From Volume 5, Issue Number 28 of EIR Online, Published July 11, 2006
Russia and the CIS News Digest

Ukraine's 'Orange Revolution' Redux Fizzles

The attempt at reconstituting an "Orange" coalition to govern Ukraine, after inconclusive March Parliamentary elections, went into a tailspin July 7, when the Socialist Party defected from its alliance with President Yushchenko's Our Ukraine and the Bloc of Yulia Tymoshenko. The Socialists joined with the Party of Regions (POR) and the Communist Party, in electing their own man, Socialist Party leader Alexander Moroz, as Speaker of the Supreme Rada. With this crumbling of the "Orange" deal, the way was opened for a different government coalition. The Socialists are joining with the same Communist Party and POR, to back POR leader Victor Yanukovych—the man defeated in the 2004 Orange Revolution—as Prime Minister.

POR spokesman Taras Chornovil said July 7 that this combination would form an "anti-crisis" government, while Yanukovych continues to hold the door open for Our Ukraine and others to join, in a "grand coalition." The next day, Yanukovych announced that relations with Russia would be rethought, because, "We must return to a calm, reasonable and self-assured tone in Ukrainian foreign policy, especially in our relations with Russia." The POR leader added that his party was developing an action plan for the current crisis, in which "Ukraine has never been so close to the edge of an economic abyss as it is today, and we are facing a national catastrophe."

Tymoshenko, who was supposed to have returned as "Orange" Premier (her main achievement, the first time around, having been the sale of the country's largest steel plant to asset-stripper Mittal), accused the Socialists of treachery. She declared that the Orange Revolution had ceased to exist. The Socialist move was a surprise, which many observers rushed to link to Moroz's own ambitions. Yet, it should be noted that throughout the "Orange" negotiations since the March elections, the Socialists' refusal to endorse the others' unconditional commitment to join NATO, had been a major obstacle.

Lyndon LaRouche commented that the Orange Revolution has turned yellow. He said the development indicated a "sleeper," something done in the context of the G-8 summit. It's the Russians striking back, or rather, the Russians and the Near Abroad: the Orange crowd was on a confrontation course with the Russians, and that relevant Russians pulled their cards. Enraged reactions can be expected from the United States and Poland, LaRouche said.

Putin Insists Economy Must Develop Through 'Innovation'

In a July 6 webcast, Russian President Vladimir Putin answered questions which came in from all over the world. Nearly 157,000 questions came to the Russian collection site alone. Another 5,000 questions were submitted through the BBC, whose correspondent Bridget Kendall, however, was permitted to pick about half the questions actually put to Putin, which resulted in a bias in the direction of the Western media's favorite litanies. The far greater number of questions submitted through, but not put to Putin, included hundreds of thoughtful questions from Russian citizens about possible improvements in economic policy. For example, 13 questions cited Putin's own reference to Franklin Delano Roosevelt (a few on the appropriateness of a President serving a third term, in a time of crisis; the others on using FDR's methods to address the economic crisis), and at least 315 proposed better ways to invest Russia's Stabilization Fund, such as in the real economy inside the country, rather than in "risky foreign financial paper."

Questioned about North Korea's missile tests, Putin cited the Russian Foreign Ministry's official expressions of concern about the missile tests, but urged that "emotions not overwhelm common sense." He said the negotiation process should resume. On Iran, the Russian President urged that the question of its nuclear program be returned to the IAEA, not the UN Security Council.

Putin's responses to economic questions began with a deft destabilization of Kendall. The British reporter asked about "the main topic for the G-8 summit—energy security," asserting that "many people in Europe are worried about the reliability of Russian supplies, especially after you turned off the gas to Ukraine in January." In reply, Putin interrogated Kendall about the price-tag on her ritzy necklace, asking her why, if "you'd hardly sell it to a man in the street for peanuts, Russia should give away its property and its natural resources for peanuts?" Putin then justified the calculation of the natural gas price for sales to Ukraine on a new basis, agreed to by President Yushchenko, attacking the press hysteria over this as pressure on Russia. He brought up the way in which the low gas prices in Ukraine, maintained for many years, had—under conditions of globalization—set up Ukraine to have the guts of its industrial capacity grabbed by sharks. In particular, "If you want us to supply our gas to Ukraine at dumping prices, you must understand that you are getting us to help you create a non-competitive environment for certain economic sectors in Europe. So Mittal Steel acquired the biggest steel company in Ukraine, Kryvorizhstal. And what if they can get gas for $50 per thousand cubic meters, while Arcelor's plants in Germany have to pay $230?"

Putin enunciated his reformulated economic priorities for Russia (even while also repeating the old dicta about not letting oil revenue fan inflation by spending too much of it inside the country): "First of all, one of our main tasks in economic development is the diversification of our economy. We want to make it an innovation economy. That is why we established the Investment Fund, where money will be allocated chiefly to develop infrastructure, and innovation. That is why we are now setting up a Venture Fund. This is why we have adopted laws and established special economic zones, earmarked for the development, first and foremost, of high-tech. That is why we are creating special conditions for the development of, for example, nanotechnologies."

Russians Concerned About Georgia G-8 Provocation

The Russian co-moderator of President Putin's July 6 webcast selected a question on whether President Michael Saakashvili of Georgia were not planning a military operation in the unrecognized autonomous area of South Ossetia, during the July 15 St. Petersburg G-8 summit. Rumors of this are flying around the Russian-language Internet, especially after Saakashvili visited Washington. Putin replied that it would be an "unforgivable blunder" and "a provocation" to initiate new bloodshed in the Transcaucasus. Saakashvili met with President George Bush at the White House on July 5, eliciting a promise of support for Georgia's attempt to join NATO. "We'll work with our partners in NATO to see if we can't make the path a little smoother for Georgia.... Georgia has got work to do, and the President understands that. And I'm a believer in the expansion of NATO," Bush told reporters.

Even as popular dissatisfaction with Saakashvili's rule is on the rise at home, Saakashvili spoke to a fawning crowd at the American Enterprise Institute, indicating his own role as enforcer for the financial oligarchy. "When I came to power, the electricity system in Georgia was so bad that I would have sold it for a dollar to any private enterprise to take it over," he said. The sale was made, though the price was marginally higher. Speaking to the Washington Post, Saakashvili warned that if his regime in Georgia fails, it will spell the end of the "colored revolutions," which have already started to fade.

Putin: Russia Prepared To Live Without WTO

Addressing representatives of the International Chamber of Commerce on July 4, Russian President Vladimir Putin pointed out that the United States is the only country which has not reached agreement with Russia on the latter's joining the World Trade Organization. "We think that in many ways the Russian economy is a lot more open and liberal in the way it functions, than the economies of some longstanding WTO members," he said, but added that "If for some reason we do not manage to reach a final agreement, then we will, of course, no longer consider ourselves bound by certain agreements that we have not only accepted, but have also been implementing, without yet having joined the WTO."

On other recent occasions, including his July 6 webcast, Putin has expressed exasperation about various WTO-related demands. In reply to a webcast question about WTO membership threatening to "bury" Russian agriculture, and some other sectors, Putin described the alleged advantages of WTO membership in terms of "the opinion of those who advocate Russia's joining the WTO." He promised that Russian agriculture would be protected. But, most of all, he said, "I particularly wish to draw your attention to the fact that we shall not agree to conditions we consider unacceptable." These include the removal of barriers to foreign banks opening branches in Russia.

Dialogue of Religions Conference in Moscow

President Vladimir Putin addressed 100 religious leaders from 40 countries at the July 3 Dialogue of Religions conference in Moscow. Putin underlined Russia's status as a model for "intercivilizational dialogue," and slammed any attempt to "drive a wedge" between Christianity and Islam: "Attempts are being made to divide the world according to religious or ethnic membership, and above all drive a wedge between Christian and Islamic communities and provoke a clash of civilizations," Putin said. Metropolitan Kirill of the Russian Orthodox Church said that the conference discussed issues relevant to the G-8 summit, which opens in St. Petersburg on July 15.

Nazarbayev Speaks in Washington About the SCO

While visiting the USA to prepare an upcoming state visit by President Nursultan Nazarbayev of Kazakhstan, that country's Foreign Minister Kazymjomart Tokayev spoke July 6 to think-tankers and students at the School of Advanced International Studies. In his remarks, Tokayev referred briefly to the Shanghai Cooperation Organization (SCO). Knowing that the SCO had been met at best by a cold silence in Washington, he reiterated that the SCO was an organization for important regional cooperation, not directed against any other party. The Ambassador also noted the SCO's role in the creation of "transportation corridors" in the region.

In reply to a question from EIR on the recent SCO summit's economic discussions, as a step towards realizing the Eurasian Landbridge concept, Tokayev underlined the importance of the SCO's economic relationships. "The SCO has a universal agenda," he said, "and Kazakhstan will work to give the SCO a well-balanced direction. The agenda of the SCO is quite unique in promoting trade and ties between the nations of our region. At the same time, our priority has been transportation. We have completed one railroad from Chinese territory through Kazakstan to Europe, and we are preparing to build a second one."

Tokayev went on, "Engaging Iran is important, because of the need to gain access to the Persian Gulf. We are working on a second pipeline to China in order to provide them with energy." He noted that Russia and Kazakstan had set up a fund of $1 billion to provide loans to the poorest SCO countries.

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