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Andrei Movchan was one of the first post-Soviet bankers, but he eventually left this world behind. In London now, but still in financial management, he offers his insights and views on the effects of economic pressure on Russia and what potential it has to achieve. Movchan believes the oligarchs do not have the strength to make Russian President Vladimir Putin change his path and would be afraid to even try. This can be seen in Putin’s eyes, he says, as treason.
“Putin is a man who remembers such things. He values loyalty, hates his enemies and can take revenge for almost anything,” Movchan said. These are people who worked under his protection. “Imagine,” says Movchan, “even if they are outside Russia, they are ‘now coming and trying in his eyes to dictate terms and become ambassadors to the West.’ We know that Putin’s methods include killing opponents outside of Russia. These people may be afraid for their safety. “That said, the prodigal oligarch Roman Abramovich tried – in an opaque context – to work with diplomatic magic to seemingly insist on ending the war.
But the background and results of his efforts remain unclear, and the public raid itself was not without accusations of poisoning. And whatever poisoning has happened, in the end it has no serious effect.
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Movchan still believes the sanctions are a justified and logical step for the West, but fears nothing but an escalation by Putin. “He needs to increase the stakes even more in order to maintain his power. If he loses the war, and the chance still exists, he will have to drastically increase the stakes in order to maintain his position, “Movchan said grimly.
Konstantin Malofeev, Chairman of the Board of Directors of the Constantinople Media Group, speaks during an interview with Reuters in Moscow, Russia, September 16, 2021 (Reuters / Tatiana Makeeva)
Like many people, he predicts further witch hunts and repression at home. “I do not believe that the situation will change. I do not believe that the war will end soon. I do not believe that the regime will fall. The Russians are not ready to make changes with the regime,” he said. And he says the West, scared of a new Russia emerging, “scared, crazy Russia,” is not sure what to do next, but it will do everything it can to keep that Russia within its borders.
The effect of the sanctions has not yet been fully felt, according to Movchan and many others. But he says they will be. And the result will be different as supply chain problems become serious. He envisions problems such as “no fertilizers, no drones to monitor crops”, which would have a huge effect on the economy. And then there are cars – something that affects everyone. The Russians like imported cars and this practice is already largely frozen. “The problem with cars is already on the market,” says Movchan.
“I was recently informed that my old car, a five-year-old Lexus in Moscow, is at a higher market price than it was when I bought a new one. This means that the deficit is already there and people are still trying to buy cars and real estate because they still believe they can protect the value of their investment by buying the price of real estate. We will see what happens in half year, but so far this is only the beginning of the process. “
Russian President Vladimir Putin talks with Roscosmos space agency staff at a rocket assembly plant during a visit to the Vostochny spaceport near Tsiolkovsky, about 200 kilometers (125 miles) from Blagoveshchensk in the Far Amur region of Tsiolkovsky, Russia, Tuesday. April 12, 2022 On Tuesday, Russia celebrates the 61st anniversary of Gagarin’s pioneering mission on April 12, 1961, the first manned flight into orbit to usher in the space age. (Evgeniy Biyatov, Sputnik, Kremlin Pool Photo via AP)
I tell Movchan that although I know Moscow well, I am a stranger to large parts of the vast country and I ask him to paint a broader picture of the Russian economy. He says the capital represents ten percent of the country’s population, sixty percent of Russia’s imports, seventy percent of capital construction and eighty percent of its financial business. In St. Petersburg, much of the rest of the pie falls.
“The rest of Russia is almost nothing in terms of the economy. There are several cities that are now thriving on one technology or one business, such as Tyumen being a good oil producer or Krasnodar and Rostov producing grain, wheat, corn and whatever. But apart from that the cities are poor, the infrastructure is poor . It is still at the level of the 1980s, “Movchan said.
Cadets ride on an armored personnel carrier BTR-80 during open practical training, in which they practiced intelligence skills, responded to simulated accidents in hazardous facilities and provided camouflage services for make-up at strategic sites, the Joint Forces of the Moscow Regions troops № 282 Center for Troops radiological, chemical and biological defense of the Russian army in the village of Bolshoe Bunkovo. Gavriil Grigorov / TASS (Photo of Gavriil GrigorovTASS via Getty Images)
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The dream of many Russians is “for their child to become an officer in the Russian army, a tax inspector or a petty official in the regional administration. That’s what they think. That’s the scale of the aspirations, “he said. “And in general, if we talk about Russia, GDP per capita, you know, is now about $ 9,000 per capita a year. The share of GDP produced by small and medium-sized businesses is less than seventeen percent. So, in a sense, Russia is a large feudal country with a large amount of mineral resources and a very limited number of rich people. Forty percent of Russians are officially recognized as poor. About ten percent of the population has savings in banks, and now the situation will be more bad. “
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“All military planes, all tanks, all missiles that are a legacy of the Soviet Union, and old technologies are strictly followed from that time. Russia has completely lost its technological school and survives on the legacy of the Soviet Union,” Movchan said. Putin would like to be different, as he has shown a new range of military equipment in recent years, including hypersonic missiles. But according to Movchan’s argument, if Russia’s arsenal had been so much more advanced, Moscow would have achieved much more in its war against Ukraine.
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