He said today: “We should be very alarmed. Every day of high tensions, nuclear alert and war increases the chances of not only unpredictable escalations, but of accidental nuclear war.”
Postol explained: “The Russian early warning system is nothing like the U.S. early warning system. The U.S. government knows when a ballistic missile has been launched anywhere in the world. The Russian’s can’t do that. They completely rely on ground-based early warning radars against nuclear surprise attack. As a result of this, the Russians are susceptible to thinking they are under an attack when they are not. The Russian false alert of 1995 illustrates the serious dangers to the U.S. from this limitation in Russia’s early warning systems. The 1995 false alarm happened to take place during a politically calm time between Moscow and Washington. If such a mistake were to happen now, there would be a very serious risk of nuclear war which would kill billions of people. In the U.S., there has been virtually no concern on this issue.”
“Instead, Washington has withdrawn from treaties in recent years like the Intermediate-Range Nuclear Forces Treaty. This has obviously upset the Russians.”
I know that something happened to Risen during the Trump years and he became a Russiagater. But prior to that, he had been known as a pretty good reporter on national security and intelligence issues for many years. So that’s why I’m posting his latest piece so people can make up their own minds. I think it’s interesting and some of it is plausible, though I’m sure there’s probably a helping of propaganda added in. – Natylie
DESPITE STAGING A massive military buildup on his country’s border with Ukraine for nearly a year, Russian President Vladimir Putin did not make a final decision to invade until just before he launched the attack in February, according to senior current and former U.S. intelligence officials.
In December, the CIA issued classified reports concluding that Putin hadn’t yet committed to an invasion, according to the current and former officials. In January, even as the Russian military was starting to take the logistical steps necessary to move its troops into Ukraine, U.S. intelligence again issued classified reporting maintaining that Putin had still not resolved to actually launch an attack, the officials said. “The CIA was saying through January that Putin had not made a decision to invade, but he was putting in place pieces for an invasion,” said a senior U.S. intelligence official, who asked not to be identified in order to discuss sensitive matters. “I think Putin was still keeping his options open.”
It wasn’t until February that the agency and the rest of the U.S. intelligence community became convinced that Putin would invade, the senior official added. With few other options available at the last minute to try to stop Putin, President Joe Biden took the unusual step of making the intelligence public, in what amounted to a form of information warfare against the Russian leader. He also warned that Putin was planning to try to fabricate a pretext for invasion, including by making false claims that Ukrainian forces had attacked civilians in the Donbas region of eastern Ukraine, which is controlled by pro-Russian separatists. The preemptive use of intelligence by Biden revealed “a new understanding … that the information space may be among the most consequential terrain Putin is contesting,” observed Jessica Brandt of the Brookings Institution.
Biden’s warning on February 18 that the invasion would happen within the week turned out to be accurate. In the early hours of February 24, Russian troops moved south into Ukraine from Belarus and across Russia’s borders into Kharkiv, the Donbas region, and Crimea, which Russia annexed in 2014.
The intelligence community’s assessment that Putin waited until almost the last minute to decide to start a war with Ukraine, which has not been previously reported, is significant because it could help explain how ill-prepared and uncoordinated the Russian military has appeared since it invaded. There have been widespread reports that Putin kept many Russian leaders out of the loop, that they were stunned by his decision to attack, and that the Russian government was not fully ready for war. “I was shocked because for a long time, I thought that a military operation was not feasible. It was not plausible,” Andrey Kortunov, a member of a Kremlin panel of foreign policy advisers, told Britain’s Sky News on March 2. Kortunov said that he and other foreign policy advisers had been sidelined by Putin.
The Russian president has instead surrounded himself with a small circle of like-minded military and intelligence officials who do his bidding. This has prompted outside experts to describe the current Russian government as being run by the siloviki, a small cadre of senior people with security, intelligence, and military backgrounds. It means that an increasingly isolated Putin made the decision to invade largely by himself. But that isolation makes it difficult to control a sprawling enterprise like a major war.
It’s possible that Putin made his decision earlier than U.S. intelligence concluded that he did. Current intelligence officials who described the CIA’s reporting on Putin’s intentions refused to identify the specific intelligence the agency used to determine when he decided to invade, making it difficult to judge the quality of the assessments. For example, whether U.S. intelligence was able to determine Putin’s plans because it gained access to his personal communications — thus giving the U.S. real-time information about his thinking — remains a closely guarded secret.
The Russian president has surrounded himself with a small circle of like-minded military and intelligence officials who do his bidding.
Several former intelligence officials said they doubt that the U.S. has access to Putin’s personal communications and instead believe it is more likely that the U.S. relied in part on intercepted communications among others in the Russian government and military. As Putin issued orders, increasing numbers of government and military officials had to be notified, and those officials then had to notify others around them. As a result, the Russian president’s plans for such a large-scale invasion couldn’t remain secret for long.
While Putin’s intentions were difficult for U.S. intelligence to determine, the Russian military’s troop buildup along the border with Ukraine was much easier to monitor. Over the past year, in fact, Russia did little to conceal its huge military deployments along the border with Ukraine. Last April, U.S. intelligence first detected that the Russian military was beginning to move large numbers of troops and equipment to the Ukrainian border. Most of the Russian soldiers deployed to the border at that time were later moved back to their bases, but U.S. intelligence determined that some of the troops and materiel remained near the border, the current and former intelligence officials said. The intelligence community realized that by only withdrawing part of its forces, Russia was making it easier to mount a quick mobilization later.
In June 2021, against the backdrop of rising tensions over Ukraine, Biden and Putin met at a summit in Geneva. The summer troop withdrawal brought a brief period of calm, but the crisis began to build again in October and November, when U.S. intelligence watched as Russia once again moved large numbers of troops back to its border with Ukraine. Pentagon analysts began to warn that the scale and costs of the deployment were much larger than would be required if Putin were bluffing, said current and former officials familiar with the intelligence.
As U.S. intelligence monitored the Russian troop buildup, there was some concern among officials handling Russian operations inside the CIA about how aggressively they were being allowed to conduct spy operations against Moscow. Early in 2021, some officials involved in Russian operations inside the CIA said that they were facing at least a temporary pause on a series of sensitive covert operations related to Russia, according to a former U.S. intelligence official with direct knowledge of discussions among the officials involved in Russian operations. The former official said that William Burns, Biden’s CIA director, was seeking to temporarily halt some high-risk and potentially provocative operations to give the new administration a chance to try to reset relations with Putin after the weird and controversial relationship between Putin and Donald Trump. The former U.S. president had been investigated for his ties to Russia, and his relationship with Putin often seemed submissive, poisoning every aspect of U.S.-Russian relations.
The Biden administration “wanted to see if they could avoid kicking over a hornet’s nest called Russia.”
“There was a deep desire for a stable and predictable relationship with Russia,” the former senior CIA official told The Intercept. The Biden administration “wanted to see if they could avoid kicking over a hornet’s nest called Russia.”
A CIA spokesperson denied that there were any restrictions imposed on operations against Russia, calling the idea that Burns had sought to limit high-risk spy missions to give Biden a chance to reset relations with Putin categorically false.
Senior intelligence officials said that the only real shift in Russian operations was to increase the agency’s focus on intelligence related to Ukraine instead of pursuing other Russia-related targets. In the first few months of the Biden administration, U.S. intelligence officials began working more closely with Ukrainian intelligence to help the country prepare for a possible Russian invasion, the senior agency official said.
As the intelligence began to show the Russian escalation along the Ukrainian border, top CIA officials became increasingly focused on Ukraine long before it burst into the headlines as a global crisis. “I saw Burns in December, and he was really agitated by the Russian buildup,” said the former senior intelligence official.
Yet for several critical weeks last fall, senior policymakers in the Biden administration remained deeply split over how best to respond. At that time, the administration was reluctant to dramatically and immediately increase arms shipments to Ukraine.
Alexander Vindman, the former Army officer who handled Ukraine policy at the National Security Council and who became a whistleblower in Trump’s impeachment over the Ukraine scandal, says that Trump was largely responsible for delaying arms shipments to the country. Vindman said in an interview that the toxic politics surrounding Trump’s handling of Ukraine continued to make officials in the Biden administration wary of how aggressively to handle Ukraine policy last year.
In 2019, Trump froze military aide to Ukraine to try to pressure Ukrainian President Volodymyr Zelenskyy to investigate Biden, then a contender for the Democratic presidential nomination. Trump was impeached by the House for his attempt to pressure a foreign leader to meddle in a U.S. election but was later acquitted in the Senate. “Trump’s freeze on arms transfers made Ukraine toxic for the remainder of the Trump years, and I think Biden saw it as a toxic issue too,” Vindman said. “We lost three years’” worth of aid to Ukraine because of Trump’s efforts to intimidate Zelenskyy, he added. (Vindman testified before Congress during the impeachment; he was subsequently forced out of his job at the White House and later retired from the Army, saying that his chain of command did not shield him from pressure from the Trump administration.)
By February, however, as the U.S. intelligence community issued specific warnings that an invasion was imminent, the period of indecision among Biden administration policymakers came to an end. Since the invasion, the U.S. and its NATO allies have poured arms into Ukraine to help the nation defend itself. But Biden has imposed limits, and this week he rejected a Polish proposal to transfer fighter jets to Ukraine.
A senior U.S. intelligence official said that Putin has been surprised and disappointed by the Russian army’s problems so far and by the strength of the Ukrainian resistance. A U.S. intelligence official told Congress this week that as many as 4,000 Russian soldiers have been killed since the invasion began.
The senior intelligence official said that the Ukrainian intelligence service, which worked with the CIA to prepare for the invasion, has performed well since the Russian attack, but did not provide any details.
“Clearly Putin’s expectation was that this would be a much easier enterprise than it is,” the senior U.S. intelligence official said.
Yahoo News! is reporting that Kremlin spokesman Dmitry Peskov attempted to clarify the meaning of Putin’s controversial remarks in a press call with reporters today by suggesting that such a “cleansing” would be a voluntary phenomenon: “They vanish from our lives themselves. Some people are leaving their posts, some are leaving their active work life, some leave the country and move to other countries. That is how this cleansing happens.” – Natylie
The main reports of the meeting were presented by Moscow Mayor, Chair of the State Council Commission on State and Municipal Administration and Head of the State Council Working Group on Economic Issues and Countering the Spread of the Coronavirus Sergei Sobyanin; Deputy Prime Minister Marat Khusnullin; Novgorod Region Governor, Chair of the State Council Commission on Social Policy Andrei Nikitin; Head of the Republic of Tatarstan, Chair of the State Council Commission on Construction, Housing and Utilities, and Urban Environment Rustam Minnikhanov, Kaliningrad Region Governor, Chair of the State Council Commission on Small and Medium-Sized Entrepreneurships Anton Alikhanov; and Head of the Republic of Buryatia, Chair of the State Council Commission on Transport Alexei Tsydenov. In addition, Prime Minister Mikhail Mishustin, Presidential Plenipotentiary Envoy to the Urals Federal District Vladimir Yakushev, Minister of Economic Development Maxim Reshetnikov, Minister of Agriculture Dmitry Patrushev, and Head of Chechnya Ramzan Kadyrov also delivered remarks.
President of Russia Vladimir Putin: Good afternoon, colleagues.
Taking part in our meeting are senior Government officials, plenipotentiary presidential envoys in the federal districts and heads of Russian regions.
We are meeting in a complicate period as our Armed Forces are conducting a special military operation in Ukraine and Donbass. I would like to remind you that at the beginning, on the morning of February 24, I publicly announced the reasons for and the main goal of Russia’s actions. It is to help our people in Donbass, who have been subjected to real genocide for nearly eight years in the most barbarous ways, that is, through blockade, large-scale punitive operations, terrorist attacks and constant artillery raids. Their only guilt was that they demanded basic human rights: to live according to their forefathers’ laws and traditions, to speak their native language, and to bring up their children as they want.
During these years, the Kiev authorities have ignored and sabotaged the implementation of the Minsk Package of Measures for a peaceful settlement of the crisis and ultimately late last year openly refused to implement it.
They also started to implement plans to join NATO. Moreover, the Kiev authorities also announced their intention to have nuclear weapons and delivery vehicles. This was a real threat. With foreign technical support, the pro-Nazi Kiev regime would have obtained weapons of mass destruction in the foreseeable future and, of course, would have targeted them against Russia.
There was a network of dozens of laboratories in Ukraine, where military biological programmes were conducted under the guidance and with the financial support of the Pentagon, including experiments with coronavirus strains, anthrax, cholera, African swine fever and other deadly diseases. Frantic attempts are being made to conceal traces of these secret programmes. However, we have grounds to assume that components of biological weapons were being created in direct proximity to Russia on the territory of Ukraine.
Our numerous warnings that such developments posed a direct threat to the security of Russia were rejected with open and cynical arrogance by Ukraine and its US and NATO patrons.
In other words, all our diplomatic efforts were fully in vain. We have been left with no peaceful alternative to settle the problems that developed through no fault of ours. In this situation, we were forced to begin this special military operation.
The movement of Russian forces against Kiev and other Ukrainian cities is not connected with a desire to occupy that country. This is not our goal, as I pointed out openly in my statement on February 24.
As for the combat tactics drafted by the Defence Ministry of Russia and the General Staff, this has fully justified itself. Our fellows – soldiers and officers – are displaying courage and heroism and are doing all they can to avoid civilian losses in Ukrainian cities.
This is what I would like to say for the first time: at the very start of the operation in Donbass, the Kiev authorities were offered opportunities to avoid hostilities, via different channels, to simply withdraw their troops from Donbass as an alternative to bloodshed. They did not want to do this. Well, this was their decision; now they will understand what is happening in reality, on the ground.
The operation is being carried out successfully, in strict conformity with the approved plan.
I must note that, encouraged by the United States and other Western countries, Ukraine was purposefully preparing for a scenario of force, a massacre and an ethnic cleansing in Donbass. A massive onslaught on Donbass and later Crimea was just a matter of time. However, our Armed Forces have shattered these plans.
Kiev was not just preparing for war, for aggression against Russia – it was conducting it. There were endless attempts to stage acts of subversion and organise a terrorist underground in Crimea. Hostilities in Donbass and the shelling of peaceful residential areas have continued all these years. Almost 14,000 civilians, including children have been killed over this time.
As you know, there was a missile strike at the centre of Donetsk on March 14. This was an overt bloody act of terror that took over 20 lives. Shelling has been ongoing during the past few days. They are striking randomly at squares with the fervor of fanatics and the exasperation of the doomed. They are acting like the Nazis did when they tried to drag as many innocent victims as they could to their graves.
But what is shocking in its extreme cynicism is not just Kiev’s blatant lies and statements that Russia allegedly launched this missile at Donetsk (they have gone as far as this), but the attitude of the so-called civilised world. The European and American press did not even notice this tragedy in Donetsk, as if nothing happened.
This is how they have been hypocritically looking the other way over the past eight years as mothers buried their children in Donbass, as elderly people were killed. This is simply moral degradation, complete de-humanisation.
It was no longer possible to tolerate this outrageous attitude towards the people of Donbass. To put an end to this genocide, Russia recognized the people’s republics of Donbass and signed treaties of friendship and mutual aid with them. Based on these treaties, the republics appealed to Russia for military aid in rebuffing the aggression. We rendered this aid because we simply could not do otherwise. We had no right to act otherwise.
I would like to emphasise this point and draw your attention to it: if our troops had acted only within the people’s republics and helped them liberate their territory, it would not have been a final solution, it would not have led to peace and would not have ultimately removed the threat – to our country, this time to Russia. On the contrary, a new frontline would have been extended around Donbass and its borders, and shelling and provocations would have continued. In other words, this armed conflict would have continued indefinitely. It would have been fuelled by the revanchist hysteria of the Kiev regime, as NATO deployed its military infrastructure faster and more aggressively. In this case, we would have been faced with the fact that the attack, the offensive weapons of the alliance were already at our borders.
I will repeat – we had no alternative for self-defence, for ensuring Russia’s security, to this special military operation. We will reach the goals we set. We will certainly ensure the security of Russia and our people and will never allow Ukraine to be a bridgehead for aggressive actions against our country.
We remain ready to discuss matters of fundamental importance to Russia’s future during the talks. This includes Ukraine’s status as a neutral country, and demilitarisation and denazification. Our country has done everything it could to organise and hold these talks realising that it is important to use every opportunity to save people and their lives.
But time and time again we see that the Kiev regime, which its Western handlers have charged with the task of creating an aggressive “anti-Russia” stance, does not care about the future of the people of Ukraine. They do not care that people are dying, that hundreds of thousands, or even millions of people had to flee their homes, and that a horrendous humanitarian disaster is unfolding in the cities controlled by the neo-Nazis and armed criminals who were cut loose.
Clearly, Kiev’s Western patrons are just pushing them to continue the bloodshed. They incessantly supply Kiev with weapons and intelligence, as well as other types of assistance, including military advisers and mercenaries.
They are using economic, financial, trade and other sanctions against Russia as weapons, but these sanctions have backfired in Europe and in the United States where prices of gasoline, energy and food have shot up, and jobs in the industries associated with the Russian market have been cut. So, do not shift the blame on us and do not accuse our country of everything that goes wrong in your countries.
I want ordinary Western people hear me, too. You are being persistently told that your current difficulties are the result of Russia’s hostile actions and that you have to pay for the efforts to counter the alleged Russian threat from your own pockets. All of that is a lie.
The truth is that the problems faced by millions of people in the West are the result of many years of actions by the ruling elite of your respective countries, their mistakes, and short-sighted policies and ambitions. This elite is not thinking about how to improve the lives of their citizens in Western countries. They are obsessed with their own self-serving interests and super profits.
This can be seen in the data provided by international organisations, which clearly show that social problems, even in the leading Western countries, have exacerbated in recent years, that inequality and the gap between the rich and the poor is widening, and racial and ethnic conflicts are making themselves felt. The myth of the Western welfare society, the so-called golden billion, is crumbling.
To reiterate, the whole planet is now paying for the West’s ambitions and the West’s attempts to maintain its elusive dominance by any means possible.
Imposing sanctions is the logical continuation and the distillation of the irresponsible and short-sighted policy of the US and EU countries’ governments and central banks. They themselves have driven up global inflation in recent years, and with their actions caused rising global poverty and greater inequality across the world. The question now arises – who will answer for the millions who will die of hunger in the world’s poorest countries due to growing food shortages?
Let me reiterate, the global economy and global trade as a whole have suffered a major blow, as did trust in the US dollar as the main reserve currency.
The illegitimate freezing of some of the currency reserves of the Bank of Russia marks the end of the reliability of so-called first-class assets. In fact, the US and the EU have defaulted on their obligations to Russia. Now everybody knows that financial reserves can simply be stolen. And many countries in the immediate future may begin – I am sure this is what will happen – to convert their paper and digital assets into real reserves of raw materials, land, food, gold and other real assets which will only result in more shortages in these markets.
Let me add that the seizure of foreign assets and accounts of Russian companies and individuals is also a lesson for domestic businesses that there is nothing as reliable as investing in one’s own country. I personally have said that a number of times.
We appreciate the position of those foreign companies who continue working in our country despite the brazen pressure from the US and its vassals. They are sure to find additional opportunities for growth in the future.
We also know those who cowardly betrayed their partners and forgot about their responsibility to employees and customers in Russia, rushing to earn illusory dividends from joining the anti-Russia campaign. However, unlike Western countries, we will respect property rights.
Here is what I would like to point out. We must clearly understand that a new package of sanctions and restrictions would have been imposed on us no matter what. I want to emphasise this. For the West, our military operation in Ukraine is just a pretext for imposing more sanctions on us. Indeed, this time they are concentrated. In the same way, the West used the referendum in Crimea as a pretext, which, by the way, took place on March 16, 2014, eight years ago today, when the residents of Crimea and Sevastopol made the free choice to be one with their historical homeland.
To reiterate, these are just pretexts. The policy of containing and weakening Russia, including through economic isolation, a blockade, is a premeditated, long-term strategy. Western leaders are no longer hiding the fact that the sanctions are not directed against individuals or companies. Their goal is to deliver a blow to our entire economy, our social and cultural sphere, every family, and every Russian citizen.
In fact, the steps designed to make the lives of millions of people worse have all the attributes of an aggression, a war by economic, political, and informational means, and it is of a comprehensive and blatant nature. Again, the West’s top political circles do not even hesitate to talk about it openly.
The verbal tinsel of political correctness, inviolability of private property and freedom of speech was blown off overnight. Even the Olympic principles were trampled upon. They did not hesitate to settle their score through the Paralympic athletes. So much for “sport being separate from politics.”
In many Western countries, people are subjected to persecution just because they are originally from Russia. They are being denied medical care, their children are expelled from schools, parents are losing their jobs, and Russian music, culture, and literature are being banned. In its attempts to “cancel” Russia, the West tore off its mask of decency and began to act crudely showing its true colours. One cannot help but remember the anti-Semitic Nazi pogroms in Germany in the 1930s, and then pogroms perpetrated by their henchmen in many European countries that joined the Nazi aggression against our country during the Great Patriotic War.
A massive attack against Russia has also been unleashed in cyberspace. An unprecedented information campaign has been launched through global social networks and all Western media outlets, whose impartiality and independence have proved to be a mere myth. Access to information is being restricted and people are being crammed full of all sorts of fake stories, propaganda, and fabrication, or simply put, snake oil. It even got to the point where American social media companies said straight out that it was possible to post calls for the murder of Russian nationals.
We realise what kind of resources this empire of lies has at its disposal but, all the same, when confronted with truth and justice, it is helpless. Russia will never stop trying to make its position clear to the whole world. And our position is honest and open, and an increasing number of people hear, understand and share it.
I want to be as direct as possible: hostile geopolitical designs lie behind the hypocritical talk and recent actions by the so-called collective West. They have no use – simply no use – for a strong and sovereign Russia, and they will not forgive us for our independent policy or for standing up for our national interests.
We still remember how they supported separatism and terrorism by encouraging terrorists and bandits in the North Caucasus. Just like in the 1990s and the early 2000s, they want to try again to finish us off, to reduce us to nothing by turning us into a weak and dependent country, destroying our territorial integrity and dismembering Russia as they see fit. The failed then and they will fail this time.
Yes, of course, they will back the so-called fifth column, national traitors – those who make money here in our country but live over there, and “live” not in the geographical sense of the word but in their minds, in their servile mentality
I do not in the least condemn those who have villas in Miami or the French Riviera, who cannot make do without foie gras, oysters or gender freedom as they call it. That is not the problem, not at all. The problem, again, is that many of these people are, essentially, over there in their minds and not here with our people and with Russia. In their opinion – in their opinion! – it is a sign of belonging to the superior caste, the superior race. People like this would sell their own mothers just to be allowed to sit on the entry bench of the superior caste. They want to be just like them and imitate them in everything. But they forget or just completely fail to see that even if this so-called superior caste needs them, it needs them as expendable raw material to inflict maximum damage on our people.
The collective West is trying to divide our society using, to its own advantage, combat losses and the socioeconomic consequences of the sanctions, and to provoke civil unrest in Russia and use its fifth column in an attempt to achieve this goal. As I mentioned earlier, their goal is to destroy Russia.
But any nation, and even more so the Russian people, will always be able to distinguish true patriots from scum and traitors and will simply spit them out like an insect in their mouth, spit them onto the pavement. I am convinced that a natural and necessary self-detoxification of society like this would strengthen our country, our solidarity and cohesion and our readiness to respond to any challenge.
The so-called collective West and its fifth column are accustomed to measuring everything and everyone by their own standards. They believe that everything is for sale and everything can be bought, and therefore they think we will break down and back off. But they do not know our history and our people well enough.
Indeed, many countries around the world have long put up with living with their backs bent, obsequiously accepting all the decisions that come from their sovereign, looking up to it subserviently. This is how many countries live. Unfortunately, in Europe, as well.
But Russia will never be seen in such a miserable and humiliated situation, and the fight we are waging is the fight for our sovereignty and the future of our country and our children. We will fight for the right to be and remain Russia. The courage and fortitude of our soldiers and officers, the faithful defenders of the Fatherland, should inspire us.
Colleagues,
Clearly, the ongoing developments are drawing a line under the global dominance of Western countries in politics and the economy. Moreover, they call into question the economic model that has been imposed on the developing countries and the entire world in recent decades.
Importantly, the obsession of the United States and its proponents with the sanctions is not shared by the countries that are home to more than half of the global population. These states represent the fastest growing and the most promising portion of the global economy. That includes Russia.
Indeed, it is difficult for us at the moment. Russian financial companies, major enterprises, small and medium-sized businesses are facing unprecedented pressure.
The banking system was the first to come under sanctions, but our banks dealt with this challenge. They are working literally around the clock to make payments and settlements between individual clients and to ensure the functioning of enterprises.
The second wave of sanctions was designed to set off panic in the area of retail. According to estimates, over the past three weeks, additional demand for goods has exceeded one trillion rubles. However, our manufacturers, suppliers, transport and logistics companies did everything humanly possible to avoid major shortages in retail chains.
I would like to thank the business community and the teams at companies, banks and organisations, which are not only responding effectively to sanction-related challenges but are also laying the foundation for the continued sustainable development of our economy. I would like to make a special mention of the Government, the Bank of Russia, regional governors and regional and municipal teams. In the current tough conditions, you are carrying out your responsibilities admirably.
Obviously, the attempts to organise an economic blitzkrieg against Russia, demoralise our society and push us around have failed, and so we are sure to see attempts to bring even greater pressure to bear on our country. But we will overcome these difficulties as well. The Russian economy will adapt to the new realities. We will strengthen our sovereignty in science and technology, allocate additional resources to support agriculture, the processing industry, infrastructure, and housing, and continue developing foreign trade ties to tap into rapidly growing, dynamic international markets.
Clearly, in the new realities we will have to make deep structural changes in our economy, and I will not pretend that they will be easy or that they will not lead to a temporary increase in inflation and unemployment.
In this situation, our task is to minimise such risks. We must not just meet all the social commitments of the state but also launch new, more effective mechanisms for supporting our people and their incomes.
We will focus on protecting mothers and children and supporting families with children. We have already made a decision – you know about it – to introduce as of April 1 payments for children aged 8 through 16 in low-income families. The size of the payment will range from 50 to 100 percent of the subsistence minimum for every child. Currently the national average is up to 12,300 rubles. Thus, we will have a uniform system of support from when a mother first becomes pregnant until the child turns 17.
I am instructing the Government to oversee the operation of this system so that it quickly detects any changes in the material status of families. That is, it is necessary to make sure families start receiving state support as soon as possible if the parents lost their jobs or faced other difficult circumstances.
I also ask the Government to promptly analyse the efficacy of the measures to support those who have lost their jobs. Such measures must obviously be expanded, through the social contract mechanism, among other.
I am aware that the price hikes are a big blow to people’s incomes, and so we will take action to increase all social payments shortly including benefits and pensions, we will raise the minimum wage and the minimum subsistence level and also the wages of public-sector workers. I ask the Government to calculate the exact parameters for the increases.
To emphasise, even under the current difficult conditions we must reduce poverty and inequality by the end of the year. This issue remains quite solvable even now. I ask the Government and the regions to focus on this task. I will add that we understand that it is not only an economic issue but also one of social justice.
At present, much depends on the lead of the heads of the constituent entities of the Federation and their readiness to assume responsibility. I signed an executive order today on additional powers for heads of regions – they will be authorised to take flexible and responsive decisions to support our citizens, the economy and social policy in light of the situation on the ground. Let me remind you that we streamlined our steps in fighting the coronavirus in exactly this way, making it possible to consider the situation in each region, city and village – and the situation is different everywhere.
I am instructing all the departments of federal bodies in the constituent entities of the Federation to coordinate their work with the regional authorities, and governors must establish operational centres to ensure economic development and to personally lead this work.
What is the priority here?
Private businesses must play the key role in overcoming the current problems as they can quickly rework logistics, find new suppliers and increase output of in-demand products. Supporting employment, incomes and wages and supporting the stable, balanced performance of the economy in general depend on how quickly private businesses will be able to find the right solutions and take them.
That is why we must respond to external pressure with the utmost entrepreneurial freedom and with support for business initiative.
I want the Government, law enforcement agencies and oversight authorities to continue their work on lifting unnecessary administrative and regulatory barriers. Furthermore, it is unacceptable to distract the private sector and regional authorities from addressing the most pressing tasks and burden them with all sorts of inspections and oversight procedures.
The lack of working capital and the unavailability or high cost of loans is among the key problems facing companies now, and the Central Bank was forced to take appropriate measures. In this regard, I am ordering the following steps to be taken.
First, companies that fulfill orders placed by government authorities and companies partly owned by the state should be paid for the delivered goods and services as soon as possible, and reinvest the proceeds into business. In this regard, I propose increasing the amount of advance payments under government contracts. The advance payment must amount to at least a half of the total amount of a contract, and the payment term for the delivered goods and services should be reduced to seven business days. A similar decision must also be made at the level of the constituent entities of the Federation, municipalities and companies with state participation.
Second, it is imperative to improve entrepreneurs’ ability to raise additional resources from development institutions, by which I mean expanding the Project Financing Factory’s activities (it is working well, and we know from practice that its services are in demand), providing resources for business investment plans through the Industry Development Fund (which is one of the really well-performing tools), the Bank for Small and Medium-Sized Enterprises, and also through regional support institutions, including guarantee funds. I hereby instruct the Government to allocate additional funds to the constituent entities of the Federation to fund these regional tools.
I want the Government and our colleagues in the regions to pay attention to the fact that the most important task is to ensure the availability of goods on the consumer market, primarily essential supplies, medications and medical products. Logistical complications and other objective problems that result in price surges must be resolved quickly. At the same time, it is imperative to rule out intervention in price regulation. The increased supply of goods and nothing else should lead to a decrease and stabilisation of prices.
Separately, I would like to address our exporters. Whenever deliveries to international markets do not run smoothly, you should send extra batches of goods to the domestic market rather than reduce your production rates. This should objectively reduce domestic prices, including those of gasoline, diesel, bitumen, metals, and other export goods. I want the Government and the Federal Antimonopoly Service, as well regional authorities, to monitor these markets at all times.
Furthermore, considering the new challenges faced by Russia, we must maintain and expand our long-term development agenda, including the implementation of all planned federal and regional projects. We must make full use of the potential of our budget system as a tool for stimulation.
As we agreed, federal funding for various projects, including construction projects, will be carried out in full. Moreover, in December we decided on allocating additional funds if construction costs went up for objective reasons.
I consider it important to note that there will be no problems with federal budget funding in the current situation. Our economy is generating adequate revenue. This means we will not have to resort to emissions. In simple terms, the Central bank will not have to print money. We have revenue – sound market revenue. The problem is not rooted in money. Let me repeat that we have the resources. The main difficulties are related to the supply of spare parts, technology and construction materials, and the need to organise the work of subcontractors. Therefore, the deadlines and the methods for implementing specific projects and project phases may be subject to change. This will require the smooth operation of government bodies and business representatives and expediting the implementation of import substitution programmes. This is an important point.
In the process, it is also important to simplify the procedure for cooperation between the regions and the federal government bodies and give the regions of the Federation more freedom in using resources and more opportunities for launching new construction projects and programmes.
Additional funding for road construction has already been allocated to the regions. I would like to ask the Government to consider an increase in funding other infrastructure facilities so work can start this year, and the possibility of building up purchases from Russian companies, for instance, with a view to upgrading public transport.
Obviously, this will be a serious additional burden on the budgets of the regions of the Russian Federation. Therefore, as we agreed, we will additionally adjust the subsidies to even out fiscal capacity. We will also use other measures for supporting regional finances. Thus, all payments on budget loans scheduled for this year will be suspended and payments on commercial loans will be replaced with budget loans wherever necessary. I would like to ask the Government to study this issue in detail and dig to the bottom of every case. Only a case-by-case approach will produce the desired effect.
In addition, the Finance Ministry will provide an additional unconditional credit line for every region. It will amount to 10 percent of total revenue with repayment no earlier than the end of this year.
We are going to maintain the same volume of infrastructure budget loans. I am instructing the Government to make arrangements for flexible management of this programme and to take account of the challenges involved in the implementation of the projects that I mentioned earlier. The regions should be able to take swift action on altering the portfolio and the contents of the projects, and focus on the ones that can be implemented as efficiently as possible in the current circumstances. If need be, we will explore the possibility of increasing the volume of infrastructure loans. This is possible and is quite feasible. In general, we will closely monitor regional finances and make additional decisions to support them, if need be.
I would like to emphasise that direct communication between all levels of government and a clear sequence of actions are of paramount importance now. The State Council and its specialised commissions have proved their effectiveness. I want the public administration commission led by Sergei Sobyanin to team up with our colleagues from the Government and to focus on problematic items on the regional agenda, to come up with the best solutions and to scale them to all Russian regions. We have gained extensive experience from combating the pandemic.
Colleagues,
Our economy, the state budget and private sector possess the necessary resources to address long-term tasks. All strategic and national goals that we have set for the period to 2030 must be achieved. The current challenges and the opportunities that they offer should mobilise us – this is what we should set our minds to in order to achieve tangible results in the interests of our people.
Clearly, we will need to fine-tune our programmes, and we welcome the initiatives coming from business circles, academics, and public associations. In this regard, I want the regions to join in organising the forum convened by the Agency for Strategic Initiatives titled, Powerful Ideas for New Times, where every Russian citizen will have a chance to present their proposals and specific projects for advancing their respective cities, regions, and our country as a whole.
To reiterate, the current developments represent a challenge for all of us. I am confident that we will come through with dignity. By working hard and working together, by supporting each other, we will overcome all challenges and emerge even stronger, as has always been the case in the thousand-year history of Russia. That is how I want you to think about this work.
The launch of the military operation in Ukraine has drawn the ire of the US and its allies, who have hit Russia with unprecedented sanctions in order to destabilize the country’s economy and pressure Moscow into ending the conflict. Among the many penalties imposed on the country over the past month, its financial system, energy exports, and forex reserves have been targeted. However, hard times call for prompt response measures, and Russia has come up with a few.
1. National payment system Mir takes over for SWIFT
Major Russian banks have been cut off from the SWIFT global financial messaging system, effectively denying them access to international markets. However, Russia can now accept electronic transfers via Mir, the Russian alternative payment system, and work with foreign banks and businesses, bypassing Western restrictions. Mir also provides an alternative to Visa and MasterCard, which have stopped providing international transaction services to Russian clients.
2. Domestic currency trade and new export destinations
Sanctions also targeted Russia’s holdings in euros and US dollars to deny the country the ability to trade internationally. However, Moscow is setting up trade mechanisms to enable national currency payments with foreign trade partners. Russia and China have had ruble-yuan payment mechanisms for a while, and earlier this month, Turkey expressed its willingness to trade in rubles. Also, a ruble-rupee trading scheme has been announced for Russian oil exports to India. India, which until now bought only 3% of its oil imports from Russia, has been eager to boost purchases, as has Serbia. It is a sign that Russia has alternatives for exports if the West continues to isolate the country.
3. Exporters ordered to dump the dollar
In order to support the ruble, which has suffered a sharp decline against major currencies this month, Russian businesses that trade abroad have been ordered to sell 80% of their foreign currency earnings and convert them to rubles. It is expected to stabilize the national currency and encourage more investments in Russia instead of moving them abroad.
4. Grain export ban to secure domestic supplies
Russia has temporarily banned grain exports to the countries of the Eurasian Economic Union (EAEU) this week. Restrictions cover shipments to post-Soviet states that share a free customs zone with Russia. They include, Armenia, Belarus, Kazakhstan, and Kyrgyzstan. The measure aims to keep the domestic food market well stocked and prices from soaring.
5. Interest rate hike to support the national currency
With nearly half of the country’s forex reserves frozen and unavailable to support the depreciating ruble, the Russian Central Bank urgently raised the key rate late in February from 9.5 to a record 20% per annum. The step was taken to compensate for the increased devaluation and inflation risks, or simply to help maintain price stability and protect citizens’ savings from depreciation. The regulator also launched additional measures to support credit institutions and recommended that banks not charge interest and penalties on loans, as well as allowing the restructuring of payments and repayment holidays. The moves have helped to stabilize the ruble, which has recorded six consecutive days of gains against the euro and the dollar, as of Thursday.
6. Ruble debt payments to avoid default
Russia has authorized two payments to bondholders totaling $117 million due on Wednesday in US dollars. The money comes from the country’s accounts frozen abroad. It is now up to the US and its allies to approve the transfer. If they do not, the Russian government has ordered that the debt be paid in rubles at the official central bank exchange rate at the time of transfer. Western-based institutions insist that unless the debt is paid in the currency of issue, Russia faces its first default in a century. Moscow insists that the West is trying to engineer “an artificial default” since the country has the money to pay its debts, to which it is being denied access.
7. Targeted support for citizens
On Wednesday, President Vladimir Putin ordered new measures to support Russian citizens amid rising prices, unemployment, and supply issues tied to sanctions. The steps will focus on protecting families with children and elderly citizens. He said a decision to increase the minimum wage, salaries in the public sector, and social benefits, including pensions, will be made in a matter of days.
8. Financial support for entrepreneurs
The Russian government has approved a draft plan to support small and medium-sized businesses. Local authorities have been instructed to provide organizations, individual entrepreneurs, and self-employed citizens with support measures, including subsidies and credits.
9. Exporters advised to turn to domestic market
President Putin has urged Russian exporters not to reduce production in response to sanctions, but to supply the domestic market. This will keep prices within the country from surging, including for gasoline, diesel, metals, and other export goods, he said, adding that import substitution projects have never been more important.
10. Foreign businesses offered ways to stay in Russia
Facing sanctions pressure, a number of foreign companies this month announced their temporary withdrawal from Russia, including IKEA, Microsoft, Volkswagen, Apple, Shell, McDonald’s, H&M, and others. Proposals were made to nationalize these enterprises to keep the businesses running. However, in his address on Wednesday, President Putin said Russia will respect private ownership of foreign firms. Earlier, he voiced support of another idea – to introduce external management, so foreign firms could be run by partners in Russia. The Ministry of Economy is developing a bill to regulate the procedure.
