From Volume 6, Issue 42 of EIR Online, Published Oct. 16, 2007
Russia and the CIS News Digest

Russian Leaders Discuss 'World Liquidity Crisis'

Oct. 9 (EIRNS)—Russian President Vladimir Putin met with members of the new Victor Zubkov government on Oct. 8, about the impact of the global financial and economic crisis on Russia. Finance Minister Alexei Kudrin acknowledged that the international credit crunch is making things "more difficult" for Russian banks, especially those that want to borrow on foreign markets. He said the Russian Central Bank would intervene at home, as necessary, using Russia's gold and currency reserves, while encouraging Russian banks to operate in rubles.

Kudrin told the meeting that Russia should be prepared for a further fall of the U.S. dollar, and for a "deepening crisis" in world liquidity, which could lead to falling energy prices, affecting Russia's export earnings. Putin ordered Zubkov, Deputy Prime Minister Alexander Zhukov, and Elvira Nabiullina, the new Economics Minister, to work closely with the Central Bank on maintaining financial stability in Russia.

At the same meeting, Putin demanded urgent action on rising food price inflation, with "no delays" in government measures to curb dependence on costly food imports, expand Russian food production, and raise duties in order to reduce grain exports. Nabiullina stated that world agriculture prices were the cause of inflation in Russia in September. Agriculture Minister Alexei Gordeyev told the press that Russia would lessen its dependence on food imports, Itar Tass reported. Russia now imports 40% of its meat and 25% of its milk.

Eurasian Customs Union Launched

Oct. 9 (EIRNS)—The Eurasian Economic Community (EurAsEc) will establish a customs union by the end of 2010, it was decided at the Oct. 5-6 triple summit in Dushanbe, Tajikistan, of EurAsEc, the Commonwealth of Independent States (CIS), and the Collective Security Treaty Organization (CSTO). All three organizations include former republics of the Soviet Union. President Putin called the EurAsEC decision "almost revolutionary," though the customs union will be formalized only in 2010. It was first proposed in August 2006.

The CIS includes Armenia, Azerbaijan, Belarus, Georgia, Kazakstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Ukraine, and Uzbekistan, with Turkmenistan as an associate member. All except Ukraine were represented by their heads of state. A key agenda issue for the CIS was cooperation to develop transport, and the summit set up a working group of deputy transport ministers to discuss creating a network of international transport corridors in the CIS, along with a more efficient tariff policy. The CIS, after what Putin called a "very long and heated debate" over its future, agreed to a development policy, and to focus each year on crucial economic issues, which this year will be labor and migration.

The CSTO, the military-security organization, has signed a memorandum of cooperation with the Shanghai Cooperation Organization (SCO), which includes China, and has India, Pakistan, and Iran as observers.

Russia's Security Chief Slams British

Oct. 11 (EIRNS)—In an interview in the daily Argumenty i fakty, Nikolai Patrushev, head of Russia's Federal Security Service (FSB), charged the British foreign secret service of trying to destabilize Russia. "MI6 is not only gathering intelligence in all areas, but is also trying to influence the domestic political situation in our country," Patrushev said, as reported in today's London Guardian. "Politicians thinking in Cold War categories still retain influence in a number of Western nations.... Our file on British intelligence services' activities is huge. We know their strengths and weaknesses. Since the time of Queen Elizabeth I, British intelligence has operated on the principle that the end justifies the means. Their main methods of recruitment are money, bribery, blackmail, and immunity from prosecution." Patrushev accused the British of recruiting Russian agents from among the emigre community in London, mentioning their most prominent agent, Boris Berezovsky.

Primakov Contrasts Iran War Threats to Korean Progress

Oct. 12 (EIRNS)—"Consider: just as a realistic prospect for ending North Korea's nuclear program has emerged, there is a loud clamor for the use of military force against Iran," former Russian Prime Minister Yevgeni Primakov, who plays an important role in Russian-U.S. relations, emphasized in a commentary published in Moscow News yesterday. Primakov's comments are a direct challenge to the "bomb Iran" drive being led by U.S. Vice President Dick Cheney. The "search for peaceful solutions, albeit slow and painstaking, can eventually produce a positive result," Primakov wrote, about the difficult talks with North Korea, "This is an instructive lesson to those who rely on the use of force to prevent the proliferation of nuclear weapons."

U.S.-Russian Ministerial Fails To Agree on Missile Defense

Oct. 12 (EIRNS)—The so-called 2+2 meeting of Russian and U.S. foreign and defense ministers on President Putin's missile defense proposal, and other issues, failed to reach agreement on the key ones, but further such talks have been slated for next year. The U.S. side refused to back away from the intention to place missiles in Poland and a radar in the Czech Republic, as an anti-ballistic missile (ABM) system that Russia evaluates as a threat to its strategic deterrent. The Americans attempted unsuccessfully to convince the Russians that these facilities were not a threat, and that U.S.-Russian ABM cooperation must include them, rather than solely pursuing alternatives, such as the joint use of facilities in Azerbaijan and southern Russia, as Putin has proposed.

Putin addressed Secretary of State Condoleezza Rice and Defense Secretary Robert Gates before they met with their Russian counterparts, saying, "As far as I have been informed, you have your own vision of how cooperation in this area should develop, and we welcome this constructive spirit. The one point I would like to make is that we hope that you will not push ahead with your prior agreements with Eastern European countries while this complex negotiating process continues.... If we concentrate solely on carrying out our own plans, we could end up losing the opportunity for reaching an agreement. But we see that our American partners are showing a constructive desire to continue the dialogue and we think this is a very positive signal."

The U.S. delegation made some proposals, which reportedly included the stationing of Russian observers at the sites in Eastern Europe. Russian Foreign Minister Sergei Lavrov said afterwards, "And at this stage, we do not hide from our American colleagues that we now see at least two serious problems with their proposals. The first problem is that we still diverge about the assessment of the character of the missile proliferation threat against which this 'third positioning region' is being created.... And the second problem is that, we believe that for the joint work of Russian and American experts to be efficient, the plans to deploy the third positioning region in Europe should be frozen. There is no agreement on this, but we encouraged our experts to discuss the existing divergences in a very concrete and specific way."

Putin reiterated Russia's intention to withdraw from the CFE (Conventional Armed Forces in Europe) Treaty, which limits its forces facing Europe, and which has never been ratified by the United States and other NATO countries. The two sides also failed to reach agreement on a follow-up to the strategic nuclear arms limitation treaty, START, which runs out in 2008.

All rights reserved © 2007 EIRNS