Free Russia Foundation Launches #NoToWar Campaign

Growth unlikely in the weak Russian economy

Mar 07 2018

On Tuesday, March 6, the Atlantic Council, a Washington-based think-tank, organized a panel discussion on the state of the Russian economy. Panelists discussed sanctions, a perceived brain drain and the absence of meaningful reforms in President Putin’s recent annual address.

The experts speaking at Tuesday’s event included:

Dr. Sergey Aleksashenko, a Senior Fellow, Global Economy and Development, Brookings Institution and Free Russia Foundation expert

Dr. Anders Åslund, a Senior Fellow, Eurasia Center, Atlantic Council

Ms. Elizaveta Osetinskaya, Fellow, Investigative Reporting Program, Graduate School of Journalism, University of California, Berkeley; Founder, The Bell

The discussion began with an overview of the state of the Russian economy by Aleksashenko, who outlined the short and long-term factors that are predicted to limit economic growth to the 1.5-2 percent range over the coming six-year political horizon. The Russian Central Bank has successfully curbed inflation, but in order to do this, it has had to raise interest rates to very high levels, making credit very expensive for businesses and thus leading to weaker growth.

Meanwhile, the Ministry of Finance is seeking to rein in its budget deficit – despite very low national debt – while not raising taxes, as promised by Putin. This is expected to lead to spending cuts, lower investment, frozen wages and pensions, and lower living standards.

In the banking sector, a crisis among banks has prompted the state to take over, with nine out of Russia’s 10 biggest banks currently in state ownership. This means banks “will sooner rely on political motivations rather than economic”, said Aleksashenko .

In addition to these macroeconomic factors, Aleksashenko said stagnation is the result of a poor investment climate depicted by the poor protection of property rights, a lack of rule of law and the clampdown on free media. Thus, businesses are not inclined to invest and this is something that neither the Ministry of Finance nor the central bank can solve.

“This is a political agenda that is in the hands of the president”, said Aleksashenko, adding that supporting rule of law would lead to Putin’s party losing its majority in the parliament. “I don’t foresee him making any progress in the next six years,” he said.

Aleksashenko also mentioned sanctions and demographics as long-term factors of weak growth. The former could lead to a growing technology gap between Russia and the West and the latter – with a shrinking labor force and an increasing number of pensioners – will add pressure on the pension system and the budget, further reducing investment.

The war over living standards

Commenting on Putin’s recent annual address to the Russian parliament, Aslund of the Atlantic Council noted that the words – reforms, sanctions, and Ukraine – were all missing from the speech. “What Putin told us is that he is not going to do reforms whatsoever for his next six-year term”, said Aslund.

Aslund outlined a number of factors harming the Russian economy: Putin’s control of the state, the FSB and the court system, cronyism and the use of state corporations for “personal benefit”.

He pointed to the $26 billion fortune amassed by Gennady Timchenko, Arkady and Boris Rotenberg and Yuri Kovalchuk. Aslund estimated that $40-50 billion leaves Russia annually and Russian individuals keep between $800 billion and $1.3 trillion abroad.

“As long as Russia doesn’t have property rights, about 4-5% of GDP leaves the country each year”, said Aslund. And there is little incentive for Putin and the elites to ensure property rights in Russia if they have property rights abroad, he said, adding that large sums of money are being kept in luxury properties in Miami, New York, and London.

Meanwhile, Aslund said, war has become a distraction for citizens suffering from the declining living standards in Russia. “Russia cannot afford serious wars”, said Aslund, adding that in the era of hybrid wars, there is less need for direct military expenditures. The panelists agreed that if Putin had to choose between military spending and higher living standards, he would choose the first.

On the bright side, Osetinskaya of UC Berkeley said that the technology sector has developed rapidly and despite some negative trends, there is a growing number of entrepreneurs who open small and medium-sized businesses. However, there is also a large brain drain, with many educated people leaving Russia due to a lack of opportunities. “The government and the state don’t address their needs”, said Osetinskaya.

Another trend is that small and medium-sized businesses have sought investment opportunities abroad, whereas the oligarchs’ fortunes are flowing back into Russia due to the sanctions, said Osetinskaya.

by Valeria Jegisman

The experts speaking at Tuesday’s event included:

Dr. Sergey Aleksashenko, a Senior Fellow, Global Economy and Development, Brookings Institution and Free Russia Foundation expert

Dr. Anders Åslund, a Senior Fellow, Eurasia Center, Atlantic Council

Ms. Elizaveta Osetinskaya, Fellow, Investigative Reporting Program, Graduate School of Journalism, University of California, Berkeley; Founder, The Bell

The discussion began with an overview of the state of the Russian economy by Aleksashenko, who outlined the short and long-term factors that are predicted to limit economic growth to the 1.5-2 percent range over the coming six-year political horizon. The Russian Central Bank has successfully curbed inflation, but in order to do this, it has had to raise interest rates to very high levels, making credit very expensive for businesses and thus leading to weaker growth.

Meanwhile, the Ministry of Finance is seeking to rein in its budget deficit – despite very low national debt – while not raising taxes, as promised by Putin. This is expected to lead to spending cuts, lower investment, frozen wages and pensions, and lower living standards.

In the banking sector, a crisis among banks has prompted the state to take over, with nine out of Russia’s 10 biggest banks currently in state ownership. This means banks “will sooner rely on political motivations rather than economic”, said Aleksashenko .

In addition to these macroeconomic factors, Aleksashenko said stagnation is the result of a poor investment climate depicted by the poor protection of property rights, a lack of rule of law and the clampdown on free media. Thus, businesses are not inclined to invest and this is something that neither the Ministry of Finance nor the central bank can solve.

“This is a political agenda that is in the hands of the president”, said Aleksashenko, adding that supporting rule of law would lead to Putin’s party losing its majority in the parliament. “I don’t foresee him making any progress in the next six years,” he said.

Aleksashenko also mentioned sanctions and demographics as long-term factors of weak growth. The former could lead to a growing technology gap between Russia and the West and the latter – with a shrinking labor force and an increasing number of pensioners – will add pressure on the pension system and the budget, further reducing investment.

The war over living standards

Commenting on Putin’s recent annual address to the Russian parliament, Aslund of the Atlantic Council noted that the words – reforms, sanctions, and Ukraine – were all missing from the speech. “What Putin told us is that he is not going to do reforms whatsoever for his next six-year term”, said Aslund.

Aslund outlined a number of factors harming the Russian economy: Putin’s control of the state, the FSB and the court system, cronyism and the use of state corporations for “personal benefit”.

He pointed to the $26 billion fortune amassed by Gennady Timchenko, Arkady and Boris Rotenberg and Yuri Kovalchuk. Aslund estimated that $40-50 billion leaves Russia annually and Russian individuals keep between $800 billion and $1.3 trillion abroad.

“As long as Russia doesn’t have property rights, about 4-5% of GDP leaves the country each year”, said Aslund. And there is little incentive for Putin and the elites to ensure property rights in Russia if they have property rights abroad, he said, adding that large sums of money are being kept in luxury properties in Miami, New York, and London.

Meanwhile, Aslund said, war has become a distraction for citizens suffering from the declining living standards in Russia. “Russia cannot afford serious wars”, said Aslund, adding that in the era of hybrid wars, there is less need for direct military expenditures. The panelists agreed that if Putin had to choose between military spending and higher living standards, he would choose the first.

On the bright side, Osetinskaya of UC Berkeley said that the technology sector has developed rapidly and despite some negative trends, there is a growing number of entrepreneurs who open small and medium-sized businesses. However, there is also a large brain drain, with many educated people leaving Russia due to a lack of opportunities. “The government and the state don’t address their needs”, said Osetinskaya.

Another trend is that small and medium-sized businesses have sought investment opportunities abroad, whereas the oligarchs’ fortunes are flowing back into Russia due to the sanctions, said Osetinskaya.

by Valeria Jegisman

Free Russia Foundation Condemns the Signing of the Treaty on the “Incorporation of New Territories into Russia,” De Facto the Annexation of the Occupied Territories of Ukraine

Sep 30 2022

On Friday, September 30, 2022, Russian President Vladimir Putin and the heads of the self-proclaimed “Luhansk People’s Republic” and “Donetsk People’s Republic,” as well as the occupation administrations of Zaporizhia and Kherson regions, signed treaties in the Kremlin on “joining Russia.”

Free Russia Foundation strongly condemns the decision of Vladimir Putin and his administration to continue the illegal annexation of the occupied territories in Ukraine. The forcible change of international borders at the expense of another sovereign state and the so-called “referenda” that preceded it are a serious violation of the foundations of international law and cannot be recognized under any circumstances.

Natalia Arno, president of Free Russia Foundation: “Today Vladimir Putin has de facto announced the illegal annexation of the occupied territory of a sovereign state. The signing of this treaty is a blatant violation of the fundamental norms of international law and the Charter of the United Nations, of which Russia is a member. Such actions by the Russian President, together with previously announced military mobilization and nuclear blackmail, only lead to an escalation of the conflict and new human sacrifices. In the modern world, borders cannot be redrawn at gunpoint. Russia’s actions are illegal and unacceptable to the civilized world.”

Free Russia Foundation, which provides support to Russian activists, journalists, and human rights defenders, calls on all countries and international organizations to join us in resolute and public condemnation of Russian military aggression and its illegal actions to tear away the territory of sovereign Ukraine. We urge you to call on the Kremlin to cease its hostilities and leave the territories it has seized.

Free Russia Foundation Condemns the Kremlin’s Decision to Annex the Occupied Territories of Ukraine and Preparations for Mobilization in Russia

Sep 20 2022

On September 20, 2022, the occupation authorities of the self-proclaimed republics “LNR” and “DNR” and other occupied territories of Ukraine, Zaporozhye and Kherson regions, hastily announced that they would hold “referendums on joining Russia” in the near future. The authorities of the “LNR” and “DNR” added that the vote will take place as early as this week, from September 23 to 27, 2022.

On the same day, the Russian State Duma introduced the concepts of “mobilization,” “martial law” and “wartime” into the Russian Criminal Code. The deputies voted for the law in the third reading unanimously — all 389 of them. Now voluntary surrender, looting and unauthorized abandonment of a unit during combat operations will result in imprisonment.

From the first day of the war unleashed by Putin’s regime and its allies against independent Ukraine, Free Russia Foundation, which supports Russian activists, journalists, and human rights activists forced to leave the country because of direct security threats, has condemned the crimes of Putin’s regime against independent Ukraine. We respect the territorial integrity and sovereignty of states and consider human life and freedom to be of the highest value.

The forthcoming “referendums”, mobilization, and martial law are a collapse of the whole system of “Putin’s stability,” the illusion of which the Kremlin has been trying to maintain since the beginning of the full-scale war with Ukraine. Vladimir Putin is preparing to blatantly violate international law once again and launch an attack on democracy and freedom in Ukraine and Europe. Any statements by the Kremlin that residents of the occupied territories of Ukraine want to become part of Russia are false.

Three decades ago, the Ukrainian people proclaimed the independence of their state. Since 2014, the world has seen that Vladimir Putin has undermined Ukraine’s sovereignty and any attempts at anti-war protest in Russia through military force, repressive legislation, false statements, and massive state propaganda. Despite all the suffering inflicted on Ukraine, Putin has failed to achieve this goal: Ukrainians continue to show fortitude and determination to defend their country at any cost, and Russian anti-war resistance continues despite repression.

We consider any attempts to tear away Ukrainian territory through so-called “referendums” categorically unacceptable and call on state institutions and international human rights organizations to join the demand for an immediate end to the war and the liberation of the occupied territories. Any war brings suffering to humanity and endangers peace. We will not allow a totalitarian dictatorship to prevail and we will continue to fight for Ukraine’s independence and Russia’s democratic future.

Free Russia Foundation announces the appointment of Vladimir Milov as Vice President for International Advocacy

Sep 01 2022

September 1, 2022. Washington, DC. Free Russia Foundation announces the appointment of Russian politician, publicist, economist, and energy expert Vladimir Milov as FRF Vice President for International Advocacy.

In her announcement of Vladimir’s new role, Natalia Arno, President of Free Russia Foundation, remarked: “I am delighted to welcome this distinguished Russian civil society leader to our team. I am certain that Vladimir will become our force multiplier and make a profound contribution to FRF’s mission, including strengthening civil society in Russia, standing up for democracy defenders who oppose war, both inside and outside the country, building coalitions and mobilizing supporters. Vladimir Milov’s professional skills and extensive experience in human rights advocacy will help us come up with effective and innovative approaches to combat the authoritarian regime and repression that the current Russian government has unleashed against citizens of Russia, Ukraine, and Belarus.”

Vladimir Milov was born on June 18, 1972. From 1997—2002 he worked in government agencies, more than 4 years of which were in senior positions, from assistant to the Chairman of the Federal Energy Commission to the Deputy Minister of Energy of Russia.

Vladimir Milov has bravely and publicly called out the authorities for monopolizing the economy, and encroaching into public and political life of Russian citizens. Milov’s profile as an opposition leader rose thanks to his joint project with Boris Nemtsov. The report titled “Putin. Results,” condemned the activities of the Russian government during Putin’s presidency. In 2010, Mr. Milov headed the Democratic Choice movement, which later served as the basis for the creation of a political party with the same name.

In 2016, Mr. Milov became an associate of the unregistered presidential candidate Alexei Navalny. On May 11, 2017, he began hosting a weekly segment on the economy, “Where’s the Money?” on the NavalnyLIVE broadcast on YouTube.

In April of 2021, he left Russia for Lithuania amidst persecution of Alexei Navalny’s organizations. In February of 2022, he categorically condemned Russia’s invasion of Ukraine. On May 6, 2022, the Russian Ministry of Justice added Vladimir Milov to the list of media outlets considered as “foreign agents.” Vladimir Milov is a regular guest expert for the world’s leading media outlets — CNN, CNBC, The New York Times, The Financial Times, The Washington Post, The Economist, The Wall Street Journal.

Kara-Murza faces a new charge as the Kremlin cracks down on its opponents

Aug 04 2022

Russian pro-democracy politician Vladimir Kara-Murza, who’s been in jail since April for allegedly spreading “disinformation” about the Russian military, now also stands accused of “carrying out the activities of an undesirable organization,” which names Free Russia Foundation in the newly filed charge.

Free Russia Foundation, unconstitutionally designated as an “undesirable” organization by the Russian government in June 2019, did not organize an event on political prisoners in Moscow in 2021. FRF does not have any presence or programs inside Russia. Additionally, FRF has never conducted any work in the State of Arizona.

FRF strongly condemns the new charges brought against Vladimir Kara-Murza by Russian authorities and demands the dropping of all charges against him and calls for his immediate release.

“All actions of the Kremlin directed against Russian opposition politicians and activists have nothing in common with establishing the truth. They are instead aimed solely at getting rid of opponents of Putin’s regime,” FRF President Arno stated.

Free Russian Foundation and Boris Nemtsov Foundation launch “Russians for Change” fundraising campaign

Jul 25 2022

Russia is not Putin. We are Russia.

We aim at sharing this message with our friends around the world — therefore, in cooperation with Boris Nemtsov Foundation we are launching “Russians for Change” fundraising campaign.

We are going to be telling the stories of active pro-democracy anti-war Russians who have not lost their hope. US nationals also participate in this campaign: Francis Fukuyama, investigative journalist Casey Michel, and alumni of Boris Nemtsov Foundation media school.

Thank you for your donation:

The Boris Nemtsov Foundation for Freedom honors the political legacy of Boris Nemtsov, a Russian liberal opposition politician assassinated in Moscow in 2015. It promotes freedom of speech and education along with the vision that Russia is a part of Europe.