From Volume 7, Issue 27 of EIR Online, Published July 1, 2008
Russia and the CIS News Digest

Medvedev Pushes Ruble's Role in Addressing Global Crisis

June 26 (EIRNS)—Russian President Dmitri Medvedev spoke on two occasions yesterday about his intention to push aggressively for introducing the Russian ruble as a regional reserve currency. In his view, such a role for the ruble will help to promote a shift to an international financial system based on multiple reserve currencies, rather than on the U.S. dollar alone.

Medvedev's latest remarks on the international financial situation, and what Russia intends to do about it, came during his June 25 interview with three Reuters reporters, which was aired on RTR state television. In this interview, Medvedev called the crisis of the dollar a problem not only for the U.S.A., but for countries that use the dollar. He said that other countries should strive to create a multi-currency international financial system, in an attempt to limit the impact on them of the dollar's collapse. Pointing to the circulation in the Arab world and elsewhere of the idea of regional reserve currencies, Medvedev said, "We, too, are thinking about this."

As a regional reserve currency, Medvedev said, the ruble could service deals among countries within a ruble zone, which would use the ruble as a means of payment. Medvedev said that the world financial system and the international food crisis are the two issues he wants to focus on at the July 7-9 Group of Eight summit in Japan. As announced at the St. Petersburg International Economic Forum in early June, Russia is preparing proposals on the international financial system for that occasion. On June 26, the Russian agrarian newspaper Krestyanskye vedomosti reported that Medvedev has indicated his intention to make a major proposal on the world food crisis at that same meeting. He has said that he intends to work for international conventions to ensure a normal food balance on the planet, because the crisis situation in food is something for which the major nations must develop an adequate response.

Also on June 25, Medvedev met with Andrei Kostin, the chairman of VTB (the former Soviet foreign trade bank, Vneshtorgbank). VTB has become an important institution for various initiatives in Russia, including capitalization of the country's Development Bank. As in Kostin's meeting with Prime Minister Putin last month, the topic of his talks with Medvedev was plans to create an international financial center in Moscow. Medvedev expressed enthusiasm for this project, calling it "one of our strategic tasks," and linking it to the objective of making the ruble a regional reserve currency. Kostin suggested that the "financial center" project would require modernization of the legal framework and tax structure. Meanwhile, he reported, VTB has taken the first steps toward creating a ruble zone, by beginning regular banking operations in five Commonwealth of Independent States countries besides Russia, and planning to do so in three more. He said this activity was creating the infrastructure for carrying out ruble-denominated transactions throughout the post-Soviet area.

Citing FDR, Lavrov Promotes U.S.-Russian Relations

June 23 (EIRNS)—Russian Foreign Minister Sergei Lavrov addressed a conference called "A Look into the Future: Russia in the 21st Century," held in Moscow and attended by leading figures from the four great powers whose actions will be decisive for the near future of mankind: the U.S.A., Russia, India, and China. Germany's Deutschebank and the Russian Foreign and Defense Policy Council (SVOP) sponsored the June 20 event. Among those in attendance, according to the online Yezhednevny zhurnal of June 23, were Igor Yurgens, head of President Dmitri Medvedev's new think tank, the Institute for Contemporary Development; Strobe Talbott of the Brookings Institution, who was Deputy Secretary of State in President Bill Clinton's administration; and Maj. Gen. Gong Xiangfu from China's International Institute for Strategic Studies (CIISS).

The Russian foreign ministry drew attention to Lavrov's speech, posting the pre-delivery text on its website.

Lavrov talked of the need for a new architecture of international relations, in the political realm as well as the financial system. Twice he invoked U.S. President Franklin Delano Roosevelt as exemplifying the quality of statecraft needed today. Lavrov urged his audience to remember then-President Vladimir Putin's February 2007 speech to the Munich Security Conference, which also began with a citation of Roosevelt—FDR's warnings about world war (see "Putin Delivers Reality Shock at Munich Conference," EIR, Feb. 23, 2007). "It is evident," Lavrov said, "that without clarifying for ourselves the 'big questions' of international development, and arriving at a common understanding of them within the international community, it will not be possible to solve any particular problems in world politics."

Lavrov strongly rejected notions that the phase of history after the Cold War, which some call "post-American," should be "a 'world after the U.S.A.'" Still less should it be "without the U.S.A.," he said. People talk in terms of a multipolar world, but Lavrov cited former State Department official Richard Haass, now head of the Council on Foreign Relations (CFR), who said the world now has no poles at all. He agreed with Haass, that "to ensure the manageability of world developments in these new circumstances, will require some kind of nucleus of leading nations."

"A new international architecture is taking shape," Lavrov said, "both political, and financial and economic, and it corresponds to the world's new realities." Among those realities, he added, is Russia's return to world politics. That is based not only on its energy wealth, but also "grain, and our leadership in nuclear energy and space exploration, as well as our potential in the area of land, air, and sea transport, and the role of the ruble as one of the world's most reliable currencies."

Citing the failure of neo-liberal economic models, Lavrov said that a different type of initiative is needed. He described what impulse Russia would welcome, and would want Europeans to look for, from the United States: "What comes to mind is F.D. Roosevelt's New Deal...." Lavrov went on to talk about the importance of Russia-American relations, and their influence upon Europe, as he called for "equality within the triangle of Russia, the EU, and the U.S.A."

The historical episodes that demonstrate the need for such an approach, he said, include not only FDR's New Deal, and the subsequent anti-Hitler coalition, but also the actions of President John F. Kennedy. "Kennedy made a bold attempt to escape from the logic of a militarization of foreign policy thinking, the danger of which his predecessor had warned about"—meaning President Dwight Eisenhower's famous speech on the "military-industrial complex." Which way the U.S. foreign policy pendulum swings today, said Lavrov, "will determine what kind of America the world has to deal with."

Lavrov repeated Medvedev's call for an all-European summit in the near future, to "formulate the positive agenda that is currently lacking." Russia advocates a "pause" in international relations, to regroup and reconsider, but Lavrov cautioned that that doesn't mean that all projects should just drift again—especially citing Kosovo's independence, the emplacement of anti-missile defenses in eastern Europe, and the expansion of NATO to the East. He called for an end to "spheres of influence" thinking and to attempts to arrogate political "veto rights" to institutions other than the United Nations.

"The time has come to address the global problems which we didn't take up during the Cold War," concluded Lavrov. "Back then, there were ideological priorities. If not now, then when are we going to take up the fight against poverty, hunger, and disease? A breakthrough into a common future requires new, innovative approaches."

Gazprom Looks to Asia

June 26 (EIRNS)—On June 24, in advance of its upcoming Annual General Meeting, the Russian natural gas monopoly Gazprom presented its perspective for the coming business year. The briefing was dedicated to Gazprom's accelerated entry into Asian markets, according to a Rosbalt news agency report. Rosbalt cited Moscow oil and gas market experts on the remarkable intensification of Gazprom's business with Asia. In the past month, Gazprom has finalized deals for new projects in Vietnam, arranged joint projects with the South Korean company Kogaz for the sale of Russian natural gas to that country, and received a large Japanese bank investment for the development of the Sakhalin 2 project on the Pacific shelf. "This indicates that Japan will be counting on Russian gas in the years ahead," the report said.

Gordeyev and Primakov Meet on Food-Production Initiatives

June 26 (EIRNS)—Russian Agriculture Minister Alexei Gordeyev this week attended a joint conference with the Russian Chamber of Commerce and Industry, held in the southern agricultural region of Krasnodar. Its topic was cooperation between the Ministry of Agriculture and the businesses represented in the Chamber, on achieving the much needed increase of Russian agricultural output. In his speech to the meeting, Chamber of Commerce and Industry head, former Prime Minister Yevgeni Primakov, expressed grave concern over the food security of Russia. He noted that food imports are growing ten times faster than Russia's own agricultural production.

Primakov said he considered it urgent to adopt a Federal law on agricultural land maintenance, because of the huge amount of arable land that has gone out of cultivation in Russia. Primakov went so far as to say that if the proper laws were passed to provide appropriate guarantees of responsible management of agricultural land, Russia could invite foreign entities to take out long-term leases to work land that is not currently being cultivated. Russia does not have enough people and companies that are capable of starting to farm at this point; hence Primakov's radical proposal.

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