Russia Reform Monitor: No. 1769

February 20:

Experts believe Russia's 12-year oil boom has nowhere to go but down in the next three years, placing current prime minister (and soon-to-be president) Vladimir Putin in a tricky situation. According to Bloomberg, current Russian oil wells are near their peak output and within three years, production rates will decline if there is no further investment. In 2011, Russia's oil and gas industry was responsible for nearly half of state income. Lowering production taxes would drastically reduce the funds available for public spending – a dangerous proposition given the country’s continued unrest. Russia’s oil and gas majors have insisted that current production tax levels deter further investment, and have even threatened to slow output until the Kremlin agrees to lower taxes. The current state of political unrest, however, suggests that tax reforms will likely have to wait until after Putin secures his position in the Kremlin.


February 21:

Russian arms sales to Syria have increased during the months-long crackdown by Bashar al-Assad on domestic opposition. Over the past year, Russia supplied around fifty percent of Syria’s arms, the most of any country. The former chief auditor for Syria’s defense ministry claims that even more Russian arms are flowing into the country now. Mahmoud Suleiman Haj Hamad, who defected in January, told Reuters that “before the uprising, Russia was trading weapons to Syria in a more limited manner. More recently... Russia began giving more weapons to Syria.” He went on to say that, to his knowledge, “Russia was shipping monthly.” The Kremlin, however, has insisted that its weapons shipments to Syria have not increased, with Deputy Defense Minister Anatoly Antonov going so far as to claim that any Kalashnikovs being used on civilians are “counterfeit.”


February 22:

The Kremlin insists that it cannot rule out the possibility that the U.S. will use its airbase in Kyrgyzstan in a strike against Iran. The U.S. airbase at Manas, near Kyrgyzstan’s capital city of Bishkek, is currently a key hub for operations in Afghanistan, reports the Agence France Presse. However, Kyrgyz president Almazbek Atambayev has threatened to evict the U.S. from the facility once its lease ends next year - a threat sparked in no small measure by worries in Moscow that the base could serve as a logistical and operational node if conflict erupts over Iran's nuclear program. "It cannot be excluded that this site could be used in a potential conflict with Iran," foreign ministry spokesman Alexander Lukashevich has said. "We hope that such an apocalyptic scenario will not be realised." An American ouster from Manas, however, would also be a strategic gain for Russia, which also maintains a military base in the Central Asian state, providing a boost to the Kremlin's efforts to expand its influence in the region.


February 23:

Thousands of people have gathered again in support of presidential candidate Vladimir Putin, marching along the Moscow River in military formation. Although he didn’t repeat his recent claims against the West, the Huffington Post reports that Putin warned the crowds against the “dangers of foreign influence,” alluding to his earlier accusations that the U.S. was behind the country’s political unrest. An estimated 75,000 people filled a soccer stadium to hear Putin speak, although thousands of participants left the event before Putin even took the stage. Many claimed to be state employees forced to participate, and some said they’d been offered two days of vacation in exchange for attending the rally.

February 24:

Vladimir Putin has unveiled another revision to the Kremlin’s military procurement plans. The latest iteration,reports the Voice of America, includes 28 submarines, 50 surface ships, 100 military satellites, 400 intercontinental ballistic missiles, 600 helicopters, 600 war planes, and 2,300 tanks. However, analysts remain skeptical over the legitimacy of the plan, which would double the percentage of the Russian economy dedicated to defense, from three to six percent. Former Finance Minister Alexei Kudrin resigned from office last year following excessive military spending, calling the plans “completely impossible.” Fyodor Lukyanov, editor of Russia in Global Affairs magazine, likewise called the most recent pledge “absolutely impossible to implement.”

February 25:

The latest anti-Putin rally gathered in the prime minister’s hometown of St. Petersburg, where thousands of participants demanded the presidential candidate’s resignation. Reknowned blogger Alexei Navalny spearheaded the effort in an attempt to prove that “anti-Putin feeling existed outside the Russian capital of Moscow,” according to Reuters. “The strategy is very simple,” said Navalny. “Vote for anyone against Putin.” Opposition activists have already planned another Moscow protest for the weekend after elections, while former oil tycoon Mikhail Khodorkovsky will publish an editorial in the German magazine Focus the day of the election to encourage the Russian people to “think strategically” about Vladimir Putin’s four opponents.