Hello from the Bear Market Brief.
This week in the news:
Voting in Russia’s presidential election began today. Authorities are attempting to encourage a high voter turnout while also repressing dissent.
Russia experienced a spate of Ukrainian drone attacks on industrial establishments over the past week.
Anti-Kremlin military groups (including the Freedom of Russia Legion, the Russian Volunteer Corps, and the Siberian Battalion) took control of villages in the Belgorod and Kursk regions.
The U.S. Department of Defense announced a new $300 million aid package for Ukraine.
— Sara Ashbaugh, Editor in Chief
Presidential election begins
Voting has begun in Russia’s presidential election, which will take place March 15-17. There is little doubt that Vladimir Putin will be the official winner. The three other candidates—Leonid Slutsky of the Liberal Democratic Party, Nikolai Kharitonov of the Communist Party, and Vladislav Davankov of the New People Party—were handpicked by the Kremlin and pose no political threat to Putin. Any anti-war or opposition candidates were prosecuted, barred from running, or outright killed prior to the vote. If Putin is declared the winner, he will be inaugurated for his fifth presidential term and secure another six years in power. The next presidential election is scheduled for 2030.
For the first time in a Russian presidential election, voting will take place over a period of three days and voters in certain regions will have access to online voting. Putin himself voted online today (as shown in a video published by the Kremlin). However, the online voting system briefly crashed, likely due to the large volume of workers who are being pressured to vote online. Authorities seem intent on ensuring high turnout for the election, even using musical performances and free prizes to entice voters to the polls. Not everyone supports Putin; some Russians are showing their dissent by spoiling their ballots or boycotting the election. Yulia Navalnaya, wife of late opposition leader Alexei Navalny, encouraged voters to go to the polls at 12:00 pm on the final day to participate in a mass protest action called “Noon against Putin.”
— Sara Ashbaugh
The presidential election is also taking place in the Russian-occupied territories of Ukraine. Polling stations have emerged in Donetsk, Luhansk, Kherson, and Zaporizhzhya, the four regions that Russia claims to have annexed through illegal referenda. Early voting was available in these regions ten days prior to the election. Voters used ballot boxes like the one pictured here, in the city of Sievierodonetsk in the Luhansk region. (photo: Alexander Reka / TASS)
Last-minute repression
In the week before Russia’s presidential election, the authorities have continued to focus on two key aspects from the Kremlin’s point of view: the repression of dissenters—likely in an attempt to prevent opposition supporters from signaling dissent—and various means to increase turnout in the vote. The latter is their key goal; the authorities need to showcase domestically and abroad that a large majority of Russians are behind Putin and the war in Ukraine.
The authorities started investigating and arresting members of the team of Boris Nadezhdin, a former presidential candidate who ran on an anti-war platform and was disqualified before the vote. In the Stavropol region, officers of the anti-extremism “Center E” group conducted searches of several people’s homes who collected signatures in support of Nadezhdin and who were going to serve as election observers. Meanwhile in Vladivostok, Igor Krasnov, the head of Nadezhdin’s local office, and other volunteers of Nadezhdin’s campaign were detained for several days under suspicion of spreading “LGBT propaganda” after Krasnov used a rainbow flag emoji in a closed Telegram chat. In Belgorod, the authorities broke into the home of Nadezhdin’s local campaign office head, Ilya Kostyukov. His colleague in Kaluga, Konstantin Larionov, was beaten by three unknown men. In all of these cases, the purpose is likely to discourage opposition activities that question the Kremlin’s narrative of the vote; over the past few weeks, Nadezhdin’s associates have been trying to arrange—mostly unsuccessfully—election observers for the polls. There was also talk about conducting an “exit-poll.”
In another intimidation attempt just days before the election, Leonid Volkov, a leading ally of the late Alexei Navalny, was severely beaten near his home in Lithuania. The authorities are also actively trying to discourage voters from following the advice of Navalny’s team: to turn up at polling stations at exactly 12:00 pm on Sunday in order to signal opposition to Putin’s coronation. The Moscow Prosecutor’s Office called the action an “unsanctioned extremist protest,” which means that participants can be arrested and charged. In at least three regions, people received fake messages purporting to be from Navalny’s team informing them that the event was moved to 5:00 pm. In Perm, local authorities announced that Maslenitsa holiday events in schools would take place at exactly 12:00 pm on Sunday.
Police also raided the homes of several artists and political activists associated with Pyotr Verzilov, an activist and member of Pussy Riot who joined the Ukrainian army. The raids and arrests took place in several regions, including Moscow, St. Petersburg, Ulyanovsk, Nizhny Novgorod, and Samara. Verzilov, who was sentenced to 8.5 years in absentia last year for spreading “fake information” about the Russian military, is currently being investigated by the Russian authorities for alleged treason.
On the first day of the vote, March 15, several polling stations across the country reported people trying to damage or destroy ballot boxes, apparently in protest. Several people poured zelyonka, a green dye previously used in violent political attacks, on the ballots. People tried to set at least five polling stations on fire.
At the same time, authorities remained focused on the turnout. This seems to be a significant worry, judging from the fact that the head of the Foreign Intelligence Service, Sergey Naryshkin, claimed on Monday that organizations linked to the U.S. Government are trying to artificially lower turnout in the vote. Meanwhile, local and regional authorities are using a wide array of methods (here’s a selection from journalist Francis Scarr) to ensure that turnout is high among regime supporters. These methods vary depending on, among other things, the financial means available to the regions. For example, in Tatarstan, the authorities organized a lavish festival and will give away three brand new cars to voters, while in the poorer Kamchatka, voters will get tickets to Russian cartoons. The authorities’ methods also include coercion (e.g. a university in Tomsk is reportedly listing students who signed up for online voting). As of March 11, 4.5 million voters were registered to vote online (apart from Moscow, where no such registration is needed).
For a detailed analysis of the campaign and how the authorities are pressuring people to vote using administrative means, it is worth reading the report of the independent election observation organization Golos and follow their “Map of Violations” during the vote.
— Andras Toth-Czifra
Pre-election attacks
Russia experienced a significant uptick of Ukrainian drone attacks on industrial establishments in the week leading up to the presidential election. Drones struck and caused outages at three oil refineries in the country on March 12 and 13, including Rosneft’s biggest refinery in the Ryazan Region, which accounts for 4.6% of Russia’s oil refining capacity. Other drone strikes hit a Rosneft refinery at Novoshakhtinsk in the Rostov Region (which has since restarted production) and a Lukoil refinery in Nizhny Novgorod, which accounts for 5.8% of the country’s oil refining capacity. Some other facilities, such as a power plant in the Oryol Region and the city administration building of Belgorod, were also reportedly hit. Dozens of further drones were reportedly shot down in several regions, including near other major fuel production facilities. Over the course of 2024, Ukrainian drones have attacked several fuel production and energy export facilities in Russia, as well as plants associated with the military industrial complex (such as the Cherepovets metallurgical plant of Severstal, which also showcased that the territory that drones are able to reach in Russia is constantly expanding). The attacks have caused significant disruptions for the domestic fuel industry, raising domestic prices and the degree of uncertainty facing the sector. They have also likely negatively affected fuel exports, albeit the exact degree of their effect is difficult to discern.
The attacks against fuel production establishments happened in parallel to incursions by Ukraine-affiliated Russian militias. The Freedom of Russia Legion, the Russian Volunteer Corps, and the Siberian Battalion entered the Kursk and Belgorod Regions bordering Ukraine and claimed control of two villages. The attacks, against which Russia mobilized the National Guard, were similar to incursions in May and June 2023.
— Andras Toth-Czifra
Mstyslav Chernov’s “20 Days in Mariupol” won the Oscar for best documentary last weekend, becoming the first Oscar win in Ukrainian history. Chernov accepted the award alongside producer and editor Michelle Mizner and producer Raney Aronson-Rath. The movie shows the harrowing first days of the Russian full-scale invasion in Mariupol. “Probably I will be the first director on this stage to say I wish I’d never made this film. I wish to be able to exchange this for Russia never attacking Ukraine,” Chernov said during the ceremony. (photo: Rodin Eckenroth / Getty Images via AFP)
Anti-Kremlin military volunteers are “going to the polls”
On March 12, the Freedom of Russia Legion, the Russian Volunteer Corps (RDK), and the Siberian Battalion announced that they are planning to “participate” in the upcoming Russian elections. “We are here to liberate you from poverty and fear, to rid you of the dictatorship imposed by a terrorist organization that seized power,” reads the statement from the Legion.
The same day, the volunteers reported crossing the Ukrainian-Russian border into the Belgorod and Kursk regions and claimed to have taken over the village of Tyotkino. Additionally, former State Duma deputy Ilya Ponomaryev posted that the border settlement of Lozovaya Rudka in the Belgorod region has also been taken over by the volunteers.
The following day, the military volunteers announced strikes on Russian military positions in Belgorod and Kursk and called on civilians to evacuate. The videos of Russians fleeing the Belgorod region emerged online on March 14 following the volunteers’ announcement. Additionally, on Thursday, Governor of the Belgorod oblast Vyacheslav Gladkov commented that Russian air defense shot down eight air targets over Belgorod and the Belgorod district. Russian military bloggers have also reported fighting in the village of Spodaryushino in the Grayvoronsky district of the Belgorod region.
A representative of Ukrainian military intelligence, Andriy Yusov, commented that the Russian volunteers who breached the Russian border are acting autonomously. “The events in the Kursk and Belgorod regions are a continuation of internal conflicts on the territory of the so-called Russian Federation, which are actively unfolding after the full-scale invasion and criminal war of Putin and Russia against Ukraine. These are not the first such cases, but this time they are probably the largest in terms of scale and consequences.” Yusov said.
— Lisa Noskova
New aid package for Ukraine
On Tuesday, the U.S. Department of Defense announced additional security assistance to Ukraine. The aid package is valued at around $300 million and is an attempt to address the country’s most pressing security and defense needs, including air defense, artillery, and anti-tank systems. In particular, the package includes stinger anti-aircraft missiles; ammunition for HIMARS; 155 mm artillery rounds (including High Explosive and Dual Purpose Improved Cluster Munitions rounds); 105 mm artillery rounds; AT-4 anti-armor systems; rounds of small arms ammunition; demolitions munitions for obstacle clearing; and spare parts, maintenance, and other ancillary equipment.
A statement made by the Pentagon, however, says that this aid package provides only a short-term solution and “is nowhere near enough to meet Ukraine’s battlefield needs.” The additional security assistance comes amid gridlock within U.S. Congress; House Speaker Mike Johnson has consistently declined to put a $60 billion supplemental aid package for Ukraine, Israel, and Taiwan to a vote. “Without supplemental funding, DoD will remain hard-pressed to meet Ukraine's capability requirements at a time when Russia is pressing its attacks against Ukrainian forces and cities,” the Pentagon’s statement reads.
Representatives that support the $60 billion aid package began gathering signatures for competing discharge petitions on Tuesday. If lawmakers gather 218 signatures, they will be able to move the legislation out of committees and force it to a House floor vote without the Speaker's support. The initiative is led by Rep. Jim McGovern (MA), and he has received nearly 180 signatures as of Wednesday evening.
— 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 and the economy
Further details of the tax hike planned for after the presidential election were released this week by the investigative outlet Important Stories. According to the report, the government will raise the personal income tax rate for income over 5 million rubles a year from 15% to 20%, while also keeping the 15% rate for incomes between 1 and 5 million rubles. The corporate income tax rate will be raised from 20% to 25%. The government expects an extra income of 2.5 trillion rubles ($27.3 billion) a year from the changes, which is around 5% of the country’s so-called consolidated budget (including federal and lower-level budgets). It is unclear how exactly this extra income will be distributed between various levels of budgets, however. It seems likely that the government will primarily try to finance the federal deficit from it, which has been growing due to war-related expenditures. While the tax hikes will not affect most Russians (the average yearly salary for 2023 was under 900,000 rubles), it will affect a significant part of educated professionals living in major cities and will also likely further reduce profit margins for employers. At the same time, following a year of erratic tax and customs policy decisions aimed at capturing extra profits wherever they appear, employers may welcome stability in the taxation system, even if it means higher rates.
Vladimir Putin removed Danone from the list of western assets controlled by the state agency Rosimushchestvo after the Financial Times reported that the company is planning to sell its Russian business to Vamin Tatarstan, a company owned by an associate of Chechnya’s head, Ramzan Kadyrov. Kadyrov’s nephew, Yakub Zakriev, has controlled the operations of Danone’s Russian assets since the authorities took them under state control last year. Following the seizure, Danone chose to negotiate and also wrote off a significant part of its assets. Another French company, the train manufacturer Alstom, also finished parting with its Russian assets this week. Alstom reported selling its 20% share in the sanctioned Transmashholding to its Russian owners for $75 million, also incurring heavy losses. For a detailed overview of the winners of Russia nationalizing former Western assets, see The Bell’s new project.
— Andras Toth-Czifra