Over the recent days bad economic news have been pouring in for Russia: the prices of bread, cheese, medicine, meats and many other product have been going up, some of them sharply. At the same time, the Ruble has reached a new low against the Dollar which forced the Russian Central Bank to intervene to defend the Ruble.
No doubt, Obama would say that the sanctions are showing their effectiveness.
Except for one problem: no economist has been able to directly link the US/EU sanctions with what we are observing. In fact, the reality is much simpler.
In the case of commodity prices what is happening is much simple: Russian companies have seized the opportunity presented by these sanctions to sharply raise their prices and make an extra profit. So far, so good. That was predictable. In fact, the Russian government and Putin himself had predicted that and they had warned that the state would be closely monitoring any such price increases and that legal action would be taken against any speculators.
This is where things become interesting.
The person in charge of this monitoring is Arkadii Dvorkovich, Deputy Prime Minister in Dmitry Medvedev’s cabinet has dismissed it all saying that when he goes shopping for bread he does not notice any price increases. So who is this Dvorkovich character anyway?
Turns out that he is a pure product of the Atlantic Integrationist clan. Himself a rather modest oligarch (his official personal income in 2011 was only 4 millon Rubles), he is married to a much bigger oligarch, Zumrud Khandadashevna Rustamova, who, according to the Russian Wikipedia, is a member of the board of directors of major companies like the Magnitogorsk Metallurgical Kombinat, the gold mining Polius Zoloto, or the main Moscow airport Sheremetevo. Her official yearly income is already a healthier 42 million Rubles. Dvorkovich, who attended Duke University in the USA, is also involved in all sort of more or less shady companies and deals including the infamous Skolkovo project.
In fact, I would argue that Dvorkovich is so typical of the Atlantic Integrationists that he could be their poster boy. By sabotaging the Kremlin’s efforts to prevent Russian businesses to profit from the sanctions, Dvorkovich not only stands to get some terrific kickbacks, but he also contributes to the 5th columns efforts into convincing the general public that western sanctions are crippling Russia.
The good news is that the Eurasian Sovereignists are fighting back and that several Russian TV channels have already reported about these abnormal price increases and about the fact that Dvorkovich seems to be doing exactly nothing about it.
Over and over again we observe the same phenomenon: the President order the Prime Minister and his government to do something, and the latter just ignore him. This is a typical example of how the 5th column works in Russia and, in the future, I plan to provide more examples of this here.