From Volume 6, Issue 31 of EIR Online, Published July 31, 2007
Russia and the CIS News Digest

Putin: Time Running Out for Joint Missile Defense

July 25 (EIRNS)—"We are offering strategic partnership—an international system to neutralize missile threats," Russian Foreign Ministry security and disarmament official Anatoli Antonov said today, according to RIA Novosti. Referring to a recent session of the Russia-NATO council, Antonov said that Russia's case has been heard, but not necessarily heeded.

President Vladimir Putin also spoke publicly again about his talks with President George W. Bush on this matter, which took place at the Kennebunkport, Maine Bush family compound, at the beginning of July. Addressing senior military and intelligence personnel at the Kremlin on July 24, Putin talked about the new quality of threat to Russian security, which U.S. anti-missile systems in Central Europe would pose: "Essentially, the Americans will be deploying elements of their strategic weapons systems in Europe for the first time," Putin said, according to the transcript on the Kremlin website. "Meanwhile, we have still received no answer to the alternative proposals we have made regarding defense from hypothetical—and I stress that they are hypothetical—missile threats." Putin said that there is a time factor for Russia, which cannot leave things at this unresolved state: "In this context, the priority for our military development at this stage is to bolster our Armed Forces' combat readiness, equip them with modern weapons and military equipment, and create dual-use systems such as GLONASS, for example."

Russia Blocks UNSC Vote on Kosovo Independence

July 20 (EIRNS)—A firm stand by Russia stopped a resolution on Kosovo from being pushed through the United Nations Security Council by its U.K., U.S., French, Italian, and Belgian co-sponsors. The resolution called for negotiations between Kosovo and Serbia for 120 days, after which the administration of Kosovo would be handed over to the European Union, with NATO troops remaining in the province. This arrangement would lead to the independence of Kosovo from Serbia.

The resolution's dejected sponsors came out of the Security Council meeting to read a statement to the press which said that, since Russia had refused to "allow the resolution to go forward," it made no sense to take a vote, and that they instead intended to take the issue to the informal Kosovo Contact Group in Vienna on July 23.

Russian Ambassador Vitali Churkin told the press that Russia had "refused to vote for the resolution or abstain.... We were not going to let it pass." Churkin stressed that Russia's non-negotiable principle is the "territorial integrity of a member-state of the UN."

Russia Threatens Pull Out of London Stock Exchange

July 20 (EIRNS)—Russian companies may just have to pull out of the London Stock Exchange, if the current tensions (between the U.K. and Russia, over the Litvinenko case) continue, Alexander Shokhin, president of Russia's Union of Industrialists and Entrepreneurs, said in Moscow yesterday. "If events develop in this key, Britain's trading floors, traditionally favored by Russian companies, including state-run companies, would start losing ground, and continental exchanges will obtain an opportunity to attract Russian companies to their bourses," RIA Novosti quoted Shokhin. He added that U.K. companies in Russia may now face more inspections from tax authorities and regulators.

Referring to retaliatory limitations on the movement of officials between the U.K. and Russia, Shokhin noted that there was "nothing to stop the British from saying that managers of state-owned corporations are also state officials. In addition, many officials who sit on boards of directors will fail to enter the U.K. as their companies' business will require." Shokhin called on Moscow not to retaliate in kind against the U.K., or the tensions could end up in a "political ping-pong, which may mean a chill in Russia-U.K. relations, if not a return to the Cold War times."

Russian Official Hits British Economic Motives

July 27 (EIRNS)—Russian Audit Chamber chairman Sergei Stepashin today became the latest Russian official to attack British economic practices towards Russia in recent years. He told reporters in Moscow that he suspected London's distress at Russian moves to end these practices was one motive behind the current showdown over the Litvinenko murder case.

Stepashin described the Audit Chamber's investigation of British Petroleum and other foreign oil and gas contracts, obtained in the 1990s for developing Russian fields. The Chamber submitted four reports to the government on environmental and other irregularities in these projects, after which Royal Dutch Shell was cut out of its share of the Sakhalin-2 project. More recently, Gazprom bought out BP's contract to develop the Kovykta gas field. President Putin, who recently exclaimed, "Thank God, Russia was never a British colony!" said in June that the Shell and some other contracts were "colonial" deals that should never have happened.

Russia's Capital Investment and Industrial Output Rising

July 24 (EIRNS)—According to Vedomosti, the Russian State Statistics Service (Rosstat) has reported that capital investment in Russia is rising at almost the same pace as it is in China. The key sectors in which increases in investment have occurred are construction, especially of apartment buildings; mining; agriculture; railroads; investment by power companies into turbines made by Power Machines; and investment by the oil and gas sector. Vedomosti reported that "this type of rapid investment growth is a first for modern Russia." The Moscow Times reported that capital investment grew at the record rate of over 2716% in June, year on year, and was up over 2216% in the first six months of 2007.

Rosstat also published figures showing a rapid rise in industrial production this year. Russia's manufacturing index was 7.716% higher in the first half of 2007 as compared with 2006, a rate of growth which Russia has not achieved since the break-up of the Soviet Union, according to a summary in Kommersant daily of July 19.

Most important was the fast growth in manufacturing, which rose a record 15.6% in June alone, and 12.2% in the first half of 2007. Construction materials were a key part of this, including cement, bricks, and reinforced concrete. Even more important, Kommersant reported from discussions with experts in the energy sector, the highest growth rates were in energy produced by steam and hydraulic turbines. In the first half of 2007, this produced 1.1 and 0.9 million kilowatts of energy, respectively, which is 1.9 and 2.7 times more than in the same period of 2006, said the report. Energy experts said that this increase is directly linked to "the beginning of the realization of a large-scale investment program in electrical energy."

Siemens Building High-Speed Trains for Russia

July 20 (EIRNS)—Germany's Siemens has launched production of high-speed trains to be used in Russia. Siemens and Russian Railways held a ceremony in Krefeld, Germany today, to mark the production of a new generation of trains called Velaro Rus, which are specially designed for the technological and natural conditions in Russia, including Russian wide-gauge track. Russian Railways head Vladimir Yakunin and Siemens Transportation President Hans Schabert were both at the ceremony, Interfax reported. These will be the first high-speed rail lines in Russia, despite its huge distances, which certainly call for such transport technology.

Russian Railways and Siemens signed a contract in May 2006, that Siemens would build eight trains entirely in Germany, in a 576 million euro deal. The Velaro Rus train can go as fast as 330 km/h, will be 250 meters long, and can carry 600 passengers. The first routes to be used will be Moscow-St. Petersburg and St. Petersburg-Helsinki. The first train will be completed by December, and the high-speed routes will begin operating in 2008. Other routes will follow, including to Nizhny Novgorod.

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