Institute of Modern Russia

1. World Cup Show

With the 2018 World Cup in full swing as of June 14, experts weigh in on the significance of the championship for Russia.

• Evgenia Albats: Football is the sublimation of war. Even in corrupt regimes, team sports thrive, not least because nationalism is the driving force of football. Paradoxically, for a lot of people, the World Cup is like a utopia—a law-regulated world that cannot be. [New Times]
• Yevgeny Slyusarenko: Russia was awarded the 2018 World Cup in 2010—before Crimea, Donbass, MH17, Skripal and the Russian doping scandal. Russians should enjoy the carnival, which may be the last bright event in their country for a while. [Republic]
• Gennady Gudkov: State companies spent around 200 million rubles (more than $3 million) on VIP tickets to the World Cup. Russians and the national budget were robbed once again—it is high time that Russians understand that the state serves the bureaucratic nomenclature, not the people. [Ekho Moskvy]
• Vladimir Mozgovoy: The Russian national team will look the worst at the championship. For years, Russia has created only the facade of reforms—why should football be any different? [Novaya Gazeta]
• Darya Korzhova: A Goldman Sachs study found that Russia has only a 33.5 percent chance of passing the first stage of the tournament—it will play Saudi Arabia, Uruguay and Egypt, all of which have higher chances of moving forward.
• As the report reads, “Russian football may suffer from the same shortcomings as the economy: Dutch disease, the excessive role of the state, limited external integration and lack of competition.” [Vedomosti]
• Editor’s note: with Russia’s team scoring five unanswered goals in the opening match with Saudi Arabia on June 14, Goldman Sachs’ scenario should probably be revised. 

Dig deeper:

• Daria Baeva: FIFA isn’t only trying to protect the World Cup from counterfeit tickets—it’s also fighting for its trademarks.
• In December 2017, more than 1,500 products at the seven Auchan supermarkets in Moscow were seized by the Russian police for the illegal use of foreign trade marks. The company was fined 100,000 rubles, but signed an agreement with the International Football Federation in May 2018 to retail licensed products.
• Other brands have been penalized for using the FIFA logo as well. After producing smartphone cases with the words “Football Moscow ‘18” in Russian, one company found out that FIFA had copyrighted the string of words. [MBK Media]

2. How New Is the Presidential Administration?

Putin appointed a new presidential administration on June 13 after approximately a month into his new term. Officials have retained most key posts, but some new faces—former FSB officers—have joined the team. Other long-awaited personnel and structural changes, including in the judiciary, are likely postponed, at least until the end of the World Cup.

The breakdown:

• Most advisors to the president remain in place, including Sergei Glazyev and Vladimir Tolstoy. Anton Vaino remains head of the administration, as do his first deputies, Sergei Kiriyenko and Alexei Gromov. Dmitry Peskov retains his roles as press secretary and the deputy head of the administration.
• Former FSB officers have also entered the Kremlin: Anatoly Seryshev succeeded Yevgeny Shkolov as the new assistant to the president, and Dmitry Shalkov is the new head of the control department.
• Putin’s advisor on the Internet German Klimenko was dismissed after a two-and-a-half year stint. The removal was likely related to Klimenko’s reaction to the Telegram ban in April 2018, when he advised users to switch to the messaging app ICQ. [Ekho Moskvy]

The FSB nuance:

• Experts are calling the new administration the same, with the added bonus of FSB figures. Shalkov has worked for the special services since 1993 and Seryshev has been involved with the KGB and FSB for almost the entirety of his career—until 2016, he headed the FSB department in Karelia, and until recently, he served as deputy head of the Federal Customs Service.
• Seryshev will allegedly oversee personnel policy in place of now-dismissed Shkolov—the most resonant change in the administration. Shkolov was seen as one of the main security forces in Russia, known as the “shadow minister of the interior.” [New Times] 

What it means:

• Alexander Pozhalov, Institute for Social, Economic and Political Studies: Changes in the composition of the presidential administration have become insignificant—these updates are more cosmetic than anything else as Putin continues to refine his team.
• The absence of major personnel shifts is partially explained by Putin’s successful performance in the elections. Conservatism is also a symptom of the high level of uncertainty emanating from Washington, both in regard to the recent G7 meeting and North Korea. [RBC]
• Alexei Mukhin, political technologist:The lack of major change in the administrative staff indicates Putin’s confidence in his own inner circle, whose members have been rewarded for their last six years of work. Of note is the growing involvement of the special services and the anti-corruption agenda, seen in particular with Shalkov. [REN TV]
• Vladimir Slatinov, Institute for Humanitarian and Political Studies: The activities of the administration are less public than the government’s, so making adjustments that signal movement toward the economic and social “breakthrough” discussed in Putin’s May Decree isn’t necessary. [RIA Novosti]

3. A Mini-Round of Sanctions

The U.S. Treasury imposed new sanctions on five more Russian IT companies which it believes are connected to the FSB: Digital Security, Dayvtekhnoservis, the Quantum (Federal State Unitary Enterprise Scientific Research Institute), Embedi and ERPScan—their managers are also included on the sanctions list of individuals. The Russian Foreign Ministry shot back, stating that Moscow would not change its independent course in the international sphere in face of more sanctions.

• U.S. Treasury Secretary Steven Mnuchin stated that the sanctions are related to the companies’ links to Russian hackers and threats to underwater communications between the U.S.and Europe.
• The companies operate in the fields of information security, diving, rescue and underwater equipment and tools, and electronic computers, respectively.
• Digital Security has provided the FSB with technological support and Dayvtekhnoservis has given underwater equipment to government services.
• The companies Embedi and ERPScan, which are registered outside of Russia, were included on the sanctions list for their connection to Digital Security. [RBC]
• The sanctions embittered the Russian Foreign Ministry, as the last two extensions of the anti-Russian sanctions have fallen on the eve of the country’s main national holidays: Victory Day (May 8) and Russia Day (June 12). [RIA Novosti]

Assessment from Russia:

• Igor Kovalev, Higher School of Economics: For the Americans, sanctions are a habitual tool, but they rarely lead to the desired result—just look at Cuba, North Korea, and now Russia. [RIA Novosti]

Other stories that mattered this week (in Russian):

• “Why the government decided to increase retirement age”: RBC journalists analyze the positive and negative effects of this measure. [RBC]
• “How Russia can diversify its exports”: Economist Natalia Volchkova outlines an alternative that is not commodities-based. [Vedomosti]
• “How the landfill crisis emerged and can it be resolved? An economist’s explanation”: Nikolai Kulbaka digs deep into Russia’s history and practice of waste utilization and the reasons why it never adopted Western standards. [Republic]