Russia Reform Monitor: No. 1862

December 10:

The International Monetary Fund has downgraded its prognosis for Russian economic growth yet again, reports the Wall Street Journal. The IMF has announced that its projections now predict Russia’s sluggish economy will grow by just 2 percent in 2014 – nearly half of the 3.8 percent it originally projected for the Russian Federation, and the fourth time this year that it has revised its estimates downward. The number is lower than the 2.5 percent growth that Russia’s own finance ministry has projected for the coming year. The culprits behind the downturn, the Journal notes, are “weaker demand for Russia’s exports and evaporating domestic investment activity.”

Russia’s military continues its transition from a conscript army to a contract force. RIA Novosti reports that Defense Minister Sergei Shoigu has outlined plans to have half-a-million contact soldiers under arms by 2022 – more than doubling the current total of some 220,000. The shift is part of a larger overhaul of manpower and readiness now underway, Shoigu noted in a presentation at a recent Defense Ministry Board meeting in Moscow. The changes include a beefing up of the overall number of soldiers under arms, because at present “the Russian military has 82 percent of the required manpower,” the Defense Minister made clear. Additionally, the Russian government has “prioritized full manning of airborne, special forces, naval infantry and peacekeeping units, including those involved in ensuring security during the Winter Olympics in Sochi,” he said.

December 11:

Russia’s state natural gas giant is poised to make an important acquisition. According to the Russia & India Report, Kyrgyzstan’s parliament has just approved the sale of the Central Asian republic’s state natural gas firm, Kyrgyzgaz, to Russia’s Gazprom conglomerate for a nominal fee of $1. The move, which was backed by some 65 percent of deputies in the Kyrgyz parliament, effectively gives Moscow control over all of Kyrgyzstan’s energy development and transport infrastructure. In return, Gazprom has pledged to pay off the company’s $40 million debt, as well as to invest $610 million in modernizing the company’s infrastructure holdings.

Russian president Vladimir Putin has ordered the country’s military to ramp up its focus on the Arctic in the coming year, the BBC reports. Russia needs to continue to pay "particular attention to the deployment of infrastructure and military units in the Arctic," Putin told the country’s top military brass at a meeting in Moscow. "Next year, we have to complete the formation of new large units and military divisions" in the region, Putin announced. This process, moreover, is already underway; earlier this year, the Russian government reopened an old, Soviet-era airbase in the Novosibirsk Islands.

[Editor’s Note: Putin’s remarks reflect a steadily-growing interest on the part of the Russian government in the Arctic – and sharpening strategic competition over the region among the polar powers. Putin’s order came on the heels of an announcement by Canada that it plans to claim the continental shelf underneath the North Pole as its own territory.]

December 12:

Just weeks after making the case against American exceptionalism in the pages of the New York Times, Vladimir Putin has publicly championed the superiority of Russian morals. London’s Telegraph newspaper reports that, in his annual state of the nation address, Russia’s president presented a vigorous defense of traditional family values and lauded his government’s resistance to what he termed “non-traditional values” – an allusion to the controversial law against “gay propaganda” recently passed by his government. Putin couched his argument in civilizational terms, arguing that “so-called tolerance” of alternative lifestyles could leave the country “genderless and infertile.”

Despite efforts by the United States to create alternatives to the use of nuclear weapons in warfighting, Russia remains prepared to use such arms in the event of a conflict with the United States, a top Kremlin official has said. The Washington Free Beacon reports that, in comments before Russian lawmakers, Deputy Foreign Minister Dmitry Rogozin outlined that U.S. plans to deploy Conventional Prompt Global Strike, a space-controlled missile system, as a non-nuclear deterrent against both Russia and China will not precipitate a similar change in Russia’s strategic posture. “We have never diminished the importance of nuclear weapons—the weapon of requital—as the great balancer of chances,” Rogozin said, and “if there is an attack against us, we will certainly resort to using nuclear weapons in certain situations to defend our territory and state interests.”