On Life In Russia, Right Now
Perceptions in Russia are of course different than those pushed in the West. But that doesn’t make them any less valid.
I have arrived back in St. Petersburg for the first time in two-and-a-half years. I have an apartment here and have had since 2015; this is a city I know well. I’m back to fulfill two main missions; attend the annual St. Petersburg International Economic Forum, (SPIEF) and assist with the support for one of our Russian staff, who is usually based in Shanghai but due to covid has been here for the past thirty months. I am discussing with her the opportunity to relocate to our new Dubai offices and talk her through that as there is little chance she can return to China anytime soon.
Concerning SPIEF, tickets were booked last year, when the geopolitical situation was very different. Russia’s view on global trade, especially as it impacts Asia is a key pillar of our understanding of Asian regional dynamics, which is why I attend this event. This year however, everything has changed.
The Russian Ambience 2022
This is the time of the White Nights, long summer evenings with people relaxing at the most beautiful time of the year. This year it is tinged with sadness, everyone knows the situation. The streets though are just as busy as always except that there are no foreign tourists – in St. Petersburg it is normally saturated with vacating Finns, Swedes, and other Europeans. These days it seems I am the only European in the entire city, while the missing Europeans have been replaced by domestic tourists – Russia is a huge country. Many of them are Russian Asians, providing a domestic exoticism.
Locals, and the out of towners, already used to no European arrivals because of Covid, turn when they hear my heavily English-accented Russian. I stand out though my voice and mangled verbs. Yet people have been friendly, apart from the bar drunk, who assuming I was English, yelled at me ‘You should be deported!’. Shushed by the bar staff and other locals, he ambled off, shamed by his own outburst. Other than this one incident, the city is generally happy, albeit more laid back than usual. No-one really discusses Ukraine. St. Petersburg is though safe to walk, and (as long as the West doesn’t give Ukraine long-range Howitzers) I do. It is light all evening.
Russian artists and sportsmen and women have been thrown out of international performances. I attend the Mariinsky Opera, where Rimsky-Korsakov’s opera ‘May Night’ is being shown. It is based on a story by Nikolai Gogol, who was born in Ukraine. The story is set in Ukraine, features Ukrainian folk songs and the players all dressed in Ukrainian traditional clothes. Ukraine has not been cancelled by the Russian public or artists. There are standing ovations.
There are none. Supermarkets are full.
Some high value consumer goods have evolved though over the years. In 2014, when Russia annexed Crimea, there were cheese shortages, with the available Russian cheese being pretty dreadful. Those European cheese manufacturers dependent on the Russian market moved to Russia instead, and set up JV’s. Now all manner of European style cheeses, but now made in Russia can be found here at almost identical quality (although they still need to improve the local Parmigiano). It is a similar story with wine, where Russia’s long Black Sea coast produces excellent wines. I do not lack for anything, and neither does anybody else.
Industrially, there have been Western media stories about problems in obtaining spare parts for machines and autos. I ask my car-owning friends, including those with expensive European vehicles like BMW, whether this is true, they say there is no problem sourcing components. It’s just that they don’t buy them from BMW direct, they source them from online manufacturers elsewhere. China is mentioned a lot, which makes sense. Given that most EU auto brands are made up of Chinese components, BMW and similar auto brands have long been reduced to basic assembly lines with a nice badge.
Aviation is mentioned again in the West as a key critical industry where a lack of parts from Boeing and Airbus will ‘cripple’ Russian aircraft airworthiness, however a good delve into the global aviation components industry show it has diversified – with India emerging as a major player. Russia is developing commercial aircraft with Chinese and Indian aviation manufacturers. I am sure that some cannibalization of old aircraft parts is going on but that happens elsewhere too.
Russia of course is energy rich and the world’s largest producer of grains. It also has key trade agreements throughout Central Asia and beyond in terms of supplies of vegetables, fruits, and other consumables. There will be no problem seeing out the Russian winter this year. But it may not be the same story in Europe.
Paying For Things
It’s a hassle right now for foreigners as most Russian banks are sanctioned and Credit/Debit card issuers such as Mastercard, Visa and American Express have all exited the market. UnionPay works, but only on cards issued in China. There is a solution, although it requires travelling getting to Russia to get it. Russia’s Tinkoff Bank is the world’s first digital only bank – everything is done online. With no branches, their representatives come to see you, which is much better service. Unsanctioned, I can transfer foreign currency to this card at zero commission and withdraw rubles at the daily rate. The payment system is Russia’s own MIR as opposed to Visa or Mastercard. Now I can pay my bills with this card in Russia when all Western cards are blocked – I just tested it to buy a beer to celebrate my financial freedom from Western card tyranny in a nearby St. Petersburg pub.
Coming from South Asia, as I tend to do, it’s easy to access Russia. Heading to Moscow or St. Petersburg can be either direct or via Dubai or Istanbul. It’s Europe that is the problem. All air and rail passenger travel has been blocked between the EU and Russia, although it is possible to transit via road, although delays can be experienced at the border. In some EU countries, to obtain access from Russia, travelers can be asked to sign a statement condemning the Russian government or be denied entry. Signing such a document is a criminal offence for Russian nationals. (Russian immigration doesn’t make such demands).
Alternatively, the only way to access Russia from Europe is again via Istanbul or Dubai. That more than doubles the journey from say Frankfurt to Moscow, which is usually 1,262km and takes just under 3 hours. Now, the shortest available route is from Frankfurt to Istanbul and a connection to Moscow, covering a distance of 2,934km and a flying time of 5.5 hours. Clearly the EU politicians responsible for this absurdity forgot all about their COP26 promises when making these plans, which are purely designed to make life difficult and obstructive.
Some of the Western media hype, and particularly about President Putin has been borderline insane. Last week marked the 350th birthday of Peter the Great, the man who built St. Petersburg and turned Russia towards Europe for inspiration. Putin (who is from St. Petersburg himself) made comments concerning Peter’s activities including his claiming for Russia from Sweden the then marshlands of the far west of Russia. A brief war ensued, following which Peter then commenced building the city. Historical fact 350 years ago have now been turned into lurid headlines such as ‘Smirking Putin threatens Sweden‘. There are many similar incidents, showcasing the absurdity of how shrieking headlines have become part of a Western-Russian news war.
In Russia, Western media is generally available, although the BBC has been blocked. It is not reciprocated. In the West, numerous Russian news outlets have been banned. ‘Russia Today’ (RT) has been sanctioned and is generally unavailable in Europe. While RT is brash and irreverent and has a habit of poking fun at politicians (Example: “Hillary Clinton called us vulgar. Wait until you hear what we have to say about Hillary Clinton!”).
A sort of a cross between the Sun, National Enquirer and Private Eye, RT also features aside from the pointed remarks, newsworthy articles that are not covered in the English language media. Sputnik News is also blocked in the West, as are several other Russian news platforms. Which is why I have to laugh at Wikimedia’s defense at being fined by Russian courts this week for publishing violations, arguing that “people have a right to know the facts, and that removing information is a violation of human rights.” I guess it depends on whose version of the ‘facts’ one wishes to push.
The Ukraine situation is covered, of course, however there is no glorification of it, no gory images, no tallying of Ukrainian dead. In Russia, this would be too much. Ukrainians are considered close, and the conflict viewed with sadness. The Western coverage is almost all obtained from Ukrainian, not Russian sources, which might account for what appears to be victorious battles being won when in fact it seems to be Russia who has the upper hand. Both sides are engaged in misrepresentation. But everyone in Russia wants the process to stop. There is no taste for conflict other than a need to be secure from NATO and nuclear threats.
Russians On Europe
Most Russians feel let down, almost betrayed, again in contrast to Western media perspectives. On the other hand, they feel that if Russia is threatened – which is the prevailing view – then Putin had to act. It seems undisputed that Russia requested that Ukraine would give assurances that it would not join NATO, and that it would not host nuclear weapons. Neither of those conditions were met. Western media doesn’t mention this much, with President Biden saying Putin wants to recreate the Russian Empire. He doesn’t. He wants security.
Overall, the view from Russia is that the EU has sold itself to the United States.
The result is that it is going to be a long, long time, before Russians and Europeans are able to generate any trust and respect for each other. The Europeans have been programmed to be terrified, and the Russians feel victimized. That is a very difficult bridge to rebuild.
Russians On The United States
Political relations have dropped so low there has been talk of breaking off diplomatic relations completely. The average Russian blames the situation in Ukraine firmly on the United States, however. The attitude has changed from admiration to ambivalence and apathy. Partisan politics, the inability to stop the use of public weapons, the apparent desire to bend the world to US foreign policy needs, the corruption of the US dollar as a global currency and the crushing capitalism involved have all worn away any sense of American humanity. Even Biden complained about the US energy companies, stating that Exxon for example last year “Made more money than God“. Most ordinary Russians view that as shocking, and disgraceful. Most don’t care for the United States, have no feelings for it and never intend visiting. What was once revered has now become irreparably broken, an American dream has turned into a contemporary nightmare. Russia though is walking away, leaving it to Europe’s eagerness and exclusivity to be the next to experience American capitalism. Russia views the EU as welcome to it.
Russians On Ukraine
As mentioned, there is a feeling of sadness, although not much feeling for Ukrainian President Zelensky, who is viewed as a regional disaster for bringing his country to this point. The Russians know the Ukrainians well, perhaps better than the European Union. Meanwhile, it should be remembered, and again this is not covered by Western media, that a large proportion of Ukrainians do not approve of their Government either. A potential Russian annexation of Odessa for example has been described to me by a local Ukrainian as “It would be welcome, as long as not too much damage is inflicted. We can all see what Russia did for Crimea and we want the same. Now we have the mafia Government in Kiev stealing everything.” These attitudes, perhaps shocking for some, are however there – yet not being given voice. Perhaps it is too inconvenient.
It should be remembered that the annexation of Crimea took place in 2014 without a shot being fired and with zero casualties. The Crimean locals wanted to be returned to Russian rule. Moscow had even held a local referendum (declared illegal by Kiev) prior to taking the Crimean Peninsula. That is worth remembering in light of the Odessa comments made above.
The issue for Kiev to answer is the heavy-handedness in which it has treated ethnic Russians in Ukraine – about 20% of the total population, and mostly concentrated in the south (Odessa, Crimea) and east (Donbass, where much of the current fighting is).
Russian language was removed as an official language, children are unable to learn it in school, and Russian-owned businesses have been subjected to intimidation. Russian-friendly areas have paid their taxes, yet not received much back in terms of infrastructure development compared with other areas of the country. These policies have led to a fractured Ukraine – and were instigated by Kiev, not by Moscow. That discontent – and it has grown ever stronger – has ultimately resulted, together with perceived Ukrainian threats to join NATO and host nuclear weapons – in a Russian ‘special mission’ to stop the process.
However, this is not how it is being promoted in the West. The US however is a major arms supplier and will have made a fortune from selling weapons to Europe. Coincidence?
Russians know all this very well. It is beyond belief that the Europeans do not. But it remains one thing to do as you say, and another to be coerced to doing the opposite. With Zelensky in no mood to take any prisoners, and possibly being the shoutiest, most demanding, stubborn, and downright rude politician in the European region, it is going to be some time before he quietens down, if ever. The feeling in Russia is that the European Union almost certainly deserves him, while Russian consumers start to get used to the fact that Europe has departed, and that Asia is the place to be going for future vacations and business developments. It is sad, but Russia is still here. It is however embarking on a different journey to Europe, and possibly one with more potential and less intimidation.
Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at email@example.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.