End this damn war
Refugees from the Kursk region petition President Putin to end the war
Hello from the Bear Market Brief.
This week in the news:
Residents evacuated from Russia’s Kursk region staged a protest to demand the housing assistance promised to them by the Kremlin.
Russia hosted the first ministerial conference of the Russia-Africa Partnership Forum as part of its effort to strengthen ties with African countries.
The Central Bank of Russia signaled a possible rate hike in December as inflation continues to accelerate.
As U.S. President-elect Donald Trump announces his cabinet picks, many speculate about their potential implications for Ukraine.
— Sara Ashbaugh, Editor in Chief
Disillusion in Kursk
Refugees in the Kursk Region who fled their homes due to the Ukrainian army’s incursion in August staged a protest demanding that the regional authorities pay them their promised housing assistance—something about which they had earlier petitioned the Kremlin as well. Later, residents of Olgovka, a village in the region, petitioned Putin to end the war.
While the federal government had allocated 15.5 billion rubles ($155 million) for the region to spend on housing aid as early as August, there have been problems with the funds reaching intended recipients from the start. Many have also complained about the funds being insufficient to survive what many residents expect to be a long war. Following the protest, Kursk Governor Alexey Smirnov dismissed the head of the Sudzha District. However, the regional prosecution also reprimanded the governor. Later, Smirnov and his predecessor, Roman Starovoit, who currently heads the federal Ministry of Transportation, jointly gave out housing certificates. The governor also announced that the region would cover part of the refugee’s rental costs and plead with the federal government to cancel mortgage debt on damaged real estate. Starovoit, who was promoted to the federal government earlier this year, actively participated in organizing the evacuation of local residents in August, prompting rumors that he was afraid of potential prosecution since the region’s failed defensive fortifications were erected by his administration.
Smirnov also gave a broad estimate this week of the damage inflicted upon the region as a result of the Ukrainian incursion. The governor put the total cost of reconstruction at 700 billion rubles ($7 billion), close to the region’s whole yearly GDP and several times exceeding its budget (which, for 2024, was adopted with expenditures reaching 88 billion rubles, roughly $881 million). He specified that 118 billion ($1.18 billion) of this would be needed in areas affected by “extensive artillery and drone operations.” The head of the region’s legislature asked the federal government to transfer to the region 25 billion rubles ($250 million) beyond current budgetary plans next year to help with reconstruction. The federal budget has so far prioritized construction and reconstruction projects in the occupied areas of Ukraine, and it is likely that the regional government feels like it has to present an exceptionally large bill to obtain a reasonable amount of federal aid.
Meanwhile, both Russia and Ukraine ramped up drone warfare this week. Ukraine’s air force reported 145 Russian drones on Saturday—a record number for a single day—most of which were shot down, but some of which hit residential areas. The Russian Defense Ministry said 84 drones were observed targeting Russian regions, with some flying towards Moscow.
— Andras Toth-Czifra
Evacuated residents of Olgovka, a village in the Kursk region, published a video appeal to President Putin this week asking him to “end this damn war.” Olgovka was one of the Russian villages captured by Ukrainian troops in August, and its former residents say that the damage will take years to repair. In the meantime, many Olgovka refugees are unable to afford housing or find jobs. “We’ve been living in hell for the past three months. Where can we turn, where can we find salvation?” the evacuee says in the video. “Hear us, the residents of border regions, and take action,” he continues. (photo: t.me/Govorit_NeMoskva)
Russia-Africa Partnership Forum
Russia hosted the first ministerial conference of the Russia-Africa Partnership Forum in Sochi over the weekend. According to the Russian Ministry of Foreign Affairs, the conference was attended by at least 54 official delegations and 1,500 people, including Russian and African government officials and business representatives. Plans for the conference were made during last year’s Russia-Africa Summit in St. Petersburg, when President Putin met directly with a number of African state leaders. Putin did not attend this week’s conference, but promised African allies “total support” in a speech read by Foreign Minister Sergei Lavrov at the plenary session on Sunday. “I would like to reiterate that our country will continue to provide total support to our African friends in different sectors: ensuring sustainable development, the struggle against terrorism and extremism, combating epidemics, food problems, and the consequences of natural disasters,” Putin’s statement said. Lavrov also met privately with many of the African delegations over the course of the conference.
The event was part of Russia’s ongoing effort to strengthen diplomatic ties with African countries. Following the invasion of Ukraine, Western sanctions sought to isolate Russia from the international community. In response, Russia turned to its African, Asian, and Middle Eastern allies to combat Western influence and create a “multipolar world.” Putin spoke about these goals during last month’s BRICS Summit in Kazan, which was also attended by representatives of more than 30 countries. Recently, Russia has stepped up its presence in Africa, including by sending troops to support military regimes and fight Islamic insurgents. After the death of Yevgeny Prigozhin, the Wagner mercenary group was rebranded as Africa Corps, and it is still active in countries such as Burkina Faso, Mali, and Niger. Additionally, according to Russian state exporting company Rosoboronexport, Russia shipped more than $5 billion in arms to Africa last year. Several West African countries seem keen on a closer relationship with Moscow as well; during the conference, Burkina Faso's Foreign Minister Karamoko Jean-Marie Traore said that cooperation with Russia was “better suited to the people” of his country than cooperation with former colonizer France. Mali’s Foreign Minister Abdoulaye Diop seemed to agree, calling Russia’s partnership “sincere.” “[Russia] has stood shoulder to shoulder with African peoples and other peoples around the world to help them emerge from the colonial system,” Diop said.
According to one of Putin’s advisors, Anton Kobyakov, these ministerial conferences will continue to take place regularly under the same format. Additionally, plans for the third Russia-Africa Summit are already underway: the summit is expected to be hosted by one of the African participants in 2026.
— Sara Ashbaugh
What’s next for the key rate?
The key rate of the Central Bank of Russia (CBR) could be raised further in December unless there is a “substantial slowdown” in inflation, according to the minutes of the October session of the CBR’s Board of Directors meeting. In spite of the recent rate hike to 21%, inflation is still accelerating. The monthly rate was 0.75% in October (1.23% for food products). So far, 21 regions have signed agreements with local producers and retailers on capping the price of butter, which has been growing particularly fast. The Prosecutor General’s Office even opened a case into growing dairy prices. These measures are unlikely to stop inflation, but they allow the authorities to demonstrate that they are working on solving the problem or allocating responsibility. Worse-than-expected harvest results may also put pressure on the bank to raise the key rate further. Meanwhile, Maria Prusakova, a Communist Party deputy from the Altai Territory, claimed that CBR Governor Elvira Nabiullina earlier told the party’s parliamentary group that the bank would start gradually dropping the key rate from March 2025 on, until it reaches its June 2023 level (7.5%). The Central Bank, however, later denied that this was in the cards.
Under the current economic conditions, the Central Bank has no better way to control inflation than raising the key rate. However, this hawkish policy may not only force the government to adopt changes to next year’s federal budget, which was planned with an average interest rate of 15%, but also acts as a break on investment, according to Deputy Prime Minister Alexander Novak. Novak told the Russian Economic Forum this week that this year’s growth of investment activity may now only turn out to be 7.8%, after 9.8% in 2023, as several enterprises are putting off investment plans until after the Central Bank starts reducing the key rate. This is slowing down infrastructure development and import substitution efforts and increasing the tension between the Central Bank and the government. AvtoVAZ, Russia’s largest car manufacturing company, recently asked the government for additional aid to avoid potential bankruptcy amidst growing debt servicing costs.
— Andras Toth-Czifra
Russian Security Council Secretary Sergei Shoigu visited China this week for diplomatic talks with top Chinese officials. During his meeting with Chinese Foreign Minister Wang Yi, Shoigu reportedly discussed the importance of countering the U.S.’s “dual containment policy” towards Russia and China. Shoigu also met with the Secretary of the Chinese Central Political and Legal Affairs Commission, Chen Wenqing, and attended Airshow China 2024, where a Russian Su-57 stealth fighter was displayed. (photo: Valery Sturit / TASS)
Trump’s first picks and Ukraine
As U.S. President-elect Donald Trump announces his cabinet picks, Ukrainian authorities can only speculate on the potential implications of these appointments. Some of Trump's future appointees appear to be supportive of Kyiv, while others seem to hold pro-Russian positions.
On Tuesday, Trump announced that he had selected Peter Hegseth, a conservative Fox News talk show host, as his Defense Secretary. The decision sparked mixed reactions in Kyiv, as Hegseth lacks military leadership experience and has previously made controversial statements calling for a reduction in U.S. commitment to the NATO alliance. On the other hand, he has also criticized President Biden for hesitating to confront Russia and for not providing Ukraine with the necessary support to end the war more quickly.
Additionally, on Tuesday, the U.S. president-elect chose billionaire Elon Musk and businessman Vivek Ramaswamy to lead a new Department of Government Efficiency. Both Musk and Ramaswamy have previously suggested that Ukraine should cede occupied territories to Russia. Ramaswamy has also been a vocal critic of providing military aid to Kyiv. However, it remains unclear whether the new department run by Ramaswamy and Musk will have any impact on Trump’s foreign policy.
On Wednesday, Trump appointed former Congresswoman Tulsi Gabbard as Director of National Intelligence. Gabbard, a longtime critic of the foreign policy establishment, has made controversial statements since the start of Russia's full-scale invasion. She has claimed that the U.S. is “guilty of military aggression” against Russia, accusing Washington of provoking Russia for years. She has also spread disinformation about weapons of mass destruction allegedly being developed in Ukrainian biolabs.
Trump’s pick of Congressman Michael Waltz as his National Security Adviser has also sparked controversy. While some commentators note that Waltz is more pro-Ukrainian and hawkish on Russia than other Trump allies, others point out that his record on Ukraine has been inconsistent. In 2022, he called on the Biden administration to send more weapons to Kyiv. However, in October 2024, Waltz suggested that the United States should reassess its objectives in Ukraine.
Another potential Trump appointee with an ambiguous record on Ukraine is Senator Marco Rubio, who is expected to be named the new Secretary of State. Like Waltz, Rubio initially condemned Russia’s invasion of Ukraine but later voted against a $61 billion aid package for Kyiv. He explained his vote by stating that it was driven by the lack of a compromise on immigration, rather than opposition to supporting Ukraine.
Ukrainian officials have not publicly commented on Trump’s announcements, although President Volodymyr Zelenskyy has expressed a willingness to work with the new administration. Ukrainian and Western political experts generally agree that Trump’s administration will prioritize China as the primary threat to U.S. security, with less emphasis on countering Russia. They believe the war in Ukraine may be seen as a distraction from addressing China. Experts also agree that Ukraine will need to become more self-reliant, particularly in terms of producing its own weapons.
— Lisa Noskova
On the podcast
Kyiv-based journalist Fabrice Deprez returns to the Brief for another update on the mood in Ukraine, including a report on his recent trip to the frontline city of Pokrovsk.
Quickfire: Regions
Both the Wall Street Journal and the Financial Times published reports this week confirming earlier rumors that the head of the Energy Ministry, Sergey Tsivilyov, proposed nationalizing Russia’s oil industry. These rumors first surfaced in early October after Tsivilyov’s meeting with President Putin. The Kremlin’s Press Office refused to confirm or deny the plans. Russian authorities have nationalized almost two hundred companies over the past two years, mostly in and around the defense industrial complex and the food industry. Seizing a major oil company would not be unprecedented; in the most recent example from 2014, the Bashneft oil company was nationalized after the Prosecution argued that it had been illegally privatized. Still, nationalizing Lukoil, the country’s largest privately-owned oil company, as the alleged plans propose, would represent a watershed moment and likely come as a shock to large business owners in the country. According to the WSJ, the plans would also include merging both Lukoil and Gazprom Neft, a state-owned company, with Rosneft. Both publications mentioned that the Kremlin was considering the merger to gain direct control over Litasco, Lukoil’s trading arm, an important trader of Russian oil.
The governors of both the Irkutsk Region and Khakassia criticized a government decree dictating that, from January 2025, electricity tariffs would be raised for those consuming more than 3,900 kWh per month. One purpose of the tariff hikes is to reduce electricity consumption and prevent power cuts on increasingly overburdened networks. This is partially the consequence of cryptocurrency mining in regions with subsidized electricity. The governors, however, argued that due to the low degree of gasification of their regions, residents are forced to use electric heating, and the new decree means that many of them would face steeply rising bills. Utility price hikes like this led to protests in several regions in earlier years. After having been petitioned by more than 10,000 local residents, Irkutsk Governor Igor Kobzev held a meeting with Deputy Prime Minister Alexander Novak, who oversees energy policy, but did not appear to have reached a breakthrough. State Duma deputy Alexander Yakubovsky proposed banning cryptomining instead.
Local councils stripped the last three sitting independent local deputies who had been labeled “foreign agents” by the Ministry of Justice of their mandates. They were Novosibirsk deputies Svetlana Kaverzina and Anton Kartavin, who supported a range of local protest movements in the past years, and Nikolay Kuzmin, a local deputy in the Zavelichenskaya District in the Pskov Region who supported the anti-war protest of former Channel One producer Maria Ovsyannikova in 2022. The votes are based on a federal law adopted in May 2024 that prohibits people labeled “foreign agents” from standing for or holding elected office. This essentially gives the federal government the right to disqualify or deprive any elected official or candidate of office in the country.
— Andras Toth-Czifra