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Andrei Movchan was one of the early post-Soviet bankers, but eventually left this world behind. In London now, but still in economic governance, he gives his insights and opinions on what effects the economic squeeze has on Russia and what it has the potential to achieve. Movchan believes that oligarchs do not have the power to get Russian President Vladimir Putin to change tracks, and they would be afraid to try at all. It could be seen in Putin’s eyes, he says, as treason.
“Putin is a person who remembers such things. He values loyalty, he hates his enemies, and he can seek revenge out of almost nothing,” Movchan says. These are people who worked under his protection. “Imagine, says Movchan, even though they are out of Russia,” they come now and try in his eyes to dictate the conditions and become the ambassadors of the West. We know that Putin’s methods include assassinating opponents outside Russia’s borders. These people may be afraid for their safety. “That said, the lost oligarch Roman Abramovich has tried his hand – in an opaque context – to work diplomatic magic, apparently pushing for an end to the war.
But the backstory and results of his efforts remain unclear, and the public intake itself was not without allegations of poisoning swirling around. And no matter what poisoning may have happened, there was ultimately no serious effect.
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Movchan still believes sanctions were a justified and logical step for the West to take, but he fears nothing but escalation on Putin’s part. “He has to increase the effort even more to maintain his power. If he loses the war and the chance of it still exists, he would have to increase the effort dramatically to maintain his position,” Movchan notes gloomily.
Like many, he predicts further witch-hunts and oppression 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 says. And he says that a West that is afraid of a new Russia that is emerging, “a scared, wrong Russia” is not sure how to act further, but will do its best to keep this Russia back to its borders.
The effects of sanctions have not yet been fully felt, according to Movchan and many others. But he says they will. And the outcome will vary as supply chain problems become severe. He predicts problems like “there is no fertilizer, there are no drones to monitor the crops,” which would have a huge contagious effect on the economy. And then there are cars – something that affects everyone. The Russians like imported cars, and that practice is now largely frozen. “The problem with the cars is already on the market,” says Movchan.
“I have recently been informed that my old car, which is a five-year-old Lexus back in Moscow, is being priced higher on the market than it was when I bought the new one. That means 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 real estate.We’ll see what happens in half a year, but so far is it’s just the beginning of the process. “
I tell Movchan that even though I know Moscow well, I am a stranger to large parts of the big country and ask him to paint the bigger picture of Russia’s economy. He says capital accounts for 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. St. Petersburg accounts for much of the rest of the remaining pie.
“The rest of Russia is almost nothing in terms of economy. There are a few cities that now thrive on one technology or one company that Tyumen is good at producing oil or Krasnodar and Rostov producing grain and wheat and corn and what “But apart from that, cities are poor, infrastructure is poor. It is still on a par with the eighties of the last century,” says Movchan.
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Many Russians’ dream is “for their child to become an officer in the Russian army or a tax inspector or a small clerk in the regional administration. That’s how they think. That’s the magnitude of the hopes,” he says. “And in general, if we talk about Russia, GDP per capita, you know, is now around $ 9000 per capita per year. The share of GDP produced by small and medium-sized enterprises is less than seventeen percent. So In a sense, Russia is a large feudal country with a large share 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 worse.”
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“All the military planes, all the tanks, all the missiles, all of which are legacy of the Soviet Union with the old technologies that were strictly followed from that time. Russia lost its technological school completely and survives on the legacy of the Soviet Union,” Movchan said. . Putin would beg to be different, having shown a new range of military equipment, including hypersonic missiles, in recent years. But with Movchan’s argument, if Russia’s arsenal were so much more advanced, Moscow would have achieved much more in its war against Ukraine.