told a TASS correspondent (translated by The Interpreter):
“Clearly, there are still internal problems, but I think that an outside hand likely has a role here.”
— Pierre Vaux
Russia’s state-owned TASS news agency reports that several of the militants who have been engaged in fighting with security forces in Grozny overnight are now occupying a school in the Chechen capital.
Ekho Moskvy radio reported that the area around the school had been cordoned off.
It is important to note that, as far as we have seen, there are no reports suggesting any children are on-site.
Ramzan Kadyrov, the Chechen dictator, told journalists this morning (translated by The Interpreter):
“They’re now surrounded. An operation is under way to neutralise them.”
The independent Caucasian Knot news site reported that the majority of schools in the city were closed this morning.
The news site said that there were claims circulating locally that 400 militants had entered the city.
Video uploaded by the SputnikTV YouTube channel (not, it appears, to be confused with Rossiya Segodnya’s international service) shows fighting near the Press House continuing into the daylight today:
Fighting is still going on in Grozny this morning after 5 policemen and 6 terrorists were killed in a shoot-out last night.
The following is a translation from Chechen into English by The Interpreter of the police radio talk on the video uploaded to YouTube titled “Shoot-out in Grozny. All the News Known” on December 3. It provides details about where the insurgents began their attack and where policemen were killed.
0:04 Ramzan [Kadyrov] will
0:08 Is that Ramzan?
0:32 I think they’re shooting
from the Press House
0:38 They are shooting from
the Press House.
0:40 Take it carefully. On
the other, you’re on the other side.
0:43 They’re shooting from
the other side at the Press House.
0:48 Be careful. Over.
0:53 Today’s a day off, all
of our guys from the auto service shop are there. There’s a total fight in the
center of the city, explosions can be heard, a Priora is burning near the
Concernt Hall. They have killed three traffic cops in front of the mosque. That’s
horrible that this is happening in the center of town, explosings and
1:14-1:31 repeat of previous
1:34 What is it now…I’m in
front of the Central Mosque, in short, three traffic patrol police are lying
here dead. The people who killed them raced away in an automobile and then
police chased them, and here in the center, as you can hear approximately,
somewhere in the area of the “Three Fools” [a popular name for statues of three
leaders of the struggle for Soviet power in Chechnya after the October
Revolution in 1917] they are going to kill those people.
tonight somewhere around two or three hours ago, they called the taxi
dispatcher and told them that they needed three foreign-make cars for a
trip to Shalazhi. They ordered the
three cars, and when they reached Shalazhi, they tied up the three drivers and
took them out of the cars. Judging from everything, this gang then hijacked
— Catherine A. Fitzpatrick
President Ramzan Kadyrov has reported on his Instagram account about 30 minutes ago that 6 terrorists have been killed in a police operation in Grozny early this morning.
The Chechen strongman published a picture reportedly of a terrorist killed in the operation.
The Interpreter has provided a translation:
Dogs die a dog’s death! The operation to destroy the bandits is entering into its final phase. Six terrorists are already destroyed at the Press House! Not a single bandit managed to get out! I am directly leading the operation. Our main purpose is not to allow causalties among the civilian population. I urge you not to go out on the street in the zone of the operation for now!
The terrorists were members of the Caucasus Emirate. According to Caucasian Knot, a regional news service, the insurgents hijacked several taxi cabs in the village of Shalazhi in Urus-Martanovsky District, then drove to the Press House in Grozny. There they engaged in a gun battle with police, who brought BTRs to the scene. Judging from some videos from Grozny, a car and a building appear to have caught fire.
Earlier, Kadyrov made a statement about the anti-terrorism operation while it was in progress:
Translation by The Interpreter:
We have received operations information about a car with
suspicious armed people. An alert has gone out to all law-enforcement
agencies. The Traffic Patrol police made an attempt to stop a car.
People inside opened fire from it. Three police officers were killed.
In pursuit, about 5-6 armed bandits broke into the Press
House. Exhausting measures have been taken with the aim of neutralizing
them. The situation in the city is calm, all the vital services are
I ask residents of the city in the area where the operation is
being conducted to observe measures of caution, do not go out on the
street without a particular necessity and do not go to the windows.
The operation will be complete by morning. All conversations
about how somewhere in the city, the fighters are running things are
absolute lies. Cars are moving as usual in the city, although they
interfere with the participants of the operation. What happens is an
attempt to create the appearance of strength but it failed. We do not
rule out the likelihood that these people could have come from another
region.In Chechnya, members of the NAF [illegal bandit formations] capable of this no longer remain.
– Catherine A. Fitzpatrick
We have been reporting on the explosion and gunfight in Grozny, which reportedly involves insurgents from the Caucasus Emirate, a group included on the US list of terrorist organizations, who have barricaded themselves into the Press House, a building with newspapers and TV located near the government building.
Local reporters say as many as 10 civilians may still be in the building as police continued to shoot at 5-6 terrorists who took over the Press House early this morning.
Five policemen have been killed in the “special operation” launched to respond to the attack. Three were killed when they tried to stop gunmen who had stolen taxis in to make their assault on the Press House. Two other policemen have died during the shoot-out.
A man who said he was a member of the Caucasus Emirate released a YouTube video with a message about the attack on Grozny saying they are taking revenge against the “apostates” for the “humiliation of Muslim women” and are under orders from Ali Abu Muhammedov, head of the Emirate and another commander. The English translation of the video by The Interpreter is here.
As of 6:22 Moscow Time, the Caucasus Knot, a leading independent news service, said that gunfire had died down but that city of Grozny was closed, streets were blocked, and police were still conducting an anti-terror operation.
There have been a number of videos uploaded to YouTube with gunfire audible and of a fire — possibly a car — and gunfire.
President Ramzan Kadyrov has finally spoken on his Instagram account, and true to form has tried to convey a sense of control by uploading a video of himself and his bodyguards driving around Grozny with a song on the radio, speaking in Chechen.
is coming. The operation to neutralize the fighters is coming to a
close. For all of us it is important that not a single bandit can leave
the city. There is an urgent request to report any information about
people who in your view provoke suspicion and may be connected to them.
Call this number 89958053939
TV Rain reported that the National Anti-Terrorism Committee had confirmed that an anti-terrorist operation is under way in Grozny against six fighters.
Translation: the number of policemen killed in Grozny has risen to 5.
video uploaded to YouTube about two hours with the title “Shooting.
Grozny” looks out on to the National Library as the electronic sign can be seen below. Gunfire can be heard in the
distance, and a building appears to be on fire.
The video was taken looking down on the the National Library here on Google Maps.
This map shows the location of the Press House across from the Government Building and the National Library.
Caucasian Knot reported that a local NGO said there are still about 10 civilians in the Press House. The number of terrorists was 5 or 6, according to various reports.
But police say they have evacuated the building of civilians as they continued to shoot at the terrorists, RIA Novosti reports.
— Catherine A. Fitzpatrick