From Volume 7, Issue 40 of EIR Online, Published Sept. 30, 2008
Russia and the CIS News Digest

Putin: New Financial Architecture, Not Bailout!

Sept. 22 (EIRNS)—Russian Prime Minister Vladimir Putin called for a new international financial architecture rather than bailouts, in a press conference in Sochi, the Russian Summer capital, on Sept. 20. Putin had been holding discussions with the French Prime Minister François Fillon there, Itar Tass reported.

"We all need to think about changing the architecture of international finances and diversifying risks. The whole world economy cannot depend on one money-printing machine," Putin told the final press conference after the meetings. "This is a very serious issue that should be addressed in a calm, attentive and working manner, without haste, together with our colleagues from Europe and America," Putin said. "This issue should be considered not in a confrontation-like way, but very benevolently, in order to find the most acceptable ways for the development of the world economy and world finances."

Putin's remarks echoed those of President Dmitri Medvedev on Sept. 19, when he called for international cooperation on the financial and economic crisis. Today, Medvedev also brought up this need, with regard to food and raw materials price inflation, in particular. Speaking in Kazakstan after a meeting with President Nursultan Nazarbayev on border-region cooperation, Medvedev said:

"The financial crisis, which is creating many difficulties for the world economy, makes it necessary to seek joint responses to this crisis. The more coordinated the actions of nations are, especially close partners, the easier it will be to overcome the consequences of the crisis. Equally complex processes are occurring with the rise of prices for raw materials and food. On the whole, we see that the current global system of managing these processes is inadequate for the demands of today. There is a lot of talk about this, but unfortunately a new system for maintaining global economic equilibrium has not yet been created, and entire economies are paying the price for the fact that there is not yet such a system."

Medvedev: Develop Far East—Despite Crisis

Sept. 24 (EIRNS)—During a 23,000 km trip to Kazakstan and Russia's Far East, Russian President Dmitri Medvedev emphasized that Russia must act for its real economic development now, even amidst the worldwide financial crisis. "We are now in the midst of a worldwide financial crisis," he said in a Sept. 23 speech in Anadyr, Chukotka Region. "So should we undertake nothing in the interim? Simply wait until everything has been resolved?... Even to implement larger visions, we need to make decisions very soon."

Medvedev said that Chukotka "has not only an important economic and social value ... but great cross-border political importance as well." This was an allusion to Chukotka's border with Alaska, but Medvedev did not mention the megaproject for a Bering Strait tunnel crossing, which is implicit in the 20-plan of Russian Railways, and was the subject of significant attention in Russia last year.

Russia cannot wait, or this area could collapse, if "its productive forces [are allowed] to depart and its projects to fail. This being the case, we need to make a lot of decisions quickly." Medvedev said he supports using an investment fund, but that there are "risks" associated with using special economic zones. The investment fund would also "attract private capital," he said.

Medvedev went on to have similar discussions in the Sea of Okhotsk coastal region of Magadan and the Kamchatka Peninsula. A national debate around the future of the Far East intensified during the trip, as Medvedev himself repeatedly termed the situation critical due to underdevelopment and declining population levels. Most striking was Moscow Mayor Yuri Luzhkov's raising the policies of the 19th-Century American System economist Sergei Witte, in a Sept. 26 interview, as the way to save the Far East for the country. Sergei Shoigu, Minister of Emergency Situations, also emphasized pre-1917 policies used to develop the Far East, including providing interest-free loans to the local population and exempting men from military service, RBC reported.

RBC quoted Konstantin Simonov, head of Russia's National Security Energy Fund, saying that only the government could solve the huge problems. "Huge investment paired with huge risks is not for private businesses," he said.

Time To Decide on Russia-Kazakstan Canal Project

Sept. 23 (EIRNS)—Russian President Dmitri Medvedev and Kazak President Nursultan Nazarbayev discussed developing transport projects between Europe and Asia, during their working meeting Sept. 22 in Aktyubinsk, Kazakstan. In addition to cooperation in nuclear energy, the two discussed the potential for constructing a new canal between the landlocked Caspian Sea and the Sea of Azov, at the top of the Black Sea, Voice of Russia reported.

In June 2007, Nazarbayev presented a proposal to the St. Petersburg Forum, to build a new "Eurasia Canal" to link the two, creating a route 1,000 km shorter than the current canal linking the Don to the Volga River, which flows into the Caspian. This new canal would be an enormous undertaking, four times as long as the Suez Canal, and the route presents a lot of geographical challenges. But, as Nazarbayev said, this great project would make Kazakstan a "maritime power."

There is another proposal, to upgrade the current Volga-Don link, and a Russian-Kazak working group was established last year to decide which project would be built. Medvedev declared that now is the time to decide which canal will be built, and called for setting up an independent group that will have the final say.

Russian Foreign Ministry Compares Rice to Churchill

Sept. 24 (EIRNS)—Russian Foreign Ministry spokesman A.A. Nesterenko yesterday released a reply to a question about Russia's response to U.S. State Department proposals to suspend bilateral cooperation on issues where there is disagreement, and to work only on areas of shared concern, like Iran. The Foreign Ministry took the opportunity to give a blistering response to Secretary of State Condoleezza Rice's Sept. 18 speech on what she called Russia's "bad behavior." Nesterenko dubbed that performance Rice's "almost Fulton speech," a reference to the notorious "Iron Curtain" speech of Winston Churchill, delivered in Fulton, Missouri in 1946, as Franklin Roosevelt's post-war design for cooperation among the great powers was being replaced by the British-shaped Cold War.

Nesterenko said that Russia opposes "holding our relations hostage to disagreements on specific issues." Russia is prepared to cooperate on Afghanistan, he said, although Washington has frozen the main venue for this cooperation, the Russia-NATO Council. He said that the USA has blocked Group of 8 measures, put forward by Japan as chairman, regarding the fight against terrorism and organized crime, nuclear non-proliferation, food security, and the Heiligendamm process from last year, which called for involving the G-8 with China, India, Brazil, Mexico, and South Africa. As for the Iran nuclear program, Russia saw no need to "drop everything else" and hold meetings on it alone, during the busy UN General Assembly week. "There are hotter matters, like the situation in Afghanistan and on the Afghan-Pakistani border, but for some reason our Western partners are in no rush to discuss these problems together."

Nesterenko concluded: "We would really like Washington to finally make up their minds about what they want in relations with Moscow."

Russia Holds 'Stability-2008' Exercises

Sept. 27 (EIRNS)—Russian President Dmitri Medvedev is staying closely involved with month-long 'Stability-2008' set of exercises, which started Sept. 22 with staff exercises by Russian and Belarusian forces. They involve three Russian naval fleets, the Strategic Missile Corps, space troops, air force, air defense forces, and ground forces from two military districts (Moscow and Far East). Medvedev met with Defense Minister Serdyukov and Chief of Staff Makarov beforehand to finalize the plans. On the 22nd, the Russian navy announced the successful test-firing of the new Bulava SLBM from a submarine in the White Sea, which hit its target in Kamchatka on the Pacific. On Sept. 26, Medvedev reviewed the subsumed "Center-2008" military exercises, conducted near the city of Orenburg by Russian and Kazakstan forces, and met with commanders of several military districts for a discussion of the strategic situation and measures to improve the Russian military.

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