Note this tweet from a Ukrainian journalist, one of several about two senior FSB men
An interesting leak from #Russia, but unconfirmed. A security analyst Andrei Soldatov says that the directors of the 5th department of FSB (responsible for #Ukraine) were arrested and put under home arrest. Reason: they misappropriated Kremlin funds to undermine #Kyiv. [Thread⬇️]
— Victor Kovalenko (@MrKovalenko) March 11, 2022
Several commentators are suggesting the FSB provided terrible intelligence on Ukraine because they were worried about angering the boss and therefore told Putin exactly what he wanted to hear -something Putin should have been aware of since he probably did the same in St Petersburg and Dresden when he was in the FSB. This is I think the perennial problem of cruel dictators isn't it?
Another tweet claims Russia has lost 31 Battalion Tactical Groups, either destroyed or degraded to the point that they can't fight. None of this can be confirmed but it does fit what we know. The Russian advance is making very slow progress and meeting furious resistance on all fronts. There is no 'liberating' going on.
However, away from the fighting we should keep an eye on the Russian economy which is being cratered by western sanctions. I noticed a couple of reports in The Moscow Times, an independent English-language online newspaper based in Moscow.
The first was about inflation. The ruble has collapsed. It was trading last night at 165 to the £, up from 95 in November last year. The MT reports:
"On an annual basis, inflation jumped to 9.2% in February, up from 8.7% a month earlier. Economists expect the pace of annual price rises will surpass 20% by the end of March.
"Imported goods such as cars, household appliances, televisions and smartphones have seen the largest price increases since the war started. Prices for new cars jumped by more than 15% in a week on average.
"Fears have also been raised over Russia’s reliance on imports for its crucial agricultural industry and even for basic household goods — 90% of potato seeds used in Russia are bought from overseas, for instance.
"Russia’s Central Bank has hiked interest rates to 20% in a bid to stabilize price rises, but analysts say further measures may be required as the economy braces for its worst downturn since the end of the Soviet Union."
If inflation does reach 20% by the end of the month it will be a phenomenal jump and will plunge the average Russian into even more poverty.
The next report is about how the Russian government is handling the invasion blow-back and it appears it is not responding well:
"While Russia’s Central Bank quickly sprung into firefighting mode — drastic interest rate hikes, closing the stock market, providing unlimited liquidity to banks and corralling exporters to sell their hard currency earnings — the Kremlin has offered little beyond rhetoric in terms of how it intends to fight an economic slump economists expect will comfortably exceed a 10% fall in GDP this year.
“So far there hasn’t been very much of a strong government position,” said Mario Bikarski, an analyst at the Economist Intelligence Unit. “There’s been no concrete or clearly set-out measures to respond to these sanctions.”
“Different members of the government, including Putin, have said that the situation will be managed and that Russia will survive. But what they’ve implemented so far are things like tax breaks, credit holidays, and some financial support to large businesses. This will not be sufficient at all.”
A 10% fall in GDP is a huge amount and the drop is expected to 'comfortably exceed' that!
I also think that once applied, sanctions which don't dramatically affect the west can be kept in place for as long as Putin is in power.. Europe is going cold turkey on its addiction to Russian gas and oil and this is a permanent impact that cannot easily be mitigated by The Kremlin.
More than 250 western companies, global brands like Boeing, Toyota Microsoft, McDonalds, Coca-Cola are pulling out or suspending operations. They are not likely to return until Russia has withdrawn from Ukraine, because of public outrage in the west.
The sanctions will probably have a greater impact on Putin's behaviour and on the Russian economy for years - probably decades and this is regardless of what happens in Ukraine. A Rubicon has been crossed.
Finally, is the ground being rolled for a big U-turn? Have a look at this tweet:
Just watched Russia’s main political talk show with notorious propagandist Soloviev (Mar 9). Couldn’t believe my ears. Two hardcore pro-Putin guests - Shaknazarov and Bagdasarov - acknowledged the impact of sanctions, military failures, and called for an end to the invasion.
— Maxim Alyukov (@MaximAlyukov) March 11, 2022
The show was pre-recorded so it was no accident. Are Putin's supporters in the state media preparing the Russian public for some sort of climbdown?
Who knows? But very interesting.
