Pro-war bloggers

Hello! This week, we look at the Russian pro-war bloggers covering the invasion of Ukraine on the ground — and whose allegiance to the Kremlin’s narrative of the war varies widely. We also look at the growing divide between Putin’s economic proclamations and the real picture of Russia’s economy as well as the Central Bank’s plan to repay Russian investors who lost their assets to sanctions — at foreigners’ expense.

Russia’s pro-war bloggers become a serious threat to the Kremlin

This week’s fighting saw Ukraine’s armed forces inflict a major defeat on Russia, almost completely liberating the Kharkiv region. Neither Russian nor Ukrainian officials offered any significant information about the course of the offensive and, unsurprisingly, the gap was filled by bloggers and Telegram channels. Russian pro-war bloggers, who have become a leading source of objective information about the fighting, were not slow to criticize the Kremlin and the Defense Ministry to their audience of millions. We explain how this part of the media functions, and who is worth reading.

What’s going on?

The Ukrainian military’s sudden offensive in the Kharkiv region turned into Russia’s worst defeat in six months of war. In just four days, Ukrainian troops broke through the Russian lines and forced the Defense Ministry to withdraw forces from the entire region. Russia controlled a third of the district from the start of hostilities.

Ukraine’s Sept. 6-10 offensive was not just a major military reversal: for Moscow, it became a PR disaster. Up until Sept. 10, the Defense Ministry and official propaganda were absolutely silent about the battle in the Kharkiv region, even though it was obvious to anyone following the war through open-source information that Russian forces had big problems.

It wasn’t until Saturday afternoon that the ministry announced a “regrouping” of Russian forces from Kharkiv to the unrecognized Donetsk People’s Republic, in what it called an “increase of efforts in the Donetsk direction.” Leading Russian officials demonstratively ignored the military reversal. At the time, President Vladimir Putin was opening Europe’s largest observation wheel in Moscow, followed by a fireworks display to mark the city’s birthday.

The behavior of both the Kremlin and the Defense Ministry is the latest disappointment for patriots and Russian nationalists, who have offered scathing criticism on some of the leading pro-war Telegram channels. Within the “fog of war,” patriotic Russian channels – many of which are run by people on the front lines or who have good sources in the Russian forces and are often unconcerned about military censorship – are almost the principal sources of information about the true state of affairs at the front.

Since February, these pro-war channels have emerged from the margins to form one of the most popular segments of Russian social media. The average audience for each of these channels is around 500-700,000. While they are all supportive of the war and “our guys,” they also often criticize the Defense Ministry and the Kremlin, accusing them of indecisiveness. They frequently call for an all-out war, full mobilization and even the use of tactical nuclear weapons. They do not simply regurgitate the Kremlin’s narrative. On Saturday, while propaganda channels were broadcasting pathetic accounts of how “Russian units are purposefully regrouping” and “the enemy is driving himself into a trap,” Russia’s “ultra-patriots” openly admitted defeat and offered objective reports of Ukrainian successes (accompanied, of course, by curses against Ukraine’s forces).

The growing popularity of nationalist channels cannot fail to alarm the Kremlin. Even before the Kharkiv offensive, renowned journalist Ekaterina Vinokurova cited a source in the presidential administration complaining of irritation with these so-called “angry patriots.” This was not limited to longtime Kremlin critics like Igor Strelkov (Girkin), but extended to “playful loyalists” such as the writer Zakhar Prilepin. “The main complaint about the ultra-patriots is their attempts to dictate their agenda and their view of the special operation to the Kremlin,” Vinokurova’s source said. The same source added that those ultra-patriots who enjoy direct influence are getting advice from above to scale back the pathos and the amount of reporting.

Which patriotic channels are worth following?

Ultra-patriotic, pro-war Telegram channels fall into several groups, each of which has its own distinctive nature.

Anonymous channels: The best-known anonymous pro-war channel is Rybar (“The Fisherman”) with 770,000 followers. It is not known who is behind the channel, nor who funds it, but it regularly publishes criticism of the Defense Ministry and the Kremlin. Frequent updates and high-quality content make it clear that Rybar can call upon a large, capable team. This channel produces the most professionally created, quality campaign maps. During Ukraine’s offensive on Kharkiv it had the fastest and most objective information about the fighting.

• Reverse Side of the Medal (151,000 followers). This channel is connected with Wagner Group and thus has excellent sources at the front. On Aug. 30, Reverse Side of the Medal warned that Ukraine was readying an offensive in the Kharkiv region for which the Russian army was unprepared.
• Another channel linked to Russian private military companies, Grey Zone has 309,000 followers.

War correspondents: Accredited Russian journalists working in the combat zone. They all share an ultra-patriotic ideology, but face differing levels of military censorship depending on where they are based.

• Kotsnews. The Telegram channel of Alexander Kots, war correspondent for Russia’s leading tabloid Komsomolskaya Pravda. Like all other journalists, he is subject to censorship and is under indirect Kremlin control. He is the most active and objective of the war correspondents.
• Rossiya TV war correspondents Alexander Sladkov (871,000 followers) and Evgeny Poddubny (693,000). As reporters for the leading state TV channel, they have access to places on the front line that are out of reach for others, so they often publish exclusive footage. Their Telegram channels occasionally deviate from the official perspective on events.
• WarGonzo (1.08 million). Run by Semyon Pegov, a former war correspondent for the tabloid Life. The author is not the most reliable or objective analyst, but he has a knack for getting to places that other journalists can’t. For example, Pegov was the only journalist to get to Izyum when it was surrounded by Ukrainian forces on Sept. 10.

Bloggers connected with the Defense Ministry: Military bloggers without any official media accreditation, typically traveling with Russian forces and broadcasting a position close to the Ministry’s official line. They are often more outspoken than officials.

• Colonel Cassad (Boris Rozhin, 744,000 followers). Rozhin was one of the best-known Russian military bloggers even before the war. Believed to have a direct link with the Defense Ministry, his reports closely follow the official line but contain far more detail than official sources.
• Older than Edda (528,000). War blogger German Kulikovsky, little known outside of Telegram, has accompanied Russian forces in the Kharkiv region throughout the war. In the days leading up to the war, he was one of only a few bloggers who announced the “special operation” in advance.

Igor Strelkov and soldiers from the Donetsk and Luhansk people’s republics (DNR and LNR): Igor Strelkov (Girkin) is a retired FSB colonel who actually started the war in Donbas: in 2014, with Russian help, he organized volunteer detachments that took Donetsk.For the soldiers of the breakaway republics, Strelkov is considered a great authority. He responded to the early days of the “special operation” with great enthusiasm, but returned to his searing criticism of the “indecisive” Kremlin and Defense Ministry after Russia’s first military setbacks. Strelkov publishes military reports derived from his sources in the breakaway republics and he often exaggerates the problems within the Russian army.

• Andrei Morozov (Murz), 11,700 followers. This channel isn’t hugely popular, but it is very interesting. The author is a notorious Moscow nationalist who has been serving in the LNR army since 2014. He knowledgeably writes about the combat zones in the Luhansk and Donetsk regions and on Russian forces’ supplies and equipment.
• Vladimir Grubnik (PriZrak Novorossii), 155,200 followers. An officer in the DNR’s army and organizer of one of the biggest volunteer funds in support of the breakaway republic. He writes about fighting in the Donetsk region.
• Alexander Khodakovsky, 400,000 followers. The current commander of the Vostok battalion, one of the most famous regiments in the DNR’s army. Compared with the other two, his channel is under closer control from Moscow.

Why the world should care

Russia’s pro-war nationalist bloggers are one of the main sources of information about the fighting in Ukraine (especially if you can filter out their bias). However, they are also one of the biggest media threats to the Kremlin. If Russia sustains more losses in Ukraine, these bloggers are likely to fuel even more right-wing resentment toward Moscow.

Putin increasingly divorced from reality of Russian economy

Putin didn’t just spend last week riding on Moscow’s new ferris wheel. He also visited the Eastern Economic Forum in Vladivostok, where he delivered another keynote speech about the economy. Compared with the figures and predictions that Russian officials debated behind closed doors in late August, the president’s speeches seem to be getting more and more distant from reality. We fact-checked the main points he made.

On the consequences of war in Ukraine: “We haven’t lost anything. And we won’t lose anything. The main benefit is the strengthening of our sovereignty.”

Officially, the authorities have spent the past several months insisting that everything is fine with the Russian economy. Meanwhile, the state is increasingly concealing data that would allow us to assess the true state of affairs. The real picture is debated behind closed doors, rather than in front of the cameras. For example, this week Bloomberg published several possible scenarios for the future of Russia’s economic development. These were discussed in a closed government meeting at the end of August. Almost every scenario anticipates a protracted economic slump which Russia may not escape before 2028-2030.

On the gas war with Europe: “The European gas market ceased to be premium.”

For Gazprom, the European market has always been premium, in the sense that the majority of the company’s revenues came from delivering gas to Europe. Following the start of the war and the ensuing gas confrontations, gas prices reached record levels and in Europe they remain as high as ever: $2,330 for 1,000 cubic meters (at the Dutch TTF hub) compared with, around $1,960 in Asia (JKM Platts index). Gazprom has all but stopped selling gas to Europe, but not because of low prices. This is how the state wishes to punish Europe for sanctioning Russia and supporting Ukraine. And the EU itself plans to impose a price cap on Russian gas.

On the grain deal with Ukraine: “It turns out that, once again, to put it crudely, they tossed us aside. They cheated us. And not just us, but the poorest countries in the world ...”

Putin believes that thanks to July’s grain deal, Ukraine is exporting grain to Europe rather than sending it to combat hunger in developing countries. It’s true that, as before, Ukraine is selling produce to Europe. However, on Aug. 30 the first cargo ship delivered grain to Djibouti in Africa. From there, it will be delivered to drought-stricken Ethiopia. In addition, grain vessels from Ukrainian ports reached Turkey.

After the start of the war, the Black Sea ports were blocked. As a result Ukraine could not export produce (agriculture makes up about 10% of the country’s GDP). Meanwhile, Russia was repeatedly accused of exporting grain stolen from Ukraine.

On Western currencies: “Before our eyes we have seen a collapse in confidence in the dollar, the euro and the pound sterling as currencies in which you can make payments, keep reserves and hold assets.”

After the outbreak of war, the West took unprecedented steps against the Russian economy by freezing the Central Bank’s assets. This sparked discussion about trust in the global financial system. But any talk of a loss of confidence in the dollar is clearly premature. For one, countries that reject the dollar struggle to attract foreign investors because they have limited scope for economic growth. The dollar’s positions are also backed by strong institutions with high liquidity and full convertibility. The same applies to the euro and to sterling.

On unemployment and the labor market: “Our unemployment rate – the most important indicator of the country’s economy – is at a low of 3.9%.”

This is true. But there’s a catch: Russian employers don’t lay off staff during a crisis — they reduce pay. Some reduce salaries, others send workers on enforced unpaid leave, others cut back working hours. In addition, unemployment figures are always lower in the summer: people often prefer to rest rather than seek work. Finally, people rarely register with the labor exchange due to Russia’s low unemployment pay. They typically prefer to enter the gray economy or grab any work that comes along.

The Central Bank will compensate Russian investors at foreigners’ expense

Russia’s Central Bank seeks to compensate 5 million Russian investors who lost access to their foreign shares due to war-related sanctions. To do this, it will use an estimated $300 billion in funds from “unfriendly” countries frozen in Russia. The Bank intends to invest this money in “friendly” securities and use the profits to provide compensation.

• On Friday, Central Bank head Elvira Nabiullina said the Bank is looking to create a fund to compensate private investors whose foreign shares were impacted by sanctions. This is motivated by a need to “rebuild investor confidence.”
• This involves 5 million private Russian investors whose foreign assets were frozen by sanctions immediately after the war broke out this spring. The bank estimates the total value of the frozen assets at 6 trillion rubles ($100 billion), of which private investors comprise at least 320 billion rubles ($5 billion).
• Foreign securities owned by Russian were frozen by European depository Euroclear. At the start of March it stopped working with its Russian partner NRD (even though the latter was not formally sanctioned until early June).
• This is the first time the possibility of compensation for Russian investors has been raised. Nabiullina said that one option was to create a fund with the support of the Deposit Insurance Agency (DIA). This could be financed with income derived from funds held by non-residents in Russia, which the bank froze within days of the war starting. The Central Bank insists that it will not requisition money from foreigners and only the profits from this investment will be transferred to Russian investors. This scheme partly mirrors Euroclear’s own behavior as it continues to receive revenue from frozen Russian accounts, Kommersant noted.
• At the end of February, the Central Bank froze approximately $312 billion belonging to non-resident investors. If (purely hypothetically) we assume that the DIA can invest all of that in, for example, Chinese state bonds, then it would be possible to compensate citizens for the lost $320 billion by investing that money for a year at 1.7% per annum. However, this would require special new legislation or a presidential decree to allow the use of frozen foreign shares. And in this case, the shareholders would likely be able to contest the Central Bank’s actions in international arbitration.

Why the world should care

It might be fair enough to compensate Russian investors for the loss of their foreign shares. They did not start the war, nor did they call on the Central Bank to freeze the assets of non-residents. However, it will clearly take far more than this to “rebuild investor confidence.”