From Volume 7, Issue 35 of EIR Online, Published August 26, 2008
Russia and the CIS News Digest

Russian Deputy Finance Minister: There's No Global Crash

Aug. 21 (EIRNS)—In his article "Free Trade vs. National Interest: The Economics Debate About Russia" (EIR, July 4, 2008), Lyndon LaRouche proved how perilous for Russia, and the world, the abiding presence of the bad axioms of British monetarist economics is within Russian policymaking. In a different way, economist Prof. Stanislav Menshikov and other leading Russian figures have expressed continuing concern about Prime Minister Vladimir Putin's having kept Finance Minister Alexei Kudrin, and other neoliberals, in their government posts. At an Aug. 20 press conference, Kudrin's deputy, Dmitri Pankin, gave a lurid demonstration of the problem.

Deputy Finance Minister Pankin said about the world financial situation, "I would not draw a pessimistic picture that a financial crash is near. We are not facing a global crash of the world financial system."

Of course, Merrill Lynch or UBS may have problems, Pankin admitted, but "that affects chiefly their stockholders." According to the ITAR-TASS summary, Pankin observed that "the market mechanisms, embedded in the world financial system, work smoothly enough to function in a crisis situation." He said it's early to say when the crisis will end, but, in any event, it won't be fatal. The business daily Vzglyad published this report under the headline, "Deputy Chief of Finance Ministry denies crash of world financial system."

Interfax reports that Pankin also boasted that the finance ministry's "conservative" investment strategy has been successful, including having $5.5 billion of National Welfare Fund and Reserve Fund money (3.6% of the total) in Fannie Mae and Freddie Mac bonds. It's the stocks that are in trouble, not the bonds, he explained. "We have no worries about having to write off any assets or take losses," since the bonds are rated AAA. "Nobody is talking about a default on these instruments. The stocks are falling, but the bonds retain their high rating and provide steady income."

The two funds are the new form of Russia's Stabilization Fund, where revenues from oil export duties have been parked during the past four years.

Meanwhile, President Dmitri Medvedev met Aug. 20 with Interros (Norilsk Nickel) oligarch Vladimir Potanin, whom he told he intends to hold a conference very soon with the board of the Russian Union of Industrialists and Entrepreneurs, "to discuss pressing problems of the Russian and world economies."

Russian Websites Post LaRouche Releases on British, Soros Hand in Georgian Attacks

Aug. 21 (EIRNS)—Lyndon LaRouche's statements on the South Ossetia crisis, nailing the British hand in the attempted orchestration of a new Cuban Missiles Crisis-quality of global showdown between Russia and the U.S.A., are now circulating widely in Russian translation. EIR's Russian-language pages ( as well as the Ukraine-based Strategium analytical site, have posted the Russian translation of "Britain's Georgia Gambit: So, Hitler Invaded Poland," released Aug. 13. On Aug. 20, the widely read Russian analytical site, founded by economist Andrei Kobyakov, placed at the top front on the main page its own translation of LaRouche's Aug. 12 commentary, "Putin Was Right, He Acted To Prevent World War III." The originals of both articles appear in the Aug. 22, 2008 issue of EIR.

Valeri Gergiev Conducts Night Requiem Concert in Tskhinvali

Aug. 21 (EIRNS)—Renowned conductor Valeri Gergiev led the orchestra of St. Petersburg's Mariynsky Theater in an evening concert for the dead of South Ossetia, as well as the survivors of Georgia's attack. Held outdoors in front of the ruined Parliament building of Tskhinvali, the capital, the concert was broadcast live on Russian TV. The music invoked powerful Russian cultural references to tenacity and mobilization under attack: Besides Tchaikovsky's 5th Symphony, the musicians performed the 7th Symphony by Dmitri Shostakovich, the so-called "Leningrad Symphony," which was composed during the 900-day siege of Leningrad (St. Petersburg) by the Nazis during World War II, in which over a million people died. That piece was first performed by the starving members of the Leningrad Symphony Orchestra during the siege.

Gergiev is "the world's most famous Ossetian," having grown up in North Ossetia (within Russia). He is also principal conductor of the London Symphony Orchestra, as well as artistic director of the Mariynsky. A nonplussed Times of London headlined its dispatch on the event, "LSO conductor Valeri Gergiev to lead defiant South Ossetia concert," and noted that Gergiev has been a close friend of Prime Minister Vladimir Putin for two decades.

Before beginning the music, Gergiev took the stage and spoke about Georgia's attack on Tskhinvali, calling it a massed, sneak attack on civilians, with nearly 2,000 people killed at home as they slept. With his hand on the shoulders of some young Ossetian children, Gergiev said this must not be allowed to happen again, adding that without Russia's intervention, the death toll would have been thousands higher. Gergiev said he had toured the devastated town, and what he saw was "Stalingrad"—total destruction. The TV broadcast showed people in the audience, which included whole families from surrounding villages, listening in rapt attention, and in tears, to the concert.

Russian OSCE Envoy Attacks 'Anglo-Saxon' Camp

Aug. 22 (EIRNS)—In an interview taped after the Organization for Security and Cooperation in Europe (OSCE) session two days ago, Russia's envoy said that not all Western countries disagreed with the position of Moscow, but it was primarily the "Anglo-Saxon countries." Vladimir Voronkov spelled this out: "I mean the U.S.A., Britain, and their allies in Central Europe. They attempted to turn the Georgian-South Ossetian [conflict] into a Georgian-Russian conflict. We categorically do not accept this. The Russian Federation is not a party to the conflict. Russia, as is known, reinforced its peacekeeping contingent in order to realize its function of peacekeepers, which is written down in the Sochi Agreements of 1992. Therefore, attempts to turn us into a party to the conflict with Georgia are incorrect."

"We are being accused mostly of the disproportionate use of force," Voronkov continued. "To this I say very simply: The disproportionate use of force was the use against the children, women, and old people in Tskhinvali of Grad volley-fire systems, heavy artillery, and mortars. Russia by its actions only induced Georgia to cease the aggression, and made it clear that it is time to get back to the negotiating table."

The Russian diplomat cited sympathy for the Russian position from the Collective Security Treaty Organization (CSTO) countries and Serbia, while "most EU countries treat our position with understanding. So I can't say we feel isolated. Many are aware that we are right. Many [this certainly refers to France, Germany, Italy—ed.] just cannot back us up because of the well-known bloc solidarity, within the EU itself, for example. But in discussions behind the scenes, our position meets with understanding."

President of Syria, King of Jordan to Moscow

Aug. 20 (EIRNS)—President Dmitri Medvedev of Russia is engaged in diplomacy with the leaders of Syria and Jordan, starting today. President Bashar al-Assad of Syria arrived this evening for talks with Medvedev at his Summer residence in Sochi. On the eve of the trip, Assad spoke of stepping up Russian-Syrian military cooperation, in view of the attack on South Ossetia by Georgia, which receives ample military support from Israel; so he put it in an interview with Russian Kommersant, which the Israeli daily Haaretz quotes today. It also quotes an Interfax wire, citing diplomatic sources, on the preparation of new anti-aircraft and anti-tank weapon sales from Russia to Syria.

What was played up in Russia, is that Assad expressed interest in stationing Russian short-range (280-km) Iskander missiles, Russia's most advanced and versatile conventional-warhead delivery system, and did so in the context of a strong statement of support for Russia's actions after what he called the "mistake" of the Georgian leadership against South Ossetia and Russia.

The following day, King Abdallah of Jordan arrived in Russia for a three-and-a-half-day state visit.

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