Russia in details: events and trends in Russia over the last week (25.07-29.07)

Events and trends in Russian over the week of 25th – 29th of July

Conclusions

1. The Russian Federation is raising the stakes in its gas blackmail strategy. The EU shows its readiness to resist. If the Russian Federation passes its law, which will allow countries to be recognized as sponsors of terrorism, this will potentially mean a complete ban on doing business with entities from these countries. The gas transmission service is the only economic transaction between companies in Ukraine and the Russian Federation. Therefore, Russia can prepare a new round of Europe’s gas blackmail. Meanwhile, the EU member states agreed to voluntarily reduce gas consumption by EU member states by 15% by the beginning of March for the safe passage of the autumn-winter period. This step was designed to ensure a safe winter passage in case Russian gas supplies are suddenly stopped after two months of reduced supplies to the EU.

2. Russia’s conflicts with Israel and S. Lavrov’s African tour demonstrate the Russian Federation’s attempt to launch a counteroffensive at the international level, trying to pull at least some Asian and African countries to its side. Playing on their anti-Western sentiments and trying to sell itself as a country with global influence which can solve complex problems, Russia aims to take a “fairer” position in the confrontation with the West. The key battle in this logic between the Russian Federation and the West is the battle for the Asian countries’ positions in the context of the war in Ukraine.

3. The Kremlin continues the policy of increasing influence on Russia’s internal regions. The basic algorithm of sending “parachutists” (from other regions) to manage most of the regions through the “acting governor” mechanism still dominates. However, considering the political challenges (foreign policy, sanctions, general instability), they are working out algorithms for maintaining control over the “difficult” regions. If the “controlled” governor is established there, the Kremlin still will not solve the problem of the presence of powerful regional local political clans.

 

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Three algorithms for changing governors in the Russian Federation

The voting day, which will be held in the Russian Federation on September 11th, 2022, cannot be called a key campaign for the Kremlin. It is instead a test of the system’s manageability and a run-in of election algorithms in “difficult” (from the point of view of the positions of “United Russia” and the potential of local elites) regions.

Events and analysis

On September 11th, the following events are planned in the Russian Federation:

• Direct elections of the heads of 14 subjects of the federation;
• Voting for the head of the region in the local parliament (Republic of Adygea);
• Election of a new composition of the regional duma (parliament) in 6 subjects of the federation;
• Local elections in Moscow;
• 11 campaigns with a lower level (cities of regional subordination).

For the past 10-15 years, the Kremlin has been pursuing a policy of limiting the influence of local elites. In particular, “parachutists” – natives from other regions – are sent to manage most of the regions. However, there are no guarantees that the candidate from the center will pass the election campaign without any issues. Therefore, since 2013, an algorithm has been tested that gives minimum failures:

• 3-7 months before the elections, an “unpopular” governor resigns or is removed.
• By Putin’s decree, a temporary acting official is appointed to the position.
• The new appointee gets time to establish control (or contact) with local elites, guaranteeing the management of the regional election committee.
• During this time, the appointee is “elected” as the head of the local branch of the party, which is “responsible” for the region. Mostly it is the “United Russia”. However, some regions are under the leadership of “Spravedlivaya Rossiya” or LDPR, for example.
• The appointee goes to the elections of the acting governor as a “local” and is formally familiar to the citizens.
• Election results are not difficult to predict.

The above algorithm of actions dominates. However, there are two more alternative approaches:

1. The power of a “long-timer” who has the strong support of one of Putin’s influential groups (or belongs to such groups and is sent to a difficult process control region). This approach works in a small (7-8) number of subjects of the federation.
2. In case of conflict among local elites, a limited “game of democracy” is allowed when a “previously unknown” candidate suddenly appears. This approach is used as a last resort and in no more than one entity of the federation at any given time.

An important feature of the Russian government system is that since 2012, the governor (head of the region) has the power to appoint one of the two regional members to the Federation Council of the Russian Federation. The local parliament elects the second from its deputies. The head of the region is a member of the State Council “ex-officio”. Thus, the Kremlin receives guaranteed more than 50% of appointed (indirectly, through “its” governors) members of the Federation Council (a part is set for life “for merit”) and a fully controlled State Council, whose role is significantly strengthened under the newly adopted Constitution.

As a result, there is a basis for the competition of the governor’s group with local parliaments. Still, at the same time, there is no possibility of creating a single monolithic group of influence. More precisely, as soon as such a threat arises, the governor is removed from office, destroying the alliance.

In 2021, an economic factor was added to this system: control over the funds of “national projects” was transferred from the government of the regions to the governors. Moreover, a system of monitoring and drawing up a regular rating of their implementation was created last week.

Taking into account all the above-mentioned, it becomes clear that the elections of governors are fundamental for the Kremlin at this stage. “Parliamentary campaigns” in Penza, Saratov, Sakhalin Oblasts, Krasnodar Territory, Udmurtia, and North Ossetia are of secondary importance.

On July 27th, the acceptance of documents from candidates for the governor’s post ended. Only 7 out of 15 campaign elections for heads of regions are “planned”. Other governors were removed (or resigned a couple of months before the end of the term), and new appointees arrived from the center.

Campaigns in the Sverdlovsk and Yaroslavl regions, as well as in Karelia, deviate from the basic algorithm. But these exceptions demonstrate the operation of alternative algorithms for managing the region.

All three listed regions traditionally pose more difficulties for the center:

• Yeltsin’s “family” has a strong position in the Sverdlovsk region, and the population is traditionally skeptical of the central government (including voting for “United Russia” competitors).
• Yaroslavl region was one of the electoral bases of the Russian democratic opposition for a long time. There is no single regional clan, but there are many groups that do not show excessive loyalty to the Kremlin.
• Finally, in Karelia, the population traditionally tends to vote for “their own”. On the one hand, it would be possible to ignore such a feature. But this region is formed of the land seized from Finland (albeit a displaced population) near St. Petersburg (which automatically affects the political situation in this city).

 

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Gas blackmail: the Russians are preparing to cut off gas from the Ukrainian Gas Transmission System (GTS)

In the Russian gas blackmail, which consists in reducing the supply of natural gas to Europe, the Kremlin traditionally resorts to the tactic of blaming Western countries: the narrative of the Russian Federation boils down to the fact that, due to sanctions and other reasons beyond their control, Russian companies are unable to supply sufficient volumes gas. This is the case of how the Russian Federation imposed sanctions on the Yamal-Europe gas pipeline after Poland imposed sanctions against Gazprom. Nord Stream supplies were reduced under the pretext that sanctions prevent equipment repair, etc. We described the content of the Russian gas blackmail of Europe, its methods, and goals in detail in last week’s review.

Russia is considering the possibility of adopting a law that will allow countries to be recognized as sponsors of terrorism in a mirror order if Western countries do it. This status will potentially prohibit doing business with entities from the country to which such status will be granted. Today, the only economic transaction between companies in Ukraine and the Russian Federation is the payment of the gas transit agent, so there is a potential stoppage of the Ukrainian transit route.

In this case, the Russian Federation will have two gas pipeline routes – “Northern Stream” (with a capacity of 55 billion cubic meters per year) and the second strand of the Turkish stream (15.75 billion cubic meters) – significantly less than for example, the volume of gas supplied to the EU last year – 155 billion. In such conditions, the Russian Federation will again offer to launch Nord Stream 2, which, first of all, is not a need for additional capacities but an attempt to break the firmness of the EU in its intentions not to back down in the face of blackmail. In the meantime, the EU is preparing for a complete stoppage of Russian gas supplies.

On July 26th, the European Union’s Council for Transport, Telecommunications, and Energy held an extraordinary meeting dedicated to overcoming the potential energy crisis the Russian regime is trying to provoke by cutting gas supplies to the EU. The Council approved the intention to voluntarily reduce gas consumption by EU member states by 15% by the beginning of March to pass the autumn-winter period safely. The only EU member state that did not support the decision was Hungary.

In March, as a result of a full-scale Russian attack on Ukraine, the European Union announced its intention to get rid of dependence on Russian energy resources as soon as possible. It has later presented the REPowerEU plan, which prescribes the directions of the “liberation” from Russian energy pressure – a kind of European energy de-russification plan. At the beginning of 2022 summer, EU officials realized the risk of stopping gas supplies. To get through the winter safely, on July 20th, the European Commission presented the plan “Let’s save gas for a safe winter”, which provided for a 15% reduction in gas consumption. It was this plan that was agreed upon in less than a week.

The European Commission estimated that if Russia cuts supplies in July, the EU will lack 30 billion cubic meters of gas in the case of a normal winter and 45 billion in the case of a cold winter. Forty-five billion cubic meters are equivalent to 15 percent of consumption.

Among the critical directions for achieving this goal are the replacement of gas with other types of fuel and the voluntary reduction of gas consumption by various groups of consumers: lowering the temperature of heating and hot water supply, reducing the intensity of air conditioning, reducing the use of gas in the production of electricity, etc. Information campaigns should play a significant role in raising citizens’ awareness of the need to save gas.

The voluntary reduction of gas consumption agreement provides for possible exceptions for states whose energy systems are poorly integrated with the rest of the EU countries. In the case of pipelines, these are the island states of Northern Ireland and Malta. And in the case of power grids, these are the Baltic countries – Estonia, Latvia, and Lithuania, whose energy systems are not yet synchronized with the European ENSTO-e system. But during the meeting, all these states expressed their commitment and intention to reduce gas consumption. Hungary was the only country that did not agree to a voluntary reduction in gas consumption; the Russian ally in the EU does not always share the policies and principles of the EU and receives discounts on Russian energy carriers.