The Brain Drain and Capital Flight from Russia Would Undermine Putin’s Regime
It’s a very “awkward” text, but I think we also need to learn not to be shy about discussing such things. Unspoken feelings won’t just disappear on their own, and they are there, even though they’re “awkward.”
We Are Not Criminals
As Ilya Krasilshchik wrote in The New York Times: “Now, when the whole world considers Russians a criminal nation, like thousands of others, I want to come out and say: I did everything I could. What does it have to do with me? But that would be a lie. I indeed did a lot. But I failed. Just like all other Russians who have been openly or secretly disagreeing with what’s been happening over these ten years. We all failed — from those who opened European cafes and built honest businesses in a corrupt country to those who fought against the regime openly, heroically, and to the end. We all failed. We failed as a nation. We couldn’t prevent the disaster.” “The state in which Russian society currently finds itself, outraged by the war, is monstrous. We lost. We couldn’t stop the mad and criminal war. Nothing is left of our freedom. We lost the country we knew.” “It turns out that we are considered criminals by both our state and the rest of the world.” “We are not criminals because we did not declare this war and did not vote for those who did.” “Moreover, we have repeatedly spoken out against the policies of the state, despite the fact that these statements were often dangerous. We are not criminals, but”…
He proposed a very sensible plan (not for the West — for ourselves) on his Instagram: “I think what we need is a mass movement of the concerned. Those who are ready to say not only ‘I am against’ but also ‘I am for.’ Those who are ready to become part of something. It’s actually not easy: you have to compromise your individuality. Because you will be for something with which you do not always agree, and sometimes you will be required to act in ways you are not fully sure of — because you agree that together we are stronger than individually. Because this is exactly what they are trying to deprive us of — being together and united. You can be wonderful individualists and be in harmony with yourself, I do not judge that, but if you want change beyond the confines of your soul, it doesn’t work.” “Such support doesn’t necessarily have to be public and dangerous. The only thing it deprives of, as I already said, is individual choice in some situations.” “I think the only meaningful action is the one that turns us from individualists into a mass force.” “Again: to support, you don’t have to agree with everything. Supporting FBK [Navalny’s Anti-Corruption Foundation], I disagree with a number of things they do, and I speak openly about it. But they do the work that I am not capable of and which I consider very important. And when they call to do something, I will do it.”
The Brain Drain and Capital Flight: That Would Undermine Putin’s Regime
When Vladimir Putin invaded Ukraine, Alexandra Prokopenko quit her job at the Russian Central Bank. In an interview, she explains why the Russian president’s economic policy is so successful. And what the West could do that would really harm the Kremlin. “Instead of sealing off the West from Russian money, we could, on the contrary, try to stimulate the outflow of capital from Russia. Every billion less in Russia means less support for the war machine. Even at a time when the Russian Central Bank had already introduced capital controls, tens of billions of dollars were still flowing abroad. Why shouldn’t the West encourage such movements instead of fighting them as it does now? I believe it is time for the West to do everything it can to encourage both the brain drain and capital flight from Russia. That would undermine Putin’s regime. It would be time to slowly bleed Russia’s economy dry.” “That’s why the regime is doing everything it can to prevent even more people from going abroad.”
Alexandra Prokopenko works in Berlin at the Carnegie Russia Eurasia Center and the Center for East European and International Studies (ZOiS). She previously served as an advisor to the Russian Central Bank in Moscow. In March 2022, Prokopenko handed in her notice in protest against the war. Interview for Der Spiegel conducted by Benjamin Bidder and Ann-Dorit Boy.
“I think we have now reached a point where we can clearly see that the measures taken so far are not working as intended. I think it wouldn’t hurt to experiment a little. Unfortunately, the EU has so far done the opposite: It is simply expanding its register of banned goods and sanctioned persons. Will this throw the Russian economy off course? Of course not.”
“These are sanctions that have not been formalized at all, but which affect all Russians, regardless of whether they are civil servants or have left the country in protest. Every holder of a Russian passport in Berlin can tell you a thing or two about it: It is enormously difficult even for ordinary Russians to open an account in Germany, almost impossible. This is not only annoying for those affected: It also cements the narrative of Russian propaganda that Russians are being persecuted abroad across the board and that the West is pursuing anti-Russian propaganda.”
“If people continue their work, that doesn’t necessarily mean that they support the war. In any case, I haven’t met anyone among my former colleagues who would be in favor of this war please bear in mind that people are in different life situations. For some, it is easier to burn all bridges.” “In the United States, we didn’t experience a mass exodus from government agencies during the Vietnam War and the growing criticism of it.”
“So, the mood among many civil servants and managers is bad, they don’t feel safe. Even in this situation, it is an enormous risk to demonstratively oppose the system. Not everyone is capable of doing this. And let’s be honest: Where are these people supposed to go today? Anyone who has worked for the Russian state will not find a job anywhere except within the Russian Federation. Even if a person demonstratively declares their resignation, they can’t expect to be able to pursue a career abroad again.”
“I […] mean normal civil servants. Some of them are excellently trained and capable people with expertise that is internationally recognized. The few who have decided to resign have major problems. They find it extremely difficult to find a job in academia. They’re not wanted in the consulting business, not even in international organizations. And I’ll say it quite openly: Perhaps more people in Russia would make a different choice if they saw a way out. But the West doesn’t offer them one.”
“There is no exit option. Why are no conditions being set? Distance yourself from the regime, pay in money for Ukraine here — and then the sanctions will be weakened or lifted. But there is no such offer. This also applies to many Russian businesspeople: Their assets are frozen, they can no longer travel. They have become pariahs of the international system. There is only Putin left, and he says: You stay with me. It may be that Putin is the devil — but for many, he is a devil that they know how to deal with. Added to this is the increasing repression and growing fear within Russia. All of this is fueling fatalism.”
Fueling Fatalism
This was a very “uncomfortable” interview — yet very constructive in its sober assessment of the situation: do you want “showiness” or do you want to progress? Zelensky is fighting to (save face) not give territories to Putin — but why are territories needed in the modern world? Take away more than a million talented and young Russians from Putin, take away the capital of dissenting entrepreneurs and investors — he will lose more from this.
After Navalny’s death, not everyone can maintain faith in a “Beautiful Russia of the Future.” Shura Burtin explains why he thinks it won’t exist. He believes that hope for the future is “now a harmful thing.” Such things, it seems to me, should also be spoken about without embarrassment. Unspoken feelings won’t disappear on their own, and they are there, although uncomfortable. And the purpose of such “internal monologues” is not in scaling despair but in the message (as with Krasilshchik): if we and the opposition leaders don’t learn to cooperate, gather, and play together, then Putin will win. Not because he is strong — but because we are weak.
“In his “don’t give up” video, Navalny talks about some kind of our strength. I don’t know. Maybe he felt his strength and extrapolated it to everyone. It seems important to me to feel our weakness. To clearly see that we have no future and that we are very weak. To see how divided we are, how poorly we can help each other.” “Hoping that something normal will happen with Russia in any foreseeable future is dangerous.”
“We are dealing with a very bad, malignant process, which will not stop anytime soon. Because Russia is a huge country with immense power.” “We are in a cell with a psycho, and we need to be afraid of him. We must soberly realize that everything will be bad — not only in Russia. The war is likely to escalate.” “And he will raise the stakes, go for escalation. No one is there to stop it. We have no strength for it, and actually, we never really did. But also, the world does not know how to confront evil. Putin’s madness is just one of its manifestations, war is coming from everywhere, and we can easily perish in it.”
“Most likely, we will save ourselves individually. The opposition is divided and helpless. Even in freedom, in emigration, it does not try to do something together; say, somehow protect the interests of millions of fleeing Russians. And I don’t see how we can influence this. Hope for the future is now a harmful thing. There’s no point in deluding yourself: we are few, we are very, very weak. The only thing we have is now, and we are in it.”
“We have to understand that our situation is dire and that we don’t know what to do. I think it’s time to switch to emergency mode and try to behave differently. We must consciously try to unite people around anything — even just cooking dinner together. It’s important not to close off, to be open to suggestions, to trust. I think Navalny’s death is not a call to charge at the ramparts (we’ll all be too scared anyway), but a sign that all along the way we didn’t do something important and thus ended up so weak. Always end up this way. I don’t believe in showy antics at fascist elections, yet it’s very important to support initiatives of good people, even if they have a different view of things. It’s worth introducing a conscious moratorium on any quarrels, it’s just stupid now. We are very bad at supporting each other, not just in politics, but in general. We need to learn, if we don’t want to die stupidly. It’s clear that we’re used to living in a normal life, in which society somehow doesn’t let you perish. It seems to me, it’s worth understanding that the situation has changed.”
“The question is how to live abroad. For many, it’s very difficult, they need help. This is something we need to seriously think about while there’s still some time. Our infrastructure is poor, but there’s still some. We should try to help organizations that are doing something more actively. It doesn’t matter who, just participate more actively in any common affairs. And organizations would do well not to isolate themselves. The stronger this infrastructure, the more chances we have. It’s good that people like Alexei Navalny or Yulia Navalnaya are trying to unite us, but actually, relying on leaders is harmful, it’s self-deception. Only infrastructure works.”
‘There are two Russias’: on the way to The ‘Beatiful Russia of the Future'
This resonates with Boris Akunin (Chkhartishvili), a popular writer (and now oppositionist) in Russia — we fight so much (against each other — within the opposition) against Putin, and not “for” something (as Krasilshchik wrote above), that we lose focus: “It seems to me, most of us haven’t realized yet that the Russian world, just like a century ago, has again split, like an ice floe, and its two halves, large and small, are swiftly drifting apart.”
“The split stretched over time, and the crack initially wasn’t wide, some are still jumping from one ice floe to another.” “And yet — it’s over. There are two Russias again. Many — on both sides — cannot or are afraid to realize this. It’s time to stop jumping, otherwise, you’ll jump one way and won’t be able to jump back.”
“Hopes for the quick collapse of the lousy regime (again, as 100 years ago) are not fulfilled. The regime is lousy, but lousiness, as known, is sticky. Last time, it took 70 years to scrape it off. This time, probably, … it’s time to unpack the suitcases and prepare for the long haul.”
“What will happen with the “small” Russia, scattered across different countries, is generally clear. Those who are younger, or more active, or professionally more cosmopolitan, will assimilate with varying degrees of success. Those who are older and professionally tied to language and culture will sadly sing “until the light does not dim, until the candle burns”… Some pay with their profession, some with impoverishment, some with emigration. The most worthy — with freedom. And even life. The higher the quality of the person, the higher the price.”
“And it’s all worth it. That’s what I think and why I wrote this text, not at all to bring you even more despair.” “It’s not so much an exam session for all of us, but for each one individually. It’s important not to cheat.”
We’ve fought so much (against each other — within the opposition) against Putin, and not “for” something, that we lose focus. If in the end, it’s about “moving forward, not just for show,” — then why are we concerned about all of Russia and all Russians? Why can’t we think about ourselves and people similar to us in values? Not only Russians — Belarusians, Ukrainians, anyone.
‘It will only weaken the anti-war movement and help Putin’
Yulia Navalnaya criticized the EU’s decision to lift sanctions against Fridman and Aven, “they just hired very expensive lawyers and found good lobbyists.” “It will only weaken the anti-war movement and help Putin stay in power longer,” she concluded.
And nothing new here. As my friend David Birch posted a year ago: “Russian warlord passed UK money laundering checks with mother’s utility bill. F**k me. I mean, seriously, f**k me. My wife was refused a savings account in December because her driving licence had expired, meanwhile a Russian warlord can use his dear old mum’s gas bill.”
I think this is exactly what Catherine Belton wrote about in her book — “Putin’s People” know how to adapt to your game, imitate it, exploit its loopholes and flaws, corrupt, and create breaches with their lawyers in bureaucratic turmoil.
A Russian warlord linked to human rights abuses and under international sanctions, Yevgeny Prigozhin, bypassed UK anti-money laundering checks by using a gas bill in his mother’s name to hire Discreet Law in 2021 for a libel lawsuit. His Russian lawyers forwarded the law firm a copy of his passport and a gas bill in the name of the Wagner boss’s then 81-year-old mother: “The bill is issued in the name of the claimant’s mother (Violetta Prigozhina) who actually lives at the client’s residential address and pays the bills.” In response, a solicitor at Discreet Law replied: “We are satisfied with the [anti-money laundering] documents.”
The firm accepted it as proof of identity, despite Prigozhin’s connections to the Wagner mercenary group and his status on the FBI’s most wanted list. This incident highlights concerns about London’s role in facilitating economic crime, with critics calling for more stringent client verification processes. Margaret Hodge, a Labour MP, said: “It is ridiculous that a Russian warlord avoided all suspicion of money laundering by simply using his elderly mother’s gas bills”. “Our bankers, accountants and lawyers all have a duty to perform robust checks on their customers,” said Hodge, adding such scrutiny was critical in preventing dirty money reaching the UK. Discreet Law founder Roger Gherson said: “Discreet Law’s position is that in taking instructions and undertaking due diligence they have at all times complied fully with their legal and professional obligations”.
I started reading “Putin’s People” by Catherine Belton and I can’t stop! The first hundred pages about his work in Dresden, building financial schemes and proxies for laundering money for the KGB and Stasi, correlates well with such AML and sanctions cheating, and even explains why the GRU needs Jan Marsalek.
“Anti-war Russians in Europe face many problems, but for Russian oligarchs, everything is easily solved with money,” Yulia Navalnaya criticized the EU’s decision to lift sanctions against Fridman and Aven. And such problems are not only for opposition-minded Russians but Belarusians too! Svetlana Tikhanovskaya about the amendment that proposes to introduce new grounds for canceling the temporary residence permit of Belarusians in Lithuania: “In conversations with European politicians, I emphasize: it’s important to isolate Lukashenko’s regime, not Belarusians,” “it’s important to remember: the responsibility for this lies not with the Belarusians, but with Lukashenko.”
“One wants to ask European politicians: ‘What has changed since you imposed sanctions on Russian oligarchs?’” Navalnaya reminded that neither Fridman nor Aven made any public statements against the war nor attempted to end it — according to her, “they just hired very expensive lawyers and found good lobbyists.” Yulia Navalnaya called the decision to lift sanctions against Fridman and Aven “harmful.” “It will only weaken the anti-war movement and help Putin stay in power longer,” she concluded.
