Russia and Eastern Europe News Digest
Russian Analyst Warns of New Provocations in the Gulf
Well-known Russian economist Tatyana Koryagina warned June 12 that new provocations in the Middle East are likely in the near future, because the world financial crisis is entering another phase-shift. Taking into account the mentality of the oligarchical groups she is monitoring, Koryagina told EIR she thought the focus of a new terrorist provocation or military operation would most likely not be India-Pakistan, but the Middle East, particularly Iraq and Iran. Such a new provocation would be accompanied by a major currency crisis and manipulations connected with oil.
Koryagina believes some major event was already planned for May, but was called off for some reason, perhaps connected to the circumstance, thatquite apart from the silliness and hysteria coming out of the Bush Administrationcertain investigations of Sept. 11 may have touched upon some of the networks actually involved in those attacks, particularly Israeli ones. She also notes that just days before President George Bush's arrival in Moscow at the end of May, Russian President Vladimir Putin called a special Security Council meeting on what to do in the event of a dramatic collapse of the Western financial system.
Koryagina's forecast of financial and political earthquakes with their epicenter in the United States (see EIR, July 20, 2001), drew attention inside Russia in the summer of 2001 and internationally after her forecast was borne out by the events of Sept. 11.
Russian Army Paper: U.S. Afghan Operation a Total Failure
Russia's military newspaper Red Star of June 11 asked pointed questions about the war in Afghanistan, which began in October 2001, and, with the downing of a U.S. C-130 plane this week, and the killing of three more U.S. military personnel, shows no sign of being completed. Russian military veterans, experienced with a decade of losses in Afghanistan carried out by the then-Soviet Union, have much to teach the foolish American "utopians" who are eager to declare "victory" in Afghanistan so as to move on to the next target in a "perpetual war" drive.
Red Star asks: More than half a year after large-scale U.S. military operation, can we say it was a success? Were the al-Qaeda really defeated? The paper answers: No. In fact, there may very probably be a new civil war. In any case, from the course of events, we can see, that a renaissance of Afghanistan is not going to occur for a long time.
Up to January 2002, the U.S. made 25,000 flights, dropped 18,000 bombs, including 10,000 with high-precision warheads. In Tora Bora, the high-power bombs BLU-82 were also used, and Special Forces were deployed. But today, despite such huge operations, experts agree that the operation was by no means so successful as originally thought: There was no success in destroying the Taliban and al-Qaeda forces.
One main reason for that failure, says Red Star, is that the Pentagon failed to close the border to Pakistan in time. Another is the miserable failure of attempts to bribe Afghan field commanders and local leaders into cooperation. As a result, the majority of the Taliban/al-Qaeda fighters were able to escape the operation, fleeing across the border or being safehoused by local population. For political reasons, a full U.S. operation to follow them into Pakistan was ruled out.
Many experts, however, consider that all of the above is still not the chief reason for the failure of the operation. A more important cause was the poor preparation by the Pentagon itself. As U.S. experts themselves admit, there was no adequate preparation for operations in the mountains at large altitudes. U.S. forces suffered headaches, weakness, fainting, and were not prepared for the tactics of the mountain fighters. Another serious failure was the lack of adequate understanding of the Afghan culture and habits, lack of comprehension of the mentality of the population. The propaganda war, including mass distribution of leaflets from the air, was a total fiasco. Events such as the bombing of an Afghan religious school, and also repeated events where American forces mistakenly fired upon friendly Afghan forces, led to intense hatred by the population.
Experts think that the Pentagon has a lot of lessons to learn from what happened. Now, the internal situation in Afghanistan is heading towar possible new civil war, Red Star concluded.
'Soccer Riots' Expose Raw Anger
Bloody riots in Moscow on June 9, which began as the Russian soccer team was losing to Japan in the World Cup tournament, had less to do with soccer than with the boiling anger of a Russian population, in response to the economic-social collapse of the country. Youth from a crowd of thousands who were watching the game on a large outdoor screen, rampaged near the Kremlin and the State Duma, smashing storefronts, setting cars on fire and battling police. Two people were killed.
In the aftermath, came fingerpointing at the police and accusations against the event's commercial sponsors, for having aired an ad that showed people smashing cars with baseball bats. But there was more to the riot than sports disappointment or excessive drinking. A leading European expert on Russia commented to EIR that the reaction was partly predictable, "because it is a national humiliation to lose this way to a traditional enemy, Japan." He added, "But that sentiment combines with something even more fundamental: These riots have a lot less to do with football, than they do with resentment at the hard life 75% of the Russian population is now leading. There is deep anger in Russia, at this process of collapse, especially as little has been done, under Putin, to make things better. He is very active on the foreign policy side of thingswar on terrorism, friendship with Bush, and so onbut domestically, in practice, all he is doing, is making deals with the oligarchs, particularly the energy giants, and people are getting very, very angry.
"HIV-AIDS is systematically rising in Russia, scientific capital is being worn away, much of Russia is approaching Third World conditions. The oil and gas conglomerates get richer, but that doesn't trickle down. This gets particularly dangerous, when it combines with insults to national pride. I worry about this explosive combination coming together again, over issues more crucial than football."
Prof. Menshikov Sees Economic Policy Capitulation by Putin
Professor Stanislav Menshikov's commentary in the June 7 Moscow Tribune was titled, "Putin Takes Up Budget And Forsakes Growth Policy," referring to the official Budget Message the Russian President has delivered for the year 2003. When Putin took the Cabinet to task earlier this year for failing to deliver respectable growth rates, Menshikov points out, Prime Minister Kasyanov and Economics Minister Gref first ignored him, then stated publicly that "great leaps" in growth were not possible, and that the attempt to achieve them would lead to collapse. Whereas "observers expected a strong counter-attack, if not government reshuffling," Menshikov observes, "Nothing of the sort happened. The budget message signalled retreat. It contained not a word of criticism of government policies and no mention of former demands to accelerate growth."
Menshikov links Putin's posture to Kasyanov's offensive in tandem with "Russian big businessmost of it based in export-oriented energy and raw material industries, which are not too eager about faster growth that can come only with the rapid expansion of the domestic market." He writes that Putin is relying on "oligarchic support," politically. At the same time, the insidious advice of former Cato Institute fellow and official Presidential economics adviser Andrei Illarionov has come into play. Menshikov points out that the Budget Message "implies that the government, instead of raising salaries and pensions, should now start reducing 'non-interest expenditure,' which is mostly socialeducation, health, housing subsidies and pensions," and "claims that excessive government spending is the basic reason for the recent economic slowdown and that cutting government expenditure is the main way to accelerate growth"super-deregulator Illarionov's argument, which Menshikov rightly calls "nonsense."
Glazyev Blasts Illarionov's Deductive Method of Swindle
In a June 6 interview on Radio Resonance, economist Sergei Glazyev attacked the Presidential Budget Message as a dangerous watershedthe first time that "officially the budget financing of sectors like education, science, and health care has been called into question." He was referring to the call for reductions in budget spending, other than for interest payments. Glazyev specifically blasted Andrei Illarionov's claim that "paying the foreign debt stimulates economic growth." This is based on the statistical correlations that Illarionov is fond of charting, Glazyev said, which have about as much validity as the statement that "the wind blows hard, because the tops of the pine-trees bend."
World Bank Reported To Seek Privatization of Russian State Savings Bank
According to a report carried June 5 on Utro.ru, the World Bank's annual report on Russiapresented to the relevant Russian institutions in closed sessioncalls for "a strategy to reform Sberbank," the state-owned savings bank where most Russian citizens deposit any funds they have. The World Bank is said to call for shares in Sberbank's network to be sold, but exclusively to "strategic investors with solid reputations," not "insiders or organizations controlled by, for example, financial-industrial groups." Utro.ru quoted representatives of Sberbank and even of the Russian Central Bank, which is now run by a liberal monetarist, who protested that this means the Sberbank shares should be sold to foreign interests. In numerous proposals by the Russian Academy of Sciences, Duma experts (Sergei Glazyev's various programmatic recommendations, for example), and regional governors (the Ishayev Report), the deposit base of the Sberbank figures rather as the basis for the internal generation of credit to finance real economic growth in Russia. This resource is now targetted by the World Bank, for looting.
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