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Russia Reform Monitor - No. 2185

Whitewashing Stalin's purges;
Soviet nostalgia rears its head anew

Edited by Ilan Berman
January 26, 2018

December 24:

Russia is bracing for new financial sanctions from the U.S.,
the Financial Times reports. New economic measures against Russia now being contemplated by the United States will "make the Cold War look like child's play" if they are implemented in early 2018, one of the country's leading bankers has said. According to German Gref, the CEO of Sberbank, the implementation of financial measures targeting Russian oligarchs and state corporations - something that may become a reality after the U.S. Treasury Department delivers a promised report to Congress on Russian "parastatal" entities in February - would be an "irrational" move by U.S. lawmakers, and one that would prompt a dramatic downturn in the already-frayed ties between Washington and Moscow.

Recent comments by Alexander Bortnikov, the head of Russia's main state security service, the FSB, effectively justifying the brutal purges of the Stalin era have drawn outrage from academics and observers alike.
The Japan Times reports that Bortnikov, in a recent interview with the official Rossiiskaya Gazeta, effectively justified much of the Great Terror of the 1930s, in which an estimated 1 million Soviet citizens died, as being founded in "objective" cases against potential anti-regime elements with ties to foreign entities.

Bortnikov's comments, intended to commemorate the 100th anniversary of the establishment of the Cheka, the USSR's first secret police force (and the FSB's ancestor), prompted 30 academics to pen an open letter in response. "Apparently for the first time since the 20th Congress of the Communist Party held in 1956 one of the top functionaries of our state justifies mass purges of the 1930s-1940s which were accompanied by wrongful sentences, torture and executions of hundreds of thousands of innocent compatriots," the letter, published in Kommersant, laid out.

December 25:

Nostalgia for the Soviet Union and regrets about the collapse of the USSR are again on the rise, a new poll has found.
According to The Moscow Times, the survey - carried out by Moscow's Levada Center - documented that nearly two-thirds (58%) of Russians polled were now "unhappy" with the collapse of the Soviet system. That figure marks the highest level of Soviet nostalgia in nearly a decade, the paper notes.

The results also highlight an ideological divide that persists in Russian society. "Broken down demographically, nostalgia towards the Soviet Union is most likely to be expressed by older respondents," according to the Times. "Only 20 percent of people in the 18-24 age group said they expressed regret about the breakup of the USSR, while 42 percent said they didn't. In the 25-34 age group, there was parity, while groups aged 35-54 and 55 or older had the highest number of respondents who said they felt regret."

[EDITOR'S NOTE: Given the effect of Russia's increasingly authoritarian political climate on pollsters and respondents alike, the results of public opinion surveys in Russia should be viewed with some caution.]

December 26:

The flight of capital from the Russian economy is accelerating.
The Moscow Times reports that foreign investors withdrew nearly $1 billion from the Russian economy in 2017 alone. Financial institutions, moreover, estimate that the pace of flight quickened toward the end of the year, as skittish investors began to withdraw funds from the country ahead of the anticipated imposition of new U.S. sanctions in the spring of 2018.

The Kremlin, meanwhile, is actively seeking to reverse this trend.
Bloomberg reports that the Putin government has put in place a series of new fiscal measures designed to "stimulate the return" of some $1 trillion in Russian capital that has fled the country in recent years. The new amnesty plan includes measures like the waiver of Russia's existing 13 percent tax on personal income, with the goal of luring Russian capital back home. "We and our entrepreneurs have repeatedly faced unjustified and illegal asset freezes under the guise of sanctions," Kremlin spokesman Dmitry Peskov has explained to reporters. "The president's initiative aims to create comfortable conditions for businesses if they want to use this opportunity to repatriate their capital."