National mourning
Russians mourn the victims of the Crocus City Hall terrorist attack
Hello from the Bear Market Brief.
This week in the news:
Four men were arrested and, following torture by the Federal Security Service, pleaded guilty to carrying out the Crocus City Hall terrorist attack.
The Central Bank of Russia maintained the key rate at 16%, suggesting that high inflation remains a significant concern.
Russian authorities opened the first criminal case on “LGBT extremism” against two employees of a LGBTQ+ club.
The United Nations Human Rights Monitoring Mission in Ukraine published a report detailing the human rights violations that Ukrainian POWs experienced in Russian captivity.
During an attack on Ukrainian infrastructure last week, Russian missiles damaged the Dnipro Hydroelectric Power Plant, the largest hydroelectric station in Ukraine.
— Sara Ashbaugh, Editor in Chief
Aftermath of the Crocus City Hall attack
A week after the second-deadliest terrorist attack in the history of modern Russia, the official death toll has grown to 143, with several people still in serious condition. A Moscow court charged four Tajikistani nationals, believed to be associated with Islamic State Khorasan (ISIS-K), with perpetrating the attack, and the Prosecution ordered three further arrests. The initial four men pleaded guilty after being tortured by Russian security services, according to several videos released during the week. This puts their testimonies, in which they say that they carried out the attack in exchange for 500,000 rubles from an anonymous contact, into doubt.
Although initial communication from the authorities suggested a degree of confusion and lack of coordination, in the days following Vladimir Putin’s first public comments on the matter, government institutions quickly fell in line with the official (unsubstantiated) narrative: while radical Islamists committed the attack, they were abetted or hired by Ukrainian intelligence and/or the U.S. and the UK. Comments to this effect have been heard from, among many others, Security Council Secretary Nikolay Patrushev, Federal Security Service (FSB) head Alexander Bortnikov (who also suggested designating Ukraine’s Security Service as a terrorist organization), the Investigative Committee (which claimed that the terrorists received money “from Ukraine”), and chief propagandist Margarita Simonyan (who accused Western intelligence services of setting up the attack). Several Duma deputies requested that the Prosecution look into the ostensible Western connections of people who committed other terrorist attacks in Russia. The authorities have also started repressing people who are posting sarcastic or indifferent comments about the terrorist attack. Additionally, they announced that Andrey Zhvakin, an activist in Samara whom the authorities accused of being a Ukrainian asset, “blew himself up” and died as he was being arrested.
One immediate consequence of the attack was a reopening of the debate about reinstating the death penalty in Russia. The chances of this happening are not necessarily high given the practicalities it would entail. However, the fact that Vladimir Vasilyev, the head of United Russia’s Duma group, raised the issue indicates that the Kremlin does want the public to consider it a serious possibility. The threat of the death penalty (and torture) could also be a further means to intimidate dissidents, many of whom are now regarded by the authorities as extremists and threats to national security.
Another consequence of the arrests has been heightened discrimination against Tajiks and Central Asian people in general. Some examples were shared in a report by Meduza. However, legislative consequences could also follow. The Labor Ministry suggested limiting the maximum term of labor contracts with migrants to two years, with a United Russia deputy suggesting limitations on entry during the period of the “special military operation.” This comes on top of at least nine regions already having introduced various curbs on migrants’ labor rights. This is a risky path, however, given that Russia’s increasingly tight labor market is in desperate need of migrant labor; the government expects migrant workers to occupy 4.7% of jobs in Russia, up from 4.2% in 2022.
It is, as of yet, unclear whether the terrorist attack will be used to justify another round of military mobilization, which remains a fraught and politically risky issue. What is clear, however, is that the attack prompted questions about the priorities and competence of the security services, in spite of record-high funding available for domestic security (both from the federal and regional budgets). As a result, the government and the security services are busy showing that they, on the one hand, are active and responding to the popular outrage, and, on the other hand, are supporting the government’s official narrative.
— Andras Toth-Czifra
On Sunday, Russia observed a national day of mourning for the victims of Friday’s terrorist attack on Crocus City Hall. Dozens of people lined up to lay flowers, toys, and candles on a makeshift memorial outside of the burned building in Krasnogorsk. Many also donated blood for injured victims of the attack. In his televised address the day before, President Putin called it “a bloody, barbaric terrorist act,” and claimed that Ukraine was involved. (photo: Olga Maltsheva / AFP)
Inflation risk remains
The Central Bank decided yet again to keep its key rate unchanged at 16%, suggesting that the Bank still considers high inflation a risk under Russia’s current economic conditions. Elvira Nabiullina, head of the Central Bank, said that lowering the rate would likely boost consumer demand, but due to limits on the Russian economy’s production capacity, this would lead to price growth. Nabiullina also underlined that labor shortages represent a serious bottleneck for the economy.
However, the Central Bank does not think that “the situation on the fuel market” has led to further inflationary pressure. By this, Nabiullina means ongoing Ukrainian drone attacks against Russia’s fuel infrastructure. Over the past few weeks, four regional oil storage facilities and seven refineries were damaged in a total of 23 drone strikes. These together represent 16% of Russia’s diesel and petrol production, according to an estimate published in Novaya Gazeta. According to energy market expert Sergey Vakulenko, this will not necessarily affect fiscal revenues or fuel shipments for the army, but, if the strikes are maintained, it could lead to rationing or price hikes down the line. In order to prevent this, Russia has increased imports from Belarus and introduced an embargo on gasoline exports between March and August this year. However, this is reportedly exacerbating pre-existing capacity issues on freight railway transit.
A government-adjacent think tank, the Center for Macroeconomic Analysis and Short-term Prognostics (TsMAKP), recently published its latest report on the prospects of the Russian economy. Their predictions are even gloomier than the Central Bank’s; the report underlines that industrial production growth has stopped, as has the previously-observed growth in investment and household consumption. This highlights the limits of Russia’s economic recovery based on defense production as well as employers living off of higher incomes in the previous period.
— Andras Toth-Czifra
LGBT extremism case
Last week, Russian authorities launched the first criminal case against “LGBT extremism” since the Russian Supreme Court outlawed the international LGBT movement. Two employees of Pose, an LGBTQ+ club in Orenburg, were arrested for “extremist activities.” The court described the two as having “acted in premeditation with a group of people...who also support the views and activities of the international public association LGBT.” The police raided Pose in early March, reportedly accompanied by a group of nationalists and pro-war activists known as the “Russian Community of Orenburg.” The club’s art director Alexander Klimov and bar manager Diana Kamilyanova were taken into custody last week and face up to 10 years in prison if they are convicted. In a hearing behind closed doors, the court decided to hold Klimov and Kamilyanova in pre-trial detention until May 18.
While many LGBTQ+ clubs have been raided by police, this is the first criminal case to be brought against so-called “LGBT extremists” since the Russian Supreme Court banned the “international LGBT movement” in November 2023. Since then, the crackdown on LGBTQ+ rights has only intensified. Last week, state financial watchdog Rosfinmonitoring followed the Court’s example and added the “international LGBT public movement” to its list of terrorists and extremists. This will allow the authorities to freeze the bank accounts of so-called “extremists” without a court order. The extremist label makes anyone associated with LGBTQ+ lifestyles or symbols increasingly vulnerable to arrest and prosecution.
— Sara Ashbaugh
Photojournalist Antonina Favorskaya was arrested on Wednesday for alleged extremist activity. She is accused of participation in Alexei Navalny’s Anti-Corruption Foundation, which was labeled an “extremist organization” in 2021. Favorskaya covered Navalny’s trials as a journalist for SotaVision and filmed the last known video of him. She can be seen here during a police search of her apartment on Wednesday evening. On Friday, Moscow’s Basmanny District Court placed her in pre-trial detention until May 28. (photo: SotaVision)
Russia continues to torture and execute Ukrainian POWs
On Tuesday, the United Nations Human Rights Monitoring Mission in Ukraine published a report on the human rights situation in Ukraine. The report covers the time period from December 2023 to February 2024 and is based on interviews with 767 victims and witnesses of human rights violations, as well as their relatives and lawyers, government representatives, and members of civil society. The interviewee pool also included 60 Ukrainian prisoners of war (POWs) recently released from Russian captivity.
58 out of 60 interviewed POWs provided accounts of torture and ill-treatment in Russian captivity, consistent with the Mission’s previous findings. The most common methods of torture included beatings, electric shocks, threats of execution, mock executions, and positional torture. Several of Ukraine’s defenders said that they had been forbidden from using the toilet without explicit permission. In some facilities, POWs experienced sleep deprivation. 39 interviewees reported that they had been subjected to sexual violence in Russian captivity, including including attempted rape, threats of rape and castration, beatings or the administration of electric shocks to genitals, and repeated forced nudity, including during interrogations and to check for tattoos. Moreover, the Mission recorded allegations of 12 separate instances of executions in which 32 Ukrainian POWs were killed. It was able to independently verify 7 executions in 3 of these instances.
In addition to the findings about the POWs, the report detailed the continued pattern of violence against Ukrainian civilians in the territories temporarily occupied by Russia. Killings of civilians, arbitrary detentions, and restrictions on freedom of expression are cited in the document. Additionally, the Mission documented pressure on men in the occupied territories to enlist in the Russian armed forces. According to the report, 429 civilians were killed and 1,374 injured in the three month period.
— Lisa Noskova
Russia hit Ukraine’s largest hydroelectric station
Last week, Russia carried out another massive attack on Ukraine’s energy infrastructure. At least five people were killed and over 30 injured across the country as a result. During the attack, Russia hit the largest hydroelectric station in Ukraine, the Dnipro Hydroelectric Power Plant. According to Ukrainian authorities, there is no threat of a dam breach, and the situation remains under control. Ihor Syrota, head of Ukrainian state-owned energy company Ukrhydroenergo, commented that one of the stations of the Dnipro power plant suffered critical damage, and that it will take several years to restore the plant. He added that a cost estimate for restoring the power plant will be provided upon the completion of rubble analysis.
Ukraine’s Ministry of Environmental Protection and Natural Resources has already calculated preliminary environmental damage caused by Russia’s strike on the Dnipro Hydroelectric Power Plant. It already exceeds 140 million hryvnia (which converts to over $3.5 million). Ukraine’s State Environmental Inspectorate recorded soil contamination and an oil spill following the strike on the dam. Experts from the State Environmental Inspectorate and the State Agency of Water Resources are also continuing to monitor the state of water in the Dnipro River below the Dnipro Dam on a daily basis.
— Lisa Noskova
On the Podcast
If we know how Russia's presidential election is going to turn out...why even bother holding the election? Join Aaron Schwartzbaum, András Tóth-Czifra, and Olga Khvostunova for an exploration of electoral autocracy and the political moment.
Quickfire: Regions
Following the presidential election, it appears that the government is stepping up repression against independent journalists and associates of the late Alexei Navalny. The authorities arrested Anastasia Muratova, Antonina Favorskaya, and Alexandra Astakhova in Moscow, as well as RusNews reporter Olga Komleva in Bashkortostan (previously, several of her colleagues were jailed). All of them are being questioned in an “extremism” case centering on Navalny’s organization, the Anti-Corruption Foundation. Favorskaya—who covered Navalny’s last trials—was remanded in custody for two months. She was arrested after visiting Navalny’s grave, perhaps suggesting that, following the presidential election, the authorities are also trying to repress that form of protest.
The legislative assembly of the Republic of Buryatia voted to scrap direct mayoral elections in Ulan-Ude. The decision, which was introduced in January by Alexey Tsydenov (the Kremlin-appointed head of the region), was briefly taken off the agenda in February—likely in order not to trigger protests before the presidential election—but then promptly adopted just months before the next mayoral election was due to be held. At the same time, Communist deputies introduced a bill that would turn the city’s purely majoritarian electoral system into a mixed system, likely benefiting the opposition, but it is unclear whether this will be adopted. Ulan-Ude was the only major city to reintroduce, rather than scrap, direct mayoral elections over the past twelve years. However, in 2019, street protests broke out when Tsydenov’s ally Igor Shutenkov was declared the winner over the popular Communist candidate Vyacheslav Markhaev. Ulan-Ude thus followed the recent examples of Novosibirsk and Tomsk, where direct mayoral elections were scrapped by regional parliaments dominated by United Russia after opposition gains. In both cities, the authorities also started cracking down on independent deputies in the City Council, which is still ongoing. As of today, apart from Moscow and St. Petersburg, only four regional capitals—Abakan, Anadyr, Khabarovsk, and Yakutsk—preserve direct mayoral elections.
Gazprom, which already owned 50% of the company operating the Sakhalin-2 liquefied natural gas project, acquired Shell’s 25.7% share through an organization called the Sakhalin Project. After Shell announced that it would be leaving the project, Novatek was expected to buy the shares and transform the company operating Sakhalin-2, a key Far Eastern energy project serving Asian markets, into a Russian entity. It is unclear what prompted the switch from Novatek to Gazprom. However, Gazprom’s gas business lost 291 billion rubles ($3.1 billion) in 2023 due to its exit from much of the European market, with potential implications not only for the company’s investment program but also for domestic gas prices.
— Andras Toth-Czifra
