One to watch: Rostec’s Sergei Chemezov makes political waves

The Bell

Hello! This week our top story is on Sergei Chemezov, the influential head of state conglomerate Rostec whose political star appears to be on the rise. We also look at: why Putin’s eldest daughter is in top-level meetings on genetically engineering humans; Russia’s latest attempt to compete with Elon Musk; plummeting levels of alcohol consumption; the launch of a sinister humanoid robot; and the two new Russians sanctioned this week over alleged interference in U.S. elections.   

One to watch: Rostec’s Sergei Chemezov makes political waves

President Vladimir Putin this week secretly made his close associate Sergei Chemezov a ‘Hero of the Russian Federation’. The title is Russia’s highest award and is usually conferred for a feat of special valor in service of the state. For over a decade, Chemezov has been CEO of state conglomerate Rostec, which earns billions of dollars on contracts with the army and security services. But Chemezov is also one of the few people in Putin’s inner circle to have spoken out about the recent anti-Kremlin protests in Moscow, and rumors have swirled that he is investing in independent media outlets.

  • We do not know what exactly Chemezov did to be given this honor and there was no public announcement of the news. The title was conferred for “cumulative merit” in the field of international cooperation on defense technology and for his work at Rostec, according to an official in the presidential administration quoted by Vedomosti newspaper.
  • Chemezov is one of the most influential — and contradictory — figures in the Russian elite. He is one of Putin’s oldest friends: they met when Putin was working for the KGB in Dresden in the 1980s and in the 1990s the two men were employed in Boris Yeltsin’s presidential administration. “We lived in one building, and were both work colleagues and neighbors,” Chemezov recalled.

  • Later, Chemezov became head of Rosoboronexport, the state-owned intermediary for the import and export of military technology. Today, Rosoboronexport is part of Rostec, of which Chemezov became CEO in 2007. Initially, Rostec was made up largely of defense assets, but it has grown into a multi-industry giant that controls companies including United Aircraft Company and Kamaz, which makes freight trucks. Rostec also has a controlling stake in arms manufacturer Kalashnikov. Chemezov’s immense skill as a lobbyist is legendary and a well-known expert once called (Rus) him the “shadow minister of the defense industry”.
  • Despite all this, Chemezov is the only person in Putin’s inner circle who may be sympathetic to the opposition. In August, he unexpectedly spoke out (Rus) in support of protesters in Moscow: he alleged that people were “really upset”, warned of stagnation and said a healthy opposition was a political necessity. The rarity of Chemezov’s public interventions only makes them more interesting. In 2016, Meduza named (Rus) Chemezov as an investor in independent TV channel RTVi, although he later denied (Rus) this was true.

Why the world should care

It is hard to square Chemezov’s critical comments and his career. He may have real sympathy for the liberal community — or it might be some sort of message to Kremlin power-brokers. One thing is clear: Chemezov is one of the most influential people in Russia even though he keeps a much lower profile than, for example, Rosneft CEO Igor Sechin. Despite his age (67), Chemezov is a figure to watch ahead of a power transition in 2024 when Putin reaches the end of his current presidential term.

How Putin’s eldest daughter became Russia’s informal genetics tsar

Maria Vorontsova (who is widely believed to be Putin’s daughter though the relationship has never been officially confirmed) discussed the editing of human DNA at a recent secret meeting with geneticists and health officials, according to a Bloomberg report this week. After more investigation, The Bell has learned there have been many such meetings. Since Putin appointed Vorontsova to a council in charge of a new genetics program, she has become closely involved in discussions about genetic modifications and the attendant ethical questions. A push to move forward on this highly sensitive area of scientific research was apparently lobbied by Putin’s friend Mikhail Kovalchuck.

  • Russia is actively involved in genetic research, but lags the U.S. and Europe in both results and investment, according to the official brief for the $1.9 billion genetic program set-up last year on Putin’s order. It goes on to state that “DNA-editing technologies will provide a special contribution towards preserving and strengthening the health of the nation.”
  • An endocrinologist by training, Vorontsova is a member of the council established by presidential order to oversee the program. “It would appear she’s personally interested in genetics: others recognize this and play along,” one source familiar with the topic told The Bell. The first time Vorontsova was publicly listed to speak on this topic was just a couple of days before the new genetics program was announced. A photograph from this meeting seen by The Bell shows a table with Vorontsova’s name tag, although she herself is not in the photo (officials go to great efforts to hide the faces of Putin’s daughters).
  • Vorontsova participates in the council’s discussions in her capacity as a member of the Russian Association for the Promotion of Science (RASN), which was also the organizer of the (different) meeting reported by Bloomberg.
  • The idea that Russia should try and take the lead in the field of genetics — a recent development — belongs to the director of Moscow’s famous Kurchatov Institute, Mikhail Kovalchuk, a source told The Bell. Mikhail Kovalchuk and his brother Yuri are both close friends of Putin.
  • It is no surprise that Mikhail Kovalchuk is a member of the council for the new genetics program alongside Vorontsova. In addition, the two are members of RASN’s presidium where discussions on genetics also take place.

Why the world should care

Nepotism is almost state ideology in Russia, and Vorontsova’s career in genetics shows how Putin prefers to entrust important issues to members of his inner circle. At the same time, all this reveals how DNA modification has become a top priority for the Kremlin — to the point where some fear it may spark a new form of arms race.

Roscosmos vs. Musk: Russia to outsource spaceship construction

State-owned space corporation Roscosmos is set to order multi-use cargo spaceships from a private company at one-quarter of the price per launch cycle of Elon Musk’s similar Dragon spacecraft. The first results will not be achieved until 2024 at the earliest, but it hasn’t stopped Roscosmos’ CEO from doubling-down on his criticisms of Musk.

  • At the moment, Russia doesn’t have any multi-use spacecraft, but this may change with the new spacecraft, called Argo, which will be able to carry two tonnes of cargo to destinations like the International Space Station. While each launch cycle will cost $9.8 million, Roscosmos hopes to earn $500 million from the new vehicle over a decade.
  • The spacecraft is being developed by privately-owned MTKS and is expected to be completed by 2024. MTKS was founded by former S7 Space CEO, Sergei Sopov. S7 Space is a project of S7 (Russia’s largest privately owned airline), which has been developing a floating spaceport since 2016. Sopov is a well-known space enthusiast: in the 1990s, he helped arrange the transfer of the Baikonur Cosmodrome in newly-independent Kazakhstan to Russian hands, and in 1988 he was part of the team that launched the unmanned Buran spacecraft. More recently, he has spoken in favor of joint state-private space exploration and the use of nuclear fuel to power ‘tug boats’ for cargo rockets.
  • Comparisons of the MTKS spaceships ordered by Roscosmos and Musk’s Dragon are no coincidence: Roscosmos CEO Dmitry Rogozin never misses an opportunity to criticize his U.S. competitors. For example, Rogozin told journalists Thursday that he “wasn’t impressed” by the spacecraft designed to colonize Mars recently unveiled by Musk, adding that only “20% of the project” is realizable. Rogozin may have himself been educated as a journalist, but he often points out (Rus) that Musk never trained as a rocket-building specialist.
  • Unlike Rogozin, many Russians look favorably on Musk and his projects. There is a popular online meme in Russia that goes: “And how do you like this, Elon Musk?”. It’s posted above photos of bizarre machines or descriptions of crazy ideas that, by some miracle, actually work. Musk himself even commented — in Russian — on one such video showing a car that had had its trunk switched with its engine.
  • Last week, the organizers of a business forum in southern Russia even rented (Rus) a billboard in California with the meme to promote a video in which they sing “only Tesla, only SpaceX, only Elon in our hearts” to a famous tune from Soviet cinema. Their idea is to persuade Musk to attend their forum. For some reason, Rogozin doesn’t get these sorts of invitations.

Why the world should care

Russia is losing the space race: last year, Russia ranked third in the world with only 19 space launches after China (38) and the U.S. (34). The attempt to outsource Argo is a gamble for Roscosmos: it might lead to a long-awaited breakthrough, or it may be a debacle.

Alcohol consumption plummets 43% in 13 years

Russian drinking habits are taking a turn for the teetotal: a study by the World Health Organization (WHO) released Tuesday showed Russians drank 43 percent less in 2016 compared to thirteen years earlier.

  • Hard liquor in particular is being shunned: there was a 67 percent drop in consumption of spirits between 2003 and 2016, according to the WHO, which compares to declines of 8 percent for wine and 4 percent for beer. The WHO concluded these declines were driven by the government’s anti-alcohol policies (including advertising restrictions, higher taxation and limitations on sales), and are a major factor in rising life expectancy.
  • Despite the changes, Russians are still some of the heaviest drinkers in the world. Men who drink at least once a year consumed on average the equivalent of 152 bottles of vodka in 2016, while for women it was the equivalent of 52 bottles of vodka.

  • The WHO also looked at the consumption of moonshine (known as samogon), which traditionally rises in times of economic crisis. While samogon’s popularity has fallen since the early 2000s, the WHO said consumption ticked upwards after 2014 when the economy was hit by a collapse in oil prices and Western sanctions. Last month, we learned (Rus) that one of Russia’s biggest moonshine fans is none other than Prime Minister Dmitry Medvedev, who produces his own samogon to gift to VIP guests (it features a bear on the label — ‘medved’ is the Russian for bear).

Why the world should care

Alcohol is — and will remain — an important part of Russian culture, but the WHO study shows very clearly that drinking patterns are undergoing rapid change.


Start-up launches sale of humanoid robots

Perm-based company Promobot has begun the sale of robots built to resemble any human requested by the client. The ‘Robo-C’ humanoids, which cost up to $46,440, can hold a conversation and move their eyes, eyebrows, lips and facial ‘muscles’ — although the rest of the body is immobile. While the company says it anticipates Robo-Cs will be used in museums, shops or as office assistants, Promobot’s development director Oleg Kivokurov told The Bell they had a request from a bereaved father to create a robot looking like his dead son (the company has yet to decide whether to accept the order). Since being founded in 2015, Promobot has sold 500 androids in 35 countries: in Russia their clients include the Moscow Metro and state-owned bank Sberbank. Earlier this year, Robo-C made headlines when it was used to present the news on a leading state-owned TV channel.

Who are the two new Russians sanctioned by the U.S.?

There were two new Russian names — Denis Kuzmin and Igor Nesterov — in the sanctions announced by the U.S. on Monday in response to alleged Russian interference in last year’s midterms. Aside from an apparent affiliation with the Internet Research Agency (which runs the St. Petersburg-based ‘troll farm’), little is known about either man. But The Bell has been able to piece together some background. According to sources, the 28-year old Kuzmin studied in St. Petersburg and spent several years promoting pro-Kremlin media organizations online, even taking part in a 2011 meeting with then-President Dmitry Medvedev. Later, he worked for a media outlet owned by Yevgeny Prigozhin, the founder of the Internet Research Agency who is known as Putin’s cook. In one incident, a source said Kuzmin tried to pass on information intended to compromise Lyudmila Savchuk, an activist who worked undercover at the Internet Research Agency before going public with her experience. Less is known about the second man, Nesterov, but sources said he was often seen with Kuzmin.

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