RUSSIAN FEDERATION SITREP 26 SEPTEMBER 2019 by Patrick Armstrong

RUSSIA INC. Another must-read report from Awara on the Russian economy. Bottom line: "In a global recession, no country is safe, but Russia looks to have quite a lot going for it in terms of economic advantages... by far the lowest debt of all major countries. All economic actors... are economically solid and minimally leveraged... government virtually debtless, but it has again replenished its spectacular forex and sovereign wealth fund reserves... hefty budget surplus... Russia runs the world’s third biggest trade surplus...We also need to point out that Russia has an enormous strength by way of being the world’s most self-sufficient major country. Russia has the by far lowest level of imports relative to GDP of all countries." Discussion of the true state of the Russian economy is hindered by two errors: while oil and gas are two-thirds of its exports, they're only 10% of the total economy (and getting smaller). Secondly, measuring Russia's GDP in USD is useless – Russia, is a full-service economy. Further discussion by Hellevig here: "while Russia does not export a great deal of manufactured goods, it produces by far a bigger share of those for the domestic market than any other country... The Western world is in turmoil: the previous overwhelming geopolitical domination is gone and over with; military solutions against the main adversaries – China and Russia – are off the books; hybrid wars against them have failed; China and Russia are economically stronger than ever, too strong for the adversary..."

RUSSIAN ARMED FORCES. Good interview with Minister of Defence Shoygu on how they started all over again to build them up. (Russian only but use a machine translator).

ELECTIONS. The bottom line in Moscow: low turnout, pedestal party retained majority but lost somewhat. Karlin thinks Navalniy's strategy made have made a bit of a difference (in a 22% turnout, mind you.) Otherwise the pedestal party pretty well kept control. Not much of anything, really. Russian politics remain dull, uninspired and stagnant which either means that people are generally satisfied or that they've given up. Turnouts are now getting as low as they are in the West.

CORRUPTION. A very senior policeman was arrested in a sting and charged with extortion yesterday.

WITH A THIN SMILE Putin offers hypersonic weapons to the USA and SAMs to Saudi Arabia.

BROWDER. Magnitskiy's family (remember him? Browder's honest lawyer murdered in jail by corrupt cops?) brought a case against Russia in the European Court of Human Rights. It was thrown out: read it here "This judgement utterly explodes the accepted narrative, and does it very succinctly". Bet your local news outfit never tells you that the entire base of the "Magnitskiy" case has been punctured by a Western court. Not the first time that a pillar of the anti-Russia mindset has been exploded in a real court. Here's another ruling by the same court. Good betting assumption for analysts: Moscow tells the truth much more often than Western governments or media do.

SMOLENKOV. I doubt it: Johnson's take smells right to me.

THE COST OF GETTING RUSSIA WRONG. We've just learned that Putin phoned Bush two days before 911 warning him that something big was coming out of Afghanistan. Other Russian warnings were ignored; one reason being Condoleezza Rice's belief that it was "Russian bitterness toward Pakistan for supporting the Afghan mujahideen". She was supposed to be a "Russia expert" too! A flat learning curve: error piled on conceit piled on complacency.

G7. Trump and Macron have hinted at Russia's being invited into the G7/8. Putin said he's ready to host so long as China and India attend too. A polite way of saying 1) no thanks 2) G7 is not very important.

UKRAINE. Some interesting stirrings. An investigation against Parubiy over his involvement in the Odessa massacre has been opened. Several investigations of Poroshenko. At least a re-look into the Maidan shootings. The prisoner exchange was a good sign although the western media didn't notice that most of the 70 people exchanged were, in the eyes of Kiev, Ukrainian citizens. This is important because in a real war you capture citizens of the other side, in a civil war you capture your own citizens and call them traitors. Ergo, it's a civil war, but the West pretends it is not.

PAINTED CORNER. Iran and/or its allies have just given Washington a lesson on what "maximum pressure" really looks like and there's a story that Trump is looking at a French plan that allows Washington to get out and pretend victory. Bolton's absence may make this possible.

TRUMP-ZELENSKY PHONE CALL. The Democrat Party has found a new rake to step on.

MACRON SPEECH. Certainly saying unsayable things. We'll see whether it's just a speech though.

© Patrick Armstrong Analysis, Canada Russia Observer

Comments

[Christian J Chuba]

I felt bad for Zelensky after they made the call public, he was obviously trying to fill his beggar's bowl, 'please give us Javelin missiles'. I get that he doesn't have a lot of options.

It got me thinking. This is ONE random conversation made public. Can you imagine the begging, pleading, and possibly even crying that has been done over the years in order to curry favor with our Presidents over the years? It must be quite the spectacle. This could be at least a contributing factor as to why we hate Iran so much, those people are just too proud, bow down already; end your defiance.

[Patrick Armstrong]

Good point. And why everybody else hates the USA so much.

[Lyttennburgh]

>TRUMP-ZELENSKY PHONE CALL.

...got me some "Vovan&Lexus" wibes, when they pranked Poroshenko into thinking that he's talking to some US/Western top honchose, and every second word by him was "Дякую/Thank you", which earned him a nickname "Count Dyakula". Well, it turns out that (Va)Zelensky so far is just Poroshenko 2.0. I mean, bringing a bullet before the UN's (3/4 empty) General Assmebly and telling a tearful story about "operat singer", that died in the ATO, while accussing Russia of waging a war - that's pathetic.

Ukrainian word of the week - "пластувание".

[Patrick Armstrong]

Poor old Z. Porky & Co were 150% for Hillary then, when that thundered in, tried to suck up to Trump who wasn't listening and doesn't care. Z doesn't know what to do. So cut him some slack.

[Lyttennburgh]

>Z doesn't know what to do.

He declared for Trump - at the expense of the EU (see his less than polite comments regarding Macron and Mercel in the transcript).

Now, the real question - will we see the "transcript rap battle of the century"? Because what if someone do reveal the transcript of a phone call between Biden and then UkrPM Yatsenyuk.

[Peter AU 1]

A very basic summary of the call was placed on president of Ukraine website on the day of the call.
https://www.president.gov.ua/en/news/volodimir-zelenskij-proviv-telefonnu-rozmovu-z-prezidentom-s-56617

From the Shoigu link .. " Today, the army is no longer the "sick man" of Russian society and not the subject of scathing ridicule of foreigners. Today the Russian army has regained respect on the part of friends, and potential and real enemies."

Shoigu goes on to list the achievements that regained respect. Weapons and weapons systems, lifting of moral and better training, and their combat achievements.
For me, I think their performance in Syria was the greatest contributor to regaining respect.

Trump also believed he had to rebuild the US military and US nuclear forces to regain the respect of the world. I have found a number of interviews from the election campaign period in which he states this. This is one.
https://www.nytimes.com/2016/03/27/us/politics/donald-trump-transcript.html?smid=tw-nytpolitics&smtyp=cur

Trump in his recent UN speech stated how he had rebuilt the US military and nuclear forces and US military was by far the most powerful military in the world.
The respect still has to be earned though. iran does not seem to be showing much respect.
In several of the early interviews I read, Trump had the veiw if sufficient pressure is applied, a deal on his terms will be the result. There seems no understanding in Trump that for some people and some peoples, there are areas that cannot be negotiated under any circumstance.
In the Nuclear Posture Review, there is an implied threat against Iran as it is named as a non nuclear country against which nuclear weapons may be used.
Yet still Iran does not respect Trump's great military.

Putin has publicly stated that any use of nuclear weapons against an ally, will be considered a nuclear attack against Russia.
Nikolai Patrushev clarified this further and stated Iran was a US ally.

Trumps long term opposition to the nuke deal is because he genuinely believes Iran is attempting to acquire nuclear weapons with the intention of destroying Israel.

Iran's position is non negotiable, and Trump's position is non negotiable....

A section from the linked March 2016 Trump interview when asked about Syria. One of his consistencies.
"Well I can only tell you – I can’t tell you, because his strategy, it’s open and it would seem to be fighting ISIS but he’s fighting it in such a limited capacity. I’ve been saying, take the oil. I’ve been saying it for years. Take the oil. They still haven’t taken the oil. They still haven’t taken it. And they hardly hit the oil. They hardly make a dent in the oil.

[Peter AU 1]

Correction to my previous post - 'Nikolai Patrushev clarified this further and stated Iran was a Russian ally'.

[casey]

Loved the "rake" line, both apt and humorous at once, not an easy task.

[prawnik]

To be fair to Ze, even if he really wanted to end the war on Donbass, and even if was prepared to accept the departure of Donbass and Crimea, his American masters won't let him.

Remember Poroshenko ran for office in 2015 as a moderate, then immediately morphed into Bloody Petya as soon as he won.

[ISL]

PA,

I always appreciate your Russia updates.

In a recent commentary: https://www.zerohedge.com/geopolitical/whats-right-about-frances-overtures-toward-russia

it was stated "And Russia, with an aging, shrinking population and ..."

A quick check reveals that currently, Russian population is growing (slightly) and has been for five or so years. Still, the US Census predicts a ~20% decline by 2050.

Aside from issues that in an age of robotics, a shrinking population of unemployable citizens could be a positive for stability and geopolitics, the reversal of the decline in Russian population is quite significant, yet most articles I could find continue to frame the issue as as a crisis.

Would be curious as to any insights you have.

[Patrick Armstrong]

Complex subject. In brief birth decline started in the 60s, got really bad in immediate post-Sov period then stabilised and started to grow. Reverse for death rate. So shrinking at each end until a couple of decades ago when it started to increase at each end (dramatic drop in drinking for example). infant mortality much reduced) and a natural increase that seems now to have slowed. Big immigration from FUSSR.
But I steal most of my knowledge from Karlin
https://akarlin.com/2014/11/normalization-of-russias-demographics/

[ISL]

very informative article. The level of propaganda aimed at the American public by the various powers in the US is amazing and to some extent largely effective until reality asserts itself..

[Patrick Armstrong]

Just ran across this report https://www.awaragroup.com/blog/russian-life-expectancy-surges-to-74-years/
"In 2000, the difference in life expectancy between the two countries was 11.1 years or 14.5% in favor of the US. But by 2019, the difference had shrunk to only 4.8 years or 6.1%."