Russia Reform Monitor: No. 2018

October 26:

Worries over the spread of Islamic radicalism has prompted a wave of arrests by Russian security services,Radio Free Europe reports. The crackdown, which is being billed by the Kremlin as an "anti-IS" effort (referring to the Islamic State terrorist group), has targeted both Russian Muslims and Central Asian laborers now resident within the Russian Federation. However, the news agency notes, the arrests "seem to be part of a wider effort to target other Islamist groups [as well], in particular the pan-Islamist political organization Hizb ut-Tahrir," which is likewise banned by the Russian government.

The Kremlin is hiding just how serious Russia's economic problems really are, say former government officials.Radio Free Europe reports that, at a recent conference at the Center for Strategic and International Studies in Washington, former deputy energy minister (and current opposition activist) Vladimir Milov noted that the drop in world oil prices, coupled with ongoing Western sanctions and the subsequent devaluation of the ruble, is resulting in a deeper and longer recession than expected. "Sanctions and the oil decline have pushed this flightless bird over the cliff," Milov said. The statistics appear to back up this assessment; according to the World Bank, Russian GDP dropped 4.6 percent between April and July of 2015, while real wages and industrial output both have declined by 10 percent.

The problems, however, run deeper. "Business doesn't want to invest," noted former Russian Central Bank deputy chairman Sergei Aleksashenko at the same conference, and not only because of Russia's current, belligerent foreign policy. Rather, the problem has to do with the man at the top, Russian President Vladimir Putin, whose return to the Russian presidency in 2013 "was the very best signal for Russian business that there is not any safety in the economy, that there is no property rights protection."

October 27:

Fears of spreading Islamic radicalism is having an impact on Russia's military as well. According to a report on the KAVPOLIT internet portal, recruitment of Dagestanis into the country's armed forces is down considerably. So far this year, just 2,800 Dagestanis have been drafted into the Russian military - less than 10 percent of the 40,000 draft-age men in the Russian republic, and a mere fraction of the numbers of draftees from there a decade ago.

The trend, notes Russia expert Paul Goble on his Window on Eurasia blog, reflects both military preferences and political worries. Declining Dagestani representation "may represent a victory for Russian commanders who don't want North Caucasians in their units," he writes. "But it creates problems both in the North Caucasus and elsewhere." Not least is the potential for still greater atomization of the restive republic's population, because "[m]any young Daghestanis want to serve so that they will be able to get jobs, especially outside of Daghestan, or get into higher educational institutions" - something that they are now less and less able to do.

Russia's Reserve Fund may run out by next year if oil prices remain low, CNBC reports. Russian Finance Minister Anton Siluanov has projected that if oil prices remain at below $50 a barrel and the dollar exchange rate remains the same, the country's budget will fall short of 900 billion rubles in revenues and current reserves will be more than halved to make up for the existing deficit. "This means that 2016 is the last year when we are able to spend our reserves that way," Siluanov explains. "After that we will not have such resources."

October 28:

The republic of Dagestan in Russia's North Caucasus is reemerging as a hotspot for Islamic militancy, reports the Associated Press. The Islamic State terrorist group has been recruiting militants there, and many Islamists - having gone to fight in Syria and Iraq - have recently returned to the region, fanning worries in the Kremlin about a surge of domestic instability. "We can't allow them to use the experience they have just gained in Syria back home," Russian President Vladimir Putin has declared, and his government is now expanding its counterterrorism efforts. But the problem is more pervasive, observers say, and more endemic. "If the high level of corruption and unfavorable socio-economic situation [in the region] remain," Dagestani political scientist Eduard Urazayev says, "it may further fuel protest sentiments and increase sympathy for the IS."