Weekly 31 August 2019

Shrugs all round as Medvedev champions a 4-day workweek

Hello! For our top story this week we look at Prime Minister Dmitry Medvedev passion for a 4-day workweek — and why it’s doomed to go nowhere. We also have the details on the robot that Russia blasted into space, profile the first banker in Russia to get a new license from the Central Bank in 4 years, and analyze a prisoner exchange between Russia and Ukraine that looks to be in the offing despite a last-minute delay.

Shrugs all round as Medvedev champions a 4-day workweek

Prime Minister Dmitry Medvedev has been missing from the public eye for much of the last year, but he appears to be attempting a comeback. His new idea? A 4-day workweek. Since June, Medvedev has spoken out at least three times about the necessity of working a little less, and this week he ordered (Rus) the Labor MInistry to look into the practicalities. 

  • Medvedev was apparently converted to the idea of a 4-day workweek in June after attending the International Labor Conference where he gave a speech about work/life balance and mentioned Henry Ford, who reduced the working week at his factories to 40 hours. Medvedev ended his speech with the phrase “the future is a 4-day working week.”
  • As soon as Medvedev returned to Russia, the 4-day working week began to be pushed by all sorts of organizations: state-owned pollster VTSIOM conducted a survey (it turned out almost half of those polled were against the idea as they feared earning less money); the Federation of Independent Professional Unions (a body under the control of the government) suggested a shortened workweek without salary reductions; and the State Duma announced (Rus) it was ready to begin working on new legislation. Then, on August 22, Medvedev ordered the Ministry of Labour to evaluate the idea and make suggestions for its implementation. 
  • Despite these moves, few concrete steps have actually been taken. A Ministry of Finance official told (Rus) The Bell in mid-August that a transition to a 4-day workweek is not under serious discussion. 
  • Even if officials took the idea seriously, they would conclude a 4-day workweek is impossible. Labor productivity in Russia is almost three times lower than in France, and twice as low as the Netherlands, where people work an average of just 29 hours per week. Even more importantly, labor productivity in Russia has barely increased in the last five years. 

Why is Medvedev pushing the issue? A lot may be linked to the fact that he is Russia’s most unpopular politician: in June, polling showed almost 60 percent of Russians disapproved of Medvedev. And the idea of a 4-day workweek may have actually given Medvedev a bump: his disapproval rating had improved to 55 percent by mid-August. 

Why should the world care?

This is yet another confirmation that Medvedev’s ideas should not be taken seriously. He remains an important political figure, but after Vladimir Putin was elected for a new presidential term last year, Medvedev has been taking more and more of a passive role. 

Russia apes Elon Musk by sending a humanoid robot into space

Dmitry Rogozin, the head of Russia’s state-owned space agency Roscosmos has clearly been impressed by Elon Musk’s media successes. This week, in a riposte to Musk, he sent a Russian-made humanoid robot called Fedor to the International Space Station. 

  • Russia’s Soyuz spacecraft with Fedor sitting in the commander’s seat docked with the ISS on Tuesday. The launch was not as colorful as Musk’s, but was accompanied by drama: the spacecraft failed to attach itself to the station on its first attempt and the Russian ISS crew had to take manual control.
  • Fedor was first designed for the Emergency Situations Ministry and he cannot work autonomously: he is remotely operated by a person in a special costume. His development cost about 300 million rubles (just under $5 million).

  • In 2016, then-Deputy Prime Minister Dmitry Rogozin took the project under his wing, made it for use in space and renamed the robot Fedor (an abbreviation of Final Experimental Demonstration Object Research). In 2018, when Rogozin took the helm at Roscosmos, the robot became a social media star. He got his own social media accounts and his posts were diligently reported by state-owned news agencies. Before flying to the ISS, the robot did the splits, push ups, drove a truck and fired two pistols simultaneously — all reminiscent of the famous robot videos from Boston Dynamics. 
  • Fedor was developed by private company Android Technika. Its founder is Alexander Permyakov, a former employee of the Soviet Union’s Atomic Ministry and now a businessman living in industrial center Magnitogorsk. In the 1990s, Permyakov was working on industrial explosives, but in the mid-2000s, he decided his business was in need of a “big idea for the next decade” — and turned to robots. 

What’s the problem? The upsetting side effect of Fedor’s fame has been the closure of a parallel project, Kosmorobot, with which Permyakov’s company was also involved. Kosmorobot was designed with space in mind, in particular to help astronauts during space walks. But Kosmorobot’s PR potential was much weaker than that of anthropomorphic Fedor: its space robots looked like rectangular cases with ‘hands’ shaped like industrial manipulators. 

What’s next? The spacecraft with Fedor on board will fly back to earth on September 7 (he will not do any work while on the ISS).  Fedor will then be placed in a museum. 

Why the world should care

The story of Fedor shows Russia is a serious competitor when it comes to developing robots for space. But the obsession with PR indicates a technological breakthrough is not imminent.  

Meet Dmitry Yeremeev: Russia’s newest banker

The Bell has looked into (Rus) the case of Dmitry Yeremeev, the founder of the first bank to open in Russia for four years. In the 2000s, Yeremeev earned millions from internet traffic, befriended the country’s best tech entrepreneurs and became one of Alibaba’s partners. He is now setting-up a new project to help Russians to receive money from Western companies. 

  • Since Elvira Nabiullina took the helm of Russia’s Central Bank in 2013, over 400 Russian banks have lost their licenses. But this summer, the first new banking license in four years was issued to Yeremeev, 36, who is from Kazan. 
  • Yeremeev does not appear on lists of successful young entrepreneurs, he rarely speaks to journalists, and his FIX Group is a complex, untransparent structure of dozens of companies. But it is all worth more than fintech company Revolut (Rus), according to a friend of Yeremeev’s. Pavel Durov’s partner in Telegram, Ilya Perekopsky, calls Yeremeev “an entrepreneur of whom Russia should be proud”. 
  • In the late 1990s, Yeremeev made websites. Then, in the early 2000s, he was one of the first to learn to optimize websites for search engines and make money on reselling traffic through Google’s Adsense. By the time search engines began to block that business, Yeremeev had learned to direct customers toward online shops and when, in the early 2010s, Alibaba Group entered the Russian market, Yeremeev became its biggest partner. Now, Alibaba pays FIX over $60 million a year for its services. 
  • Several years ago, Yeremeev decided to move toward fintech and his idea is to create a new payment system to simplify transactions into Russia. In the 2000s, Google paid Yeremeev with paper checks which it sent by post from the U.S. and were impossible to cash in Russia. Since then, the fight against money laundering means transnational payments has only become more difficult. 
  • Tens of thousands of Russians work remotely for Western companies and receive payments via international payment systems such as Payoneer — but these operate according to the laws of their own countries, not the laws of the countries where their customers live. Yeremeev has agreed with the Central Bank that he will create a new payment system with a Russian banking license. New Russian laws limiting operations with Western payments systems will likely help Yeremeev’s business. 

Why the world should care

It will be interesting to observe how Western regulators react. What will be the more powerful motivator: trust in a project licensed by the Central Bank or suspicion about Russian money?

Will a prisoner exchange with Ukraine mean better relations with the West?

After August’s nuclear saber-rattling, there now seems to be a chance a Russian-Ukrainian prisoner exchange will lead to a thaw in relations between Russia and the West. If it happens, it would be one of the few examples of serious cooperation between Moscow and Kyiv in 5 years. 

  • An exchange almost took place in the early hours of August 30, but was called off at the last minute. According to Ukrainian politician Mustafa Nayyem, the deal fell apart because Russia demanded the inclusion of Vladimir Tsemakha, a former officer with separatist rebels in Ukraine who is a key witness in the investigation into the shooting-down of flight MH17 over Ukraine in 2014. Others have speculated that the delay is due to Moscow’s insistence that the pro-Russian politician Viktor Medvedchuk supervise the exchange. Medvedchuk flew to Moscow on Friday. 
  • Among those set to be released by Russia is the most famous Ukrainian imprisoned in Russia: filmmaker Oleg Sentsov. According to unofficial reports, Putin agreed to this with French President Emmanuel Macron at their recent meeting in France. 
  • The Kremlin apparently sees the exchange as a gesture of goodwill to Ukraine’s new president, Volodymyr Zelensky. The prisoners could have been handed over before the presidential elections to boost the chances of Medvedchuk (who ran against Zelensky on a pro-Russian ticket) — but the Kremlin didn’t do this. 
  • Putin and Zelensky are due to meet for the first time in September. The encounter will take place in Paris along with the leaders of Germany and France. 

Why the world should care

Many predicted that Zelensky’s election could herald significant changes to the situation in eastern Ukraine and an improvement in Ukrainian-Russian relations. A successful prisoner exchange is an important first step in this direction. 

Peter Mironenko