From Volume 7, Issue 31 of EIR Online, Published July 29, 2008
Russia and the CIS News Digest

China, Russia Sign Final Border Agreements, Reaffirm Strategic Partnership

July 21 (EIRNS)—Russian Foreign Minister Sergei Lavrov met with Chinese President Hu Jintao and Prime Minister Wen Jiabao today, at the beginning of a two-day visit to Beijing. He signed, with Chinese Foreign Minister Wang Jiechi, a protocol regarding two islands at the westernmost edge of China, at the confluence of the Amur and Ussuri Rivers, the final step in determining the 4,300-km border between the two countries.

The two also discussed the further development of their mutual relationship. The Chinese foreign minister said at a press briefing, after his talks with Lavrov, that they had reached a wide-ranging consensus and that their talks were "positive and fruitful." He said the two sides exchanged views on how to further promote the Sino-Russian strategic partnership of cooperation, and enhance bilateral cooperation on international and regional issues.

Lavrov said the talks were "fruitful" and concentrated on how to carry out bilateral agreements and the new tasks raised during Russian President Dmitri Medvedev's China visit in May, and contacts between Hu and Medvedev in Japan earlier this month. Lavrov also announced that Russian Prime Minister Vladimir Putin would be attending the opening of the Beijing Olympics on Aug. 8. Both ministers were to attend the Association of Southeast Asian Nations (ASEAN) Regional Forum in Singapore, occurring just after their Beijing meeting. After this, the two will travel to Dushanbe for a meeting of the Shanghai Cooperation Organization's foreign ministers. There will first be a meeting of the SCO countries, and then meetings that include the SCO observer nations. The SCO will also discuss the possibility of lifting the present moratorium on the expansion of membership in the organization.

Russia Says It Will Host Grain Summit

July 20 (EIRNS)—On July 14, Russian Deputy Minister of Agriculture Vladimir Izmailov told the Novosti news agency that Russia seeks to host the "grain summit," proposed by President Dmitri Medvedev at the recent G-8 meeting in Japan. At the same press conference, a ministry spokesman said the meeting might take place in June 2009 and be attended by representatives from 50 to 70 countries. Izmailov, as well as Deputy Finance Minister Dmitri Pankin in a separate statement, said that Russia wants to investigate grain pricing, including how to limit speculation, and to discuss increasing production.

The same day, Agriculture Minister Alexei Gordeyev, First Deputy Prime Minister Victor Zubkov, and other officials held a conference in the Tambov Region, addressing measures to boost agricultural output in Central Russia. This area, sometimes called the non-black-earth zone, is responsible for one-fourth of Russian food production. Gordeyev said that a package of land-use laws, designed to bring more arable land back into cultivation, will be readied for action by the State Duma this September, along with housing programs for young agriculture specialists.

Moscow Mayor Yuri Luzhkov, attending the Tambov meeting, called for action against price-fixing by large retail chains within Russia.

Russian Official: U.S. Policy Is Heritage of British Empire

July 20 (EIRNS)—Dmitri Rogozin, a former leader of the Rodina (Homeland) political movement and current Russian Ambassador to NATO, was in Washington earlier this month. He spoke July 7 at the Nixon Center, explaining the unacceptability of placing U.S. anti-missile systems near Russia's borders. Then, according to, Rogozin took up the often overlooked deeper historical problem, the same one Lyndon LaRouche writes about in his article "Free Trade vs. the National Interest: The Economics Debate About Russia" (EIR, July 4, 2008), namely, the influence of British imperial thinking and practice, inside the United States.

According to the summary, "To make a broader point about the thrust of U.S. foreign policy, Rogozin brought up what he called the 'common pain' of the White House and the Kremlin: Afghanistan. That country, the Ambassador argued, 'will always burn,' due to the 'artificial borders' imposed by the British Empire, which he asserted sought to separate the region's ethnic groups into distinct administrative units, to ensure that they could never unite in rebellion. He went so far as to say that elements of this imperial divide-and-conquer strategy are alive and well in American policy today, especially on three issues of major concern to Russia: missile defense, NATO expansion, and the Conventional Forces in Europe (CFE) Treaty."

Medvedev: Economy Depends on Physical Infrastructure

July 20 (EIRNS)—Russian President Dmitri Medvedev, meeting July 11 with Presidential Representative for the Ural Federal District Pyotr Latyshev, came down squarely in favor of implementing the large infrastructure projects charted during the Presidency of his predecessor, Vladimir Putin. "As you know," Medvedev said, "we consider infrastructure today to be the key factor in the development of the Russian economy until 2020. Such big projects, really great projects like Industrial Ural-Polar Ural, should be the backbone of this work in the years ahead."

The northern Ural project, known by its acronym UP-UP, was designed by a team from the Council for the Study of Productive Forces (SOPS) under Academician Alexander Granberg. It involves rail, power, and processing facilities near large raw materials deposits. In the July 11 meeting, Latyshev reported to Medvedev that German specialists are working with Russia on designing one of the main railroads. State financing is being supplemented by pledged private investment from Russian companies.

Russia-Italian Declaration Echoes LaRouche—in Part

July 24 (EIRNS)—Under the headline "Life After the Death of the Financial System," Russian analyst Mikhail Khazin yesterday reported in the Russian publication about a conference that took place July 9-10 in Modena, Italy, on potential solutions to the world financial crisis. The meeting called for a set of measures, including a fixed-exchange-rate monetary system, big infrastructure projects, and a two-tier credit system that would prioritize productive investment to the detriment of speculation. Reviewing the Modena Declaration, adopted at the meeting, Khazin wrote: "Theoretically, there is nothing new here, in each specific point. Such measures hitherto could be found in the interventions of individual experts, whose influence might be rather large in certain delimited sectors, but who have been marginalized by the so-called expert community. Suffice it to mention the best known of them, the American Lyndon LaRouche."

Indeed, the Modena Declaration closely copies the program presented by LaRouche over the past decade and a half, and especially the sequence of international appeals for a New Bretton Woods system, initiated by Schiller Institute founder Helga Zepp-LaRouche and Ukrainian political figure Natalia Vitrenko in 1997. These include the identification of the Aug. 15, 1971 end of the gold-reserve Bretton Woods fixed-exchange-rate system, as the launch point for the greatest speculative bubble of fictitious capital in history; the need for a return to fixed exchange rates; pegging of currencies to some kind of real value; capital and exchange controls; a two-tier credit system—with low, long-term interest rates for investment in production, and high, punitive interest rates on purely financial operations; a freeze on all derivatives contracts; abolition of offshore financial centers; banning hedge funds; reconsideration of the World Trade Organization's function, in light of the damage it has done to national economies; and the promotion of big infrastructure investment projects on a continental scale, in transport, the power industry, communications, and scientific R&D.

Khazin reported that a lead author from the Russian side was Prof. Yuri Gromyko, who has participated with LaRouche in numerous Schiller Institute deliberations on replacement of the current, murderous financial system over the past 15 years.

Other Russian sponsors included Moscow's Millennium Bank and other organizations linked with Vladimir Yakunin, CEO of the state-owned Russian Railways and co-initiator of the International Public Forum-Dialogue of Civilizations, also known as the Rhodes Forum. Yakunin took part in the meeting, as did Anatoli Aksakov, president of the Russian Association of Regional Banks. Other Russian participants were Gromyko, Academicians Sergei Rogov, Nodari Simoniya, and Ruslan Grinberg, and several leading journalists. One of them, Mikhail Leontyev, last week published a call for a New Bretton Woods system, without mentioning the Modena event. The main Italian sponsor was the Fondazione Cassa di Risparmio of Modena, and there were northern Italian businessmen in attendance.

The Modena Declaration is not an adequate copy of LaRouche's ideas, however. Drafted under the auspices of the "West-East Dialogue: Integration and Development," it downplays the potential of United States participation in an overhaul of the world financial system. Several of the specific proposals, citing former EU official Jacques Delors' projects and certain bond financing schemes, are unworkable half-way measures, under current conditions. Russian banking official Aksakov, in particular, talked in terms of the global crisis stabilizing somewhat after the U.S. Presidential elections, whereupon "new rules of the game" could be introduced.

Upon hearing the content of the Modena Declaration, LaRouche today warned, "You cannot save the world economic system by excluding the U.S.A. Attempting to do that would be a disaster." He warned against the temptation to fall for a "rotten compromise," when what is needed is what he himself outlined in his July 22 webcast: an initiating group of the U.S.A., Russia, China, and India, to launch a new economic system, based on U.S. Constitutional principles of credit for real development.

The Modena Declaration proposes that its listed measures could be taken up at a conference, held after next year's Group of Eight meeting. Beware, LaRouche warned: That could be about as effective as the Socialist International's Zimmerwald Conference, attempting to stop World War I in 1915, when it was already too late—"a waste of time."

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