From Volume 5, Issue Number 16 of EIR Online, Published Apr. 18, 2006
Russia and the CIS News Digest

Russia Urges Calm on Iranian Nuclear Program

Although the Russian Foreign Ministry officially criticized Iran's announced moves to proceed with its uranium enrichment program, Moscow is continuing to insist that no punitive measures be taken. Foreign Minister Sergei Lavrov said April 13 that military attacks on the facilities would create "a dangerous explosive blaze in the Middle East, where there are already enough blazes." UN Ambassador Andrei Denisov said there were no reasons whatsoever for punitive measures, because there was no evidence of non-compliance with the Non-Proliferation Treaty. He said one should not rush events, and that further actions would "depend on the conclusions in the report, to be presented by the International Atomic Energy Agency (IAEA) chief, as well as on his recommendations and proposals." The IAEA report is due at the end of April.

Moscow Heat Technology Institute Director Yuri Solomonov, whose organization is Russia's own nuclear weapons producer, said Iran posed no threat to the United States. "Iran does not have and will not have the chance to develop such systems in the foreseeable future, as regards U.S. territory," he said.

Sergei Kiriyenko, Head of the Russian Nuclear Power Agency, said, "Industrial uranium enrichment in Iran is out of the question and the Iranians are not capable of industrial uranium enrichment." Igor Linge, deputy director of the Russian Academy of Science's Safe Atomic Energy institute said, "One hundred and sixty-four centrifuges suffice only for a laboratory experiment. Real cascades are much larger. And the fission process involves a lot more than a hundred centrifuges." Linge added, "The Iranian announcement of the beginning of uranium enrichment is true but Tehran is still far away from the possession of nuclear weapons."

Russia in No Rush To Join WTO

Russia's chief trade negotiator, Maxim Medvedkov, explicitly told Rossiyskaya Gazeta April 12 that Russia has "slowed down the negotiating process" for its accession to the World Trade Organization. RG said that Medvedkov cited the "purely political demands" recently sounding from the U.S. side. Speaker of the State Duma Boris Gryzlov said the same on April 11, echoing President Vladimir Putin's own complaint, the week before, that the United States (the main hold-out on approving Russia's membership) had raised new demands all of a sudden. On April 10, U.S. Senate Majority Leader Bill Frist (R-Tenn), at a Moscow press conference, had loudly linked WTO approval with Russia's "positions on the issues such as Iran's nuclear program and trends in democracy promotion." Gryzlov said, "Our country isn't interested in unfavorable terms."

Russian Stock-Market Mania Rises; Shades of '98?

Current news about Russian stock market investment is a nearly verbatim replay of the first half of 1998, when "Russia was hot"—on the eve of the August 1998 default. Since the beginning of this year, prices on Moscow's RTS and MICEX stock exchanges have surged by 33%. Most of the companies listed on the exchanges are oil and metals exporters. Leading the pack is the state-owned gas monopoly, Gazprom, which on April 10 passed Royal Dutch Shell to become the sixth-biggest company in the world in market capitalization. At $227 billion, it is only $10 billion behind British Petroleum.

On April 5, the U.S. Department of Commerce noted that Russia's gold and foreign currency reserves had reached $185 billion, the fifth-highest in the world. The next day, Bank of Russia head Sergei Ignatyev said the figure actually hit $205.9 billion on April 1, an increase of 150% over the 2005 level.

The greater part of these reserves accrue from the taxation of oil and raw materials exports. In addition, all such taxes accruing due to oil prices in excess of $27/barrel are funnelled into the Stabilization Fund, which now stands at $60 billion. The government is stuck on the monetarist dictum, that spending that money inside Russia would destroy the economy by breeding inflation. Earlier this month, Finance Minister Alexei Kudrin confirmed what Prime Minister Mikhail Fradkov had hinted: Russia is going to invest the Stabilization Fund in foreign stocks and bonds! According to an RIA Novosti overview of the Stabilization Fund debate, dated April 13, "the bulk of the money will be invested in foreign government bonds, and the rest in large foreign companies." Some people are even pushing for the $60 billion portfolio to be "managed by a foreign company that knows the market well," though others at least contend that the Russian Central Bank can oversee the investment itself.

Another 'Color Revolution' Loses Its Hue

An anti-Soros organization in Georgia mounted rallies in Tblisi on April 13, calling for President Michael Saakashvili to resign, Parliament to be dismissed, and new Presidential and Parliamentary elections to be held. About 2,000 representatives of the anti-Soros public organization, which unites a number of opposition parties, told the press they had declared 2006 as "the year of the Saakashvili regime's resignation." "Our demands should unite all opposition forces," they said. Over recent weeks, there have been dozens of such demonstrations against Saakashvili, some of them with several thousand participants protesting the further collapse of pensions, living standards, etc.

The Georgian Rose Revolution leader is also facing multiple challenges in Parliament. Currently 38 right-wing deputies are boycotting all proceedings, to protest a ruling against Parliamentarians being active in business. On April 10, a Parliament spokesman had to come out and deny press reports that Saakashvili was about to dissolve the body and hold early elections.

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