From Volume 5, Issue Number 11 of EIR Online, Published Mar. 14, 2006
Russia and the CIS News Digest

Putin To Visit China in March

Russian President Vladimir Putin will make his planned visit to China on March 21-22, it was announced March 9.

CFR Throws Wrench Into Russia-U.S. Relations

On Sunday, March 5, the day before Foreign Minister Sergey Lavrov arrived in the USA, a Council on Foreign Relations task force on Russia-U.S. relations, chaired by former Sen. John Edwards (D-NC) and former Rep. Jack Kemp (R-NY), issued its findings in the report, "Russia's Wrong Direction: What the United States Can and Should Do." The task force, warning repeatedly of growing "authoritarianism" in Russia, argued that the United States has a right and a strategic necessity to make demands regarding what happens inside Russia.

Calling for increased funding for NGOs and "democracy" groups inside Russia, the CFR task force proposes that Europe, joined by the U.S. administration and Congress, draw up criteria by which they will judge the legitimacy of Russia's 2007 parliamentary elections and 2008 Presidential elections—and give this public discussion "comparable to the attention that was given, long before November 2004, to the integrity of Ukraine's political process." Otherwise, there is "the very real risk that Russia's leadership after 2008 will be seen, externally and internally, as illegitimate."

There can only be "selective" cooperation with Russia now; a partnership is not feasible at this time, the CFR task force also concluded. They declared the U.S. should accelerate integration of Russia's neighbors into Western institutions and economy [e.g., NATO]. And, while rejecting Sen. John McCain's (R-Ariz) proposal that the West boycott the upcoming G-8 meeting in St. Petersburg, the taskforce recommended Russia be placed "on informal probation" in the G-8, while activating the G-7 as a separate forum from the G-8, which would meet first, so the G-7 walks into the St. Petersburg G-8 meeting as a bloc.

Former State Department official Stephen Sestanovich was evidently the lead figure among the Russia-specialists on the task force. Three of its members, Clinton and Bush 41 Administration figures, dissented from the CFR document, issuing their own statement, which opposed so much meddling in Russia's internal affairs.

Lavrov: Cheney Is Not President

Russian Foreign Minister Sergei Lavrov was interviewed March 8 by Rossiya TV, after his talks in Washington that day. The interviewer asked if Dick Cheney's militant warnings against Iran, in his recent speech before the American-Israeli Political Action Committee (AIPAC), along with the CFR report, did not represent a tightening of U.S. policy towards Russia. Lavrov replied, "First of all, I did not have the honor of meeting with Vice President Dick Cheney. I met with the President of the USA, George Bush. I have already said how he evaluates the situation. I proceed from the premise that the President of the USA determines foreign policy."

The Nation Attacks CFR Russia Report

Katrina Vanden Heuvel, editor of The Nation, wrote a signed editorial in the weekly's March 7 issue, titled, "Needed: A New Direction for U.S.-Russian Relations." She said that the CFR's "Russia's Wrong Direction" report was just what is not needed, because of its "hectoring tone" and push in the direction of a "remilitarized" U.S.-Russian relationship. If Russia seems to have become "semi-authoritarian," Vanden Heuvel wrote, one could try to understand that with a "sense of history—something missing from too much of media coverage of Russia today," and starting with the history of the past 15 years. For example, "The Edwards-Kemp [CFR] report (see above) ... fails to make clear that after the looting and plundering of Russia's natural resources by a handful of oligarchs in the 1990s, abetted by Yeltsin and also endorsed by the U.S. as 'reform,' it was virtually inevitable that Putin, or any post-Yeltsin leader, would reassert state control over the country's essential resources, particularly oil and gas." Or, one might recall that "de-democratization" began when President Yeltsin used tanks to suppress an elected Parliament in 1993.

Vanden Heuvel also expressed regret that Sen. Edwards, in focussing his attention on Russian-American relations, had done so in association with this CFR task force, rather than, say, "addressing the poverty ravaging that beleaguered country," which would have been naturally coherent with Edwards' campaign against poverty in the United States.

Fradkov Warns Cabinet: Heads Will Roll

Russian Prime Minister Mikhail Fradkov warned the cabinet on March 9, that failure to meet specific policy targets is reason for the dismissal of ministers, RTR Vesti reported. Ironically enough, the missed target is the inflation rate—domestic price inflation in Russia was 4% in January-February alone—but the heads that would roll could be those of Economics Minister German Gref and Finance Minister Alexei Kudrin, strict proponents of neoliberal economic rules, who have opposed investing Russia's oil windfall in domestic infrastructure or industry projects on the grounds that doing so might spur inflation.

Gref Warns of Bubble in Russian Stock Market

Russian Minister of Economic Development and Trade German Gref told a March 2 cabinet meeting that share prices on Russian stock exchanges were at risk of forming "a so-called bubble," and that the government was "very afraid" of such a development. According to figures from Renaissance Capital, cited in the Moscow Times March 3, Russian market capitalization increased as much during January and February of this year, as it had done in 2001-2003. The Russian Trading System (RTS) Index has climbed by 100% in the past 12 months. A dozen large companies account for approximately 80% of Russian stock trading. The current surge, according to Moscow market-watchers, is being driven by portfolio investment from abroad. The Moscow Times quoted a specialist from Moscow's MDM Bank, who said, "Money has to go somewhere, and the appetite for risk is very high. Other emerging markets are doing well, too."

Velikhov: Energy Infrastructure Needs Investment

Yevgeni Velikhov, president of Russia's Kurchatov nuclear research center and a senior member of the Russian Academy of Sciences, said that power generation will rank high on the agenda of the upcoming G-8 Summit in St. Petersburg. At present, the global network of power supplies is incapable of meeting the growing demands of especially the developing nations, the billions of citizens of which have the same right to energy supply as citizens in Europe, the USA, or in Russia.

The biggest problem is that giant investments are needed, to keep power supplies up with the growing demand, Velikhov said, and that requires $15-$16 trillion over the coming 25 years. In previous interviews, Velikhov has insisted that without nuclear power, future power supplies will not suffice for the world, and he has strongly endorsed the development of nuclear fusion.

Russians Charge 'Blockade' of Transdniestria

In a statement issued March 9, the Russian Foreign Ministry charged that Ukraine and Moldova are "blockading" the Transdniestria region of Moldova. New customs regulations require all cargoes moving from Transdniestria into Ukraine, to have an official Moldovan customs stamp, for the stated purpose of curbing smuggling. Transdniestria, a narrow strip of territory along the left bank of the Dniestr River in Moldova, borders Ukraine. But Russian forces have patrolled the area since fighting there in the early 1990s, and the local authorities do not answer to the Moldovan government in Chisinau. The Foreign Ministry statement, as well as a resolution passed the next day by the Russian State Duma, accused Ukraine of threatening the population of Transdniestria with a "humanitarian disaster." The flare-up of the Transdniestra hot spot escalates tensions in tensions in East Central Europe, on the eve of elections in Belarus (March 19) and Ukraine (March 26).

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