From Volume 8, Issue 6 of EIR Online, Published Feb. 10, 2009
Russia and the CIS News Digest

Zepp-LaRouche's Interview of Hankel Electrifies Russian Readers

Feb. 3 (EIRNS)—The Russian economics and financial website has published a Russian translation of the interview with Prof. Wilhelm Hankel, former head of the Money and Credit Department of the German Finance Ministry, conducted by Helga Zepp-LaRouche and appearing in EIR of Feb. 6. Slightly abridged, the Russian version of the interview is headlined "A Code-Red State of Emergency." identified Zepp-LaRouche as founder of the international Schiller Institute, and made clear that her husband, mentioned twice by Hankel in the interview, is "the American economist Lyndon LaRouche."

Hankel's discussion, in response to Zepp-LaRouche's incisive questions, of the insanity of a derivatives-driven financial system, grabbed the attention of Russian readers. So did his review of the principles of infrastructure investment, presented with reference to his work at the Kreditanstalt für Wiederaufbau during Germany's post-war reconstruction. Over 60 readers left comments on the site. One of the highlights was this:

"This should be mandatory reading for all officials, from President Medvedev, Putin, Kudrin, Nabiullina, etc., to members of the Duma to mayors and governors.... You should learn this one by heart...." (The named officials are the Russian President, prime minister, finance minister, and economics minister.)

Russian Writer Highlights LaRouche's View: British Behind Terrorism and War

Feb. 4 (EIRNS)—Yesterday the Russian Anti-Drug Front posted a Russian-subtitled version of a short Dec. 25, 2008 LaRouche PAC video called "The Anglo-Saudi Alliance." In the four-minute clip, LPAC's Alli Perebikovsky reported Lyndon LaRouche's remarks on the importance of cleaning out Anglo-Saudi financing of terrorism and war in Southwest Asia. (The short is accessible at lpactv-anglo-saudi-alliance.html).

A few hours later, the popular Russian news and analysis portal published an article by Mikhail Vasilyev, under the dramatic headline, "Britain Organized the Terror Acts in India." The article is especially striking, in view of LaRouche's emphasis during his Jan. 22 webcast, on Russia's "softness on the British Empire"—"failure to take into account the political realities of U.S. and international politics, to recognize, in particular, that what many people in Russia tend to blame on the United States, is actually to be blamed, put at the door of the British Empire!"

A sidebar identification of LaRouche cited his record on the coming collapse of the global financial system. "In 1971, already," it said, "LaRouche warned that breaking with the post-war Bretton-Woods agreements and ending the dollar's peg to gold would lead to uncontrolled development of fictitious capital, which as a result would bury the real (physical) economy. He criticized the philosophy of the post-industrial ('information') society, believing that its implementation would lead to the degradation of the productive forces, as well as human morality."

Kudrin Seeks Counsel in London

Feb. 5 (EIRNS)—A November 2008 LaRouche PAC release titled "Reading from a London Script," circulated widely in Russia, highlighted the detrimental recommendations of Russian Deputy Prime Minister and Finance Minister Alexei Kudrin in favor of a "global Maastricht" agreement to limit overspending by major powers, as if that were the cause of the systemic financial and economic breakdown. The European Union's Maastricht Treaty obliged member-states to keep their budget deficits below 3% of GDP—a goal which proved impossible, as the global economic crisis deepened.

Today, Kudrin was in London, doing a good job of exemplifying the question about Russian policy which Lyndon LaRouche posed during his Jan. 22 webcast: "What are the pernicious influences which have been acting on Russia, to misguide a number of notable Russian officials in making the mistakes they have made?"

The occasion for Kudrin's visit was the first-ever Russian-British Economic Dialogue forum, under the auspices of U.K. Chancellor of the Exchequer Alistair Darling. Itar-Tass quoted a source in the Russian delegation saying that this is a new form of cooperation between Russia and Britain, prompted by the financial and economic crisis. "It is a demonstration of pragmatism and of the wish to discuss some very crucial matters of financial and economic development of Russia and Britain," the source said. "We expect there will be an exchange of information about the latest steps and measures the British and Russian authorities have been taking, as well as their effectiveness in combating the world financial and economic crisis. Also in focus, will be a new financial architecture."

With Kudrin are Russian Central Bank first deputy president Alexei Ulyukayev, officials from the Federal Service for Financial Markets, and Russian businessmen, including VTB chief Andrei Kostin. The source said that Britain will support Russia's admission to the Financial Stability Forum. The report also indicated that Russian officials think there is an urgent need for the BRIC nations (Brazil-Russia-India-China) to get into "financial stability" institutions, with Russia oriented particularly to what this source called the "post-crisis period."

Kudrin met with leaders from the City of London, with Darling, and with Lord Peter Mandelson, co-chair of the Russian-British inter-governmental commission. He also met British Foreign Secretary and supreme meddler David Miliband, to improve visa arrangements for businessmen.

Kazakstan Forced To Nationalize (Bail Out) Banks, Devalue Currency

Feb. 5 (EIRNS)—The Kazakstan government had to buy 78% of the shares of BTA, the largest bank in the country, by injecting it with some $2 billion on Feb. 2. BTA has assets of $31 billion. The government will also likely buy 76% of Alliance Bank, the fourth largest in Kazakstan, and then inject $200 million. At the same time, the national Financial Regulation Agency dismissed Mukhtar Ablyazov, BTA chairman and a former opposition leader. Ablyazov said he has no direct interest in BTA. All in all, the government is bailing out the country's four biggest banks, including Halyk Savings Bank, which is majority-owned by President Nursultan Nazarbayev's daughter and son-in-law, Timur Kulibayev.

The government is claiming the measures are only temporary. "This measure is not nationalization, it is temporary according to existing Kazak legislation which stipulates the government will eventually exit its shareholder base," a statement said.

Today, it became clear that Kazakstan was abandoning attempts to prop up its currency. The central bank announced an 18% devaluation of the tenge against the U.S. dollar. Kazakstan, the second-largest oil producer among the former Soviet republics after Russia, has 3.2% of the world's oil reserves, according to BP Plc. The government expects that economic growth will slow to 1% this year, after a decade-long boom in which the economy expanded by an average of 10% a year. Profit for all of Kazakhstan's 37 banks plunged 93% to 15.4 billion tenge in 2008 from a year earlier, as they boosted reserves to protect against delinquent loans.

Meanwhile, the size of Kazakstan's foreign debt and its low foreign exchange reserves have led to talks of the country going to the IMF after devaluation, said a Société Générale banker. Ainagul Shakirova, a spokeswoman for Prime Minister Karim Masimov, declined to comment on any possible request for IMF help.

Joe Biden Meets Saakashvili, Ivanov

Feb. 8 (EIRNS)—U.S. Vice President Joe Biden held separate meetings today with Georgian President Mikheil Saakashvili and Russian Deputy Prime Minister Sergei Ivanov, on the sidelines of the Munich Security Conference. Ivanov characterized the meeting as "very positive." When asked to explain what he meant by that, Ivanov said, "restarting the button," referring to Biden's speech yesterday, in which the American Vice President said the parties must "press the reset button" on U.S.-Russia relations. Deputy Secretary of State Jim Steinberg was also present in that meeting. Biden was asked about possible Georgian membership in NATO, but simply replied, "I'm in favor of Georgia's continued independence and autonomy. That's a decision for Georgia to make."

All rights reserved © 2009 EIRNS