Hello from the Bear Market Brief.
This week in the news:
Russians experienced widespread internet disruptions, possibly related to recent protests in the regions.
Anti-war presidential candidate Boris Nadezhdin submitted the required 100,000 signatures of support to the Russian Central Electoral Committee, but whether or not his name will appear on the ballot in March remains to be seen.
207 Ukrainian POWs were released in a prisoner swap with Russia.
A draft law on mobilization was submitted to the Ukrainian Parliament for approval, but will likely require further amendments.
Internet shutdowns
Russian internet users experienced several connectivity disruptions over the past week, first in specific regions of the country and then across the whole country.
After the authorities limited access to the messenger apps Telegram and WhatsApp during recent unrest in Bashkortostan, users in Yakutia, which experienced protests over the murder of a local man, also reported problems with accessing the two messaging apps (as did residents of several other Far Eastern regions). Officially, these disruptions were triggered by “work agreed with Roskomnadzor” (Russia’s communications agency, which also oversees online censorship), but residents believe that they are due to the protests. LTE mobile internet was also briefly down in and around St. Petersburg, as well as in the Pskov and Novgorod Regions. Observers pointed out that this could be an attempt to thwart the flight of Ukrainian drones that rely on mobile networks after several Ukrainian attacks on oil and gas infrastructure in Russia’s northwest. The disruption could also be related to the visit of Belarusian dictator Alexander Lukashenko.
On January 30, websites and online services in the .ru domain failed to load for several hours both domestically and abroad. The authorities later said that the domain lost its DNSSEC (Domain Name System Security Extensions), a system of digital signatures that is essential for browsing the web. The outage did not seriously affect Russia’s National Domain Name System. This was set up in 2019 in an attempt to isolate the Russian segment of the internet from access points linking it with the rest of the world, ostensibly to defend the country’s online space from attacks. However, researchers and activists have pointed out that the system is just another tool for the Russian authorities to gain full control over digital communications in the country. Several observers suggested that the cause of the outages on Tuesday could have been a test of this system. The organization managing the domain infrastructure hinted at a technical problem.
Whatever the reason for the outages, they all highlight a growing focus of the Russian government on controlling the country’s digital infrastructure, both as a repressive tool and as a means of protection against what the authorities perceive as foreign threats. The war both makes this endeavor more pressing and more difficult due to Russia’s restricted access to foreign technology.
— Andras Toth-Czifra
The Central Election Commission (CEC) unveiled the official promotional materials for the March presidential election this week. The letter “V,” a symbol commonly associated with a pro-war stance, features heavily in the design, alongside the quote, “Together we are strong—vote for Russia!” Putin often uses the phrase “together we are strong” at public events, leading many to accuse the CEC of attempting to influence constituents to vote for the incumbent President. (photo: Sofya Sandurskaya / TASS)
Another week of electoral drama
The Russian Central Electoral Committee stopped accepting signatures in support of presidential candidates on January 31. One day prior, Boris Nadezhdin, the election’s only openly anti-war candidate, submitted more than 100,000 signatures (the required minimum) to the committee. According to his campaign website, Nadezhdin collected at least twice the required amount. However, he chose not to submit the signatures collected beyond Russia’s borders. Along with Nadezhdin, Sergey Baburin (a relatively unknown candidate of the “Russian All-People’s Union”) presented his supporters’ signatures, but then withdrew from the election in support of Putin. Irina Sviridova, another candidate, did the same, claiming that she had failed to collect the necessary number of signatures.
Electoral authorities can still easily disqualify Nadezhdin if they claim he has too many unverifiable or fake signatures. The state-funded broadcaster RT is already reporting that there “are shortcomings.” The verification process will take place over the next week. Meanwhile, a survey conducted by the Russian Field polling agency found that Nadezhdin is currently the second most popular presidential candidate. Among Russians who say they will definitely vote in the election, 10.4% say they will support Nadezhdin and 79.2% say they will vote for Putin. Nadezhdin has more support than the already-registered Communist candidate Nikolay Kharitonov, the head of the Liberal Democratic Party Leonid Slutsky, and the candidate of the New People party Vladislav Davankov combined, at least according to this survey. The survey also found that 16% of voters will boycott the election.
Political decision-makers in the Kremlin will likely spend the next week calculating the risks of letting Nadezhdin run for office in March versus the risks of disqualifying him. There are arguments for allowing an openly anti-war candidate on the ballot. For example, it would allow the authorities to showcase, using their vast toolbox of propaganda and repression, how little support such a position enjoys in Russia, all while keeping turnout as high as possible. However, if Nadezhdin enjoys an uncomfortable lead over his rivals from the “systemic” opposition and he could become a beacon for disgruntled voters, the Kremlin may simply deem such an experiment too risky and engineering the desired election results too resource-intensive. In this case, Nadezhdin could either be denied registration or face a concerted effort to delegitimize his participation later in the campaign. The decision will also depend on how the Kremlin’s curators of domestic policy assess the risk of protests if Nadezhdin is removed from the election. The candidate himself promised protests “within the limits allowed by law.”
— Andras Toth-Czifra
207 Ukrainian POWs released
On Wednesday, Ukraine and Russia conducted another prisoner exchange. As a result, 207 Ukrainian defenders—almost half of whom are Mariupol defenders—returned home. In his nightly address, President Zelensky said that among released POWs are members of the Armed Forces, National Guard, Border Guard, and National Police. Earlier in January, Ukraine and Russia held the largest prisoner swap since the beginning of the full-scale war, with 230 Ukrainian prisoners released from Russian captivity. According to Ukraine’s Ombudsman Dmytro Lubinets, this was the 50th prisoner exchange between Ukraine and Russia, and 3,035 Ukrainians have returned home to date.
None of the prisoners exchanged on Wednesday were the service members that the Russians claimed to have been on board the IL-76 plane that crashed on January 24. Following the downing of the aircraft, Russian propagandist Margarita Simonyan published the list of Ukrainian POWs that were allegedly on board the IL-76. However, according to Lubinets, the list shared by Simonyan includes names of POWs who had been exchanged earlier.
Ukraine’s military intelligence spokesperson Andrii Yusov commented that Ukraine received no proof from the Russian side that 65 Ukrainian POWs had been killed in a plane crash. The Russians are also refusing to return the bodies of allegedly killed Ukrainian prisoners that had been on board the aircraft. Ukraine’s Security Service has opened a criminal investigation into the IL-76 crash.
— Lisa Noskova
Over 200 Ukrainian soldiers returned home this week as part of a prisoner exchange between Russia and Ukraine. Ukrainian President Zelensky posted photos of the emotional event to X, with the caption “We remember each Ukrainian in captivity. Both warriors and civilians. We must bring all of them back. We are working on it.” None of the prisoners were the ones that Russia claimed were aboard the IL-76 plane that crashed last week. (photo: @ZelenskyyUa / X)
Amended mobilization draft law in Ukrainian parliament again
On January 30, the Cabinet of Ministers approved the amended version of the draft law on mobilization and submitted it to the Ukrainian Parliament. Once passed, the law will allow Kyiv to conscript more people and tighten penalties for draft evasion. An earlier version of this bill received a lot of criticism from lawmakers and the general public. Parliament rejected the previous version and sent it back to the government to make necessary changes.
Among other things, the new draft envisions demobilization of military members who have served continuously for 36 months during martial law. This is an important change, as currently there is no time limit on military service during the war. Additionally, men will be obliged to create an electronic cabinet to which the military authorities can send mobilization summons. This step is aimed at preventing draft dodging. Under the new law, Ukrainian citizens residing abroad are also required to have up-to-date military registration. Receiving any consular or embassy services will require citizens to present their military registration paperwork. The law also envisions that upon mobilization, conscripts will undergo mandatory training for 2-3 months. The law lays out penalties for draft evaders, including freezing their assets and imposing restrictions on going abroad or driving a vehicle. Lastly, in an effort to make the mobilization process more fair, some categories of civil servants will no longer be eligible to defer conscription.
The draft law needs to be approved by Parliament and signed by the President in order to come into force. Ukrainian parliament members say that they expect the adoption process to take a significant amount of time, as there will likely be more amendments requested.
— Lisa Noskova
On the Podcast
Almost two years after Russia’s full-scale invasion, the Bear Market Brief investigates how we got here in the first place. What does theory say about Vladimir Putin’s decision making? Seva Gunitsky joins to discuss.
Quickfire: Regions
The situation in Bashkortostan remains tense two weeks after protests started in support of Fail Alsynov, a jailed activist and the former head of the Bashkort organization, in Baymak and Ufa. The region’s governor, Radiy Khabirov, decided to organize an assembly and concert in Ufa in support of the regional government (local media reported that public employees were bussed in to inflate turnout). At the same time, security services cracked down hard on protesters, arresting at least 123 people and continuing searches for participants of the protests. There are several reports of the authorities torturing people under arrest. A man who reportedly did not even participate in the protests was arrested and died in unclear circumstances. Another detained activist was reportedly tortured after he refused to reveal phone passwords to the authorities. He suffered a debilitating spinal injury. The authorities’ reaction highlights how the government is turning to harsher methods of dealing with protests in the republic compared to a couple of years ago.
Around ten million barrels of Sokol crude oil that was shipped from the Far Eastern region of Sakhalin has been stranded near South Korea in tankers for weeks due to still-unresolved issues with payments, according to Reuters. This represents six weeks’ worth of production at the Sakhalin-1 oil extraction project. As the dispute now threatens production in one of Russia’s flagship extraction projects from the past decade (energy extraction projects in the region already took a hit in 2022 after the departure of Western investors), several ships reportedly started moving to sell their crude to other Indian refineries, in order to strengthen Rosneft’s negotiating position vis-à-vis the Indian Oil Corporation. Energy minister Alexander Novak denied that there are problems with shipping.
The Audit Chamber issued a report reviewing the results of a federal program to improve the circumstances of Russia’s ten economically and socially most deprived regions after three years. The funds allocated for the program amounted to a mere 52 billion rubles ($571 million), which prompted the federal government to revise its stated goals in 2022 (in the fields of reducing poverty, unemployment and stimulating investments). The Audit Chamber report found that some regions, including Mari El, Chuvashia, Pskov and Adygea, showed some positive results, but in general deemed both the funding and the administrative resources of the program insufficient. Sanctions also play a role, as they have made construction work more expensive and investments less likely. The government is apparently happy to extend (and review) the program, but it is unlikely that it will be able to significantly raise the funding under current budgetary constraints.
— Andras Toth-Czifra
Quickfire: Ukraine
On Monday, rumors about the dismissal of Ukraine’s Commander-in-Chief Valerii Zaluzhnyi started circulating in Ukrainian media. Allegedly, Zaluzhnyi was called to a meeting at the President’s office on Monday where he was informed that he was being fired. According to CNN, a presidential decree dismissing Zaluzhnyi is expected to come out by the end of the week. Ukrainian media outlet Ukrainska Pravda managed to get a comment from Zelensky’s press secretary Serhii Nykyforov, who debunked this information. “Absolutely not. The President did not fire the Commander-in-Chief,” he said on Monday.
On Wednesday, videos of explosions in occupied Crimea emerged on Telegram. Later that day, Air Force Commander General Mykola Oleshchuk commented that, during the attack, Ukraine hit the Belbek airfield located a couple of kilometers north of Sevastopol. The attack was allegedly carried out using SCALP or Storm Shadow long-range cruise missiles. On Thursday, Ukraine’s Main Directorate of Intelligence also reported that the Russian Ivanovets missile boat was destroyed during a special operation. The value of the ship is estimated at $60-70 million, and Russia had only three ships of its kind in the Black Sea Fleet.
— Lisa Noskova