Weekly 14 December 2018 Weekly 14 December 2018

Hawks propose a Chinese-style plan to isolate Russian internet

Hello! This week we look at how a group of lawmakers, including the suspected killer of Alexander Litvinenko, are pushing a plan to create Chinese-style internet in Russia. We also analyze why the woman alleged to be Putin’s youngest daughter made her first ever appearance on state television, the outrage provoked by 1990s privatization architect Anatoly Chubais, the bizarre popularity of an online poll to rename 47 airports and the successful sale of a Russian-Ukrainian photo editing startup to U.S. tech giant Snap.

Hawks propose a Chinese-style plan to isolate Russian internet

What happened

Russian lawmakers have started working on the Kremlin’s long held dream of an isolated internet along the lines of the system used in China. The official reason for this is fear that during a conflict with the U.S., servers allowing internet access in Russia could be shut down.

  • Legislation has been prepared by a group of lawmakers headed by Andrei Klishas, who earlier this week proposed (Rus) fining people who show online “disrespect” to the authorities. The other key figure in the proposal is Andrei Lugovoi, the former security officer suspected of poisoning Alexander Litvinenko in London in 2006.
  • “In a situation where [Russia is] aggressively surrounded and the U.S. makes statements about Russian cyberattacks we have to be able to provide security for the internet in Russia if the U.S. restricts access to the servers,” Lugovoi told The Bell. He stressed that this did not mean blocking foreign internet traffic in Russia.
  • The creation of an independent internet has long been a dream of the Russian authorities. The first ‘stress tests’ for a situation in which the U.S. shut out Russia from the internet were carried out in 2014. These exercises, run by the Communications Ministry, showed that Russia’s internet is vulnerable. And overcoming this vulnerability by building a mechanism to isolate Russia from the global internet is not something that has been achieved in the four years since then. Lugovoi told The Bell it won’t cost operators any money to do this — but they will need to re-tune their equipment.

Why the world should care

While the proposal by Lugovoi and Klishas seems unsophisticated, it is yet another reminder of how hawks in the Russian elite see the internet. And they have not given up on creating a system that will replicate in Russia what China has so successfully implemented for itself.

Putin’s youngest daughter makes her debut on state-owned television

What happened

Last weekend, Putin’s youngest daughter, Katerina Tikhonova, appeared for the first time ever on state-owned television. Tikhonova is head of Innopraktika, a fund based out of Moscow State University, which manages projects that boast major Russian companies as their investors. This summer, the same television channel showed the woman believed to be Putin’s older daughter.

  • The TV report that featured Tikhonova was about the work of Innopraktika’s Center for Neurotechnologies and described how a technology they have developed will allow the human subconscious to be programmed by controlling the brain’s electrical signals. In the words of the TV correspondent, these discoveries will help prepare modern man for jobs needed in the future.
  • Putin’s daughters are an extremely sensitive topic for the Kremlin. But it is known that Putin’s eldest daughter, Maria, studied medicine at Moscow State University and now works as an endocrinologist. In July 2018, television channel Rossiya 24 interviewed Maria (identified as Maria Vorontsova) in a news report about a medical masterclass.
  • Katerina Tikhonova, Putin’s younger daughter, is more well known. In her youth, she was an Acrobatic Rock’n’Roll athlete and in 2013 she was appointed to lead Innopraktika. It was believed the fund would be responsible for a project to create Russia’s answer to Silicon Valley in Moscow, but that project never materialized. Now, Innopraktika is involved in an initiative to create “a belt of 1,000 technology companies around Russia’s leading science universities by 2026”. This project is slated to receive investments from major Russian natural resources companies.

Why the world should care

One can only speculate why 2018 was the year when both of Putin’s daughters appeared on state television. There is probably some logic to allowing the public a glimpse of these women, despite the secrecy in which their lives are usually shrouded, but we are unlikely to ever fully understand why it was necessary.

Outrage as architect of 1990s privatization bemoans lack of ‘gratitude’

What happened

The topic of 1990s privatization can lead to violent disputes in Russia even thirty years later. This week, there was heated debate about a speech given by the architect of privatization, Anatoly Chubais, in which he said that Russian society should be grateful to Russian businessmen, and not refer to them, derogatively, as “oligarchs”.

  • At a conference in Moscow over the weekend, Chubais told the audience that: “In twenty years, society hasn’t thought even once to say thank you to business for everything it did: it built up the country, restored collapsing Soviet enterprises, returned salaries to people, filled the state coffers with money… This was all carried out by the same people that society refers to as oligarchs.”
  • The subsequent outrage was expressed most succinctly by journalist Ekaterina Vinokurova in a Facebook post: while the country was suffering, she wrote, the oligarchs and their patron, Chubais were “eating caviar.” In the 1990s, Chubais was the main architect of Russian economic reforms and he was responsible for a program of privatization that led to the unfair distribution of the country’s wealth.
  • In 1992, all Russia’s 146 million citizens received a voucher with the right to buy shares in companies up for privatization. But most people, having never lived in a market economy, sold their vouchers to re-sellers or handed them over to frauds.
  • The best assets were privatized in 1995. Oligarchs bought oil and metals companies at discounted prices in exchange for loans to the government, which were issued by the Ministry of Finance. For example, Vladimir Potanin paid $170 million for Norilsk Nickel, which is now valued at $31 billion. The goal was to guarantee the support of the oligarchs for Boris Yeltsin in the 1996 presidential election.
  • The nature of the privatization of the 1990s is one of the reasons why Russia has one of the highest rates of unequal income distribution in Europe. In the 18 years that Vladimir Putin has run the country, this inequality has only increased.
  • Chubais has said that some unfairness was unavoidable in the privatization process, but that the primary goal was always to create private property and destroy communism.
  • In the 1990s, Chubais was the butt of many complaints and criticisms, both from the opposition and the government. The phrase, “Chubais is to blame for everything”, attributed to Boris Yeltsin, became one of the country’s most popular political memes in the late 1990s. Under Putin, Chubais has run several state-owned companies.

Why the world should care

The reaction to Chubais’ words is a vivid reminder of the still fresh wounds from the unfair sell-off of state assets in the 1990s and the extent of economic inequality in Russia today.

Nationwide online vote to rename airports provokes an existential crisis

What happened

A competition to rename Russia’s 47 airports has attracted unprecedented interest and was taken surprisingly seriously: over 5 million people voted, social media debates raged for weeks and, in one city, the poll even led to street vandalism.

  • The rules were as follows: local authorities created a long list of names and local residents could add their own candidates as long as they received 500 votes. A short list was then created on the basis of this initial polling information and then the final vote was held. As a result, Moscow’s Domodedovo airport was named in honor of polymath Mikhail Lomonosov and Sheremetyevo airport was given poet Alexander Pushkin. Krasnoyarsk’s airport was named after Dmitry Khvorostovsky, an opera singer who died recently in London. You can read a full list of the winning names here (Rus).
  • The vote turned into a fully-fledged scandal in the Siberian city of Omsk: social media users demanded their airport be named after Yegor Letov, lead singer of a hugely popular Perestroika-era punk group. But Russia’s Kurt Cobain wasn’t even included in the short list, despite street protests and a petition (Rus) with tens of thousands of signatures. It wasn’t just Russia’s opposition, who often quote his lyrics at protests, who campaigned for Letov. Government officials also voiced support: for example, the head of RT, Margarita Simonyan, hinted she told “several important people” about Letov. Yet Culture Minister Vladimir Medinsky called the musician’s fans “marginal” and said naming an airport after someone who was still alive was “bad luck” (he was later informed that Letov died in 2008). In the end, Omsk’s airport was named after Soviet general Dmitry Karbyshev.
  • In Kaliningrad (until 1945 known as Königsberg), philosopher Immanuel Kant was leading in the polls. However, at the last minute, a lawmaker complained, arguing that naming the airport after Kant, who died 137 years before World War Two, would be an insult to war veterans. A few days later, a monument to the philosopher was vandalized. The vice admiral of the Baltic fleet, based in Kaliningrad, demanded (Rus) that his sailors vote against “traitor to the motherland” Kant, who wrote “suspicious books” that no-one had “ever read and will never read.”
  • This isn’t the first contest in which Russians have been asked to chose their most beloved symbols and historical figures. In 2007, there was a vote for “Russia’s seven wonders” and the following year saw the “Name of Russia” competition in which Josef Stalin was beaten at the last moment by 13th century prince Alexander Nevsky.

Why the world should care?

This absurd vote is a perfect illustration of how difficult it is for Russians to define their national identity, and how bizarrely artificial attempts to define a ‘national idea’ can appear.

Popular Russian-Ukrainian photo editing app bought for $8 million by U.S. tech giant

What happened

Internet entrepreneurs across Russia have been trying for years to repeat the success of the founders of MSQRD, who sold their photo face swap app to Facebook in 2016. This week, they finally did it: 20-year old programmer Vladislav Urazov and his partners sold their app, Teleport Future Technologies, to Snap (the owner of Snapchat) for $8 million.

  • Teleport allows users to edit their photos (by changing their hair color and background), and was launched in 2017 by programmers Vladislav Urazov, Bogdan Matveev, and their mentor, Victor Kokh. While Urazov grew up in Odessa, Ukraine, he moved to Moscow during high school and his partners are Russian. The company itself is registered in the U.S. and has been looking to be acquired by a tech giant.
  • Teleport took 7 months to develop and was an instant hit: 24 hours after its launch it had been downloaded over a million times and remained the top rated app in the App Store for over a week. Their major investor is Albert Nisanov, nephew of God Nisanov, a well known Russian shopping mall developer rated the 37th wealthiest man in Russia by Forbes with an estimated net worth of $3.3 billion. Albert Nisanov invested $1 million and he has now exited with more than $3 million. According to one of the co-founders, Snap bought 100% of the company.
  • Of Teleport’s 30 employees, at least five have joined Snap following the acquisition. Among these is Teleport co-founder and ex-IBM executive Sergey Demyanov. He will lead the Snap machine learning team in Los Angeles. The remaining staff have left to work for other companies, or pursue their own projects. Urazov himself plans to launch a fund that will invest in AI startups.

Why the world should care?

Teleport is a typical Russian start-up with good prospects in Silicon Valley: young programmers from all over the post-Soviet space, investor money from dubious businesses born in the 1990s and a compelling vision. It’s similar to how Russia’s largest social media network, Vkontakte, got started. Its founder, Pavel Durov, is now developing messaging app Telegram on a global scale.

Peter Mironenko

Anastasia Stognei contributed to this newsletter. Translation by Tanja Maier, editing by Howard Amos.

This newsletter is supported by the Investigative Reporting Program at UC Berkeley


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