From Volume 5, Issue Number 48 of EIR Online, Published Nov. 28, 2006
Russia and the CIS News Digest

Germany, Russia, China in Rail Freight Agreement

A step in development of the Eurasian Land-Bridge was taken by Hartmut Mehdorn, Vladimir Yakunin, and Liu Zhijun, top railway officials of Germany, Russia, and China, respectively, on Nov. 22 in Beijing. They signed a statement of intent. Mehdorn said that the purpose of investments in the improvement of existing rail infrastructure, as well as links to the ports of Shanghai and Hong Kong, is to create "a Trans-Siberian Landbridge between Asia and Europe." By 2011, 10 million standard 20-foot containers will be transported between China and Europe, taking 12 days. Container ships from Shanghai to Hamburg take 30 days. Germany's share in the project is 2 billion euros, of which 1.2 billion is for modern freight terminals that reduce loading-unloading time.

International Fusion Project Advances

On Nov. 21, an international agreement to build the world's first fusion power reactor was signed in Paris by Russia, the United States, the EU, China, Japan, South Korea, and India. Scientists from Russia, which accounts for about $1 billion of the $10 billion project, first elaborated the controlled thermonuclear fusion concept, and completed many different fusion experiments. The project's plan was mostly complete in 2001. Then began three years of negotiations over its location; ultimately, France won the International Thermonuclear Experimental Reactor (ITER) bid, but Japan acquired the right to set up a scientific and information center to manage experiments. Construction is to begin in January 2007, according Academician Yevgeni Velikhov of Russia's Kurchatov Institute. "We plan to finish the construction in 2017," he said, "and yet it will take 20 years more to say that humanity has paved the way for thermonuclear energy." The center in Japan will design the ITER project and provide materials, Velikhov said. British nuclear scientist Martin Rees, according to the Frankfurter Allgemeine Zeitung, observed that if the ITER received more funding, fusion technology would be available 10 or 15 years earlier than 2050, the current projected date.

Bush and Putin Sign WTO Agreement

Before the late-November APEC summit in Hanoi, there was a sudden focussing of U.S.-Russian relations onto the world's worst axiomatic system, free trade and globalization, in order to prepare an 800-page Bilateral Market Access Agreement for signing by Russian Economics Minister German Gref and U.S. Trade Representative Susan Schwab, on the sidelines of the meeting. Presidents George Bush and Vladimir Putin discussed the matter at a Moscow airport stopover by Bush, and again in Hanoi, and the document was signed Nov. 19. Media coverage trumpeted it as the last big hurdle before Russia's accession to the World Trade Organization (WTO). Gref, notorious for loyalty to the rules of globalization, proclaimed, "This is a historic step, the last step, that marks Russia's return to the market principles of the world economy." The Moscow Times, among others, indulged in speculation on the relationship of the "breakthrough" to the situation around Iran, since one of the obstacles removed by Bush at the last minute was U.S. sanctions against Russia's Sukhoy Aircraft company for sales to Iran.

In the recent Russian documentary film, "The Global Change," Lyndon LaRouche is asked about the prospects for Russia's joining the WTO. "I wouldn't recommend it," LaRouche replied. "I think that if Russia finds a reason for not entering it, that would be a good thing. The WTO is a part of a process of globalization. And without protectionist policies, nations cannot make long-term investments, of the type that Russia has to make now.... The game [of the WTO] is to reduce the prices of things, through a free-flow globalization. Therefore, you are going to destroy the capital investment within countries, to produce.... You are going to ruin the economy of every country in the WTO system. This is the greatest single threat, of this kind, to civilization globally. The WTO and civilization cannot live together much longer. Either civilization will go, or the WTO will go."

Several steps remain, before Russia might really be admitted to the WTO. It needs to get most-favored nation status in the United States, which can't happen unless the Soviet-era Jackson-Vanik Amendment (linking trade status to Jewish emigration) were ended; that, in turn, involves Congressional review, during which Russia-bashers might have a field day. The Saakashvili government in Georgia continues to vow to block Russian accession, as long as what Tbilisi calls "illegal trading" by Russia with South Ossetia and Abkhazia continues.

Russian-EU Summit Treads Water

Russian President Vladimir Putin met European Union leaders Nov. 24 in Helsinki, Finland, for talks on energy and other areas of cooperation. New negotiations on a cooperation agreement (the present one expires at the end of 2007) could not begin, because Poland vetoed them. Expressing regret, Putin remarked at the concluding press conference, "The EU has not yet worked out a consolidated position on this issue." In a pre-summit article for European newspapers, Putin criticized the moves by Poland and other new EU members to torpedo the next round of talks: "Future talks should not deteriorate into an exchange of complaints," he wrote. "Those who warn of the danger of Europe becoming dependent on Russia see Russia-EU relations in black and white, and try to fit them into the obsolete mold of 'friend and foe.' Such stereotypes have little in common with reality, but their persistent influence on political thinking and practice runs the risk of creating fresh divisions in Europe."

Foreign Minister Sergei Lavrov, in a Nov. 22 interview in Rossiyskaya Gazeta, said that Poland's veto was an internal EU problem, not a Russia-EU one, though he suggested that Warsaw had partly been retaliating against Russia's demands to prosecute and correct cases of tainted meat imports from Poland to Russia. Speaking after talks with the Greek foreign minister on Nov. 22, Lavrov also repeated that Russia has no intention of ratifying the Energy Charter (which demands an end to Gazprom's pipeline monopoly). In Helsinki, Interfax reported, Russian Energy and Industry Minister Victor Khristenko said the EU was trying to get Russian ratification by political pressure, rather than looking to mutual concessions for the sake of more energy cooperation.

Kremlin Confirms Domestic Gas Price Hikes for Russia

In an interview in the Nov. 22 Wall Street Journal, Russian Presidential economics adviser Igor Shuvalov confirmed plans to triple domestic natural gas prices over coming years, from the current level of $40-50 per thousand cubic meters, to $150. Shuvalov said that charging more, especially to Russian industrial users, is the only way to ensure investment in the industry. Bringing domestic prices into line with speculation-dominated international commodities markets has been a demand on Russia from international financial institutions and other globalizers, for 15 years. Shuvalov is seen in Moscow as representing the tendency within the Kremlin that favors playing by free-trade rules.

British experts and media continue to harp on Russia's troubles, stemming from underinvestment by Gazprom in production. On Nov. 20, the London Independent featured Alan Riley of the Center for European Policy Studies, who attacked the notion of Russia as "an all-powerful energy superpower." Riley cited a warning by Vladimir Milov, a former Russian Energy Ministry official, that Russia's shortfall of natural gas could be 126 billion cubic meters by 2010. Gazprom calls this "disinformation."

On Nov. 22, President Putin held a meeting with top energy officials, to discuss power supply problems that have already cropped up. A week earlier, Gazprom fired Alexander Ryazanov, the deputy CEO in charge of contacts with foreign partners on developing the Shtokman gas field in the Barents Sea. His replacement, Valeri Golubev, is a long-time associate of Putin from St. Petersburg.

Putin: High-Profile Assassinations Are Provocations

Speaking in Helsinki Nov. 24, President Putin commented on recent sensational political assassinations involving Russia. In reply to a question about journalist Anna Politkovskaya's murder, he said: "We must also think about other assassinations of that kind. Another journalist, the American Paul Klebnikov [of Forbes, ex-son-in-law of banker John Train and biographer of Boris Berezovsky] was also assassinated. An investigation was opened and the case was brought to trial. Unfortunately, the defendants were freed by the jury. The prosecutor has reopened the case." Putin went on to note that political murders were taking place abroad, too, mentioning the poisoning of former Russian intelligence officer Alexander Litvinenko, who died in London that morning. Putin said he hoped that the death would not be used for political provocation. At the same time, a deathbed letter by Berezovsky ally Litvinenko, saying that if he died, Putin was to blame, is being publicized worldwide.

Migrant Labor Activity Restricted

Under a government decree, issued Nov. 15 after demands by President Putin, migrant workers from outside Russia are prohibited from selling alcohol or pharmaceuticals as of Jan. 1, 2007. For January-March, no more than 40% of retail personnel working at outdoor locations may be foreigners, while after April 1, new hiring of these migrants to work such jobs is banned. The decrees, requiring changes at large Moscow and other urban outdoor markets, where immigrants from the Near Abroad (former Soviet Union) work for very little pay, could set the stage for serious frictions.

Putin requested the new rules at the height of tension with Georgia in mid-October. A crackdown in the Moscow markets, led to the deportation of as many as 100 Georgians a day. Officials say there are between 10 and 15 million foreigners working in Russia, many of them without proper documents. With Russia losing 700,000-800,000 people annually (net, outside of immigration), they make up nearly 10% of the population. Vremya Novostei recently quoted Federal Migration Service head Konstantin Romodanovsky, saying that more than 17-20% foreigners in any region is too much, especially if they are from other nationalities and religions than Russia's traditional ones. "I consider that settlements of the 'Chinatown' type would be unacceptable for Russia, and I can assure you there will be no such settlements," he said on TV.

Amid inter-ethnic street fights and beatings of foreigners in various parts of Russia (hyped by the media though they may be, there's no way around the fact that such incidents have become more frequent), Kremlin advisor Vladislav Surkov told Ekspert magazine in an interview last week, that "ethnic criminal groups and the xenophobia they engender, could destroy multiethnic Russia, unless they are defeated by the justice system, education, and successful development."

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