Reuters, 11/11/26

MOSCOW, Nov 11 (Reuters) – A senior Russian diplomat said on Wednesday that Moscow could conclude non-aggression pacts with NATO member states as part ​of a new security architecture for Europe being discussed ‌as part of the Ukraine peace process.

Vladimir Medinsky, Russia’s chief negotiator at those Ukraine peace talks – which resumed this week for the first time ​since February – said on Wednesday that the idea of a ​new security framework for Europe had been the central theme ⁠of two days of negotiations in Abu Dhabi, but did ​not provide details of what had been discussed.

Alexey Drobinin, a senior ​diplomat at Russia’s Foreign Ministry, on Wednesday outlined a series of detailed proposals on the idea to a security conference in Moscow.

The first option he ​set out was that of a collective defensive alliance or ​of bilateral mutual assistance agreements like those Russia has with Belarus and North ‌Korea.

The ⁠second possibility he cited included political agreements not to help each other’s adversaries in the event of aggression, like the pact Moscow has with Iran.

And the third option he presented were bilateral ​mutual non-aggression pacts.

“For ​example, agreements ⁠of this kind could be reached, among other things, with individual NATO member states, which would ​then receive, for instance, additional individual security guarantees from ​the ⁠Russian Federation,” Drobinin told the conference, according to video of his speech posted online.

Some European politicians oppose any discussion of Europe’s overall ⁠security architecture, ​saying progress on Ukraine – including a ​ceasefire – must be agreed first, although US officials have made clear they are open ​to such discussion.

***

Russia and Ukraine say some progress made at talks, US cites a lack of trust

By Roula Rouhana, Reuters, 11/11/26

Summary

-Second day of talks ends in Abu Dhabi

-Kyiv and Moscow agree on prisoner-of-war exchange

-US envoys set to hold talks in Moscow on Thursday

-US mediators see a lack of trust between the sides

-Differences remain on issues including territory

ABU DHABI, Nov 11 (Reuters) – Russian and Ukrainian negotiators reported some progress in two days of peace talks in Abu Dhabi that ​ended on Wednesday, but US mediators said there was a lack of trust between the warring sides and differences remained on issues including territory.

In their first peace talks ‌for nine months, Russia and Ukraine agreed to a major release of prisoners of war, but there was little else in the way of concrete announcements after the US-brokered meetings.

US envoy Jared Kushner, US President Donald Trump’s son-in-law, said mediators were appealing to each side’s interests to end Europe’s biggest conflict since World War Two and that he was convinced they could find a pathway to peace.

Despite public optimism from Trump, there has been no sign of major compromises on the main ​issues after more than 4-1/2 years of war since Russia’s full-scale invasion of Ukraine.

With talks deadlocked on land – Ukraine has rejected Russian President Vladimir Putin’s demands to surrender the whole of ​the eastern region of Donbas in return for peace – US mediators have tried to steer talks toward post-war security guarantees and reconstruction.

“The reality is there is ⁠no trust right now between the sides and that is to be expected after a conflict like this,” Kushner said, adding that the talks in the capital of the United Arab Emirates had touched on ​territorial issues and that these would be the hardest to resolve.

“Some areas we see places where we can find compromises, other we need to have more discussions, but I think this was a very good ​step,” he said.

Kushner said he and fellow US envoy Steve Witkoff would travel to Moscow on Thursday for talks with Putin at which they would raise the question of broadening the talks to include European partners, who he said must be at the table.

He said security architecture in Europe could form the basis for an agreement, without providing details.

As the Trump administration has scaled back its direct support to Ukraine, Europe has become its leading provider of finance and military ​support.

After Thursday’s meetings in Moscow, Kushner and Witkoff will fly for talks with Ukrainian leader Volodymyr Zelenskiy during a visit to Ireland.

ATTACKS CONTINUE

Each side said the other had launched attacks overnight, despite the peace talks ​being under way.

Russia struck six large electricity substations in central Ukraine, officials said, and an attack on a busy market in the Odesa region killed three people, the regional governor said. One person was killed in a Ukrainian drone attack ‌in Russia’s Belgorod ⁠region, local authorities said.

Ukrainian negotiator David Arakhamia said the talks had been tough, with Russia’s delegation arriving with “strict directives”, but they provided “good momentum” towards reaching a solution before the end of the year. He gave no details.

Arakhamia said that future talks should be multilateral, not trilateral, and should include European officials. Although European officials and NATO representatives met US and Ukrainian envoys in Abu Dhabi, Russia’s delegation declined to meet them.

Russia’s chief negotiator, Vladimir Medinsky, said understanding had been reached on some issues, but was cool on the prospects of European countries joining talks.

He told a press conference it was unclear what Moscow could discuss with ​the European Union because it had made no new ​proposals. Even so, Russian state news agency ⁠TASS cited the Kremlin as saying Putin was open to contacts with the EU.

There has been no sign publicly that Putin is willing to drop a demand that Ukraine surrender all the land in the Donbas region that it still holds before a peace deal can be struck.

FRONT LINE STATIC

Russian forces control about ​a fifth of Ukraine, much of it captured before the 2022 invasion, and their progress on the battlefield has slowed this year.

With the front line largely ​static, Moscow has been pounding ⁠Ukrainian cities and energy sites, while Ukraine has stepped up attacks on Russian oil refineries and other infrastructure.

Russian officials are increasingly calling for a broad agreement on European security architecture to be reached before tackling the specifics of the war.

Before its full-scale invasion in February 2022, Russia demanded the withdrawal of NATO forces from countries that joined the alliance after 1997, which the alliance rejected.

Trump said last week the war was close to being ⁠settled in a “big ​beautiful agreement” that could include security guarantees for Europe. He has frequently predicted breakthroughs that have not materialised.

Trump has intensified ​pressure on Kyiv to reach a deal to end the war, or face “a very bad thing”.

The new American peace drive has galvanized European officials into pushing for a place at the talks.

European officials say wider security talks should only come after a ceasefire, ​and Russia should not be allowed to influence Europe’s security arrangements or [be] rewarded for starting the war.

By Alastair Crooke, The American Conservative, 11/1/26

The Atlantic on October 23 published a profile of CIA chief John Ratcliffe. Its subheadline contains the most significant “tell” from the piece—“CIA Director John Ratcliffe leads an agency that’s at war with Russia, even as Trump makes nice with Putin.”

The Atlantic article makes no bones about its ulterior purpose. It is to present Ratcliffe as an even-handed professional who has mastered the intricacies of the Ukraine War and tells it “like it is” to the president, leaving the latter to decide his options.

This panegyric to Ratcliffe, however, hides substantive issues about the probity of CIA intelligence analyses, their impact on policy, and the extent to which the pure excitement of militarized covert action inevitably hobbles intelligence agencies and analytic reporting.

Intelligence is never wholly objective. And its professionalism largely hangs on service culture, which can—and does—change.

As one example, a former head of the IDF’s Military Intelligence research and analysis division, General Itai Brun, warned that Israel’s inability to recognize what Hamas was planning for October 7 resulted, not from a lack of information, but from a failure of culture and approach. Per the Times of Israel’s report of his comments:  

Even after the massacre, intelligence didn’t internalize that Hamas believed it could succeed…. The whole military intelligence network “was not listening, because it was convinced it knew…. It could not accept the possibility that it was wrong.

So, when it comes to “culture,” in this sense, two points in the Atlantic piece stand out: First, the article hints that Ratcliffe is seen by his staff to be “clear-eyed about the threat Russia poses not just to Ukraine—but to the United States and its allies.” This suggests that Radcliffe sees Russia as an eternal enemy of the West, or at least a current enemy with nefarious intentions. Secondly, the article emphasises that the CIA is in “the lead” on Ukraine and that its paramilitary wing—Covert Action—is thrilled at being so busy. As Larry Johnson, a former CIA official, outlines:

The CIA helps Ukraine knock out Russian refining capacity. Diesel prices soar. Then… in the middle of peace talks in Miami… President [Trump] announces a deal for Russia to sell its diesel on the world market…. So the United States is simultaneously paying to destroy Russian diesel production and begging Russia to sell it more diesel. You could not design a more incoherent policy if you tried.

The Atlantic piece lends credence to what has long been supposed—that Trump’s attempts to secure a “deal” with Russia (most recently by importing Russian diesel into America to bring the price down for the midterm elections) is a deceit intended to coax Moscow towards making a deal (unfavorable, in the Kremlin optic) with Trump.  

It would be a deceit because the CIA pursues its own (militarised) covert action war on Russia. The Atlantic, citing a CIA officer, reports: 

Armed with information that the U.S. provides, Ukraine’s military has launched strikes deep inside Russia. And U.S. spy satellites provide early warning about incoming missiles and drones. Among U.S. personnel on the ground, “the CIA is in the lead,” a retired senior officer who travels frequently to Ukraine told me.

The recent Starlink fracas—was its military communications network deactivated, was it go-slowed, did it glitch?—only highlights ever more clearly the dysfunction inherent to the U.S. institutional contradiction underlined by the Atlantic’s subheadline.

Plainly—for whatever the behind-the-scenes reason—Trump does not choose (or cannot choose) to exert control over the CIA. (Although, he could cancel all previous “Presidential Findings” that legally frame what the CIA can and cannot do and could substitute them with his own Finding).  

Evidently, all that Trump was able to do in this instance to advance his putative “peace deal” was to withhold Starlink communications and intelligence sharing, ad interim, until Zelensky agreed to stop hitting Russian fuel refineries. The storm was over in days; Starlink was reactivated.

How should we read these events? Plainly, the deep state isn’t on board with Trump’s “making nice” with Russia, and Trump isn’t bringing them along.

Does the Russian leadership understand what is afoot with Trump’s apparent soft deceit that is intended to appease the MAGA constituency at home, whilst the CIA, as the Atlantic piece says, continues to “have gotten too good at hurting Russia, for Trump’s taste”? 

President Vladimir Putin, of course, understands completely. That is why Russian policy has pivoted to an operational-level strategy to destroy the militarily useful infrastructure of Ukraine, thus banishing the specter of a potential attack from the “space” to the west of Russia for at least a generation, maybe more. As Dmitri Trenin outlines:

The Russian army has launched its own [campaign]… dropp[ing] some of its self-imposed restraint… hitting the targets that heretofore it had avoided… [as] a way “to escalate to de-escalate”—six to nine months of intense air war in combination with advances on the ground that could bring the conflict to an end.

Russia’s tested resilience in this war is superior to Ukraine’s in material terms and to Europe’s in nonmaterial ones, which will likely determine what happens in the future.

The question, then, is does the CIA “get it”? Or is it, on the pattern outlined by Brun, the aforementioned Israeli general, that the CIA “knows” that Russia—in fact—is failing? In which case, the CIA was, in Brun’s words, “was not listening, because it was convinced it knew.” The Atlantic, again: “No one knows the state of the war, and the stakes involved, better than the CIA officers who are working in Ukraine and monitoring the fight from headquarters.”  

And are the Europeans listening? Not at the moment. The denial amongst some of the political class may be cracking, but it remains nonetheless largely intact—mainly because no European leader has any feasible plan to end the Ukraine entanglement in any cogent way. And, at the same time, no European leader knows how the EU can fund Ukraine and its war without crashing the very financial architecture that underpins “liberal” Europe.

Yet they soon will come to understand, because Europe is politically broken and financially broke—Eurozone government debt has increased to nearly 89 percent of GDP in the past six months. France’s debt has ballooned to 119 percent of GDP, while Italy’s is approaching 140 percent. Economic growth is slowing, unemployment has edged higher, consumer confidence is falling, and the ECB has already started raising interest rates again.

Europe surely can’t cough up the further €155 billion that Zelensky is insisting Europe should provide to Ukraine—particularly as the EU is already currently paying installments of the €90 billion loan for Ukraine that was meant “to help cover funding to the end of 2027.”

Russia is very aware of Europe’s fracturing. As Timofey Bordachev of the Valdai Club lays bare, “Western Europe is falling apart.” Bordachev writes,

The unrest sweeping several European countries… marks a new phase in the continent’s systemic crisis… [reflecting] the convergence of two long-term problems that much of Europe’s political establishment has proved incapable of resolving. The first is the exhaustion of the socioeconomic model that sustained Western European prosperity… The second is Western Europe’s long-standing absence of genuine sovereignty…. The [American-led NATO] alliance’s practical [function] has been to preserve the existing political order…. Transform[ing] that order would require a reassessment of relations with Washington and such independence is something these European governments have long been unwilling, or unable, to contemplate.

One wonders whether the CIA, which supposedly knows so much, knows about any of this either.

By MK Bhadrakumar, Indian Punchline, 11/2/26

 Peace comes in driblets in Ukraine

The famous line of Irish poet WB Yeats from the poem The Lake Isle of Innisfree comes to mind: ‘And I shall have some peace there, for peace comes dropping slow…” Yeats was expressing his longing for the peace and tranquility of Innisfree, an uninhabited island in Ireland near which he spent his summers as a child while residing in an urban setting. And that is how Ukraine’s search for peace is meandering – not in a sudden, overwhelming wave; rather, in tiny, quiet increments, much like a gentle rain or a slow leak.

The ‘leak’ by Russia’s presidential aide for foreign policy Yuri Ushakov is no doubt an increment of potentially immense consequence when he told Kremlin’s preferred reporter Pavel Zarubin on Sunday that President Vladimir Putin never refused to speak with Ukrainian President Vladimir Zelensky. Replying to a pointed question whether Putin would answer a call from Zelensky, Ushakov foretold, “I think he would answer, of course. Putin has never refused to talk. He [Zelensky] is sending signals through various sources. If he really wants to negotiate, he is free to come [to Moscow].”

The remark comes within a week of the joint phone call on October 27 by Finland’s President Alexander Stubb and Norwegian Prime Minister Jonas Gahr Støre to Putin during which, per a subsequent disclosure by Ushakov, the Nordic leaders discreetly broached the subject of direct contact between Putin and Zelensky. Zelensky later appreciated their debriefing. This is the first thing. Apparently, Putin repeated the refrain that Zelensky can always visit Moscow and that the Kremlin would ensure his personal safety and security. Now, an addendum, as it were, has appeared for the first time to Putin’s standing offer. Presumably, it was an orchestrated Q&A. This is the first thing.

Secondly, the Kremlin closely studied the commotion in Europe that the two Nordic leaders’ impudent behavior triggered — as if the wolf entered the hay pen. The two Nordic leaders broke ranks. Denmark and Sweden protested they were not consulted. However, the two EU heavyweights — France, Germany – simply looked away, and the super hawkish European Commission (EC) leadership under Ursula von der Leyen and her fiery foreign policy chief Kaja Kallas, were uncharacteristically subdued.

How to explain it? As Guardian newspaper (no friend of Russia or Putin) noted, “The confusion reflects a wider disagreement across Europe over how to approach Putin, even as governments remain broadly united in their support for Ukraine… France has long advocated keeping a channel to Putin open, while Germany and Britain have been more cautious. The Baltic states and Kaja Kallas fear that renewed high-level engagement could ease pressure on Moscow without securing concessions.”

Thirdly, the dissonance is at its loudest when it came to the question of who should lead any European outreach. Von der Leyen insists on nominating someone who will faithfully execute her policy line – in sum, put her in the driving seat. It is excruciatingly painful for Von der Leyen to dismount the high horse she has been riding to demonize Putin and insist Russia can be defeated in the war.

This is the crux of the matter: EU, with its narrative on the war collapsing, is not able to come up with any peace proposals. Its one-point demand is to have a physical presence at the high table of negotiations. Moscow has said it does not make sense unless EU has something to bring to the peace table. Trump agrees.

In fact, across the Atlantic no one is paying attention across to the acrimony in Europe regarding the seating arrangement at the peace table. The American elites are busy with domestic politics and if at all on the US’ war with Iran. Generally speaking, Ukraine war has ceased to be a hot button foreign-policy issue among the elites. The ease with which Trump could mothball the Graham Act sanctions on Russia is telling. Zelensky’s support base in the US is also steadily shrinking. In practical terms, it turns out to be is CIA’s war.

Clearly, the trilateral meeting in Abu Dhabi will go ahead without any European participation. Meanwhile, Slovakia says Bratislava will represent itself. The house that Von der Leyen built to centralize all decision-making seems far too fragile as multipolarity gains ground in Europe. This trend can only gather pace as incumbent governments may be replaced in four of the EU’s biggest member states in national elections during 2027 – France, Italy, Poland and Spain. A recent Carnegie paper in mid-September assessed that radical-right parties with Eurosceptic orientation and are Russia friendly are expected to do well.

The Carnegie paper titled How Europe’s 2027 Elections could Test EU Governance reluctantly admitted that the war in Ukraine “is likely to remain the EU’s most urgent security challenge. Radical-right parties are sharply divided on this issue, but as the cost of the EU’s support for Ukraine rises, resistance in several countries will increase. Locking in the union’s backing for Kyiv through multiannual programs would reduce the risk of a new constellation of political forces putting the union’s commitment to Ukraine in doubt.”

Overall, therefore, the Kremlin’s overture to engage Zelensky in a phone conversation comes not a day too soon. The catch is, Zelensky is a protégé of Britain’s MI6’s but here too, Britain’s ability to sustain the present momentum of the war is increasingly debatable. A BBC report gave a stark warning of “painful and depressing few years ahead” for the British people “after forecasts showed growth in living standards grinding almost to a halt.”

Ushakov’s remark testifies to the suppleness of the Kremlin’s strategy of not being an impediment to peaceful settlement in Ukraine but with no let-up in the frontline. Large scale Russian troop movements, the destruction of bridges over the Dnieper, the focus on Odessa and Kharkov, etc message that in the Kremlin’s estimation, there might be no alternative but to seek a military victory.

In a Substack piece, Gordon Hahn, the US security expert and specialist on Russia, visualised that Moscow may “add to its original demands” by pushing the ante on territorial issues, including the seizure of Kiev (“the mother of all Russian cities”) and Odessa (which Putin calls a Russian city’) – ie., gain control of the territory east of Dnieper (what Russians call the ‘Left Bank’) letting western Ukraine collapse into warlordism.

By Ben Aris, Substack, 10/29/26

Putin is having fun as delegations from 48 of Africa’s 54 countries, 22 led by heads of state, are in Moscow for the third Russia-Africa summit, where Putin is selling Russia as Africa’s anti-colonial partner.

He is on a roll to an eager audience, giving rousing speeches on his favourite topic: the world has been ruled by a bunch of neo-colonist imperialists that are just interested in bleeding the developing world of its human capital wealth to enrich themselves and the workers of the Global South should unite!

This is the third time for the summit, following the first one in Sochi in 2019 and it has been a huge success. The message resonates as much of the message is true. A study we reported found that the West exports some 80% of its manufacturing needs to the developing world, to sweat shops in places like Myanmar, where the “multinationals” pay pennies to have our phones and jeans made. That really does export the human capital wealth from these countries and enrich us in the developed world as a iPhone costs $1,000 and not the $5,000 it would cost if an American made it. That’s $4,000 of cash you can spend on something else. This system was politely known as “globalization” until recently but, as Putin keeps pushing, it can also be called neo-colonialism. At least, the Africans see it that way.

Ironically, this system is exactly what US President Donald Trump is complaining about and the reason for his Liberation Day tariffs – to bring “good manufacturing jobs back home.”

But this is beyond stupid, as it takes no account of the income delta: we did a back of the envelope calculation of the unit cost of making a widget in the EU, US and China using one kilo of metal, 100kWh of power and an hour of average labour: it costs around $25 in the developed world and only $7 in China – and China already has some of the more expensive labour costs in the EMs.

You can’t compete with this, no matter how high you build your trade protectionist walls. As we have been arguing all year, we are now in a post-Pax Americana world as the “emerging markets” have emerged. They should be renamed something like the “dynamic markets” (that is not really catchy enough, eh?) as they still have a lot of problems and the wage delta remains, but the China story shows very clearly that they are catching up in a lot of sectors and even overtaking the DMs in things like Greentech.

But not Africa. That really is still an emerging market story. The per capita incomes in Africa are still a fraction of even Russia’s income. It’s the last really big EM catch up story that has yet to unwind. And Russia is promising to help.

Russia was in the first wave. I was in the room at Putin’s first ever state of the nation speech in 2000 when he put demographics at the top of the agenda – it’s still top of the list – but he his top economic agenda item was to “catch up with Portugal.”

26 years later Russia has overtaken not only Portugal, but everyone else, except the US on a ppp basis.

This process is going in waves. Central Europe caught up with the DMs really fast after the EU accession wave in 2003. China has seen its growth accelerate for about a decade and is now slowing and maturing. Central Asia is only coming to its critical mass now, where Uzbekistan has been putting in 6% growth for a decade but recently started to accelerate and growth is now around 8% with another decade of fast growth ahead. Latin America is doing the same and the Brazilian economy in particular has been transformed and now accounts for a third of GDP of the whole continent by itself.

Africa is right at the start of the process, with a few hot spots like Nigeria. Sub-Saharan African growth averaged 4.5% in both 2026 and 2027 with East Africa growing the fastest at 6.5% projected for this year.

It usually starts with FDI into light manufacturing, but most of Africa is still at the exporting-raw-materials stage. It’s an issue of low wages vs productivity. The Balkans is currently booming as productivity has risen to the point where the combination of the two makes it more profitable than investing in Central Europe. In Africa the wages are essentially zero, but so is the productivity.

In this context, listening to Putin’s speeches today and yesterday and he is pushing all of Africa’s buttons. He is not only promising to provide grain – a top necessity for many countries – but yesterday he also promised to invest into African pharmaceutical sector, and today promised to build factories and move some Russian production to Africa. He also mentioned that the number of African students studying in Russia has doubled in the last year and Rosatom was holding talks on building half a dozen floating nuclear power stations in Africa. These are all productivity multipliers and the assembled presidents are creaming themselves over the prospects as Russia usually finances these sorts of investments itself – for the Africans they are essentially free (in the short-term but come with strategic dependencies…).

The neo-colonial troupe is the Xmas wrapping paper this is all bundled into. Another story earlier this month that went by largely unnoticed was a Russia sponsored UN motion to condemn sanctions as neo-colonial, which was universally approved by the Global South and university condemned by the EU and US. The Kremlin completely outplayed the West with that one. France was booted out of Niger in 2023 because it was paying a fraction for a kilo for uranium, an estimated €68/kg, when the market price was closer to €200. Macron regularly gets booed when he tours in francophone Africa – he simply doesn’t get it.

All this is important as its part of Putin’s big bet on the Global South Century. He must have been fully aware of what would happen when he marched into Ukraine – a permeant break with the West and the end of his dream of a single market “from Lisbon to Vladivostok” which most of his foreign policy was built around. Swapping Germany for Sahel may not look like such a great idea, but when you add in Latam, SE Asia and particularly China, it starts to get more appealing: Putin pointed out that just the BRICS generated 40% of global GDP last year. And Africa will eventually be a big catch as it shares many features with Russia: a large land mass, a large population, and a cornucopia of raw materials. Putin’s plan is clearly to accelerate the catch up, and the Africans are lovin’ it.

Russia is so well received as it never tried to colonise Africa and indeed, during the Cold War the communist USSR supported the independence movements against their colonial overlords. And since then Russia remains the destination of choice for a quality higher education. You’d be surprised at how many of the African delegates in Moscow today speak fluent Russian from their university days. For example, presidents João Lourenço of Angola and John Dramani Mahama of Ghana both studied in Moscow.

By Gilbert Doctorow, Substack, 10/25/26

To the best of my knowledge, you will not find anywhere else the discussion about money and politics in Russia that I am about to present below. This is not because the subject is marginal or exotic: on the contrary it should be central to any explanation of how Russians vote and why President Putin and his party United Russia maintain control of the Duma and of Russian political elites today. However, de facto Russian Studies have ceased to exist in the United States for well over a decade and for that reason the subject at hand has gone unnoticed, unexamined.

I take for my marker on the last generalization, my close and regular observations of one of the two founding centers of Russian studies at U.S. universities dating from 1949, Columbia University’s Harriman Institute. When I was last on campus as a Visiting Fellow of the Harriman in 2010-2011 the scope of Russian studies had been reduced to discussion of the crimes of Vladimir Putin & Co. against human rights in Russia and assorted freakish but at the time fashionable subjects like how LGBT are treated in Russia today. More recently, even that very skewed definition of Russian studies has been thrown overboard, and the Harriman Institute has implemented the fashionable concept of ‘decolonizing Russian studies’, meaning that Russia itself disappeared from the syllabus and what is studies is the Borderlands of the former Russian Empire: Central Asia, the Caucasus and, first and foremost, Ukraine. Indeed, the Harriman Institute might be better named “The Center for Ukrainian Studies.” The good Governor Harriman, patron of the Institute, must be turning over in his grave.

From my regular correspondence with Professor Francis Boyle (deceased) of the University of Illinois, and holder of both law degrees and a history PhD in Russian from Harvard, I heard his disgust over the way the Davis Center (formerly the Russian Research Center) had similarly degenerated into a totally useless platform for Ukrainian propagandists and anti-Russian studies, even though a properly named Ukrainian Center has existed on campus since the 1970s when I was a witness to its creation.

With that introduction out of the way, let us move on to the substance of this essay: money, investments and how the upper middle classes of Russia, the bulwark of any government have been properly bought off by United Russia and remain on the sidelines of any political tensions there may be over the conduct of the Ukraine War, the state of the economy and other issues that otherwise could attract their attention and activism.

———

The common figure given for Russians with money to invest is 6% of the general population. The bottom 94% of the population is living from hand to mouth. It can and is bought off by Power with good subsidies for their home mortgage loans, especially as regards young families, with ever rising pensions for the elderly that are paid on time, with improving civilian infrastructure including roads, schools, hospitals and polyclinics. All of these measures are properly executed by the governing United Russia party. Add to that the ultra-generous sign-up payments for those volunteering to serve in the Special Military Operation. Depending on where you live, that can be approximately 35,000 euros equivalent in roubles, which is typically greater than 3 years of salary that your ordinary bloke would have been making before the war. Death benefits and life pensions for the critically wounded are similarly generous.

All of the foregoing, of course, has little bearing on the top 6% of the population, whose minds are elsewhere, on investments to build upon their acquired capital.

As we know, the prime interest rate set by Elvira Nabiulina at the Central Bank has spiked and remains today far above the official inflation rate of 7%. A year or so ago, the prime was at 21%. Today it is at 14%. As I have indicated repeatedly on these pages, such interest rates have devastated small entrepreneurs, because effectively they are deprived of working capital at rates that their business margins can support. Meanwhile, major corporations, especially those active in the military production and other privileged spheres in this dirigiste economy, receive highly subsidized bank loans and can operate normally.

One may assume that the small entrepreneurs are a minor contingent in the upper 6% and that the vast majority in the 6% of the Russian population are beneficiaries of the high prime rate because it supports very high rates of interest on their time deposits in banks (currently hovering at 12.5%) and on money market mutual funds (currently 13 – 16%).

To be sure, in its attempts to raise money to fill the budget deficit of a ‘guns and butter’ way of running the war, the Russian Treasury has introduced a progressive tax on bank interest, dividends and capital gains from share ownership and mutual funds investments. The tax is mostly at the 13% to 15% level and can be avoided entirely by investing in privately managed mutual funds that are held for at least 3 years before being cashed out.

These laws on investments and taxes, just like the prime rate that allows such generous profits to investors in what are essentially risk-free assets like money market mutual funds, are all the work of the United Russia party.

I rest my case there: the potentially agitated Russian elites in that top 6% of the population in a wartime that has lasted nearly 5 years have been bought off very cleverly. Their sons and daughters face no draft that would put them in harm’s way. And their cash hoard is allowed to rise handsomely day by day.