Author Archives: Nadia Kazakova

The joy of painting

Having nothing to say to the world about Russian (and any other country’s) politics or fluctuations in gas prices, one naturally turns to contemplation on the meaning of life, universe and everything. It is not 42. The answer is not discrete, it is continuous. Let me explain.

All the world’s problems come from the inability of the left side of the brain to talk to the right side of the same. That applies universally across genders and borders. 

The angry, judgmental and reward-driven left side of our communal brain dominates politics, business, culture, religion. This has served us well as species on the way out of the forest and onto megapolis. It is failing us now. 

Our human weaknesses are well researched and weaponised. We are primed to chase the next best thing by clever marketing. we are distracted with red herrings in politics while real action is happening elsewhere. We are getting angrier. Deep down, however, we all know this is not how it is meant to be.

The mute, compassionate and touchy-feely right side of the brain does not have a say in this modern discourse. But this is the side which knows how it feels to be happy and free. And it is unflinching in letting you know that Pavlovian response to worldly goodies and YouTube shorts is not it.

The disconnect between the two sides of human nature is probably the reason for being on the brink of a collective nervous breakdown or a catastrophic climate event, whatever comes first. If the lucky few make it there, a Martian settlement will still have the same problem kicked down the road in the future. 

There might be a way out. It is not carbon capture, nitrogen-powered cars a very big rocket or migrants going where they came from. These might cure symptoms but not the disease. The solution could lie in allowing our compassionate right side of the brain have a say. First it might produce a tiny little squeak. Then a little conversation. Then a dialogue of equals.

It does not cost anything and it might change your life. But it is tremendously hard going. And at times terrifying. Much harder than getting a super duper rocket in space.  The trick is to get started and persist. Sorry, you can not outsource this to AI.

Policy makers might revisit the idea of Universal income and a four-day working week to get the process going. This would release some energy from the senseless daily grind to pursue something more enjoyable. For those artistically inclined, there is much more. Get a copy of “Drawing on the right side of the brain” by Betty Edwards. Contour drawing is critical and don’t skip the exercises.

Apart from learning much about yourself with a bit of spare money and time, there might be some interesting side effects when we let our right brain have a say.

You might get a better night’s sleep as the right side of the brain uses so much energy for seeing (observing), scribbling and emoting, the entire brain (including the worrisome left hemisphere) shuts down for the night. Mind you, there will be some uncomfortable nights when the brain will not let you sleep. 

The right side of the brain slows you down. Let someone in front of you make her slow way down the stairs on the tube. There might be a reason why the universe wants you to miss the meeting. 

As your pace slows down, there is time to see around, notice shapes, colours and curves. Possibly other people too. This might feel good. 

So here is the answer how to fix us. The meaning of life and everything is a continuous dialogue between the right and left side of the brain. This could make us more human.

Good luck! 

Ps. and while we’re at it, the right side of the brain has found the route of the UK perpetual productivity problem. it is gossip. No one does much inbetween.

Edited by Martin O’Rourke

When Grigory Alekseyevich met Vladimir Vladimirovich

On October 26th, 2023 Grigory Yavlinsky,  the prominent Russian opposition politician met with the Russian president Vladimir Putin. This must have been an unusual event for both sides – the first one-to-one meeting between the politicians since May 2014. There was only one more encounter in March 2018 when President Putin met with Mr. Yavlinsky and other candidates who ran for the Russian presidency that year.

On top of that the timing of the meeting proved to be interesting, while the content of the discussion and the aftermath could be described as ambiguous. In other words: “What was it all about?”

Taken at face value, the Putin/Yavlinsky meeting was mainly about the war in Ukraine. President Putin decided to give Mr. Yavlinsky a chance to put across his long-standing anti-war position. Possibly, this could be read as an attempt by Kremlin to send a political signal that Moscow is ready to negotiate a ceasefire. Mr. Yavlinsky is seen as a credible anti-war politician. He is currently gathering ten million signatures in support of his party Yabloko, which has a strongly anti-war platform. Could it mean that his anti-war views would be tolerated or even allowed to sip into mainstream politics as the Russian administration is scraping its way out from the bloody and costly war?

A darker and more cynical view of the event is that Mr. Yavlinsky was offered a deal (not necessarily in too many words but clear enough for him to read between the lines). He is allowed to run for Russian presidency in March 2024 on his anti-war platform. In return, he is effectively legitimising the process and the outcome of the elections.

Grigory Yavlinksy is a well-known Russian opposition politician; he is the same age as Mr. Putin (both are 71); he has been in opposition longer than President Putin has been in power (since 1996 and 1999 respectively).  Mr. Yavlinsky and his party Yabloko have strong anti-war views, they sounded alarm about the coming war during the Russian parliamentary campaign of 2021. Mr. Yavlinsky ran for Russian presidency four times (he won 7.3% of the vote in 1996 and 1.05% in 2018, he was barred from running in 2012). Unlike many other prominent opposition figures, Grigory Yavlinsky is not in jail and is still residing in Moscow.

The meeting between Mr. Yavlinsky and Mr. Putin took place on October 26th, the day full of speculation that Vladimir Putin had died. Rather promptly on October 27th the Kremlin spokesman Dmitry Peskov denied the rumours of Putin’s demise.

On November 4th Mr. Yavlinsky gave a YouTube interview to the veteran Russian journalist and broadcaster Alexei Venediktov. The interview mainly focused on the war in Ukraine, which was discussed during Mr. Yavlinsky’s meeting with President Putin. When asked a direct question about Mr. Putin’s health and appearance, Grigory Yavlinsky confidently replied that the Russian president was his normal self.  

Mr. Yavlinsky did not disclose who initiated the meeting (and why) but said that it had been a serious discussion which lasted for an hour and a half.  The focal point was Mr. Yavlinsky’s anti-war position and his vision of the future relations between Russia and Ukraine. Mr. Yavlinsky offered himself as a negotiator with Ukraine to achieve an immediate ceasefire.  

Mr. Yavlinsky  insisted that he managed to give a detailed account of his anti-war position to Mr. Putin. Anyone who is opposed to the anti-war position, Mr. Yavlinsky said, “is responsible for mindless deaths of a huge number of people”. Vladimir Putin does not share this view “at the moment”, but “this [Mr. Yavlinsky’s anti-war position]  is now a subject for consideration”.

“By the way”, the opposition politician said in the interview, “the events have been moving fast, very fast, if you have noticed. In the last five-seven days the talks on this subject on the other [presumably Ukrainian] side have become very active”. According to Mr. Yavlinksy, the Ukrainian press has been seriously discussing his meeting with Mr. Putin on October 26th, while the Russian press has only mentioned “a laughable and pointless matter” of the next presidential elections in Russia[1]. Mr. Yavlinsky does not have doubts about the outcome of the elections: it is laughable not to expect that Vladimir Putin would be re-elected.  

Talking about the war, Mr. Yavlinsky said that Ukraine might have been in a much stronger negotiating position a year ago “after events around Kharkov and Kherson”. That moment [for negotiations] has been missed and in that respect, Ukraine has lost, he believes. (Russia has lost much more, in my view, including the illusion of being one the global superpowers). At the meeting with the Russian president, Mr. Yavlinsky offered himself as a negotiator with Ukraine. Vladimir Putin did not respond to the offer, Mr. Yavlinsky said. 

When asked by the broadcaster what the negotiating position would have been if he were appointed to hold talks with Ukraine, Mr. Yavlinsky replied that it would be an immediate ceasefire, not substantive talks on the shape of the front line or fate of the territories.

Mr. Yavlinsky was directly asked about Mr. Putin’s health and appearance, how Mr. Putin behaved in person during the one-to-one. Mr. Yavlinsky confidently replied that the private dialogue with Mr. Putin was “absolutely normal”, the President was the same as he remembered him from meetings going back twenty years. The meeting took place on October 26th, the day when the health and the very physical existence of Vladimir Putin was called into question.

In the YouTube interview, Mr. Yavlinsky comes across as sincere but also on the defensive. A cynic would ask how such a man could have survived a lifetime in opposition in Russia. My guess is that Yavlinky’s political longevity is down to him being treated by the Russian ruling class as both “useful idiot” and “toothless idiot”. While his humanist position is consistent and admirable it is completely lost on (or simply unknown to) many Russians (at least “at the moment”). Also consistent and admirable is his long-standing position that election not revolution should change the regime in Russia. It’s a pity that Mr. Yavlinsky himself does not expect such an election to happen any time soon.

[1] The first round of the next is scheduled for March 17, 2024.

We’re only human after all

Last week (Oct 28/Oct 29) the Weekend FT ran a series of articles on India. This was inside the Money section which is a bit of a backyard for the publication if you ask me. This time there were plenty of golden nuggets to be dug out and closely examined for a non-specialist in Indian affairs.

The number that caught my attention was the Human Capital Index for India and China. This was published by the World Bank back in 2020 in updated after the pandemic. The index is based on a relatively straight forward calculation and is a function of a child’s chances of surviving, getting educated and working until retirement[1].

For China, the Human Capital Index is 0.65 and for India is 0.49. The average for high-income economies is around 0.70. Singapore has the maximum among the 174 counties, and it is 0.88. The reasons behind the India/China gap are better explained by specialists (see the same FT articles – excellent, in my view, though behind the paywall), but what about the rest of us?

A quick Google search led to the report itself and the country data, all neatly arranged and easily accessible. I looked at China, India, Russia, Ukraine and the US (this is in an alphabetical order). The US has the highest value for the index at 0.70, Russia is at 0.68, Ukraine’s Human Capital Index is 0.63. The data is pre-pandemic and pre-war.

There is a good but not a linear correlation between the human development index and the country economic success (as measured by the GDP per capita).  The charts below give a bit more detail on key components of the index: infant survival rates, years in education and text scores achieved. At a very superficial level, the figures indicate the US is running close to its human capital capacity while China, India, Russia and Ukraine should do much better economically for the quality of the people.  Not much of a discovery, perhaps, but food for thought, nevertheless.

The World Bank Human Capital Index 2020 and its components

Source: World Bank[2]

P.S. It is stating the obvious that investment in people might have a better pay-off than investment in various warring tribes.

P.P.S. And there might be a room to redefine the concept of “national security” as making own nation/people secure, which means healthier, less anxious, having more spare time, etc. Could it be “Americans first” as an election slogan? And could Russians do better then figuring out that their national security depends on presidential elections at home, not in the US.

[1] The official definition in the publication: The Human Capital Index (HCI) measures the human capital that a child born today can expect to attain by her 18th birthday, given the risks of poor health and poor education prevailing in her country.

[2]“World Bank. 2020. The Human Capital Index 2020 Update: Human Capital in the Time of COVID-19. © World Bank, Washington, DC

Gazprom in mid-January: output rises, export to Europe plummets and to China jumps, domestic sales flatten out

  • In the first 15 days of January, Gazprom produced 23.1 bcm of gas, up 2.1% YoY. This means that the average daily gas output was 1,540 mn cu m/d, up 32 mn cu m/d on the same period of last year.
  • The main contribution to extra output (est.19 mn cu m/d) might have come from the Chayanda field in East Siberia, which feeds the Power of Siberia pipeline to China. Gas export to China was up 50% YoY to estimated 44 mn cu m/d, based on numbers released by Gazprom.
  • Gazprom deliveries to domestic consumers in the first 15 days of January were up 3.7% YoY to 16.8 bcm (1,121 mn cu m/d). The weather in Russia has been mixed in January with both cold and mild spells. This pattern might last for the rest of the winter.   
  • Over the first half of January Gazprom export to Europe, Turkey and China fell 41% YoY to 5.4 bcm (360 mn cu m/d). Gas export was also down 17.9% MoM (compared to December last year). We estimate that gas export to Europe only (excluding China and Turkey) was down 55% YoY to 227 mn cu m/d.
  • Our model of Gazprom gas balance for January indicates that the company might have reduced Russian gas storage withdrawal by est. 195 mn cu m/d to offset for a reduction in export (down est. 248 mn cu m/d). This could mean that Gazprom gas storage will be at 52 bcm as of end January, up 14 bcm YoY. At the end of the heating season in Russia (end March), Gazprom gas storage might be as high as 38 bcm, up 23 bcm YoY.
Gazprom_mid-Jan22-stats_17an22_FINALDownload

Gazprom plans for 2022: what the numbers tell us
(report revised on 18 Jan 2022)

  • Gazprom management have disclosed the company’s targets and forecasts for 2022. Total gas exports (inc. Europe, Turkey, China and the FSU) are to rise 3.5 bcm to 227 bcm in 2022. The corresponding export price is expected to average $296 per 1,000 cu meters (per mcm). 
  • Based on these numbers we estimate that Gazprom export sales to Europe only might rise from estimated 157 bcm in 2021 to 160 bcm in 2022. This includes an increase in gas supplies to Ukraine (+8 bcm YoY), a sharp drop in volumes sold via Electronic Sales Platform (ESP) for deliveries in 2022 (- 3 bcm) and lower sales under the long-term contracts (-3 bcm YoY).
  • To meet export targets, Gazprom would need to utilise existing transit routes, including the Yamal – Europe pipeline, more fully in the coming months, even if the company is to ship additional export volumes via the Nord Stream-2 pipeline in the second half of 2022.
  • We assume that export to Turkey might decline slightly from est. 27 bcm to 24 bcm in 2022, on availability of alternative supplies. Sales to China via the Power of Siberia pipeline are forecast to increase 6 bcm to 15 bcm in 2022.
  • Gazprom management expects average export gas price (to Europe, Turkey and the FSU) to rise from ‘over $280/mcm’ in 2021 to $296/mcm next year. This means that Gazprom might be factoring in the same level of prices for long-term contracts and a 40%+ YoY increase in oil-linked prices.
  • Gazprom’s CEO Alexei Miller said that Gazprom Group production could reach 515 bcm in 2021, up 61 bcm YoY. Considering the company’s plans for domestic deliveries and exports in the next year, we estimate that Gazprom Group output will fall 3% YoY to 500 bcm in 2022.
Gazprom_plans_2022_22Dec21_FINAL-1Download

Gazprom in November: output near capacity, export to Europe stabilises MoM

  • Monthly operating data was promptly released by Gazprom on December 1. The company’s output was 1,500 mn cu m/d in November, up 77 mn cu m/d on last year.
  • Gazprom deliveries to Russian customers were up 49 mn cu/d, while exports fell 143 mn cu m/d, in our estimates. This would suggest that net Russian storage withdrawal was much lower than last year.
  • At the current production rate, the company could potentially increase supplies to Europe in December, even if the first winter month in Russia is as unusually cold as last year.
  • Please see below for more detail.
Gazprom_Nov21-stats_2Dec21_FINALDownload

Gazprom: plan B for winter

  • Gazprom management held a conference call on the company’s financial results of 3Q21 on November 29. The Q&A session was mostly focused on the company’s plans for the rest of this year and into the next one.
  • Our key take-away is that the company’s management did not reaffirm export target for this year and seems to be working on the assumption of high gas prices in Europe in the coming months. This would suggest that Gazprom might be reluctant to increase gas supplies to Europe until the Nord Stream-2 pipeline (NS2) is approved.
  • As discussed in our November Russian gas report, we see some availability of Russian gas for additional exports in December. We also believe that the prospect of successful certification of NS2 may have improved if Gazprom were to fully utilise available transit capacity for gas exports to Europe in the coming months.
  • In our view, the approval of NS2 might drag on well into the next year. This means that the NS-2 capacity might not be operational in 2022. This corresponds to our pessimistic scenario for Russian gas supplies to Europe in 2022. However, we still forecast Gazprom to export to Europe (inc. Turkey) to increase 4 bcm to 174 bcm in 2022.
  • Below are brief comments on these and other points of interest.
Gazprom_Plan_B_for-winter_1Dec21_FINAL-1Download