RUSSIAN FEDERATION SITREP 26 SEPTEMBER 2019

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

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