So according to anonymous intel sources speaking to the WSJ recently, they didn’t see Russia’s outreach to China and North Korea coming. Just like they didn’t foresee Russia’s defense of its perceived interests in Crimea and Syria, or its resilience against every sanction the west could think up. What do these Russia experts and intelligence analysts do all day? I would have been fired long ago for this level of incompetence. I guess the Peter Principle is alive and well in Washington and Virginia. – Natylie

RT, 6/19/24

Moscow’s security partnerships with Beijing, Pyongyang and other US “adversaries” were not anticipated by Washington, the Wall Street Journal has reported, citing anonymous intelligence sources.

Russian President Vladimir Putin signed a strategic partnership and mutual defense treaty with the Democratic People’s Republic of Korea on Wednesday, before flying on to Vietnam. Putin’s trip to China last month prompted one US policymaker to declare that decades of American efforts to keep Moscow and Beijing apart have come to naught.

“The speed and depth of the expanding security ties involving the US adversaries has at times surprised American intelligence analysts. Russia and the other nations have set aside historic frictions to collectively counter what they regard as a US-dominated global system, they said,” the WSJ reported on Wednesday.

Washington has accused Pyongyang of “sending workers to Russia to help man weapons production lines,” as well as selling missiles and artillery shells to Moscow, for use against Ukraine.

Russia and North Korea agree on mutual aid against aggression – PutinREAD MORE: Russia and North Korea agree on mutual aid against aggression – Putin

The US also believes China has enabled Russia’s military industry to circumvent Western sanctions, by delivering “massive quantities of dual-use equipment, including machine tools, microelectronics … optics for tanks and armored vehicles, and turbo engines for cruise missiles,” according to the Journal’s sources. They also alleged that China has helped Russia “improve its satellite and other space-based capabilities for use in Ukraine.”

Beijing has rejected US allegations, called the sanctions unilateral and illegitimate, and accused Washington of hypocrisy for fueling the conflict by arming and supplying Kiev.

Iran has become “Russia’s primary weapons supplier,” unnamed Pentagon officials told the Journal, accusing Tehran of helping build a factory in Tatarstan Region capable of making Shahed-136 drones by the thousands.

Russia’s “expanded security ties” with the DPRK, China and Iran don’t amount to a NATO-like military alliance but appear to be “a series of bilateral exchanges,” anonymous Americans told the Journal. The technology transfers involved risk improving the long-term capabilities of all countries involved, thereby threatening the US, they added.

Earlier this month, at the St. Petersburg International Economic Forum, Putin announced that Russia’s strategy of economic relations with the ‘Global South’ would involve partnerships based on “technology and competency transfers rather than market control.”

Moscow has also signaled it would turn to the ‘Global South’, which has been alienated by the West’s behavior in the Ukraine conflict. The attempts by the US and its allies to isolate Russia have suffered a “complete failure,” Russian Foreign Minister Sergey Lavrov said in February.

By Anatol Lieven, Responsible Statecraft, 7/19/24

Perhaps the most striking thing about Moscow today is its calm. This is a city that has been barely touched by war. Indeed, until you turn on the television — where propaganda is omnipresent — you would hardly know that there is a war.

Any economic damage from Western sanctions has been offset by the large number of wealthy Russians who have returned due to sanctions. The Russian government has deliberately limited conscription in Moscow and St. Petersburg, and this, together with a degree of repression, explains why there have been few protests by educated youth. No longer fearing conscription, many of the younger Muscovites who fled Russia at the start of the war have now returned.

As to the shops in central Moscow, I couldn’t say if the Louis Vuitton handbags are the genuine articles or Chinese knock-offs, but there is no lack of them. And far more important, Russia since the war demonstrates something that Germany once understood and the rest of Europe would do well to understand: that in an uncertain world, it is very important indeed to be able to grow all your own food.

In the provinces, it is reportedly very different. There, conscription, and casualties, really have bitten deep. This however has been balanced by the fact that the industrial provinces have experienced a huge economic boom due to military spending, with labor shortages pushing up wages. Stories abound of technical workers well into their seventies being recalled to work, fostering their income and restoring the self-respect they lost with the collapse of the 1990s. As I heard from many Russians, “the war has finally forced us to do many of the things that we should have done in the 1990s.”

In Moscow at least, there is, however, little positive enthusiasm for the war. Both opinion polls, and my own conversations with Russian elites, suggest that a majority of Russians do not want to fight for a complete victory (whatever that means) and would like to see a compromise peace now. Even large majorities however are against surrender, and oppose the return to Ukraine of any land in the five provinces “annexed” by Russia.

In the elites, the desire for a compromise peace is linked to opposition to the idea of trying to storm major Ukrainian cities by force, as was the case with Mariupol — and Kharkov is at least three times the size of Mariupol. “Even if we succeeded, our casualties would be huge, so would the deaths of civilians, and we would inherit great heaps of ruins that we would have to rebuild,” one Russian analyst told me. “I don’t think most Russians want to see that.”

Despite efforts by some figures like former president Dmitri Medvedev, there is very little hatred of the Ukrainian people (as opposed to the Ukrainian government) — in part because so many Russians are themselves Ukrainian by origin. Hence perhaps another reason why Putin has presented this as a war with NATO, not Ukraine. This recalled the attitudes to Russia of people I met in the Russian-speaking areas of Ukraine last year, a great many of whom are themselves wholly or partly Russian. They hated the Russian government, not the Russian people.

In the foreign and security elites, various ideas for a compromise peace are circulating: a treaty ratified by the United Nations, guaranteeing Ukrainian (and Russian) security without Ukraine joining NATO; the creation of demilitarized zones patrolled by U.N. peacekeepers as opposed to the annexation of more territory; territorial swaps, in which Russia would return land in Kharkov to Ukraine in exchange for land in the Donbas or Zaporozhia. The great majority of Russian analysts with whom I spoke believe however that only the U.S. can initiate peace talks, and that this will not happen until after the U.S. elections, if it happens at all.

The overall mood therefore seems to be one of accepting the inevitability of continued war, rather than positive enthusiasm for the war; and the Putin administration seems content with this. Putin remains very distrustful of the Russian people; hence his refusal so far to mobilize more than a fraction of Russia’s available manpower. This is not a regime that wants mass participation, and hence is also wary about mass enthusiasm. Its maxim seems rather, “Calm is the first duty of every citizen.”

A German version of this article was published in the Berliner Zeitung on June 29, 2024.

By Michael M. Drew, ACURA, 6/19/24

In sharp contrast to the original Cold War of 1946-1989 which generally differentiated between Russia as a nation and its then-Communist government, the renewed hostilities between Russia and the West over the Ukraine conflict have seen an ominous wave of Russophobic propaganda targeting the history and culture of Russia. The West’s ideological crusade has repeatedly shown a total disregard for the basic facts of history in its attempt to brand Russia as an evil, aggressive force led by a madman menacing democracy. 

A glaring example of this brand of polemics is a recent two-minute video called “Why Russia Fights” produced for the Hoover Institution in an obvious attempt to drum up support for the US proxy war in Ukraine (The video can be accessed here:   https://www.youtube.com/watch?v=h6kae4lWBhc).

Far from limiting its criticism to the policies of Vladimir Putin’s administration, the video from the Hoover Institution paints Russia throughout rice centuries of its history as a unified state as a sinister force intent on dominating the world due to an ideology based on moral superiority. Accepting this premise rules out any hope of the West ever peacefully coexisting with Russia unless it is weakened and its vast territory broken up into various small vassal states—as some in the West have argued. 

This is a far more extreme position than was ever advanced by influential people and institutions in the earlier Cold War when the principal objection in the West to the Soviet Union was centered its Communist system rather than its overall history and culture. 

By painting Russia as the aggressor and never once mentioning the devastating invasions from the West that Russia suffered over centuries, the Hoover video stands history on its head. Western aggression against Russia was the salient theme in The Battle of Russia, the celebrated wartime documentary produced by Frank Capra for his Why We Fight series. This series was so well known for so long that it seems almost impossible that today’s Western propagandists could ignore it. Indeed, it is likely that those at the Hoover Institution chose the title “Why Russia Fights” as a deliberate attempt to counter Capra’s Why We Fight series. I’m certain the neoconservatives who made the Russophobic video are far from stupid or as ignorant of the basic facts of Russian history as they assume the American public to be. But they clearly believe that the end justifies the means and hence are willing to lie about the past in order to further their cause in the present. 

The Hoover Institution apparently calculated that their propaganda will succeed in the present age of disinformation and widespread historical and cultural illiteracy. Unfortunately, they may be right. Surveys have revealed that many Americans do not even know in what century their own Civil War took place or which side Russia was on in World War II. Only a relatively select number of Americans today have seen Eisenstein’s Alexander Nevsky or Mikhail Kalatazov’s The Cranes Are Flying. I doubt if many among the current generation in the US have ever read Tolstoy’s War and Peace or seen the memorable film adaptations by King Vidor and Sergei Bondarchuk. 

The new Russophobia that came to the fore in the West during the Maidan coup of 2014—and became especially virulent in the wake of Russia’s Special Military Operation in Ukraine in 2022— has been far more sweeping than which swept the country during the Cold War or the earlier period of tsarist rule. The attempt in the West to “cancel” Russian culture in the last few years, eerily reminiscent of the campaign against German culture in the US in 1917-18 during World War I, has no parallel in previous periods of tension between Russia and the West, whether in tsarist or Soviet times. Distinctions were once made in the West between Russian artists and their government, with the artist viewed as expressing a spirit of freedom whatever the constraints imposed on him by the particular regime in power. 

Now, however, in the wake of the Ukraine crisis, in a manner all too typical of decades of Western political correctness, there have sprung up various analysts who claim to see the hand of Russian autocracy and ethnocentrism in the country’s great writers, a critique in synch with the deplorable efforts of Ukrainian nationalists to suppress Russia’s classic artists as vestiges of imperial oppression. 

That Western leaders’ present attitude toward the Russian Federation is guided by old stereotypes of “darkest Russia” is glaringly apparent from a statement by President Joe Biden who said at the Munich Security Conference in February 2018 that “the time will come—it may not come in the near future—but eventually the people of Russia will look West and out of that deep black hole they have been staring into for the last 150 years or longer.” If he was referring to the decade of the 1860s, then he is clearly unfamiliar with the great reforms of Alexander II including the introduction of trial by jury and the emancipation of the serfs which inspired American abolitionists in their own efforts to get rid of slavery. Culturally, what Biden dismissed as a “deep black hole” was an age of incredible artistic achievements—the great novels of Tolstoy, Dostoyevsky and Turgenev and the great music of Tchaikovsky, Rimsky-Korsakov, Borodin, and Mussorgsky.

But the wave of Russophobia has not only sought to erase the achievements of Russia’s distant past—they seek to distort more recent history as well.  In his book, The Road to Unfreedom: Russia, Europe, America, Timothy Snyder, an Establishment historian committed to the new Cold War, consistent with his view that Russia has always been a land of tyrannical darkness, wrote of the “faked 1996 election” in which Boris Yeltsin retained his presidential office but conveniently omitted the major role President Clinton’s advisers played in ensuring that victory. The Hoover Institution once made Alexander Solzhenitsyn an honorary fellow but now condemns as a mortal enemy to Western values the Russian traditions that the writer so powerfully expressed in his works. The West’s chronicle of the new Cold War ignores all of its actions that made February 24, 2022 all but inevitable: the violation of the promise never to expand NATO eastward; the Clinton administration’s strong support of Yeltsin’s autocratic regime in the 1990s and the economic disaster that followed from its policies; the US withdrawal from its arms control treaties with Russia; the US instigation of so-called “color revolutions” hostile to Russia in former Soviet republics, of which the 2014 Maidan coup— which installed a violently Russophobic regime in Ukraine—has been the most disastrous; and the West’s refusal to implement the Minsk accords intended to resolve this crisis. 

With the US complicity in Israel’s monstrous Gaza genocide now plainly in evidence, all the West’s high-flown rhetoric about its response to the Ukraine crisis being part of some cosmic struggle between Western democracy and Eastern authoritarianism has been unmasked as nothing more than a hypocritical cover for continued world domination by American military and corporate elites. 

The attempt by the Western political and media establishment to whip up fears of the East by simultaneously appealing to Russophobia, Islamophobia and Sinophobia is rooted in centuries of anxieties about “the Other” going back to antiquity. When Western countries have looked eastward, they have experienced uneasiness by the sheer size of these lands, the vastness of their populations, the “strange” customs and cultures of these civilizations, their wealth and power seen as a threat to the West’s planetary domination. At a time when cooperation between East and West is absolutely essential to human survival, there must be a concerted effort by all those who care about continued life on this fragile planet to fight the West’s ancient prejudices. Instead of promulgating as inevitable a “clash of civilizations” between East and West, we must strive for a new consciousness of our shared humanity. 

William M. Drew is a writer, film historian, researcher, and college lecturer. He is the author of Speaking of Silents: First Ladies of the Screen (1990) and At the Center of the Frame: Leading Ladies of the Twenties and Thirties (1999).

By Ben Aris, Intellinews, 6/10/24

Russia’s economy is booming. In the first quarter, Russian GDP grew by 5.4%, higher than in the fourth quarter of last year, albeit boosted by an extra day in February. The economy is on course to expand by over 3% this year or more, ahead of expectations.

The growth has gone beyond the military Keynesian boost Russia enjoyed in the first year of the war in Ukraine due to the torrent of military spending. A number of factors have come together to put the wind at the economy’s back as the changes in the economic growth become structural.

On the plus side of the balance sheet is higher than expected oil and gas revenues, as the West oil price sanctions have largely failed. Russia has also managed to almost entirely dodge the technology sanctions, with technology imports in 2023 only 2% less than a year earlier. Russian companies rallied to the challenge of sanctions and have been investing heavily in retooling their production lines to deal with the difficulties of obtaining Western inputs. Investments in fixed capital in Russia moved up by 14.5% year on year in the first quarter of 2024, RosStat recently reported to RUB5.93 trillion ($66.2bn) over the reported period. Fixed capital investments as of 2023 year-end gained 9.8% y/y and amounted to more than RUB34.04 trillion ($379.6bn). 

The growth in industry shows up in Russia’s PMI manufacturing index, which was 54.4 in May, far ahead of the 50 no-change benchmark and one of the strongest expansions in Europe.

At the same time, the labour shortage – unemployment fell to a fresh all-time low of 2.6% in April – has driven nominal wages up about twice as fast as inflation (7.8% in April), which has seen real wages rise strongly for the first time in a decade and is fuelling a consumption boom. S&P Global reports that job creation in Russia in May was at its highest level in 26 years.

Another unintended side-effect of the war is that Russia’s poorest regions have been the biggest winners from the militarisation of the Russian economy, and that has gone a long way to undoing Russia’s legendary income inequality, leading to a broader-based and more equitable growth in the whole country, not just the leading cities.

“Additional demand from the state was transferred to the population and business through government procurement, budget transfers and payments to households. The same processes spurred lending, including as a result of the improvement in the financial situation of borrowers: wages in March increased by 21.6% y/y in nominal terms and by 12.9% in real terms,” The Bell reports.

On the negative side of the balance sheet is that inflation remains stubbornly high and that the economy is running very hot, according to CBR Governor Elvira Nabiullina. The CBR’s forecast for the end of the year is that inflation will fall to 5.6% before returning to its target rate of 4% in 2025, but that is starting to look increasingly unlikely. However, the central bank has hiked rates to 16% and economists speculate that it may hike them again by as much 100bp in July in an effort to check inflation.

Another more worrying trend is that Russian productivity is falling, despite the record 81% capacity utilisation rate, as even with the government’s heavy investment into the military industrial complex Russian industry remains in desperate need of modernisation. However, this is on the agenda, as laid out in President Vladimir Putin’s recent guns and butter speech, and is at the heart of the National Projects 2.1, the Kremlin’s blueprint for developing the whole economy, not just the military industrial segment.

By all measures the Russian economy is experiencing a boom, based on three significant factors, The Bell reports.

One of the unintended consequences of sanctions, and especially self-sanctions by multinationals working in Russia, is that their departure has opened large niches in various sectors into which other countries have gleefully stepped. The most obvious is the automotive sector, which was probably the most hurt by sanctions and came to a screeching halt in the summer of 2022. However, as reported by bne IntelliNews, the car market had almost entirely recovered by April, as China neatly stepped into the shoes left empty by the European and US multinationals. And after the pull-out of franchises that offered goods like iPhones, these have been almost entirely replaced with the 90s-era traders that used to supply Russia with Western consumer goods before the franchises arrived.

According to estimates by the Kyiv School of Economics, since the start of the war in Ukraine, more than 1,600 transnational companies have suspended their activities or left Russia. Only 666 companies can be considered to have truly gone, that is, liquidated or sold, according to the recent report “The Place of Exiting Foreign Companies in the Economy of Industries and Regions of Russia.” In 2022, there were 223 actual companies that left. The growth in 2023 was caused by long periods of closure of a company or its transition to new owners, The Bell reports.

Russian companies have also stepped into these niches, fuelling an investment boom. Many of the multinationals staff and ran their Russian operations with locals, who have simply taken over. That means profits that used to accrue to the owners of the intellectual property now all stays in Russia and are being reinvested into rapid expansion. One of the most iconic foreign investments into Russia was the opening of the Pushkin Square branch of McDonald’s in 1990, which went on to build a country-wide network of restaurants. After more than two decades of work, the chain was taken over by Vkusno I Totchka (Tasty. Period), which has continued to expand the rebranded chain and claimed in June of last year to be more profitable than the original.

Similar stories are now playing out in other sectors with a big hole left in them after the abrupt departure of famous international brands.

“In the first quarter of 2024, the profits of companies in the insurance and financial sector increased by 2.3 times; in the tourism sector, 52 times; construction, 41 times,” The Bell reports.

And this trend is only being driven by the state’s ideological commitment to import substitution over and above the practical need to set up domestic production of goods that used to be imported.

The prototype of this change was cheese production. For decades it was cheaper to import high-quality European cheese than to try to make lower-quality and more expensive Russian cheese. After the Kremlin slapped tit-for-tat agricultural sanctions on European imports in 2014 after the annexation of Crimea, French and Swiss cheese disappeared from Russian supermarket shelves overnight. It took about two years, but a Russian domestic cheese-making industry sprang up to meet demand. Since then the Kremlin has been pouring money into the agricultural sector and food production to turn Russia into an agricultural powerhouse.

The 2022 sanctions are far more extreme, creating similar opportunities in products across the board, and Russian entrepreneurs are rising again to the challenge.

These changes have all been made easier by the robust health of the domestic banking sector. After taking over as governor in 2013, Nabiullina set out on a large-scale clean-up of the banking sector that was more or less complete by 2018, well before the war in Ukraine started. Despite its lack of access to dollars, the domestic market is large enough to fuel a vibrant, liquid and well capitalised banking sector that has been able to fund the investment and growth. Last year Russian banks reported more profits than at any time since the 2014 sanctions were imposed and are on course to have the most profitable year in modern history this year. Corporate and retail loans are growing strongly and the various rounds of sanctions mean that banks and companies remain underleveraged, giving them plenty of room to grow.

The strength of the growth, rising demand and the need to invest into import substitution is outweighing the painfully high interest rates for the moment. Lending growth doubled in the first quarter of this year, despite the Central Bank’s double-digit interest rate. The issuance of retail loans rose by 3.7% compared to the previous quarter. Car lending is increasing: the average car loan size for 2023 expanded from RUB1.2 to RUB1.4mn, The Bell reports.

In addition, a new class of borrowers has emerged: people with high incomes prefer to save their earnings on deposits (this is facilitated by rates of 17%), and finance current consumption through loans. The CBR reported in May that most of the new borrowing is on credit cards which are less sensitive to high interest rates, as consumers prefer to borrow short term to make purchases and leave their deposits in high-earning bank accounts.

“Those who were [not] creditworthy yesterday become creditworthy, and they begin to take out more loans despite the fact that loan rates are quite high,” explained the head of the country’s largest bank, Sberbank, German Gref.

The corporate portfolio also continued to grow (1.9% in April and 1.8% in March), the Bank of Russia reported: developers received the most loans as part of project financing for housing construction, as well as transport and IT companies. Industry, especially engaged in performing.

A positive feedback loop of heavy state spending on the war that is pumping the economy full of money has been established and as long as the war continues and as long as the state keeps running healthy current account surpluses thanks to oil exports, this virtuous circle will continue to spin.

It is similar to the virtuous circle that was established following the 1998 financial crisis. The devaluation of the ruble by 75% overnight cut Russian oil prices operating cost by the same amount, but the revenue they earned from exports was denominated in dollars and the leading oil companies became fantastically profitable overnight. Collectively they invested more in boosting production in 1999 than had been invested in the previous decade following the fall of the Soviet Union. The cash from the oil companies poured into the economy, fuelling a virtuous circle of investment, increased wages, higher consumption, rising profits and circled back to more investment. Russia’s economy doubled in size over the next decade.

While the virtuous circle that has started now is not as robust as the previous episode, it is likely to continue as long as oil prices remain high and the ruble remains relatively weak. However, Russia’s economy is also exposed to a sudden shock if the elevated military spending comes to a halt and high inflation eats into the fast growth and growing real incomes. Making the sanctions regime more effective could bring this virtuous circle to an abrupt halt.

The Bell, 5/27/24

The Great Repatriation: Russian millionaires bring their cash back to the Motherland

After trying to send their money overseas in the immediate aftermath of Moscow’s invasion of Ukraine, wealthy Russians are now bringing their millions back home, new data shows. The number of high net worth individuals jumped back above pre-war levels last year, after falling in 2022. Some 22,000 wealthy Russians account for almost $150 billion stashed in domestic bank accounts — around a quarter of the national total.

• In 2023, the funds held by high net worth clients — defined as those with more than 100 million rubles ($1.1 million) — in Russian banks and investment companies jumped by 62% to 13.1 trillion rubles ($148 billion), research from banking consultancy Frank RG showed. The number of those who qualify among the ranks of the country’s wealthiest jumped 50% to 22,000, with their combined assets accounting for 23% of Russia’s total financial capital. The cohort of super-rich banking clients, with at least $5.5 million of assets, grew even faster, up 62%.
• That marks a major reversal from 2022, when capital flowed in the opposite direction. Frank RG figures for the first year of the war showed a 21% fall in the number of high-net worth individuals, and a 27% drop among the super-rich category. The combined capital they held dropped by more than 20%. A panicked transfer of funds abroad after Russia invaded, combined with the plummeting stock market and the transfer of cash into non-liquid assets such as gold and foreign property also had an impact on bank balances.
• Many factors are behind the revival in 2023. Thanks to high interest rates (the central bank’s key rate is currently 16%), Russian banks are currently a profitable place to deposit cash. And after a collapse in 2022, the Russian stock market was up 44% in 2023. No less important than these financial factors was the political climate. Russian money turned out to be unwelcome in the West. Threatened with sanctions and the freezing of their assets, billionaires transferred tens of billions back into the relative safety of Russian jurisdiction. Bloomberg reported earlier this month that the richest Russians were continuing to repatriate their funds, even while they recognized the increasing domestic threat of forced nationalization.
• It is not just double-digit interest rates and the chance to strike it rich on the back of the militarization of the economy that await rich Russians investing at home. Higher taxes are also on the cards. Last week the State Duma was busy discussing tax reforms — the central plank of which will be an increase in income tax for the upper middle class (those with monthly income above $1,700) and corporate tax. President Vladimir Putin is leaning on the poorer segments of Russian society more and more for his support, meaning the country’s economic policy is inevitably drifting to the left. In the 2024 May decrees, Putin’s program for his latest presidential term, reducing wealth inequality was named a “national goal” for the first time.

Why the world should care

We never tire of pointing out that sanctions against individual Russian billionaires are probably the most dangerously ineffective of the West’s measures against Moscow. From day one, Western countries have put obstacles in the way of capital flowing out from Russia — something that could have seriously weakened the Russian economy — meaning wealthy Russians had little choice but to bring their money home. Now those funds are being tapped to spend on the war.

Europe’s last land border closes to Russian tourists

Norway has announced that it is closing its land border with Russia, the last remaining land crossing to Europe that was open to Russian tourists. During the 2022 mobilization, this was a popular way for Russians who did not want to be forced into the war to leave the country.

• From May 29, Norway will ban entry for Russian citizens traveling as tourists and “non-essential” purposes. Exceptions may be possible for those traveling to visit close relatives, for work or study. The Norwegian government said the new restrictions were needed to support its allies in their response to Russia’s war in Ukraine.
• Norway was the last European country bordering Russia that had not closed its borders to Russians traveling only on tourist visas. Although Norway is not an EU member, it is part of the Schengen visa-free zone, meaning once in Norway, Russians were free to travel onwards to most other countries in Europe.
• The decision could have implications for Russians trying to flee military call-ups. When Vladimir Putin announced a partial mobilization in September 2022, tens of thousands of men immediately tried to leave the country, triggering prices for air tickets to rocket and huge lines at Russia’s land borders with Georgia and Kazakhstan. Suddenly, the remote northern Norwegian border turned into an unexpected escape route: with a simple tourist visa for any Schengen country, it was enough to spend $100-$300 on a ticket from Moscow to Murmansk, then ride a couple of hours to the Norwegian border on a bus. A few hours after that, you could be in Oslo, able to fly to almost anywhere in Europe. Now this route will no longer be possible.
• All other European countries that border Russia — Estonia, Latvia, Lithuania and Poland — had long ago closed their borders to Russian tourists.

Why the world should care

The FT reported a figure close to the Russian military saying that by the end of 2024 or beginning of 2025 another round of mobilization would be “inevitable.” When it does happen, this time it will be far harder for men to get away than it was in 2022 — Russia’s repressive new conscription legislation, the creation of a digital register of call-ups and Europe’s border closures will see to that.

Russia moves towards recognising the Taliban

Russia is planning to recognise the Taliban as the lawful government of Afghanistan and remove it from the list of “banned” organizations. This will put an end to the absurd situation where Taliban representatives are officially received in the Kremlin, while journalists can be jailed for mentioning them in their articles.

• Russia is set to remove the Taliban, which seized power in Afghanistan in 2021, from its list of banned organizations, TASS reported on Monday. The step has been agreed upon by the foreign ministry and the justice ministry, and has been reported to Vladimir Putin. The foreign ministry anticipates that after this, Moscow will recognize the Taliban as the legal government in Afghanistan. The move could come ahead of Aug. 19, when the Taliban celebrates Afghanistan’s independence day — the date it seized control from the US-backed government and, as it says, threw off “three empires in three centuries”:  Britain, the Soviet Union and the United States.
• The Taliban has been a banned organization in Russia since 2003. However, the more Russia’s relations with the West deteriorated, the warmer the relationship with the Taliban became. The true start of closer contacts came in 2015, when Russia got involved in the conflict in Syria. At that time, the Russian authorities relied on the Taliban’s enmity towards ISIS and Al-Qaeda (also banned in Russia). Moscow’s position was partially rewarded when the Taliban seizure of power became inevitable — at a time of total panic in Kabul in August 2021, Russia’s embassy worked normally under a guard of militants.
• Since their return to power, Taliban delegations have regularly visited Russia. This year, the Taliban-run foreign ministry strongly condemned the terror attack on the Crocus City Hall in Moscow, blaming it on ISIS, and in May an official Taliban delegation attended the “Russia – Islamic World” forum. 
• Throughout all this, Russian state media have continued to accompany any mention of the Taliban with the label “banned organization.” For everyone else, even a mention of the Taliban carries the threat of a criminal charge. Just two weeks ago, journalist Nadezhda Kevorkova was arrested in Moscow on charges of “justifying terrorism.” One of the two accusations against her is justifying the Taliban’s terrorist activities. She faces up to seven years in jail.

Why the world should care

Despite grinding poverty at home, Afghanistan holds significant natural resources, including globally significant stocks of lithium and nickel (read more about this here). However, developing these resources is difficult, whether due to the lack of protection for investors or the absence of infrastructure and technology. For now, Russia’s relationship with the Taliban remains political, and the common factor remains their shared anti-Western agenda. Afghanistan’s main international partners are Iran, China and Pakistan. The Taliban mostly wants Russian cheap grain and fuel.