Hello! This week we look at more revelations about the nuclear accident in Russia’s north, why iconoclastic Kremlin economic advisor Sergei Glazyev lost his job, and what Putin has had to say about the Moscow protests after weeks of silence. We also have brief stories on the secret gold stash found at a Russian bank (did it come from Venezuela?), and the Central’s Bank’s bizarre choice of messaging app for its new payment system.
Alarm at level of secrecy over nuclear incident in northern Russia
The secrecy surrounding the accident on a platform in the White Sea in Russia’s far north earlier this month is more and more reminiscent of official attitudes after the 1986 Chernobyl disaster. This week, we learned that the doctors who treated the victims after the explosion were not immediately warned about the radiation risks.
What we know about the explosion: On August 8, a nuclear accident took place on a platform in the White Sea, about 40 kilometers from the city of Severodvinsk, during testing of some kind of high tech weapon. A total of 7 people died: 5 nuclear engineers and two military personnel.
Last week, we wrote about the accident and the possible causes.
Radiation trail: The doctors working in the hospital where the victims were treated were not warned about radiation contamination and, when they finally realized what was going on, they were forced to use homemade protective equipment, according to the BBC (Rus). “All of the victims’ clothing was emitting radiation and even the stretchers and the hospital bathroom,” the BBC quoted one of the doctors as saying. When they asked about the risks, doctors were told it was not dangerous and that they should continue working, another doctor told Meduza.
- Information about what happened has emerged gradually, and there are several disturbing details. Firstly, it is unclear why victims from a military site were taken to a civilian hospital. Secondly, from reporting by the BBC and The Moscow Times, we know that: (i) other patients were initially left in the emergency room because no one knew about the radiation risk; (ii) victims showed symptoms of acute radiation sickness; (iii) the doctors at the hospital signed non-disclosure agreements on the insistence of security officials; and (iv) the medical histories of all the victims were confiscated.
- The local deputy health minister met with doctors three days after the incident, but he didn’t provide assuage their fears. Instead, he said they could go to Moscow and be tested for contamination. About 60 people agreed, but, in the end, only two groups actually flew to Moscow — others were tested on-site. The radioactive isotope caesium-137 was detected in the muscle tissue of one of the doctors, but the local government said (Rus) that it entered his body “via foods” like mushrooms or fish.
Yet another worrying sign: Four Russian radiation monitoring stations stopped transmitting data after the explosion on August 8, according to The Wall Street Journal. All of the stations are run by Russia’s Ministry of Defense, which has not commented on the outages. The Ministry of Foreign Affairs said that the transmission of such data is voluntary.
Why the world should care
Monitoring from neighboring countries (like Finland) indicates that there has been no massive spike in radiation levels. So — fortunately — there is no risk of mass fatalities like after Chernobyl. But the combination of extreme negligence and continuing secrecy makes certain parallels unavoidable. And that is the most scary thing: Russians are realizing that the approach taken by the authorities would be the same even if the danger was very real.
Putin’s maverick economic advisor is quitting his Kremlin job
At the end of last week it was revealed that unorthodox economist Sergei Glazyev will be stepping down as economic advisor to President Vladimir Putin. Glazyev is known for his bizarre, anti-liberal ideas that evoke derision from experts but appeal to ordinary Russians.
Who is Sergei Glazyev? Before his 7-year stint as an advisor in the Kremlin, he served as a State Duma deputy and worked for the Eurasian Economic Community and the Customs Union of Russia, Belarusa and Kazakhstan. Glazyev was also an active participant in the events in Ukraine in 2013-14: Ukrainian prosecutors published recordings of conversations from that period in which Glazyev discusses holding a referendum in Crimea. Earlier on in his career, Glazyev harbored political ambitions: in 2004, he ran for the presidency against Putin, finishing in third place with 4.1% of the vote. Now, according to media reports, he will take up a position at the Russian-led economic bloc, the Eurasian Economic Union.
What do Glazyev’s colleagues think about him?
“In the economic sphere, he is respected, but his suggestions were not taken seriously and he didn’t have any impact on real decisions,” Deputy Finance Minister Alexey Moiseev said in a conversation with The Bell. Other economists had similar reactions (Rus).
Glazyev’s four most controversial suggestions:
- Flood the economy with money: Glazyev’s recipe (Rus) for growth is as follows: pour trillions of rubles into the economy via targeted loans to businesses, hoping the increase in efficiency and sales protects against inflation. Other economists are deeply skeptical. “It’s like taking part in a discussion about physics that begins with the words ‘let’s take two interconnected vessels and pour water in them to different levels,” leading Russian economist Konstantin Sonin said (Rus) at the time.
- Use a crypto-ruble to defend against sanctions: Glazyev has a personal connection to sanctions: he himself is on U.S., EU, Canadian, Australian and Ukrainian sanctions lists. And his suggestion was to protect Russia from Western sanctions by removing the U.S. dollar from Russia’s reserves and creating a supranational crypto-currency for the countries of the Eurasian Economic Union (Russia, Kazakhstan, Armenia, Kyrgyzstan, Belarus).
- Currency controls: Glazyev is a frequent critic of the Central Bank. According to him, the regulator should limit the rubles’ moves against the U.S. dollar to a maximum of 1 percent and, if necessary, force banks to sell foreign currency.
- More interference in Ukraine: In May, Glazyev caused a minor scandal when he criticized (Rus) Russia for abandoning Ukraine to “agents of Western influence” and stating the new Ukrainian government will begin “mass relocations” of “the inhabitants of the Promised Land” — in other words the Jews — to Eastern Ukraine. The Kremlin distanced itself from the comments, and Glazyev later said he was misunderstood.
Why the world should care
Glazyev’s ideas are deeply populist and the news of his departure led to some regretful commentary on social media. In some ways this affection for Glazyev is easy to understand: after 5 years of falling real incomes people want to believe in a magic solution for the economy. It’s possible this is the reason Glazyev held onto his position in the Kremlin for so long even though no-one was taking his suggestions seriously.
Putin finally comments on the Moscow protests. What took him so long?
Moscow’s protests have died down: last Saturday’s demonstration was modest compared to previous weeks and the rally scheduled Saturday is unlikely to draw a large crowd. This is possibly why Putin, who has just returned from his summer holiday, finally spoke (Rus) publicly about the protests. Before then, the Kremlin’s position had been relayed by Dmitry Peskov, Putin’s press secretary, who maintained the protests weren’t anything out of the ordinary.
- Putin’s position wasn’t surprising. He stressed that the officially sanctioned protests in Moscow took place without incident, that candidates not registered to take part in the elections should appeal to the courts (a refusal to register independent candidates was the initial spark for the protests), and drew a positive comparison between Moscow and the violent clashes in France at gilets jaunes rallies. The reference was deliberate: Putin was responding to a question from a reporter ahead of his Monday meeting with French President Emmanuel Macron.
- The Bell spoke with several experts about Putin’s intervention. The delay might have been related to a lack of consensus in the Kremlin over the issue, according to Gleb Pavlovsky and Aleksei Makarkin. Another political scientist, Alexander Kynev, called the long silence “bureaucratic instinct” — it’s better to say nothing than commit yourself unnecessarily. A question about the protests was going to be hard to avoid at an international press conference, Kynev added.
- There was little unusual about Putin’s comments, but a statement by Sergei Chemezov, Putin’s former KGB colleague and head of state conglomerate Rostec, was genuinely unexpected. “It is obvious that people are really upset, and that is not good for anyone. In summary, my position as a citizen is the following: the existence of a healthy opposition is beneficial,” Chemezov said in an interview (Rus) published Monday.
- Chemezov is one of the last people you would expect to be commenting on opposition rallies. He may have intervened because he is looking to bolster his own political standing and was, as expert Pavlovksy put it, “testing the waters”. It is highly unlikely Chemezov received ‘permission’ to comment. “Putin is the master of vague answers like: ‘if you want, speak’. And then he watches what happens,” according to Pavlovsky.
Why the world should care
The protests in Moscow began when the authorities refused to register independent candidates to run in elections to the city legislature. But dissatisfaction is far more widespread than just Moscow, and there are lots of aggravating factors. All this means that the protest movement in Moscow, and the government’s decisions over how to handle it, will be used by opposition leaders and civil society activists as a guide about what to expect in the future.
Promsvyazbank’s secret gold stash
Eight tonnes of gold worth $348 million has been found (Rus) on the balance sheet of Promsvyazbank, a large bank that works closely with the defense sector. The gold appeared between April and June, but the bank hasn’t bought precious metals for almost two years. Perhaps it’s just a coincidence, but Venezuelan President Nicola Maduro reportedly sent eight tonnes of gold abroad for sale in February 2019 (in total Venezuela sold 24 tonnes of gold between April and July). At the time, the U.S. threatened potential buyers with sanctions. But these would not scare Promsvyazbank — it’s already under sanctions. Even so, there’s no way to be sure as the crucial section of Promsvyazbank’s financial statement was redacted from its publicly available report.
The Central Bank’s new money transfer system is linked to eastern Ukraine
Card to card money transfers are perhaps more common in Russia than anywhere else on earth: you can use card to card payment to reimburse a trader selling berries at the market or even to leave a tip. This is explained by the fact that this payment system was developed extremely effectively by financial giant (and near monopolist), Sberbank. Money can be transferred using banking apps and via chats on Russian social media sites VKontakte and Odnoklassniki. But the Central Bank has been unhappy with Sberbank’s dominance and is developing its own system. The regulator also wants use messaging app and it emerged this week that they have chosen Serafim, a tiny app that has been downloaded about 1,000 times and was created for state-owned companies. For now, there are more questions than answers: particularly when you discover Serafim’s co-owner is linked to businessman Konstantin Malofeev — who is well known for his ties to Russian-backed rebels in eastern Ukraine.
An insider view, in 5 minutes