Putin’s Marathon Talk Show - “2024 Year in Review”
Four Hours and 26 Minutes of Talk | Economy & Sovereignty | Ukraine & Trump
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“Barbershop Whispers….Russia (BWR)” begins with “My Takeaways” on the main topic, followed by a discussion on the main topic. The last two BWR sections are “Follow-ups” on previous publications and “Quick Bites” on emerging events.
In last week’s BWR, I discussed the fall of Syrian President Bashir al-Assad’s impact on Russia’s global influence. Russia’s only Middle-Eastern client State, is no longer in the Kremlin’s orbit of influence.
In this week’s BWR, I discuss Putin’s marathon citizens call-in/press conference talk show. It was four hours and 26 minutes of questions and answers from citizens and the press.
Takeaways
DISCONNECT—Putin is disconnected from the economic reality of the average Russian. While the economy will not collapse tomorrow, it is fragile, and citizens are taking notice.
UKRAINE—Putin is obsessed with Ukraine and considers it an existential threat to Russia. He may very well believe this to be true, but he is certain that the loss of Ukraine is an existential threat to him and his power.
Putin’s Marathon Talk Show - “2024 Year in Review”
FOUR HOURS AND 26 MINUTES OF TALK | ECONOMY & SOVEREIGNTY | UKRAINE & TRUMP
Russian President Vladimir Putin held his third annual marathon citizens call-in/press conference show last week, challenging Cuban President Fidel Castro’s legendary record for speeches—Castro’s 7 hrs:10 mins to the III Communist Party Congress in 1986 vs Putin’s 4 hrs: 26 mins.
Granted, Putin’s event, featuring highly curated questions from fawning citizens across the motherland, is not the same as Fidel’s entertaining, nonstop, venom-laced anti-American speeches. However, the fawning over the great leader’s patriotism—saving the country from becoming a Western vassal and preserving its sovereignty—is the same.
The four-hour, 26-minute Q&A session (Video and Transcript) was broadcast over eleven time zones on state television. The questions ranged from the “special military operation” to the increasingly higher cost of food to government family subsidies in the face of the demographic crisis.
Economy & Sovereignty
Channel One Dmitry Kulko and VGTRK presenter Alexandra Suvorova moderated the event. Kulko opened by highlighting the work of thousands of volunteers who sorted more than 2 million written and call-in questions using Sberbank’s sophisticated AI Gigachat platform. As Kulko said, the AI platform allowed them to efficiently identify the most pressing topics and ensure all citizens’ questions were answered.
The event was designed to highlight Russian sovereignty and Putin’s paternal leadership from beginning to end, including AI. One should note, in September 2017, Putin stated,
“Artificial intelligence is the future, not only for Russia, but for all humankind […] it comes with colossal opportunities, but also threats that are difficult to predict. Whoever becomes the leader in this sphere will become the ruler of the world.”
Suvorova began the show with the first question to Putin,
“…everyone has been feeling… the world is going crazy… because the potential for conflict is off the charts…the global economy is struggling. How does Russia manage not only to stay afloat, but also to continue growing in this situation?’
To which Putin responded,
"…when all is calm…we get bored. This amounts to stagnation, so we crave action. When action begins, time starts whistling by – or bullets do, for that matter. Unfortunately, bullets are what is zipping past our heads these days. We are scared, yes – but not “all get out” kind of scared. "
Putin’s response suggested that his war on Ukraine was launched out of boredom. This is unlikely to be the case or the intended message. It is likely a poor attempt to convey confidence and control over the current chaotic global environment. Putin followed his response with boasts about Russia’s economic performance despite the chaotic global environment compared to the underperforming EU economies, particularly Germany. While he acknowledged the 9.3% high inflation, he attributed it to a sign of economic success because Russian citizens are now more prosperous, buying more goods, which is driving inflation. He chose to ignore the unsustainable Keynesian wartime foundation of the economy and government spending as the primary source of inflation.
Later, Survorova pressed Putin on the relationship between Russia’s strong economy and sovereignty. He attributed Russia’s strengthening economy and sovereignty to Russian entrepreneurs who filled the vacuum left by Western companies exiting Russia,
“Our entrepreneurs have started producing these goods domestically, necessitating further research and the engagement of institutions, including those focused on development. All of this – what we are discussing – is the enhancement of technological sovereignty.”
Sovereignty manifests itself in various forms: defense, technology, science, education, and culture. This is of paramount importance, especially for our nation, because should we lose sovereignty, we risk losing statehood. That is the crux. Economic growth is also an effect of bolstered sovereignty.”
Yes, the redistribution of Western assets through the Presidential Commission on Control of Foreign Investments created numerous newly minted oligarchs, or entrepreneurs, who received assets at a fraction of their actual value and whose primary contribution to the economy was fidelity to Putin.
Russia’s sovereignty is also increasingly in China's hands. China is Russia’s second-biggest oil export market and a primary source of microchips and machine tools for the Russian industrial complex. As the Kremlin continues its costly economic de-dollarization, the Chinese Renminbi (RMB) is Russia’s largest non-USD cross-border settlement currency.
Ukraine & Trump
In classic Soviet maximalist fashion, Putin reiterated his terms for peace, beginning with the surrender of the Donetsk, Luhansk, Zaporizhzhia, and Kherson regions, which Russia illegally annexed in 2023. However, Moscow does not fully control these regions.
He said he is ready to hold talks with Ukraine “without preconditions,” but he also referred to Ukrainian President Volodymyr Zelensky as an “illegitimate” representative of Ukraine. He went on to say that Russia could only sign a peace agreement with “those who are legitimate” to sign on behalf of Ukraine.
He expressed satisfaction with the Russian armed forces’ progress in “liberating” more Ukrainian lands. Still, he did not elaborate on the enormous cost of treasure and blood—750,000 Russian casualties—exacted from Russia to execute these occupations.
NBC American journalist Keir Simmons asked Putin,
Mr. President, you have failed to reach the objectives of your special military operation. Large numbers of Russians have died, including a Russian general assassinated here in Moscow this week. And the leader of Syria, who you supported, has been overthrown. Mr President, when you face President-elect Trump, you will be the weaker leader. How do you propose to compromise? What are you going to offer?
In response, Putin expressed readiness to meet with Trump "any time" to discuss the Ukraine situation, though he claimed they had not spoken in over four years. He also argued that Russia is now in a stronger position than it was three years ago. He stated,
“Esteemed Mr Simmons […] you and the people who pay your salary in the United States really want to see Russia in a weakened state. I believe that Russia has become significantly stronger in the past two or three years […] because we are becoming a truly sovereign country, and we barely depend on anybody. We are capable of firmly standing on our feet when it comes to the economy […] we are strengthening our defense capability. The combat readiness of the Russian Armed Forces is the highest in the world […]
The same is true of our defense industry […] we are increasing the production of everything our army and navy need now and will need in the future. We are doing so confidently and quickly, unlike our opponents.
While Putin expressed openness to discussing a peaceful settlement regarding his unprovoked war on Ukraine, in and outside of this marathon call-in/press conference event, he has shown no interest in compromising his demand that Ukraine surrender its territories and neutralize its armed forces.
Conclusion
After three years of war, Putin continues telling Russian citizens to stay calm and don’t worry. This while inflation eats into their lunch and dinner, their sons and daughters return in body bags, and social infrastructure failures.
Putin has mortgaged Russia’s future treasure and blood and continues to tell the citizens that Russia is winning the war and has secured its sovereignty from Western powers. He is unmoved by the 750K war casualties, a fragile economy on the cusp of stagflation, and eroding global influence.
Additional Reading(s)
Results of the Year with Vladimir Putin-Transcript (Office of the President of the Russian Federation, 19 December 2024)
Putin says Russia is ready to compromise with Trump on Ukraine war (Euractiv, 20 Dec 2024)
RUSXIT—Russia’s Exit from the Global Economy (Barbershop Whispers…Russia, 15 Sep 2024)
The Stagflation Ghost Haunts the Kremlin (Barbershop Whispers…Russia, 1 Dec 2024)
The Central Bank of Russia’s Crystal Ball (Barbershop Whispers…Russia, 2 Sep 2024)
Follow-ups & Quick Bites
Follow-ups
Gazprom Shares Dropped to a 16-year Low
Gazprom’s shares dropped to 106.1 RUB ($1.02) this week, the lowest in 16 years, as news reports that Ukraine will not renew the “Transit Agreement” between Russian state-owned Gazprom and the Ukrainian state-owned Naftogaz. The Transit Agreement expires on 1 January 2025. The agreement covers Russian gas deliveries through the Ukrainian-owned Urengoy–Pomary–Uzhhorod pipeline that connects Russia with Europe.
Gazprom posted a 2023 loss of $6.9B due to its voluntary exit from the European gas market after Putin’s second invasion of Ukraine. Since then, revenues have plummeted, and dividend payments to shareholders have been suspended.
Gazprom’s problems seem to be worsening, with the stalled Power of Siberia 2 project and rumors that Gazprom Neft, an oil production subsidiary and its only profitable business today, may be merged into a mega Russia oil production entity led by Rosneft.
Watch this space, as it will involve the ongoing informal Russia/Ukraine ceasefire negotiations and the redistribution of Russian energy assets inside and outside Russia. Nord Stream 2 AG will be put on the bankruptcy auction block in early 2025, Gazprom’s Siberian oil company is facing the threat of US sanctions, and Gazprom Germania GmbH, now SEFE, will be privatized by 2028.
Additional Reading(s)
Gazprom Shares Fall to 16-year Low (Yahoo Finance, 18 Dec 2024)
Serbian Oil Company May Face US Sanctions Over Russian Ownership
Naftna Industrija Srbije (NIS), a Serbian oil company majority-owned by Gazprom (RU), is facing US sanctions. If sanctioned by the US, the U.K. and the EU would likely follow with their sanctions. The US sanctions could go into effect as early as 1 January 2025, as reported by Reuters.
NIS has a colorful Russian history dating back to 2009 when the Serbian government sold 51% of it to Gazprom for $400 million. The shares were sold to Gazprom, conditioned upon follow-up investments of $500 million. The acquisition price was significantly less than its supposed market value at the time, and it is questionable whether the follow-up investments ever materialized.
Additional Readings:
US US Set to Sanction Serbia’s Main Oil Company Over Russian Ownership, Vučić Says (Politico, 14 Dec 2024)Additional Reading(s)
Quick Bites
Russian River Tankers Drop 3K Tonnes of Oil in the Kerch Strait
Two 50+-year-old Russian river oil tankers, the Volgoneft-212 and Volgoneft-239, were disabled by a storm in the Black Sea. One tanker broke in half, releasing more than 3K tonnes of oil products.
The tankers carried around 9K tonnes of mazut, a low-grade heavy fuel oil used in Soviet-era power plants.
Ukraine’s Environmental Ministry said the oil leak had been “significant” and threatened a “large-scale environmental disaster in the Black Sea,” which could have “catastrophic consequences for the marine ecosystem.” It accused Russia of failing to comply with maritime safety rules.
This accident speaks volumes about the decrepit state of Russia’s seaborne tanker fleet and the strain on resources caused by Putin’s war on Ukraine. One should ask, why are river tankers being used in the Black Sea?
Additional Reading(s)
Black Sea oil spill worsens as third Russian tanker sends distress call (Reuters, 18 Dec 2024)
Vol 2, No 61 - BWR 22.12.2024
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