"...it is important to talk to Russia. [...] Because first it is our neighbor, and also because it is important that we have a stable relationship with this country, (inaudible). And it is in the name of these principles that we would like to maintain this dialogue. It does not prevent us from standing firm, like we said earlier.
But of course, Europe, as well, need to talk to Russia at a high level, and mainly because there is a major issue, which is arms control.
And over the past few month, we witnessed the de-organization – deconstruction of the regulation system of weapons that – the system that was put in place in – at the end of the ’90s on the strategic armaments. And luckily, we have New START being extended, but we also have the issue of the intermediate nuclear forces.
And all of these regulations are a matter of security to prevent any accident or incidence, to provide some relative transparency. All of that does not exist anymore, so this is what is at stake – the interest to rebuild, to begin to rebuild all of that.
It was discussed by President Biden and President Putin, and this is what we will be working on together based on a common agenda.
So we need to talk to have a strategic stability, to have relational stability between the Europeans and the great neighbor. And all of the initiatives aiming at talking with a willingness of dialogue are there.
And they’re not – the Americans, while they’re specialist in dialogue with Russia, and the Europeans are special experts in sanctions, we need both, and this is what we’re doing."
French Foreign Minister Jean-Yves Le Drian at a joint press conference with US Secretary of State Tony Blinken June 25, 2021
"We have for years promoted relations [with the EU], doing this in a sincere and pragmatic manner. These relations were aimed at integrating things, minimising costs, engaging in mutually beneficial cooperation in a number of areas.
Regrettably, this largely fruitful work was stymied by the West, by the Brussels elite, who are fully at Washington’s beck and call. European nations, citizens of European countries have nothing to do with this blockade.
Why did this happen? Because peaceful, mutually beneficial and effective coexistence on the European continent is a nightmare for the United States! Because it means they will be unable to find competitive advantages or fish in troubled waters. No! Any kind of US domination will be out of the question.
As of today, “divide and rule” is the sinister, frightful 21st-century logic, with its conscious intention to sow chaos and attempt to rule.
We were proceeding from pragmatic decisions that were necessary for our national interests. Let me remind you that the EU was created as the European Coal and Steel Community; integration in other areas was launched later, with the ECSC transformed into the European Economic Community and subsequently the European Union with a common currency. It all seemed well and good until it dawned on someone in Washington that Europe acquiring its own strong currency and a totally independent energy system was unheard-of impudence.
Can you imagine what it means for the US “deep state” to understand that Europe is energy independent and has its own mineral resources and technologies to produce and deliver these to any location in Europe and neighbouring regions.
It means leaving the United States out in the cold.
Obviously, they could not afford it, because they have no competitive advantage left to them other than the capacity to wreak havoc.
So, everything was done, as we understand now, to transform the EU from an independent economic integration system into an economic division of NATO, to destroy ties, and deal a blow to the entire edifice of European unity, which we observed."
Foreign Ministry Spokeswoman Maria Zakharova 8 June 2022
"Washington demands more and more sanctions against Russia and the majority of European politicians obediently go along with it. They clearly understand that by pressuring the EU to completely give up Russian energy and other resources, the United States is practically pushing Europe toward deindustrialisation in a bid to get its hands on the entire European market.
These European elites understand everything – they do, but they prefer to serve the interests of others. This is no longer servility but direct betrayal of their own peoples. God bless, it is up to them.
President of the Russian Federation Vladimir Putin 30 September 2022
"On 21 November 1806, Napoleon, by issuing the Berlin Decree, enacted the world-largest embargo ever against the United Kingdom. The Berlin Decree established the so-called Continental System, a Europe-wide blockade forbidding France-aligned European countries to import British goods.
Initially the embargo seemed to work: the British withdrew from Europe and in a few months the exports to the continent fell by half.
But over time the British found three ways to break the international isolation: circumvention, diversification and diversion. In a few years the UK was capable of replacing the trade with Europe by deepening the ties with overseas colonies and the rest of the world. A life-threatening challenge was turned into a once-in-a-lifetime opportunity to create a still existing symbiotic metropolis-peripheries relationship – ie the Commonwealth.
While the UK gradually recovered from the blockade, France-centered Continental System suffered more and more because of Europe's over-reliance on British imports, from textile to technology. The economic troubles fueled smuggling, prompting Napoleon to intervene, even militarly, as it occurred in Spain. But, eventually, sabotage and imperial overstretch weakened Paris' capability of controlling the Old Continent and quickened Napoleon's downfall.
The UK experienced a pre-modern economic encirclement, a pre-modern form of containment, and turned the isolation from Europe, which was London's main trade partner, into an opportunity to expand into new markets, to strengthen national industries, and to shape its future vital space.
Napoleon's desires never materialised: the UK experienced no high inflation, no stagnation, no economic crisis, no bankruptcy. Conversely, the Continental System would prove crucial in fueling the UK's extraordinary political and economic growth throughout the 19th century."
Emanuel Pietrobon, Geopolitical Analyst, 5 May 2022
"We tried to build up relations with the leading countries of the West and with NATO. The message was the same: let us stop being enemies, let us live together as friends, let us engage in dialogue, let us build trust, and, hence, peace. We were absolutely sincere, I want to emphasise that. We clearly understood the complexity of this rapprochement, but we agreed to it.
What did we get in response? In short, we got a ”no“ in all the main areas of possible cooperation.
We received an ever-increasing pressure on us and hotbeds of tension near our borders...
The goal was to make Russia more vulnerable...
...they try to turn everyone into a tool, in order to use these tools for their own purposes. And those who do not yield to this pressure, who do not want to be such a tool are sanctioned: all sorts of economic restrictions are carried out against them and in relation of them, coups are prepared or where possible carried out and so on.
And in the end, if nothing at all can be done, the aim is the same: to destroy them, to wipe them off the political map.
But it has not and will never be possible to draft and implement such a scenario with respect to Russia.
...Russia is not challenging the Western elites. Russia is simply upholding its right to exist and to develop freely.
Importantly, we will not become a new hegemon ourselves. Russia is not suggesting replacing a unipolar world with a bipolar, tripolar or other dominating order, or replacing Western domination with domination from the East, North or South. This would inevitably lead to another impasse.
....Let me recall that the Western civilisation is not the only one even in our common Eurasian space. Moreover, the majority of the population is concentrated in the east of Eurasia, where the centres of the oldest human civilisations emerged.
The value and importance of Eurasia lies in the fact that it represents a self-sufficient complex possessing huge resources of all kinds and tremendous opportunities. The more we work on increasing the connectivity of Eurasia and creating new ways and forms of cooperation, the more impressive achievements we make.
The successful performance of the Eurasian Economic Union, the fast growth of the authority and prestige of the Shanghai Cooperation Organisation, the large-scale One Belt, One Road initiatives, plans for multilateral cooperation in building the North-South transport corridor and many other projects, are the beginning of a new era, new stage in the development of Eurasia. I am confident of this.
Integration projects there do not contradict but supplement each other – of course, if they are carried out by neighbouring countries in their own interests rather than introduced by outside forces with the aim of splitting the Eurasian space and turning it into a zone of bloc confrontation.
Europe, the Western extremity of the Greater Eurasia could also become its natural part.
But many of its leaders are hampered by the conviction that the Europeans are superior to others, that it is beneath them to take part as equals in undertakings with others. This arrogance prevents them from seeing that they have themselves become a foreign periphery and actually turned into vassals, often without the right to vote
...Do you know what’s really important? ... to have the European part regain its legal capacity...Helmut Kohl told me...that if European civilization wanted to keep going as a global centre, it should definitely work with Russia. "
Vladimir Putin 27 October 2022
"We lost faith in our Western colleagues’ negotiation skills and dependability after 2014, when Crimea-related sanctions were imposed on us...Since then, we have been relying on ourselves and our contacts and connections with dependable partners. As a result of the measures we had taken, we became an agricultural powerhouse. For many years before that, we had been importing large amounts of food."
Russian Foreign Minister Sergey Lavrov 4 June 2022
Apparently the agreed rules of WTO no longer suits the American corner of the world community because the WTO allegedly doesn't follow Western democratic ideals.
"Even before Russia's invasion of Ukraine, all the U.S.' major Western trading partners agreed that there must be significant systemic reforms to the WTO's structure and rules to make it a functioning institution.
China and to a lesser degree Russia's presence in the WTO, along with the WTO's own rules, however, make reforming the institution virtually impossible.
Therefore, any consideration of real reform must include eliminating the institution and starting over...By withdrawing PNTR status for certain WTO members, the U.S. is recognizing that it can no longer remain shackled to a framework that no longer functions properly. If the institution is unable to force reform because of the gridlock created by its own rules, then it is time to consider abandoning the institution.
Withdrawing PNTR is a first step in creating a system for countries that adhere to Western democratic ideals."
Robert DeFrancesco, American lawyer
"We drew a lesson from all this, which is to never again rely on these people.
This does not mean that we will stop talking to them. We’ll see what they have to tell us when they get over the current insanity.
Under no circumstances, from here to eternity, will we ever let any critical sphere of our country or our people’s lives depend on Western investment or technology."
Russian Foreign Minister Sergey Lavrov 4 June 2022
"Why, by interweaving our destiny with that of any part of Europe, entangle our peace and prosperity in the toils of European ambition, rivalship, interest, humor or caprice?"
George Washington, Farewell Address, 17 September 1796
"Events of this year confirm the special significance of such a factor as accessible and affordable raw materials without which it is impossible to organise any production process or to set up co-production chains. Russia is just about the only country that is completely self-sufficient in terms of natural resources, and the Far East plays a substantial role here. This region is a highly important supplier of crude oil and natural gas, coal, metals, timber and marine biological resources to the domestic market and our foreign partners.
We are staking on the prudent and rational development of Russia’s natural riches under the most stringent environmental standards. First of all, we will refine all extracted raw materials domestically as much as possible. We will also use these raw materials to strengthen the sovereignty of this country, to ensure industrial security, to raise incomes and to develop the regions.
We have already protected the resource extraction industry from unfriendly actions. From now on, only companies with Russian jurisdiction have the right to develop natural resources in Russia.
The Ministry of Natural Resources and Environment together with the Ministry of Industry and Trade and leading business associations has determined the national economy’s demand for strategic raw materials. This information will become the foundation of the revised Strategy for the Development of Russia’s Mineral Resources Base with an extended planning horizon up to 2050."
Vladimir Putin, 7 September 2022
"...Under the Executive Order, if the Russian Federation and/or Russian legal entities or individuals are stripped of their ownership rights regarding properties in the foreign states that are targeting the Russian Federation or its legal entities or individuals, with unfriendly actions, and/or if the Russian Federation and/or Russian legal entities or individuals are stripped of their property titles, as well as when these rights are subject to any restrictions or there is a threat of being deprived of these rights, facing restrictions, and threats to Russia’s national, economic, energy and other kinds of security, its defence capability, an interim administration shall be instituted regarding the following assets:
a) movable goods and properties located in Russia and belonging to foreign parties with ties to unfriendly countries (including if these foreign parties are citizens or residents of these countries or if they have their registered addresses in these countries, or principal place of business or if they derive most of their profits from operating in these countries), and also those belonging to the parties controlled by the said foreign parties;
b) foreign-held securities, shares in authorised (joint) capital of Russian legal entities held by parties from unfriendly foreign countries;
c) property rights held by parties from unfriendly foreign countries.
The Executive Order sets forth a list of movable goods and properties, securities and shares in authorised (joint) capitals of Russian legal entities, as well as property rights subject to interim administration measures.
The document designates the Federal Agency for State Property Management as the interim administrator and also sets forth its authority.
Under the Executive Order, the President of the Russian Federation decides when to terminate the interim administration.
Presidential Executive Order 25 April 2023
"We always want to make sure that any sanctions that we put in place can at some point - if behavior changes - be reversed in order to make sure that threat actor knows that once sanctions are put in place, the goal is behavioral change ultimately"
- US Deputy Treasury Secretary Wally Adeyemo 17 April 2022
"5,787 new restrictions have been imposed against Russian legal entities and individuals since February 22, and their number has reached more than 8,500 in total. No other country has ever had so many restrictions imposed on it. Even Iran, which has been under sanctions for more than 40 years, comes in a distant second, with only 3,600."
- RT, 12 April 2022
"In this context, the further development of the huge gas industry network created in the east of our country is becoming strategically important for Russia. This network includes the Yakutia and Irkutsk gas production centres, the Amur Gas Processing Plant, which is under construction, and the Power of Siberia gas pipeline, which was connected to new reserves with the launch of the Kovykta gas condensate field into commercial operation last December.
Overall, as far as international cooperation and export contracts are concerned, Gazprom is facing monumental challenges, having to rearrange its logistics routes and gain a foothold in new markets. Yesterday alone, I think Mr Miller and I spent about two hours discussing all these plans with our potential partners.
Let me emphasise that no matter how important international trade is, what matters the most to us is promoting our national development, providing for reliable, steady economic growth, shielding the national economy from any threats, and ensuring uninterrupted supplies for our enterprises and regions. Of course, this also includes improving the quality of life for people across all regions of Russia.
I believe the expanded programme of social gasification, when connection to gas distribution networks is brought right up to the land plot boundary, is one of the most important projects for Gazprom in terms of its social responsibility. Starting this year, the programme has no expiration date. In addition, it now covers social infrastructure, educational and medical institutions, as well as housing.Let me remind you that certain categories of people can benefit from additional support. This includes families with many children and combat veterans. I am referring to subsidies people can obtain when buying services and gas equipment for their homes. We have already allocated federal funding to this effect"
Vladimir Putin 17 February 2023
As a result, major energy players such as Vitol, Glencore,
Trafigura, Shell and Total stopped trading Russian oil for third
Now, however, they will be able to resume business with Russia.
The legal details of the new provision will be published in the
Official Journal of the EU"
RT 23 July 2022
#2 In early August the UK removed
sanctions on insurance and reinsurance of ships carrying oil
to third countries (not the the EU). The UK is the single major
ship insurer in Europe. Russia has made it illegal to insure with
'unfriendly countries' anyway, and has developed it's own
insurance businesses for it's own oil and LNG carriers.
Reversal: in early September 2022 the EU and UK (oil
buyers) agreed they would 'cap' oil prices, and that any 'friendly
country' buying oil from Russia at prices higher than the cap
would result in withdrawal of insurance on the oil tankers and
prohibition on using EU/UK ports to unload. This 'cap' is to start
in December 2022. Obviously, the EU and UK don't control the
international oil market. This 'initiative' has quite rightly been
met with scorn and derision.
"Russia will embargo countries that support the Washington-proposed price cap on its oil...In my opinion, this is a complete absurdity… To those companies or countries that will impose restrictions, we will not supply our oil and oil products, because we are not going to work under non-market conditions”
Deputy Prime Minister of the Russian Federation Alexander Novak 01 September 2022
"In September 2014...Restrictive measures forbade the US export of commodities, services and technologies to support deep-water, Arctic and shale projects of Gazprom, Gazprom Neft, LUKOIL, Rosneft and Surgutneftegas (Forbes 2014). The new US sanctions introduced in August 2017 applied to these five companies and forbade American citizens and companies from participating in their new projects both within and outside Russia (RBC 2017). However, Bogdanov commented that the sanctions would have little effect on Surgutneftegas since it did not have any debt denominated in foreign currencies, did not have any deep-water or (offshore) Arctic projects and had limited dependence on foreign technology (Neftegaz.ru 2014a)."Western companies involved in supporting existing Russian drilling programs have all fled - except for the USA's SLB, which is the world's largest oilfield services company (SLB was formerly known as Schlumberger). It has picked up the most lucrative service and equipment contracts abandoned by those who fled Russia, and as a result revenue from the Russia-Central Asia division of SLB grew by 25% in the third quarter of 2022 - twice the growth in revenue from its Middle East and North African operations. SLB continues to expect record earnings from its Russian contracts - presumably confined to existing contracts, so as now to fall afoul of the US trade restrictions.
'Russian Oil Companies in an Evolving World' Indra Overland and Nina Poussenkova
"The territory of the Russian Federation includes a vast sea shelf, which makes up almost 22% of the total area of the world’s ocean shelf, and 70% of this Russian sea shelf can be used to produce oil and gas. According to geological data, this territory contains about 56 billion tons of proven oil and gas resources and is forecasted to contain an extra 100–140 billion tons of oil and gas resources (in oil equivalents) [1,2].
For the Russian Federation, oil and gas production on the shelf of the northern seas and Sakhalin Island is an important strategic objective and, to a great extent, the economic situation in the country and its defense potential depends on whether this objective will be achieved.
It should be noted that foreign companies lack experience in oil and gas production on ice. The solution to the problem of developing a sea ice-resistant platform for operation on the shelf of the arctic seas and Sakhalin Island has no parallels in the world practice."
Poletskov et al 2019
"OECD Europe has refinery intake of roughly 11 million barrels a day. It has its own crude production of about some 3 million barrels a day. The remainder is imported. Of this, we have some 800,000 barrels a day of Russian crude flowing via Druzhba which will be difficult to replace initially, and another roughly 1.5 million barrels a day of Russian crude heading to OECD Europe via sea...So potentially a very large hole in the European balance..."
Neil Crosby analyst OilX 15 April 2022
"The United States is allocating oil from its strategic reserves – well, this is good, but they will have to be replenished and the market analysts understand this. Today, they have withdrawn oil from strategic reserves and tomorrow they will have to buy it again. We are hearing that they will buy when prices go down. But they are not going down. So what? Wake up! You will have to buy at high prices because prices have gone up again.Driver of permanently high oil prices
What do we have to do with this? These blunders in the energy sector were made by those who have to think about it and deal with it."
Vladimir Putin 27 October 2022
"Why should Russia maintain oil production of 10 million bpd if we can (more) effectively consume and export 7 million-8 million bpd without losses to the state budget, domestic consumption? Which is better - to sell 10 barrels of crude for $50 or 7, but for $80?"
Leonid Fedun, Vice President Lukoil 30 May 2022
"Today's package contains a complete import ban on all Russian seaborne crude oil and petroleum products. This covers 90% of our current oil imports from Russia. The ban is subject to certain transition periods to allow the sector and global markets to adapt, and a temporary exemption for pipeline crude oil to ensure that Russian oil is phased out in an orderly fashion. This will allow the EU and its partners to secure alternative supplies and minimises the impact on global oil prices."
European Union press release 3 June 2022
"Member States who have a particular pipeline dependency on Russia can benefit from a temporary exemption and continue to receive crude oil delivered by pipeline, until the Council decides otherwise."First, EU countries "who have a particular pipeline dependency on Russia can benefit from a temporary exemption and continue to receive crude oil delivered by pipeline, until the Council decides otherwise." Translated, all the landlocked former Soviet States connected to the Soviet era Druzhba pipeline will be allowed to receive Russian oil without restriction for the foreseeable future (but won't be allowed to re-sell it).
European Union press release 3 June 2022
"Croatian President Zoran Milanovic said that the sanctions didn’t work because they cut energy purchases from Russia, but global prices for energy are on the rise. As a result, Russia is receiving even more revenue than last year. Let them draw their conclusions. Clearly, they have finally started crunching the numbers and trying to figure out what they are doing and what are the consequences"
Russian Foreign Minister Sergey Lavrov 1 June 2022
"Limited spare capacity in the global refining system, together with reduced exports of Russian fuel oil, diesel and naphtha have aggravated the tightness in product markets, which have now seen seven consecutive quarters of stock draws. While a first tranche of SPR releases halted the precipitous decline in OECD industry stocks in March, crude made up the majority of it and product stocks have continued to fall. Notably, middle distillate reserves reached their lowest levels since April 2008."
IEA May 2022 report
'...the REPowerEU strategy appears to be the most feasible.The plan suggests cutting Russian natural gas imports to 101.5 bcm from 155 bcm ( 2021) – in theory, by increasing non-Russian gas supply by 63.5 bcm, and reducing gas demand by 38 bcm.
The EU plan to cut two-thirds of its Russian gas imports and replace it [from] elsewhere – by the end of 2022 – is very optimistic...to attract more LNG cargoes, spot prices in Europe should be $2-3/MMBtu higher than the Asian markets. This is leveling now at $35/MMbtu for the rest of 2022 which is more than five times their five-year average.
The bottom line is that it will be impossible for the EU to increase their LNG imports by the crucial 50 bcm milestone. Even if the EU overcomes the technical issues represented by the regasification capacities and the interconnections between the EU countries and Britain, the supply in the global LNG market simply cannot meet the demand.Although Europe may receive an extra 25 bcm of LNG, it will come attached to a very high price tag, while prices in North America will be largely unaffected. The US is the big winner in this scenario...Europe will have to acknowledge that it will be neither an energy independent or politically independent continent for the foreseeable future.'
'Beggaring Europe: switching cheap Russian gas for expensive American LNG' The Cradle, Daoud Baalbaki 15 June 2022
"More than ever, getting rid of Russian fossil fuels and of fossil fuels in general, is essential. What is at stake is both the need to accelerate the fight against climate change, and, as we can see now, the short-term energy security of the European continent."
Barbara Pompili, EU President 3 March 2022
"Regarding Nord Stream 1, our German partners have agreed that all technical aspects of Nord Stream 1, including the maintenance of gas-pumping turbine units, are subject to British law because – I myself was unaware of this and learned about this from Mr Miller – Gazprom had to sign a contract for the maintenance of these units made by Siemens not with the Siemens main office but with its subsidiary based in the United Kingdom, which slapped sanctions on Gazprom, and agreed to repair the turbines at a Siemens plant in Canada.
What do we have to do with all of that? Canada finally took it but yielded to numerous requests coming from Germany and gave it to Germany, whereas under an agreement with a Siemens subsidiary in the UK, the turbines were to be shipped straight to St Petersburg. Logistics arrangements have changed and the contract has to be revised. The British-based Siemens subsidiary will not even respond to Gazprom’s inquiries.
You can take as many photos with the turbine as you want, but give us the documents, for crying out loud. This is our property. We need to understand the legal status of this property and its technical condition. They give us nothing but chit-chat.
The last turbine is now out of order, so Siemens representatives came to look at it. There is an oil leak, which is an explosion and fire hazard. There is no way for the turbine to remain operational given its current condition. Give us the turbines, and we will turn on Nord Stream 1 overnight. They do not give us anything. They say we are weaponising it. What are they talking about? They themselves messed things up big time and are now not sure what to do about it. They drove themselves into a sanctions dead end.There is only one way out. In Germany, people are rallying to turn on Nord Stream 2. We are supportive of the demands by German consumers and we are ready to turn it on as early as tomorrow. All we need to do is press the button, but we are not the ones who imposed sanctions on Nord Stream 2."
Vladimir Putin 7 September 2022 [Note: Nineteen days after this speech, Nord Stream 2 was bombed by a western Government - with or without the complicity of other government co-conspirators/proxy non-state actors.]
Whatever Europe does to reduce gas use, it will take time. China has expanded it's imports of natural gas from Russia, ostensibly as a measure to generate more electricity due to the summer 2022 heatwave - but some 'surplus' Russia-origin gas is re-exported to Europe, perhaps as much as about 7% of Europe's gas needs in the January to June 2022 period. These transhipped LNG cargoes have been reportedly been sold at a handsome profit for the Chinese businesses involved.
Gazprom, Russia's gas giant, said last week that since the beginning of this year, the EU had reduced its imports of Russian gas by 48%, while the EU plus the UK combined have reduced Russian gas imports by 49%.
Gazprom's exports to countries outside the CIS have shrunk this year by more than 35% compared to last year's period.Still, the gas giant is set to rake in 85% higher revenues this year, to around $100 billion, as natural gas prices surged following the Russian invasion of Ukraine and the significant cut to Russian pipeline gas exports to Europe, an analyst told the Financial Times last week.
"Of course, Europe is protecting its interests, especially in the economy, but then again it is doing so half-heartedly. There go the gas pipeline explosions. These are not our pipelines; these are pan-European pipelines. Five European companies are part of Nord Stream 1. So what? Everyone is keeping quiet, as if it is business as usual. They even have the nerve to suggest that Russia blew it up. Russia blew itself up. Have they lost their senses or what? No, they keep doing this.
Gazprom published photos from 2016 showing, I think, a US-made explosive device under the gas pipeline system. They claimed they lost it during exercises. They lost an explosive device so conveniently that it slipped right under the pipeline. I think the [stated] purpose of the device was to destroy underwater mines. Look, here is the photo.
The international media are keeping silent about this; no one is broadcasting it; it all withers on the vine and is nowhere to be seen: neither online, nor on television. This is another case of monopolising the media to promote what they need and to kill everything that stands in their way. It is right there, but no one is saying a word about it.
Vladimir Putin 27 October 2022
"We are ready to supply gas, and we are ready to supply oil – why turn them down? After the explosions on the Nord Stream pipelines we have one pipe left and it is operating. We can pump 27.5 billion cubic metres but they don’t want it. What does this have to do with us? If they don’t want it, so be it."
Vladimir Putin 27 October 2022
"At the Russian Energy Week yesterday, after consultations with the Turkish Minister of Energy and CEO of Botas, an agreement was reached with Gazprom. I spoke about this publicly: if Turkiye and potential buyers in other countries are interested, we can consider building another gas pipeline and establishing a gas hub in Turkiye for trade with third countries, first of all European countries, of course, but only if they are interested. This hub, built by Russia and Turkiye together, would serve as a platform for both supplies and pricing, as pricing is a critical issue these days. The prices today are exorbitant. We would be able to regulate them properly at a market level without any political implications."Russian gas to China
Vladimir Putin 13 October 2022
"We are going to provide the power of Siberia pipeline 2 within four years. We are going to complete this process and we are going to have the completion and reliable supply of gas without any Europe - and when Europe says that you cannot live without us, that's absolutely nonsense! Russia will survive, it's a big territory it's a big country."
Andrey Gurulyov, Member of the Russian Federation State Duma budget expenditure commission 30 September 2022
"Using natural gas from the Russian Federation for decades, the leading European economies clearly had advantages of a global dimension. If they believe they have no use for these advantages, that’s okay with us and does not bother us in any way, because the demand for energy around the world remains high. It is not just about our friends from the People's Republic of China, whose economy is growing fast, as I said and everyone in the world is well aware of, the demand for energy is growing...
...Even the Europeans’ US partners have redirected their LNG tankers to Asian countries...In effect, today it is the biggest economy in the world in purchasing power parity. The Chinese economy is bigger than the American one. Their needs are on the rise, we have stable agreements...Our Chinese friends are tough bargainers. Naturally, they proceed from their national interests in any deal, which is the only way to go. But they are stable and reliable partners and the market is enormous.
But there is more to it. We will also engage in liquefying gas and selling LNG all over the world. As you see, I have already cited an example of the first Arctic LNG-1 tanker ... Everybody is buying it. They will buy it, it will be profitable for them. So we have no problems at all. If European countries want to give up on that, losing their competitive advantages, this is up to them. Let them do it."
Vladimir Putin 7 September 2022
Russia is clearly going to
be the major supplier of the cheap and reliable natural gas that
China needs. As mentioned, Russia aims to ultimately supply
China with 50 billion cubic meters of gas
a year through a pipeline in West Siberia (Power of Siberia
2). This pipeline was originally intended to transport natural
gas from the Arctic Yamal gas field to Europe. But the
pipeline will now be redirected East to China. Sales of gas
shipped through Power of Siberia 2 will fully replace the now
defunct Russia-Germany Nordstream 1 pipeline. Nordstream 1 carried a third of
the Russian gas supplied to the EU. All that will ultimately
be exported East. All that remains is a pipeline going through
Ukraine, and a contractual dispute has left that with only one
string flowing. Eventually, it is possible that no Russian gas
will flow to Europe. But the proposed new 2,600 kilometer long
Russia-China Power of Siberia 2 pipeline is going to be a few
years coming - Mr. Gurulyov's 4 year timeline
seems improbably optimistic.
The pipeline will run through difficult terrain in a severe climatic zone. The proposed pipeline route also transits Mongolia, a country which the US is working very hard to bring under it's influence, with all the consequences that will follow (installation of puppet governments, cancellation of gas projects in favor of US funded 'green energy projects', installation of US bases and Russian-facing missiles under the guise of 'defense cooperation' - the whole sorry package). Pipeline construction is not even planned to start until 2024.
The route through Mongolia has been chosen because it brings transit income to Mongolia, it will be a market - albeit a minor market - for Russian gas, and the very polluting Soviet-era coal plants that currently power the Mongolian capital city could be finally closed down. In addition, the pipeline will be able to connect directly into China's national gas distribution pipeline as it exits Mongolia into Chinese territory. But the pipeline doesn't have to transit Mongolia. The pipeline could travel up to the existing Power of Siberia 1 pipeline, follow its route across Russia to Northern China, and thus avoid the risk posed by the USA engineering a destructive 'Ukraine 2' situation in Mongolia. The disadvantage is that it is a longer route, and also needs a subsidary pipeline in China to carry on into the main Chinese network. Gazprom has not made a final decision, but seems to be leaning heavily in the direction of risking a Mongolia transit.
Russia's LNG exports
The most competitive supplier of natural gas will have a track record of reliability and moderate price. That describes Russia (discounting the effects of the US/NATO proxy war on Russia).
In December 2022 the Russian President pointed out that Russian
natural gas is supplied to 'partner countries' at a price ten
times lower than European gas users pay. He makes
the point that as Russia is a reliable supplier, those
countries can develop industries with confidence, including
fertiliser industries. So far, this has mainly been pipeline gas.
Price and reliability are Russia's competitive advantage. But
selling pipeline gas requires a long term commitment from the
buying country. For example, it took Russia 10 years to negotiate
the contract for natural gas supply via the Power of Siberia
pipeline to China.
Until recently, China thought that it would be possible to obtain
cheaper natural gas from contracts for LNG loads, as it already
relies on LNG for around two
thirds of it's natural gas imports. But West's interference
in normal gas trade has meant there is now a bottleneck in LNG
shipping capacity, as Europe, spurning available pipeline gas,
turns to an increased number of LNG shipments. At the same time,
China's demand for LNG shipments is bouncing back as it's natural
gas imports from LNG shipments returns to more normal levels after
21% drop in 2022. The US blockade has clearly demonstrated
the value of overland pipeline gas that cannot be interfered with
(the Nordstream 2 pipeline under the Baltic Sea is not so much a
pipeline as a practice target for Nordic country, Poland, UK and
USA undersea drones).
Russia seems to be settling on a very flexible and diverse
natural gas distribution system - land-based pipelines, pipelines
under the Black Sea far from the 'unfriendly' countries, and LNG
priced at favorable terms (for friendly countries), targeting both
longer term and spot markets. It doesn't exclude supplying
'unfriendly; countries either, except that there be a
pre-condition - they will supply at free market prices. Even
mention a 'price cap' and it's "no gas for you".
Russia has a plan to be able to produce 110-190
bcm/year of LNG exports by 2025. Russia, with 4 LNG plants
in operation, is already the world's fourth largest LNG exporter
at 40 bcm/year of LNG exports. There is likely to be very
strong competition in the LNG market, and it is likely to split
along the West's 'friendy'/'unfriendly fracture line, which may
also become the cheap/expensive line. Strategically, China could
import all of Russia's 2025 LNG export production without
blinking. It would still need to import LNG shipments from
elsewhere, but could drop LNG imports from unfriendly countries -
(44 billion cubic meters a year) and USA (12 billion cubic
meters). China is also well aware of the US push into Central
Asian oil, gas and uranium producing countries - and the
inevitable overthrow of governments and instigation of violent
internal divisions the USA always use to gain control.
405 million cubic meters of LNG entered the European gas
transmission system by year end of January 2022. This
is a record 110% increase in the 5 year average annual
demand. This was even when the Nordstream pipelines were operating
and supplying gas to Europe as well. Ironically, the EU stocked up
on Russian gas - imports of
Russian LNG surged
41% year on year August 2021/August 2022.
Obviously, Europe was preparing to dramatically cut Russian gas
purchases. As it turns out, it it wasn't enough.
By late December 2022 Russian Deputy Prime Minister Aleksandr
Novak revealed that the European countries were "constantly asking
us to increase supplies” through the remaining undamaged pipelines
- the Turkstream
(31.5 billion cubic meters a year), Bluestream
(16 billion cubic meters a year capacity), and the Urengoy
('brotherhood') pipeline entering Ukraine at the Sudzha metering
station (reduced to about 15.7 billion cubic meters a year as at
late December 2022 but as at February 19 2023
that had fallen to 14.3 billion cubic meters a year). Clearly,
there is European demand for Russian gas at the moment, and Russia
- in principle - is happy to provide it under commercial
conditions. But global LNG supply is increasing.
“The buyer wants supply stability, and the seller wants a buyer who is stable and can buy in the long run. But the fundamental problem in Europe, in my opinion, is that governments talk about buying more gas, but they can’t because most European countries don’t have the funds to buy gas. Most LNG purchases are made through private companies. It is the private sector that buys... I think 10-15 year deals are probably the most acceptable for both parties. But for us, the long-term deal is not only in duration, but also in price... If you look at the situation, it will be very difficult for Europe to withstand zero supplies of Russian gas for more than two winters...There will be some LNG coming from the US and other places. We have committed ourselves not to remove anything from Europe and not divert any volumes. But, in the end, this is a small volume compared to the huge volume that comes from Russia.”
Qatari Minister of Energy Saad al-Kaabi 5 October 2022
"The EU is the world’s largest LNG importer. In 2021, the bloc purchased 80 billion cubic meters of LNG. Among the union’s major LNG suppliers are the US (28%), Qatar and Russia (20% each), Nigeria (14%), and Algeria (11%)."In 2021 the US sold about 36% of its LNG to Asia and Southeast Asia (13% to China, 13% to South Korea and 10% to Japan). Clearly, the USA is aiming to take Russia's 20% EU market share as well.
RT 24 July 2022
"The European Commission and member states' efforts to diversify away from Russian fossil fuels saw them last week sign a Memorandum of Understanding with Egypt and Israel for LNG exports from the eastern Mediterranean. We agreed a joint statement with Norway to step up our cooperation to have a deeper long-term energy partnership and will work towards securing additional short-term and long-term gas supplies, addressing high energy prices and cooperating on clean energy technologies. We are also working together with other alternative energy suppliers such as the USA, Qatar and Azerbaijan, to give just some examples."
European Commission Spokesperson CNBC 29 June 2022
[The EU] will pay more on average for its [non-Russian] oil and gas than its peers. Asian countries will buy more Russian oil at discounted prices, LNG imported by Europe from the U.S. will cost more than the price paid by U.S. consumers owing to transport and liquefaction/re-gasification costs."
Christopher Granville, TS Lombard, CNBC 29 June 2022
"A transition to carbon neutrality does not go against Russia’s interests – we have opportunities for developing alternative energy sources, including hydrogen energy and pure hydrogen, and we have serious competitive advantages in this respect. In part, it is possible to use gas. There are many opportunities, and this does not scare us at all but, on the contrary, creates an impetus for development. Primary gas is the best source of energy as a transitional source of energy. How was it possible not to invest enough money - or prevent investment - in the traditional energy sector without preparing fully for this green energy transition? How could this happen?
This is largely the reason for the current energy crisis. After all, Western politicians just talk to win voters to their side. First, they scare regular people with potential climate changes, then they start exploiting this fear and make unrealistic promises, and then they receive the votes they need, come to power and then say “oops”! What is happening now – a return to coal, a return to fuel oil?"
Vladimir Putin 27 October 2022
"Rosatom's cooperation agreement with France's Air Liquide for a project to build a hydrogen production complex on Sakhalin Island has expired...Rosatom said it ...is now "continuing the implementation of the project independently with the participation of a number of Russian and foreign partners.
Air Liquide...announced on Friday that it intends to exit Russia. The company said it signed a memorandum of understanding with the local management team...to transfer its activities in Russia in the framework of a management buyout. This is subject to Russian regulatory approvals.
Rusatom Overseas, Air Liquide and the Sakhalin regional government signed a memorandum of understanding in the spring of 2021 to study the possibility of building a complex on Sakhalin Island to produce up to 100,000 tonnes of hydrogen per year. The parties completed a feasibility study for the project in February 2022....Rosatom is considering a total of ten pilot projects in the field of hydrogen energy. Rusatom ...is now developing these projects. The company is doing research on large-scale hydrogen transportation and production and working with metal companies."
“US persons are prohibited from engaging in any transaction – including gold-related transactions – involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation or the Ministry of Finance of the Russian Federation.”
US Treasury 2022
"(a) STATEMENT OF POLICY.—It is the policy of the United States to seek to exclude government officials of the Russian Federation, to the maximum extent practicable, from participation in meetings, proceedings, and other activities of the following organizations: (1) Group of 20; (2) Bank for International Settlements; (3) Basel Committee for Banking Standards; (4) Financial Stability Board; (5) International Association of Insurance Supervisors; (6) International Organization of Securities Commissions,"In other words, one member of the International community is attempting to dictate to other members who may or may not attend meetings of world organisations. While the US dominates the Bank of International Settlements, and in principal could force a change to article 55 (3), so far it hasn't. But the US is just one member in 28 of the Basel committee, so it has no power, it seems, to bend rules to keep Russia away from meetings, let alone make regulations that disadvantage Russia's gold reserves status.
"In order to ensure, under the current conditions, the state’s technological independence and security based on the full life cycle of production from raw materials to final products, the Russian Federation Government was instructed to develop and implement a set of priority measures to create demand for domestic solid minerals (including rare and rare earth metals, titanium, lithium, manganese, beryllium, tantalum and wolfram) in certain critical sectors of the economy (metallurgy, the defence, chemical and medical industries, and construction).
These measures should, in particular, provide for a consolidated order for specific types of goods (machinery, assemblies, installations and materials) with an increase in the share of Russian solid minerals in the chain of their manufacture; the creation of Russian production capacities and technologies for the processing, mining and exploration of minerals, and the geological study of minerals; the utilisation of waste components of mining and processing activities, ashes and slags; the geological and economic reassessment of recorded state reserves; the assessment of probable mineral resources; and the adjustment of strategic planning documents for the development of the mineral resource base and industries regarding the coordination of goals, activities, indicators and deadlines.
The Russian Federation Government, together with the Federal Assembly chambers, was instructed to work out the issues of stimulating the exploration and mining of strategic and scarce types of raw materials and to make the necessary amendments to the legislation.
The Government, with the participation of the Russian Academy of Sciences, Rosatom State Corporation and other interested organisations, was instructed to determine the priorities for the development of the mineral resource base of solid minerals in conjunction with the forecast for scientific and technological development in order to create promising high-tech products and materials for the long term. In addition, the instructions relate to the development and implementation of a federal scientific and technical programme aimed at providing comprehensive support for geological exploration, mining and industrial processing of solid minerals, as well as the accelerated substitution of imported technologies and equipment with Russian equivalents.
The Government was instructed to organise prompt and coordinated support to address these tasks, including using the mechanisms of the Russian Federation Government Coordination Centre."
Instructions following an audit of the implementation of legislation and presidential decisions aimed at developing a promising mineral resource base 28 June 2022
“The nickel alloy market is estimated at around $10 billion and expected to grow by 8–10% over the next five years. That is why we see a great opportunity for Nornickel to enter new high value-added markets and actively promote nickel, the Company’s strategic product.”Russia produces about 10% of global nickel. There are ample supplies of class 2 nickel in the world (less than 99.8% nickel content), but class 1 nickel is not so abundant (about 40% of nickel deposits are high quality sulfide deposits). Russia's Nornickel produces15-20% of world battery-grade nickel (class 1 nickel). Nornickel is the world’s largest producer of high-grade nickel and palladium.
Denis Sharypin, Nornickel Head of the Marketing Department 23 August 2022
"“The combination of battery materials production and recycling enables the circular economy by closing the loop,” said Tim Ingle, Vice President Precious Metals Refining, Chemicals & Battery Recycling at BASF. “To drive electrification, we are focused on bringing solutions for high energy density cathode active materials and high-efficiency lithium extraction for battery recycling.”It is obvious to me that BASF is setting up conditions to bankrupt the Nornickel plants, buy distressed assets, and become a 'full cycle' battery manufacturer while shutting Nornickel out of the same 'green' credential.
Nornickel describes the construction of a modern recycling plant as a further step towards becoming “one of the most sustainable nickel refineries in the world”. The Russian company and BASF have been partners for some time and have already announced that they want to further intensify their cooperation.BASF’s investment in its Finnish plant is part of a multi-stage investment plan worth €400 million that the company announced in mid-2017. The cathode materials business is still a relatively small unit under the BASF umbrella but is one of the Group’s most important innovation projects. From 2012 to 2015, the company made a number of acquisitions and investments to gain access to the cathode market.""
"I will emphasise it once again – Russia has been and remains one of the world’s main food producers and exporters. We supply our agricultural products to 161 countries. Last year, we exported over 43 million tonnes of grain, including 33 million tonnes of wheat. This year, we expect good grain harvests, which will allow us to increase our supplies to the external markets up to 50 million tonnes."The west started applying its illegal trade restrictions on Russia from about 2013 onwards. Russia was forced to take sudden and dramatic measures to build up its own food industries, as before then, it had imported a lot of food from overseas, Europe in particular.
Vladimir Putin, 30 June 2022
"Today, we have managed to ensure food security among most key products such as grain, sugar, vegetable oil, and fish products, to name a few. I would like to separately note the achievements of meat and meat product producers.
In addition to saturating the domestic market, our livestock and poultry producers are exporting their products to more than 110 countries.
Of course, we are aware of what we need to work on, such as fruits, vegetables, milk, and dairy products in general. To reiterate, given our land area and other resources, the industry’s potential is tremendous. To tap it, it is critically important for us to consolidate our positions, achieve tangible progress and the necessary independence in a sensitive area like the seed and breeding fund which is the base of the agro-industrial complex and a basis for increasing the yield of our crops and the productivity of our farms."
Vladimir Putin 21 November 2022
"Russia is one of the six largest exporters of vegetable oils, margarine, processed cereals; in the top ten world exporters of sugar and chocolate products, packaged tea (for black tea - in the top five), is the world's largest exporter of yeast, ahead of China [2-4].
Russian producers in the feed market occupy a significant share: the largest share in the export commodity structure is occupied by sunflower and rapeseed cake, sunflower and soybean meal, grain processing residues, beet pulp, according to which Russia is the world's largest exporter, and in terms of export of sunflower cake and oilseed meal. and grain processing residues consistently ranks second in the world."
A. V. Kuchumov 2022
"Together with the State Council Commission on Agriculture, the Government has been instructed to amend the Agriculture and Fishing Development Strategy until 2030 to set forth a growth rate of at least 3 percent for agricultural output; set annual performance indicators for the import substitution of critical agricultural products as well as products used by the agriculture industry and fisheries; state support measures for these sectors, including to promote new export opportunities for finished products and increasing funding for the state programme to rehabilitate and reclaim farm land."Planting of the 2022 spring crop started before severe trade restrictions began. Trading the harvest starts in July. The government allocated 419 million USD to subsidize short term credit for planting, and later another about 374 million USD in subsidized credit for similar purposes. Big plantings require big machinery. The large American agricultural machinery company John Deere has pulled out of Russia, and spares will no longer be available. Modern agricultural machinery is heavily computerised, and repairs become all but impossible without access to the companies diagnostic software. No doubt Russia will develop its own high tech ag machinery in time (or Belarus will), and in the interim may turn to suppliers such as China. On April 26 2022 the President directed the government to ensure the increase in production of agricultural machinery and to remove import duties on any ag machinery that Russia does not produce.
Presidential Instructions following meeting on agricultural industry, fisheries and related sectors’ development April 26, 2022
"In addition, there is also a problem with Russian grain exports. Although the West loudly proclaims that grain is not covered by the sanctions, it coyly remains silent about the sanctions on vessels carrying Russian grain. They are not accepted in European ports and are denied insurance. All logistics and financial chains linked with grain supplies to the world markets are under Western sanctions."Russian wheat and sunflower exports are doing very well. Most Russian wheat is sold in the Middle East, and demand is very high. Russia's current (2022) season crop is expected to be larger than last year. Forward prices are rising around the world, as North America, India, Europe, and China are expected to have average to lower harvests, primarily due to unfavorable weather at sowing and harvest. In late June 2022 Russia introduced a requirement that foreigners must pay in rubles for wheat, sunflower seeds and sunflower expeller cake (used for animal feed). The Agriculture Minister had previously suggested that export crops would only be available to countries that refrained from restricting Russian trade. Russia imposes an export tax on wheat and other edible seeds. The idea is to raise the price of exported food high enough that it is profitable to sell these foods into the domestic market first, with only the excess to local market requirements being then exported. This tax, too, must be paid in rubles.
Russian Foreign Minister Sergey Lavrov 1 June 2022
"Western countries, which have artificially created several problems by closing their ports to Russian ships and disrupting supply and financial chains, should seriously think about what is more important to them: to use food security as a media stunt or to overcome the challenge with concrete steps. It's up to them."
Russian Foreign Minister Sergey Lavrov 31 May 2022
"The “Ukrainian deal” is being more of less acted upon even though far less than 10 percent is going to the poorest countries, and the bulk (almost half of it) is going to the EU and about the same amount is going to well-off developing countries. The poorest countries are getting just a sliver of it, although Antonio Guterres promoted his initiative with precisely these countries in mind.
No amount of UN efforts has prompted the EU or the United States to lift barriers to our exports of grain and fertilisers.
Washington and Brussels keep saying that no sanctions on food or fertilisers have been imposed. Indeed, the adopted decisions do not mention “food” or “fertilisers.” There is a provision, though, that bans Russian ships from entering Mediterranean ports, a provision that bans foreign ships from entering Russian ports, and there is also a restriction imposed on our main agricultural bank, Rosselkhozbank, cutting it off from the SWIFT system. There is a problem with freight and insurance.
Antonio Guterres must be credited with highlighting these issues publicly. But things have not budged an inch.
The West continues to insist that food and fertilisers have not been sanctioned...the specific issues that Antonio Guterres proposes addressing (and we strongly support him in that) simply remain on the sidelines.
Just like our free offer of to deliver the fertilisers that are stranded at European ports (about 280,000 tonnes). After this cargo had been arrested at the European ports, the Russian owners of these fertilisers said they wanted to have these fertilisers sent for free to the poorest countries so as not to waste the product which loses its potency over time."
Russian Foreign Minister Sergey Lavrov 23 January 2023
"...volatile weather results from ‘the combination of a high continental weather pattern, with the occasional blocking in the seasonal paths of cyclones’ (ibid., p. 3), producing ‘dry hot east winds’ which blow all the way ‘from Central Asia across the Volga, Northern Caucasus and the Ukraine’ (ibid.). These hot winds from the deserts bring high temperatures and virtually no rainfall, causing serious droughts across the whole chernozem region."
'Persistent farmland imaginaries: celebration of fertile soil and the recurrent ignorance of climate' Oane Visser 2020
"The company is also focusing on foreign trade. In 2021, exports amounted to almost 3 million metric tonnes. Our main goal is to fully bypass international trade mediation and work directly with the importing countries. Egypt is probably our main client. Over two agricultural seasons, we ranked highest among Russian exporters with 1.5 million metric tonnes of wheat.
Moreover, with our partners from friendly countries, we are transitioning to payments in national currencies. For example, we have signed several contracts with our Turkish partners. The latest of these, signed in March, is payable in rubles; the overall total will be about 3 billion rubles."
Dmitry Sergeyev CEO of the United Grain Company 6 July 2022
#1 On 22nd July 2022 Russia came to an agreement with the United Nations to allow facilitate grain ships leaving Ukraine via the Black Sea. Turkiye and the UN will inspect the empty ships (with Russian and presumably Ukrainian observers) as they enter the Black sea in order to confirm they are not carrying weapons to Ukraine.
The price for this agreement is that the sanctions on Russian grains must be removed. I think this refers to sanctions on insurance, port access, and shipping companies, as well as on specific sanctioned products. Time will tell.
"Officially, the sanctions on our fertilisers and food have been lifted, but in reality certain restrictions remain. This is a complicated and insidious situation. It appears that there are no direct sanctions affecting our products, and yet there are restrictions concerning logistics, chartering ships, money transfers and insurance. Many of these restrictions persist, although credit should be given to the efforts of the UN Secretary-General and the United Nations in general: when it comes to chartering ships, many restrictions are being lifted despite the sanctions imposed on the ports we ship cargo from. Nevertheless, this sector is being released from the restrictions and the vessels can already call at our ports. So, the situation is improving.
There are still certain restrictions that prevent us from ensuring that the interests of all consumers in global food markets are being served. As a result, prices on the global markets are going up. But we hope that the remaining restrictions will be lifted. This is the first point.
Second. You may remember my meetings with our friends in Africa and African organisations. As I said in my speech, we promised to do everything we could to serve the interests of the developing countries – specifically, by ensuring supplies to their markets, including supplies of Ukrainian grain. When we discussed this, that was the understanding.
What we see is more audacious deceit. And they did not deceive us: they deceived the international community, their partners in Africa and other countries that desperately needed food. It is a con job, impudence and disgraceful conduct towards the partners who were supposed to benefit from the deal. It was a hoax, see?"
Vladimir Putin 7 September 2022
"Of the 87 ships that left Ukrainian ports carrying grain, 32 remained in Turkiye, and I believe that was a fair part of the deal because Turkiye was the country that arranged this entire process and therefore is certainly entitled to this. Three went to South Africa, three to Israel, seven to Egypt, 30 to the European Union, and only two ships headed for the poorest countries under UN food programmes – for Yemen and Djibouti. They carried 60,000 tonnes of grain, or a mere 3 percent.
I would like to ask the Foreign Ministry to take this into account when interacting with our partners, including the UN. True, we cannot influence this process, cannot direct how much food goes where, but nevertheless, we consider it right to increase supplies to the poorest countries...
In May-August of this year, the Russian Federation supplied 6.6 million tonnes of grain to world markets, including wheat, barley and corn, of which as much as 6.3 million tonnes went to Asia, Africa and Latin America. Overall, by the end of the year, we will supply 30 million tonnes of grain and are ready to increase our exports to 50 million tonnes or more, because thank God, this year's harvest is good."
Vladimir Putin 9 September 2022
"The Russian portion of this package, which is formalised by a special Memorandum between the UN and our country, is not being implemented at all. Our Türkish friends and the initiator of the entire package, UN Secretary-General Guterres, are sending calls and requests to Western countries, but in vain.
The obstacles to financing, logistical clearance, transport and the insurance of these exported Russian products remain unchanged and are even getting tougher.
Our Western colleagues do not tire of repeating, despite the facts well known to them, that neither fertilisers nor grains are on the sanctions lists. Indeed, neither fertilisers, nor grains are recorded in the sanctions column.
But everything else that my friend has just said is in evidence: disconnection from the SWIFT system, the inability to insure and reinsure cargo under normal conditions, the inability for Russian ships to enter Mediterranean ports and for foreign ships to enter Russian ports, and much more.
President of the European Commission Ursula von der Leyen and others who are “eager” to solve developing countries’ food problems can repeat like a machine that food and fertilisers are not under sanctions. This will mean only one thing: they are telling us that Russia must keep its food and fertilisers, sit on them but not take them anywhere, even though they are not under sanctions.
Having once extended this deal for a second term (120 days) and not seeing any signs that anyone can really solve these problems, and after tiring of appealing to the conscience of those on whom it depends, we were forced to escalate matters somewhat. We offered to extend the deal only for 60 days. We proceeded from the assumption that if there were no further progress in removing obstacles to the export of Russian fertilisers and grains, we would reflect on whether we need this deal now.
“Corridors of solidarity” are being implemented concurrently with the Black Sea Initiative which the European Union came up with and which imply exporting Ukrainian grain and many other goods to Europe and the EU over land. These goods enjoy the most favourable terms and conditions. In fact, they are discriminating against similar products made in the European countries. Major protests started there because the European market is flooded with cheap Ukrainian grain. All of that has degenerated into commercial exports to Western countries. If their countries are overflowing with cheap Ukrainian grain, which makes selling grain produced by the European countries an unprofitable proposition, they could give it to poor and developing countries. As we were told, this is the rationale for UN Secretary General Antonio Guterres’ “package” initiative. As a result, less than 3 percent of Ukrainian grain is going to the poorest countries with the bulk of it ending up in the EU.
If they choose not to take the approach that Antonio Guterres proposed and persistently promoted in an honest manner, let them continue to ship products from Ukraine by land, rail, or river. The West has the appropriate logistics in place and they are fully operational.
Russia will work, if it has to, outside the Black Sea Initiative. We can already work with Türkiye and Qatar.
The presidents discussed these plans. Russian exports to the needy countries will not be affected. I can promise you that."
Sergey Lavrov 7 April 2023
Looks like Türkiye acts as middleman for some shipments, but the noise from the west about the starving south can't receive grain due to Russia has been shown to be a lie. Very little of it was ever intended for those most in need. Russia will block the Black Sea as an export corridor for grain until the west unlocks its ban on SWIFT connection, insurance "and more". In the meantime, Russian grain will flow to re-export hubs in Turkiye and Qatar.
"The Rosselkhozbank, the main bank that services our agricultural exports, has been expelled from the SWIFT system, and there are no plans to bring it back in. Instead, we are offered a one-off alternative, where three American banks, as the Secretary-General requested, replace SWIFT and help Rosselkhozbank service export operations.
A few months have elapsed, and one of the banks kindly consented to finance one operation. But when we are told that we should continue our efforts on the basis of this principle, that’s not much to go on.
If you want to systemically resolve the issue of food shortages on the global market, then there is the need to bring our bank into the fold of the SWIFT system.
...Yes, we can see that the Secretary-General and his colleagues have been making efforts, but there have been practically no results, unless we are to view as results the glimmer of hope that, instead of normal provision of necessary products to global markets, each time there will be a need to make efforts manually and plead with American and European ports, banks and other structures, insurance companies and request that they be magnanimous.
That’s not the deal we reached on July 22 of last year when we supported the Secretary-General’s initiative which, as he has reiterated, is a major package that has many components....
...There are still problems with insurance, and yesterday I was told by the Secretary-General that the rates dropped significantly after his contacts with Lloyd’s of London, but this is all focused on maintaining and preserving control over everything that is happening, to prevent our fertiliser and grain from freely reaching markets and on the basis of market mechanisms, to prevent them from entering certain countries. All this, of course, complicates the work of the World Food Programme which has been helping the poorest countries...No, I do not suspect that UN Secretary-General Antonio Guterres was disingenuous when he proposed the deal. I believe his intentions were sincere. I know Mr Guterres quite well and can state this with confidence."
Sergey Lavrov, 25 April 2023
There’s no measurable progress under the Russia-UN Memorandum. There are obvious issues with the declared humanitarian component of the deal where Ukrainian grain is being exported through this sea corridor mostly to high and above-average income countries, including “well-stocked” European markets.
Countries that need it most have received hardly anything, 722,000 tonnes (or 2.5 percent) of the total amount of 30 million tonnes that had been moved from Ukrainian ports over nine months.
The export of Russian products, even donations of fertilisers to the neediest countries, continues to be blocked by various aspects of the illegal and unilateral sanctions.
Western capitals and UN platforms continue to talk much and in loud voices about global food security and the threat of hunger. These tasks are explicitly, and in detail, laid out in the Russia-UN Memorandum, which is being systematically sabotaged by Washington, Brussels and London. The Black Sea Initiative doesn’t say a word about it.
There is no progress either in resuming ammonia shipments mentioned in both Istanbul documents. In particular, this concerns the Togliatti-Odessa ammonia pipeline, which the UN Secretary-General focused on during his visit to Kiev on March 8, and a separate initiative, which, like the Russia-UN Memorandum, remains only on paper.
Given the circumstances, we are compelled to issue a reminder primarily to the United States, the EU and Great Britain, which care so much about food security in word only, about the need to actually remove Russian fertiliser and foods from the list of unilateral sanctions.
There are five systemically important issues that must be resolved as part of implementing the Russia-UN Memorandum and which have seen no progress whatsoever so far, namely, reconnecting Rosselkhozbank to the SWIFT system;
supplying spare parts;
unblocking transport logistics and insurance;
reestablishing the Togliatti-Odessa ammonia pipeline, and
unfreezing the Russian companies’ assets.
There can be no talk of expanding the Black Sea Initiative in principle without these requirements first being met. The agreement will be terminated after July 17.
Press release on renewing the Black Sea Initiative 18 May 2023
In a nutshell, the west continues to try to hold Russia's grain exports to ransom. The UN appears to be largely either impotent or secretly unwilling, in my opinion.
"Let me add that restrictions on the operations of Russian metal and steel manufacturers are a clear act of unfair competition (I repeat, we can see this in other industries as well), they are attempts by Western countries to restrain Russian businesses as leaders in world metallurgy and redistribute the markets, of course, in their favour.
I would like to stress once again that Russia will always be a reliable and responsible supplier of metallurgical products to foreign customers and partners regardless of any current political troubles. We will also be reliable partners to those who are looking for beneficial, predictable business cooperation, but we will not act against our own best interests in relations with those who have adopted an openly unfriendly stance towards us. This applies not only to the metal market, but also to our other exports..."
Vladimir Putin, 1 August 2022
"Our foreign customers and partners have always seen and continue to see cooperation with Russian metallurgists as predictable and mutually beneficial.
...the Western states have imposed illegal restrictions on Russian companies. This includes a ban on shipping ready-made products, as well as the purchase of certain components for manufacturing - rolled metal products, steel sheets, rods, etc."
Vladimir Putin April 20, 2022
"Today, we have a high demand for cold-resistant steels in Russia, which are used in the construction of Arctic zone ships and vessels. The demand for AB2-PK steel exceeds 700 tons a year. The production of this steel at Motovilikha will allow for the domestic shipbuilding industry to be less dependent on imported counterparts. Entering this market is part of a program to get the enterprise out of bankruptcy proceedings and create a center for the manufacturing of innovative steels demanded by leading sectors of the economy. In the medium term, we expect to take 50% of the shipbuilding steel market and enter into industrial cooperation with shipbuilding companies..."
Semyon Yakubov, the RT-Capital CEO 6 October 2021
"Arc steels have not yet come into use among shipbuilders, but in future they are expected to replace many shipbuilding steels. The first commercial order in Russia for arc-steel was drawn up with the help of Rosatom. In the upper part of the icebreaker Leader hull, it will be used in the areas with the lowest operating temperatures. Arc-steels are one of the results of work in the field of precision, that is, precise, technologies for creating new materials.
Until recently, any changes in steel quality indicators were solved mainly by alloying - the introduction of various chemical elements into iron. But an increase in the content of alloying elements significantly increases the cost and complicates the production process. By fine tuning the technological process, it is now possible to obtain steels with different properties from the same workpiece. For example, a change in temperature at the end of hot deformation can affect the strength and ductility of the metal.
The of KM Prometey Central Research Institute, part of the Kurchatov Institute Research Centre, is Russia’s largest interdisciplinary materials science centre, specialising in advanced materials and technologies for industries where products, structures and equipment are operated in extreme conditions. These are shipbuilding, nuclear, thermal and hydropower, gas and oil refining industries, mechanical engineering and production of military equipment. In particular, within the framework of the design and manufacture of a new generation of VVER-type reactor plants, work is underway to create an austenitic, radiation-resistant steel for elements of in-vessel structures."
Nuclear Engineering International 6 October 2020
"...these unfriendly steps towards Russian metallurgists are only serving momentary political interests...they have suspended ties that took years to establish and that hinged on reasonable parameters like business reputation, mutual interest and economic efficiency.
There was no place for these key concepts, which are crucial to businesses, in the political games of Europe’s bureaucrats...there is no reason to believe that there will be any essential change in our partners' behaviour. We have to take this into account when implementing our metallurgy development strategy at the corporate and state levels.
...Businesses are already rebuilding their logistics and production chains and looking for new suppliers and clients in order to keep enterprises working and protect the interests of their staff.
...we should not forget about the long-term development of the metallurgy industry, the implementation of its future plans, and seek not only to ensure the steady operation of the entire metallurgical complex and to maintain production volumes but to boost production capacity and expand the range of goods produced domestically.
I suggest that we discuss a potential industry development model with the business representatives here, based on the current state of affairs and thinking far ahead.
I want to stress the importance of domestic demand, which needs to be supported and stimulated – primarily, by expanding the scope of residential, infrastructure, commercial and industrial construction, and by producing more metal-based goods.
I want to repeat that long-term projects and programmes are necessary to support the demand for Russian metals. The impact of such projects and programmes will serve the entire economy. It will benefit the Russian regions and their residents."
Obviously, new clients have to be found from amongst the
'friendly' countries. But Russia may be a price taker. Metallurgical
exports fell about 20% year-on-year in Q2 2022, steel prices
are down due to muted global demand, sheet metal product demand in
particular is down, domestic consumption is down. New markets are
being found, but at a discount to export markets lost in Europe.
For all these reasons, Evraz, Russia's largest steel goods
manufacturer, is struggling.
But as Evraz
makes 28% of all Russian railway wheels and
97% of Russian train-tracks, it has to be regarded as a
strategic company. The more so that it has partnered
with Gazprom to mutually explore pipeline transport of
hydrogen gas, a process that requires 'high spec' steel and
special welding techniques. The hydrogen gas is derived from
re-formatted natural gas, and
the CO2 waste stream from this
process can be captured and stored deep underground in
depleted natural gas reservoirs. Gazprom has a great deal of
experience in carbon capture and storage. Hydrogen gas can
only be transported in licensed gas pipelines, and who can
produce and certify the specialised steel pipes has a
strategic and economic advantage. Russia generally takes
majority control of strategically important companies by one
means or another, so I expect Evraz to be added to the Russian
government strategic asset list.
Evraz North America is
privately owned, with one major shareholder (who recently
resigned as chairman), and the company is listed on the UK
stock exchange. The UK has blocked trading in it's shares, and
sanctioned the companies products and financial transactions
(including dividends and repatriated profits from the US
subsidiary). Clearly, Evraz Russia
is ripe for de-listing and takeover by the Russian government
- who will also inherit it's debt. The majority shareholders
loss on assets of Evraz
North America can be dragged for decades through the WTO
and various courts.
Tin plate (used in food canning, aerosoal spray cans etc) in Russia is in short supply due to 'sanctions'. In 2014 Belarus funded an enterprise to make tin plate to export to Europe, but it has fallen into bankruptcy. In August 2022 Belarus took on the companie's debts, and nationalised it. As tin plate to Europe is now 'sanctioned', Belarus has turned east. Belarus will supply it's own annual needs of about 30,000+ tonnes (previously all imported) first, and then supply tinplate to Russia, Kazakhstan, Africa and Central Asia instead. The plant is aiming to produce around 9,000 tonnes a month by November 2022, and reach the full capacity of 150,000 tonnes of tin plate annually by 2024.
Russia's domestic market for Steel
International conditions for expansion of steel use are currently
unfavorable to Russia. Domestic demand is key to the survival of
the Russian steel industry. As always, the government has to pay
for this by subsidising or funding new projects. As it happens,
infrastructure development is the Russian governments main
priority. Russia is the largest country in the world, with vast
distances between towns. The eastern and northern regions are
poorly served with road and rail. New industries in the near
arctic are hampered by poor roading, poor communication, poor
water, poor housing, and poor public facility infrastructure. A
large amount of investment money is needed, and not all of it can
be supplied by the rather carefully controlled Russian budget.
Foreign investment is needed.
The government brought in a regime of tax breaks for foreign
investors - an important source of capital. Westerners will no
longer be able to invest in Russia. But other countries, such as
China, the UAE, Saudi Arabia will.
A combination of private domestic and foreign investment. plus
Russian government investment, funded from budget surplus and
cheap loans from the Central bank might make up for losses of
longstanding steel contracts with the west.
Russian steel products are likely to be sold at discounted
prices, if that is what it takes to keep the industry alive.
Better prices also help cement in long term relationships.
And Russia plans ahead for the long term. It has a plan for an
economy that improves its citizen lives (the number one priority
of government, according to President Putin). That plan involves a
lot of coordination of private and public investment, and involves
a lot of logistics planning, a lot of big projects. And that
involves a lot of steel.
Russia is the third-largest coal exporter, after Indonesia and Australia. Russia provides about 18% of world coal exports by volume. Almost 23% of Russia's coal goes to China (over 45 million tonnes a year), and about 22% goes to the EU (almost 39 million tonnes in 2021). South Korea and Japan took roughly 17 million tonnes each in 2021.
The Elga coal deposit in Yakutia has reserves of about 2.2
billion tonnes. It is not only the largest coal deposit in Russia,
it is also one of the largest
coking coal deposits in the world. Coking coal is 'metallurgical
coal', that is, it is the carbon source used in making carbon
On April 8th 2022 the EU prohibited import of Russian coal, with the restriction due to come into effect on 10 August 2022. This is surprising given the EU's dependence on Russian coal imports. Maybe the eu will import it (at great expense) from Australia. On 21 July 2022 the UK also prohibited the import of Russian coal as from 10 August 2022.
Both China and India are increasing imports of Russian coal to
take advantage of the reduced price. Turkiye has started importing
than usual quantities of coal from Russia (1.8 million
tonnes in June 2022, which, if annualised, is a bit over 21
million tonnes per year) If fact, Russian overall coal sales have
increased slightly since the start of the Ukraine operation.
Russia is the world's 4th largest titanium exporter, valued at
USD$471 million in 2020. Main export markets 2 years ago
(millions) were Germany $148, US $132, China ~$29, UK ~$27,
Ukraine $22.5. It's imports in 2020 were modest (millions),
Kazakhstan ~$19, China ~$9, Estonia $10.7, US ~$7, Ukraine ~ $6.
Most of the world titanium dioxide concentrate produced in the
world is for the bright white pigment used in white paint and in
plastics. Only a small percentage of the mined ore is used to
smelt into titanium metal, an energy intensive and technically
complex process. Russia has 3 large titanium mines. Russia's
largest titanium mine is Ruchar, with 3 billion tonnes of ore
containing 15% titanium. The Pudozhsky
mine in the Republic of Karelia.has 516.7 million tonnes of ore
(8.1% titanium). This mine also contains resources of about 1
million oz of platinum and 2.4 million oz of gold.The Yugo-Vostochnaya
Gremyakha mine in Murmansk Oblast.has 585.3 million tonnes
of titanium ore grading out at 8.51% titanium.
Russia is not listed in the US Geological Survey data on tonnage
of titanium production. The UGS gives its data in weight of
titanium dioxide, rather than ore containing a certain percentage
of titanium oxide. Perhaps Russia's reserves are simply being
air-brushed out. Even so, Russia is the worlds third largest
producer of 'smelted' (sintered) titanium 'sponge',
33,000 metric tonnes per year. China is the worlds largest
producer (110, 000 tonnes). Japan is second largest titanium
sponge producer (50,000 tonnes).
The Russian State owns the world's largest titanium producing company VSMPO-AVISMA Corporation, which is a subsidiary of state-owned Rostec corporation. While titanium is a not uncommon mineral, it is, of course, a strategic mineral, important in aircraft and spacecraft manufacture. Russia produces about a third of global titanium used in the aviation sector. In addition to titanium, VSMPO-AVISMA produces aluminum, magnesium and steel alloys, and exports products to 50 countries around the world. VSMPO-AVISMA has facilities in USA, Ukraine, Germany, England, and Switzerland. Boeing USA has invested heavily in a joint 50:50 venture with VSMPO-AVISMA created in 2007, 'Ural Boeing Manufacturing'. The joint venture makes titanium components for Boeing finishing in Boeings USA factories, as well as parts for Airbus. VSMPO-AVISMA also supplies manufactured parts for Embraer, Safran, and Rolls-Royce.
"In an interview with Design News, Boeing’s chief materials maven Alan Miller brushed off concerns about relying on a Russian source for titanium. Miller said that Boeing has done a lot of collaborative work in developing new high-strength alloys in collaboration with Russian titanium experts.
Boeing’s alliance with the Russian titanium industry has been growing since the early 1990s. As of 2008, VSMPO-Avisma will become Boeing’s biggest titanium supplier, moving ahead of US companies TIMET and RMI Titanium. As part of the deal, Boeing is helping develop Russia’s aircraft production capabilities."
Design News July 30 2007
A second production line was launched in 2018. This highly
million dollar expansion, located in a special economic zone
called 'Titanium Valley' machines parts for Boeings new civilian
airliners. The 'titanium valley' special
economic zone has special tax concessions and customs
fast-tracking for investing companies, as well as guaranteed
Ironically, while Russia has been the reliable partner, the US
has not. The Boeing officials should have been more concerned with
their own politicians de-stabilising a mutually beneficial
partnership with their 'sanctions'.
"During last November’s Dubai Airshow, the company and Boeing announced an extension of Ural Boeing Manufacturing joint-venture “for years to come.” A Memorandum of Understanding covered the supply of titanium of current and future commercial aircraft programs, including the 737/MAX, 767, 777/777X, and 787, making the Russian company the largest supplier of titanium parts to Boeing. The two companies would also work together on new alloys and technologies. In a press statement at the time, Boeing Commercial Airplanes CEO Stan Deal described VSMPO-AVISMA as “a reliable and valuable partner to Boeing for almost 25 years.”"
Airinsight.com February 28, 2022
The 'sanctions' means that Boeing 'suspended' buying titanium
from Russia. Boeing had been diversifying titanium sources in
recent years, and while it still relies on Russia for
30% of its overall titanium metal supply, Boeing believes it can
increase its supplies from domestic US suppliers, China, Japan and
Kazakhstan in sufficient quantity to replace Russia. The US
produces about 100,000 tonnes of titanium dioxide a year, but has
to import a further 1,000 000 tonnes of TiO2 a year,
mostly for use as a white pigment. It is discretely quiet about
the machined parts it obtains from its Ural Boeing Manufacturing
joint venture. According to various industry internet resources
these parts are still delivered by roundabout means that comply
with the letter, but not the 'spirit' of the so-called
'sanctions'. It seems there is a certain amount of 'don't ask,
don't tell' going on.
Boeing has suspended the supply
of aircraft parts to Russian airlines, and suspended training in
Russia. The EU banned the sale and trade in aircraft and aircraft
parts in February
2022, but didn't ban imports of titanium, as such.
"Airbus has said it relies on Russia for half its titanium needs, while state-backed VSMPO-AVISMA provided a third of Boeing's needs under a deal renewed last November . Last month, Boeing said it had suspended buying Russian titanium. Aerospace officials say Airbus is partly concerned about the reliance on Russia at suppliers like France's Safran, which uses titanium to make jet engine parts and landing gear.Safran said in February it had reserves for several months and depended on Russia for less than half its needs."
Reuters 12 April 2022
Will the American and European aircraft part manufacturing trade return? That is really 'will the American and EU 'sanctions' end'? If you 'tool up' to make specific parts for specific airline models, as Boeing did, it is a big financial blow if you have to walk a way from it. Well the French seem to have got cold feet, because on 22 July 2022 the EU abandoned the proposal to impose sanctions on VSMPO-AVISMA - mainly due to objections from France.
If Boeing walks away from their Russian investment, they might
lose the Russian specialist titanium metallurgic expertise as well
as the modern bespoke production capacity. Or they may pay a huge
salary for the experts to emigrate to America. America's loss may
end up as Russia's gain.
USA mainly imports titanium ore from South Africa (27%)
Madagascar (18%), Australia (15%) and Mozambique (15%). China,
which has the worlds largest titanium ore reserves (230 million
metric tonnes titanium dioxide) - is also a massive titanium ore
consumer. Not only did it consume all the ore it produced, China
also imported 3.6 million tonnes of titanium mineral concentrate
in 2021, mainly from Mozambique (32%), Australia (14%), Vietnam
(13%), and Kenya (9%) (U.S. Geological Survey, Mineral Commodity
Summaries, January 2022). While China exported titanium-based
manufactured products it remains a nett importer of its own
resource. No doubt it met its own needs for titanium metal first.
Australia has the worlds second largest titanium ore reserves,
with 160 million metric tonnes of titanium dioxide. India has the
worlds third largest titanium ore resource, at 85 million metric
tonnes, but has relatively little mine production.
Uranium ore is relatively widely distributed around the world. As at mid 2022 Kazakhstan, Russia's neighbour, produces 45% of world supply, the next largest producers being Australia (12.1%), Namibia (12%), and Canada (10%). Russia has produced relatively small amounts of it's ore resource. Long term, the largest economically recoverable resource is in Australia (28% of global resources), Kazakhstan (15%), Canada (9%), Russia (8%), and Namibia (7%). China's ore resources amount to 4%, and USA's are only 1% of global resources.
Currently, nuclear power only supplies 10% of world electricity.
Around 60% of global electricity generation comes from burning
fossil fuels, and this has not changed much over the years. Demand
for electricity is rising and will accelerate as the world warms.
The lead time to build new nuclear power plants is fairly large.
Older reactors are having their design life extended with repairs
and modification. At the same time, new reactors 'go live'. Demand
for both power plants and their 'consumables' will increase. There
is no chance that nett carbon emissions by 2050 can be achieved
without a massive build-out of nuclear power. (Nett zero simply
cements in all global warming consequences until that equilibrium
state, whether that is tomorrow or 2050. It does nothing to remove
and thus reduce the dangerous level of fossil-fuel derived carbon
dioxide buildup in the atmosphere).
While the US and Europe may want to 'onshore' and 'friendshore'
all the elements of nuclear power plant construction and fueling
in order to reduce dependency on Russia (in particular) for fuel
assemblies, in reality the nuclear power industry is a complex and
internationalised industry with many co-dependencies.
"When the commercial nuclear industry began in the 1960s, there were clear boundaries between the industries of the East and West. Today, the nuclear industry is characterized by international commerce. A reactor under construction in Asia today may have components supplied from South Korea, Canada, Japan, France, Germany, Russia, and other countries. Similarly, uranium from Australia or Namibia may end up in a reactor in the UAE, having been converted in France, enriched in the Netherlands, deconverted in the UK and fabricated in South Korea."
World Nuclear Org, April 2023
Russia’s Rosatom exports fuel for Brazilian nuclear power plants and radioisotopes for medical purposes. Rosatom is also interested in participating in the construction of new power units in Brazil, including low-capacity nuclear power plants, both land and floating plants, because it has unique and extensive experience, and technologies that are not available elsewhere in the world.
Russia Press Statement 16 February 2022
Russia is also involved in building nuclear power plants in Turkiye, Egypt, and Brazil, which will inevitably use Russia fuel.
"Neither the pandemic, nor foreign policy pressures were able to obstruct the construction of the world’s largest nuclear power plant. The credit for this, which cannot be overestimated, is to be given to the leaders of our two countries, who sometimes had to intervene personally to help us resolve certain issues.
Construction on the first unit is nearing completion, with the equipment being assembled at the site. At the second unit, the reactor vessel has been installed. At the third unit, the melt localisation device is being installed. In the fourth unit, reactor housing foundation reinforcement is nearing completion, and work continues on a key piece of equipment for the plant, the low-speed turbines...
...The construction of Turkiye’s first nuclear power plant has become a true joint project: over 400 Turkish companies are taking part in it, and we can say that Turkiye now has its own nuclear industry cluster. The experience we have gained through cooperation will allow us to tap the potential of this industry at other sites, including international sites......Training and education for the power plant’s personnel is underway. About 300 people have already received educations in the professions needed by the nuclear power industry at Russian universities, undergone hands-on training and joined the project team. Education quotas will also be allocated for the coming academic years"
General Director of the Rosatom Atomic Energy State Corporation Alexei Likhachev 27 April 2023
Russia generally offers a 'full package' of building, repairs, and fueling, with operation eventually being left in the hands of locals. Russian-built nuclear power plants use Russian manufactured fuel assemblies, and it is technically challenging (but not impossible) for other enrichment and fuel rod manufacturers to manufacture compatible fuel assemblies. In other words, Russian-built nuclear power plants provide a ready market for Russian manufactured fuel assemblies for the design life of the power plant.
The El Dabaar nuclear power plant project will be Egypt’s first nuclear power plant. It has a design-lifetime of 60 years. When completed in 2028, the plant will have 4 reactors capable of producing 4,800 megawatts. The Russian government is meeting 85% of the $30 billion cost, but as a loan to the Egyptian government. The remainder is met by the Egyptian government and investors. Rosatom will supply the nuclear fuel for its design lifetime, and maintain and repair the reactors for ten years. In 2021 Russia started training Egyptian specialists to take over the work in full after the ten year period. However, political games sometimes puts an end to existing Russian commercial interests.
"We would like to highlight that the initiative from Fennovoima's management to terminate the EPC contract - which is such a major step for the project - was taken without any detailed consultation with the project's shareholders, the largest of which is RAOS Voima (an 100% subsidiary of Rosatom), with a 34% stake.
"The reasons behind this decision are completely inexplicable to us. The project has been progressing and we had established a good working relationship with our client."
Rosatom added: "We reserve the right to defend our interests in accordance with applicable contracts and laws."
World Nuclear News 3 May 2022
In late March 2022 Finland reneged on it's fixed-price contract with Rosatom to build a 1, 200 megawatt nuclear power plant. No doubt Rosatom will sue them. The EU attempted to convince Hungary to in effect renege on its agreement with Russia to provide additional nuclear power capacity, but Hungary, as it is not as stupid as the rest of the EU countries, refused.
Rosatom has an agreement with Uzbekistan to construct
two VVER-1200 nuclear reactors to be operating by about
2028. Russia has financed most of the 13 billion cost, and will
train Uzbek technicians in all aspects of nuclear technology
deployment. The reactors will meet about 15% of Uzbekistans
expanding energy needs. (Currently, most Uzbek electricity is
generated from natural gas. It also imports electricity from
neighbouring countries.) Uzbekistan has the world's 7th largest
uranium resources, mostly exported to USA, China, and South Korea.
On the April 12 2023 the US imposed 'sanctions' on Rusatom Overseas (a division of Rosatom) and Evgeny Pakermanov, its president. Rusatom Overseas. Rusatom Overseas is responsible for the development of small (under 300 MW) nuclear power plants suitable for supplying electricity to remote areas. These power plants can also be used to supply heat from the reactor coolers, a form of co-generation. Rusatom also deals in export of various nuclear tech products used in science, medical, and industrial sectors. So far, only Rwanda has signed up for a small nuclear power plant, whose principle use will be research and technical extension. Rwanda's growing population demands more power, and it's hydro sources have proven unreliable due to periods of poor recharge. No doubt more small plants will follow. Once proven for safety and reliability, there is likely to be a good market in Africa.
Nuclear fuel exports
An important element of Russia's nuclear industry is supplying nuclear fuel for power plants. This is in the form of low-enriched and purified uranium manufactured into uranium oxide fuel pellets. These pellets are assembled into banks of rods of appropriate size and shape for a given nuclear power plant reactor design. The design and building of enrichment facilities is complex and expensive, so relatively few countries have them. Russia is an important supplier of these assemblies (including to Ukraine - which it continues to supply in spite of the conflict). Recent Russian-built nuclear power plants have long design lives - the power plant being built in Turkiye, for example, has a design life of 100 years. That's a long-term customer. Given the rapidly emerging global warming crisis, nuclear power is certain to become much more important. Ironically, rising temperatures means accelerated demands for electricity for cooling.
"A single uranium pellet, slightly larger than a pencil eraser, contains the same energy as a ton of coal, 3 barrels of oil, or 17,000 cubic feet of natural gas. Each uranium fuel pellet provides up to five years of heat for power generation. And because uranium is one of the world’s most abundant metals, it can provide fuel for the world’s commercial nuclear plants for generations to come."
Hitachi Ltd 'Nuclear Power Basics'
While the USA is a minor player (7%) in enriching uranium for
fuel, but Europe is a major player at about 33%. Russia has the
largest capacity of all, supplying 43% of the world's enriched
2023, US, Canada, and Europe announced plans to gradually
stop buying Russian nuclear fuel - which will be awkward for the
approximately 18 nuclear power plants in Europe that use Russian
electric power generation - long term prospects
In the long run, the future must be nuclear. All countries in the world will need to cooperate. The USA and it's vassals are impeding coherent science-based practical steps to stop extracting and burning fossilised carbon. They play stupid political games in a climate emergency. For their immediate personal self interest, and to hell with the rest of us - and our children and grandchildren. The combined west are not just sociopathic fools, they are extremely dangerous fools.
Our consolidated net profit increased by almost 47 percent and constituted 163.5 billion rubles. EBITDA increased by 18 percent to 335 billion. The total market value of our assets is a new indicator that we introduced last year. It is 980.5 billion rubles, which is 50 percent higher than in 2020; this means that the value of our assets is constantly growing.
"A lot has been done over 2021. Our consolidated revenue grew by almost 10 percent and amounted to 2.06 trillion rubles. We have crossed the important psychological milestone of two trillion. We have been trying to achieve this for a long time and, finally, last year we surpassed this barrier, this milestone.
The share of civilian products in the consolidated net profit amounted to 45.5 percent."
Sergey Chemezov, CEO of Rostec State Corporation 18 May 2022
The Russian Government-owned Rostec Corporation ('State Corporation for Assistance to Development, Production and Export of Advanced Technology Industrial Product') is the largest player in the Russian defense industry. The Russian government has long wanted to see civilian product spin-offs from defense technology, as has happened in the west. The President set Rostec a target of a civilian market segment of "50 percent by 2030". As Sergey Chemezov noted, they have already achieved 45.5%, and, 'thanks' to both covid-19 and western sanctions, it is almost certain this target will be met much earlier than expected.
The western sanctions have created a strong imperative for Russia
to innovate across many industries. The Russian military has been
a major source of innovation since the earliest times, and the
pace seems to have accelerated under external pressure. While the
most advanced hypersonic missiles are unlikely to be exported, the
various track-decision-launch integrated layered defense systems
are exported. They are already competitively priced, fairly
efficient, and are likely to become a popular option for countries
needing a defensive posture as a major part of homeland security.
The updating of the strategic defense system, including the
massive liquid fueled Sarmat ICBM, has allowed Russia to design
and build an unbeatable nuclear strike missile. The Sarmat can
reach into space, has a range that allows attack from any
direction (including via the South Pole), has an ability to
accelerate, and a degree of maneuverability.
The West's proxy war on Russia has meant Russia has had to
re-invigorate it's defense production of missiles, and even at
early January 2023 missiles factories are working 3 shifts, around
"...we produce annually three times more of the air defence missiles that you manufacture than the United States does.
Overall, our defence industry manufactures about the same number of air defence missiles of different designations as all of the world’s defence manufacturers put together.
Our production is comparable with global production. So we have something to rely on. All this is bound to fill us with confidence that victory will be ours."
Vladimir Putin January 18 2023
Advances in satellite-based
electronic intelligence for military operational purposes,
including sophisticated integrated optical and radar technology,
is not usually 'for sale'. But again, there are spin-offs in
commercial space vehicle satellite deliveries, as well as other
Sergey Chemezov outlined some of the accomplishments of Rostec in
the military sphere in 2021 and projects for the future -
- Rostec will use its experience in the special military operation in Ukraine to develop 'pocket-sized' drones that are all but invisible. They will be used for fire control and real-time military intelligence, especially useful in urban warfare.
- Total redesign and equipment refit of the 1980's Tu-160M missile carrier, fitted with Rostec's new NK-32 engine ("We have actually created a totally new aircraft. It looks like the previous model on the outside, but in fact, everything is new")
- The Checkmate fifth generation light tactical 'stealth' fighter with a modified Su-57 engine. Flight testing is due in 2023 and production is due in 2027. (This aircraft was designed mostly for export)
- Okhotnik UCAV drone with an innovative flat jet nozzle that makes it less visible to radar with production due in 2023.
- the first Russian-made diesel gas-turbine engine (the M55R), to be used in Russian frigates
Russia is a nett energy exporter.
Russia's Electricity exports in year end January 2022 were $179M
and imports were $2.11M, a nett export value of $177M. Russia
exports electricity mainly to Finland ($116M, 9 terawatt-hours
nett), about 10% of demand, China ($22.2M), and Lithuania
($20.1M), with smaller amounts to Kazakhstan and Latvia. In May
2022 Finland refused
to pay Russia for the electricity Russia had already
supplied, Fingrid saying "Due to these restrictions payments for
sold Russian electricity can no longer be made." As a result,
Russia cut off power to Finland until Finland had paid its debt.
The Russian grid is run by the national grid company Rosseti,
which is 88%
owned by the Russian government. Rosseti is one of the largest
grid companies in the world. So far the west's trade
restrictions haven't had a major impact. The Rosseti CEO says that
"large-scale" transition to domestic equipment and
"solutions" has been accelerated by the restrictions,
implying it was already under way. He says Rosseti is "giving
a lot of our time to it" and has "accomplished
quite a lot". Russia historically has produced most
electricity from thermal generation (coal and gas). About 68% is
from thermal sources, but many of the turbines and associated
equipment is old and
long overdue for upgrading. Upgrading had already started prior to
the recent sanctions, but mostly affected small capacity turbines.
It was cheaper and easier to buy foreign medium and large turbines
(mainly Siemans and GE). Maintenance was done solely by overseas
specialists, and parts of course came from overseas. The Russian
government now has to build it's own large turbines, fund Russian
scientists and technologists, find made solutions to technically
challenging parts of turbine manufacture, solve technical
problems, and subsidise the local manufacturers in perpetuity. All
of which it can do over time.
Russia has long had the ability to make power station
transformers, including for nuclear reactors and
renewable energy. Russia in fact exports such products. Overall,
the sanctions will accelerate the already-planned modernisation of
Russia's thermal power generation.
As at 2021 electricity supply reached 860 billion kilowatt-hours,
56 billion higher than 2020. Time will tell if this growth rate
(7%) in supply will continue. According to Kommersant, there are
forecasts that electricity exports over summer 2022 may reach 1.35
billion kWh. The massive 2022 drought in China restricted China's
electricity supply at a time when airconditioning was desperately
need, and as a result, Russia's exports to China jumped by 35%.
The value of electricity sold to China in the first 6 months of
2022 reached $125 million - more than fives times greater than for
the whole of the previous year. Rosseti's revenue increased
to 1.1 trillion rubles in 2021, 100 billion rubles more than
2020. A major focus of investment of some of this revenue is to
'de-bottleneck' distribution of electricity from the Murmansk
Region (which has a surplus from it's hydro, nuclear, and wind
"Providing the Eastern Operating Domain with electricity, our largest project at the moment, is our top priority, no doubt about it."
Andrei Ryumin, CEO Rosseti 12 July 2022
The grid has also been extended to mining companies in isolated areas of Russia's autonomous regions and one of the republics in Russia's East - as well as port facilities in the Far East.
sector - civilian aircraft
Russia, the largest country in the world, is the world's 11th largest aviation market. Quite apart from the EU banning all business jets, and passenger and cargo airliners in the EU airspace, the EU has banned the sale, trading and leasing of aircraft to Russia.
Aircraft parts, vital to repairs and airworthiness certification,
are also banned. In response, the Russian government will provide
it's own airworthiness certifications, has placed the leased
overseas owned aircraft on it's own domestic register, has allowed
the terms of existing leases to be unilaterally changed, and has
allowed the Russian government to "add
exceptions" to foreign aircraft ownership rights. The law
was put in place days before about $10
billion of leased aircraft were to be re-possessed. Russia
515 foreign aircraft.
"Not all of Russia's 35 airlines, about 15 of which represent 95% of the country's traffic, are relishing what experts have already warned could spiral into aviation's largest default.
"We hope to avoid registering our planes in Russia; we want to return them to leasing companies," a source at one of the airlines said."The airline would become an accomplice. The law provides a way to register in Russia, but does not oblige the airline to do so....It is the first step to the kidnapping of the airplanes."
Moscow's government insists special measures are needed in the face of sanctions on the economy that President Vladimir Putin has described as "akin to a declaration of war". Lawyers say a three-way legal battle between airlines, lessors and insurers could last for a decade."
Reuters 15 March 2022
As it turns out the major lessor, AerCap, terminated the lease on the aircraft and engines that it could not seize back, and 'wrote off' their value. Perhaps some time in the future the leases may be reactivated, but who knows what is in the contracts and what effect sanctions have on obligations by either party...
"In AerCap’s first-quarter report...the company said: “In response to the Russian invasion of Ukraine and sanctions imposed by the United States, the European Union, the United Kingdom and other countries, we terminated the leasing of all our aircraft and engines with Russian airlines. Prior to the Russian invasion, we had 135 aircraft and 14 engines on lease with Russian airlines, which represented approximately 5% of AerCap’s fleet by net book value as of December 31, 2021. We have removed 22 aircraft and 3 engines outside of Russia, and 113 aircraft and 11 engines remain in Russia.”
John Helmer 26 July 2022
In late December 2022 Aeroflot bought out 10 long range Boeing 777-300ER from the unnamed Irish company it was leasing them from (possibly Avolon, maybe SMBC). Russia already owns 9 wide-body 777-300ERs. According to Aeroflot this latest purchase was done under Russian government direction:
An airline representative told reporters..."The deal was
implemented as part of the fulfillment of the Russian government's
order 'to undertake measures to resolve legal relations with
foreign lessors in order to ensure the transfer of ownership
rights to the jurisdiction of the Russian Federation' and
taking into account all necessary permits of Russian and foreign
regulators...The company will continue to work "on further
implementation of transactions for the buyout of aircraft in order
to preserve the current fleet of foreign-made aircraft in its own
operation and to expand the capabilities of their operation..." "
Interfax December 30 2022
it's own passenger aircraft, the MC-21/MS-21,
the TU-214 and the SSJ-100 (Sukhoi Superjet 100).
of the sanctions affecting component availability, the United
Aircraft Corporation (a Rostec subsidiary) can only deliver two
MC-21's in 2022, rather than the 4 initially planned. A fully
import-substituted version should be built by 2023, and
certified with the substitute components for sale in 2024. The
Government aims to deliver 18 new MC-21s by
the end of 2025. Because the MC-21 is a short and
medium haul aircraft (the
largest market segment for passenger aircraft), if it can
reach the international market it will compete with the Airbus
A320 and Boeing 737 variants. To
make the aircraft more attractive, it can be fitted with
either the 'made in Russia' Aviadvigatel’s PD-14
engine, or the Pratt
& Whitney PW1400G. The PD-14
engine develops 14 tonnes of thrust at takeoff.
The United Engine Corporation (a Rostec company) owns a number of
turbine, engine, and aviation related companies, of which
Aviadvigatel is one. Aviadvigatel in turn owns the Perm Motor
Plant, and on April 6 2023 UEC-Perm Motors announced the start of
serial production of the PD-14 engine.UEC-Perm anticipates that 72
MS-21 medium haul MC-21 310 variant aircraft will be produced, and
160 PD-14 engines will be produced annually. This seems optimistic
- unless the PD-14 wiull be used to replace the FrenchRussian
engine in the SSJ.
Sukhoi SSJ's contain almost
no foreign parts, and 19 have already been built, and will
an import-part free version of the SSJ regional jet started in
2018, and a fully import-free version is expected to be
available in 2024. This seems very optimistic, as the engine for
the SSJ-100 is produced by a French-Russian
joint venture, and the French components have stopped being
delivered. Nevertheless, Aeroflot expects to receive 34 new SSJ's by
the end of 2025. The Russian side is toying with the
idea popular with the Germans, that is, some form of 'temporary'
control of the local assets of the French company in order to
ensure a supply of spare parts from stock on hand.
"To prevent disruptions, the Ministry of Industry and Trade reportedly proposed an idea to legalize the transfer of foreign companies’ property to Russia-registered enterprises. The move could ensure that the property of foreign companies, that terminated their business in Russia due to the international sanctions, would be temporarily managed by Russian entities and resources such as spare parts for SaM146 engines could be seized to secure the maintenance of SSJ100 jets"
AeroTimeHub, Gabriele Petrauskaite 31 March 2022
However in mid November 2022, the Russian government allocated an additional 44 billion rubles (about US $723 million) to the United Aircraft Corporation to accelerate the production of fully Russian-built jet engines, aiming for 50 engines to be produced in order to meet the target date for a fully import-free version of the SSJ regional jet (2024). Engine versions will also be built for the TU-214.
At the moment, only 2 or 3 of the longer range narrow body TU-214
aircraft are produced per year. Russia will build additional
construction capacity and increase this to up to 10 per year. In
early 2023 Government officials said a total of 11 TU-214 will be
delivered to Aerflot by the end of 2025. They will replace the
Airbus and Boeing planes Russia has used up until now.
produces a wide body passenger plane, the Ilyushin-IL96 long
range aircraft, as well as the Soviet-era Ilyushin Il-76, a
four-engine turbofan airlifter used for cargo.
Aeroflot has placed an order for 339 aircraft, primarily for
domestic use. The idea is to create economies of scale for the
production of aircraft for the domestic regional network.
"Because if there is no big order for a domestic company, the cost will always be high. It will be individual custom production, as it were. But with a big order, the cost goes down and the final price goes down. In this case we are talking about a complicated product, an aircraft. A good, large order will certainly support the manufacturer of domestic aviation technology"
Vladimir Putin, 9 February 2023
Spare parts will be made for all the domestically produced planes at a proposed new manufacturing center in Kazan, capital of the Republic of Tatarstan. Russia hopes to have it up and running by the end of 2023. Its focus will be on parts for domestically manufactured aircraft.
had relied heavily on Ukraine for helicopter parts, at least.
But following the 2014 coup in Ukraine, Russia has joined China
production of aviation products - engines, helicopters,
parts, specialised cockpit glass. A China-Russia joint company
has already been buying Russia's Ka-32A11BC
on contract to the Shanghai Ministry of Public Security. China
uses the twin engine multi-purpose mi-8 and the newer mi-17
helicopters in various versions, both military and civilian.
used the various helicopters produced by Russian
Helicopter manufacturers for many years. Russia's Ka-62
and Ansat helicopters are larely locally built. The Ansat
is already "widely used", and the Mi-38 should come
off the production lines in the not too distant future.
The Rostec-owned plant in Ulan-Ude produces helicopters at a 'state of the art' modern facility, producing for customers all over the world. As well as high tech versions of the Mi-171, the 'Russian Helicopters' Rostec subsidiary is producing an advanced fully digital single engine civilian light helicopter, the VRT-500 for release about 2023. However, the engine was expected to be from Pratt & Whitney Canada - there is no chance for that now. Where an engine might come from is unclear at this point, but it is very likely it will be either Russian designed, built, and certified, or it will be from a reliable partner.
certifies the overseas companies that do maintenance and repair
on the helicopters that Russia has sold. NATO is a party to
the conflict in Ukraine, and repairs Ukraine's Russian
helicopters via companies in Bulgaria and the Czech Republic. As
July 2022, Russia has suspended their certification, and
stopped supplying spare parts.
prohibition on the import of foreign civilian airplanes has
given the domestic civilian aviation industry a massive boost. Russia's
United Aircraft Corporation (UAC) is now producing
civil aircraft "in large quantities: not large enough yet,
but we are striving towards this" - Sergey Chemezov, Rostec, May
"I would like to note that in general, Russian air carriers will soon be thoroughly re-equipped. Our airlines, including Aeroflot, have placed the largest order package in modern history, for about 500 Russian-made mainline aircraft. By the way, as far as I know, the United Aircraft Corporation and Aeroflot have signed a respective agreement on the sidelines of this Eastern Economic Forum, and the figures in there are quite impressive – over a trillion, I think.
This high demand should become a powerful incentive for aircraft factories and design bureaux, for many related industries, including electronics and aircraft components, and, of course, for the schools training professional personnel including engineers and skilled blue-collar workers in the aviation industry."
Vladimir Putin 7 September 2022
The aviation industry is regarded as strategically important. Building new aircraft will be funded from the National Welfare fund, at a very low interest rate - 1.5%. The fund will provide 175 billion rubles (roughly USD$2.5 billion) in 2023. The aircraft projects funded by the Government are structured in such a way that the Finance Ministry provides capital to a government-controlled aircraft leasing company (Aviakapital-Servis), which in turn is a subsidiary of Rostec, a state-owned corporation.
It is obvious Russia will never be at the mercy of foreign
aircraft leasing corporations again. The profits from aircraft
leasing will flow into government coffers, not into foreign-owned,
Irish registered companies.
'Unsanctionable' aviation is a strategic and economic priority
for Russia. However, while investment money has been made
available, there is a disconnect between drawing up technical
specifications for contracts - particularly military contracts -
and letting out the work to the various aviation related
businesses. Some still have no work for 2023. Unusually, the
Russian President publicly castigated the Minister
of Industry and Trade for the delays.
"Mr Manturov, as long as there are no manufacturer's specifications (passports), as you mentioned yourself, and companies do not have those, just like they have no contracts, there is no understanding of what they will do or what they need to do.It is taking too long. I know no contracts have been signed with the enterprises, the directors told me so. What are you fooling around for? When will the contracts be signed? This is my point....I want all of this to be done within a month...Do we not understand the circumstances we are in? Please complete this work within a month. Okay?...No, do not try to do your best; please get it done in a month. It must be done in a month, no later."
Vladimir Putin 11 January 2023
Russia sees the unmanned aerial vehicle (UAV) business as having
tremendous prospects, both for domestic use and for export. UAV's
of difference sizes and sophistication have both military and
civil applications, with new applications being developed all the
time - from real-time adjusting fires of artillery to monitoring
crop health, power lines and other infrastructure, through to the
more mundane, such as pizza delivery. Given Russia's vast space
and lack of transport infrastructure in the far East, UAV's could
provide a cheap solution to urgent deliveries, such as delivering
blood or critically important medications, as well as give early
warning of outbreaks of fires in the vast conifer forests of the
"...this industry is critically important. Earlier in the meeting I said it is an exciting and greatly promising industry both from the perspective of the country's technological development and for ensuring our technological security and sovereignty, and from the business perspective. If this market is measured in one trillion rubles within the next few years, it means something.
Here is what I would like to say: the state has a stake in your success, and we will do our best to ensure this success...this technology can make any economy by far more competitive, and if we want structural changes – and we do – we certainly need to focus our efforts on developing this industry.
...to be honest, many things no longer have any secrecy, because thanks to large resolution – and our ill-wishers have high-level resolution technology – there is nothing secret left. And if something remains, you can, as you said, introduce certain bans on territories. But it seems to me that almost nothing should be banned here either."
Vladimir Putin, at a meeting with representatives of manufacturers and operators of unmanned aerial systems at the Rudnyovo industrial park, 27 April 2023
"Importantly, Russian companies operating in the field of unmanned aviation have many technical solutions to present, including different types of UAVs and infrastructure designs for safe use in our airspace, as well as a range of innovations in related fields, including artificial intelligence and other end-to-end technologies. All these things are interconnected to the point where some areas of unmanned aviation cannot exist without artificial intelligence. That is why this synergy is extremely important and exciting.
I am convinced that we have the potential in a critically important area like unmanned aircraft to ensure the proper level of technological sovereignty. Frankly, this is the area where we can and should not just replace imports but be one step ahead of our competitors. Today, our business leaders made it clear that such opportunities are available. In fact, our manufacturers are way ahead of their competitors and we must support them.
We need to support technology companies, start-up businesses, small and medium-sized companies to literally and figuratively spread their wings so that we can have our own national champions and industry leaders in domestic and global markets alike, and so that Russian-made drones are widely used to conquer the skies in the broadest sense of the word.
...digital aviation is possible only in a digital environment, which is why, to reiterate, it is important to make wider use of digital platforms based on Russian software and AI technology...They will be used to store, process and analyse data received from unmanned aerial systems. it is clear that drones are in demand and are widely used for military purposes. But the real market for them is in their civilian use – this is what I meant when I talked about a one-trillion-ruble market.
One great tool for boosting demand for a product is the creation of special operators who will make large purchases and then lease the UAVs. Mr Ditrikh [CEO of State Transport Leasing Company] who spoke today, proposed making his company the operator in this area. Here we need to help business at all levels: at the state, federal, regional and municipal levels...we must make the industry economically appealing, and then investors will come.
Just as with other segments of the UAV market, it is essential to prevent monopolies, to preserve competition based on a balance of interests between entrepreneurs, investors and the state."
Vladimir Putin 28 April 2023
The Russians want to deal with UAV technologies in a systems approach. They want to limit barriers to widespread use. For example to work around 'prohibited aerial recording areas', and integrate UAV's into existing systems - air traffic control, digital topographic geolocation, mapping, and navigation - taking into account the advanced features of autonomous operation and the application of applied wide-spectrum integrated artificial intelligence.
"Monitoring systems are being implemented. International organisations accepted them with permits that expire in 2040 and beyond. This is a rather conservative niche in aviation, with technology changing slowly.
Similar systems are produced in Western countries, the United States, the European countries. Russia is the only manufacturer in the SCO and BRICS.
What do we have here in this country as of today? Since, due to external conditions, some of the air navigation service revenues were lost and the technology implementation rates in the air navigation industry are beginning to slow down, of course, we need your attention for the development issues of unmanned aviation in order to keep moving forward.
Second, in view of the current situation and the developing relations with Asian and other countries, I would like to propose these options for export because this technology is something we do well."
Andrei Potemkin, Aviatelecominvest, at the Rudnyovo industrial park 27 April 2023
While visiting Rudnyovo industrial park Vladimir Putin noted that he had a conversation with "colleague from China" recently, in which he had a "frank conversation" covering many issues. The President met with the Chinese Minister of National Defense, Li Shangfu, on April 16 2023 (along with Minister of Defence Sergei Shoigu). Mr. Li Shangfu noted at the time that "military and military-technical cooperation between Russia and China is developing very well", and that under Mr. Xi's and Mr. Putin's "strategic leadership" the two countries "are actively developing cooperation in practical spheres". It seems logical that China would be an export market for Russian flight monitoring and control systems, if not for military UAV drones. Given the continuing military cooperation regular joint exercises, it may be that the two strategic partners are working to integrate some aspects of their autonomous drone systems.
Russia is now routinely using small drones to locate enemy
positions in order to direct firepower at that position. New
military intakes are being trained to operate small UAVs as part
of integrated arms operations. Russia has also had extensive
experience in Syria on the 'flip side', detecting and destroying
small drones operated by western-backed jihadi armed criminals
attempting to overthrow the legitimate Syrian government. On
examination, some of these were clearly engineered by western
technical experts, while disguised in relatively crudely made
bodies. Russia has learned from these experiences, and now has
sophisticated detection and destruction means, including
electronic jamming. As always, these do not provide a
perfect defense when defending a large area, but they do cut the
number of successful strikes dramatically. As at 30 April 2023
Russia has destroyed 3,901 "unmanned aerial vehicles fielded by
the NATO proxy army, according to the Russian Ministry of Defense.
You can be sure that some of these drones will contain
sophisticated anti-electronic warfare components made by the west
- in other words, test versions of the latest western drone
The nett result is that Russia is accumulating vast 'real world'
experience in creating drone that can avoid detection and avoid
electronic jamming. Which means it is opening up a big market for
export versions of such devices.
to Eduard Bagdasaryan, general director of the defense enterprise
JSC Aerocon, Russia already has an export version of the
lightweight (about 20 kg) turbo-prop Orlan reconnaissance drone
with a laser target designator and a limited precision strike
capacity. Swappable tech units enhance its utility. In 2021
Kazakhstan and Uzbekistan both bought Orlans. Earlier Orlon class
drones have been available since about 2017 for export. Their main
use was real-time aerial reconnaissance and surveillance,
electronic jamming, and radio signal detection.
Russia's JSC Sukhoi is developing
a large (20 tonne) strike UAV, which they are calling the Okhotnik
(‘Hunter’). The Russian military also has an advanced
reconnaissance UAV (Forpost-R), based on the Israeli IAI
It is early days for the Russian military drone export market,
but as it is being built from the ground up, the Russians are
making every effort to ensure all components are locally sourced,
including " the production and improvement of components including
sensors, gauges, optics, matrix electronic systems, and the
elemental base for radio-electronic systems” according to Eduard
Suicide drones, akin to the US switchblade type suicide drone are
also manufactured in Russia, possibly using Iranian components.
The Geranium-2 ('Geran') suicide drone has proven effective in the
proxy war when used against targets unprotected by modern air
defenses. However, this drone likely depends on imported parts,
and is maybe unlikely to be exported.
The Lancet-3 suicide drone (loitering munition) has however,
proven a cheap and effective destroyer of positioned artillery
(and sometimes mobile) and military equipment. According to the
Russian Defense Minister, of the 59 USA government-provided M777
howitzers that the Russian forces have
destroyed (April 2023), 25% were destroyed by the
catapult-launched ZALA Lancet. These drones have been upgraded in
the course of the war, and are now fitted with 3 types of warhead
and improved electro-optical systems. They seem to be used in
conjunction with reconnaissance drones and other target
identification systems (acoustic, radar, etc) to locate targets.
The drone operators can then go to within strike range of the
target before launching the drones, then relocate and await a new
target. Because these systems are light, highly accurate
(important in urban environments), and untrackable to source,they
are likely to dominate destruction of artillery, mobile radar
installations, troop carriers, tanks (using thermobaric warheads)
and other heavy gear in future battle frontlines. Long distance
artillery will be saved for destroying troop concentrations.
#1 In early August the UK removed sanctions on insurance and reinsurance of aircraft, aircraft parts, and aero-gas turbine engines.
"I must note that recently Russian shipbuilding companies have faced difficulties with supplies of foreign equipment and parts for civilian vessels. We know the reasons for this: our Western partners are failing to comply with their commitments for purely political considerations...I recognise that the replacement of foreign equipment and components in the production of fishing and other civilian vessels may affect the parameters of current projects...In April 2023 Russia completed a new Aframax oil tanker for the Rosneft oil company. It it one of 4 being supplied Rosneft, and these ships are made by assembling and fitting out pre-made 'modules' from China and South Korea.
In general, let me stress that, as you know, the situation in the world and the actions of our Western partners have shown once again that we need be proactive in developing our own competences in shipbuilding. I have said this many times.
It is impossible to substitute every imported part, and there is no need to do this, but it is necessary to achieve technological sovereignty in critical positions of ship equipment, and in the most significant production processes and technologies. We need to make sure that as many operations as possible to equip, retrofit and repair ships are carried out in Russia...
We need to set in motion the initiatives of Russian shipbuilders, their domestic suppliers and customers, to support the upgrading of our shipyards and offer convenient financial mechanisms so that new orders for high-quality, modern vessels, including ice-class ships, are completed in Russia in order to increase the capacities of the Northern Sea Route and our other Arctic projects. All this is necessary to increase the workload of domestic enterprises and to create jobs in this complex, high-tech industry...
Construction of high-tonnage ships is one of the main prospective areas in Russian shipbuilding. We have already decided to subsidise part of the costs of these projects when they are connected with the localisation of plants and the creation of cutting-edge Russian technologies in this area."
Vladimir Putin 18 August 2022
"We propose implementing a ...programme for low-cost water transport leasing. We would like you, Mr President, to support the proposal for issuing loans from the National Welfare Fund at 1.5 percent per annum and easing the requirements concerning return on investment. We have already formed an investment project, and the STLC [State Transport Leasing Company] in conjunction with the Finance Ministry have agreed on its parameters.
Our shipyards plan to build 260 civilian vessels in 2023–2027 as part of this order which will include a wide range of equipment of varying deadweight that can be used for various purposes. Cargo ships, such as tankers, container ships, barges, tugs, and dry cargo ships, including Arctic class vessels, will account for the bulk of orders.
The first two electric river boats that are part of a total order of 21 such boats placed by Moscow are undergoing trials.
We are focusing separately on building fishing vessels and dredgers to be used for breaking water artery bottlenecks which is particularly important with more logistics routes coming into service."
Deputy Prime Minister – Minister of Industry and Trade Denis Manturov 11 January 2023
'Ice-class' ships are needed by Russia to open up the strategic northern (Arctic) route to China and beyond. On the 22nd of November 2022 Russia launched the nuclear powered icebreaker Ural. Another nuclear icebreaker, the Yakutia, is ready to be put put into the water. It will be fitted out and ready for service in late 2024. Two more icebreakers in this series are already in service. A further nuclear powered icebreaker in the series is commissioned for 2026.
"In particular, following the amendments, the item concerning the development of infrastructure of the Arctic zone now provides for the construction at Russian shipyards of the following ships for operating in water area of the Northern Sea Route:
at least seven Project 22220 nuclear-powered icebreakers;
the Leader nuclear-power icebreaker flagship;
and an additional four non-nuclear-powered icebreakers;
16 emergency response and rescue vessels of different capacity by 2024;
30 emergency response and rescue vessels of different capacity by 2030,
three hydrographic survey vessels and two aids to navigation;
expanded use of LNG and compressed natural gas at sea and river transport in water area of the Northern Sea Route and domestic small nuclear power plants for supplying consumers with energy; comprehensive and interlinked development of maritime, air, railway and auto transport infrastructure of the Arctic zone; development of an automatic system for identifying vessels and monitoring them at a long distance; and provision of remote sensing data to interested customers in accordance with Russian Federation laws."
'Amendments to the Strategy for Developing the Arctic Zone of the Russian Federation and Ensuring National Security until 2035' Executive Order signed 27 February, 2023
Russia produced the world's first covid 19 vaccine, showing it
was fully capable of meeting the needs for technically advanced
immunilogical products domestically.
Rostec's Natsimbio (National Immunobiological Company) subsidiary supplied over 100 million sets of all kinds of vaccines "from the coronavirus to flu, and various other diseases" to domestic customers in Russia. Most were domestically manufactured.
Russia's Direct Investment Fund financed ChemRar to develop the world's first anti-coronavirus drug, Avifavir. It is currently sold in at least 15 countries. The Russia's Direct Investment Fund is also backing a project to localise production of the Sputnik V vaccine in Brazil.
In 2010 Prime Minister Vladimir Putin announced the Russian
government plan to 'onshore' the pharmaceutical sector of the
economy. This seems realistic with regard to antibiotics, as
generic (off patent) antibiotics can in principle be manufactured
by anyone from various precursor chemicals. China dominates the
manufacture and global supply of these chemicals because it has
low labor costs, government subsidies, and lower environmental
standards. Given their global dominance, China has economies of
The antibiotics made from these precursors are immensely
important. The broad spectrum fluoroquinolone antibiotic Ciprofloxacin
for example, is highly important in treating bacterial sepsis
within the body cavity, bone and joint infections, respiratory
infections, anthrax, typhoid, urinary tract infections and so on.
China has the intention of becoming the 'pharmacy of the world',
and will achieve this goal for medium and smaller countries. Large
technically advanced countries could make the precursor chemicals,
but will need government subsidies to do so.
"Today, China is the main source of the key ingredients for both penicillin and another class of antibiotics, cephalosporins. Together these drugs comprise two-thirds of the antibiotics used in the U.S. each day...when a giant cargo ship ran aground in the Suez Canal, global trade was snarled. More than 200 vessels carrying billions of dollars’ worth of goods were left waiting to get through the canal. Such a bottleneck could pale in comparison to potential antibiotic shortages. If U.S.-China tensions were to escalate over Taiwan, trade corridors and supply chains would be at risk of massive disruption—including the freighters expected to bring antibiotics to America’s hospitals and pharmacies."
MarketWatch 28 April 2021
It is clear to me that the US intends
to manufacture critically important medicines domestically in
future for strategic reasons (90% of the drugs consumed in
USA are generics, most finished generics are imported - mostly
from India - and the 3 major US resident generic drug
manufacturers Mylan, Sandoz and Teva have relocated generic drug
production to China. Western domestic single batch preparation of
generic antibiotics precursors and intermediates is low profit
margin, inefficient, and can't compete with slowly emerging
continuous flow production [CFM]).
"Continuous manufacturing is best described as a series of processes that optimize drug production to a continued flow of drugs. This is in contrast to the widely used batch manufacturing, which consists of complex processes rendered across the world where materials are made in large batches, rather than in a consistent flow.
Denoted as one of the top 10 emerging technologies, a November 2021 World Economic Forum (WEF) report stated that CFM could effectively “revolutionize” the process of drug manufacturing by allowing greater personalization of each medicine made on-demand that would not need to be shipped across multiple locations. Yet adopting CFM will likely be a long process, particularly while producing complicated assets like biologics.
...As of now, Baxendale says that some aspects of CFM are appearing in the pharmaceutical industry rather than a wholesale transfer to flow chemistry. New tools and new processes still need to be created, and many companies consider CFM at a proof-of-principle stage, says Baxendale. Although CFM could play an increasingly more visible role in the industry, Kappe anticipates seeing the use of both batch manufacturing and CFM in a hybrid system in the years to come."
Pharmaceutical Technology May 20, 2022
India has a massive trade imbalance with China, and is very dependent on China for the active ingredients for medicine manufacture. Strategically, India is likely to produce at least the more important active ingredients locally in the future.
Russia is somewhat dependent on imports from India at this stage.
I suspect Russia will indeed slowly move to re-shore manufacture
of critical medicines. In principle Russia can import active
ingredients from China at very favorable prices, but once again,
they would be wise to expand their domestic active ingredient
production facilities, at least for medicines of critical
importance. And if they have the capital to further build the
sector, Russia certainly has the educational-technical capacity to
develop continuous flow techniques right from the very start -
driving down costs.
Russia already subsidises strategically important industries. It
already takes a 51% shareholding in industries that are
strategically important. Expanding and subsidising a chemical
precursor industry for domestic insurance would be fully in line
with their current strategic practice.
"Ravi Uday Bhaskar: Sanctions do not apply to medicines and agriculture. So, even discontinuation of supply in the shadow of western sanctions may not have a serious impact because Russia possesses its own capabilities to manufacture active pharmaceutical ingredients as well as formulations.In fact, Russia's domestic market is good, and they are capable of getting things done.Sputnik: China is a major supplier of active pharmaceutical ingredients (APIs) which are the raw materials for medicine. If Beijing tries to fill the void in the Russian market created by European countries ceasing to supply medicines, do you fear any disruption in the supply of basic materials?Ravi Uday Bhaskar: I do not think so. China is one of the most prominent suppliers of APIs, intermediates, and basic chemicals. That's why it will not have any serious effect on supply of raw materials from China.Europe also imports APIs and other raw materials from China. Ukraine may face problems with raw materials but Russia will not face any disruption as it has good relations with China. And Russia itself is capable of tackling challenges resulting from western sanctions.Sputnik International 11 March 2022
The 'Pharma-2020' and 'Pharma-2030' initiatives required Western
pharmaceutical companies locate their production in Russia.
Abbott, Johnson & Johnson, Novartis, GlaxoSmithKline, and
Pfizer are among the large Western drug companies producing
vaccines, generic medicines, or Russian branded products.Russia
remains a lucrative market for western (mainly European) pharma
Russia sold out Veropharm, its major medical products company, in
2014 to the US owned Abbott Laboratories. The pharmaceutical
industry in general is exempt from the western illegal trade
restrictions, and Abbott intend to remain
operating in Russia, as are most US major drug companies.
"We remain committed to providing essential health products to those in need in Ukraine, Russia, and the region, in compliance with current sanctions and while adapting to the rapidly changing situation on the ground.”
Johnson and Johnson spokesperson March 2022
"...major opportunities will open up if they leave, and the market will accommodate new players. I am 100 percent confident that the substitution of foreign owners and manufacturers will improve the quality of services for Russian citizens. I am 100 percent confident."
Vladimir Putin April 20, 2022
“We take good care of those foreign businessmen who stay [in Russia]. We have extremely great respect and the same care for those businessmen who, under pressure, are now forced to wait it out, but who have already said that they will resume their activities here as soon as possible"
Dmitry Peskov, Kremlin spokesman, 12 June 2022
"Margarita Simonyan: Mr President, I would like to show you something that I have brought with me especially. It is juice, and it used to be so nicely coloured. It does not matter what sort of juice it is; you cannot even see the brand here, although it is a popular one. And now – do you see? A small picture and the rest is white. Why is that? And this is happening on a massive scale.Because we ran out of paint. The producer of paint for such packaging has left Russia, and the producer of the packaging also announced that they are leaving. I bought this two weeks ago, and soon this will disappear.
Vladimir Putin: Whenever any decisions are taken, the key issues must be singled out. What is key for us? Being independent, sovereign and ensuring future-oriented development both now and for the future generations? Or having packaging today?
Unless we have sovereignty, we will soon have to buy everything and will only produce oil, gas, hemp fibre, saddles and sell rough logs abroad....
...The issue is not about import substitution, the issue is to establish our own capabilities based on progress in education, science and new promising schools of engineering.
We will always be given packaging materials and other simple things, event telephones and smartphones. What we have never been given and never will be is critically important technologies. We have never been given them before even though we had problem-free relations with our Western partners in the previous decades. This is the problem.
And when we begin to stand up for our rights, we are immediately slapped with some sanctions and restrictions; this is what the problem is all about.
Therefore, we must commit ourselves to that and have the capacity to reproduce critically important technologies on the basis of what I mentioned.
And with that base we will always be able to manufacture the goods you mentioned: packaging materials, telephones and smartphones. If we realise that and keep focusing on solving fundamental issues, we will resolve everything else without a problem.
Let me reiterate: others are already coming to that place – those who produce the packaging materials, those who produce the paints. We are also starting to produce paints and other consumer goods as well as goods employed in industry in a broader sense. We can make anything – I have absolutely no doubt about that.
Obviously, some things will be lost, other things will be made on a new basis, much more advanced – the way it happened earlier. Therefore, when we talk about import substitution, we will substitute some thing(s) while other things will have to be done on a totally new promising basis of our own making."
Margarita Simonyan, CEO RT News, and Vladimir Putin, President of Russia, at the St. Petersburg International Economic Forum Plenary Session 17 June 2022
"In the past 15 years, funding has increased six times over with your support, which affects the development rate of the entire transport infrastructure.Russia is the world's largest country. It has 1,566,000 kilometres of roads – 64,500 kilometres of federal roads, almost 1 million kilometres of local roads, and 503,000 kilometres of regional roads. Massive amounts of money is being poured into Russia's notoriously dilapidated roads. As of 2022 Russia spends 3.2 trillion rubles a year on roads, 1.7 trillion rubles from regional and local budgets, and 1.5 trillion rubles from the federal budget. Spending almost doubled in the period from 2018 to 2022.
Since 2020, funding has increased by 69 percent. Our funding has almost doubled. These are enormous sums."
Vitaly Savelyev, Minister of Transport 9 February 2023
"Notably, 84 airfields have been upgraded and eight new regional and hub airports have been built over the past 20 years. New Russian aircraft are being designed and promising, logistically optimised routes are being developed.
This work will continue. Airports will be retrofitted. The number of direct flights and modern transport hubs will increase. Special attention will be paid to renewing the airline fleet.
As I noted earlier, we will address these challenges relying on domestic technology and the capacities of domestic manufacturers. We will create and develop a range of new and upgraded aircraft and localise production as much as possible...our goal is to make the industry competitive, modern, and responsive to current demands and national development goals."
Vladimir Putin 9 February 2023
Soon after the start of the operation to expel Ukrainian forces
from the newly declared breakaway republics, the EU and US
closed it's airspace to Russian flights. This effectively
ended most Russian overseas tourism, putting Russia's Aeroflot's
fleet of aircraft almost out of work. As a result, Russia has
focused on domestic air transport, subsidising
domestic airfares until October 2022, which were then extended to
2023. Russian airlines also received a subsidy in 2022
billion rubles) to make up for lost international air routes
and restrictions on flights to 11 airports in southern
and central Russia associated with the operation in Ukraine.
These restrictions will stay in place until August 2022, at least.
Air cargo normally a profitable industry, has had to be subsidised
for the first time.
The government's overall objective is for Russian airlines to
carry at least 100 million passengers in 2022. By the
end of November 2022 there were 71.4
million domestic passengers. Domestic transport remains
heavily subsidised, with airfare prices being slightly
cheaper than last year, even though Russian jet fuel is 45%
more expensive in 2022 than in 2021.
As at early 2023 the government subsidises tickets
"for socially important destinations, as well
as fares for pensioners, people with disabilities,
students, and families with many children".
Russia's low cost airline, Pobeda, while "operating in difficult conditions, including the pandemic and the current period of sanctions" carries little debt, and is profitable. and posting profits. It carried over 11 million people in 2022 and has grown into Russia's third-largest national airline.
By the end of 2022 Russia's fifteen International airlines were
flying to 22 countries, carrying not only cargo, but 15.7 million passengers internationally. Total
passengers carried, domestic and international, totaled 87 million
people by the end of 2022. Russia has flights from 25
foreign countries, encompassing 51 different companies.
"The changed conditions acted as a cold shower on many participants of the transport and logistics market and sobered them up. The departure of the world’s largest sea carriers from the Russian market, difficulties with chartering vessels and the closure of traditional routes, especially via Europe, forced us to look for new ways and options to ensure transportation.
Business solved this problem. As you can see, store shelves are not empty, businesses did not stop, foreign trade indicators, while declining, but there is no collapse. One of the recent months’ results is that the country’s transport and logistics system has become much more resistant to external influences. For example, Russia took the first steps toward building its own trading fleet, including a container fleet.
I believe that the country needs a “Russian Maersk”. Its creation would be the reasonable completion of the entire logistical chain we are building in our country and in the world today. We would close all its components and get not only great synergy effects, but also real logistical independence.
Besides, we would be able to distribute cargo flows between transport corridors evenly....I am sure that Russia, as a transit country, could play a much more important role in global logistics. Now it is 2-3% of the world’ commodity flows but, taking into account the length of our territories and transit opportunities, especially railroad transportation, well-developed port infrastructure, and new routes, including via the NSR, these results could be higher.
...the implementation and a multiple increase, for example, in container transit could become a separate, highly profitable sector of the economy.
The transportation of containers is always followed by the development of terminal facilities, engineering, traction rolling stock. There will be a multiplicative effect, giving a boost to the production of platforms and containers, which are still not being manufactured in sufficient volumes in Russia. We still buy the bulk of containers abroad, in China.
Can you imagine what the effect would be from transit operations alone? No doubt this is a question of the future, the conditions, including geopolitical ones, must mature."
Sergey Shishkarev, Board Chairman of Delo Group 22 November 2022 interviewed by TASS News
In the greatest part of the Black Sea the risk of Ukrainian mines floating free (from snapped cables) is relatively low. Black Sea nations are actively hunting for them. Russia has cleared a few areas of mines and defined safe corridors In the dangerous northwest, but NATO rightly considers overall the risk is high (as is risk from GPS jamming, and electronic interference). If ships owners and charters can't get insurance, they won't ship. The West doesn't need to formally 'sanction' Russian owned or chartered ships - the reluctance of insurers will do it for them by not writing insurance for some 'territories', which, of course includes Russia, at least.
"Since the London Market’s Joint War Committee (JWC) listed the Black Sea a week before the conflict began, much has happened...Apart from the physical damage to ships and many vessels being trapped, underwriters have been faced with a variety of challenges from the ever expanding sanctions regimes which failed to deter the attack, have failed to stop the conflict and have not yet changed the political path adopted by Russia.
For insurers whose reason for existence is to support trade, it is difficult to thrive in an environment where they are being compelled to stop themselves and others from trading. Having put expensive compliance teams in place and embedded due diligence, they are under intense pressure. This is further evidenced in the advent of self-sanctioning where entities take a policy decision not to broke or write any new or renewal business in certain countries. The situation is legally constricted as running risks cannot simply be cancelled unless there is contractual reason to do so.
Problems have arisen from the speed and number of measures as well as the difference between sanctions and asset freezes, plus variations between different national measures. These can leave clients at least partially without cover and underwriters similarly without reinsurance. Additionally, the reinsurance market has felt the need to utilise territorial exclusions, so many underwriters are now significantly and unexpectedly exposed without the protection they had expected to have.The situation remains very fluid, with new developments daily, so underwriters will proceed with great caution, if at all, as the penalties for errors are high."
Neil Roberts, Head of Marine and Aviation at Lloyd’s Market Association June 2022
"Originally, ‘operational’ FONOPs were designed as the next step to supplement diplomatic efforts to challenge excessive claims or when these efforts have proven fruitless. An example of this, the USCG did a FONOP 35 years ago in the North Western Passage, much to the annoyance of Canada.There is almost no doubt that the US will move into Russian territorial waters within 'Gulf-like' coastlines, as US does not recognise waters encompassed within the outer arms of the 'gulf' as territorial waters, whereas Russia does - fully in line with Article 10 (6) of the1982 United Nations Convention on the Law of the Sea (Russia is a party to the Convention). There is no doubt in my mind that Russia will use force to push vessels out of these waters, whether submarine or surface.
As Odell stated, “the United States does not conduct FONOPs vis-à-vis all excessive maritime claims everywhere in the world every year”. The pattern, tempo and nature of ‘operational’ FONOPs has principally focused on those countries who happen not to agree with the “rules-based...international order”, a concept exclusively promoted by Washington to uphold its global primacy.
While other countries who take umbrage at what they perceive as excessive claims, they go to the ITLOS [International Law of the Sea - US is not a party] to try to settle the matter, the U.S. sends in the navy. What does that say?"
Andrei Raevsky 01 December 2020
"...the USS John S. McCain, which entered the Sea of Japan several days ago, violated Russia’s territorial waters in the Peter the Great Gulf, "passing the maritime border by two kilometers." "The Pacific Fleet’s Admiral Vinogradov anti-submarine destroyer used an international communication channel to warn the foreign vessel that such actions were unacceptable and the violator could be forced out of the country’s territorial waters in a ramming maneuver. After the warming was issued and the Admiral Vinogradov changed its course, the USS John S. McCain destroyer returned to international waters..."
Russian Ministry of Defense
"...when ratifying the Convention on the Law of the Sea, it [the Russian Federation] does not accept the procedures provided for in Section 2 of Part XV, which lead to binding decisions on disputes regarding military activities, including naval activities by government vessels."
Maria Zakharova, Foreign Ministry Spokeswoman 14 October 2021
#1 "...as part of the sixth sanctions package introduced last month, the EU prohibited European companies from insuring and reinsuring sea shipments of Russian oil and oil products to countries outside the European Union.
As a result, major energy players such as Vitol, Glencore, Trafigura, Shell and Total stopped trading Russian oil for third countries.
Now, however, they will be able to resume business with Russia. The legal details of the new provision will be published in the Official Journal of the EU"
RT 23 July 2022
#2 In early August the UK removed sanctions on insurance and reinsurance of ships carrying oil to third countries (not the the EU). The UK is the single major ship insurer in Europe. Russia has made it illegal to insure with 'unfriendly countries' anyway, and has developed it's own insurance businesses for it's own ships. For example, State-owned Sovcomflot, Russia's biggest shipping company, now insures it's own fleet itself. through 'Russian National Reinsurance Co'. (also state owned). The Russian National Reinsurance Company has become the main reinsurer of Russian ships.
What this 'sanctions backdown' really means is that London is losing insurance business, and this is a futile attempt to rescue a bit of what little is left.
#3 "...we have provided clarity to industry and partners. This includes the UK’s publication of a General Licence as well as the U.S. General Licence 6B ; and updated and detailed EU guidance . These provisions make clear that banks, insurers, shippers, and other actors can continue to bring Russian food and fertilizer to the world.
We call on our global partners, and on the actors, industries and services involved in agricultural trade, to take note of these provisions; to act in accordance with them; to bring Ukrainian and Russian food and fertilizer to meet acute demand; and to continue to advance the accessibility of food to all."
US - UK Govt. joint statement 14 November 2022
In other words, the Russians were correct when they repeatedly asserted that no one in the west would provide banking services, shipping services and insurance service to Russian efforts to export their grains and fertiliser. It may have been 'technically legal' but no western company believed the USA or UK when they said companies could serve the export of Russian grain and fertiliser without any form of punishment. Western corporates have no trust, no faith, in the assurances of their own government. Why risk payment being locked up again on the whim of a politician? If it can happen once, it can happen again.
"As for containers, there has definitely been a full-scale turnaround to the east. Both exporters and importers want to deliver cargo via the Far East, so all infrastructure facilities there: railroads, land border crossings, and sea terminals, have become overloaded.
Our North-West direction has decreased from over 100 thousand containers per month to 10 thousand.
Now Ust-Luga and terminals in St. Petersburg are gradually coming back to life due to the growth of non-container cargo turnover and the beginning of vessel calls from Southeast Asia, particularly from China...We have a big investment program for the Far East. Last year we gave up coal transshipment in favor of containers...
In general, we should say openly – in terms of technological readiness for market reorientation, both our own and our colleagues’ infrastructure cannot cope with the current volumes...
...vessels stand for a long time at Far Eastern ports, waiting for loading (although this year VSC managed to reduce the average duration of the roadstead by a third compared to last year). And this leads to serious financial losses for marine operators, including us.
...the impact of negative external factors can last indefinitely, and emergency methods will not work anymore. In our opinion, it is necessary not to patch up the holes, but to prevent their appearance in the future."
Sergey Shishkarev, Board Chairman of Delo Group 22 November 2022 interviewed by TASS News
"We do not support confrontation, we prefer dialogue. But we cannot ignore the restrictions they have imposed. Therefore, on September 29, a Presidential Executive Order was signed to ban international road transport across Russia by foreign operators from those countries that have imposed restrictions on our individuals and legal entities. Any new attacks will also not go unanswered. No one should have any illusions about this.On the 19th of September 2022 the EU had finally been embarrassed into allowing Russian fertilisers, animal feeds, 'essential goods', coal and related products to be transshipped through the EU to non-EU countries “to combat food and energy insecurity around the world”.
Sergey Lavrov 8 October 2022
"In our opinion, the transition to a single logistics ecosystem can be implemented in two stages. The first stage should involve the implementation of common standards for data exchange and the development of regulations for the processing of digital documents for all participants of the supply chain.
The second stage is creation of the digital services for logistics management, including optimization of routes for cargo movement, coordination of electronic transportation plans, and monitoring and coordination of their execution"
Sergey Shishkarev, Board Chairman of Delo Group 22 November 2022 interviewed by TASS News
"The Russian Industry and Trade Ministry has offered imposing a ban on exports of wood and a number of articles made from it until the end of this year. The ban will cover unfriendly countries that have been put on the list, including the US and EU countries. Birch raw wood (the main raw material for paper production) and chip fuel placed under the ban are critical goods for the European Union...In its turn, the ban on exports of peeler block (raw material for plywood production) amid the EU’s anti-dumping duties on ready plywood from Russia will prevent European producers from boosting capacities of their own enterprises using Russian raw materials"
Russian Industry and Trade Ministry 11 March 2022
"Russia has 82 billion cubic metres of timber, compared to 126 billion in Brazil, 47 billion in the United States, 30 billion in Canada, and slightly over 14 billion in China.
The actual felling volume in Russia is well below the annual allowable cut, while the timber industry’s contribution to Russia’s GDP is rather modest at about 1 percent, or 0.99 percent, to be precise.
Clearly, the industry has proper reserves and good prospects for long-term growth."
Vladimir Putin 10 February 2023
"We must certainly stay the strategic course for expanding the timber industry, which includes...increasing demand at home, expanding our own processing capacities and manufacturing high-quality products with high added value, including wooden houses, furniture, paper, and so on. Also, it is important...to expand the use of biofuels in the housing and utilities sector.
Mortgage tools should be used more extensively in housing construction. Wooden houses are a good choice for relocating people from structurally deficient residential buildings...as well as for rural health posts and other social facilities....the availability of the latest timber processing technologies and equipment is of paramount importance.
...wooden housing construction embraces all phases from lumber harvesting to completion of construction. Without a doubt, we need to expand these capacities. I would like the Government to draft a set of measures to support the manufacturing of wooden house kits.
And one more point. We have a lot of construction under national projects and other state and regional programmes. Urgent care centres, cultural centres, libraries, Russian Post offices, etc...I believe it is possible to resort to wood construction technology on a bigger scale and use common designs for building projects, while of course observing all safety requirements. "Vladimir Putin 10 February 2023
"However, soon supplies to the EU could become questionable. The thing is that Belarusian enterprises won’t be able to obtain new international certificates of compliance of standards of sustainable forest management and certificates of conformity guaranteeing respect for the rights of wood industry workers known as FSC."
Belsat 4 March 2022
"...we are a leader, and guarantor, of food security, and not just in the Russian Federation but throughout the world.
Over the past decade, we have increased production of all types of fertilisers by 40% – up to 55 million tonnes. We have surpassed the United States and India in this respect, and we are now second in the world after China. This is really an enormous achievement.
Of course, our priority is the Russian domestic market. We are fully meeting demand. In the past decade, fertiliser sales in the Russian market have increased by 2.5 times – to 13.2 million tonnes. This is an all-time record.
And, of course, we are now the world's largest exporter of mineral fertilisers, with an export capacity of about 37–38 million tonnes, although that was in 2021. In 2022, it is clear that we had a slight drop due to the sanctions and all the export problems that happened."
President of the Russian Association of Fertiliser Producers, Andrei Guryev, April 27, 2023
"...we are ready to fully meet the demand of agricultural producers in Indonesia and other friendly countries for nitrogen, phosphorous and potassium fertilisers and raw materials for their production. Russia’s share of mineral fertiliser in the world market amounts to 11 percent and exceeds 20 percent in some varieties. Last year, we sent abroad 37 million tonnes of these products.
We certainly intend to continue fulfilling in good faith all of our contractual obligations for the supply of food, fertiliser, energy resources and other critical goods. In this context, we consider it vital to restore the supply chains disrupted by sanctions"
Vladimir Putin, 30 June 2022
In February 2022 Lithuania banned the transhipment of Belarusian
potassium from its port of Klaipeda. Almost all Belarusian potash
(10-11 million tonnes per year) was exported from there. As a
result of Lithuania's actions, new facility are being built at St.
Petersgurg to export the Belarus production. Lithuania will lose
it's lucrative port charge income.
"Considering that Russia and Belarus are the biggest suppliers of fertiliser to the global market, I would like to discuss with you ways of satisfying the demand on the global market and our permanent customers.
I think we have 15 percent of the global trade, and 25 percent in some fertilisers, which is a very significant amount in the world markets.
Low use of fertiliser obviously brings down the next year’s harvest outlook. All that is very regrettable."
Vladimir Putin June 25 2022
"The EU has indeed avoided a direct and comprehensive ban on the import of Russian agricultural products.
...despite prohibiting the import of certain types of Russian fertilizers, the EU has introduced exemptions to fulfill its own needs.
The import of fertilizers from Russia into the EU this and the following seasons (until 9 July 2023) is permitted in an amount equal to the average annual volume of imports of these products (imports of potassium chloride are allowed in the amount of 837,570 tonnes, other restricted fertilizers - in the amount of 1,577,807 tonnes).
EU Member States are also authorised to grant, at their own discretion, access to EU ports of vessels flying the Russian flag, as well as entry to the EU of Russian road carriers for the purposes of importing or transporting agricultural products, including fertilizers and wheat, that are not subject to restrictions.
...What the EU fails to mention is that anti-Russian unilateral sanctions are still distinctly detrimental for key Russian producers and exporters of agricultural products. They affect directly or indirectly the export, financial and transport capabilities of Russia, including in the food sector. The ultimate goal of these actions is obvious - to undermine the Russian economy, including the agro-industrial complex.
...Stringent measures are being introduced or proposed to police the proper implementation of the anti-Russian sanctions regime, including criminal liability for either circumventing or assisting in circumventing unilateral sanctions, which, according to instigators of these measures, should induce economic operators in EU Member States to terminate their cooperation with Russian partners. Consequently, cargo transports, as well financial and insurance services are seriously hindered and logistics chains are disrupted, also due to total customs inspection of all goods imported into the EU from Russia. Western financial and commercial entities, intimidated by the prospect of penalties for violating the sanctions regime, are either delaying or frequently annulling their transactions.
Furthermore, individual restrictions have been imposed against the owners and chief executives of leading Russian producers and exporters of fertilizers - Uralchem, Eurochem, PhosAgro, Akron...The future of factories that belong to them in some EU Member States also hangs in the balance.
Evidently, the European Union is engaged in a deliberate campaign to obstruct the export of Russian food products and fertilizers, including to prevent Russia's access to third markets. Behind the smoke-screen of its habitual hypocritical rhetoric the EU is busy aggravating what is already a precarious situation in terms of global food security."
Russian Foreign Ministry press release 3 June 2022
"It is worth mentioning that Mazepin hadn’t owned ToAz for some time, he took control of it with a raid just three months before the war. The former British controlling partners, the Bkit consortium, complained that their representatives were blocked by the Russian special police forces, the Omon, at the entrance of the shareholders’ meeting, which voted to exclude them from the board in their absence. An appeal to the Dublin court is open against the raid on ToAz. But in the meantime, Mazepin has formally transferred control of the group to two close allies since it has been under sanctions."
The Odessa Journal, 21 October 2022
"The Executive Order was signed in response to unfriendly actions taken by the United States of America and the foreign states and international organisations that sided with it, seeking to impose restrictive measures on Russian citizens and legal entities in violation of international law, in order to uphold the national interests of the Russian Federation and in accordance with Federal Law On Special Economic Measures and Measures of Coercion of December 30, 2006, Federal Law On Security of December 28, 2010, and Federal Law On Measures (Countermeasures) Against Unfriendly Actions by the United States of America or Other Foreign Countries of June 4, 2018.
The President resolved to introduce a temporary procedure for making decisions by a general meetings of participants (shareholders), a board of directors (a supervisory board), or a collective executive body of a Russian economic entity on issues within their competence....If a body of a Russian economic entity includes persons from unfriendly foreign states, the participants (shareholders) of the Russian economic entity who are not nationals of unfriendly foreign states shall be entitled to rule that the votes of said persons shall not be counted when establishing a quorum or in voting. In such case, a decision shall be made notwithstanding the provisions of the founding documents of a Russian economic entity or its corporate agreement. The temporary procedure established by the Executive Order shall remain in effect until December 31, 2023, inclusive."
Executive Order On Temporary Procedure for Making Decisions in Certain Russian Economic Entities,17 January 2023
"We hope that we will open the port in Taman by the end of 2023, and that will change the situation where the Russian Federation – a major producer of ammonia for as long as the country has existed – has been left with… Well, not a single ammonia transshipment port has been built, and we are tied down, or dependent on other countries that have such ports.
Therefore, we want to close this gap. We are working jointly with the Ministry of Industry and Trade, with the Government of the Krasnodar Territory, and other agencies. But we would like to ask you to help – to temporarily include transshipment and transportation of ammonia in Odessa in the grain deal for us, so that our product can also go to developing countries, including Africa."
Dmitry Mazepin, Chairman of Uralchem, Chairman of the Commission for the Production and Trade of Fertilizers meeting with Vladimir Putin 23 November 2022
#1 On 22nd July 2022 Russia came to an agreement with the United Nations to allow facilitate grain ships leaving Ukraine via the Black Sea. Turkiye and the UN will inspect the empty ships (with Russian and presumably Ukrainian observers) as they enter the Black sea in order to confirm they are not carrying weapons to Ukraine.
Part of the price for this agreement is that the sanctions on Russian fertilisers must be removed. I think this refers to sanctions on insurance, port access, and shipping companies, as well as on specific sanctioned products.
"We are aware that the European Commission has lifted the sanctions on the supplies of Russian fertilisers, and we certainly welcome this decision. However, the European Commission issued a clarification on this matter on August 10, whereby only EU countries can buy our fertilisers, but we and Belarus cannot ship our fertilisers through the ports of European countries to the developing economies of Asia, Africa or Latin America, which is an act of discrimination against our partners from these parts of the world.
Massive amounts of our fertilisers (100,000 tonnes, I believe) are stored at the ports of some European countries. Our manufacturers – primarily of potash fertilizer – are willing to give them for free to the developing countries in dire need of these fertilisers. I want the Foreign Ministry to work through this issue"
Vladimir Putin 9 September 2022
"I would like to ask the UN Secretariat – I discussed this matter with UN Secretary-General Antonio Guterres the day before yesterday – to use its influence on the European Commission’s decision not in word, but in deed and to demand that they, our colleagues from the European Commission, lift these clearly discriminatory restrictions on developing countries and provide access for Russian fertilisers to their markets.
Also, the day before yesterday I apprised Secretary-General Guterres of the fact that 300,000 tonnes of Russian fertilisers are stocked at the EU seaports. We are ready to make them available to developing countries for free."
Vladimir Putin 16 September 2022
262,000 tonnes remain blocked as at late November 2022.
Dmitry Mazepin "We have shipped a trial batch of 20,000 tonnes or less than ten percent of our impounded volumes to Malawi. The UN and Ms Rebeca Grynspan actively addressed this issue, and they helped us. The Netherlands is now ready to ship this batch to us.
We are facing a problem because we are unable to pay freight charges, even if we are delivering free fertiliser to Africa. We have reached an agreement with the UN that we will remit the money to the UN. They will charter a ship that will sail to the Netherlands, take on the free batch and sail to a port in Mozambique because, according to the UN, Malawi is now hard pressed for fertiliser.
This is why I would now like to raise this issue and to obtain your approval, so that we can reach agreement on the entire initiative. We would contact the UN and the African Union, in order to unblock our entire 262,000-tonne batch. By agreement with the Chairperson of the African Union, they will list countries that are hard pressed for fertiliser, and we are ready to make these deals.
Vladimir Putin: Are you talking about free deliveries?
Dmitry Mazepin: Yes, free deliveries."
Dmitry Mazepin, Chairman of Uralchem, Chairman of the Commission for the Production and Trade of Fertilizers meeting with Vladimir Putin 23 November 2022
By January 2023, the EAU had released only one consignment of fertiliser, given by Russia to Malawi for free (and Russia paid the shipping). Russia is now pressuring the UN to stop 'slow walking' work to make the EU releases the fertiliser. Russia has pledged to give some of this fertiliser for free to the Kingdom of Eswatina (formerly Swaziland).
"Since UN Secretary-General Antonio Guterres strongly advocated the settlement of all issues related to unimpeded supply of Russian grain and fertilisers to the world markets, we agreed today that the Eswatini government and Russia will address him with a request to promptly resolve the issue of using part of the Russian fertilisers seized in EU ports for the needs of the people of Eswatini free of charge. These fertilisers are available for free."
Sergey Lavrov, 23 January 2023
The truth is revealed. The EU is holding Russian/Belarusan bulk fertiliser to ransom in European ports, preventing the transhipment to their destination. Port storage charges will now be massive. So the companies are willing to donate the fertiliser to poor countries and write off the loss. The companies are most unlikely to pay the port charges (even if they could), and are most unlikely to ever use those european ports again.
Forcing Russia (and Belarus) to export through Russian ports might add costs for Belarus, but exports via the Black Sea is probably the shortest and cheapest route anyway, even if infrastructure might be a bottleneck.. This EU restriction gives Russia the high ground - Russia will not supply Europe with any fertiliser so long as Russia cannot send fertiliser to the global south via European ports. Once again, the Europeans are over a barrel - either totally remove the sanctions without any conditions (and possibly wipe the port charges), or go buy fertiliser from 'somewhere else'. Of course, Russia may hold out for full restitution - payment for the fertiliser, cancellation of port charges, and complete wiping clean of all sanctions.
"Another eloquent example of the Western sanctions’ disruptive effect is that they are even preventing a free transfer of some 280,000 tonnes of Russian fertilisers to the poorest countries. The products are now stranded in the ports of Latvia, Estonia, Belgium and the Netherlands. It must be emphasised that these Russian products are intended as a donation to those in need, while all the transit costs are being covered by Russia...However, most of the products are still being held in Latvia. That country’s authorities are refusing to give our fertilisers to the poorest countries, for purely political reasons."
Deputy Foreign Minister Sergey Vershinin 17 November 2022
Russian fertilizer producer Uralchem-Uralkali has agreed with the Netherlands, Estonia and Belgium to supply cargoes of fertilizers stranded in those countries to Africa, TASS news agency reported on Saturday.
It cited Uralchem’s head Dmitry Konyaev as saying the group was “actively working with the U.N. to organise free deliveries to Africa of more than 262,000 tonnes of mineral fertilizers that have been ‘frozen’ in EU countries”.
The Netherlands said on Friday that following a request from the United Nations it would allow shipment to Malawi of 20,000 tonnes of Russian fertilizer that had been stuck in the port of Rotterdam because of sanctions against a Russian individual, whom it did not identify. It said a condition of the agreement was that the sanctioned person and the Russian company would earn nothing from the transaction.
Reuters 12 November 2022
The 'sanctioned' individual that Reuters mentioned is, of course, the owner of Uralchem-Uralkai, Dmitry Mazepin. The UN has organised the shipping, and Russia has paid the cost of shipping. Did the UN pay Netherlands, Estonia and Belgium the cost of storage of the illegally seized cargoes?
"Some clients and financial assets have left the banks that were hit by the sanctions and gone to banks with foreign participation and sanctions-free regional banks that are comfortable for businesses now. The number of flows has increased five-fold.
Looking at our financial sector overall, there are about 320 banks operating in Russia, including about 115 banks working with budget funds.
Today, we are monitoring about 20 trillion rubles. About 80 percent of all budget funds are concentrated in our 15 largest banks
...we managed to cut the share of budget funds being channelled through high-risk banks to a third, and the involvement of 'technical firms', fly-by-night companies, by about 40 percent. More than 43 billion rubles allocated from the country’s budget has been saved; 32 billion has been transferred back to the budget, and the assets of officials who were implicated in criminal cases have been seized – assets worth about 7 billion rubles. We have helped initiate over a thousand criminal proceedings.
As for countering the financing of terrorism, we have officially identified about 1,500 people as terrorists, including legal entities and terrorist groups linked with nationalists in Ukraine.
Reciprocal “freezing” works particularly well...Reciprocal “freezing” is when our foreign colleagues give us their lists of terrorists that they believe to be in our country or are wanted. In turn, we give them our lists of people who we think are abroad. We have received lists with about 1,500 names from them and have given them lists with about 2,000 names.
Over 280 cases on terrorism have been initiated and are being conducted with our participation.
Unfortunately, I must say that non-profit organisations are being used today to raise funds and then give them to terrorists. We are also working with the FSB on this."
Yury Chikhanchin, Head of the Federal Service for Financial Monitoring, 9 March 2023
"We are past the period of losses, which was an incredibly difficult time for us. We incurred a major loss since we lost almost all of our foreign assets, except in the CIS countries. Without a doubt, the SDN sanctions made it impossible for us to operate on exchanges in any currency, be it US dollars or euros.
So, over the past period, we have fully formed the reserves to cover all existing issues. We are beginning to operate as usual, and there can be no doubt about our sustainability, since we will show financial results. With the Central Bank’s permission, we began to disclose our financial results, because we want everyone to see that all our problems are in the past.
We have ensured the bank’s functioning in challenging conditions, meaning the border areas, as well. I traveled around our border areas, and saw that our employees continue to work in extremely difficult circumstances...We are the only core bank for the people in the small towns in the Belgorod, Kursk and Voronezh regions. A situation where we stop providing financial services is unimaginable and we will continue to provide the full range of financial services there.In this sense, you are absolutely correct and the groundwork that we created by building our own platform based on proprietary solutions led to the fact that, in general, we are unscathed by the vendors’ departure from the market, since 80 percent of our solutions are based on in-house IT products. In 2023, over 90 percent of the services that we use will be our proprietary services."
German Gref, CEO and Chairman of the Management Board of Sberbank, 7 March 2023
Russia has developed its own 'secure' domestic smartphone, the AYYA. It is based on based on a domestic operating system (Aurora) and on the android system. It will be available in late 2022.
"Today, the only producer of fibre for telecom in the entire EAEU is Optic Fibre Systems, a company in Saransk (Mordovia). Its production capacity was increased to 4 million kilometres of fibre per year, which meets almost half of the domestic demand. To fully cover the market, the company drafted a comprehensive investment project. It will expand the company's capacity to 10 million kilometres of fiber per year, allowing it to meet the requirements of not only Russia but also other EAEU member-states. There are already agreements with the Republic of Belarus."
Denis Manturov, Minister of Industry and Trade, 15 February 2023
Russia, like most developed countries, has a 'Digital Economy'
programme, with high-speed data transmission the key enabler.
Russia has been late to digitise it's economy, which is fortunate
because it can both modernise and fully indigenise critical
infrastructure. Unlike almost every other country, it will become
fully able to function in any condition of blockade or war.
It is also leveraging digital services to improve speed and
efficiency of services such as healthcare (an rea in desperate
need of funding and modernisation).
"Again, we still have a lot to do to ensure that every Russian, regardless of the region they live in, receives high-quality and up-to-date medical care. This is not only about better medical equipment and facilities.
Other key priorities include building up capacity to provide specialised and high-tech care, improving the education level of medical personnel, as well as the wider use of advanced information technologies, including so-called digital assistants, which help doctors make diagnoses and reduce the time spent on paperwork.
People who are not versed in the industry still find it unusual that big data systems can help in diagnosing patients. This is amazing but true, and it improves the quality of the work."
Vladimir Putin 15 February 2023
"Military and aerospace markets are the most closed both for foreign companies and private Russian designers and electronics manufacturers. However, in many cases technological inferiority of enterprises controlled by government doesn’t allow them to fulfill tasks of Defense Ministry and it makes them to get private companies as subcontractors of the second level to take part in most projects on designing and manufacturing military equipment of new generation. In this year the first precedent of direct interaction was set between private company and military customer."
Ivan Pokrovsky, Electronica Publishing House 2008
Globally, the high-tech end of electronics manufacturing is
worth $1 trillion, and it is dominated by China. Not only is it
hard to compete on a global market, the area is capital intensive
and crowded. The Huawei 5G wireless network debacle shows that
even if you are big, cheap, and cutting edge, the 'unfriendly
countries' will find a reason to block your products. (On the
other hand, perhaps Huawei were simply naive.) Russia does have a
prescence in manufacture and sale of 'electronica' in general, but
it is rather small. In the Soviet days it was more advanced than
the US, but no longer.
"...Russia's semiconductor technology was also brilliant in the former Soviet Union. At that time, the Soviet Union did not have any channels to obtain technology and equipment from the West, but it still achieved good results in the early days. With the strong support of the Soviet Union's planned economy, the gap between the Soviet Union and the United States in the semiconductor field was not large in the early days...in 1957, the world's first semiconductor company Fairchild was born in Silicon Valley, and the Soviet Union also had its own first semiconductor manufacturing plant in 1959...
Judging from the current state of the semiconductor industry in Russia, its technological accumulation in the upstream design and manufacturing of semiconductors comes from the legacy of the former Soviet Union on the one hand, and the upgrading of backward western production lines on the other hand. Products appeared, but eventually disappeared in the long history due to various reasons, and its semiconductor industry was eventually reduced to extensive sales of rare materials...
...It is difficult to cultivate world-leading products on the barren semiconductor industry soil. By October 2020, MCST announced its latest CPU - Elbrus-16C, which uses TSMC's 16nm process, which consists of 12 billion transistors. However, at this time, the mainstream CPUs on the market already use the 7nm process, and the Soc of the flagship mobile phone uses the 5nm process"
MinNews 17 August 2022
Communications equipment sales are the next biggest by value
($230 million), but make up only 10% of total sales.
Security systems are the third biggest sector by value ($215
million), but make up only 9% of sales.
Commercial equipment and medical electronics sales are fourth
biggest by value at $100 million, but together make up only 4% of
the market. Automotive electronics are worth $80 million in sales
and make up 3% of industry sales volume. Consumer electronic
segment was about the same. Industrial electronics make up 20% of
sales (worth $50 million).
Total market value of electronic products in 2019 was "estimated
at $2.74 billion". These
figures are for 2020, via 'Expo
However, according to the (presumably Russian) Electronics
Developers and Manufacturers Association, annual sales of
domestically-built 'electronica' equipment comes to $15
billion, and exports of Russian-made electronics bring in about $1
billion. "Overall, the industry’s gross income stands at $6bn". In
2007 the total Russian 'electronics' manufacturing - equipment,
components and units - was valued at over $8
billion [pdf]. That was 15 years ago, $15 billion today
sounds reasonable. Maybe there is a difference between
'electronica' equipment and electronics.
An unspecified 'number'
of branches of major global manufacturers work in Russia (or at
least did, in 2020).
"Amount of electronic components manufacture in Russia made up to 400 million in 2007, a quarter of which is due to export deliveries. Average annual growth for the last five years is about 10%. In 2008—2009 we expect much higher figures related with the beginning of IC manufacturing for smart cards at the new 0.18 EEPROM line at NIIME and Mikron (Sitronix) company and extension of technological potential of a number of state enterprises financed according to the national target program."
Ivan Pokrovsky, Electronica Publishing House 2008
According to Expo
electronica, 36% the electronic industry are involved in
either production of custom items or purchase and resale of
components, 30% work in marketing and development of electronic
devices, 18% specialise in development and marketing of modular
components, 8% of companies are involved assembly and testing of
modules and equipment, 5% are involved in 'completing production'
(whatever that means), and 3% are involved in manufacturing cases
for equipment. The Russian government would like to eventually
replace all government PC's (and presumably servers) with Russian
designs and components. Annual sales of domestically-built
products were $15 billion in 2020. Only about 15% of this is due
to military equipment exports (built with Russian electronic
systems). The Pantsir air defense system and the Krasukha
mobile electronic warfare systems would be examples.
"Russia’s state arms exporter Rosoboronexport sealed defense deals with international companies worth roughly $2.35 billion at the Army-2020 international military-technical expo held in the outskirts of Moscow. Rosoboronexport has inked contracts to deliver cutting-edge electronic warfare systems (EW), such as the Krasukha mobile EW system and the latest mobile Repellent-Patrol electronic countermeasures complex — for the first time in the history of military-technical cooperation between Russia and foreign states. ...the mobile electronic warfare system “Krasukha” protects command posts, groupings of troops, air defense systems, and vital industrial, administrative and political facilities. The Krakusha-4 system analyzes the signal type and impairs enemy radar stations by powerful jamming emissions at ranges of up to 300 kilometers (186 miles). As a result, enemy aircraft lose their capability to detect targets and aim their precision weapons against them."
Caspiannews.com 29 August 2021
The electronics/electronica industry employs 360,000 people. The Russian Ministry of Industry and Trade confirms the 'domestic civilian electronics sector' is worth $15 million.
Sales drop off in years prior to 2020 were attributed to "mainly
due to a reduction in orders from the Russian military-industrial
complex. Delays in financing and a lack of large-scale military
projects explains the slowdown." This may have changed recently,
but I suspect only to an extent. Practical military equipment
needs 'sturdy' workaday processors that can survive shaking and
jarring when in the active military environment. At the military
workstation (and probably missile) level lower 'spec'
microprocessors - which Russia produces - are more than adequate.
Russia has been shut off from 'high end' semiconductors, at least
from unfriendly countries. Russia probably could quietly acquire
the relatively small number of very advanced semiconductors it
needs from friendly countries, but strategically, it seems more
likely they have developed their own. It would be a big - but not
impossible - task to start cold to reach the extremely high level
of technical competence to make these very advanced chips. Small
numbers of these specialist chips for limited-run advanced
projects may well already be made by Russia's research institutes
contracted to the Russian military industrial complex. If so, the
Government is unlikely to mention it.
"In general, the semiconductor industry of the Soviet Union, whose main purpose is military industry, does not pursue the power and commercial possibilities of pure semiconductor technology. It only needs to be practical and durable enough to ensure the effectiveness of military units. From the military industry [point of view] it is said that this move [breakup] of the Soviet Union is actually not a problem. Even today, semiconductors used in the industrial and military fields are not advanced process chips, but mature ones with higher reliability and durability in various extreme environments.
For example, the temperature ranges required for normal operation of civilian chips, industrial chips and military chips are very different. Civilian grade requires 0°C~70°C, industrial grade requires -40°C~85°C, and military grade requires -55°C~125°C. This is only an indicator of temperature. Industrial and military grade chips also have anti-interference and impact resistance. Even aerospace-level radiation resistance and other requirements, these are difficult to achieve with more sophisticated and smaller advanced process chips, so even if today's Russia is almost out of the global semiconductor industry chain, it can produce [them] to a certain extent."
MinNews [slightly edited for sense] 17 August 2022
There seems to be a lot of dispute within the Russian industry and bureaucracy about whether or nor Russia should attempt to produce high end microprocessors. Russia produces 600-nanometer microchips for military use, even if, up to now, the Russian designed processors using these chips are assembled in Taiwan. There is no reason beyond cost why Russia should not assemble these modules domestically. Taiwan can produce very high capability ultra-small chips of down to 5 nanometers, but whether these are essential in the military context seems dubious.
"Defense and commercial companies in Russia rely heavily on foreign-made microchips. While Russian engineers provide the design specifications, the technology is assembled by Taiwan Semiconductor Manufacturing Company, or TSMC. Following the Feb. 24 invasion of Ukraine, TSMS ceased production of Russian-designed Baikal and Elbrus microchips."
DefenseNews, 9 June 2022
"Microelectronics manufacture, particularly semiconductor one, is most attractive for investors. While establishment of modern manufacture for electronic equipment costs
several million or tens of million dollars, establishment of semiconductor manufacture needs several hundred of million or several billion dollars."
Ivan Pokrovsky, Electronica Publishing House 2008
Russia has several
companies involved in production of semiconductors for one
purpose or another, including paycards and the like. Mikron chips
are internationally certified, and Mikron is already producing
chips for the Russian automobile industry. According to one
Russian social news website
Mikron already produces microcircuits for automotive instrument
clusters and has presumably 'generic' components "body electronics
and engine management systems, driver assistance systems and
lighting equipment". Mikron says it is developing, or intends to
develop, around 72 kinds of microcircuits (both generic and
bespoke) for Russian car manufacturers, a range which will allow
80% of electronic components to be domestically sourced.
In April 2022 Russia announced a $38.3 billion digital
transformation plan which includes $5 billion to design and
manufacture its own 90-nanometer process nodes by December 2022 -
and produce their own 28-nanometer node by 2030.
The Mikron Group is Russia's largest producer and exporter of microelectronics. It is based in the “Moscow Technopolis”, a special economic zone with favorable conditions for business. It is jointly controlled by Rostec and Sistema and produces products for both military and civilian purposes.
Japan finally joined in the west's trade restrictions on the sale
of semiconductors to Russia in late January
2023. Russia imported about 100 million USD of
microchips in 2020. Import statistics will now cease to be visible
to the west. This makes it easy to import specifically configured
lower-level chips used in industry (perhaps including for some
missiles) from friendly countries (possibly as very well-paid
"The statement did not accuse these or any of the other countries named – a diverse group that included Armenia, Georgia, China, Brazil, Israel, India, Singapore and Taiwan – of facilitating sanctions-dodging...the nations were among “certain common transshipment points through which restricted or controlled exports have been known to pass before reaching destinations in Russia or Belarus.”
“In some instances, controlled U.S. items may be legally exported to these and other jurisdictions as inputs for the production of other finished goods. However, further export to Russia or Belarus of those finished products and goods, potentially through additional transshipment points, may be prohibited,” the statement read...
...Washington imposed punitive measures on an Uzbek company over its dealings with a sanctioned Russian firm that it said 'amounted to' collusion in sanctions-dodging. Promcomplektlogistic company “has actively supported” Russian company Radioavtomatika in its “effort to evade U.S. sanctions,” the State Department said at the end of June.
Its transgressions included “providing electronic components such as microcircuits to Radioavtomatika,” which procures foreign items for Russia’s defense industry.""
eurasianet 12 July 2022
The west may cut Russia off from some specialised products, but it is impossible to cut it off from a reliable supply of all the electronic components it needs.
"At present, Russia’s electronic market accounts for 0.4% of the worldwide market, according to the EDMA.
At such a small scale, Russian companies do not have the opportunity to provide a high level of guarantees, and comprehensive offerings, customers require.
The dependence on basic foreign technologies is very high, which increases the risks associated with sanctions.
Maintaining competitiveness is also an issue. Public firms operate on a contractual basis, receiving [Government] budget financing. This deprives them of incentives to increase their production’s economic efficiency. On the other hand, private companies are forced to compete against multinational corporations, which does not allow them to develop, due to high Russian demand for foreign-manufactured products."
Expo electronica 13 January 2020
Russia has announced
(April 2022) an accelerated plan to increase it's domestic digital
capabilities, in line with it's strategy for it's digital economy.
About $33 will be spent on the development of technologies needed
for semiconductor production encourage the further development of
domestic chips and local electronic modules, build out
infrastructure for datacenters, develop the skills of the
technical workers, and market it's own electronic products and
Russia has a relatively low level of involvement in industries
producing technically advanced electronic equipment for the
public. Perhaps this will slowly change. Right now, Russia is
likely to focus on state-sponsored production of those electronic
components and manufactures that are critical to Russia's
security. In 2018
the production of "electrical equipment, electronic and optical
equipment" amounted to less than 5% of industrial output
overall. Russia imported 73% of its 'electronics' and electronic
components. I doubt this will change for quite a long time,
particularly as there will likely be an oversupply of
'electronica' in the world.
There is increasing global competition to sell electronics
and components. For example, India announced in 2021 that it would
develop a semiconductor manufacturing business (it is also
developing an electronic repair industry). The US is also trying
to develop a domestic chip manufacturing capacity. Russia is flush
with money, and is a reliable customer. The rest is predicable.
It's true that the electronics sector can be a large
employer, especially if you look at it in the widest sense,
including the other industries enabled by it. And this area may
end up being its strength. Employment in good tech-related jobs is
one of the goals of the Russian government, and Russia is very
strong in Science, Technology, Engineering,
and Maths education. The program to develop the tech
industry is ambitious. The Russian Ministry of Industry and
Trade's draft strategy for the Russian electronics sector out to
2030 includes these elements:
It is clear that Russia has a long term strategy to bring digital
technology to everyone, right across the vast country. It has the
vision and the money to do it.
"In 2022, 355 companies (vs 282 companies in 2021) from Russia, Austria, Armenia, Belarus, Germany, China, and Norway exhibited at ExpoElectronica and ElectronTechExpo. The trade shows were attended by 16,435 industry professionals from 20 countries and 70 regions of Russia, among which 8,151 visited for the first time. The number of visitors increased almost by 50% compared to last year. The share of visitors from Russian regions also increased by 45%...experts discussed import substitution, consolidation of the industry to overcome the sanctions, and use of domestic products."
ExpoElectronica and ElectronTechExpo 18 April 2022
Looking ahead, there is no reason why Russia cannot further develop it's own rather modest electronics sector and increase sales to friendly countries. Friendly countries may well be interested in Russia as a trade partner for some electronic products, because they can bilaterally trade for Russia's raw materials. Right now, Russia simply doesn't need the west's products. In principle, and in the long run, Russia may open up to the wests low-end disposable consumer electronics - if they are competitive. But friendly countries will always receive the most favorable treatment.
"It remains only to adopt rules on the use of their intellectual property. Without any licenses and payment of royalties. This, among other things, will be our retaliatory sanctions on their property rights. For everything from movies to industrial software. Thanks, by the way, to those who have developed various programs for the unlicensed use of their expensive intellectual products. In short, for pirated use in the mode of personal sanctions 😄. And what, à la guerre comme à la guerre..." [note: this means something like 'all's fair in love and war',or ' in times of difficulty do your best with what is at hand'.]
Dmitry Medvedev (in his Telegram Channel January 2023)
22, 2022 the United States Patent and Trademark Office
(USPTO) broke off ties with both the Russian Patent Office
(Rospatent) and other Eurasian Patent Offices. The US Patent
Office will no longer police infringement of Russian patents in
USA (or any other country). In addition, restrictions on remitting
money to Russia will likely prevent American patent holders from
paying Russian and Eurasian agents, and protection of US patent
holders will end. If annual fees payable in Russia for IP
protection aren't paid, IP protection ends.
In response to the US trade restriction, on 6
March 2022 the Russian government, under provisions for
emergency measures in the Russian Civil Code, decreed that Russian
companies (and individuals) can use any inventions, industrial
designs without the consent of the patent holder, or paying any
compensation. The Code requires payment of “proportional”
compensation, but in the case of patent owners from foreign
countries which perform unfriendly actions 'in relation to Russian
legal entities and individuals' will have the compensation level
set at zero.
As the above regulation outlines, the Russian government, Russian individuals, and Russian businesses, are prohibited by law from fulfilling existing agreements and obligations to foreigners and foreign businesses where those foreign businesses or individuals have been sanctioned by the Russian government. The Russian government can turn the supply of raw materials to foreigners on and off like a tap, simply by the government designating those foreign importers as now being under Russian sanction. As at early August 2022, this tool has barely been used. The most consequential raw material to shut down would be uranium to USA for its nuclear power plants. The fact they haven't done this could be interpreted several ways.
"The Presidential Executive Order says federal and regional government authorities, other government authorities, local self-government bodies, and organisations and individuals under the jurisdiction of the Russian Federation shall operate on the premise that special economic measures are to be applied to certain legal entities, individuals and organisations under their control, starting on the day the Executive Order comes into force.
The document introduces a ban on government authorities at all levels, as well as organisations and individuals under the jurisdiction of the Russian Federation, implementing agreements (including foreign trade contracts) with legal entities, individuals and organisations under their control that are subject to the special economic measures, and on executing obligations under existing agreements (including foreign trade contracts) to individuals under the sanctions where such obligations are not satisfied or are partially satisfied.
The Executive Order also bans conducting financial operations whose beneficiaries are individuals under sanctions.
In addition, the document imposes a ban on exporting products or raw materials manufactured or extracted in Russia when they are delivered to individuals under sanctions, or by individuals under sanctions to other individuals"
Executive Order On Imposing Retaliatory Special Economic Measures in Connection with the Unfriendly Actions of Certain Foreign States and International Organisations
3 May 2022
'This Executive Order was signed to protect the national interests of the Russian Federation in response to unfriendly actions, which contradict international law, undertaken by the United States and joined by other foreign states and international organisations, aimed at introducing restrictions against Russian citizens and legal entities.
The President resolved that in light of the risk of natural disasters and man-made emergency situations endangering the life and safety of people and threatening the national interests and economic security of the Russian Federation, arising due to the violation by certain foreign entities and individuals of their obligations under the Agreement of the Development of the Piltun-Askokhskoye and Lunskoye Oil and Gas Fields on the Basis of Production Sharing, signed on June 22, 1994, special economic measures shall be applied to these foreign entities and private individuals under their jurisdiction.
In particular, the Government of the Russian Federation is to establish a Russian Limited Liability Company, which will take over the rights and obligations of Sakhalin Energy Investment Company in accordance with this Executive Order. The ownership of the company’s property, created within the framework of the above Agreement, shall be transferred forthwith to the Russian Federation.'
Russian Executive Order June 30 2022
"Americans stand to lose heavily too, as the production sharing arrangements dating back to the Yeltsin era had been forced out of Russian government when it was in dire economic straits during the transition from the Soviet period and was in no position to negotiate optimal deals. Come to think of it, something like 262 such so-called production sharing agreements (PSAs) were squeezed out of the Russian government by western oil companies by the time Yeltsin retired.
After coming to power in 1999, President Vladimir Putin set about the mammoth task of cleaning up the Aegean stables of Russia’s foreign collaboration in the oil sector. The “decolonisation” process was excruciatingly difficult, but Putin pulled it through and got rid of as many as 260 (out of 262) PSAs. In fact, Sakhalin-1 and Sakhalin-2 are the very last remaining two PSAs harking back to post-Soviet Russia’s decade of humiliation under Yeltsin."
Any surprises why the Biden Administration hates Putin so much and wants him out of power in Moscow? "
M.K. Bhadrakumar 10 July 2022
“Sakhalin-1 is a valuable non-Middle East source for Japan, which depends on the Middle East for 90 per cent of its crude oil imports. There is no change in maintaining the interests of Japanese companies in it.”
Industry minister Koichi Hagiuda, August 2022
"...the situation in the industry has indeed gradually stabilised. All major Russian manufacturers have been increasing the load on their assembly lines. This includes AvtoVAZ, GAZ, KAMAZ, UAZ and Ural. The Tula unit of China’s Haval is also boosting production."The Russian government focus has shifted to ensuring the economic viability of small businesses producing components that fully substitute in quality and price for the components that can no longer be imported from overseas. Component manufacturers will receive preferential loans from government, and viability bolstered by "demand support programs". The manufacturers of "gas engine equipment" will be subsidised. I'm not sure if this means 'gasoline engine' or equipment to allow vehicles to run on compressed natural gas (or hydrogen gas, for that matter). On the consumer demand side, programs of preferential car loans - including to miliitary personnel, families of mobilised conscripts, and pensioned former military and low-cost lease options are being introduced to make car ownership affordable for Russian families. In May 2022 12,000 vehicles (all types) were manufactured in Russia, but by October that number had quadrupled - primarily due to state subsidies helping offset increased car prices.
Deputy Prime Minister – Minister of Industry and Trade Denis Manturov 16 November 2022
"Should the executives at Gazprom Germania “carry out the procedure of the voluntary liquidation” as ordained, the long-term gas contract held by German companies with the German subsidiary as their partner was at risk.
These long-term contracts are highly lucrative, as they were agreed upon before the record spike in gas prices and are usually hedged against massive price swings to allow for stable business planning.
As per German law, any transfer of ownership in “critical” infrastructure requires the go-ahead of Habeck’s ministry, which was not given. Fearful of additional attempts to interfere with the subsidiary, the German government did something it had never done before.
“I’ve lived to see Germany nationalise Russian companies operating in Deutschland, what a time to be alive,” commented legal scholar Jakub Jaraczweski.
Gazprom Germania will be steered by the federal network agency until 30 September 2022, although the government has yet to comment on what will be done with the subsidiary of the Russian state company afterwards."
Euractiv.com 5 April 2022
"Will there be any political decisions that run counter to contract clauses? We will ignore them and suspend deliveries if these decisions are inconsistent with our interests, our economic interests in this case. We will then stop supplying gas, oil, coal, or fuel oil, suspend all our deliveries and fully comply with our contractual obligations. Notably, the people who are trying to impose things on us are not in a position to dictate their will to us. Let them come to their senses."The German government was of course aware oil from the Druzhba was likely to be shut off. The German Chancellor (Scholtz) said they had "gamed" this eventuality, and that Germany was negotiating seaborne oil supply from Khazakhstan, and oil imported through Polands Gdansk oil terminal. Germany has an oil terminal at Rostock port, and there is an oil pipeline going directly to Schwedt. But the oil terminal at Rostock can only handle about 9 million tonnes of oil (2016), only relatively small 'aframax' tankers can be handled (at 6 berths), and the pipeline to Schwedt has limited capacity (about 7 million tons per year). Rosneft says the refinery capacity would be cut in half in if supplied only from Rostock via pipeline. Even if chokepoints can be overcome, this will be expensive oil, it is still imported oil, and it has to be of a certain grade (equivalent to medium sour Urals) to suit the Schwedt refinery configuration. Apart from Khazakhi oil, the needed 233,000 barrels of the correct grade of oil a day are 'planned' to come from Norway, Saudi Arabia, UK and the U.S...
Vladimir Putin 7 September 2022
"We are the largest North American producer by volume in the rail and large diameter pipe markets. We also hold leading positions in the West Coast plate as well as the Western Canada oil country tubular goods and small diameter pipe markets.
Our diverse range of manufacturing capabilities allows us to produce a wide array of specialty steel products: plate, coiled plate, welded and seamless pipe for oil and gas applications, rail and wire rod and bar. We take a dynamic approach to manufacturing, using the geographic accessibility and production flexibility of our facilities to respond quickly to changes in the market for maximum efficiency and cost savings. Our Product Technology Centers in Pueblo and Portland and our Research and Development complex in Regina enhance our ability to develop high strength steel products for the most demanding applications."
Evraz North America
"ENA [Evraz North America] will be the first North American line pipe producer qualified for high-pressure, 100 percent hydrogen pipeline transportation.
Testing is being conducted at a RINA-CSM S.p.A, a leading independent European research center specializing in hydrogen and fracture mechanics. All pipe samples are produced in Regina, Saskatchewan and made from steel at ENA Regina Steel, the Company’s EAF-based steel mill.
Hydrogen is a core component of ENA’s alternative energy strategy, which also includes carbon capture, utilization and storage (CCUS) and geothermal energy."
Evraz, 11 July 2022
"Russia paved the way into outer space for the entire world, and I believe that every Russian citizen is proud of our space achievements. Many generations of Russian engineers and designers created a tremendous scientific and technological basis, and it is necessary to convert this basis into specific services that the Russian economy needs today.The quote above came in response to the Russian President asking the DG of Roscosmos (the Russia state-owned space corporation) "What aspects should we focus on?" Taking the comment to it's logical conclusion, the primary goal is to create a reliable system of space-based communications and data transmission services to Russians, whether citizens, industry, or military. In other words, to continue the work to create a self-reliant Russia, free from interference from the west.
The sector is facing a difficult situation, and the main task of my colleagues and myself is to increase, rather than reduce, specific standards. We need to provide the Russian economy with essential space services, in the first place. This includes navigation, communications, data transmission, meteorological and geodetic information, etc. These are the services that are in greatest demand today, and it is impossible to imagine our everyday life without them."
Yury Borisov, Director General of the Roscosmos State Corporation 26 July 2022
"Angara-A5M launch vehicle in 2028, General Designer of the Energia Rocket and Space Corporation Vladimir Solovyov said.
"If the decision to build it [a space station] is made before the end of the year, the first stage will begin in 2028 with the launch of the Research and Power Module by the Angara-A5M carrier rocket... The interlinked node and airlock modules will be launched by the Angara-A5M launch vehicle from the Vostochny [Cosmodrome]," Solovyov said in an interview with the Russian Space magazine, an official publication of the Roscosmos state corporation.
The module will have to be "retrofitted with various systems, including a gyrodyne block, to be able to use it for several years as the main module," he said.After that, a basic unit should arrive at the station, making it possible for the station to have four cabins and two toilets, Solovyov said."
Interfax 26 July 2022
"... the head of the Russian space program has demanded that the British government divest its shares in OneWeb and that the broadband satellite operator not provide services to foreign militaries in order to launch a new batch of spacecraft...In November 2021 OneWeb and Intelsat revealed that they had demonstrated the constellation’s capabilities to representatives of the U.S. Army and Department of Defense."
Parabolic Arc 2 March 2022
On March 4, Rogozin ordered a stop to preparations for the launch of a Soyuz-2.1b rocket carrying OneWeb satellites from the Baikonur Cosmodrome. The decision was made because "OneWeb has disobeyed our lawful demand to provide necessary information as to whether or not the system will be used for military purposes for the benefit of the Pentagon and military agencies of NATO member states."
Interfax 13 April 2022
"all installation and launch preparations to be completed by the end of the year, as set forth in your executive order."The site for the Vostochny Space Launch Center was chosen to avoid the sort of problems mentioned above, and because it is closer to the equator (allowing a greater umber of payloads to be put into orbit), and because falling booster stages will land either in the sea or on Russian territory, removing the need to come to agreement with other countries with regard to falling stage-components. In addition, the airfield needed to receive the heavy lift cargo planes needed to fly in the assembled rocket and satellite components from West Russia is nearing completion.The benefits are obvious.
Yury Borisov, Director General of Roscosmos State Space Corporation, 19 January 2023
"We are entirely clear on how to proceed. The main conclusion is not to rely in our plans on the West as a negotiating partner. It has proved ...it is ready to violate its own principles and resort to outright theft and robbery. The sanctity of private property and the presumption of innocence...have been upended and crudely violated.
We have already made our conclusions. We will rely only on ourselves and our trustworthy partners, the overwhelming majority of which are not part of the former “golden billion.”
We have enough buyers of our energy resources. We will work with them. Let the West pay much more than it paid to the Russian Federation and let them explain to their own people why they have to be made poorer."
Sergey Lavrov 11 May 2022
"At the peak of Russian energy supplies to Europe not a single Western analyst was trying to scare Russia about its dependence on the EU. Just the other way round, the US warned Europe against hydrocarbon supplies from our country in a bid to replace them with its own shale oil and gas. Now that we are re-orienting our exports to Asia, they suddenly decided to take care of us and give us a “friendly” reminder about potential dependence on China.
Thanks for the advice, but we will use our own judgment and rely solely on national interests and our reliable Chinese friends who are tested by time and real-life actions.
Over the past two years, bilateral trade was growing by a third annually and reached a new record-high level of $185 billion in 2022. We supply each other, on a mutually beneficial basis, with the products that our countries need. Importantly, over half of the settlements between our countries are denominated in national currencies. Our cooperation is not limited to trade, but covers a very wide range from energy and industry to agriculture and space exploration.
We have developed a relationship of positive interdependence with China in trade and economic ties, and this outcome of our work cannot but satisfy us."
Sergey Lavrov 4 April 2023
"China is our biggest trade and economic partner among foreign countries, with more than $100 billion in mutual trade.China, like India, is a great trading nation. Developing trade between countries with language, cultural, and legal differences is not easy. It is an area where expertise and experience counts. Businesses 'lubricating' trade between the countries will expand, and with it, further business opportunities. Small and medium sized businesses are the major employers in virtually all countries of the world. The west's sanctions have accelerated China - Russia trade contacts, the build up of trust-based relationships.
And that does not include major projects related to oil, gas, aviation, machine engineering, nuclear energy and other industries.
But in today’s conditions, small and medium-sized businesses have many opportunities to join a great variety of projects, on both sides."
Vladimir Putin April 20, 2022
"It is clear that all kinds of restrictions imposed at the height of the anti-Russia frenzy have led to spikes in energy prices and have destroyed the existing logistics chains, which has affected the economy and foreign trade of regional countries. The situation is completely different in those regional states which opted to maintain normal relations with Russia and refused to join the sanctions war, despite unprecedented pressure by Western countries.
Positive dynamics was reported in the first quarter of 2022 in Vietnam, Malaysia, Indonesia (GDP growth over 5 percent) and the Philippines (over 8 percent). Cambodia expects to report similar yearend figures in 2022. Export-import transactions went up in Indonesia (38 percent), Malaysia (23 percent) and Vietnam (15.6 percent).
We have taken notice of our ASEAN partners’ growing interest in Russian oil, fertilisers and food. Statistics show that Russian exports to these countries have grown in January-March 2022. For example, our exports to Vietnam reached $971 million (up 48.2 percent year on year).
The delivery of our chemical and foods products to Thailand has increased by 54 percent and 185 percent, respectively. We can report an increase of bilateral trade with Indonesia (up 89 percent), Malaysia (up 38.5 percent), Myanmar (up 128 percent) and Laos (up 50 percent). Draw your own conclusions.
Foreign Ministry Spokeswoman Maria Zakharova 8 June 2022
"True, there have been some good shifts [authors note - in international cooperation against covid]. One of them is the United States’ return to the World Health Organisation (WHO). Some hotheads in Washington believe that, now that they have returned, they will make others do their bidding.
There are fewer than 50 Chinese people in the WHO Secretariat, 25 Russians, over 200 Americans, and more than 2,000 NATO representatives. The past US administration said China was manipulating the WHO. That is not true. Otherwise, we are admitting the complete helplessness of 2,000 NATO members who should be the majority in the WHO Secretariat.
Nevertheless, there are some positive results though. This problem has been recently considered at the UN General Assembly and the Security Council. It is important now to focus on equitable collaboration within the WHO. Besides the attempts at carrying out “soft coups” and establishing their own rules in the organisation, hardly based on consensus, an idea has been suggested to move the main decision-making on global health policies outside the universal organisation."
Sergey Lavrov 19 Feb 2021
"April 1, 2022, '“Sputnik nasal vaccine, world’s 1st registered СOVID vaccine in nasal form, is especially effective vs. highly transmissible Omicron & other emerging variants not only in terms of protection from infection but alsо at preventing transmission." According to the document published on the state register of medicines, the nasal spray version of the Sputnik V vaccine is to be applied in two doses according to the document published on the state register of medicines, reported CNA on October 13, 2021."Obviously, if this 'no needle' technology proves out, this will prove a popular vaccination choice, for it's protective quality as well as ease of administration, especially for children. Whether it is able to pass WHO is a very different matter, considering the politicised nature of the organisation.
Precisionvaccinations.com April 26 2022
"I would like to emphasise that only domestic parts and components were used in creating the Sarmat missile. This will, of course, facilitate its production by defence industry enterprises and expedite its use in the Strategic Missile Forces."
Vladimir Putin, April 18 2022
"Just now during my conversation with your executives, one of them said, “We feel more stable when we stand on our own two feet, two supports. And the second one is civilian equipment.” Yes, the task is to reach 30 percent – 30 percent of what defence companies produce should be civilian. In 2021, the figure was 27 percent, which is close to the goal of 30 percent
Probably, now the share of combat equipment is growing but our requirements are also on the rise. However, we will resolve this task of producing civilian equipment gradually. There will be military orders, while also growing the civilian side."
Vladimir Putin 18 January 2023
The Motor Sich
manufacturing factory in Zaporizhzhia Ukraine makes engines
(turbo-prop, turbo-fan and turbo-shaft) for drones, airplanes,
helicopter engines (including engines for several of Russia's
military helicopters), and marine gas engines, among other things.
It's main market was Russia, but that ended after the coup in
Ukraine in 2014. As a result, Ukraine looked for new markets and
more capital and found some of what they wanted in China's partly
Skyrizon Aviation. Skyrizon bought a 41% share in Motor Sich in
2017, with 250 million of new capital to be injected, and an
assembly and servicing plant in China to be opened. USA then
'sanctioned' Motor Sich company, resulting in the capital
injection and China facility being scotched. Some bizarre
dodgy share-issue dealings by Ukraine almost gave Skyrizon a
controlling shareholding. This was blocked
by the Ukraine government. Ukraine announced in March 2021
that it intended to unilaterally
nationalise Motor Sich and 'compensate' the China-based
shareholders. Skyrizon Aviation placed a suit
against the Ukrainian government for 4.5 billion at the Permanent
Court of Arbitration in the Hague. In the meantime, Ukraine
explored Turkiyes interest in buying a 50%
stake in Motor Sich.
"High-precision long-range air- and sea-based missiles in Zaporozhye have destroyed the production facilities of Motor Sich plant, which produced aircraft engines for combat aircraft of the Ukrainian Air Force, including UAVs"
Russia Ministry of Defense, 26 May 2022
strike ended production of the Al-450 turbo-prop engine used
in the Turkish Baykar
Bayraktar drone, currently in use by Ukraine against Russian
forces (assisting the two newly independant Republics to remove
Ukrainian forces from their territory). The AI-450
engine cost about $250,000 USD. (Russia has destroyed a number of
Baykar Bayraktar drones entering Donesk and Lughansk, and also
destroyed facilities storing these drones.
"According to objective laws governing the economy, it is obvious that in this ongoing sanctions frenzy, if I may say so, the European Union and its people will inevitably face consequences that will be hard to reverse. The same applies to the world’s poorest countries, which are already at risk of hunger.
Let me emphasise that full responsibility for all this lies squarely with the Western elites, who are ready to sacrifice the rest of the world for the sake of preserving their global dominance."
Vladimir Putin, 12 May 2022
"The euro and dollar exchange rates for the first time in 20 years caught up. Predictions about the onset of a systemic crisis in the euro area are beginning to come true.
First, the EU members shot themselves in the head with a sanctions pistol. Now they are reaping the bitter fruits of a decline in production, supercritical food inflation, the loss of competitiveness of their goods and the expectation of winter in ice dwellings without our gas.
In global terms, this is confirmation of the extremely ill-conceived nature of the sanctions against Russia. Sanctions don't work. Sanctions are harmful to the Europeans themselves. The euro is weakening."
Dmitry Medvedev deputy chairman of Russia's Security Council 12 July 2022
"Today's exports bans are worth €10 billion and target areas in which Russia is vulnerable, e.g. quantum computers and advanced semiconductors. This will degrade Russia's technological base and industrial capacity and prospects (beyond purely military) in the medium term."
EU press release (8 April 2022)
Today's import bans are worth €5.5 billion and will cut revenue streams for Russia and its oligarchs, on products from wood to cement, from seafood (e.g. caviar) to liquor (e.g. vodka). In addition, loopholes between Russia and Belarus have been closed as far as possible by mirroring the import bans in place for Belarus, as well as aligning – where feasible – our restrictions and import bans with those of our partners, notably the UK and the US."Russia has been denied €5.5 billion of export income.
"Incidentally, the global crisis is largely caused by these sanctions. Those who conceived them proceeded from short-sighted, exaggerated political ambitions and Russophobia, at the expense of their own national interests, their own economies and the wellbeing of their people, as primarily demonstrated by the rising inflation in Europe. In some countries, the annual rate of inflation is approaching 20%, while prices in the eurozone increased by over 11%, on average."The consumer price index for goods (excluding energy - gas for home heating, diesel, gasoline etc) in the eurozone spiked to 7% in November, 2022. With energy included, the CPI was 10%, the second worst since the eurozone started collecting data in 1997. The Baltic countries (Latvia, Estonia, Lithuania), which once relied on Russia for energy supplies, had CPI inflation of over 21% in November 2022.
Vladimir Putin, 12 May 2022
"Recent events have laid bare the extent to which critical supplies depend on stable global conditions… In response, governments are legislating to increase supply security, notably through the Inflation Reduction Act in the US and the strategic autonomy agenda in Europe. But that could, in turn, accelerate fragmentation as firms also adjust in anticipation. Indeed, in the wake of the Russian invasion of Ukraine, the share of global firms planning to regionalise their supply chain almost doubled --to around 45%-- compared with a year earlier. This “new global map”… is likely to have first-order implications for central banks.
One recent study based on data since 1900 finds that geopolitical risks led to high inflation, lower economic activity and a fall in international trade… ECB analysis suggests similar outcomes may be expected for the future. If global value chains fragment along geopolitical lines, the increase in the global level of consumer prices could range between around 5% in the short run and roughly 1% in the long run."
Christine Lagarde, ECB President, 18 April 2023
" Russia has already suspended gas supplies to Poland, Bulgaria, Finland, the Netherlands, Denmark and to some extent Germany because they refused to comply with the new payment system."
Interfax, 2 June 2022
First, Germany and France, in cahoots with the Ukrainian government, deliberately sabotaged every step of 8 years of diplomatic effort by the Russian Federation in order to buy time to arm and NATO-train the Ukrainian armed forces to launch an attack on the rebel Ukrainian provinces. And Europe sanctions Russia.
"Expectations by some EU countries that LNG would quickly substitute Russian pipeline gas are self-deceptive. Global LNG demand will exceed supply in 2022 (436 million tonnes vs. 410 million tonnes), new projects will not become operational until 2024, while current infrastructure will be unable to ramp up production by more than 10.6 million tonnes (15 billion cubic meters) per annum."
Russian Ministry of Foreign Affairs 9 June 2022
"The spike in gas prices was also driven by the systemic strategic mistakes of the European Commission, which has pursued the irrational policy of abandoning long-term gas contracts in favour of spot contracts (in September 2021 the price per 1,000 cubic meter exceeded USD 1,000 and reached the record high of USD 3,600 in March). Meanwhile, according to experts, Russian pipeline gas in Q1 2022 would have been 40% cheaper for Europeans than spot prices. It is important to note, that, in line with the EU energy model, whatever the buying price of Russian gas, EU companies sell it to downstream to power generators and companies (and therefore to citizens) at spot prices, making super-profits. As a result, generating companies go bankrupt, energy shortages are preprogrammed, and, consequently, prices for regular consumers grow. Yet the EU authorities fail to explain this to citizens."
Permanent Mission of the Russian Federation to the European Union 3 June 2022
"...we are proposing today to tighten our hard-hitting EU sanctions against the Kremlin, enforce them more effectively and extend them until January 2023. Moscow must continue to pay a high price for its aggression.”
Ursula von der Leyen, President of the European Commission 15 July 2022
"From the early days of gas supplies to Europe in the 1960s the USSR and, subsequently, the Russian Federation proceeded from the premise that energy cooperation should never become contaminated with politics. Following the escalation of anti-Russian rhetoric in some EU quarters in the 2000s we repeatedly urged the EU to refrain from politicizing energy cooperation, highlighting the mutually beneficial nature of this partnership which brings our economies closer and enhances security in Europe.The United States is planning to replace the Russian pipeline gas with it's own burgeoning exports of US LNG. (At the expense of their existing Asian customers.) But this gas is much more expensive. As a result, European businesses are fleeing to the USA where energy is cheaper.
Heeding calls by the EU and seeking to increase mutually beneficial cooperation with our Western neighbours, Russia has over the past decades embarked on new domestic oil and gas projects while constructing pipelines for carrying these products to Europe. To this end the EU-Russia Energy Dialogue was inaugurated in 2000 and its internal well-developed composition established. The “EU-Russia Energy Cooperation until 2050” roadmap was adopted in 2013. Work was ongoing to ensure the convergence of energy standards and discuss the feasibility of coordinating energy strategies
Even in the course of gas “conflicts” between Russia and Ukraine in 2005-2006, 2008-2009 and after 2014 Russia invariably demonstrated its reliability and guaranteed an uninterrupted energy supply in accordance with its obligations. At the Gas Exporting Countries Forum in Doha in February 2022 the Russian side reaffirmed its commitment to continue exporting natural gas to international markets, including to Europe.
By disseminating baseless claims about Russia’s supposed plans to terminate hydrocarbon supplies to EU, our adversaries in the EU and across the ocean seek to pull Russia away from Europe, sever the ties that bind us, even in spite of the enormous damage this will cause to EU economies and its citizens. Unfounded allegations that Moscow is using energy supplies for political aims are part and parcel of the fact-twisting information warfare unleashed by the EU and the US, the latter seeking to increase its LNG exports to the EU.
There are simply no alternatives to Russian energy resources in the European market in the short term. Should their supplies be restricted, immense difficulties for the EU’s economy and citizens will follow. Some EU capitals are well aware of the fact. Hence, amidst public calls to renounce Russian energy resources, some countries are in fact increasing natural gas shipments from Russia to fill their underground storage facilities.
Thus, it is the EU which, by imposing or planning to impose further unilateral sanctions against Russian energy supplies, is politicizing the energy sphere, attempting to use interdependences between energy consumers and suppliers as an instrument of political pressure, while damaging its own economy and the well-being of its citizens and aggravating what is already a precarious situation in the global energy markets."
Permanent Mission of the Russian Federation to the European Union 3 June 2022
"Nor should we forget that Europe is now doing more than the United States. President of France Emmanuel Macron flew to Washington to try to convince US President Joe Biden to make concessions to Europe during the implementation of the Inflation Reduction Act that creates unprecedented advantages for US-based industrial companies. The French Minister of the Economy has repeatedly noted the fact that [US] industrial enterprises pay four times less for gas than their French partners. This act promotes the deindustrialisation of Europe because industrial companies will rush to obtain subsidies and more privileged terms in the United States."
Sergey Lavrov December 7 2022
'Siemens Energy has withdrawn its services and maintenance support for Russia in order to comply with Western sanctions ..Siemens Energy said in a statement to Reuters that the turbines were manufactured in Canada and need to be returned regularly for maintenance. One of the turbines is currently being overhauled in Montreal, Siemens Energy added.Germany must fill it's gas stores in summer before the high-demand season in winter (they are at about 71% full in early August 2022). The German firm Siemens provides the compressors (built by Rolls Royce) that help impell gas down the Nordstream pipeline from Russia to Germany. The compressors at Portovaya are critical, as they are the last compressors before the very long subsea section of the pipeline. The compressors are repaired and overhauled at Siemens plant in Montreal, Canada. However, the sanctions now prohibit any Siemens for fulfilling its contract to do repair and support work for Gazprom (and in early August 2022 Siemans flagged it's intentions to pull out of Russia entirely). The Gazprom managed Portovaya compressor station was ordered by the Russian regulatory watchdog to idle several turbines as they had now exceeded their scheduled overhaul deadlines. As a result, gas supply to Germany was subjected to erratic fluctuations, and supply at mid June was down to 100 million cubic meters a day, down from the normal 167 cubic meters.
“Due to the sanctions imposed by Canada, it is currently impossible for Siemens Energy to deliver overhauled gas turbines to the customer ......Russian technical compliance watchdog Rostekhnadzor ordered the facility to idle several turbines in Portovaya because of “technical faults and the expiry of overhaul deadlines”, according to Gazprom.'
Upstream online 15 June 2022
"the Association of German Chambers of Commerce and Industry (DIHK) said on Monday. "A total of 16% of industrial companies are forced to respond to the current energy situation by reducing production or partially abandoning some areas"...energy-intensive businesses, where readings are twice as high as the average across industry, are hit particularly hard, with a total of 32% of energy-intensive companies forced to cut all or part of their production...many companies had yet to purchase significant volumes of gas for the current year, and only half had already covered their needs through contracts.The Russian government previously warned the German government that if the installation of the Nordstream 1 pipeline compressor was delayed, then some of the gas set aside for Nordstream 1 will be diverted to filling Russian domestic winter stores. Nordstream 1 would run on half the previous volume, presumably until Russian stores are full. At July 26, the newswires claim Nordstream 1 will be reduced to 33 million cubic meters a day from July 27 2022. Since then, on September 26, 2022, the Nordstream 1 pipeline has been sabotaged. One of the 2 pipes has been destroyed (Nordstream 1 has an 'A' and a 'B' pipe), and Russia has devised reasons not to supply gas via the remaining undamaged pipe. Worse, the Russian gas transitting Ukraine has been disrupted by the conflict, and instead of 40 billion cubic meters a year, as of October 2022 was only supply Europe with 15.5 billion cubic meters a year.
Sputnik 25 July 2022
"Actions by Kiev authorities are the only obstacle in the way of commercial vessels entering and departing from Black Sea ports of Ukraine. Upon Kiev’s decision approximately 420 naval mines of an outdated design have been placed in the basin of the Black Sea and the Sea of Azov. Due their technical inadequacy these mines are coming off of their anchors (cables) and are thus putting all vessels of the Black Sea states at risk. The Ukrainian origin of the naval mines has been confirmed, their precise location is unknown. Earlier some of these mines were cleared near the coast of Romania and Turkiye. These explosive devices are frequently uncovered near the coastal strip of the Odessa region....
...maritime corridors are being opened on a daily basis from 08.00 to 19.00 (Moscow time) in the Sea of Azov (length 115 miles, width 2 miles) and the Black Sea (length 139 miles, width 3 miles).Their coordinates and details have been widely circulated among the international community. In the Mariupol area this corridor is fully operational.
In the Odessa region it is the responsibility of the Ukrainian side to ensure the safety of vessels leaving ports and proceeding to the assembly area. Kiev avoids liaising with representatives of foreign states to which the vessels belong in order to ensure their safe passage to the assembly area.
The humanitarian corridor in the Black Sea has been open since 27 March 2022"
Russian Foreign Ministry press release 3 June 2022
"Currently, the Joint Coordination Centre (JCC) in Istanbul is indeed experiencing difficulties with registering new vessels and conducting inspections. They arise solely as a result of actions by Ukrainian representatives as well as UN officials who are apparently unwilling or unable to stand up to them.
Having finally discarded not only humanitarian considerations, but even elementary human decency, they are striving to make the most out of the Black Sea Initiative stooping to anything from outright abuse of the rules of procedure to demanding bribes from the ship owners, doing all of the above for the sake of maximising commercial profits.
As a result of these actions, the share of recipients of Ukrainian food in poor countries has fallen to the lowest level (out of 28.3 million tonnes of exported grain, those countries received only 742,000, or 2.6 percent).
The owners of incoming ships who refused to pay a bribe are forced to wait for registration for many months. Outgoing dry cargo ships that have paid also have to wait for the inspection, because once they receive the money the Ukrainians lose interest in them.
This situation stems from the fact that in line with the current practices (importantly, not the rules of procedure), the process for obtaining applications for registration under the Black Sea Initiative is in the hands of the Ukrainians, while the UN is in charge of the inspection plans (for the entry and exit of ships).
Under these circumstances, the registration of ships, which Russian experts carry out strictly within the approved rules of procedure and their respective powers, is the only way to restore order to some extent and to build a fair and transparent basis for participating in the initiative.
However, our proposal to add to the registration lists the ships which will then sail to the countries in need, in particular Africa, as well as those that have been waiting in line for more than one month, was met with hostility by Ukrainian representatives. Kiev was not ready to jeopardise its commercial corruption schemes.
As a result, the Ukrainians first blocked the registration process having disagreed with our proposals, and then suspended all inspections, including inspections of outgoing ships (27 ships with 1.2 million tonnes of cargo on board). It is clear what they are banking on: launching a propaganda machine and playing the food card with the help of Westerners and the UN.
Brussels and Washington wasted no time: first, the High Representative of the EU for Foreign Affairs and Security Policy, Josep Borrell, and then US Secretary of State Antony Blinken announced that Russia allegedly broke its promises to the countries in need of grain and blocked 50 ships in the Black Sea.
The EU did not stop there and expressed a belief that is striking in its absurdity and amateurishness: the sanctions imposed on Russia are so well calibrated and balanced that they do not interfere with Russia’s agricultural exports, an example of which is the supply of Russian grain under the Black Sea Initiative.Unfortunately, Brussels still has not figured out that only Ukrainian food is being exported across the Black Sea under the grain deal."
Russian Foreign Ministry Spokeswoman Maria Zakharova 19 April 2023
"Russia expects to have a good wheat harvest this year, which will allow our country to offer 25 million tonnes of grain for export from 1 August 2022. Our capacity for exporting fertilizers from June to December 2022 will amount to at least 22 million tonnes (20% of global consumption over this period).
Since the launch of the special military operation Russia has continued to provide humanitarian assistance to countries in need through bilateral and multilateral channels. Via the UN World Food Programme Russian food aid was delivered to Lebanon, Tajikistan, Kyrgyzstan, Cuba, Yemen and Sudan. On a bilateral basis assistance was provided to Sudan and Cuba - 20,000 tonnes each.
Meanwhile, illegitimate unilateral restrictions imposed by the EU, the US and their satellites remain the main obstacle to normal export relations between Russia (and Belarus) and buyers of grain and fertilizers."
Russian Foreign Ministry press release 3 June 2022
"The food market has been disrupted most severely. I said this at the recent St Petersburg International Economic Forum, and I want to say it again: they printed money, distributed it in their wealthy countries and, like a vacuum cleaner, started scooping up all the food from the global market. Only recently, the United States was a food exporter – a net exporter – but now, I think, their imports are about US$17 billion more than their exports. This is a dismal indicator for food markets around the world.
Meanwhile, the soaring cost of essential agricultural commodities such as grain has hit the developing countries and markets the hardest as this is where bread and flour are vital for the survival of most of the population.
I think it was French Queen Marie Antoinette who, looking over a crowd of starving citizens from her palace, reportedly said with indifference: “If they have no bread let them eat cake.”
This is the same cynicism that certain Western countries are now showing by destabilising the global production of agricultural products and dealing with this matter by restricting, for example, supplies of Russian and Belarusian fertilisers and impeding exports of Russian grain to world markets."
Vladimir Putin June 24 2022
"Incidentally, the Americans have adopted sanctions on our fertilisers, and the Europeans followed suit. Later, the Americans lifted them because they saw what this could lead to. But the Europeans have not backed off. Their bureaucracy is as slow as a flour mill in the 18th century. In other words, everyone knows that they have done a stupid thing, but they find it difficult to retrace their steps for bureaucratic reasons."
Vladimir Putin June 17, 2022
"Cooperation in the chemical industry and the production of environmentally friendly mineral fertiliser is progressing at a good pace. In 2021, Russian companies supplied almost 10 million tonnes of fertilisers worth about $3.5 billion to the Brazilian market."
Vladimir Putin 16 February 2022
"...Russia provides a third of the palladium metal used in sensors and memory products produced by U.S. companies. Russia is also a “crucial” source of C4F6 (hexafluorocyclobutene), which several U.S. suppliers buy and purify for advanced node logic device etching and advanced lithography processes for chip production, Techcet wrote in advance of the invasion as Russia build up troops along the border of Ukraine in recent weeks."
Fierce Electronics 25 February 2022
"Ukraine makes more than 90% of the high-grade neon in gas-phase lasers used to make chips produced by U.S. semiconductor companies. The gas is a byproduct of Russian steel manufacturing which is purified in Ukraine, said market research company Techcet. Neon prices soared during the Russia-Ukraine conflict in 2014."The two largest steel plants in the world are (were) the Soviet-era Azovstal and Zaporizhstal steel plants in Ukraine. The Soviets designed the Azovstal steel plant to double as a hardened nuclear-resistant military HQ. The deep below-ground network of facilities was very large, and became HQ for the combined Ukraine-NATO attack on the Donesk and Lughansk Republics, with Russia's Crimea territory to follow. Russia assisted the Republics in their attack on the plant - quite a big job, as the above ground part is around 4 square kilometers. The
Fierce Electronics 25 February 2022
"New production of high-purity neon used in the production of microelectronics for smartphones, card and other equipment has been launched in the Bauman Moscow State Technical University in Russia.
It is planned to reach a production level of some 70,000 cubic meters of neon a year by the end of 2022, which will increase Russia's share on the global market of this inert gas to 10% (the current share is one percent), Russian Deputy Prime Minister and Industry and Trade Minister Denis Manturov said at a meeting between Russian President Vladimir Putin and the government on Monday."
Interfax 26 July 2022
“If we talk about the income that Finland received from international tourism, then the share of Russians in it was as much as 19%. This is a lot. Annual losses this year will amount to more than 600 million euros [$640 million]. If we add to this the difficulties with the Asian market due to the closing of the sky over Russia, we will lose 2 billion euros [$2.13 billion] every year”
Kristiina Hietasaari - head of 'Visit Finland'
"According to our data, in 2022, trade between Russia and the UAE increased by 68% and reached $9 billion. This is a record level in the history of relations between our countries."
Denis Manturov, Deputy Prime Minister and Industry and Trade Minister 21 February 2023
"Everyone knows all too well our misgivings regarding the approaches of the collective West, or whatever you call it – NATO-centricity or Washington’s satellites, it can be framed in all kinds of ways.Diplomats use precise language. What is deliberately left unspoken is sometimes as important as what is said. Ambiguous hints are given. Russian diplomats, in particular, are masters of "someone" "somewhere" did "something" "somehow". What needs 'revision'? What is 'the global track'?
This deals with NATO’s aggressive expansionist policy,
the absence of security guarantees for our country,
conditions undermining our security,
the destructive unilateral, illegal and illegitimate sanctions and restrictions,
failing to respect Russia’s interests or take them into consideration in all spheres, including security, economic, financial and humanitarian matters,
endless lying and cheating when discussing subjects that matter for the collective West just as much as they are important to us (although we have been unable to engage in a sincere, frank and pragmatic conversation on many of these subjects lately),
their inability to deliver on their own promises for no particular reason or offer an adequate explanation.
We have discussed this at length and convened all kinds of negotiating formats throughout the second half of 2021. President Vladimir Putin, Foreign Minister Sergey Lavrov and Defence Minister Sergey Shoigu have regularly raised these subjects. All Russian ministers, including the ministers of sport, culture, finance, industry, etc., have discussed these matters from all possible angles.
We need to revise something in the global track so that we do not have to think about rebuilding anything.
I believe that we need to address the root of the problem instead of thinking about minimising the damage it caused when there is nothing left in terms of substance."
[...] We have always believed that every state has the right to its own independent foreign and domestic policies, economy, etc. Countries can create voluntary unions on a mutually respectful footing. If they want their integration to be guided by other principles, this must be something they decide on their own. Whenever countries decide to subordinate their national interests to a supranational structure, they must do so voluntarily.
A state can cede part of its sovereignty if it believes that it can benefit from this. This can include giving up its own armed forces and merging them into a military bloc that would protect the country in question. This may be the best option for it. This way, they can spend their defence budgets on their domestic agenda instead. If they are doing this voluntarily and this is what the people want, and if all the required legal procedures are fulfilled, and referendums held, so be it.
However, what we are seeing is the opposite of that."
Foreign Ministry Spokeswoman Maria Zakharova 8 June 2022 [list formatted by Laurie]
"As many as 11,160 sanctions have been imposed on Russia. No other state has ever faced so many challenges. Therefore, for us it is a moment of truth. We must see our work differently and, as you rightly said, today we have only one party, which is our country. The interests of the Motherland must be superior to any party programmes, and we aspire to achieve that."
Vyacheslav Volodin, Speaker of the State Duma (Parliament) July 7 2022
"...during four out of the past ten months, we have had to live with a military-political operation, which is crucial from every point of view. We fully support your decision to this effect, because what is at stake is the survival of the Russian world. We must stop US globalism, which is attempting to dictate its terms to the rest of the world. Moreover, we must do whatever we can to prevent Nazism and Banderaism from spreading across Europe.
Last time, when fascism and Nazism engulfed the whole of Europe, mankind paid the cost of 71 million lives, 27 million of which were the lives of the best sons and daughters of the great Soviet homeland.
I made it a point to visit the economic forum in St Petersburg, where I followed closely your remarks and jotted down 26 statements. I felt, perhaps for the first time, that we are on the same page for every issue you identified."
Gennady Zyuganov, Head of the Communist Party of the Russian Federation July 7 2022
"I must say that today is not the time for party differences. Today we must consolidate society and remove rather than draw dividing lines between political forces with a view to supporting the national economy and social obligations."
Leonid Slutsky, Head of the Liberal-Democratic Party of Russia July 7 2022
Le Drian says there is willingness for dialogue. No there wasn't. France did not respond to Russia's direct questions on it's understanding of the concept that one state must not gain its security at the expense of another. As for the Americans being 'specialists in dialogue with Russia', what a joke! The opposite is true. Americans are specialists in hectoring, lecturing, and monologues.To his credit, Le Drian is correct about the Europeans being experts in sanctions. Far beyond USA. In other words, Europeans are experts in being patsies, destroying themselves for Americas benefit. Maybe the lightbulb has finally gone on in Le Drian's brain. Eight month's on...
So we need to talk to have a strategic stability, to have relational stability between the Europeans and the great neighbor. And all of the initiatives aiming at talking with a willingness of dialogue are there.
And they’re not – the Americans, while they’re specialist in dialogue with Russia, and the Europeans are special experts in sanctions, we need both, and this is what we’re doing.
French Foreign Minister Jean-Yves Le Drian at a joint press conference with US Secretary of State Tony Blinken June 25, 2021
Around 400 Russian diplomats have been expelled from 28 countries since the launch of Moscow’s military operation in Ukraine, the Russian Foreign Ministry revealed on Monday. According to Deputy Foreign Minister Evgeny Ivanov, diplomatic expulsions became the preferred method of the West even before February 24The EU has taken similar destructive actions, although they lagged a little behind their master (the EU actions are dictated by the political doctrines of US and UK). I suspect they are now re-thinking their relationships, not just with Russia, but with the puppet-master.
RT 25 April 2022
“... everyone tends to understand that this is a trend of time, and sooner or later, in one format or another it will be carried out... But, once again, it should be legal, correct, in accordance with the rules that will be formulated...The question is when it will happen, how it will happen and how it will be regulated. Now both the Central Bank and the government are actively engaged in this.”
Denis Manturov, Minister of Industry and Trade of the Russian Federation 18 May 2022
"Unfortunately, I must admit that the use of crypto currency is growing. We have yet to fully regulate this. In particular, we are monitoring over 25,000 participants in these transactions and have identified about ten financial organisations that are helping them. We believe crypto currency trade is over 630,000 bitcoins. We initiated about 120 investigations that resulted in over 60 criminal cases.
We launched a software product called Transparent Blockchain. At one point, you instructed us to do this together with VTB Bank. We have upgraded this project.
A year ago, we worked with just bitcoin crypto currency whereas now we are dealing with over 20 currencies. Testing is currently ongoing at the Ministry of the Interior, the FSB and the Investigative Committee. A number of CIS countries have asked us about using this programme so they can launch it at home. This programme helped us shut down a very big internet platform called 'Hydra' in cooperation with law enforcement agencies and our colleagues from financial intelligence services abroad. This platform focused on drug trafficking, arms sales and money laundering. All people involved have been arrested. It was established that one Ukrainian terrorist nationalist organisation was provided with funds in crypto currency. We are working on this now with the FSB.
Yury Chikhanchin, Head of the Federal Service for Financial Monitoring, 9 March 2023
"The ban on transferring funds abroad by legal entities from countries which support sanctions also remains in force. The restrictions are effective through 30 September 2022."
Central Bank of the Russian Federation 8 June 2022
"The restrictions against Russia imposed by unfriendly countries have affected Russian businesses, and, of course, complicated the logistics of exports and imports and created obstacles to making settlements.
It is necessary to provide entrepreneurs with as much assistance as possible ...including speeding up the transition of foreign trade to rubles and the national currencies of countries that are Russia’s reliable business partners.
I want to emphasise that in the new, changed environment, we need to do this much faster."
Vladimir Putin, April 18 2022
"In order to mitigate sanctions risks to trade and economic cooperation between Russia and Latin America, we are consistently working to introduce alternative financial mechanisms to Western ones, and that includes [...] direct correspondent relations between banks. We are also taking a number of other steps towards this goal"
Foreign Ministry Spokeswoman Maria Zakharov, June 8, 2022.
"When they froze the Russian assets in dollars, euro, yens, and the pound sterling for the amount of more than 300 billion euros or dollars, those were mostly the money kept in Western banks after we received payments from them, from the Western countries, for our gas deliveries. In other words, they paid us, and they stole the money from us because those were the currencies which are linked to the Western banking system"
Sergey Lavrov April 2022
"Sberbank is the largest financial institution in Russia and is majority-owned by the GoR. It holds the largest market share of savings deposits in the country, is the main creditor of the Russian economy, and is deemed by the GoR to be a systemically important financial institution. Within 30 days, OFAC is requiring all U.S. financial institutions to close any Sberbank correspondent or payable-through accounts and to reject any future transactions involving Sberbank or its foreign financial institution subsidiaries. Payments that Sberbank attempts to process in U.S. dollars for its clients — with examples ranging from to technology to transportation — will be disrupted and rejected once the payment hits a U.S. financial institution. To implement sanctions on Sberbank, OFAC issued Directive 2 under E.O. 14024, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions” (the “Russia-related CAPTA Directive”)."
US Treasury 24 February 2022
"Treasury is taking unprecedented action against Russia’s two largest financial institutions, Public Joint Stock Company Sberbank of Russia (Sberbank)and VTB Bank Public Joint Stock Company (VTB Bank), drastically altering their fundamental ability to operate. On a daily basis, Russian financial institutions conduct about $46 billion worth of foreign exchange transactions globally, 80 percent of which are in U.S. dollars.
The vast majority of those transactions will now be disrupted. By cutting off Russia’s two largest banks — which combined make up more than half of the total banking system in Russia by asset value — from processing payments through the U.S. financial system. The Russian financial institutions subject to today’s action can no longer benefit from the remarkable reach, efficiency, and security of the U.S. financial system."
US Treasury 24 February 2022
"So what we told them to do: they would not be paying directly to Gazprom’s accounts abroad, but they would be paying to a bank called Gazprombank. It is an independent entity. They would be paying the same amount which they have to pay under the existing contracts, but they will pay these amounts to a special account which they have to open with this bank. There would be a parallel account in roubles. So they pay euros, and then inside this bank these euros are transferred to the rouble account, and from this account Gazprom receives roubles.
As of now, they would not be able to keep the money in their banks, the money that they not even owe us, but which they paid to us already. I believe this is something which does not contradict contracts. They would still be paying in euros or dollars or whatever was the currency of the contract, but we will have insurance that this robbery would not happen again."
Sergey Lavrov April 2022
"It is crucially important to support domestic demand and prevent it from shrinking. It is necessary to act both through the budgetary system and to provide businesses with greater access to loans. This is the responsibility of the Central Bank. The bank has already begun lowering the interest rate, which will reduce the future cost of loans in the economy...'
....the budget definitely should actively support the economy, fill it with financial resources, maintain its liquidity. We have the capacity for that.
Of course, one needs to act with caution; the Minister and I constantly discuss this."
Vladimir Putin, April 18 2022
"Nevertheless, in the first quarter of this year we are witnessing a record level of budget surplus...It is necessary to be cautious, and as I see it, the key condition is that the financial system remains stable at the federal and regional levels.The current fat in the budget may soon disappear. According to the head of the Audit Chamber, Russia’s 2022 oil and gas revenues received in 2022 (estimated $85 billion) will be needed for government spending, and $54 billion will be needed in 2022 to keep the economy stable. There will be a budget deficit of around $21.6 billion dollars in 2022.
What is our current surplus? I believe it is some 1.1 trillion rubles, and the total surplus in the regions is about 0.9 trillion rubles."
Vladimir Putin, April 18 2022
"Let me remind you that the key rate increase by the Central Bank was, however, justified and necessary to stabilise the banking sector and financial markets. The decision proved successful and the Bank of Russia is already lowering the key rate gradually, which will make loans cheaper. Other steps are possible based on the real situation in the sector, but this is the prerogative of the Central Bank."
Vladimir Putin April 25 2022
'Of course, the main condition for a real increase in our citizens’ incomes is the creation of new and well-paid jobs, the acceleration of the economic growth rate, and the development of industry and other sectors.
Overall, the current situation is stable in this regard, as we can see from the electricity production index. This indicator is very good, which points to the dynamic development of the economy. And the number of registered unemployed is relatively low.'
Vladimir Putin 12 May 2022
The Basel 3 banking regulations require that in a time of stress, Tier 1 (first class) assets in various 'legal entities' must be liquid, easy to monetise, immediately available and and freely transferable. This would apply to Russian Central Bank currencies held at the Bank of International Settlements. All the various Russian Central Bank investments involving currency reserves of the hostile 'sanctioning' countries are frozen, illiquid, untransferable, and therefore automatically lose their 'tier 1' status.
"The illegitimate freezing of some of the currency reserves of the Bank of Russia marks the end of the reliability of so-called first-class assets.
In fact, the US and the EU have defaulted on their obligations to Russia. Now everybody knows that financial reserves can simply be stolen.
And many countries in the immediate future may begin – I am sure this is what will happen – to convert their paper and digital assets into real reserves of raw materials, land, food, gold and other real assets which will only result in more shortages in these markets."
Vladimir Putin 16 March 2022
30.22What will happen to the $300 billion of Russian Central Bank money held in foreign bank accounts? There is no legal mechanism to seize it. In these situations the US looks for some injured US citizen to win a suit (heard in American courts, of course) against a government, and use the illegally frozen funds to pay as damages to its citizen. The Americans did this to Aghanistan government money. Saudis perpetrated 911. The Taliban, who had nothing to do with it, had damages 'awarded' against them by the US courts. Likely the Americans will find the family of some US mercenary killed in Ukraine and use them to sue the Russian Government.
In assessing whether assets are freely transferable for regulatory purposes, banks should be aware that assets may not be freely available to the consolidated entity due to regulatory, legal, tax, accounting or other impediments.
Assets held in legal entities without market access should only be included to the extent that they can be freely transferred to other entities that could monetise the assets.
"The paying agent — National Settlement Depository — received funds to pay income on Russian Eurobonds maturing in 2026 in the amount of $71.25 million and due in 2036 in the amount of 26.5 million euros."Thus, the obligations to service government securities of the Russian Federation have been fulfilled by the Russian Finance Ministry in full in accordance with the issuance documentation for Eurobond issues."Russia’s Finance Ministry used the new 'temporary procedure' to send 12.51 billion rubles ($234.5 million) in interest payments to the National Settlement Depository to pay the due interest on two issues of dollar-denominated Eurobonds (maturing in 2027 and 2047). The investors will now have to open a ruble account in Russia so that the depositories transfer the money (in rubles) to it to it. The investor can then wrestle with their western banks to repatriate the money - and convert it out of rubles and into dollars. But they can't interact with 'sanctioned' Russian banks. Which begs the question - which Russian lending institutions are on the 'authorised' list anyway? Would these banks all happen to be 'sanctioned' banks? That would be deserved. Whatever the case, Russia has not defaulted. There is no reason to downgrade Russia's credit risk, but of course, that is what the Fitch rating agency did anyway. No one cares.
Sputnik 20 May 2022
"Payments to holders of Eurobonds issued by the Russian Federation shall be made through authorised Russian lending institutions, the list of which is approved by the Government of the Russian Federation.
Obligations under the Eurobonds issued by the Russian Federation shall be recognised as properly met if executed in rubles in the amount that is equivalent to the value of the obligations in a foreign currency and converted at the foreign exchange rate available on the domestic foreign exchange market of the Russian Federation on the day the Russian Federation made the payment to the central depository."
Executive Order On the Temporary Procedure for Meeting State Debt Obligations in the Form of Government Securities [etc] 22 June 2022
“Unfortunately, we now have no reason to expect the situation with foreign currency to change for the better in the future… Therefore, in September we will be forced to extend the restrictions that were introduced in early March..Even in the most apocalyptic scenario, in the most difficult scenario, cash dollars will circulate in our country. According to our estimates, the population has only about $85 billion in foreign currency cash, both in dollars and euros. Now banks can sell and buy this currency, so the circulation of cash will continue.”
Russian Federation Central Bank Governor Elvira Nabiullina July 2022
"To ensure socioeconomic stability and protect the population, including in connection with the political, economic, and other sanctions imposed on the Russian Federation, Russian individuals or legal entities, and/or the cancelling of business by employers, the President instructed the top officials of Russia’s constituent entities to take comprehensive measures to ensure socioeconomic stability based on the geographical peculiarities of the respective territories.
These measures include targeted support for various categories of citizens facing challenging circumstances; keeping social services available; ensuring uninterrupted functioning of life support facilities, transport, supply and social infrastructure, education, public health and social services institutions, energy, industry and communications facilities; the day-to-day monitoring of retail prices of essential goods, medications and medical goods and their retail availability; labour market monitoring and implementing proactive measures to support employment (including retraining and advanced training courses).
In addition, the Executive Order provides for measures to meet and eliminate increased demand for certain types of goods, work and services; provide support for organisations, individual entrepreneurs and self-employed individuals, including targeted support in the form of monetary funds and other property, or other exemptions and concessions; support for socially oriented non-profit organisations that engage in providing social services, social support and protection, assistance to refugees and internally displaced persons, or in activities related to patriotic education and the encouragement of internal labour migration."
Executive order on measures to ensure socioeconomic stability and protection of the population in Russia 16 March 2022
Law on measures (countermeasures) against unfriendly actions of the United States of America and other foreign countries
June 4 2018
"The Federal Law is aimed at protecting the interests and security of the Russian Federation, its sovereignty and territorial integrity, the rights and freedoms of citizens of the Russian Federation from unfriendly actions, including the introduction of political and economic sanctions against the Russian Federation, its citizens and Russian legal entities. To achieve these goals, the Federal Law stipulates a list of measures (countermeasures) that can be applied to the United States of America and other foreign states that commit such unfriendly acts with respect to individual entities under the jurisdiction of such states, directly or indirectly controlled by them or affiliated with them, or officials and citizens of such states."
"Russia has been able to withstand this unprecedented pressure. The situation is getting back to normal with the ruble recovering to where it was in the first half of February, which is attributable to a robust trade surplus, which is an objective reality. In the first quarter, the current account surplus exceeded $58 billion, setting a historical high. Foreign cash is returning to the banking sector and household deposits are growing."
Vladimir Putin April 18, 2022
"...Russia is confidently dealing with external challenges due to the responsible macroeconomic policy of the past few years and systemic decisions and solutions to strengthen its economic sovereignty, technological and food security."
Vladimir Putin, 12 May 2022
"As for the difficulties faced by some manufacturing industries, yes, this was inevitable. But I think for many people – for those who were and are trying to create problems for us, it was surprising to see how effectively we countered the threats created for us in the economy and in some manufacturing industries. It appears that our financial system is fully functional, all manufacturing industries and services are operating – they are working rhythmically, without disruptions.
Moreover, international institutions had to admit that Russia had not only fended off the expected shocks – that is, a reduction in the scale of production, the level of the labour market and its condition, but we and the international institutions actually expect some growth across all indicators this year, general growth in the Russian economy.
This means we have overcome – I hope – the most complicated stages of overcoming the obstacles that are being put in our way, and we will be moving forward."
Vladimir Putin, 9 February 2023
"Our production companies are gradually filling domestic market niches vacated after unscrupulous partners left the country. This concerns daily staple goods, industrial and service sector equipment, construction and farming machinery"
Vladimir Putin, 12 May 2022.
"We are expecting a good harvest this year. According to preliminary expert estimates, we may harvest 130 million tonnes of grain, including 87 million tonnes of wheat. If this happens, then the projected grain harvests would hit an all-time high in Russian history.
This will make it possible to meet domestic demand, with a substantial safety margin, and to expand global exports for our partners; this is highly important for global food markets."
Vladimir Putin, 12 May 2022
"Inflation is gradually subsiding. Last month, inflation rates fell several-fold on March levels. Weekly price hikes are down to 0.1 percent. This closely matches weekly growth rates under Bank of Russia inflation targets."
Vladimir Putin, 12 May 2022
"The Bank of Russia’s baseline scenario expects annual inflation to run at 14.0–17.0% by the end of 2022. Inflation movements will be shaped including by such impactful factors as the efficiency of import substitution processes and the scale and speed at which imports of finished goods, raw materials and components will be recovering. According to the Bank of Russia’s forecast, given the current monetary policy stance, annual inflation will reduce to 5.0–7.0% in 2023 to return to 4% in 2024."
Bank of Russia Press release 10 June 2022
"We cannot say that we are doing fine either, however, because there is a recession. But our situation is indeed better than in many other countries in several ways. Inflation, as I mentioned, will be a little over 12 percent, around 12.2–12.3 percent for the year, whereas in Europe it will be anywhere from 17 to 20 percent, even above 20 percent. This is absolutely off the scale for the European economy."
Vladimir Putin, 9 December 2022
"We continued to protect property interests of the state, primarily where third parties tried to benefit, based on their premeditated and selfish interests. Thus, more than 16,000 claims concerning state and municipal property have been filed with courts.
Moreover, we also continue to return state control over strategic enterprises that are important for our country’s security and defence, the control over which was illegally seized by third parties, including in favour of foreign agencies, the state control of which has been illegally lost.
This also applies to the new territories. I instructed my subordinates to prevent the illegal transfer of property rights to real estate in the transitional period and to fully ensure the observance of the rights and freedoms provided by the Constitution of the Russian Federation for our new compatriots, Mr President."
Igor Krasnov, Prosecutor General of the Russian Federation 31 January 2023
In the first quarter of 2022 inflation-adjusted wages rose by 3.1%
, but is still not enough to make up for inflation. The minimum
wage was slated to be raised by 10% on June 1st 2022.
Public sector wage indexing (to account for inflation) was due to
be completed by the end of January 2023. Presumably that has been
Private sector wages (including market-based state owned
enterprises) won't be touched. Mechanisms such as a minimum wage
will be used to try to deliver a living wage to private sector
"...dictating wage levels at enterprises in an administrative manner is very dangerous as it can throw their finances out of balance. Ultimately, if you go down that path, an enterprise could become unprofitable, it would simply close down and that would be it, the jobs would disappear. So, we must be very careful in this respect in a market economy. But this does not mean at all that we should not think about it. On the contrary, we must think about this all the time. Other mechanisms are used in this case..."
Vladimir Putin 18 January 2023
"Last year, we increased the minimum wage twice. I think overall it was an increase of 19.5 percent. I may be wrong, but it was certainly above the inflation rate that turned out to be less than 12 percent in this country. That said, we must realise that despite an average inflation rate of less than 12 percent, the situation with some products, some product groups, especially foods, looked quite different, especially in the middle of last year. People, the average citizens, experience serious pressure at times.
So, with these and other mechanisms, we will certainly monitor the level of wages and the correlation between inflation processes, that is, the rising costs of goods and services with real wages. For this year, I again instructed the Government to adjust the minimum wage to keep the increase above the rate of inflation."
Vladimir Putin 18 January 2023
By the end of 2022 unemployment in Russia was at "the lowest level in modern history". But some industries - for example the car industry - have lost a lot of jobs. Export manufacturing industries have been hit hardest. Wood and wood product industries have declined by 21%, causing job losses. As always, the most remote and economically depressed areas also experience relatively high levels of unemployment, compounded by low wages.
Income attributable to some form of entrepreneurial activity increased by 23% in the first quarter of 2022. When times become hard, Russians do what they have always done - sell stuff at markets.
"In 2021, the subsistence minimum began to be calculated as 44.2% of the median per capita income for the year preceding the year the subsistence minimum was set....In the first quarter of 2022, the poverty line was 12,916 rubles. The population with incomes below the poverty line in the first quarter of 2022 amounted to 20.9 million people, or 14.3% of the country's population.
Compared to Q1 2021, the population with incomes below the poverty line in Q1 2022 increased by 0.1 percentage points, or 0.1 million people. The main reason for the growth was the acceleration of inflation to 11.54% (Q1 2022 vs. Q1 2021), which exceeded the growth in average per capita nominal cash income."
Overall, real (inflation adjusted) disposable cash income of the population decreased by 1.2% compared to Q1 2021%.
One of our key national goals, which we discuss all the time, concerns efforts to improve the material situation of Russian citizens and to raise their incomes, especially for those who lead a modest life, to put it mildly. In other words, our main goal is poverty alleviation.
In 2017, people facing this situation accounted for 12.9 percent of Russian citizens. In late 2021, their share decreased to 11 percent. Of course, we have made some headway here. However, its pace and speed are obviously not enough. Even during this year’s high inflation, which, thank God, is gradually subsiding, I set the task of reducing the level of poverty and inequality, a no less important matter.
For this purpose, we are implementing an entire package of measures. From June 1, 2022, we have indexed pensions and subsistence-minimum wage levels by an additional ten percent. They now exceed 2021 levels by 19.5 percent. Our system for supporting families with children now covers much more people than before. From now on, needy families can request monthly payments, that is, after mothers become pregnant and until their children reach 17.
Of course, social contracts play a major role in reducing the level of poverty and inequality, and we have been addressing this matter for a long time. Last year, these programmes involved almost one million people. It is important that social contracts should provide people with real employment opportunities in the future, and that they help them launch their own businesses, no matter how small and modest."
Vladimir Putin 18 July 2022
Welfare of society support payments
The number of people receiving support payments increased by 6% in the first quarter of 2022. Pensions will be raised by 10% on June 1st 2022.
support benefits are paid until a child turns 18
months.Children from low-income families (whose income is below
the minimum for subsistence) qualify for support payments for each
child up to (and including) 17 years old.
"The budgetary system’s capabilities continue to expand. In January-April, the consolidated budget surplus reached 2.7 trillion rubles, while budgetary spending has grown appreciably over the same period following decisions to finance development projects and purchase prepayments earlier than planned."
"Russia’s public finances remain stable. In January-November of this year, the federal budget was executed with a surplus of 560 billion rubles, and the consolidated budget with a surplus of 1.451 trillion rubles."
Vladimir Putin 15 December 2022
However, by the end of December 2022 it is clear the conflict in
Ukraine and the difficult trading conditions have had some effect.
The Russian Government expect a Federal budget deficit in the
first half of 2023
of about 2% of GDP. Even so, this is the lowest deficit of
any country of any G20 country. The Russian Government's current
projections are for the deficit to fall to 1% of GDP by 2025.
Faith in the ruble
"The national currency, the ruble, is growing stronger in conditions of a record-breaking foreign trade surplus. It appears that it is posting better results than all other foreign currencies since early 2022."
Vladimir Putin, 12 May 2022
By mid May the Russian currency briefly hit 55.63 rubles to the US dollar - the strongest since February 2018. In June 2022 the First Deputy Prime Minister of the Russian Federation said "As concerns the optimal exchange rate, the more or less consensus opinion is that this is a rate in the range of 70-80 rubles per dollar." In other words, the ruble needs to be at the balance point where Russian exports are not too expensive for overseas customers, and the ruble not so weak that vital imports become too expensive for domestic consumers.
The ruble is a floating currency, relatively little affected by
Central Bank interventions. The 'fiscal rule' meant that Russia
would pay for social security and domestic infrastructure
investment needs primarily from tax earnings, rather than from
borrowing money from the Central Bank and never paying back - i.e.
the US system, which amounts to printing money ('money issuance').
The Central Bank has a limited role as a buffer in times of
emergencies to keep the ruble exchange rate within bounds (and
thus dampen inflation), which the bank implements through the
unsanctioned component of the Central Banks foreign exchange
"Beginning in 2015, a mechanism was established that made it possible to ensure a fairly stable exchange rate amid conditions of a floating ruble, although the ruble's volatility did increase after the transition to a floating exchange rate, he said.
"The key element of this mechanism was, as you know, the fiscal rule, which thanks to simply automatic procedures established at the regulatory level made it possible to balance the ruble's exchange rate within certain ranges. And not by means of [money] issuance - this is very important.
The Bank of Russia's options for managing issuance expanded and, accordingly, this was one of the cornerstones of inflation targeting, to which the Bank of Russia transitioned in the past seven years.
Now this mechanism has virtually evaporated, stopped working. This is due to the blocking of the Bank of Russia's reserves and the automatic suspension or cancellation of the fiscal rule because of this," Belousov said, explaining the need to discuss a new mechanism."
First Deputy Prime Minister of the Russian Federation 20 June 2022
The 'fiscal rule' was introduced in 2015 to reduce Russia's
dependence on the price of natural resources (such as gas and oil)
dictating the exchange rate of the ruble. A policy on financial
stability was developed at the same time, as were 'instruments' to
implement the policy.
The fiscal rule limits the extent to which government spending
relies on tax revenue from natural resources. Why? Because
commodity prices are volatile, and if a budget commits to spend
based on assumed tax income, but there is an economic
downturn and the prices fall (as they have in the past - oil
prices have crashed, as have gas prices), the government books
will end up in the red.
In times of high natural resource prices the budget surplus was
used by the Russian Treasury to buy foreign currency
denominated assets, and then in times of low prices some of
the assets (government savings) would be sold to supplement the
The earnings from selling the foreign-denominated assets are, of
course, converted into rubles. So there is a balanced flow of
foreign currency, buying and selling, depending on (mainly) oil,
gas, minerals, and wheat price peaks and troughs.
The Federal Treasury controls these money flows, whether buying
or selling foreign assets, not the Central Bank. There can be no
speculation on currency, as the value of the foreign exchange
purchases is limited to the ruble value of accumulated windfall
tax from high export prices, and sales of foreign currency are
limited to the amount of foreign currency denominated assets
purchased in earlier periods of abundance.
"These restrictions mean that these FX operations under the fiscal rule cannot be considered as setting or managing the rouble exchange rate policy. The rouble exchange rate continues to be free-floating, and the Federal Treasury is a large FX market participant that cannot and does not aim at a particular rouble exchange rate.
All purchases and sales of foreign currency are sterilised via the central bank’s monetary policy operations. The Central Bank of the Russian Federation administers the FX purchase and sale operations under the fiscal rule and may stop them if it determines that they are a threat to the financial stability. The foreign currency accumulated by the Federal Treasury’s purchases under the fiscal rule has the effect of increasing Russia’s FX reserves.
However, sales of this foreign currency are limited by the overall amount and schedule of budget spending.
From an FX reserves management perspective, any spending (portfolio outflow) of foreign currency under the fiscal rule is relatively predictable in terms of amounts flowing out during the next few months.
This relatively new type of financial policy has two sets of implications for financial stability:
(i) issues that are commonly experienced worldwide; and
(ii) country-specific issues.
The commonly experienced financial stability issues arose mainly during and after the 2007–09 global financial crisis. Among these, free-floating exchange rates proved to be a generally better shock-absorbing policy than FX intervention-based policy. The trivial conclusion is that, during the crisis, more FX reserves were better than less. Further, excess debt creation in an economy should be more closely monitored and addressed in good time etc.
The country-specific financial stability implications for Russia arise mostly from the industrial structure of the economy, its emerging market economy characteristics, and the sanctions regime that restricts the access of Russian corporations and government to the global capital market.
Russia’s financial stability policy assumes the possibility of FX intervention, including outright sale of foreign currency and foreign currency lending (FX swaps, FX repo and FX lending). Outright foreign currency sales are decided on an ad hoc basis; the timing and amounts are not precisely predictable, and any intervention would require sterilisation via monetary policy operations.
The central bank provides FX lending through overnight swaps available daily on standby terms. Other types of FX lending (repo and loans) may be quickly activated if needed. But the unpredictability as to the timing and amount of any intervention creates a challenge for FX reserves management and, as a result, a strong FX liquidity preference is applied when the FX reserves asset allocation is decided.
Asset allocation decisions (on currencies, asset classes etc) reflect to the extent possible the estimated amounts, currencies and timing of potential reserves usage."
BIS Papers No 104
And there you have it. The 'sanctions' have to a great extent
stopped Russia from buying and selling foreign currency
denominated assets, and to that extent totally stopped the
'buffering' of the value of the ruble.
According to some
western analysts "...the 1.45 trillion ruble deficit from
June to August wiped out roughly 90 percent of the previously
accumulated surplus." They attribute this as probably the result
of the appreciation of the ruble. In other words, government
'windfall taxes' from high revenues from exports were spent on
foreign currency denominated assets, but these assets then had to
be sold to bring in cash to support the government budget. But
when the assets are sold overseas, the strong ruble meant fewer
rubles are available when the (weaker) foreign currencies are
This explanation is part of the story, but my guess is that the
war has meant the domestic budget had to be expanded to pay for
upkeep of refugees from Ukraine, services expanding into the new
territories, the burden of free healthcare being applied to the
new territories, war pensions for the wounded and the widowed
families, and wages for the 300,000 conscripts (amongst other
things such as war materiels).
Thus, a combination of a poorly 'unconstrained' strengthening ruble and sharply elevated domestic expenditure pushed the federal government’s balance into deficit in June, July and August 2022.
Of course, the opposite is also true - when demand for exports
falls and when prices of export goods fall, the purchasing power
(for imported goods) of the ruble also falls. The cost of imported
goods on the domestic market rises, and the amount of rubles
received for the reduced volume/cheaper exports rises. As the
government is the majority shareholder in the major strategic
export businesses such as oil, gas, and wheat exports, the
government ends up with a higher volume of rubles for spending
into the Russian economy. And as natural gas sold domestically in
Russia is about
8 times lower than the global average (March 2022), the
Russian economy remains somewhat insulated from price rises in the
non-ruble 'outside world'. In other words, energy costs, the major
cause of unavoidable price increases in the world, have much less
impact on Russians. Prices increases for essential goods reduce
consumer purchasing power, and are akin to inflation.
For now, the 'tool' Russia has is now only half a tool - it will
only work with unrestricted buying and selling of the
assets/currencies of 'friendly' countries.
What other measures are possible? One partial answer would be to
junk the commodity indices whose 'spot market' speculations
heavily influence the stability of the price and therefore the
ruble exchange rate fluctuations. Indices based on long term
contracts would be favorable for everyone. I suspect Russia will
move in this direction.
"...the Russian ruble has become one of the world’s strongest currencies since the start of the year. We achieved this result by making decisions to regulate the capital drain, convert payments for gas into rubles, actively use national currencies in trade with our partners, but primarily, of course, by pursuing a responsible fiscal policy."
Vladimir Putin 15 December 2022
It will be fascinating to see what the Russians come up with to
amend or replace the foreign currency balancing system that has
worked reasonably well for them so far. Especially as it has put a
rein on government spending, as well as reducing exchange rate
As part of the fiscal rule mechanism, on January 13 2023 the
Russian Central Bank resumed buying and selling foreign currency
on the Russian FX exchange "evenly throughout every trading
day of the month" in order to minimise impacts on
the market. Presumably Russia now has excess volume of Yuan,
rupee, dirham, and euros etc such that it can resume (at the
moment) selling foreign currency to either increase the ruble
denominated budget surplus 'nest egg', or fund increased spending
by the Russian government.
In December 2022 President Putin expressed the firm view that Russia will stick to the current "responsible fiscal and macroeconomic policy" as it allows the full funding of social programs as well as providing funding for "the resolution of new tasks" Russia has to face over the next three years. These tasks seem to be related to creating conditions for economic growth.
Russia Federation National External debt
At March 2022 total external debt (private and government) is
about (USD) $453.5
billion. This sum includes money owed to foreigners by the
Government, the Central Bank, and commercial banks. It also
includes money owed directly to foreign investors (loans, trade
credits, various securities, private direct investment funds and
other entities etc).
Total national external debt has dropped 5.5% since December 2021.
Russian Government (only) external debt
2021 was (USD) 62 billion. Almost all of this was long term
securities, probably bonds of some description. All else equal, as
the ruble strengthens, this will be cheaper to re-pay. Especially
the Euro denominated debt - given the current weakening of the
Euro continues (as it perhaps must, given the continual selling to
buy rubles for gas).
Lower export volumes of oil and gas have been more than
compensated by higher prices. Over 40% due to much higher natural
gas prices. Other fossil fuels - coal, oil, and petroleum products
have also had an influence. Markets are shifting, and the shift is
still in play (late 2022). There will always be 'baseload' demand
for fossil fuels in an age of resource depletion, while transition
to renewables slowly erodes the market. Recessionary conditions
are developing globally (late 2022), and possibly this may further
reduce demand - or perhaps make it more volatile. The price and
volume trends for coal and natural gas may start to slope downward
by the end of 2024.
The price and market volumes for grains and pulses are affected
by seasonal weather variations, and the rising prices (and
availability) of inputs such as fertiliser and diesel. Russia is
well supplied with these essential inputs. Further increases in
production is only constrained by climatic factors, which can't be
predicted from one year to the next. Given favorable seasons,
Russia should continue to see good returns from grains and seeds,
especially if an efficient grain trading bourse can be created
within Eurasian countries.
"Despite the sanctions – such a curious thing – over the first nine months of this year, the supply of basic goods from Russia to the EU countries increased by 1.5 times. Aggregate Russian exports increased by 42%, and our trade surplus grew 2.3 times, up to US$138 billion."
Vladimir Putin 15 December 2022
Current Account (Trade in Goods & Services)
"We do indeed now have a strong current account balance. And while before this current account balance was offset by capital outflow, today the capital outflow is limited. Is this good or bad? From the point of view of the current policy of a floating ruble it is bad, because the ruble is strengthening, but from the point of view of the balance of savings and investment it is good. This is where the debate comes from. We have an investment resource forming in the country, and we now need to properly use it. Basically this is what the government is working on now"
First Deputy Prime Minister Andrei Belousov June 20 2022
Balance of Trade
A record-breaking foreign trade surplus in 2022.
Balance of Payments
"According to the Bank of Russia’s preliminary estimate, the current account surplus of the balance of payments of the Russian Federation in January — June 2022 continued to grow and amounted to $138.5 billion, having increased by 3.5 times compared to the corresponding period of previous year."
Bank of Russia 11 July 2022
The fact that imports have been severely curtailed helped reach this result.
"...as for priorities, the importance today of the very factor of
economic growth has grown dramatically, since the national goals
that the president set are an expression of the interests and
expectations of society, of people. Solving the issues of poverty,
demographics, quality healthcare, quality education, roads, the
environment, housing, and growth in household incomes - achieving
these goals without economic growth is impossible, that's obvious.
The economic resources that only growth provides are needed for
their realization. Therefore, growth in this sense is imperative.
The question is, when we will be able to transition to
economic growth and on what scale, given the restrictions that
First Deputy PM Andrei Belousov 24 June 2022
As of June 2022, the Russian Economic Development Ministry
estimates economic activity for 2022 will have shrunk by about 8%.
The Deputy PM
thinks it will turn out to be about 3%-5% over the whole
year if the domestic economy receives enough stimulus. In
October 2022 the International Monetary Fund (IMF) estimated
that Russia's GDP fell by 3% over 2022. (For perspective, Russian
GDP fell by around 7% in the 2008 - 2010 global financial crisis.)
It looks like the Deputy PM was right.
A major engine of stimulus of the domestic economy will be
investment. As of June 2022 investment growth was up 12.8% year on
year. But you have to wonder how much of this 'growth' was simply
buy-out of businesses exiting Russia. Investors have been given
tax cuts, and a favorable regulatory environment to 'get on with
business' without excessive local bureaucratic interference (which
Russia is famous for).
Consumer demand for non food products has fallen, which is hardly surprising. It will take years to develop new businesses, new logistics, new confidence. How many years? My guess, based on post -1999 recovery and the covid mobilisation is 2 years of widespread low (barely adequate) income while the rich become richer, and 10 years to a reasonably prosperous middle class and less income disparity between the rich elite and the ordinary people. But it is an experiment that has never happened before in a modern economy (and in a time of global change), so, who knows...
In spite of the west's blockade and proxy war on Russia, Russia's
GDP fell by only 2.5%
Domestic private and business income/economic
"...some trends that require special attention. For example, domestic demand is short of 2021 parameters. Corporate and private accounts continue to shrink. Obviously, these factors impact economic development trends, and it is necessary to reduce these risks by relying on our successful experience of targeted actions during the 2020–2021 pandemic.
As before, today, the most important indicator of successful socioeconomic policy is the income of Russian citizens. To ensure positive dynamics here, it is necessary to support consumer demand and improve the opportunities for businesses and regions. In March, we decided to expand the financial aid programme for families with children in need. From April, it was extended to include families with children aged up to 16 years. Backdated payments have been made since May 11.
We have also arranged for additional financial support for the constituent entities, by restructuring regional debt and granting loans from the federal budget....These mechanisms must motivate regions to finance additional economic development programmes, including a capital boost for regional industrial development funds, and they must also ensure that all obligations and programmes are fulfilled on the ground and that major construction projects are continued. All these measures are compulsory.
With respect to businesses, we have developed a lending programme for backbone companies, secured by VEB. Such loans are expected to amount to 1.6 trillion rubles. There are specific decisions to support key industries such as aviation, agriculture and food production....we have expanded the programme for the guaranteed support of lending to businesses by VEB...an instruction has been issued to extend this programme to companies that are yet to obtain the status of major employers but have already emerged from the category of small and medium-sized businesses. Aided by VEB’s guarantees, these organisations will be able to raise over one trillion rubles at attractive, lower rates due to the risk reduction.
Next, in late April, we agreed to take special measures to grant additional resources to the economy – as professionals say, to saturate it with liquidity. This is important for the continuous operation of companies and organisations and for maintaining and even increasing the number of jobs. These measures include deferring social contribution payments for the second quarter of 2022. There was extensive discussion of this matter and a decision was made. Companies which employ almost 52 million people in total will be eligible for this concession.
Social contributions for these organisations will be deferred for a year, starting from May 2023. Overall, businesses will be able to keep around 1.1 trillion rubles in circulation. Essentially, this money will serve as an interest-free loan from the Government. In addition, companies in the production sector will be eligible for social contribution deferment in the third quarter of this year, amounting to another half a trillion rubles.
I have instructed the Government to explore the issue of providing additional preferences with regard to repaying insurance contributions for the third quarter depending on employment and payroll retention. We went through this, as I said, during the pandemic."
Vladimir Putin, 12 May 2022
Extensive debt restructuring is keeping businesses going, keeping
people in jobs. The deferment of business 'social contributions'
probably starts in May 2022, I suspect the start in 2023 is an
error. The major strategic businesses in Russia are bare-majority
owned by the Russian Government, so 50% of 'social contributions'
are essentially natural profit distribution to
citizen-shareholders anyway. All these measures can easily
be 'rolled over' as needed, especially as high oil prices are
providing the government with a windfall of un-budgeted extra
Gazprom, majority government-owned, is the major too for using
Russia's oil and gas resources into a 'social benefit'.
"Gazprom has a solid track record of paying special attention to carrying out major social and humanitarian projects by supporting cultural, educational and environmental programmes, building housing and schools, helping equip hospitals and improve and develop streets, embankments and parks.
For example, over 2,000 sports centres, sports grounds and school stadiums have been built across Russia as part of the Gazprom for Children programme, which I believe was launched around 2007 (Mr Miller will correct me if I am wrong).
Gazprom is investing substantial funds in the comprehensive development of our cities, rural areas and regions, and it is doing the right thing. I would like to thank its management, shareholders and all workers for that.
It is notable that Gazprom’s perspective plans always look ahead and are designed for years and even decades to come, clearly, because of the long implementation cycle of your projects, which fully meets our national interests, and the goals and priorities of Russia as a major power and a sovereign centre of the multipolar world."
Vladimir Putin 17 February 2023
The regional development being pumped up is expected to bring in capital resources of 300 billion rubles.
Before the pandemic unemployment was 4.9% and by December 2022
"In 2012, you came out with another major policy essay titled “Social Policy: Building Justice for Russia,”...you wrote that if our ethnic, migration and demographic policies remain sluggish, we – one-sixth of the planet’s land, but only 2 percent of the world's population – we run the risk of becoming, I quote, “an empty space, the fate of which will be decided by someone else.” ...We need to take back thousands of people...who are registered with our foreign missions and are willing to come back. It is imperative to create clusters with excellent health care and education – we can afford it – with jobs and take our people back."
Leonid Slutsky, Head of the Liberal-Democratic Party of Russia July 7 2022
Russia is in competition with the rest of the world for a well trained professional workforce. Young Russian IT workers in particular, have left. There are claims around 70,000 have left due to the current conflict. Some are concerned they might be called up for military service, others are simply looking to profit from the competition for IT workers the world is currently experiencing. Similarly, Russian tech workers are held in high regard, and if family ties aren't a constraint, it makes sense to work for better pay and conditions in other countries.
"Thirdly, we need to drastically enhance the technological capabilities of the Russian economy, to stimulate the creation of new facilities and jobs...
"...The fourth point. Strengthening the financial sovereignty of our country is a systemic issue. This is vital for boosting investment in high-tech companies, industry, agriculture and many other sectors. I am very much counting on the effective work of the Central Bank and the Government here, primarily, the economic bloc and the Finance Ministry
"Fifth. It is necessary to develop economic policy measures in such a way that will lead to the growth of real wages and incomes, and, coupled with social support measures, primarily for families with children, will ensure the continued reduction of poverty and inequality.
"The sixth priority. Special attention must be paid to addressing acute demographic problems...I am referring, in part, to addressing these issues by making modern, high-quality healthcare more accessible.
the Government has been instructed to draft a special development programme for the new regions before the end of the current quarter. By 2030, they should reach the national average in terms of infrastructure, social services and many other parameters of living standards. I would like to ask the Government, federal agencies and colleagues in the regions to work out, clearly and consistently, all the details of this programme.
Vladimir Putin 11 January 2023
Central Bank interest rates and monetary policy
When the special military operation began in February 2022 the
west imposed it's pre-planned sanctions, destabilising the ruble.
Russia's Central Bank immediately hiked the key CB interest rate
to 20%.This, and other government measures soon saw the
ruble start to regain it's purchasing power.
"Let me also note that the Bank of Russia continues easing its monetary and lending policy and making loans more widely available in general. The Central Bank key rate, as you know, has been reduced to 14%.
Given this dynamics, we have taken the decision to reduce the favourable mortgage rate to 9%. Loans at this rate are available as of May, while the favourable mortgage programme has been extended until the end of this year. This decision should be of help to the families that are planning to buy a flat and to improve their living conditions. We should go on thinking about this. And, of course, the favourable mortgage mechanisms will support the construction industry and the related economic sectors."
Vladimir Putin, 12 May 2022
"On 10 June
2022, the Bank of Russia Board of Directors
decided to cut the key rate ...
to 9.50% per annum." - Press Service Central Bank
of the Russian Federation
The Bank of Russia's June 10 2022 forecast is for a key rate
averaging 10.8—11.4% for 2022 (perhaps lower than that in the
second half of the year),
On the 22nd July 2022 the Central Bank of Russia cut its key interest rate to 8.0%, as inflation was slowing down and consumer demand was subdued. The bank said “... the external environment for the Russian economy remains challenging and continues to significantly constrain economic activity...”
The consensus of Russian
experts is that the optimal Central Bank key interest rate
is around 5% - 6%, which was the rate prior to the intervention in
Ukraine. The Russians are anxious that the key rate is predictable
and not subject to large changes.
Bank DOM.RF is a majority Russian government-owned joint stock
company which operates as a bank. As well as normal banking
operations, it offers mortgages (including state subsidised
mortgages for families and to encourage settlement in the Far
East) and other loans. State
subsidised mortgages from Bank DOM.RF makes up 35% of all
mortgages. (which is 830,000 families out of the approximately 55.38
million households in Russia). Mortgage rates are still too
high. Even state subsidised mortgages have an interest rate of 7%.
They make repaying debt difficult if not impossible. Many
household incomes are so low that even loans at low interest rates
are still unaffordable. Bank DOM.RF issues mortgage bonds to banks
to increase bank liquidity in order to issue mortgages. These
bonds now underpin guarantee 10% of the mortgages in Russia.
Therefore Bank DOM.RF has been building rental accomodation, but
the numbers built are still very small.
The EU ban on coal may give Russia a 'glimpse of the future'. Coal burning is the primary long-term driver of irreversible climate change. Like it or not, Russia will ultimately have to leave coal in the ground. In the meantime, coal is in short supply in the world, and, unfortunately, Russian coal finds a ready market, including in Germany (in 2022 Germany imported 13 million tons of coal from Russia, in spite of German participation in the proxy war on Russia).
"I don’t think we are thinking in the context of sustaining. Sustaining means, you know, you sustain, you take some hardships, and hope that, sooner or later, this would be over.
Russia has been under sanctions all along – Jackson–Vanik, then it was repealed, but Magnitsky Act was introduced, then we were punished for the free vote of the Crimeans, we were punished for supporting those who were in favour of keeping the Minsk agreements...and so on and so forth.
So, now we have come to a very straightforward conclusion. We cannot rely on our Western colleagues in any part of our life which has strategic significance, be it food security, which we managed to ensure ourselves after 2014, be it, of course, defence, and be it some strategic sectors where high-tech is developing and indicating the future of the mankind.
We did not have time to achieve self-sufficiency in all these areas, but in most cases, we resolved this issue.
Of course, we are open to cooperation with all other countries who do not use illegal, illegitimate unilateral measures in violation of the UN Charter."
Sergey Lavrov 19 April 2022
"...specific decisions will be made in the near future on the indexation of pensions and all social benefits, as well as the salaries of specialists employed in the public sector. To ensure practical implementation of this policy, I ask the parliamentarians to carefully work out the necessary amendments and legal mechanisms.
These and the other decisions we have been making are aimed at providing direct assistance to the most vulnerable categories of the population – families with children and senior citizens.
The key industries, strategic enterprises, small and medium-sized businesses are also receiving and will continue to receive support.
As a result, by taking the measures I have just mentioned, we have not just softened, but, as I said, we have repelled, blocked the very first crushing blow – as the West believed it to be – of the illegitimate sanctions against our country.
Our banking system, national currency, transport, trade, and the economy in general have withstood the shock and have not crumbled. On the contrary, they now have good resources for development, for the launch of new projects in infrastructure and industry, and for developing and unlocking the potential of all our regions.
Undoubtedly, this is the result of a balanced and responsible socioeconomic policy over the recent years, the implementation of our national projects, and the result of your, my colleagues, concerted and energetic efforts amid today’s extraordinary circumstances...
...we will counter any crude and often inept external restrictions, the destruction of all civilised rights and agreements and attempts to isolate us with greater freedom of entrepreneurship, openness to honest partnerships, respect and reliable protection of owners and genuine investors."
Vladimir Putin 27 April 2022
"The Russian economy’s accumulated potential, including its experience overcoming the 2014 sanctions, will allow the Russian economy to quickly adapt to the latest sanctions and the global crisis. In the coming years, Russia will go through a laborious period of completing the construction of a self-sufficient industrial core, including with respect to the defence industry, high-tech engineering, and the IT sector.
Russia will expand payments in Russian rubles on loans and energy supplies.....The further reformatting of the Russian economy and the departure of Western brands will open windows of opportunity for partner countries in the EAEU to increase the export of services, food, and engineering products. New niches will be vacated on the Russian market, and the EAEU countries will receive privileged access....The US is living beyond its means, "exporting" inflation to developing countries...over the past 20 years, the United States has become the largest debtor in the world; the cost of the dollar does not reflect its real value.
According to a March 2022 IMF report, over 20 years the share of the dollar has decreased from 71% to 59% due to its replacement with national currencies. The process will accelerate after the erosion of confidence in the dollar due to the theft of Russia's dollar reserves....the scope for de-dollarisation in the global economy remains significant...
This will also be facilitated by the formation of a settlement architecture parallel to the dollar, including new units of accounting (probably tied to real values and resources), as is currently being discussed between the EAEU and China."
Vyacheslav Sutyrin, Valdai Discussion Club, 24 May 2020
This year, our country faced the sanctions against its real and financial sectors that were unprecedented in scale. In February and March, these events caused:
a higher volatility in the financial market,
a weaker ruble,
a sharp rise in inflation expectations,
an outflow of depositors’ funds from banks, and
a feverish consumer demand.
Financial stability risks rose substantially.
A package of measures was taken to stabilise the situation. They included
a brief but sharp increase by the Bank of Russia of the key rate on 28 February,
an introduction of restrictions on capital flows,
a suspension of trades on the Moscow Exchange,
regulatory easing for banks, and
a borrower support.
These measures made it possible to curb the volatility in the domestic financial market, return depositors’ funds to banks, and support the banking sector.
The Bank of Russia managed to fully meet the elevated liquidity needs of banks and stabilise the situation quickly even though fluctuations in cash flows were extreme. The major contributors were the resilience of the banking system, which had been continuously improved in the last few years, as well as the maturity and reliability of the monetary policy operational procedure, which supported liquidity provision and absorption mechanisms.The financial situation stabilised.
Now, the economy is undergoing transformation. This is a long and challenging stage of the adaptation to new environment. It will take time for companies to readjust their business models and economic relations and for people to revise their consumption habits.
Our key task is to ensure that our country goes through the transformation without extreme losses in the economic activity and avoids macroeconomic stability risks
Alexey Zabotkin, Deputy Governor of the Bank of Russia 12 August 2022
"Of course, we have all we need to defend our national interests. We will use it fully if needed. Those using the language of sanctions to talk to
should understand that thus far we have shown restraint in our response to these acts of economic aggression, but that our patience has its limits. Russia
They failed to tear our economy to shreds as Barack Obama passionately wished some time ago. And they will not be able to do so. All that they intended to provoke in
has now started to hit home. A number of European countries are seeing price spikes, drops in revenues and the exhaustion of energy resources. Political experts have spoken of the growing dangers of a social explosion. Russia
The usual blessings of civilisation are turning into a privilege for Europeans. This is the price that ordinary citizens must pay for the Russophobic attitudes of their politicians.
But this is what’s happening in the West. In
, we will build up our economic and technological sovereignty and chart alternative financial and logistic networks to service our international trade. We will continue to strengthen our cooperation with our partners in Asia, the Middle East, Africa, and Russia Latin Americawho, just like us, are in favour of equal cooperation and against the politicisation of trade."
Sergey Lavrov 8 October 2022
"You know, as far as the state is concerned… Of course, we have incurred costs, above all, losses associated with the special military operation, which I keep thinking about all the time, and there are economic losses as well.
But there are enormous acquisitions and what is happening now, will, without any doubt, ultimately – I want to emphasise this – will ultimately be beneficial for Russia and its future.
What are these acquisitions about? They are about the strengthening of our sovereignty across all areas, primarily, in the economic sphere.
Not long ago, we ourselves were concerned about our becoming some kind of semi-colony where we are unable to do anything without our Western partners. We cannot perform financial transactions, we have no access to technology and markets, or sources for acquiring the latest technology. Nothing.
All they need to do is snap their fingers for all that we have to fall apart. But no, nothing fell apart, and the basis of the Russian economy and the Russian Federation turned out to be much stronger than anyone may have thought, maybe even ourselves.
This is an act of purification and understanding of our capabilities, the ability to quickly regroup given the circumstances and the objective need not only to speed up the import substitution processes, but also to replace those who are leaving our market.
It turned out that in most areas our businesses are replacing those that are leaving. Those who depart are whispering in our ear: we are leaving for a short while and will be back soon. Well, how are they going to accomplish that? They are selling multibillion-dollar properties for just one dollar. Why?
They are reselling them to the management. What does this mean? It means they have reached an agreement with the management that they will return. What else could it be? Are they gifting these businesses to two or three individuals? Of course, not. We know this sentiment.
So, this is critically important.
We ourselves have finally realised – we keep saying that we are a great country – we have now realised that we are indeed a great country and we can do it.
We are fully aware of the mid-term consequences of cutting access to technology. But we did not have access to the critical technology anyway. The COCOM lists that have been in force for decades appear to have been cancelled. Now, they have tightened the screws, but it turned out what we are getting by, nonetheless.
Another important component, this time of a spiritual nature, which is, perhaps, the most important part. First, this motto – we leave no one behind – actually sits deep in the heart of every Russian and in the other ethnic groups who are Russian citizens, and the willingness to fight for our own people solidifies society. This has always been the great strength of our country. We confirmed and reinforced it, which is the most important thing."
Vladimir Putin 27 October 2022
"The enemy countries do not have the courage to admit that their "infernal" sanctions have failed miserably. They don't work. The absolute majority of industrial products and consumer goods managed to replace their own, Russian, and the missing – Asian brands. Parallel imports also work, from which we get the same Western brands, and their owners – nothing. So it's the same as always: Americans are making money from humiliated Europe. Crushed Europe suffers and loses money. At the same time, even the IMF predicts economic growth in Russia this year.
According to a study from the University of St. Gallen in Switzerland, quoted by the newspaper, less than 9% of companies from the EU and G7 countries have terminated relations with their Russian partners. The Russian economy, the publication continues, turned out to be "surprisingly resilient, which raises questions about the effectiveness of Western sanctions.""
Dmitry Medvedev (in his Telegram Channel January 2023)
"We have long come to the conclusion that we can only rely on ourselves and those who honour their agreements. We will never again rely on those who lie, who constantly deceive others and who try to gain illegitimate unilateral advantage.
Some Western companies, which acted on their governments’ orders to leave Russia, are trying to return now. Our government has commented on this situation. We are not sure that this matter should be decided immediately. Let our businesses take the vacant niches. We will develop our economy by using the material benefits which history and God have given to us in this world, rather than through any virtual services or the artificial domination of the dollar and dependence on it...
The sanctions against Russia are indeed something that nobody has ever seen or been able to imagine. But for us it is a resolved issue. We have all the capacities to be independent from this sort of behaviour by our Western colleagues who have proven their complete inability to negotiate."
Sergey Lavrov 25 April 2023
"..the Government has been instructed to draft a special development programme for the new regions before the end of the current quarter. By 2030, they should reach the national average in terms of infrastructure, social services and many other parameters of living standards.
I would like to ask the Government, federal agencies and colleagues in the regions to work out, clearly and consistently, all the details of this programme.
It is essential to set clear and understandable development benchmarks for Russia’s new regions, so that people know what will be built in their cities and towns, which facilities will be renovated and when, how family incomes will grow, what kind of assistance they will receive from the state, how kindergartens, schools, universities, hospitals and clinics will operate, when enterprises will reopen, what kind of support small businesses and entrepreneurs will receive, and how infrastructure and transport will develop.
Here I would like to emphasise the need to support local entrepreneurs. Of course, if we need investment from major Russian sources, from our large companies – private or state-owned – we need to facilitate that as well. But it is of the essence to support local businesses wherever possible.
Key performance indicators for the development of the Zaporozhye and Kherson regions, LPR and DPR must be established for this year, 2023. I am referring to uniform and transparent criteria for assessing not only regional and municipal, but also federal authorities...it is necessary to involve the new regions in the implementation of our national projects, and this, among other things, means that funding needs to be provided."
Vladimir Putin 11 January 2023