Finnish finished with Russia
Finland closes some of its border crossing checkpoints with Russia
Hello from the Bear Market Brief!
This week in the news:
Finland closed four of its border checkpoints with Russia due to an increase in illegal border crossings.
Infrastructure limitations continue to hinder the Russian economy’s pivot to Asia.
Two regional politicians from Samara, Viktor Kudryashov and Mikhail Aseev, were detained in a corruption case.
Ukrainian charities are looking for new ways to attract donors to fund Ukraine’s counteroffensive.
Finland closes border checkpoints
This week, Finnish authorities decided to close four border crossing points with Russia. Finnish Prime Minister Petteri Orpo announced that, starting at midnight on November 17, four of the country’s nine border crossing points with Russia would be closed—Imatra, Niirala, Nuijamaa, and Vaalimaa.
The decision was prompted by a surge in illegal crossings through these checkpoints, mostly by migrants originally from Middle Eastern and African countries such as Syria, Yemen, Somalia, and Iraq. Finland has accused Russia of deliberately sending these migrants to the border and even helping them cross illegally. “It is clear that these people are helped and they are also being escorted or transported to the border by border guards,” Orpo said. Once in Finland, migrants are able to seek asylum with the Finnish government. Although Finnish border guards report that the number of asylum seekers has been manageable so far, it is increasing rapidly; 75 migrants arrived in Finland on Wednesday alone (compared to a total of 91 over the last four months). 280 asylum seekers have arrived in total since the beginning of November, one border guard said.
The European Union condemned Russia’s use of migrants to put pressure on other countries. “Russia’s instrumentalization of migrants is shameful,” European Commission President Ursula von der Leyen posted on X. Finnish President Sauli Niinistö suggested that Russia’s actions are in retaliation for Finland becoming a member of NATO last April. In response, the Kremlin said that it “deeply regrets” Finland’s decision to close these border crossings. “We deeply regret that the Finnish leadership has chosen to deliberately move away from what used to be good relations," Kremlin spokesperson Dmitry Peskov told reporters on Wednesday.
Finland shares a 1,340 kilometer (832 mile) border with Russia. Although its four southern-most border crossing points will be closed until February 18, two other crossing points farther north will remain open for asylum seekers—Salla and Vartius.
Meanwhile, Estonia has also reported an uptick in attempted border crossings from Russia. Eight Somali citizens attempted to cross into Estonia on Thursday, but they were expelled back to Russia. “It is unlikely that the Somali citizens came up with this idea on their own,” Estonian Minister of Internal Affairs Lauri Läänemets said. Norway and Estonia have both signaled their readiness to close their borders with Russia if the situation escalates.
— Sara Ashbaugh
Snapshot
On November 16, after more than a year in pre-trial detention, Russian protest artist Sasha Skochilenko was sentenced to seven years in a penal colony. She was found guilty of spreading “false information” about the Russian army when she replaced price tags in a St. Petersburg supermarket with labels containing anti-war messages. Skochilenko, 33, is pictured here on the day of her sentencing. “Despite being behind bars, I am freer than you. I can make my own decisions, I can speak my mind,” Skochilenko said in her final remarks to the court. Friends and family of the artist are concerned about her access to health care while serving her sentence, as she suffers from several chronic illnesses. (photo: Anton Vaganov / Reuters / Scanpix / LETA)
Capacity issues
As the second year of Russia’s full-scale war against Ukraine is drawing to an end, a series of developments over the past week highlighted the still-existing infrastructural limitations of the country’s pivot to the East. Kommersant reported that the oil shipping company Transneft had to reduce oil shipments to the port of Kozmino near Vladivostok due to insufficient capacity in the electricity network of the Kemerovo and Novosibirsk regions (electricity is used to pump oil towards the East). This electricity shortage is a consequence of the heavier use of far eastern railways for various other exports. In the near future, Russian Railways plans to expand these railway lines as Russia reorients its export infrastructure towards the East, which will put further strain on electricity networks. So far, the outages have reduced shipments by an insignificant amount relative to total oil sales (17,57 thousand metric tons), but the reports do show that heightened competition between various exporters is exacerbating pre-existing problems with network capacities and creating a blame game between companies over the shortcomings. In this case, Transneft, Russian Railways (RZhD), and the electricity network operator Rosseti, all of which are state-owned, have clashed over the issue. However, earlier squabbles over tariff increases and transit capacities have involved privately owned exporters as well.
Meanwhile, Sergey Tsivilev, the head of the Kemerovo region (Russia’s main coal-producing region), again expressed frustration over the fact that coal exporters are not granted more guaranteed transit capacity on RZhD’s network in the Eastern direction (where most of their buyers are now located). In order to prioritize cargo with more added value, RZhD proposed reducing the volume of guaranteed coal exports from Kemerovo to 47 million tons next year. So far, the guaranteed volume has been 53 million tons, but the region only exported 48 million tons in 2022. Deputy Energy Minister Sergey Mochalnikov also said that it was due to insufficient transit capacities that coal exports will most likely not exceed 2022 volumes this year. However, over the past month, both India and China have reduced their purchases of Russian coal. While in India’s case the decrease is likely seasonal, in China’s it is related to increased inventory.
Coal is not one of Russia’s most lucrative commodities, but Tsivilev’s region heavily relies on the industry for revenue (as do local heavyweights). The region enjoyed significant windfall revenues in 2022, but these are unlikely to return. Even if the region maintains or increases the volume of its exports, these are expected to sell at a discount in the foreseeable future. Not to mention that higher transportation costs will continue to erode profit margins.
— Andras Toth-Czifra
Bad Samarites
On November 14, the authorities detained Viktor Kudryashov, the deputy governor of the Samara Region, and Mikhail Aseev, the acting regional minister of construction. Kudryashov, a long-time associate of the region’s governor, Dmitry Azarov, resigned from his position shortly before the arrest, citing health reasons. After the arrests, Alexander Mordvinov, the deputy head of the regional government and former regional minister for energy, utilities, and housing, announced that he would continue working in the Vologda Region under the newly-appointed governor.
The official reason for the arrests is a criminal case initiated by local State Duma deputy Alexander Khinstein over the illegal transfer of funds to a company linked to Aseev. The funds were intended to be used for designing a metro station that was never built. However, Kudryashov’s son, Yury, earlier attracted attention for criticizing President Putin and the war in Ukraine. This prompted an investigation by the Interior Ministry, which also handles the corruption case that led to the arrests.
Whatever the actual trigger, the timing of the arrests spells trouble for Governor Azarov. The dismissal of Vologda Governor Oleg Kuvshinnikov two weeks ago prompted speculation that further regional leaders may be replaced before the end of the year (a standard practice in Putin’s Russia until last year). Following Kudryashov’s arrest, rumors about Azarov’s imminent dismissal spread quickly. A couple of weeks earlier, regional elites in the Republic of Altai mounted what seemed to be a concerted effort to block two initiatives of the region’s governor, Oleg Khorokhordin, which were intended to implement federal policies in the region.
Whatever happens to the two governors in the end, both cases highlight the kinds of issues that opponents, either local or federal, can use to discredit sitting governors before their real constituency—the federal authorities.
— Andras Toth-Czifra
Snapshot
On November 7, Muscovites gathered to demand the return of their mobilized family members from the war. The protest was organized by several organizations, including “The Way Home” telegram channel, which aims to unite the relatives of mobilized people across Russia. It was also joined by leaders of the Communist Party of the Russian Federation. “This was done publicly, now you can’t ignore us,” The Way Home posted on Telegram following the protest. Demobilization rallies are becoming increasingly common, prompting authorities in several regions to ban public marches. (photo: The Way Home)
Ukrainian fundraisers get creative
Since the first days of the Russian full-scale invasion, Ukrainian volunteers have been working tirelessly to provide newly-mobilized soldiers with necessary equipment, such as combat gear, medical supplies, and vehicles. In the beginning of the war, donations were pouring in from all over the world, but as the war drags into its second year, the number and amount of donations have been noticeably declining.
From February to November 2022, the average monthly donation to Ukraine’s largest charity organization supplying equipment to the military, Come Back Alive, was around 3,996 hryvnia, which converted to roughly $130 at that time. From February to November 2023, the average monthly donation decreased to 3,233 hryvnia (around $88). The total number of donations to Come Back Alive has also declined; from February to November 2022, 1,296,680 donations were made, while during the same period in 2023 the number was 983,502. Smaller charities also report that they have noticed a decline in number and average amount of donations, with most smaller fundraisers receiving average donations of 50 to 100 hryvnia ($1-3). Additionally, due to Ukraine’s ongoing counteroffensive, the number of fundraisers for military needs has spiked. As a result, donors are distributing their funds across several charities instead of donating a larger portion of money all to one organization.
As donation amounts decline, Ukrainian volunteers and charities have come up with creative ideas to remain visible and attract donors. One example is Ukrainian stand-up comedian Vasyl Baidak, who has been posting videos performing covers of famous songs and asking viewers to make donations. Thanks to one of his recent videos, Baidak collected 5 million hryvnia (around $138,000) for the military needs of several units. Once the fundraiser closed, the comedian also provided receipts of how the money was spent.
Another emerging phenomenon has been the rise of auctions in Ukraine or abroad. For example, Ukrainian singer MONATIK sold President Zelensky’s traditional embroidered shirt—or vyshyvanka—for 74,000 hryvnia (about $2,000) at his concert in Kyiv a couple of months ago. He donated the money to the Your Support charity fund, which provides humanitarian assistance to families residing in recently unoccupied regions, among other things. These are just a couple of examples of out-of-the-box thinking by Ukrainian volunteers to draw more attention to their cause.
— Lisa Noskova
On the Podcast
Where does Russian public sentiment on politics and war stand these days? And on a more basic level, how is it measured? Bear Market Brief talked with Isabelle DeSisto of Russia Watcher to learn more!
Quickfire: Regions
The State Duma adopted, in the key second reading, Russia’s 2024 budget and fiscal plans for the 2025-2026 period. The main character of the budget did not change relative to the first reading: the government will place all bets on the war by increasing the (already high) defense expenditures from 6.8 to 10.77 trillion rubles ($75.6 to 119.7 billion). A further 3.3 trillion ($36.7 billion) will be spent on domestic security services. Expenditures under the “National Economy” heading (which covers state-funded investments) will drop from 4.1 to 3.8 trillion rubles ($45.6 to 42.2 billion) in nominal terms, while health care and education expenditures will be frozen. The government, however, found 300 billion rubles ($3.3 billion) in federal funds to raise the salaries of security and military personnel. On the whole, the budget is based on very optimistic revenue projections, which suggests that the government will continue seizing extra profits when and where they appear in the economy. The prioritization of military expenditures in the federal budget also means that regions will likely be expected to spend more on the goals that are deprioritized on the federal level but are still considered important, such as infrastructure investments, social aid, and housing.
The Tomsk Regional Court sent Ksenia Fadeeva, an independent municipal deputy and the former local coordinator of Alexey Navalny’s campaign, to pre-trial detention. Earlier this year, the deputy was put under house arrest. She has been facing various restrictions on her public activities for the past two years due to her association with Navalny and his “extremist” organization. Fadeeva was one of the few independent opposition deputies who was elected to the Tomsk City Council in 2020, shortly after Navalny was poisoned in the same city. That election deprived United Russia of its majority in the City Council and some deputies have now spoken up in support of Fadeeva. In both Tomsk and Novisibirsk, the other major city where Navalny’s “Smart Voting” strategy and his cooperation with local grassroots opposition movements brought electoral successes in 2020, the authorities have pushed back against political pluralism, including by scrapping direct mayoral elections.
Local authorities have prohibited marches organized by relatives and acquaintances of mobilized men in several Russian cities, including Krasnoyarsk, Chelyabinsk, and Novosibirsk. Prior to this, organizers had already planned to protest open-ended mobilization and demand their loved ones to be rotated out of the war zone in Ukraine on November 19. A protest already took place in Moscow on November 7, and the media outlet Vyorstka counted at least 27 regional initiative groups. However, regional and local authorities have a long list of excuses that can be used to legally ban protests, from pandemic-related concerns to alleged fears of provocateurs and public safety. However, while these groups currently represent desperate minorities, the problem will not go away, and governors are ill equipped to deal with it. In Novosibirsk, after the local authorities did not allow a public protest, organizers announced one behind closed doors that was open to media representatives.
— Andras Toth-Czifra
Quickfire: Ukraine
The European Commission recently released its 2023 report on Ukraine in which it recommends that the European Council start accession negotiations. However, the official start date of these negotiations has yet to be determined. The President of the European Commission, Ursula von der Leyen, said that Ukraine has completed 90% of the tasks that were a prerequisite for the start of negotiations. She noted that Ukraine has made significant progress in limiting oligarchs’ influence on state, justice system reform, anti-corruption and anti-money laundering efforts, and protection of national minorities. President Zelensky welcomed this recommendation, saying, “There is a positive signal from the European Commission—a recommendation to start negotiations on our country’s membership in the EU. This is exactly the decision we expected. I thank you, Ursula, Madam President of the European Commission, and all your colleagues for always having an unwavering and sincere belief in Ukraine. Our people deserve to be in the European Union—together with all the free peoples of our Europe. And we are doing everything for this.”
The Security Service of Ukraine (SBU) has opened investigations into about 8,000 cases of suspected high treason since the beginning of the war. Over 2,000 criminal proceedings have been sent to courts, and 330 collaborators have been sentenced. One of the most recent collaborators to be convicted to a 15-year prison sentence (albeit in absentia) is Volodymyr Saldo, head of the Russian occupation authorities in the Kherson oblast. Saldo was charged with high treason, collaborating with occupying Russian authorities, and justifying Russia’s invasion of Ukraine.
— Lisa Noskova