CORNERED

Moscow’s Plan to Beat Sanctions? ‘Russia First!’

The law Trump signed reluctantly in August targets ‘the most significant senior foreign political figures and oligarchs in the Russian Federation.’ It takes effect in February.

Russia's President Vladimir Putin talks to U.S. President Donald Trump during their bilateral meeting at the G20 summit in Hamburg, Germany July 7, 2017.    REUTERS/Carlos Barria - RC12A0EC47F0

Carlos Barria

MOSCOW—The talk of the town these days in Moscow is Russia’s coming trade war with Washington as a new wave of U.S. sanctions, rammed through Congress and down President Donald Trump’s throat in August, threaten in the next few months to hit the entire political and business elite that is loyal to President Vladimir Putin.

The various poles of power in the Kremlin are pulling and pushing Putin to make decisions, one contradicting the other. Both liberal and conservative factions of the Kremlin admit that Washington has Russia’s president cornered.

But some Russian VIPs still wake up hoping to make a deal with the Americans before the Russian presidential election campaign of 2018 is underway—to convince Washington that if the pressure of sanctions grows worse, a much scarier “enfant terrible” than Vladimir Putin will come to power in Russia.

They call themselves Ryvok (Рывок), which translates loosely as the Jumpstart Party. They do not discuss the issue of Russia’s conflict with Ukraine; neither do they talk about the scandal of interference in the U.S. presidential election last year—the real reasons behind America’s punishment of Russia.

Instead, they urge President Putin to announce right now, this month, a radical challenge for the Russian elite. “Putin and about 400 Russian VIPs, including the head of Rosneft, Igor Sechin, have seen our Jumpstart program,” one of the authors, Yuriy Krupnov, told The Daily Beast. “Putin gave us the green light to popularize the program.”

In brief, it’s a manifesto and an ultimatum: either you bring all your offshore money back home and invest in developing the economy or you will have to go.

The group’s estimate of cash kept abroad by Russian companies is around $1 trillion.

“There are several ways to inspire the sanctioned businesses to invest in Jumpstart: either they could be put in jail, or they could just disappear from the scene,” one of the program’s authors, Yuriy Gromyko, told The Daily Beast. “Another option for them is to join our Jumpstart movement.”

Gromyko, director of the Moscow-based Shiffers Institute, a think tank, believes that the program would help Russia fix its industry and agriculture, as well as technological development. “The success of Jumpstart in industry depends on our self-determination; the latest Washington sanctions push us to the red line. The Russian elite is in trouble.”

The liberal wing of the Russian elite also speaks about the center of Putin’s power being cornered: “We have come to the edge,” Russian former finance minister Aleksei Kudrin recently announced on Rain TV.

The law that President Donald Trump reluctantly signed in August ordered the U.S. Secretary of the Treasury, the Director of National Intelligence, the Secretary of Defense, and the Secretary of State to identify “the most significant senior foreign political figures and oligarchs in the Russian Federation, as determined by their closeness to the Russian regime and their net worth.”

Experts of the liberal wing insisted that Putin was doomed. “By that law Washington gave a clear signal that next time they will be talking with Moscow will be after the regime changes,” Yevgeny Gontmakher, Kudrin’s deputy at the Institute of World Economy and International Relations told The Daily Beast.

Get The Beast In Your Inbox!

Daily Digest

Start and finish your day with the top stories from The Daily Beast.

Cheat Sheet

A speedy, smart summary of all the news you need to know (and nothing you don't).

By clicking “Subscribe,” you agree to have read the Terms of Use and Privacy Policy
Thank You!
You are now subscribed to the Daily Digest and Cheat Sheet. We will not share your email with anyone for any reason.

The group is convinced that in December Vladimir Putin is going to announce his intention to run for reelection in 2018, after he cleans up the top echelons of power.

In fact, almost every week the Russian president is sacking regional governors. Earlier this month, Putin fired the governor of Novosibirsk.

But the liberals insist that nothing will help at this point, that President Putin does not have any good options left.

“The supporters of Jumpstart want to turn Russia into a fortress; but if they lock hundreds in jail, there will be no technological progress even in defense. Nobody, even China would invest in such an isolationist Russia,” Gontmakher insisted.

It seems that the majority of the Russian business elite is convinced that nothing too significant is going to happen in February, when the details of the sanctions are made public with the names of Putin’s friends, their families, and wealth.

The government of Prime Minister Dmitry Medvedev, who was once considered more liberal than Putin, decided not to force companies to transfer their offshore assets back home.

Meanwhile, President Putin worked on his own plans, receiving Saudi King Salman bin Abdelaziz last week. Putin was struggling to lift oil prices, to save the state’s biggest industry, which so far has been the driving force of the Russian economy.

“Oil and the war in Syria are the biggest immediate problems Putin faces today,” Alexey Makarkin, vice president of the Center for Political Technologies, told The Daily Beast. “Putin is trying to convince the Saudi king and pro-Saudi militants to cope with Bashar Assad’s regime.”

The supporters of the Jumpstart group do not believe that a better price for oil is going to save Russia. “These efforts to keep the price for oil up are useless; oil is Russia’s drug addiction,” Krupnov said.

Last week, Krupnov talked on television about the main resource for the proposed Jumpstart program: revisiting the privatizations of the 1990s. “Nonsense!” Krupnov’s opponents cried.

“Washington should consider a deal with Russia, a joint struggle against global challenges,” Krupnov told The Daily Beast. Otherwise the new leader will not be a reformer like, say, exiled former billionaire Mikhail Khodorkovsky, “but a completely anti-Western, revenge-thirsty general, who would cause harm to the USA.”

The debates about Russia’s future are boiling over. And they may yet burn America.