Signature move
Potential presidential candidate Boris Nadezhdin’s signatures of support were declared invalid by the CEC
Hello from the Bear Market Brief.
This week in the news:
The Central Electoral Commission rejected Boris Nadezhdin’s registration as a candidate for the upcoming presidential election.
The government continues to crack down on political dissent in the regions, with new developments in Khabarovsk, Novosibirsk, and Bashkortostan.
The founder of Yandex announced that the company will be separating its Russian assets from its international operations in a $5.2 billion deal.
President Zelenskyy announced the resignation of Valerii Zaluzhnyi as commander-in-chief of the Ukrainian Armed Forces and appointed Colonel General Oleksandr Syrskyi to be his replacement.
A new branch within Ukraine’s Armed Forces, the Unmanned Systems Forces, will focus on improving Ukraine’s drone operations.
— Sara Ashbaugh, Editor-in-Chief
Game over for Nadezhdin
Russia’s Central Electoral Commission (CEC), as expected, rejected the registration of pro-peace presidential candidate Boris Nadezhdin, claiming that too many of the signatures of support that he submitted were invalid. BMB has reported on Nadezhdin’s campaign several times over the past few weeks, including on potential reservations about him as a “systemic” opposition figure with ties to leading government officials and the movement that his campaign has nonetheless inspired. According to a “Russian Field” poll ordered by Nadezhdin, he had the support of more than 10% of the voters who intend to participate in the presidential election.
Nadezhdin, who asked the CEC to postpone its decision, vowed to challenge it in the Russian Supreme Court. However, it is unlikely that the Court will overturn the electoral authority’s ruling. Whether or not the decision will inspire protests among Nadezhdin’s supporters, on the other hand, remains to be seen. Nadezhdin claims that more than 200,000 people provided their signatures in support of him. However, the previous rejection of another anti-war candidate, Yekaterina Duntsova, did not lead to significant protests.
If Nadezhdin remains disqualified, the ballot will likely contain, apart from Putin, three candidates from the systemic opposition: Communist Party lawmaker Nikolay Kharitonov, head of the far-right Liberal Democratic Party Leonid Slutsky, and deputy head of the New People party Vladislav Davankov. Davankov earlier supported Nadezhdin’s run, likely in an attempt to present himself as an alternative should Nadezhdin be disqualified.
— Andras Toth-Czifra
In an unusual move, President Putin sat down with far-right media personality Tucker Carlson for a 2-hour-long interview on Tuesday. The interview, which took place at the Kremlin in Moscow, was Putin’s first with a Western media personality since Russia’s invasion of Ukraine. Carlson neglected to ask Putin many tough questions, instead opting to mostly listen as the President gave a long history lecture justifying Russia’s occupation of Ukraine. Carlson has been widely criticized by independent media for giving Putin a platform to disseminate propaganda. Meanwhile, Russian state media has been promoting the interview and covering Carlson’s activities during his visit to Russia. (photo: kremlin.ru)
Note: A previous version of this post referred to Carlson as a “journalist.”
Crackdown on dissent in the regions
In addition to Nadezhdin’s disqualification, regional authorities have continued to suppress opposition and protest activity in the regions five weeks before the presidential election.
In the Khabarovsk Territory, the local prosecutor’s office suggested labeling “I/We Sergey Furgal,” a slogan supporting the region’s jailed former governor, as an “extremist organization” (even though no movement is registered with this name). This would allow the authorities to ban protests in support of Furgal completely. Furgal was arrested and taken to Moscow in 2020, where he was sentenced to 22 years in prison for allegedly arranging the murder of his business rivals in 2004-2005. Another legal case against Furgal focusing on embezzlement from the Amurstal steel factory is still ongoing. His arrest triggered massive protests in the Khabarovsk region. Over time the protests have dwindled, but a dedicated group of supporters have continued to mount smaller protests for him in Khabarovsk and other regions.
In Novosibirsk, an independent deputy of the city council, Anton Kartavin, who supported several local protest movements over the past few years (for example, against higher utility tariffs and against the scrapping of direct mayoral elections), was named a “foreign agent.” This designation will severely restrict his political activities. Two of his colleagues, Sergey Boiko and Helga Pirogova, were also labeled “foreign agents” and stripped of their mandates last year, nominally for failing to file an income declaration. Last week, a local deputy from the ruling United Russia party with links to a controversial construction conglomerate (against which independent deputies were campaigning in 2020), publicly called for Kartavin to be labeled a “foreign agent,” pointing out his links to Boiko.
In Bashkortostan, which saw significant protests in January against the sentencing of Bashkir nationalist activist Fail Alsynov, authorities placed 34 people in custody for participating in or organizing “mass riots.” This is despite the fact that Dmitry Peskov, the Kremlin’s spokesperson, said earlier that the events in the region could not be called mass riots. One man who was arrested after the January protests, Rifat Dautov, died in custody under unclear circumstances and was buried by his relatives this week. The head of the region, Radiy Khabirov, continues to take a hard line on the protests; at a meeting with the representatives of the World Qoroltai of Bashkirs, a cultural organization, Khabirov squarely refused to honor Dautov’s memory by observing a minute of silence.
What links the above cases is that they all mark a gradual escalation of repression against dissent in regions that have seen significant opposition and grassroots activity in recent years. This opposition is often without clear goals but almost always reflects deep regional frustrations. Local leaders know that protests, which are often themselves a consequence of mismanagement, can not only diminish their standing in the eyes of their minders in Moscow, but can also potentially be used by their local rivals to attack them. Since the start of the full-scale invasion, the Kremlin has significantly slowed the rotation of regional and federal officials, likely in an attempt to preserve domestic stability. However, it is not unlikely that Putin will initiate a series of dismissals following the March presidential election. Regional leaders thus want to show that they are willing and able to use all available means of repression against dissent. This could, on the other hand, prompt further pushback from residents.
— Andras Toth-Czifra
Yandexit
On Monday, Arkady Volozh, the founder of Yandex (Russia’s largest internet firm), and Yandex’s Netherlands-based foreign shareholders announced a $5.2 billion deal to divorce the company’s Russian assets from its international operations, which will then be rebranded. The Russian assets, which currently represent the main income base of the company, will be taken over by a consortium of senior managers and a smaller group of financial investors, including the Lukoil oil company and a former manager of the Gazprom gas company. These investors likely represent larger business interests that needed to be disguised, as Yandex’s foreign investors would not have been able to strike a deal with sanctioned people and entities. The Bell noted that several of the investors are associates of Yury Kovalchuk, who is close to Vladimir Putin, and Vladimir Kirienko, the son of the Kremlin’s domestic policy overseer, Sergey Kirienko.
The deal is notable because it represents a major step towards the Russian government’s goal of establishing full control over the country’s online space. Repressive regulations and security services oversight make up a major part of this goal, but state-assisted business takeovers (where business groups actually represent the interests of the state) are an important part of the process as well. For the new owners, Yandex’s assets come with a considerable discount as a consequence of Russia’s wartime regulations about divestments. The sliding takeover of Yandex over the past five years echoes the takeover of VK, Russia’s largest social network, by Kovalchuk’s and Kirienko’s circles in 2021. Tight oversight over the two companies will allow the government to use subtler forms of information manipulation and data collection.
— Andras Toth-Czifra
President Zelenskyy included this photo in his posts to Telegram and X announcing commander-in-chief Valerii Zaluzhnyi’s resignation. The posts were accompanied by the caption, “I met with General Valerii Zaluzhnyi. I thanked him for the two years of defending Ukraine. We discussed the renewal that the Armed Forces of Ukraine require. We also discussed who could be part of the renewed leadership of the Armed Forces of Ukraine. The time for such a renewal is now. I proposed to General Zaluzhnyi to remain part of the team. We will definitely win! Glory to Ukraine!” Later that evening, Zelenskyy appointed Colonel General Oleksandr Syrskyi the new commander-in-chief of Ukraine’s Armed Forces. (photo: X @ZelenskyyUa)
Changes to Ukraine’s military leadership
On Thursday, President Zelenskyy wrote that he met with commander-in-chief Valerii Zaluzhnyi and discussed new strategies and changes necessary to optimize the work of the Ukrainian military. In his Telegram post, Zelenskyy said that he offered for General Zaluzhnyi to “remain a part of the team.” Zaluzhnyi also published a post about his meeting with the President, saying that “a decision to change approaches and strategy was made.” These posts immediately sparked discussions about whether Zaluzhnyi was being dismissed.
Indeed, an hour or so later, in his nightly address, President Zelenskyy thanked Zaluzhnyi for his service and announced that he will no longer lead Ukraine’s military. Zelenskyy appointed Colonel General Oleksandr Syrskyi as the new commander-in-chief. “He has successful experience in defense—he led the Kyiv defense operation. He also has successful offensive experience—the Kharkiv liberation operation,” Zelenskyy said. He added that Syrskyi will introduce a new Armed Forces leadership team soon.
Zelenskyy also said that beyond the changes in leadership, he expects a realistic, detailed action plan for the Armed Forces of Ukraine in 2024, including changes in the distribution of weapons on the front line, the resolution of logistical bottlenecks, the introduction of an effective rotation system, and improvements in the quality of training.
— Lisa Noskova
The Unmanned Systems Forces
During his nightly address on Tuesday, President Zelenskyy announced that he signed a decree to create a new branch within Ukraine’s Armed Forces—the Unmanned Systems Forces. “The current list of tasks is clear: special staff positions for drone operations, special units, effective training, systematization of experience, constant scaling of production, and the involvement of the best ideas and top specialists in this field,” he said. The establishment of the Unmanned Systems Forces will be undertaken by the military, the Ministry of Defense, and the government as a whole.
The announcement comes as Ukraine is looking to introduce changes to mobilization processes in the country and improve its overall military strategy. Last week, in an article published by CNN, Ukraine’s then commander-in-chief Valerii Zaluzhniy named key areas of focus for Ukraine’s military in 2024. According to the General, drones “provide the best way for Ukraine to avoid being drawn into a positional war.” He added that, in order to gain advantage, Ukraine needs to master unmanned vehicles and other technologies.
Besides the need to boost Ukraine’s technological capabilities, Zaluzhnyi emphasized that the country needs to take into consideration Russia’s advantage in mobilizing human resources and the reduction of military support from Ukraine’s key partners. Lastly, the commander-in-chief pointed out that Ukraine’s ammunition production is hampered by bottlenecks caused by the current regulatory framework and partial monopolization of the country’s defense industry. These bottlenecks lead to further reliance on partners for supplies.
— Lisa Noskova
On the Podcast
Almost two years after Russia’s full-scale invasion, 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
Lukoil’s Volgograd refinery briefly stopped working after what local media reported as a drone attack. Later, the Security Service of Ukraine assumed responsibility for the attack, which is the latest in a spate of similar attacks against Russia’s oil refining and energy export infrastructure over the past few weeks. The attacks have contributed to a noticeable drop in Russia’s oil refining capacity, almost 4% in January according to industry data reported in the Russian press. The attacks, for which Ukraine now regularly claims responsibility, complicate fuel shipments to the war zone and expand the area within Russia that is under potential threat. Additionally, even if they only lead to temporary shutdowns, these attacks could make industrial operations and shipping riskier and more expensive.
Conflicts between commodities exporters continue, prompted by scarce transit capacities towards Asia. Last week, the Russian Coal company, active in the Krasnoyarsk Territory, Khakassia, and the Amur Region, accused VaninoTransUgol, the company administering the coal terminal in the Far Eastern Vanino seaport, of unfairly raising transshipment prices and threatening Russian Coal with stopping shipments. Kommersant also reported that coal companies stopped working with OTEKO’s terminal in the Krasnodar Territory for similar reasons. Earlier, coal exporters had a conflict with Russian Railways (RZhD) and exporters of other goods and commodities with higher added value due to transit bottlenecks to and from Asia. These conflicts have not been resolved; Kemerovo Governor Sergey Tsivilev mentioned insufficient transit capacities in an interview this week. At the same time, the exporters and RZhD fail to agree on how to expand railway capacities. Kemerovo’s influential Kuzbassrazrezugol is pushing for bypasses and track expansions in the Irkutsk region and the Maritime Territory, which would benefit its operations.
— Andras Toth-Czifra
Quickfire: Ukraine
Russia launched another massive attack on Ukraine this Wednesday. This time the Kyiv, Lviv, Mykolaiv, Dnipropetrovsk, and Kharkiv oblasts were all targeted. As of Wednesday afternoon, five people were killed and over 50 were reported injured across these regions. Rescue operations are ongoing. As a result of the attack, some districts in Kyiv experienced power outages and water supply issues. Russia reportedly used 29 cruise missiles and 15 drones to carry out the attack.
On Wednesday, in a 49-50 vote, U.S. Senate Republicans blocked a bipartisan border bill that included aid to Ukraine, Taiwan, and Israel. The vote was largely split along party lines, with only four Republican Senators voting for the border bill—Mitt Romney of Utah, Susan Collins of Maine, Lisa Murkowski of Alaska, and James Lankford of Oklahoma. Five Democrats joined Republicans in voting against the bill—Bernie Sanders of Vermont, Ed Markey of Massachusetts, Bob Menendez of New Jersey, Alex Padilla of California, and Elizabeth Warren of Massachusetts. Following the unsuccessful vote, Senate Majority Leader Chuck Schumer introduced a package that contains aid for Ukraine and Israel and no border security provisions. On Thursday, the Senate voted to advance a $95.3 billion foreign aid package that includes assistance for Ukraine. Once the bill is passed by the Senate, it will next go to the House of Representatives, but it is not clear when or whether Speaker Mike Johnson will hold a vote on it.
— Lisa Noskova