From Volume 7, Issue 14 of EIR Online, Published Apr. 1, 2008
Russia and the CIS News Digest

Bush To Meet Putin, Medvedev in Sochi After NATO Summit

March 26 (EIRNS)—The White House has announced that President George Bush will travel to Sochi on April 6, at the end of his European trip, to talk with Russian President Vladimir Putin and President-elect Dmitri Medvedev on the planned missile defense system in Europe and other aspects of the U.S.-Russian relationship. Speaking to foreign print media reporters, Bush said, "I'm optimistic we can reach accord on very important matters."

At the same time, both Bush and National Security Advisor Stephen Hadley reiterated that, at the April 2-4 Bucharest NATO Summit, also on the agenda of Bush's trip, the U.S. would be pushing for extending a Membership Action Plan to Ukraine and Georgia. That is still strongly opposed by Germany and a few other European nations, and must be decided by the NATO heads of state. Putin will also attend the summit, having accepted NATO's invitation for the first time in seven years.

Russian Economists Debate Economic Crisis, Capital Flight

March 24 (EIRNS)—On yesterday's Vesti Nedeli (News of the Week) TV program, Russian Presidential aide Igor Shuvalov confirmed the open secret that top-level Russian economists and policy-makers are fiercely debating the severity of the current financial crisis. RosBusinessnet today reported that the debate is couched in terms of how long the U.S. mortgage crisis could last, though the government Finance Academy's report, issued earlier in March, addressed the systemic nature of the crisis. "Some think it could continue for a long time, triggering a global economic crisis, and others expect the U.S. economy to improve this year," Shuvalov said, "Russia would like the crisis to end as soon as possible." He added that Russia plans steps to make the ruble a stable regional currency, and that the government and Central Bank are reacting quickly to global economic developments. Shuvalov backed joining the WTO, even at a time of global economic crisis, saying that the "WTO will give us new opportunities to develop our national economy."

Finance Minister Alexei Kudrin, while maintaining the line that the "Russian economy remains highly resistant to the global crisis," also admitted on First Channel TV that net capital outflow of $20 billion in January-February 2008 was worse than the rates of capital flight in the last crisis. "In 1998, when our financial system collapsed, capital flight was lower," Kudrin said. Since August 2007, Russia's goal has been to "create such a firm and stable system that capital flight of $20 billion to $80 billion could not collapse it. We have done that." On the world crisis, Kudrin admitted: "Of course, the wave is coming closer, but the question is how we will react, whether we will be able to keep our economic growth." He acknowledged the likelihood of "more difficult times ahead."

Russia in Nuclear Cooperation With Egypt, Chile, Japan

March 25 (EIRNS)—During Egyptian President Hosni Mubarak's March 24-25 visit to Moscow, Egypt and Russia signed an agreement on Russian assistance to Egypt's civilian nuclear industry. Russia is one of three countries Egypt has approached as potential contractors for its first nuclear power station, which the Egyptians hope to have up and running by 2017. Mubarak's visit to Moscow was preceded by a trip to Cairo by Minister of Industry and Energy Viktor Khristenko.

President Putin said that the new agreement will allow Russian companies to bid to build nuclear power plants in Egypt. Signed by Russian nuclear chief Sergei Kiriyenko and his Egyptian counterpart, Hassan Younes, the agreement also stipulates personnel training for nuclear facilities in Egypt, and nuclear fuel supplies to the country. A tender for the construction of the power plant is expected to be announced this year.

In Chile, the University of Santiago has invited top Russian physicists and nuclear energy experts to discuss the advantages of nuclear energy, for the second time in the space of a year. (See "Ibero-America Digest.")

Russia and Japan have decided to form a "nuclear alliance," wrote Novosti commentator Tatyana Sinitsyna on March 26. The nuclear giants, Russia's Atomenergoprom and Japan's Toshiba, will form an "alliance in civilian nuclear power operations, including power plant construction and fuel production," Sinitsyna wrote. Under a framework agreement, Atomenergoprom will enrich uranium produced in Kazakstan, while Toshiba will produce nuclear fuel and undertake design and engineering of nuclear power plants. The two may set up "a strategic partnership in the future," according to Toshiba spokesmen. This partnership could lead the world's nuclear sector, according to experts. Before this new alliance, there were four main nuclear companies: the French-German alliance of Areva and Siemens; two American-Japanese groups, Toshiba-Westinghouse and GE-Hitachi; and Russia's Atomenergoprom, but now there are just three. The French newspaper Les Echos called the new alliance "the main event in the nuclear production cycle"—and "France is worried that the Russian-Japanese tie-up could become a major rival of the French Areva," the Novosti commentary says.

Bering Strait Tunnel Talk Revived

March 27 (EIRNS)—The Russian company Infrastruktura, owned by Chukotka Gov. Roman Abramovich, has commissioned the manufacture of the largest tunnel-boring drill ever made, it was announced earlier this month. Infrastruktura placed its order for the 19-meter-wide drill, price tag 100 million euros, with the German company Herrenknecht AG. A tunnel dug with such a machine could accommodate a six-lane highway, or a four-lane highway plus one rail line.

Multi-billionaire Abramovich is currently estimated to be the second-wealthiest person in Russia. He sold out his oil holdings some years ago, ran for the Chukotka governorship at a time when other 1990s-era "oligarchs" were facing a crackdown, and has met repeatedly with President Putin, evidently coordinating his personal investments in steel and other industries, with state priorities. Russian wires reporting the bore drill contract quoted a Ministry of Transport official, who said that equipment like this is badly needed by Russia, which last year built only 7 km of highway tunnels and 6 km of railroad tunnels nationally. Der Spiegel magazine and other sources reported that the Infrastruktura equipment is destined for use in upgrading infrastructure around Moscow, and near Sochi, site of the 2014 Winter Olympics.

But Chukotka is the Russian area that fronts on the Bering Strait. Thus, the London Daily Mail wrote today, "There was speculation the soccer boss may have bought the machine in league with Putin, in the hope of gaining approval from America for a plan both men are said to have long savored—building a tunnel from the frozen wastes of the Russian region of which Abramovich is governor, Chukotka, to Alaska beneath the Bering Strait."

John Mann, the British spokesman for Abramovich (who owns the Chelsea Soccer Club and has his Millhouse Capital investment company based in London), denied that the bore machine is for the Bering Strait, pointing out that there is not yet any road from the rest of Russia to Chukotka's capital, Anadyr. But, the Bering Strait prospect once again caught people's imagination. The Russian clipping and translation site InoPressa, in its Russian translation of the Daily Mail article, included a sentence that does not appear in the text as currently available from the Daily Mail (but possibly it was in earlier editions): "According to one insider, 'This is one of Putin's dreams, and he is already conducting secret talks with Washington on the matter. He considers Russia to be the center of the world, and wants the Europeans to ship their products, as well as Russia's, from one end of Russia to the other, and on to the USA'."

The report was picked up also in the Daily Telegraph and other British press, as well as Alaska's Voice of the Times. The latter carried a column by William Tobin, on March 23, about related developments in North America: "Discussions continue about extending the Alaska Railroad—maybe to the west, to connect through a tunnel under the Bering Sea to the Trans-Siberian Railroad in Russia. Or maybe to extend the railroad to the east to link up with the Canadian rail system." Tobin dismissed the discussion as "just talk," but did chide Alaskans on their failure to match Russian railway building.

On March 12, Eurasia Net published an overview of Russia's rail plans for the next 20 years (as reported in EIR of Sept. 7, 2007). These include:

* the North Siberian Railway, or SevSib, a 2,000-km freight-oriented system, to be completed in five years, to connect northern regions of Siberia to the Baikal-Amur Mainline, at Ust-Ilimsk in Irkutsk region;

* smaller, but crucial Far East rail projects such as a bridge or tunnel to Sakhalin Island;

* the "extraordinary project to build a transcontinental Yakutsk-Magadan-Anadyr-Alaska rail link, including the world's longest subsea tunnel under the Bering Strait, at an estimated cost of some $55-67 billion."

All rights reserved © 2008 EIRNS