Russia - Armed, Lawless & Dangerous… to Itself

My Dear Friends,

The impact on Russia, Ukraine, and the rest of the world of Putin’s pet “special military operation” project will have many “faces”. Most of them are ugly as heck. Some we do not yet see but will be able to observe in the very near future. Many of the consequences (sanctions, isolation) are obvious to all of us. Yet, others can only be seen if you look for them, making those consequences that much more dangerous.

Today, I will talk about one specific impact of the war against Ukraine on Russian society - the massive increase in violence and crime. Many of my readers will no doubt remember that one of the reasons for Putin’s unwavering support amongst Russians around the turn of the century was his “victory” against the random and all-pervasive crime of the 1990s. The undoing of this Achievement might be the undoing of Putin himself, Certus paribus.

I did some work on the recent crime numbers, and they do look scary. Since February 28th (through the end of October of this year) the number of violent crimes committed, using unregistered firearms, has jumped by 31%. These are Russian government statistics we are talking about here, people. It’s the Official GDP numbers that are inflated.?Crime stats are always underreported. Does this mean that the real story is by far scarier? You bet it is.

These already frightening official statistics hide an even more dramatic increase in violent crimes in the big cities. Moscow reported a 203% increase, while St. Petersburg is “only” at 108%. Needless to say, both numbers are much greater than the already alarming national average of the 31% increase, and both are likely to be severely underreported. We have not seen anything like this seen since late 1990s. While these numbers reported by MVD (Russian ministry of internal affairs) are staggering and would be even more alarming if reality were to be known, the reasons for this meteoric jump should surprise no one.

Firstly, in order to commit violent crimes utilizing firearms, you need to have the firearms, and capacity to commit a violence offence. When it comes to firearms, the war became a true Klondike for unscrupulous Russian military bureaucrats. Even during peace time, the amount of military equipment and weapons that were stolen and sold defies the laws of gravity. This is one of the main reasons why the Russian army turned out to be a paper tiger. So much of its might (at least what we saw on TV) was simply sold! Corruption was so rampant that Russian tank operators, sent to fight in Ukraine, were surprised to find out that many of these tanks were missing engines (a helpful device - I must attest).

For less than honest bureaucrats in the Russian military, stealing weapons during peace time is riskier than stealing during a war. If you illegally sell an AK 47 today, and it is captured tomorrow during a bank robbery, it will be easy to track down where it was stored, and who is responsible for its disappearance. Not that this stopped weapons from being sold, but it definitely put some limit on those illegal sales. The war opened all doors. Who would bother to investigate a division that is only 40% of its full strength, but has been fully equipped with of weapons and ammunition? Where did the other 60% go? Once weapons are shipped to Ukraine, they disappear 20 times faster than soldiers do. This creates the perfect opportunity for an out-of-control black market for all sorts of weapons: “how much is your bazooka, today, my comrade? Do you offer financing? What is your return policy?”

If we think that accountability for weapons distributed to the regular army units is less than perfect, what can be said about the paramilitary forces from Russia, DNR, LNR, and other places. Many of them are simply criminal gangs that receive full or partial support from the Russian government with highly murky reporting structures. There is no protocol, to the best of my knowledge, requiring any accountability for the weapons distributed to these paramilitary groups by the government. In fact, I am convinced that the plunder and weapons trading is at the core of the very existence of several of these entities. Essentially, the war is a legal excuse for millions of dollars in weapons and ammunition to simply disappear with limited to no accountability. And disappear they do… only to re-emerge in the tidal wave of criminal activity that has become the unintended (at least I hope so) consequences of this ill-conceived military conflict. While I do not have any data from Ukraine, I would venture a guess that if the Ukrainian army procurement leaders are not careful, the same problem will plague them as well.

The rise of criminal activities is not a surprise. What shocked me is the speed and magnitude of this rise. It’s supported by many “grey” zones (typically located in a close geographical proximity to the actual military theater), where corruption is “uncheckable”. The Russian government managed to amplify this impact by creating an extraordinarily convoluted system of paramilitary and privately-own military units all feeding off the Russian war budget. And this brings me to my next point. Having easy access to any weapons, from a gen 4 Glock to an armored personnel carrier is an important pre-condition for a massive crime wave, but you still need criminals to commit these crimes. Why do we have so any more criminals in Russia?

Imagine that we are back in 2020. Your New Year’s resolution is to start a business manufacturing medical masks. It seems like there are some thoughts missing here. Were you going to talk about how running a business is so difficult due to corruption?

This is what it feels like to be a criminal in Russia right now. All efforts of Russian law enforcement, from the lonely “uchastkoviy” (your local neighborhood cop) to the highly trained FSB officers are directed towards the war. Hunting down deserters, intimidating the opposition, rounding up mobilization objectors, preventing non-existent terrorist plots… anything besides doing their actual job: actual law enforcement.

But wait there is more. If I am a rather minor, modest and almost bashful criminal, 10 minutes of watching Russian propaganda programs will embolden me to embark on a great adventure. Thousands of Russians are encouraged to join paramilitary organizations, equipped and supported by the Russian government to go fight the “Nazis” in Ukraine.

Just about a year ago, if I (as a small time criminal) form an armed band with likeminded derelicts, even in Russia, I would have been arrested. Now, as long as I “sing” the anti-Ukrainian song, I will be surrounded by love and respect from the Russian government. Clearly, the government is too busy to follow-up if I am really fighting in Ukraine, or simply preparing to take on a bank 100 miles or so away from the front lines.

And if you think it the pinnacle of insanity for ANY government to relinquish its monopoly on violence by arming its citizens, I will respectfully disagree with you. The real pinnacle of stupidity is to be arming the worst of your citizens. It’s well documented that several of the most known paramilitary gangs are “recruited” in jails. Thus, for a criminal in Russia, going to jail is not problematic. To end an incarceration, all he needs to do is start singing his favorite pro-Russian song..

Now, imagine that I am the warden of a large prison of let’s say 15,000 inmates, operating at full capacity. I just receive the “words of encouragement” from upstairs to allow “ideologically” correct members of my “population” to go fight for the unity of all Russian speaking peoples, and against Ukrainian Nazis. Once again, who’s going to keep track if I really let 5,000 of them become the Russian Expendables, or, for a healthy fee, will allow another 2,000 to simply vanish into a thin air under the disguise of becoming “freedom fighters”?!

This is how we get a massive increase of criminals of all levels of expertise. But, this is just the beginning. What we have not yet seen is the return of hundreds and thousands of disillusioned, and massively psychologically damaged, Russian soldiers back into civilian life when this maddeningly senseless war is finally over. These will be soldiers with military experience, many may still be armed, who will return home with mental and physical scars that are unlikely to be attended to by the state.

They were promised compensation / benefit packages that often exceed what they can make in a year in their civilian occupations. Based on historical precedents, these soldiers will get but a fraction of what they were offered at the start. Thus, they will have to reintegrate into an increasingly violent society, flush with weapons, and just like in the early 90s, their combat skills will be put to good use.

Forecasting this problem of a spiral of violence in Russia is easy. To reverse this trend, and to dig ourselves out of this hole, will take decades. Yet, the first (and a rather logical) step to reverse this process is to STOP digging oneself deeper into this hole. If I could talk to Vladimir Vladimirovitch, I would make a plea to, stop this failed endeavor. Aside from the complete insanity and illegality of it with respect to the Ukrainian people, it is a death sentence for Russian society”.

I suspect that Putin understands these implications perfectly. After all, his triumph in the 1990s was due to his ability to push the outward manifestation of Russian organized (as well as disorganized) crime, underground. And while all of us knew that most of these former gangsters simply turned into corporate board members and bank presidents, we were happy that nobody was shooting in the middle of Nevsky Prospect (the main street in St. Petersburg) in broad day light.

If Russia, once again, spirals into a criminal nightmare, we, collectively, again will need a strong man (or strong grandpa, since Putin will be pushing his mid-70s in a few years). Yet, what we Russian citizens tend to categorize as a “strong government” is simply one that is not afraid to override existing laws (or synthetically make new ones outside of the constitutionally outlined path) to fit a particular circumstance on a given day.

This nonchalant attitude towards the legal framework and the actual law ENFORCEMENT, as well as the pesky Rule of Law, is what makes the “strong state” weak. Yes, you can create a stupid law banning the use of the word WAR, instead of special military operation. But if you do not enforce the existing anti-corruption laws, half of your tanks will have no engines when they arrive on the battlefield.

If you send your citizens to die, as a means to advance your personal vendetta and to hold on to power, someday Russians will wake up and realize this en masse. For Putin’s own sake - I hope that when this moment comes, he is retired far far away from Russia. Yet, regardless of Putin’s fate & retirement plans, we Russians will have to spend the next few decades bringing our house in order.

Take Care,

Kirill A Krylov, CFA, PhD