Reuters, 10/15/24

KYIV, Oct 15 (Reuters) – Four-fifths of Ukrainians said they supported a new law banning Russia-affiliated religious groups in a survey released on Tuesday, as Kyiv seeks to root out a branch of the Orthodox Church accused of cooperating with Moscow, which is waging war on Ukraine.

The Ukrainian Orthodox Church (UOC), which counted 6% of the respondents as followers, has for years faced accusations that it is a tool of Moscow’s influence in Ukraine and that some of its clergy cooperate with Russian intelligence.

The church denies these allegations and maintains that it officially broke off all ties to the Russian Orthodox Church, previously its parent church, in May 2022 – three months after Russia invaded Ukraine.

In August, Ukraine passed a law that bans the Russian Orthodox Church on Ukrainian territory and says that a government commission will assemble a list of “affiliated” organisations whose activities are not allowed.

Lawmakers said the process of banning the UOC would be long and complicated as each UOC parish is an individual legal entity and will have nine months to decide whether it wants to leave the church.

Most Ukrainians are part of the Orthodox Church of Ukraine, a separate church founded in 2019 to be independent of Moscow and recognised by the Ecumenical Patriarch of Constantinople, widely regarded as the spiritual leader of Orthodox Christianity.

Russia’s invasion has already driven hundreds of UOC parishes to switch to the OCU, sometimes causing tensions in rural communities with one church.

The poll, conducted by the Kyiv International Institute of Sociology, found broad support for the law across all regions of Ukraine that remain under Kyiv’s control. Even in the more Russophone east, over 70% of respondents supported the ban.

Overall, 16% of Ukrainians said they opposed the ban, while another 4% were unsure, with 80% in favour.

Throughout the war, Kyiv has highlighted the national security risks it says the Church poses.

Dozens of UOC clergy have been arrested and tried on charges including treason and cooperating with Russia. The UOC says it is the victim of a witch hunt.

Ukraine has traded a number of UOC clergy for Ukrainian prisoners of war held by Russia during the war. One unidentified clergyman accused of working for Russia was swapped for 28 Ukrainian soldiers.

Lawmakers in Estonia and the Czech Republic have also raised concerns this year about Moscow’s influence through the Russian Orthodox Church in their countries.

RT, 10/31/24

The Ukrainian military has reportedly instructed soldiers to avoid using the term “retreat” in communication with the press, according to a reporter from RFE/RL, the US state-run foreign media network.

In an interview with Kiev’s Radio NV, on Wednesday, Vlasta Lazur shared insights gathered from recent conversations with Ukrainian troops and their commanders.

“I spoke with a soldier on the Pokrovsk front,” Lazur said. “He said, ‘We received orders to use the words ‘offensive,’ ‘victory,’ ‘moving forward,’ and ‘driving out the enemy’ when communicating with journalists. But I can’t say the word ‘retreat’ or that the enemy has breached our defenses.’”

Pokrovsk, in Russia’s Donetsk People’s Republic, has been a major scene of fighting in recent weeks.

Lazur noted that the restrictions reflect deeper communication issues within Ukraine’s military hierarchy. “Everyone lies to each other. Local commanders are afraid to report to generals or higher-ups any problems, or that they do not have enough people, or that they are not able to carry out a task,” she added.

According to her, reports based on reality are often withheld from the top command as commanders fear disciplinary actions or job loss.

One soldier reportedly joked about the situation: “Maybe we should say that we are advancing on the Dnieper?” The Dnieper River is located to the rear of Ukrainian forces, underscoring the irony felt by some on the ground who sense a disconnect between official statements and the realities of their positions.

“Everyone lies to each other. Local commanders are afraid to report to generals or higher-ups any problems, or that they do not have enough people, or that they are not able to carry out a task. Even if such reports are founded in reality, they are afraid to send them, for fear of getting fired,” Lazur said.

These revelations coincide with comments by Ukrainian President Vladimir Zelensky, who acknowledged that Ukrainian forces might need to “retreat” when significantly outnumbered. Despite mobilizing over a million people since the escalation of conflict in 2022, Ukraine’s government faces severe manpower and logistical challenges. Recent revelations from lawmakers highlight over 100,000 cases of desertion, and they expect to call up an additional 160,000 troops in the coming months.

As Kiev contends with battlefield pressures, the internal limitations on reporting may underscore an attempt to manage public perceptions about the conflict’s progress.

Russian forces have made major advances in Donbass over the past several months. One Ukrainian general has blamed shortages of munitions, battle fatigue, and poor command and control.

By Faustine Vincent (Kyiv, Ukraine, special correspondent), Le Monde, 10/16/24

At first, all that can be seen from the Ukrainian Parliament, guarded by a checkpoint, are the neoclassical columns of the facade, redecorated in the Ukrainian colors of yellow and blue. Access to the chamber itself, an ultra-sensitive area of Kyiv, is even more restricted. Le Monde was granted exceptional access. After passing through a series of gates and staircases, you enter under high windows protected by sandbags, then along a marble railing, also fortified, in front of which two paintings of the Madonna and Child are displayed. Heavy engraved doors then open onto a room of ancient woodwork, bristling with Ukrainian and European flags, and topped by a spectacular glass dome. It was here, in the heart of the Rada, the Ukrainian Parliament, that MPs converged at the start of the invasion in February 2022, despite the risk of attack.

None of them have forgotten the madness of those early days, when the Russians were at the gates of the capital. “We were voting in a hurry, eyes glued to the air, fear in our stomachs, because we expected a missile to hit the glass dome at any moment,” said Oleksandr Merezhko, MP for the parliamentary majority, Servant of the People, and president of the Foreign Affairs Committee. “But maintaining these sessions was crucial to show the world that Parliament was standing and that the institutions continued to function despite the war.”

The Rada immediately became a symbol of resistance, but also the embodiment of Ukrainians’ fight to defend their nation and the values of democracy in the face of Moscow, determined to discredit and destroy their state, whose independence Vladimir Putin has always considered an artificial creation. Contrary to public fears, the MPs did not flee en masse. The level of confidence in this institution soared to over 50%, according to several studies – an unprecedented level.

How to keep it going?

More than two and a half years later, the threat has receded since the withdrawal of Russian troops from the Kyiv region in April 2022, although enemy drones are still regularly intercepted in the vicinity of Parliament. But the war is still here, with its trail of obstacles, obligations and restrictions.

No more elections are in sight. Martial law has postponed the presidential election indefinitely. The legislative elections, originally scheduled for October 2023, have also been canceled. The absence of elections is no longer debated in the country, as many understand that with over 6 million refugees, 3.7 million displaced, 20% of territory occupied by the Russians and constant bombing, they would be neither safe nor democratic. But the challenge is unprecedented for Ukraine: How can it keep going over the long term and keep democracy alive despite the war and the impossibility of renewing its representatives?

Parliamentary representatives are beginning to falter. Exhausted after 32 months of conflict and high-tension work, they are condemned to remain in office for as long as the war lasts, as stipulated by the Constitution, under the once again critical gaze of the population. “To be frank, Parliament has become quite a depressing place,” said Oleksandr Zaslavskiy, director of the Agency for Legislative Initiatives, a Ukrainian think tank that has been working on the Rada for 25 years. “Being a member of parliament today means working 24 hours a day, under pressure, without vacations, and being hated by everyone. Some even get messages from soldiers telling them they’re coming back to kill them.” This resentment is fueled by repeated scandals, such as that of MP Yuri Aristov, who was seen in a luxury hotel in the Maldives in July 2023 under the pretext of a business trip.

The list of dissatisfactions among representatives continues to grow. Martial law has forced them to drastically restrict their travel abroad, which is now subject to the approval of Rada president Ruslan Stefanchuk. Access to the media has also been restricted since the introduction of the “telemarathon,” a major tool in the information war waged by the Ukrainian authorities, which broadcasts the same information on several channels, and from which opposition MPs claim to be excluded. “The authorities are taking advantage of martial law to curb freedom of expression,” said Mykola Kniazhytskyi, an MP for European Solidarity, the party of former president Petro Poroshenko and Volodymyr Zelensky’s great rival. To remain visible and address the public, the 56-year-old MP expresses himself on TikTok and has launched his own YouTube channel.

‘Be careful about democracy’

But since the beginning of the invasion, the entire Parliament has been marginalized. “Almost all power is concentrated in the hands of the head of state and the Presidential Office, which he controls,” said the Warsaw-based Center for Eastern Studies in a study published in August. Kniazhytskyi has warned Zelensky. “He has to be careful about democracy, otherwise our allies won’t give us any more money. But compared to Putin, he’s very democratic,” said the opponent. “Criticism and political debate have returned to parliament, but the exercise remains delicate as Russia seeks to exploit divisions. It’s a difficult balance,” said Kniazhytskyi. “I have to talk to you openly, but I also have to be careful, because we have to stand united against Putin.” The war has also created some strange situations. Some MPs now represent a region that came under Russian occupation. Others have seen their electorate flee abroad, or elsewhere in the country.

Opponents are not the only ones voicing concern about the scale of the difficulties. The unease is even greater among the representatives of Servant of the People, who have a majority in Parliament. The landslide victory in the 2019 parliamentary elections of the party founded by Zelensky had brought to power these men and women devoid of political experience, with very diverse profiles. Today, many of them want to resign and return to their former lives. Especially as their salaries have remained virtually unchanged at around 40,000 hryvnias (€880), including allowances.

“The elected members of Servant of the People were probably the least prepared to deal with all this,” said Zaslavskiy. In January, the party’s leader, Davyd Arakhamia, announced that he had received 17 requests for resignation and anticipated “a major crisis” in Parliament. However, according to several sources, these resignations had not been put to the vote by the Rada president, preventing any departures.

Stefanchuk told Le Monde he denied this, asserting that, “so far, I haven’t received a single request,” apart from those, at the start of the invasion, from MPs of the former pro-Russian opposition party The Opposition Platform – For Life, which was banned in June 2022. And if these resignations were to reach him? “We currently have the lowest number of MPs since Ukraine’s independence. This is an essential factor for them not to resign,” said Stefanchuk. “I’m sure that the MPs have understood their historic mission at this crucial time for the country.”

Unexpected allies

Since the start of the invasion, the number of MPs has fallen to 401 out of 450 seats – 28 have lost their mandates or resigned, two have been killed, and the remaining seats were already empty since the annexation of Crimea and the occupation of part of the Donbas in 2014. The priority is clear: Everyone must stay in their posts. According to political analyst Ihor Kohut, a deal has reportedly been struck with the resigners to convince them to stay. “This is a huge challenge in terms of democracy, since their mandate has expired,” said the expert. “But they have to stay until new elections are held, and nobody knows when that will be possible!”

In the meantime, the presidential party is making sure it doesn’t lose a single vote. The Servant of the People MPs still hold the majority with 233 seats, but gathering the 226 votes needed to pass legislation on their own has become almost impossible. Since the beginning of the invasion, they have only managed to do so 17 times out of 5,200 votes, according to a study by the independent organization Chesno, which specializes in political transparency. “They were never in full strength to vote,” said analyst Oleksandr Salizhenko. Others also refuse to support their own camp.

To make up for the missing votes, Zelensky’s party has found some unexpected allies: the MPs of the former pro-Russian party Opposition Platform – For Life. These representatives, liable to be prosecuted for treason, have formed two new factions: Platform for Life and Peace, and Restoration of Ukraine. Zealous, these 39 MPs vote massively in favor of the laws proposed by the majority.

Their informal alliance with Servant of the People is above all pragmatic. “They want to show their loyalty, survive in their political environment and not lose the business they otherwise own,” said Salizhenko. However, this loyalty has its limits: When the law on decolonization and changing Russian names to Ukrainian was put to the vote, none of them took part. “They abstain wherever Russia’s interests are at stake,” said the analyst.

Despite his exhaustion, Merezhko is hanging in there. This former professor of international law, who also had no political experience before his arrival at the Rada, is convinced that the “great sacrifice” made by the MPs is essential for the survival of the Ukrainian state. “One day, people will be grateful to us.”

Reuters, 11/6/24

Summary

-Kremlin takes cautious stance after Trump claims victory

-Russian sovereign fund floats reset with Trump

-Foreign Ministry says Moscow has no illusions about Trump

-Medvedev says Trump is probably bad news for Ukraine

MOSCOW, Nov 6 (Reuters) – The Kremlin reacted cautiously on Wednesday after Donald Trump was elected U.S. president, saying the U.S. was still a hostile state and that only time would tell if Trump’s rhetoric on ending the Ukraine war translated into reality.

Russia’s invasion of Ukraine in 2022 triggered the biggest confrontation between Moscow and the West since the 1962 Cuban missile crisis when the Soviet Union and the U.S. came close to nuclear war.

Trump’s re-election caps a remarkable comeback four years after the Republican was voted out of the White House and ushers in a new American leadership likely to test democratic institutions at home and relations abroad.

Kremlin spokesman Dmitry Peskov said Trump had made some important statements about wanting to end the Ukraine war during his campaign, but only time would tell if they led to action.

“Let us not forget that we are talking about an unfriendly country, which is both directly and indirectly involved in a war against our state” (in Ukraine),” Peskov told reporters.

Peskov said he was not aware of any plans by President Vladimir Putin to congratulate Trump on his victory and that relations with Washington were at an historic low.

“We have repeatedly said that the U.S. is able to contribute to the end of this conflict. This cannot be done overnight, but… the U.S. is capable of changing the trajectory of its foreign policy. Will this happen, and if so, how … we will see after (the U.S. president’s inauguration in) January.”

Russian and U.S. diplomats say relations between the world’s two largest nuclear powers have only been worse during the depths of the Cold War. Russian officials from Putin down said ahead of the election that it made no difference to Moscow who won the White House, even as Kremlin-guided state media coverage showed a preference for Trump.

The Russian Foreign Ministry said Moscow had no illusions about Trump, noting that there was what it called a bipartisan anti-Russian position among the U.S. ruling elite designed to try to contain Russia.

“Russia will work with the new administration when it ‘takes up residence’ in the White House, fiercely defending Russian national interests and focusing on achieving all the set objectives of the special military operation (in Ukraine),” the ministry said.

“Our conditions are unchanged and are well known in Washington.”

Kirill Dmitriev, the influential head of Russia’s sovereign wealth fund, struck a softer note, saying a Trump victory could be a chance to repair ties.

“This opens up new opportunities for resetting relations between Russia and the United States,” added Dmitriev, a former Goldman Sachs banker who has previously had contacts with the Trump team.

WAR IN UKRAINE

Trump, 78, has promised to swiftly end the war in Ukraine, though he has not explained exactly how he would do that.

Putin has said he is ready for talks, but that Russia’s territorial gains and claims must be accepted, something that the Ukrainian leadership has rejected as an unacceptable capitulation.

Russian forces are advancing at the fastest pace in at least a year in Ukraine and control about one fifth of the country.

That includes Crimea, which Moscow annexed from Ukraine in 2014, about 80% of the Donbas – a coal-and-steel zone – and more than 70% of the Zaporizhzhia and Kherson regions.

Former Russian President Dmitry Medvedev said on Wednesday that Trump’s win would probably be bad news for Ukraine, which relies on Washington as its top military backer.

“Trump has one useful quality for us: as a businessman to the core, he mortally dislikes spending money on various hangers–on,” said Medvedev, now a senior security official.

Intellinews, 10/15/24

A new study led by prominent Russian economists at the Higher School of Economics (HSE) found a significant underestimation of the country’s wealthy population and rising property inequality, The Bell reported on October 15.

The research, carried out by Alexander Surinov, the former head of Rosstat and now director of HSE’s Centre for Economic Measurement and Statistics, alongside his colleague Sergei Kuzin. The results show that there are nearly twice as many relatively affluent Russians as previously thought, further exacerbating the nation’s income disparity, and that two thirds (66%) of Russian made under RUB40,000 ($415) a month, less than the national average wage of RUB70,000 ($725).

The study employed an innovative approach to reassess income distribution, blending two methods that traditionally has skewed the results in the past.

Survey-based data tends to underrepresent wealthier individuals, who are reluctant to disclose their true income, while administrative data from the Federal Tax Service (FTS) omits lower-income groups, many of whom avoid formal tax systems altogether as they are so poor.

The HSE scientists addressed these limitations by mixing the results from the two surveys, including the data from tax declarations for 2022, to get a more accurate picture of income stratification in Russia.

Key findings showed that individuals earning over RUB150,000 per month accounted for 1.1% of the population – more than double the previous estimate of 0.5%. Similarly, those with monthly incomes exceeding RUB200,000 represented 0.5% of the population, up from the earlier figure of 0.3%.

For comparison, a Siberian bus driver has recently seen salaries increased from RUB70,000 to RUB100,000 to persuade them to remain in their jobs, but many have been enticed away by military salaries where they can earn over RUB200,000 a month as a driver behind the line of contact in Ukraine.

These adjustments primarily came from a recalibration of the cohort earning RUB100,000-150,000, which dropped from 2.3% to 1.8%. Meanwhile, 66% of Russians continue to earn less than RUB40,000 per month, with 18% earning between RUB40,000 and RUB60,000, and 8% earning between RUB60,000 and RUB80,000.

The recalculation has also heightened Russia’s already high levels of income inequality. The country’s Gini coefficient – a standard measure of inequality – rose from 0.34 to 0.36, indicating a sharper divide between rich and poor. The coefficient of funds, which compares average incomes of the wealthiest and poorest deciles, also increased from 9.1 to 9.9.

Moscow’s wealth gap stood out in particular. In the capital, the average income of the top 1% was found to be underreported by a quarter, rising to RUB356,000 from a previously estimated RUB285,000. In other regions, incomes of the top 1% were underestimated by 11%, reaching an adjusted average of RUB128,000.

Conflicting pictures

The results of the HSE’s survey confuse the picture as another survey found Russia’s poorest regions have been the biggest winners from the war, as heavy military spending on the war provided full time employment in military industrial factors in Russia’s far flung regions. At the same time a study of regional bank deposits showed that deposit accounts have swelled in poor regions thanks to military pay, as the bulk of Russia’s recruitment and the partial mobilisation in September 2023 was focused on Russia’s poorest regions.

At the same time a chronic labour shortage has driven up nominal wages far faster than inflation leading to a spike in real disposable incomes up to a record 9.6% in July. As bne IntelliNews reported, the soaring real disposable incomes have created a new War middle class, for whom life has never been better, The Bell reported earlier this year.

Russia’s income distribution has always been distorted by its Soviet legacy and the country’s vast size. As bne IntelliNews reported in 2018, incomes in some of the monotown mining towns deep in the tundra continue to outstrip those of Moscow, although the cost of living there is also considerably higher. At the other end of the scale, the incomes in the southern regions of the Caucuses and in the centre of the country remain at rock bottom.

Despite these gains that have been to the benefit of millions of people in the lower strata of society, Russian income inequality remains a serious problem.

However, overall the lot of Russians has improved over the last year. As reported by bne IntelliNews in its last despair index – the addition of poverty, inflation and unemployment – that captures a picture of what life is like in the lower third of society, the index value is currently at its lowest level ever. In particular, Russia’s poverty rate is currently 10.5%, or approximately 15.3mn from a total population of circa 150mn people, including immigrants. The poverty line is currently RUB13,600 ($140) monthly income.

Russia’s poverty rate compares favourably with most of the EU where poverty rates are typically in the low teens. The average poverty rate in the European Union is currently around 16-17%, according to Eurostat, but varies widely by region inside the EU. The picture is further confused as poverty is a relative concept and what constitutes poverty in Denmark is very different to what it means in Russia. At the same time, President Vladimir Putin has pledged to bring Russia’s poverty rate down to 8.5% as part of his National Projects 2.1 programme.

The incomes should be adjusted for PPP (purchase power parity), and on this basis Russia’s economy looks much stronger, after it overtook Japan to become the fourth largest economy in the world this year in adjusted perms. Russia also overtook Germany in PPP GDP terms two years ago.

Adjusting the average income of RUB70,000 for PPP (using an exchange rate of RUB27 to the dollar, rather than the current RUB95 to the dollar) and the average income rises to $2,590, on a par with the average income in the EU, although it is still half the average income in Germany, but twice those in Central Europe.

Implications of recalibrating income data

HSE’s updated income figures could bolster the Russian government’s narrative around its progressive tax reforms. In May Putin announced the end of the flat tax regime, which he put in place almost as soon as he took office in 2000, with higher taxes for most affluent Russians.

As of next year, higher earners will face a new tax structure: a 15% tax rate on annual incomes over RUB2.4mn, which will progressively rise to 22% for those earning over RUB50mn. While these reforms may appear to target the wealthiest, analysts suggest they will likely bypass the true elite who derive much of their income from dividends and share sales, which are exempted from income taxes, The Bell reports.

In reality, the reforms may have the most significant impact on workers in the defence industry, whose incomes have risen sharply due to the ongoing war effort in Ukraine. As Kommersant reports, the anticipated increase in revenues from higher personal income tax (estimated at RUB533bn per year) is expected to pale in comparison to the financial injection required for Russia’s military build-up. By 2027-28, the government may introduce additional income redistribution measures in response to these financial pressures.

As reported by bne IntelliNews, instead of cutting military spending in 2025, the new three year budget, currently under debate, will be increased by a quarter in 2025. Indeed, the increase was so extreme, the Kremlin ordered the media to bury the story; those that did report the increase cited only the raw spending numbers and did not provide year-on-year comparisons.

The threshold for when the new progressive tax regime kicks in remains extremely high and barely affects Russia’s elite, nor will it make a big difference to Russia’s tax revenues. However, after refusing to touch the flat tax regime for three decades, the Kremlin is now moving cautiously to finally increase taxes on Russia’s prosperous middle class and rich and introduce a more equitable tax regime.

Bloomberg’s Russia economist Alexander Isakov warns that the wealthiest Russians should prepare for more substantial tax hikes, predicting that rates could rise to 30-35% by the next election cycle.

This recalibration of income distribution highlights the challenges facing the Russian economy, where regional inequality remains stark despite the recent military spending rebalancing. The benefits of economic growth remains too concentrated among a small, affluent segment of the population in the richer regions. As military spending continues to soar, pressure on the tax system may prompt further reforms that could significantly alter the financial landscape for Russia’s upper-income earners.