INTL 5/10 EU/NATO/CIS/CSTO-SCO|NATO war games hinder U.S.-Russia ties: Putin

I've added the Shanghai Cooperation Organization to this thread's coverage due to the interrelationships between Russia, the PRC and India (as well as Pakistan). As such the Taliban/AQAM fighting and other internal issues will remain on future South Asian threads....Housecarl
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Russia warns foes in Soviet-style show
Richard

Oh, btw, World War Three might soon erupt... (Multi-page thread 1 2 3)
Spirit Of Truth

Russia expels Canadian diplomats
pixmo

The end of Europe's independence
rs657

Georgia warns of Russian anti-NATO action
Spirit Of Truth

4/26 EU/NATO/CIS/CSTO|Natural Gas Summit/U.S., Russia:START 1 Replacement/et al
Housecarl

Georgia Tank Batallion Mutiny's
Hfcomms
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http://www.reuters.com/article/world...5490P320090510

NATO war games hinder U.S.-Russia ties: Putin

Sun May 10, 2009 10:01am EDT
By Guy Faulconbridge

MOSCOW (Reuters) - Russian Prime Minister Vladimir Putin said NATO military exercises in Georgia did not help efforts to rebuild Moscow's relations with the United States in comments published on Sunday.

Putin, speaking in an interview with Japanese media before a trip to Tokyo, said the NATO war games were a signal of support for the Georgian authorities which last week clashed with protesters demanding President Mikheil Saakashvili resign.

When asked about Washington's efforts to reset relations with Moscow, Putin said: "As to the NATO military exercises in Georgia, this is of course a signal in the other direction.

"We really hope that today's leaders of the United States will hit the pedal properly to put a brake on the negative trends in our ... ties and take the necessary steps to make sure they really gain new substance."

Russia says the war games are dangerous muscle flexing by the Western military alliance that have raised tensions in the Caucasus nine months after Russia repelled a bid by Saakashvili to retake the pro-Moscow rebel region of South Ossetia.

Russia's relations with the United States sank to a post-Cold War low after the war in Georgia and Russia's subsequent recognition of South Ossetia and another rebel region, Abkhazia, as independent states.

U.S. President Barack Obama and his Russian counterpart, Dmitry Medvedev, have said they want to rebuild ties, but Georgia -- a transit route for Caspian oil and gas to Europe -- remains a sticking point.

Moscow says the NATO war games send the wrong signal to Saakashvili, who has faced weeks of protests by domestic opponents demanding he resign for blundering into the war with Russia and crushing democratic freedoms.

Saakashvili, who is reviled in Moscow, has refused to resign. He faced a mutiny at a Georgian military base on the eve of the NATO exercises, which started on May 6.

"Against all this they decide to hold military exercises. It cannot be seen as anything but support for the ruling regime," said Putin, according to a transcript of the interview supplied by the Russian government.

"Even if you take the traditional approach of our Western partners -- the United States and Western Europe -- to democratic problems then no such standards are being adhered to today in Georgia," Putin said.

"So why hold military exercises there which give such a clear signal of support to the ruling regime? We consider this is movement in the opposite direction."

NATO says Russia was fully informed about the war games in advance and had been invited to participate.

Putin said there had been positive signals from Washington on efforts to reduce the number of nuclear weapons before a Cold War arms treaty, known as START I, expires in December.

The former Kremlin chief said Russia was linking the talks on finding a replacement for START I to concerns about plans initiated by former U.S. President George W. Bush to deploy an anti-missile system in Europe.

"The new U.S. administration has not yet made a decision on the future of the anti-missile defense system, at least in relation to Europe," Putin said.

"Russia will of course link questions about anti-missile defense, and all related issues, to those about strategic offensive weapons," Putin said. A new round of talks on nuclear weapons cuts will take place later this month in Moscow.

(Editing by Philippa Fletcher)

© Thomson Reuters 2009. All rights reserved.

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http://www.stratfor.com/geopolitical...ton_and_warsaw

Geopolitical Diary: Russia's Shifting Relations with Washington and Warsaw
May 8, 2009 | 0011 GMT


Russian Foreign Minister Sergei Lavrov met with U.S. President Barack Obama in the Oval Office on Thursday, discussing plans for Obama’s trip to Moscow in July. The relationship between Russia and the United States has been tense to say the least, although the Russians have introduced an interesting twist.

The last major meeting between American and Russian leaders came April 1 in London, when Obama and Russian President Dmitri Medvedev met at the G-20 conference. That meeting went poorly.

The issues on the table at that time included NATO’s expansion to former Soviet states, U.S. ballistic missile defense (BMD) plans in Poland, nuclear reduction treaties and proposed NATO military supply routes to Afghanistan. The Russians entered that meeting convinced they had the upper hand: They believed the NATO expansion issue was locked away and the Americans would have to implore their permission in getting supplies to Afghanistan. Russian leaders believed they could force the United States into more complex negotiations and a compromise over Poland that would nix U.S. plans for a BMD installation and military assistance in Poland.

However, this was not the case.

Washington did not make a serious push for Moscow’s help on supply lines for Afghanistan; it also re-opened the issue of NATO’s relationship with Georgia and Ukraine, two former Soviet states. The Americans made it clear that the Polish issue would not be discussed. The only item on which Russia and the United States seemed to agree was the need to renegotiate strategic nuclear reduction treaties. Consequently, there were bitter tastes in many mouths after the April 1 meeting, and bickering between Russia and NATO has escalated during the past month:

* Russia has blocked almost every move by Western governments to increase their influence in Central Asia.
* Russia has more than doubled its troop presence in breakaway regions of Georgia, from just over 3,000 to more than 7,600.
* NATO has initiated military exercises in Georgia, despite Russian troops’ presence just 20 miles from the location of the drills.
* In response, Russia has threatened to call off NATO-Russian relations.
* NATO officials in Brussels expelled Russian diplomats over a spy scandal that involved the imprisonment of an Estonian official; Russia in turn has expelled Canadian NATO officials.

From the outside, it would appear that the core issues between Moscow and Washington have been pushed back into the former Soviet sphere and NATO-Russian relations. For instance, Poland has been a central theme for Russia and the United States, with Moscow’s concerns about U.S. military plans there very apparent. Warsaw and Moscow have had a terrible relationship: This has been evident in energy cut-offs, trade embargoes, spy scandals, Poland’s blocking of Russian-EU relations and more. There has been undisguised contempt on both sides for years. Russia has not attempted to deal with Warsaw directly, but instead has pressured the United States to abandon independent and anti-Russian Poland.
This approach hasn’t worked.

It was significant, then, that Russia’s foreign minister spoke in positive terms this week about “improving Russian-Polish relations.” The day before leaving for Washington, and following a meeting with Polish Foreign Minister Radislaw Sikorski, Sergei Lavrov went so far as to call Poland “pragmatic” — a marked departure from the “hysterical” and “irrational” labels that Russia has used in discussing Poland in the past. He even noted that Moscow was looking to re-establish the Polish-Russian Committee — an intergovernmental body that has not convened since 2004, when relations between Moscow and Warsaw began to sour.

This change in rhetoric gives us pause. We do not believe that Poland is about to change its stance against Russia or for the United States. But the shift in tone by Russia indicates that Moscow is, at least temporarily, abandoning its tried-and-failed approaches of indirect pressure and threats — by telling the Poles instead that they may have options in forming an understanding with Russia.

Moscow is giving Warsaw an opportunity to change the tenor of relations. The timing of this shift was deliberate, designed to give Washington something to think about as Lavrov met with Obama. The hope appears to be that Russia can change things on the ground with Poland by offering a little honey instead of vinegar.

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http://www.atimes.com/atimes/Central_Asia/KE02Ag01.html

May 2, 2009
Russia, China on comradely terms
By M K Bhadrakumar

Westernism is giving way to Orientalism in Moscow's outlook, if the past week's happenings are any guide. As Russia's ties with the West deteriorate, an upswing in its strategic partnership with China becomes almost inevitable.

The resumption of Russia-NATO (North Atlantic Treaty Organization) dialogue has gone awry. And the nascent hopes regarding a "reset of the button" of the Russian-American relationship are belied. With Moscow under multiple pressures from the West, two top Chinese officials have arrived in the Russian capital to offer support - Defense Minister Liang Guanglie and Foreign Minister Yang Jiechi.

Moscow angrily reacted to NATO's expulsion of two Russian diplomats on Wednesday. In exceptionally strong language, it called the NATO move a "crude provocation" and an "outrageous action". The Foreign Ministry alleged that certain "completely unscrupulous ... forces" in the West were "hectically" creating pretexts for obstructing Russia's dialogue with Europe.

The two diplomats to NATO headquarters in Brussels are the Russian mission's senior adviser and political desk chief Viktor Kochukov and mission attache and executive secretary Vasily Chizhov. They were accused of espionage "incompatible with the diplomatic status".

The Russian mission to NATO went a step further to allege an attempt to "disrupt a reset in relations between Russia and the US". In immediate terms, the scheduled Russia-NATO foreign minister-level meeting on May 19 in Brussels appears problematic. Hardliners have prevailed.

Unsurprisingly, Moscow has also ratcheted up its condemnation of NATO's 27-day military exercise in Georgia, due to start this coming Tuesday. President Dmitry Medvedev called the exercises "an open provocation" and warned that there could be "negative consequences for those who made the decision to hold them". He accused the alliance of encouraging Georgia's "re-militarization". Russia seems to estimate a larger plot to corner it in the Caucasus.

In a pre-emptive move, Moscow on Thursday signed five-year border defense agreements with Georgia's breakaway regions of Abkhazia and South Ossetia whereby the two regions will delegate their border security (including the maritime frontiers) to Russian forces.

Rivalries over control of Caspian oil provide the backdrop to these rapid developments involving Georgia. Conceivably, the hardliners would exploit the spiraling tensions to brand "revanchist" Russia at the summit meeting of the European Union (EU) in Prague this coming Thursday, which is expected to take a view on the two rival pipeline projects that aim to transport Caspian and Central Asian gas to Europe - South Stream, sponsored by Russia, and Nabucco, supported by the US.

At the Prague summit, Europe's dependence on Russia for its energy supplies will come under scrutiny. There is mounting frustration among the proponents of Nabucco that Moscow is steadily advancing South Stream. Yet, leading European countries like Germany, France and Italy are at ease with Russia. US attempts to stall South Stream have been of no avail.

Last Tuesday, Russia's Gazprom and the Bulgarian gas utility Bulgargaz initialed a cooperation agreement on a feasibility study for South Stream. But the Bulgarian side cannot formalize the South Stream agreement before the EU summit meeting of May 7. Washington hopes that the parliamentary elections in Bulgaria due in early July may postpone the agreement. It will be a close call.

All these factors are at work in the current tensions between NATO and Russia. But that isn't all. NATO, with active US support, is once again making a determined effort to pitch its tent in Central Asia. The latest Western attempt to establish a NATO regional centre on terrorism in Tajikistan comes on top of the US's agreement with Tajikistan regarding a basing facility for NATO operations in Afghanistan. The US has secured similar facilities in Uzbekistan and negotiations are underway with Turkmenistan.

However, no matter the criticality of the Afghan situation, the US is insisting that NATO should sidestep offers of help from the Collective Security Treaty Organization (CSTO) and the Shanghai Cooperation Organization (SCO). In effect, the US's containment strategy of the George W Bush era still remains intact at the operational level in Central Asia, no matter President Barack Obama's promise to revamp US regional policy.

Chinese newspaper the People's Daily recently featured a commentary broadly estimating that while Obama's diplomacy was characterized by "soft power", that was merely tactical, since "the US will not give up its dominant role in world affairs ... Wrapping a big stick in a layer of soft sponge or putting a carrot at the front and a big stick at the back, the US has never given up its powerful military force ... Diplomatic policy is also a kind of political game. One of its fundamental principles is to obtain the largest benefit at the least cost. The adjustment of Obama's diplomatic policy notably predicates a reduction of cost, without any change in their goal to obtain the most benefits."

The commentary likely had Central Asia in mind. Both Russia and China will take note that US regional policy cuts into their core interests. Russia's state television, Rossiya, showed a documentary last week accusing the US of using its air base in Manas, Kyrgyzstan, for running intelligence operations. Rossiya showed clippings of a windowless two-storey building in the Manas base, which it said was the hub of a major US radio-intelligence unit. (Manas is close to China's missile sites in Xinjiang.) There are signs that Moscow and Beijing will invest the SCO as a key instrument to counter the US moves to expand NATO into the Central Asian region. The SCO conducted war games in Tajikistan recently, simulating an attack by al-Qaeda from Afghanistan, in which terrorists seized a chemical factory and took its workers hostage.

Medvedev has called for a stronger role for SCO in stabilizing Afghanistan. Arguably, by prevailing on Bishkek to evict the US from Manas, Moscow signaled that it was reviewing the rules of the game in Central Asia. A cat and mouse game is going on. Washington kept up an appearance for weeks as if it was reconciled with the closure of Manas, while Moscow (and Beijing) put on an air of indifference. But now it transpires the Pentagon is seeking a reversal of the decision by the Kyrgyz government. "We are still engaged with the Kyrgyz ... They have given us notification and they want to end the presence of the US basing abilities in Kyrgyzstan, but the story is not over there yet," a US official was quoted as saying.

On Wednesday, Pentagon spokesman Geoff Morrell said, "I think there's actually progress in dealing with the Kyrgyz on Manas ... And I think we see reason for hope there, that that can be worked out ... We hope we're getting closer." On the other hand, Bishkek keeps affirming that its decision is irrevocable. Kyrgyz Prime Minister Igor Chudinov insisted, "Not a single government official has been authorized to hold such negotiations. No one. I have no information about such negotiations."

At any rate, Russia plans to increase the number of military aircraft at the Kant air base in Kyrgyzstan. "It is in line with the situation in Central Asia and Afghanistan," CSTO secretary general Nikolai Bordyuzha said. There is also a concerted attempt on the part of Moscow to rally the CSTO. Moscow will host a CSTO summit meeting on June 14, which is expected to formalize the creation of the alliance's new rapid reaction forces. To be sure, Moscow is reasserting its role as the guarantor of security for Central Asia.

But Moscow also regards the SCO as a forum within which it has the unique opportunity to coordinate with China. While receiving the SCO defense ministers who gathered in Moscow this week, Medvedev said, "Overall, the region in which the SCO operates is a complex one, and so we have to take into account the reality that surrounds us, and the need for our countries to jointly coordinate efforts on a wide range of issues, including security and the defense capability of our countries on a collective basis."

The defense ministers' meeting in Moscow on Wednesday saw a strong affirmation by China on enhanced SCO cooperation to confront regional challenges. In an oblique reference to the US, Liang called for the eschewal of "antagonism, clique politics and unilateralism" and underlined that the SCO has a role to play in the entire Eurasian region. Russia and China separately agreed on an intensified program of bilateral military cooperation that includes as many as 25 joint maneuvers in 2009 in a demonstration of the strengthening of strategic ties.

Russian Foreign Minister Sergei Lavrov also expressed similar sentiments earlier in the week after his talks with his visiting Chinese counterpart. Lavrov said Moscow and Beijing favored the "comprehensive strengthening of the SCO as a key factor of the promotion of stability and security in the Central Asian region". Lavrov summed up that two chief principles lie at the core of the "dynamically evolving" Russian-Chinese strategic cooperation. One, the two countries share a common perspective on the contemporary world processes.

Two, the two countries will "always support each other on concrete issues" that directly affect their national interests. Carefully choosing his words, Lavrov added that Russia and China agreed during consultations in Moscow that "such comradely mutual assistance" is only going to be strengthened.

Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.

Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved.

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http://silverscorpio.com/china-india...z-army-report/

China, India ‘may stir up regional war’: Oz Army report

By admin on May 9th, 2009 32 views

Canberra (Australia), May 9 (ANI): An Australian Army internal report has claimed that both China and India may stir up a war in the Indian Ocean Rim region in the not too distant future.

According to the White Paper, a copy of which has been accessed by The Australian, makes hawkish comments about India and China’s military ambitions.

A draft copy of an army report, Army’s Future Land Operating Concept, due to be finalised in September, warns about China and India’s military ambitions.

China and India’s growing military ambitions, matched by growing military spending, have the potential to destabilise the region with their military expansion,” the report states.

“China, and potentially India have the potential to challenge US (strategic) dominance within their regions,” the report states.

“Of particular concern is an increased likelihood for dispute escalation as a result of changes to the perceived balance of power with the real potential for a return to major combat operations involving states.”

The different wording in the documents suggests the white paper was toned down for public release to avoid causing offence in Beijing and New Delhi. (ANI)

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http://www.atimes.com/atimes/South_Asia/KE05Df01.html

May 5, 2009
Chinese antics have India fuming
By Sudha Ramachandran

BANGALORE - China's blocking of India's application for a loan from the Asian Development Bank (ADB) has raised hackles in Delhi, marking the first time Beijing has dragged a bilateral territorial dispute with India into a multilateral financial institution.

China asked for a postponement of an ADB board meeting on March 26-27, which was set to discuss the 2009-12 strategy for India. On the table was an Indian request for a US$2.9 billion loan approval. What appears to have got China's goat was the inclusion of a $60 million flood management, water supply and sanitation project in Arunachal Pradesh. Although China gave no explanation for its move at the ADB meeting, ADB sources in Delhi say that India's inclusion of a project in "disputed territory" prompted the Chinese decision.

China maintains that Arunachal Pradesh, which lies in India's northeast, is "southern Tibet". It lays claim to around 90,000 square kilometers of territory in India's northeast, roughly approximating the Indian state of Arunachal Pradesh. During the 1962 border war, China advanced into and briefly occupied territory here before announcing a unilateral ceasefire and pulling back to the McMahon Line that India recognizes as its border with China. In 1987, there were serious skirmishes at Sumdorong Chu in Arunachal Pradesh.

Despite the general improvement in Sino-Indian ties, China has not given up its claims on Arunachal Pradesh, even becoming more assertive in making these claims in recent years. Incursions into Arunachal and Sikkim have been frequent. The entire 4,057-km-long Sino-Indian border is disputed.

China's move at the ADB meeting isn't surprising. It has always objected to any development whereby India asserts itself vis-a-vis Arunachal Pradesh. Only a few days earlier, China raised objections to India's President Pratibha Patil visiting Arunachal Pradesh and objected to Prime Minister Manmohan Singh's visit there last year.

In 2007, a civil servant from Arunachal Pradesh was denied a Chinese visa on the grounds that he was from Chinese territory and hence didn't need one. During ongoing negotiations on the border dispute too, China is said to be rigid on its claims in Arunachal Pradesh.

Thus, an objection to an Indian loan involving Arunachal Pradesh was to be expected at the ADB.

An annoyed India has conveyed its displeasure with the ADB for allowing China to bring bilateral baggage to bear on its lending policies. It has made it clear that it will not remove the Arunachal project from the plan. This is the first time that an ADB loan to India - the largest recipient of ADB funding last year - has been blocked.

Days after the setback at the ADB, India struck back. It turned down China's informal request to be included in some form, ie as observer or associate member, into the 33-member Indian Ocean Naval Symposium (IONS) initiative started by India last year.

Reports in the Indian media have described Delhi's decision to exclude China from the IONS initiative as a tit-for-tat response. Officials of India's Ministry of External Affairs (MEA), however, deny that the decision on IONS is related to China's action in the ADB.

"China cannot be included in this initiative as IONS is restricted to Indian Ocean littorals, which China is not," an MEA official told Asia Times Online.

India's rejection of Beijing's request to be part of IONS has to do with its long-standing anxieties over China's growing presence in the Indian Ocean. With half the world's containerized freight, a third of the bulk cargo and two-thirds of oil shipments traversing this waterway, the Indian Ocean's importance for global trade is substantial. Its significance for India's economic development and security too is immense as most of India's trade depends on the sea for transport, while nearly 89% of India's oil imports arrive via the sea.

India is uneasy with China's presence in the Indian Ocean as it believes it poses a threat to its security and other interests.

"That India's decision on IONS followed close on the heels of the ADB developments is purely coincidental," the official said.

But a Chinese scholar on South Asia who spoke to Asia Times Online on condition of anonymity said that India is "reading too much on the Chinese move at the ADB". It was a "routine protest that had to be made. Had China not raised an objection, India would have seen it as softening on the part of Beijing on the issue."

"The meeting has only been postponed," he pointed out, adding that China would not sabotage the approval of India's loan when the meeting is rescheduled. "At a time when China is seeking a larger role for itself in multilateral financial institutions, it would not want to be seen as obstructionist or as using its position in these forums to settle bilateral scores," the scholar said.

But Indian officials are wary. With China's clout in global financial institutions growing, there is some concern in India that Beijing will use its influence to keep India in check.

After all, "China's use of its position in multilateral forums to clip India's wings is not new," the MEA official said.

Indeed, Beijing has resisted India's membership in the Association of Southeast Asian Nations Regional Forum and the Asia-Pacific Economic Cooperation and has never been keen on India becoming a permanent member of the United Nations Security Council. At the Nuclear Suppliers Group meet in Vienna last year, when a waiver of restrictions on nuclear trade with India was being considered, China sought to block a consensus from emerging in favor of India.

Indian officials say that China's move at the ADB is an issue of concern not only for India but other countries. China could use its position in multilateral financial institutions to hold back funds for countries that take a position that is more sympathetic and supportive of Tibetan leader the Dalai Lama for instance, or of Taiwan. Beijing could flex its muscles in these situations as well.

Sudha Ramachandran is an independent journalist/researcher based in Bangalore.

Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved.

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http://www.atimes.com/atimes/South_Asia/KE07Df01.html

May 7, 2009
India looks on as the East integrates
By Zorawar Daulet Singh

NEW DELHI - The agreement by the finance ministers of China, Japan, South Korea and the Association of Southeast Asian Nations (ASEAN+3) last week to create a US$120 billion regional reserve pool "to address short-term liquidity difficulties in the region and to supplement the existing international financial arrangements" must surely be another milestone in East Asian geoeconomics.

This, however, is not an unsurprising development but part of a trend to integration that has characterized the political economy of the region. India remains disconnected from this geoeconomic space. For too long, the country's look-East policy has been based on rhetorical aspirations rather than on immersing India into the commercial networks that have entwined the nations of East Asia.

The popular images that animate any discussion on East Asia, such as those concerning the North Korean nuclear question, the naval dimension and sea-lane security, and disputes in the South China Sea, tend to emphasize the latent, potential and ongoing conflicts in the region while crowding out any meaningful conversation on the question of economic interdependence. This is partly a result in India of a security bias within the security establishment whereby it tends to project India's perspectives on China onto other actors in the region. For the major part, however, this is because India's own economic linkages with the East are relatively perfunctory.

It is worth highlighting the underlying dynamic that enables interdependence to operate. While some analysts have opined that the economic impulse in the region has a life of its own, and security considerations have been subordinated by geoeconomics, such a perspective does not address the reality that East Asian actors have made a conscious political choice to stimulate commerce.

This is not to suggest that nations on China's periphery have somehow lost the plot and have adopted a benign attitude vis-a-vis China. China's neighbors are simply executing hedging strategies whereby their security under the American umbrella and the latter's substantial forward deployments in the Western Pacific has reassured them to enhance their economic linkages with China.

Ironically, the US has encouraged such engagement, and the extraordinary climb in Sino-US relations has only reinforced the impulse of China's neighbors to engage her. Thus, the situation of a muted security dilemma has paved the way for extensive interactions in the economic sphere.

The interdependence of East Asia cannot be understood without an appraisal of manufacturing supply chains, and China's role as a "conduit" in this process.

Over the past decade, production sharing has become more pronounced in the region. A number of electronic and machinery industries are now characterized by a vertical division of labor - the slicing up of the manufacturing process whereby each economy is specializing in a particular stage of the production sequence of a single product, which is eventually shipped out from Chinese ports to Western markets.

China has emerged as a central assembly point of imported high-technology components which are processed there by affiliates of multinational companies (MNCs), shipped out again for further processing, and sent back to China as organized components for final assembly.

This is reflected in the data. Over the past decade, the proportion of components in exports to China has increased by five times for Indonesia, 15 times for Thailand, 19 times for Malaysia, and 60 times for Philippines. Today, Japan, Taiwan and South Korea account for around 50% of China's component imports.

Foreign direct investment into China has played a vital role in restructuring intra-industry trade in the region. Japan has established 30,000 companies and joint ventures in China with an investment of US$60 billion. South Korea has 30,000 enterprises there with an investment of $35 billion. Singapore has invested $31 billion in 16,000 projects. Taiwanese firms are estimated to have invested $100 billion on the mainland. Taiwanese firms alone are responsible for 60% of China's information-technology hardware exports. From 1985 to 2007, MNCs in China increased their share of total trade from 10% to 60%, and currently 80% of the value of their exports is imported.

Clearly, what we view as "Chinese" exports is in reality part of a complex trade and investment web that spans across East Asia. This has three important implications:

First, China's manufacturing edifice must not be exaggerated since it is primarily the point of final assembly and shipment to Western markets. A lot of the sophisticated research and development and high-tech components that go into China's electronic exports continue to be manufactured in Japan, South Korea or Taiwan. To be sure, there has been a gradual relocation of some mid-value manufacturing to the mainland as China's advanced neighbors have moved up the value chain. But even here, MNCs (Japanese, South Korean, American) have led the way and continue to control major elements of the supply chain.

Second, for the most part (with the exception of a few labor intensive economies) the regional division of labor has largely been a positive-sum game. Thus, the popular notion of the Chinese hegemon overwhelming the Asian economic scene is empirically unjustified. Even more ironically, it may be noted that the US has been an important beneficiary in this division of labor. It is estimated that 60% of all imports into the US emanate from US subsidiaries or subcontracted firms operating in China. Thus, not only are US MNCs in East Asia playing a vital role in what is exported back home, the surpluses that China accumulates have been recycled into US government debt, making China into, as economist and columnist Paul Krugman has called it, a "T-bills republic"!

Third, the US trade deficit with China is in fact a de facto trade deficit with East Asia that bilateral statistics do not and cannot capture. Such a complex multilateral chain complicates attempts to impose economic costs on China, since protectionism against Chinese exports will inevitably penalize other East Asian producers, including US corporations themselves.

Clearly, the nuances in East Asian interdependence and the extensive economic involvement of the US must be appreciated if India is to craft a sensible look-east policy. A reliance on a stereotypical image of China and her neighbors has precluded India from economically immersing itself in the region.

Instead of overstating China's economic story, New Delhi should become better acquainted with the integration dynamic in East Asia, one that is already transforming political choices in the region. And the prerequisite for India's participation in regional supply networks will begin by constructing an ecosystem at home that encourages the allocation of resources toward labor-intensive manufacturing.

Zorawar Daulet Singh is an international relations analyst and co-author of India China Relations: The Border Issue and Beyond, Viva Books 2009, New Delhi. zorawar.dauletsingh@gmail.com

Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved.

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http://www.voanews.com/english/2009-05-09-voa18.cfm

Russia Parades New Missile Defense System
By Peter Fedynsky
Moscow
09 May 2009

Russia has celebrated the 64th anniversary of its World War Two victory over Nazi Germany with its second show of military force on Red Square since the Soviet collapse nearly 18 years ago. The parade featured 1,000 more troops than last year and mostly the same Soviet-era tanks, missiles, and aircraft. But a new exhibit this year and a recent addition to the Russian arsenal was the S-400 missile defense system, which some experts said has advantages over its American counterpart, the Patriot.


Russia's new S-400 Missile Launcher, 09 May 2009

9,000 Russian soldiers shouted a thundering "hurrah" following a speech by their commander in chief, President Dmitri Medvedev, who issued a warning to Russia's potential enemies.

"Any aggression against our citizens will be met with appropriate resistance, and the future of Russia will be peaceful, successful and happy," said Mr. Medvedev.

Dozens of Soviet-era heavy tanks, howitzers and missiles rumbled through Red Square for the country's annual Victory Day Holiday, and combat aircraft roared by just 300 meters overhead. Making a public debut was the S-400 missile defense system, which was first deployed around Moscow in 2007.


Vice Admiral Alexander Pobozhny (ret), 09 May 2009

Vice Admiral Alexander Pobozhny, who retired from the Russian navy in 2003, told VOA the S-400 is in the same category as the American Patriot. The admiral considers his country's system to be better, but notes it does not affect any military balance.

Pobozhny said the S-400 is strictly a defensive system, so it won't change anything. He added that it simply increases the security of Russia.

Russian military expert Alexander Konovalov told VOA development of the system began about ten years ago following the advent of long distance precision-guided weapons.

Konovalov said the S-400 hits targets at a distance of 125 to 150 kilometers, which means it identifies them when they are still 400 kilometers away. He said the system can intercept incoming weapons from the very lowest altitudes to as high as 30 kilometers, which means it can hit airplanes, cruise missiles and tactical missiles that have a range of about 3,500 kilometers.

The S-400, code named the SA-21 Growler in the West, was first deployed around Moscow two years ago. However, Konovalov said Russia lacks the industrial capacity to produce the system quickly enough and in sufficient numbers to defend the entire country.


Analyst Pavel Felgenhauer, 09 May 2009

Independent military analyst Pavel Felgenhauer agreed. He traced the situation to the collapse of the Soviet Union, which built weapons with components supplied by republics that are now independent nations. Felgenhauer said another factor is a work force that is aging along with Russia's weapons, because of low salaries in the country's military industrial complex.

Felgenhauer said there are no young people (in defense industries) where the average age has now stabilized at 60, because people are either retiring or dying off.

Felgenhauer noted that Moscow has been buying weapons components abroad and may soon purchase entire weapons systems and know-how in the West. As an example, he cited Russia's deal last month to buy unmanned Israeli intelligence-gathering planes.

Nonetheless, the Red Square parade impressed virtually every veteran in attendance, and Felgenhauer said the aging weapons on display remain very deadly.

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Talk to Russia, remember Georgia

Published: May 10 2009 19:36 | Last updated: May 10 2009 19:36

When even Dmitry Rogozin, Russia’s combative envoy to Nato, has something nice to say, it is fair to speak of improvements in relations between Moscow and the west.

“We do not think Nato is lost for us as a partner,” said Mr Rogozin on Friday in a bid to draw a line under recent disputes over spies, diplomatic expulsions and Nato exercises in Georgia.

His comments reflect a general will in Russia and the US to stick with the “reset” in ties proposed by President Barack Obama.

This is all to the good. The alleged spying and the consequent expulsions are standard diplomatic fare. No reason to get excited. The Georgian exercises, coming after last year’s war, were more sensitive. But, as Moscow knew, they were planned before the conflict, so were in no sense a provocation.

This leaves the way clear for Mr Obama to follow his strategy of engaging Russia on his priority issues – Iran, Afghanistan and nuclear non-proliferation – while trying to avoid bilateral rows. Out go futile efforts to lecture Russia on its democratic rights. In comes hard-headed diplomatic realism.

The first fruits are likely to come later this year with a new arms control treaty. This is welcome in itself and for the precedent it will set for the rest of the world.

Moscow also seems willing to co-operate more closely on Afghanistan, and with good cause since Russia lies uncomfortably close to the danger zone. Iran is different: it is unclear whether Moscow is ready to put much pressure on Tehran over its nuclear programme – or whether such pressure would work.

But the real test of the Obama approach to Russia will come in how the US responds to Moscow’s claims for primacy in its “near abroad”, the former Soviet Union. Washington has postponed talk of soon bringing Ukraine and Georgia into Nato, and has gone quiet on plans for missile shield bases in eastern Europe.

But Russia wants more and demands a say on all strategic matters in the region, not least energy supplies. The US must not abandon the former Soviet republics to a renewed Russian domination. Washington cannot offer Georgia as much support as it gives, for example, the Baltic states, but Russia must not be allowed a free hand.

Much will depend on events in two key countries – Ukraine and Georgia – which are both wracked by instability, as was shown last week in Georgia’s apparent failed coup. Mr Obama’s carefully defined Russia strategy could yet fall foul of unexpected incidents in Kiev or Tbilisi.

Copyright The Financial Times Limited 2009

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Vladimir Putin signals he is pondering a presidential comeback in 2012

* Luke Harding in Moscow
* guardian.co.uk, Sunday 10 May 2009 20.02 BST


Russia's prime minister, Vladimir Putin, tonight gave his strongest hint yet that he is pondering a comeback that would see him return to the Kremlin as president in 2012.

Putin said there was no decision yet on whether he or his close ally Dmitry Medevedev, the current president, would run for office when Medvedev's four-year-stint in the job expires.

"Depending on the effectiveness of our work, President Medvedev and I will take decisions about what to do in the future, he and I," Putin said in an interview with the Japanese media.

He added: "I have very good relations with President Medevedev. Each one of us does our work. We each have our niches. But of course at this level, questions frequently arise that cross over."

Medvedev took over as Russia's leader last May. But exactly a year after he was sworn in most ordinary Russians – as well analysts and Moscow's western partners – believe that Putin remains the most important figure in Russian politics.

In recent months, some commentators have said that Medvedev has been trying to nudge Russia in a more liberal and less authoritarian direction. Sceptics, however, have noted the differences between the two leaders are merely stylistic.

Last year Medvedev extended the presidential term from four to six years – fuelling speculation that Putin was already plotting a comeback. Putin served eight years as president from 2000-2008, before taking up his current job.

Today Putin said the economic crisis that has battered Russia would decide which of the two men stood in 2012. "I have known him for a long time and I know he will look at his political future based on the interests of the country," Putin said.

The relationship between Medvedev and Putin remains something of a mystery. They have known each other since the early 1990s, when they worked together in St Petersburg's mayor's office, with Putin naming Medvedev as his successor in autumn 2007.

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Russian leader's intentions remain a mystery
Clifford J. Levy, New York Times
Sunday, May 10, 2009


(05-10) 04:00 PDT Moscow -- Vladimir Putin once characterized liberals and leaders of human rights groups as jackals who scavenged for handouts at foreign embassies. His protege and successor, Dmitri Medvedev, recently met with some of those very people, praising their work and saying that they had been treated unfairly.

Yet Medvedev then left it at that. No new policies or aid.

About a year after becoming Russia's third president, Medvedev remains something of a puzzle, and the financial crisis has only deepened the questions about his intentions. Is he the affable front man for the business-as-usual hard-liners in the Kremlin, a puppet president who offers soothing remarks, but little else? Or is he a genuine reformer who is edging Russia away from the more heavy-handed practices of Putin, but needs time to make his mark?

Medvedev lately seems to have gone out of his way to showcase his supposed liberal leanings and to distinguish himself from Putin, who is now prime minister. Medvedev first gave an interview to a fiercely anti-Kremlin newspaper, Novaya Gazeta, whose reporters have been killed and harassed in recent years.

He then convened the meeting with human rights and related advocacy groups on April 15. They have long complained of government harassment and are now operating in such a climate of intimidation that some of their leaders have hired bodyguards.

"It is no secret that there is a seriously distorted perception of human rights activities in our country," Medvedev said at the meeting, issuing the kind of apology rarely, if ever, heard from Putin.

"Many officials are now under the impression that all nongovernmental organizations are enemies of the state and should be fought, so that they do not transmit some sort of disease that may undermine the foundations of our society," Medvedev said. "I think such an interpretation is simply dangerous."

If his statements were heartening to the groups, they were, as often is the case, not accompanied by action. And in general, it is difficult to discern even a minor shift in how the Kremlin wields power under Medvedev.

The recent mayoral race in Sochi, host of the 2014 Winter Olympics, appeared to have been orchestrated using the same techniques honed in the Putin era. Opposition candidates were kicked off the ballot or subjected to intensely hostile television coverage. The Kremlin's favorite won 77 percent of the vote after barely campaigning.

"For now, Medvedev is just pronouncing nice words," said Alexei Simonov, who is president of the Glasnost Defense Foundation in Moscow, which promotes media freedom, and was at the meeting. "And he has done a lot of that. But there has been a complete lack of deeds."

Medvedev's comments are regularly parsed for signs of discord with Putin, who is considered Russia's paramount leader, and it is perhaps possible to glean from them a rebuke to Putin's style.

But it seems far more likely that Putin has chosen to let Medvedev adopt his own tone as long as he does not alter the government's course.

Medvedev is a former law professor who appears to have sympathy for the difficulties of human rights groups. Even so, the groups' leaders could point to only one move by the government recently that indicated a thaw: a court-ordered release from prison of a lawyer, Svetlana Bakhmina, who was a minor figure in the crackdown by Putin on the Yukos Oil company and its head, the former oligarch Mikhail Khodorkovsky.

At the same time, though, prosecutors are pursuing new charges against Khodorkovsky, who was once Russia's richest man and was imprisoned in 2003 after angering Putin by getting involved in politics. The new charges, which could keep Khodorkovsky behind bars for two more decades, have been widely seen as a sign that the Kremlin has no intention of loosening the reins.

"We so want to believe that things are getting better that we sometimes confuse our expectations with what is really happening," said Irina Yasina, an analyst at the Institute for the Economy in Transition in Moscow, who was also at the meeting with Medvedev. "We so want to believe that there is a big difference between Putin and Medvedev. And sometimes our hopes prevent us from seeing the reality."

Beyond the debate about whether Medvedev is sincere, there is another issue: Does he have the power to carry out significant changes in civil liberties, political pluralism and related matters, especially during the financial crisis?

Putin, of course, is still in office. As in Soviet times, there are competing groups of senior officials in the Kremlin - some liberal, some decidedly not. Some have signaled that it would be a mistake to consider ceding control, now that Russia is facing widespread unemployment and fears of disorder in regional centers.

In March, Vladislav Surkov, often described as the Kremlin's chief political strategist, publicly mocked calls for reform. "The system is working," he said. "It will cope with the crisis and get through it."

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Feeding Georgia to the Bear

Germany has almost certainly benefited more from the NATO alliance than any other country. But the Germans seem already to have forgotten what it was like to be always vulnerable to Russian aggression.The current NATO exercises in Georgia, scheduled in January of 2008, began last week and will run through the month of May. The alliance's decision to move forward with the exercises was met with belligerent rhetoric from Moscow and a coup attempt that was almost certainly inspired, if not directed, by the Kremlin.

Still, Frank-Walter Steinmeier, Germany's foreign minister and SPD candidate for Chancellor in elections later this year, has apparently thrown his lot in with the Russians, criticizing the exercises as unhelpful to the maintenance of regional stability:

"In the current phase of domestic political tensions in Georgia one should have course carefully considered whether this is the right time to let the exercises take place there," Frank-Walter Steinmeier said on Deutschlandfunk radio. "It will definitely not contribute to calm."

Imagine if the United States had taken such a view of NATO exercises in Germany during the Cold War. Would anyone seriously suggest that those exercises did not contribute to regional calm? Or maybe Steinmeier thinks that West Germany would have been better off without the thousands of U.S. troops and tanks and aircraft that were constantly training alongside West German soldiers in preparation for a Soviet attack much like the one Moscow launched against Georgia last summer?

Posted by Michael Goldfarb on May 10, 2009 03:03 PM

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Moscow and Grozny Maintain the Illusion that the War has Ended
Publication: North Caucasus Weekly Volume: 10 Issue: 18
May 8, 2009 04:42 PM Age: 1 days
Category: North Caucasus Weekly, The Caucasus, North Caucasus , Home Page, Featured
By: Mairbek Vatchagaev

Several weeks after the official announcement of the end of the counter-terrorist operation in Chechnya on April 16, little has changed in the region. It is evident that the situation in the republic remains tense. Reports from the region indicate that, notwithstanding the end of the counter-terrorist operation, the armed opposition (represented by the jamaats) continues its activities across almost the entire North Caucasus region on the same level as they were during the counter-terrorist operation. These are not conventional military operations, which have not been carried out in the region for several years, but rather militant activities circumscribed to daily assaults on Russian law enforcement structures and on those, who—according to jamaat members—collaborate with the pro-Russian authorities on the local level.

It is not surprising, then, that the military’s announcement of the launch of local counter-terrorist operations (in a particular region or in a given area or settlement) caused indignation of the Chechen leadership, which had presented the end of the counter-terrorist operation as a complete and final victory over the armed opposition as represented by the jamaats. An even more unpleasant surprise for Chechen President Ramzan Kadyrov was the fact that on April 20, a counter-terrorist operation was declared in several settlements in the Itum-Kale district and the mountainous regions of the Vedeno district of Chechnya. Three days later, on April 23, counter-terrorist operations were carried out in three other districts of Chechnya: Shatoi, Vedeno and the mountainous part of the Shali district (www.kasparov.ru/material.php?id=49FAA7310D9B2). This upset Kadyrov to the point that he publicly denounced the aforementioned actions by the law enforcement authorities (http://www.kavkaz-uzel.ru/articles/153360) and demanded their immediate cessation. Indeed, it is difficult to convince the Chechen people that there has been a victory over terrorism when almost one third of the entire republic is still under a partial counter-terrorist operation regime. The Chechen leadership is more worried about the creation of the image of a peaceful territory, which in their view implies that such terms as “counter-terrorist operation” and “militants” must be relegated to the dustbin of history. In an interview with the Austrian newspaper Die Presse published on May 3, Kadyrov tried to present the region as being attractive for foreign investment and promised to make the republic free of Russian federal budget subsidies by 2012. Equally interesting was the fact that he apparently aims to remain the president of Chechnya until 2019, which by then—in Kadyrov's view—will have become a flourishing republic (http://www.ruvr.ru/main.php?&q=112342&cid=437&p=03.05.2009).

At the same time, according to open source information obtained by the on-line news portal Kavkazsky Uzel, approximately 88 special operations and shootouts and three terrorist acts that claimed the lives of four law enforcement officers and wounded 12 took place in Chechnya from January to March. During just those three months no less than 66 suspected militants and their accomplices were detained and 37 munitions caches and 17 bases of militants were discovered. According to law enforcement officials, no less than 1,060 explosive ordnances were defused (www.newsru.com/russia/27apr2009/kavkazz.html).

The April-May period will in all likelihood be even more active when it comes to militant attacks. In fact, militant actions are occurring practically every day from the end of April to early May. For instance, on April 28, there were news reports about assaults on the columns of cars in the Shali and Achkhoi-Martan districts of Chechnya (http://www.kavkaz-uzel.ru/articles/153626). On May 1, a serviceman with the interior ministry forces was severely wounded as a result of an explosion (Itar-Tass, May 1). On May 2, a car in a convoy hit a landmine in the vicinity of the village of Shuani. One person was killed and several wounded (www.regnum.ru/news/1158654.html). On May 3, two suspected militants were killed in the settlement of Chernorechnye in the Zavodskoi district of Grozny, Chechnya’s capital (www.yuga.ru/news/153608).

This spike in militant activities could explain the reanimation of the constant accusation by the Russian military that the Georgian authorities are supporting the Chechen militants. The focus of this accusation is on the financial support for the militants directed from the territory of Georgia and Azerbaijan. According to Russian Prosecutor General Yury Chaika, “the financial means for illegal armed formations in the North Caucasus are delivered by couriers who infiltrate through the adjacent states—Georgia and Azerbaijan” (www.newsinfo.ru/news/2009-04-30/chaika/178186). The Georgian authorities quickly reacted to accusations of this sort and denounced the assertions of Russian representatives as groundless (www.kavkaz-uzel.ru/articles/153604). Russian political scientist Igor Dobaev also disagrees with the Russian prosecutor general. Dobaev thinks that funds from Muslim countries compose the main source of income for the armed underground (http://www.kavkaz-uzel.ru/articles/89319).

Similar accusations against Georgia have resurfaced periodically whenever the relationship between these two countries has become tense. This time it seems that it is related to the NATO military exercises in Georgia and the deployment of Russian border guards along the borders of South Ossetia with Georgia, which implies one more step toward unification of the breakaway Georgian republic with the Russian part of Northern Ossetia-Alania.

Against the backdrop of statements about the absence of militants in Chechnya, news reports increasingly feature stories about detentions of former members of the armed underground. These detainees can be anyone, including volunteers who fought in the first military campaign (1994-1996), as well as those who simply sympathize with the militants. It is obvious that the police are carrying out prophylactic measures in order to demonstrate to the skeptical public that their activities are fruitful at the expense of those who even once carried a machine gun during the first war (www.newsru.com/russia/03may2009/chechn.html). It is no longer a surprise that the detainees facing these trumped up charges, or those inclined to surrender, always reveal hidden weapons cache (or if he doesn’t have one, the accused must buy machine guns in order to present them as weapons surrendered to the law enforcement authorities voluntarily). A suspect must also identify several new people so that the authorities can then follow the chain and continue to operate this assembly line of artificially “surrendered” militants.

Meanwhile, human rights defenders quote figures indicating that from the start of the year through April there was a noticeable growth in the abductions of people by “unknown military structures” in Chechnya. This is precisely the sort of categorization that has been employed to identify all law enforcement bodies that carry out special operations in Chechnya. Thus, according to the Memorial human rights group, out of approximately 34 people who have been abducted, 27 have been released, two were found dead, two disappeared without trace and three were found in the pre-trial detention facilities (http://www.newsru.com/russia/27apr2009/kavkazz.html). Since the majority of abductees (20) are from the village of Dargo (in Chechnya’s Vedeno district), it is possible to infer that these actions taken by the law enforcement authorities were directed against the family members of militants in order to apply pressure on them by abducting their relatives. This method is actively used against all members of the armed opposition in Chechnya.

At the same time, it became clear that the abolition of the counter-terrorist operation does not automatically mean the lifting of the ban on journalists' access to Kadryrov's "paradise." The Russian Foreign Ministry’s official representative, Andrei Nesterenko, noted that the “previously established order for the travel of foreign correspondents to Chechen Republic” remains in place (http://www.vz.ru/news/2009/4/29/281848.html). Considering that the international human rights watchdog Freedom House, in its recently published annual report, named Russia the most dangerous country for journalists (www.freedomhouse.org/uploads/fop/2009/FreedomofthePress2009_OverviewEssay.pdf), it is possible to predict that for journalists, the rules of travel to this special region of southern Russia will remain the same.

Thus, the recent developments in Chechnya give little reason to believe that the resistance to the authorities on the part of the jamaats is ending. Moscow and the official Grozny continue the public relations game for the public at large by investing funds into the reconstruction of Chechnya that they themselves devastated, and all of it is presented as proof that the war has ended. Yet, the war will end only when the issue of the armed resistance’s ideology is resolved satisfactorily, and not through the authorities' physical intimidation of their relatives.

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The Ukrainian-Russian Cultural Conflict
Publication: Eurasia Daily Monitor Volume: 6 Issue: 87
May 6, 2009 06:12 PM Age: 4 days
Category: Eurasia Daily Monitor, Home Page, Foreign Policy, Russia, Ukraine
By: Taras Kuzio

Discussions over the many conflicts between Ukraine and Russia have focused on the more well known: the status of the Russian language, unpaid energy bills and gas pipelines, withdrawal of the Black Sea Fleet, Russia's invasion of Georgia, support for Crimean separatism, and future NATO membership. What is less widely known is the undeclared Ukrainian-Russian cultural war that is as bitter as any other aspect of the poor state of the bilateral relationship between Ukraine and Russia.

The Ukrainian-Russian cultural war has significant ramifications in Ukraine and Russia's domestic politics, national identities and geopolitical orientations. It has long been established that the language spoken by Ukrainians (Ukrainian or Russian) and their attitudes towards Russia shaped by their stance on culture and history, in turn influences the voting patterns of Ukrainians -into pro-Western and pro-Russian orientations. These orientations then influence attitudes towards their support for Ukraine's integration into the CIS, NATO and the EU.

Unlike in the 1990's, Russia under Vladimir Putin has gone on the offensive in seeking to counter what it sees as the "Ukrainian nationalist" view of Ukrainian history and culture which has been propagated by President Viktor Yushchenko since his election in January 2005. Yushchenko's active and personal involvement in reviving the Ukrainian national memory has added to the deep-seated antagonism that Russia's leaders hold towards him.

The Ukrainian-Russian cultural war has become acute as a consequence of the release in April of a new Russian film about Nikolai Gogol's fictitious Cossack leader Taras Bulba. The film was sponsored by the Russian Ministry of Culture at a cost of $20 million and took three years to produce.

The new Taras Bulba film has obvious ideological and geopolitical ramifications. Bulba is portrayed as fighting "Western enemies" and dies for "the Orthodox Russian land." The film's director Vladimir Bortko openly admitted that his aim was to increase "pro-Russian" sympathies within Ukraine and to propagate the myth that Ukrainians and Russians belong to one narod. The film unashamedly propagates a pan-Slavic line that has won praise from Russian nationalist politicians such as Vladimir Zhirinovsky.

Taras Bulba opened on April 3 in Moscow's Kinoteatr Oktyabr to thunderous applause at Bulba's "Russian soul" speech and scenes where Cossacks expel Poles from Ukraine. The film has aroused widespread public interest and criticism and has already grossed $14 million in Russia and Ukraine (Kyiv Post, April 22). The film has attracted both older viewers, nostalgic for the USSR, and younger people because of its abundance of gratuitous violence (www.life.pravda.com.ua, April 3).

It was released for the 200th anniversary of Gogol's birth who, although born in Ukraine, wrote in the Russian language and has traditionally been viewed as a "Russian" writer. The Ukrainian-Russian cultural war has therefore descended into an historical dispute over Gogol.

On April 1 President Yushchenko visited Gogol's museum in his native Poltava region (www.president.gov.ua, April 1). At a concert in Gogol's honor, Yushchenko said, "Gogol wrote in Russian, was a Ukrainian, and thought and felt himself to be a Ukrainian. I believe it is ridiculous, and to a certain extent the conflicts surrounding which country he belongs to are demeaning" (www.president.gov.ua, April 1). On the same day, Vladimir Putin hailed Gogol as an "outstanding Russian writer."

The Ukrainian-Russian cultural war had earlier become contested over Yushchenko's propagation of the 1933 famine as directed against Ukrainians and as genocide. Russia has gone on the offensive against both of these Ukrainian claims.

On February 25, the Russian Foreign Ministry issued a DVD which will be followed later this year by 3 volumes of 6,000 historical documents to counter the Ukrainian claims. The Head of Russia's Federal Archives Agency Vladimir Kozlov, introduced the DVD at a Moscow press conference, with the claim that the famine was "the result of [Stalin's] criminal policy" against the peasantry, rather than against any specific ethnic group (www.rian.ru, February 25).

Ukraine's debunking of Stalinism and its publicizing of the famine, has forced Russia under Putin to digress from its full-blown rehabilitation of Stalinism. While rejecting Ukrainian claims of an ethnic genocide-famine, Kozlov was forced to admit that a crime (famine) had indeed taken place against the peasantry, as a result of Stalin's collectivization policies. Russia's rehabilitation of Stalinism has propagated the myth that it was the elites who had suffered the most from Stalin's purges (www.gulag.ipvnews.org, September 16, 2006).

The Ukrainian-Russian cultural war and differences over national identity has become acutely important in Ukraine's presidential elections, which are invariably perceived as deciding the country's geopolitical future as either lying with Russia and the CIS or with the West. This was the case in the 1994, 1999 and especially in the 2004 presidential elections, when Russia heavily intervened to halt the "nationalist" candidate (Yushchenko) and lost. Putin has since taken this as a personal defeat that requires some form of pay back.

With six months remaining until the elections, Yushchenko has described himself as a person who does, "not belong to those people who waver in their patriotism. I am not a little Russian, I am not a khokhol (derogatory term for little Russians). I am a Ukrainian" (Eko Moskvy, April 3). Yushchenko continued, ‘I am a Ukrainian president, I know that this country requires an ideal president' (www.president.gov.ua, April 3).

Ukrainian opinion polls suggest the "pro-Russian" Party of Regions leader Viktor Yanukovych and the "treasonous" Prime Minister Yulia Tymoshenko are the two leading presidential candidates, neither of whom therefore match Yushchenko's requirements for a "patriotic" president. On April 24 Ukrayinska Pravda and four days later the pro-Yushchenko Ukrayina Moloda both ran leading articles on negotiations already underway for a new "pro-Russian" coalition between the Party of Regions and the Yulia Tymoshenko bloc (BYuT), facilitated by Vladyslav Surkov, first deputy head of the Russian presidential administration.

The Ukrainian-Russian cultural war is part of a wider on-going undeclared conflict between both countries over their evolving national identities. Ukraine's "quadruple transition" has focused on nation and state building, as well as democratic and market economic transition. Russia, which did not declare independence in August 1991, became a reluctant independent state and under Boris Yeltsin it never settled on what nation and state it was building. Under Putin, the emerging Russian national identity is unwilling to accept a Ukraine in any guise except one populated by "little Russians."

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Moscow Pressuring Ukraine on its EU Pipeline Deal
Publication: Eurasia Daily Monitor Volume: 6 Issue: 89
May 8, 2009 04:17 PM Age: 2 days
Category: Eurasia Daily Monitor, Home Page, Energy, Russia, Ukraine
By: Pavel Korduban


Russian Prime Minister Vladimir Putin (L) with Ukrainian counterpart Yulia Tymoshenko

Ukrainian Prime Minister Yulia Tymoshenko, commencing talks with her Russian counterpart Vladimir Putin in Moscow on April 29, said that a "certain confrontation" in the gas trade between the two countries will soon become history. She had planned to meet Putin on April 8, but Moscow re-scheduled the visit in the wake of the March 23 Ukraine-EU agreements on modernizing Ukraine's gas pipelines -which Moscow rejected. There was apparently no confrontation in Moscow this time, but Tymoshenko achieved less from her visit than she expected. The only promise that she secured from Putin was that Ukraine will not be fined for buying less gas in January-April. However, she failed to secure either a $5 billion loan or an agreement on gas for storage in the underground reservoirs for next winter.

At the start of the talks, Tymoshenko thanked Putin for allowing Ukraine to buy less gas from Russia this year. Ukraine had pledged to buy 5 billion cubic meters (bcm) of gas in the first quarter, but bought only 2.5 bcm because the Ukrainian industry, whose output shrank by more than 30 percent in the period, could not consume the agreed volumes. The January 2009 contracts between Naftohaz Ukrainy and Gazprom provided for fines in such cases. Putin estimated the fine, including for an unspecified amount of gas that Naftohaz failed to buy in April, at $2 billion, but he said it would not be applied as Russia understands that Ukraine is in a difficult situation due to the global recession (UNIAN, April 29). This was the only positive result achieved by Tymoshenko in Moscow.

Tymoshenko failed to obtain a definite answer to her earlier request for a $5 billion loan. The cash-strapped Naftohaz, had expected that the loan would be used to buy Russian gas. However, Putin said that additional consultations were needed on this (Interfax-Ukraine, April 29). The Ukrainian weekly Zerkalo Nedeli reported on April 30 that Russia agreed to lend $5 billion to Ukraine, with the condition that $3 billion will be used to buy gas. Ukraine's Deputy Prime Minister Hryhory Nemyrya, denied this saying that "this issue was not discussed in this context during the talks" (5 Kanal TV, April 30).

Putin and Tymoshenko agreed on a deal whereby 0.8 bcm of Russian gas would be pumped into Ukraine's underground storage facilities for the winter in exchange for a respective sum in fees for the transit of Russian gas across Ukraine to the EU. That was far less than the 19.5 bcm of gas that Tymoshenko had hoped to secure in exchange for transit fees over a longer period. Putin gave no clear answer, but he noted that this quantity of gas would cost exactly as much as Tymoshenko wanted to borrow from Russia -$5 billion. He suggested that Ukraine should try to borrow that sum from the EU, and he said that Gazprom was reluctant to pay Naftohaz with gas for transit for several years ahead, fearing complications in the event of Naftohaz's possible reorganization (UNIAN, April 29).

The 17 bcm of gas that had been kept in the underground reservoirs in western Ukraine from 2008 were instrumental for the country's survival in January, when Russia stopped the gas supplies for two weeks over a price dispute. While Ukraine was consuming gas from its reservoirs, several Balkan countries were left to freeze in the absence of Russian gas, which is pumped through Ukrainian pipelines. The storage gas was bought from Russia at $179.5 per 1,000 cubic meters in 2008, which allowed Ukraine to purchase less gas in the first quarter when Russian gas prices reached $360.

Talks on both the loan and gas for underground storage will continue between the two governments. In the meantime, Tymoshenko used the opportunity, however, to make several statements pleasing to Russia. She said that Ukraine was no longer selling arms to Georgia and was not planning to resume these sales (Interfax-Ukraine, April 29). Ukraine did sell arms to Georgia ahead of the Russian-Georgian conflict in August 2008, which exacerbated existing tensions in the relationship between Moscow and Kyiv. Tymoshenko also promised to "minimize" any protectionist measures in bilateral trade with Russia amid the global recession, and to do her utmost to support Russia's aim to join the WTO (Interfax, April 29). Ukraine joined the WTO in May 2008, which Russia hopes to do in 2010.

Russia and Ukraine apparently agreed to differ on the plans to upgrade Ukraine's gas pipelines that carry Russian gas to Europe. Putin reiterated his earlier proposal, which was suggested in 2002, involving the idea of an international consortium to manage Ukraine's pipelines. In this case Russia would play a major role in the consortium, rather than the minor role assigned to it in the projects to upgrade its pipelines agreed between Kyiv and the EU on March 23. Tymoshenko invited Russia to participate in the Ukraine-EU projects by supplying pipes and other equipment (Interfax-Ukraine, April 29).

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Davutoglu Promoting "Strategic Depth" in Turkish Foreign Policy
Publication: Eurasia Daily Monitor Volume: 6 Issue: 89
May 8, 2009 04:39 PM Age: 2 days
Category: Eurasia Daily Monitor, Home Page, Turkey, Foreign Policy, Domestic/Social, Featured
By: Lale Sariibrahimoglu

On May 2 Professor Ahmet Davutoglu (50) was appointed as Turkey's Foreign Minister, replacing Ali Babacan (42). Davutoglu had been the "behind the scenes" figure instrumental in devising what is termed as the pro-active and multi faceted foreign policy of Turkey's ruling Justice and Development Party (AKP) which came to power in November 2002. He has now come to the forefront of Turkish politics.

A veteran Turkish diplomat described him as having the capability to fill old wine in new bottles. This description of Davutoglu stemmed from the diplomat's conviction that there is little new in Turkish foreign policy, it is merely being repackaged. Ankara, in his view, has been unable to match the "pro-active" foreign policy with practical achievements. This was due to Turkey being a quasi-state -not functioning like a state- as long as real democracy does not fully function within all the institutions in the country (Turkish diplomat in an interview with Jamestown).

Davutoglu is noted for his 2001 book, "Stratejik Derinlik" (Strategic Depth) in which he asserted that Turkey has become a key country, emerging from its position of serving as a forward base for NATO during the Cold War. By using its geopolitical and geostrategic position, Turkey can become a regional as well as a global actor. As part of this vision, the government has pursued a policy of ending its long-term hositilites with its neighbours, mainly in the Middle East, which the Ottoman Turks had once ruled.

Davutoglu was the architect of dialogue with all the political actors in the Middle East, including the most controversial ones, such as Hamas leader Khaled al-Mashal. He was instrumental in Turkey's mediation between Syria and Israel, and he devised the strategy of opening dialogue with all groups within Iraq, including the Kurds with whom Ankara had troubled ties. This increased engagement of Turkey in the Middle East's politics and conflicts, labelled "Neo Ottomanism" has however, raised concerns over whether Ankara has been distancing itself from NATO and its ultimate goal of becoming a European Union (EU) member.

Davutoglu has denied the policy of Neo Ottomanism on various occasions, while most recently reaffirming his adhrence to Turkey's Euro-Atlantic integration, during a ceremony marking his appointment held on May 4. Turkish foreign policy has changed, he said on May 4, away from crisis-oriented to being based instead on "vision," allowing Turkish policy-makers to identify potential crises before they errupt and devise appropriate policies to tackle them (Today's Zaman, May 4).

Accordingly, he said Turkey now has a stronger foreign policy vision toward the Middle East, the Balkans and the South Caucasus region, adding: "It has to take on the role of an order-instituting country in all these regions. ...Turkey is no longer a country which only reacts to crises, but notices the crises before their emergence and intervenes effectively, and gives shape to the order of its surrounding regions." It is clear that such an active foreign policy pursued with the inspiration and contribution of Davutoglu, has increased Turkey's visibility, suggested retired ambassador and Taraf columnist Temel Iskit (Taraf, May 5).

However, Iskit questioned the success of this new foreign policy: "It is hard to say that this visibility has increased Turkey's effectiveness. For example, Turkey could not reap any harvest from its role as a facilitator in the Middle East. The Palestinian issue remains in stalemate, and Turkey was not given any credit for the Israeli-Hamas ceasefire" (Taraf, May 5).

Indeed, many analysts agree that difficult tasks are awaiting Davutoglu both inside and outside Turkey. Internally, the government has frequently fallen victim to efforts by the Turkish opposition, as well as non elected bureaucrats, to insert populism into foreign policy matters. Prime Minister Recep Tayyip Erdogan has been falling into the trap of either nationalists or Islam sensitive groups influencing foreign policy issues.

For example, a senior Turkish diplomat explained in an interview with Jamestown, Erdogan has bowed to the pressure from Azerbaijan, supported by Turkish nationalists, thus complicating a fresh start with Armenia. Efforts to control the damage done by other politicians will keep Davutoglu occupied, he added.

Meanwhile, Iskit warned against forgetting the importance of the effect of Turkey's politically powerful armed forces, which restricts not only the government's room for maneuver, but also Davutoglu on foreign policy issues (Taraf, May 5).

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NATO and freedom in Turkey
by
ALİ ASLAN

Change did not -- and will not -- come to Ankara just because US President Barack Obama dropped by Turkey. Exactly a week after Obama’s well-crafted address in the Turkish Parliament on April 6, stressing “model partnership” based on common values such as democracy and freedom in the presence of top Turkish generals, the head of the Turkish military took the stage.

In a two-hour-long nationally televised speech, Chief of General Staff Gen. İlker Başbuğ practically annulled all hopes that Turkey would soon be a country where military-civilian relations are defined as in a normally functioning Western-style democracy.

True, the general’s tone was milder than most of his predecessors. In an apparent effort to restore the deteriorating public image of his institution, he presented himself at relative ease, especially with regard to religious and ethnic identity questions, on which the Turkish military brass have often taken a hawkish stand. However, at the core, there was a cry for the continuance of the semi-autonomous and politically interventionist status that Turkish generals have enjoyed since the late Ottoman era, further emboldened by the inception of the republican Kemalist regime in 1923.

Gen. Başbuğ took the stage again last Wednesday in a two-and-a-half-hour press conference. Just the fact that acting military leaders can talk on topics that mostly fall within the civilian administration’s terrain -- partly thanks to many journalists who seem comfortable with this -- presents clear evidence about the shortcomings of Turkish democracy. The question is: Despite ongoing European Union membership talks and 57 years of NATO membership based on so-called “common values” such as democracy and freedom, why do Turkey’s activist generals still feel so free to meddle in politics, not to mention engage in numerous other extremely controversial and legally questionable activities? To what extent have international mechanisms and institutions had a corrective impact on the role of the military in Turkish politics? I believe anyone who wants more freedom in Turkey has the right to ask these questions.

Even though they don’t usually say this publicly, many Turkish generals are known to disapprove of various aspects of the EU reform process. Cosmetic changes have been made --such as reorganizing the National Security Council (MGK) and state security courts in a more civilian way to meet the Copenhagen political criteria minimally. Given the diminishing credibility of the EU in Turkey, it is not that difficult for military leaders to resist reform demands coming from the European front. The dimmer the light at the end of the EU tunnel gets for Turkey, the less soft power Europeans can exert. That leaves NATO as perhaps the only Western platform that might have some leverage on Turkey, and the Turkish military in particular. However, so far other strategic priorities seem to have outweighed democratic concerns when it comes to dealing with Turkey in NATO.

After all, NATO is based on common values. In the preamble of the North Atlantic Treaty it is suggested that democracy is essential to NATO. The fundamental role of NATO is proclaimed to safeguard not only the security but also the freedom of its member countries. NATO often prides itself with its dedication to protecting democracy, human rights and the rule of law. However, by this token, given at least three coups and constant indirect interventions since Turkey joined NATO, the country's membership does not seem to have had the desired effect on the Turkish military and Turkey’s democracy. To be fair, if it weren’t for NATO and other Western-led organizations, Turkey would have been far more behind in terms of its democratic credentials. What I’m speaking of here is lost opportunities and their costs in the past and today.

At NATO summits, every other member nation’s highest-ranking military officer sits behind their secretary of defense. The only exception is Turkey, which only sends its deputy chief of general staff, because the military does not think their top commander is subordinate to a civilian Cabinet member. Normally, exceptionalism is not the norm at NATO. There are mechanisms and preconditions at NATO to help new members, coming especially from the former Soviet bloc, reform civilian-military relations so that they can better fit into an alliance of democracies. For example, the Partnership for Peace (PfP) program that was set up in 1994 serves as an overarching mechanism that NATO has at its disposal for promoting democracy. Too bad that, being one of the senior members, Turkey gets away with it. It’s an open question whether Turkey would qualify as a NATO member had it applied for membership today.

Western powers are well aware that civilian-military relations in Turkey are not good enough to be a full-fledge member of the transatlantic alliance. European members of NATO occasionally raise these issues, at least in the context of EU negotiations. But the US, the most influential member of NATO, prefers keeping an extremely low profile on this front. This is not only morally problematic, but also strategically shortsighted, because it prolongs the process that would make Turkey more democratic and free and, eventually, a more stable and stronger component of the transatlantic alliance.

The apparent indifference of NATO to the democratic credentials and human rights record of Turkey and its military has always struck me. During the Cold War, NATO did not put Turkey on hold or revoke its membership in the aftermath of military coups. I wonder how NATO would act now in such an instance and if Turkish generals are being plainly told about the consequences (if any) of undermining democracy. A test case is the ongoing investigation and trial against the “Ergenekon” organization. So far there has been no indication that NATO would take issue with the alleged, but well-documented efforts on the part of some acting and retired senior Turkish military officers to set the stage for a hardcore coup only a few years ago -- not to mention the recent discovery of stockpiles of army-type weapons and ammunition buried under the ground in a second-degree military area by the alleged coup-mongers. Gen. Başbuğ has tried to play down the issue. But isn’t this a security breach, to say the least? Furthermore, does NATO monitor surfacing evidence from the Ergenekon investigation indicating that some officers in a member military might actually have been responsible for plots resulting in thousands of torture cases, disappearances and political assassinations, especially in the predominantly Kurdish regions of Turkey? How can those things be reconciled with the “common values” and practices of the Western alliance? Has there been any investigation within NATO about such controversial actions? I’m really curious to hear from NATO.

NATO may not care that much about the “value” aspect of the military alliance, especially when it comes to Turkey. But, as a Turkish citizen, I do. Since I am paying taxes to fund NATO and, if necessary, will be called to participate in its operations as a soldier (thanks to the military draft system in effect), I should have the right to question the effectiveness of its contributions to my own freedoms. When and how can NATO serve as a platform for really modernizing my military, not only technically, but also mentally? How can I be assured that my military leadership, which often sees even peaceful elements in Turkish society from a threat perspective, mainly due to ideological reasons, is not actually using NATO channels to go after or at least mislabel people they don’t like? Since civilian Turkish administrations don’t have much say on what their chief of general staff does with NATO, who is going to correct them if they are making mistakes with threat perceptions and operations? And doesn’t NATO realize that the sustained political role of the military in a nation like Turkey, where civil society and rights movements have been strengthening against all odds, can pave the way for serious social backlash, eventually diminishing the prestige and effectiveness of a crucial military partner and perhaps -- God forbid -- even destabilizing a key ally?

NATO and its Western members must bear in mind that the more Turkish civil society is emboldened, the more pressing these questions will become. It’s high time they at last adopted a comprehensive reform strategy and a principled attitude so that the Turkish military thinks and operates like a military in a regular Western democracy. This might yield some tactical costs in the short run because of possible resistance. But, in due course, it is good for the strategic benefit of the Turkish military, the Turkish nation and all other NATO members.

10 May 2009, Sunday

Posted for fair use....
http://www.telegraph.co.uk/comment/...01009/A-look-in-the-EUs-unbalanced-books.html


A look in the EU's unbalanced books
The EU's former chief accountant has laid bare endemic corruption, but our own politicians are too emasculated to care, says Christopher Booker.

By Christopher Booker
Last Updated: 7:12PM BST 09 May 2009


Evidence mounts on all sides as to how Britain's standing in the world is in sad decline. After 10 years as the world's fourth largest economy, we have now slipped to sixth place behind China and France. In Wednesday's Daily Telegraph, under the heading "The UK will be missed on the world stage", Irwin Stelzer wrote about the failure of our military missions to Iraq and Afghanistan, and lamented Britain's retreat from an effective role alongside our US partners. On the same day, Max Hastings reported a similar story from America itself, where he was shocked to find how far we have lost the respect earned in the days of Mrs Thatcher.

Another, perhaps less obvious, reason why Britain has lost respect is reflected in a shocking new book, published tomorrow, entitled Brussels Laid Bare, by the EU's sacked former chief accountant, Marta Andreasen. The outline of her story has long been familiar. In 2002, as the first qualified accountant to be given the job, she was appointed to sort out the EU's accounts, which for six years running had not been cleared by the EU's Court of Auditors due to a maze of "irregularities".

In 1999 the entire European Commission had resigned when, thanks not least to a Commission whistleblower, Paul van Buitinen, every kind of fraud and corruption had come to light. Miss Andreasen – who was born to a Danish father, lived in Spain and had worked for various multi-national organisations – began her new job as something of a "European" idealist, hoping she could help to put things right.

As soon as she arrived, she was invited to meet the Court of Auditors. They welcomed her and expressed the hope that she could impose order on chaos, but warned that she would meet stiff opposition, not least from the powerful Frenchman who for years had been in charge of the EU budget. (Although her book changes officials' names for legal reasons, he is identifiable without much difficulty as Jean-Paul Mingassen.)

As soon as Miss Andreasen began looking at the EU's accounting system, she saw that it was a shambles. Between the 2000 and 2001 accounts, €200 million had gone missing without explanation. She was told these were "loans" which had been â written off'. Senior officials were authorised to hand out huge sums without any proper records being kept. Accounts were kept on spreadsheets which could be accessed and changed without leaving any trace of who made the changes.

The system was open to fraud in every direction. Almost immediately, however, Miss Andreasen found herself being pressured to sign off the 2001 accounts which, as she said, would be a criminal offence, since this was the responsibility of her predecessor and she had been given none of the information needed to know whether or not they were correct.

It soon became obvious that her attempts to introduce changes were being blocked at every turn. The German budget commissioner, although initially sympathetic, was hopelessly out of her depth. Thus began a horror story only too familiar from the experience of previous whistleblowers, from Van Buitinen to Bernard Connolly, author of The Rotten Heart of Europe – except that Miss Andreasen insists she was not a "whistleblower" but merely trying to do her job.

Her telephone was bugged. She was followed outside the building. In desperation she sought an interview with Neil Kinnock, the Commission Vice-President charged with fighting fraud, but she describes how he treated her with "bullying" contempt. At Lord Kinnock's instigation, she was first suspended and consigned to a tiny office without a telephone, then dismissed, finally to face disciplinary proceedings,

Thus her life descended into a five-year nightmare, as she faced one tribunal or court after another, all finding her wholly to blame. At one point she had to appear before all the Commissioners, like a naughty child, only one appearing to listen to her while Kinnock made grimacing signs to indicate that she was mad.

Her book reads like a chilling cross between two Kafka novels, The Trial and The Castle. Yet this is the organisation to which our politicians have surrendered much of the power to decide how Britain is governed, and to which British taxpayers now hand over some £13 billion every year with no control over how it is spent.

On June 4, a minority of us will cast our votes in elections to the European Parliament. By a surreal twist, the Danish-Spanish-Argentinian Miss Andreasen will be standing in the East "Euro-region" as lead candidate for the UK Independence Party. But she knows that whoever is elected will make no difference to the nature of a "mega-state" which, as she puts it, is irredeemably corrupt and unreformable. The tragedy is that our own politicians are so emasculated, reduced to expenses-fiddling zombies by this strange form of government we now live under, that most neither know nor care.

Leaflets can be a real swine to get right

I'm sure we've all been enjoying the Government leaflet on swine flu, distributed to all of us at great expense to tell us how to sneeze and how to prepare for the coming pandemic by recruiting a network of "flu friends". These are, apparently, the neighbours who will be willing to do our shopping when the killer virus confines us to our homes.

Some of us may recall the last time a government spent millions of pounds on warning every household of the approach of such a deadly health threat, way back in February 1987. Our West Country postman, having just driven a mile up a snow-covered farm track in the Mendips, solely to deliver a copy of Mrs Edwina Currie's famous "Don't Die Of Ignorance" leaflet on Aids, wryly observed: "I'm not sure it was wholly necessary for the Government to warn a married couple in their 80s of the dangers of unprotected anal sex."

Twenty two years later, HIV/Aids has so far in Britain killed an average of less than 1,000 people a year. In NHS hospitals, MRSA and C difficile alone are currently killing more than 10 times that number of patients each year. Perhaps our Government would have done better to send a leaflet to itself.

Posted for fair use....
http://www.american.com/archive/2009/may-2009/the-world-economy2019s-europe-problem

The World Economy’s Europe Problem

By Desmond Lachman Thursday, May 7, 2009

As ‘green shoots’ of recovery sprout in the United States, potential crises in a number of European economies pose the main risk to any early global economic recovery.

As “green shoots” of economic recovery seem to be in evidence in the United States, potential crises in a number of East and West European economies seem to be the main risk to any early global economic recovery. Supporting this view is the sobering economic forecast put out earlier this week by the European Commission, which sees little prospect for a pickup in European growth before early 2010. Further bolstering this outlook is a recent International Monetary Fund report warning that the shortage of capital in European banks is larger than in American ones and that these banks could likely continue reducing their loan exposure to a troubled East European economy in the months ahead.

In contrast to the market expectation of a V-shaped economic recovery, the European Commission is predicting a long recession for Europe that will be followed by only a very gradual economic recovery expected to begin in early 2010. On this basis, the commission believes that the overall European economy will contract by as much as 4 percent in 2009 and will show virtually no growth in 2010. The commission is also anticipating that European inflation will slow to barely 1 percent in 2009 before picking up only modestly in 2010.

A great risk posed to the global economic recovery by a prolonged European recession is the precarious economic position of Ireland and a number of Mediterranean members of the euro zone.

The very weak European growth outlook poses a particular challenge to Europe’s beleaguered eastern periphery. Many of the countries in that region are highly dependent on a vibrant Germany as a market for their exports and they are also especially vulnerable to any further slowing in West European bank lending to the region. At the same time, the US$1.5 trillion in Western European bank loans outstanding to Eastern Europe underscores the importance for the West European banking system of an early resolution to the East European economic crisis.

An even greater risk posed to the global economic recovery by a prolonged European recession is the precarious economic position of Ireland and a number of Mediterranean members of the euro zone. Greece, Ireland, Portugal, and Spain are all neck deep in recessions of epic proportions that will soon raise unemployment to the highest levels in the past 70 years. In Ireland and Spain, the bubbles bursting in the housing market make the United States’ own predicament look benign. All four countries also must cope with a global collapse in trade and tourism, and with rapidly deteriorating public finances as a direct result of their deep recessions.

The German government now concedes that the German economy will contract a staggering 6 percent in 2009 before recovering only marginally in 2010.

Under usual circumstances, countries experiencing recessions of these proportions would sharply reduce interest rates and allow for a sharp depreciation of their currencies. However, stuck within the euro zone, Greece, Ireland, Portugal, and Spain have to live with interest rates set by an overly cautious European Central Bank (ECB) and with a euro whose relatively high price on world currency markets renders their economies grossly uncompetitive. Meanwhile, their deteriorating budgetary positions leave them with little room for fiscal stimulus.

The delicate position of many East European countries and of the weaker euro-zone members underscores the need for a more proactive fiscal policy posture in Germany, and a more aggressive ECB monetary policy. The German government now concedes that, with present policies, the German economy will contract a staggering 6 percent in 2009 before recovering only marginally in 2010. Absent more vigorous economic growth in Germany, it is difficult to see how Greece, Ireland, Portugal, and Spain can extricate themselves from deep recessions even if they ignore the European Union’s advice to tighten their budgets in the midst of deep recessions.

Desmond Lachman is a resident fellow at the American Enterprise Institute. He was managing director and chief emerging market economic strategist at Salomon Smith Barney and a deputy director in the International Monetary Fund’s policy and review department.

FURTHER READING: Lachman wrote “Can the IMF Really Save the World Economy?” and “Don’t Repeat Japan’s Mistakes,” which warns against the policies Japanese authorities followed during their financial crisis in the early 1990s.

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http://www.nytimes.com/2009/05/07/opinion/07iht-edrogozin.html?_r=1&ref=global

May 7, 2009
Op-Ed Contributor
Your Call, NATO
By DMITRY ROGOZIN

Russia and NATO both desire to step up cooperation, but their approaches differ. They affirm a mutual interest in providing security, and recognize differences on certain issues. Yet their positions on these differences also differ.

For instance, enlargement to the east is not a matter of principle for the alliance. NATO is quite satisfied with the format of partnerships the alliance is developing. NATO partners have been increasingly using “coalitions of the willing” for certain projects, for example the fight against the Taliban in Afghanistan.

The accession of new members, which often have miniscule military capabilities and permanent internal problems, only weakens the Alliance and drives it to increase expenses for the growing NATO bureaucracy. So enlargement is no longer a priority in NATO’s security policy.

For Russia, issues pertaining to enlargement, as well as the prospective deployment of American radar and ballistic missile defenses in Europe, are of vital importance. To put it in other words, those problems that have not been settled with NATO are a cornerstone of Russia’s foreign policy, while for the alliance they are just one element of its broader partnership policy. At the same time, the future and security of countries in the Euro-Atlantic space depend on the nature of Russia-NATO relations. This is the paradox of relations between Russia and the West.

All other issues pertaining to Russia-NATO cooperation derive from this contradiction, and the success of Russia’s engagement with the alliance depends on its settlement.

To truly “reset” our relations it is not enough to issue general declarations on our cooperation in the spheres where our interests converge (Afghanistan, the fight against terrorism, drugs trafficking, etc.). These would inevitably be caught in traps such as the current NATO exercises in Georgia. We cannot move forward in our relations unless the complex problems that have piled up are first resolved.

In this regard, the ball is in NATO’s court, as Russia not only says it wants to cooperate with the Alliance, but proves it in deed. In 2001, Russia unequivocally sided with the West in its fight against terrorism. Despite NATO’s stand with regard to Georgia and the freezing of the NATO-Russia Council, Russia demonstrated readiness to provide its territory for non-military transit for the needs of Western troops in Afghanistan in 2008. Our country aims at broadening cooperation with the alliance on Afghanistan, and this is a matter of principle for us. In spite of this, the Alliance has not yet made a step toward Moscow. It continues to maneuver between the declared desire to cooperate with Russia and its practical actions, which, as NATO perfectly knows, are in gross violation of Russian national security interests.

In essence, the entire future of the Euro-Atlantic region is at stake. Missing this opportunity to come to an agreement is fraught with the danger of sliding into chaos on security matters. NATO will be the first to suffer, in terms of both the security and economic stability of its member-states. If there is no political progress in relations with the West, Moscow will have to look eastward to define its foreign policy. Then the West will be faced with new economic and security difficulties.

Is this in NATO’s interests, with its operation in Afghanistan at a deadlock and no chance (as NATO allies themselves confess) of solving the Iranian nuclear problem without Russia? Is it a good idea to tease the Russian bear by continuing to support regimes in Georgia and Ukraine only so they stand ready to be used as a counterweight to Russia?

If so, security in Europe is not increasing but, on the contrary, degrading. The conflict zone between the West and Russia is being expanded artificially through no fault of Moscow.

The best way to cope with modern threats and challenges is through concerted action. Russian potential is obviously high in this regard. Time will pass, and Russia and Georgia will solve their common problems. We are neighbors sharing a long common history, we have a great number of family ties and common economic interests. Yet the problem in future relations with NATO for Russia might be the fact that NATO was able to help at a time of need, but did not want to, recklessly siding with Tbilisi’s anti-national regime.

For the time being, NATO does not seem ready to move on the decisions made at the jubilee summit at Strasbourg and Kehl insofar as re-engagement with Russia is concerned. NATO’s latest move — the expulsion of two Russian diplomats accredited to the alliance, which was announced on the day of the first formal NATO-Russia Council meeting at the level of ambassadors since last summer’s freeze — clearly runs counter to the interests of forces within NATO that aspire to normalize relations with Moscow. It is up to NATO to make a decision. As the call, so the echo.

Dmitry Rogozin is the permanent representative of the Russian Federation to NATO

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FİKRET ERTAN f.ertan@todayszaman.com Columnists
Russian moves in the Southern Caucasus

Only a few days before NATO's military training exercise in Georgia, Russia signed, on Thursday, joint border protection agreements with the former Georgian breakaway republics of Abkhazia and South Ossetia.

The agreements were signed in the Kremlin by Russian President Dmitry Medvedev, Abkhazian President Sergei Bagapsh and South Ossetian President Eduard Kokoity. Under the agreements, Russia will guard and control the Abkhaz and South Ossetian borders, including maritime frontiers. The agreements give effective control of the Georgian borders with the breakaway republics to the Russian forces. So, it is very significant and important.

Of course, the signed agreements are the latest moves by Russia to strengthen and consolidate its growing military power in the South Caucasus in general, which is focused presently on Abkhazia and South Ossetia.

In fact, Russia has already set up land bases in Abkhazia and South Ossetia, which was confirmed by the commander of Russia's ground forces, Gen. Vladimir Boldyrev, on March 20. He said that the so-called fourth and seventh military bases would be ready to host tactical exercises by the end of 2009.

In addition to these land bases, Russia is also planning to deploy military aircraft to a base in Abkhazia, near Gudauta. The base in question is the Bombora Air Base, which is the largest military airfield in the Southern Caucasus. Bombora is strategically very important not only because of its four-kilometer-long runway, but also because of its closeness to the sea. In fact, the runway ends less than 100 meters from the sea, allowing aircraft to take off at very low altitudes over the sea and fly undetected by enemy radar in the initial stages of flight. During the war in 2008, Russian airborne troops landed in Bombora and proceeded to western Georgia to fight against the Georgian army.

Now, according to various sources, Russia is planning to deploy some 20 aircraft, including a wing of the Sukoy-27s (Flankers in NATO terminology), a squadron of the Sukoy-25s (Frogfoot) attack aircraft and several Antonov-26 (Curl) military transport aircraft.

Other than the base in Bombora, Russia is planning to establish a Black Sea naval base in the Abkhaz port of Ochamchire. In fact, this was confirmed by the Abkhaz leader Bagapsh last January. Then he had said no signed treaty existed on the matter, but an agreement was reached that the construction of the base would start this year and it would be done within the framework of a comprehensive treaty on friendship and cooperation.

Ochamchire is an important port about 60 kilometers southeast of the Abkhaz capital of Sukhumi, near the cease-fire line established after the last war with Georgia. When stationed there, Russian warships would essentially control the Georgian territorial waters all the way to the Turkish border.

In addition to this, the Georgian ports of Poti and Batumi would become very vulnerable in terms of the Russian navy's striking capability from the planned base in Ochamchire. This, of course, would provide Russia with an advantage -- the future intimidation of Georgia.

When Ochamchire becomes operational, it will also provide the Russian navy with a new but limited alternative to Sevastopol, the main base of the Russian Black Sea Fleet on the Crimean coast of Ukraine, which wants the Russian navy to quit the base when the bilateral agreement expires in 2017.

Ochamchire will be a limited alternative to Sevastopol because it is relatively small; its waters are shallow and it does not have a protected bay. Nevertheless, it will serve as a key forward supply base for the Russian navy, seaborne special troops and marines deployed in the Black Sea region, as well as a strong naval deterrent against Georgia.

With the establishment of land, air and naval bases in Abkhazia, including the already present 3,700 Russia troops, Russia clearly aims to consolidate its military muscle in the Southern Caucasus and the Black Sea not only for setting up a credible and formidable deterrence against Georgia, but also to change the balance of power in the region.

03 May 2009, Sunday
FİKRET ERTAN

Posted for fair use....
http://en.rian.ru/russia/20090510/121530185.html


Russia to link missile defense in Europe with nuclear arms treaty
13:41 | 10/ 05/ 2009

MOSCOW, May 10 (RIA Novosti) - Russia will link U.S. plans for a missile shield in Europe with the issues of strategic offensive armaments in relations with the United States, Prime Minister Vladimir Putin said on Sunday.

"One needn't be an expert to understand: if one party wants or would have an umbrella against all kinds of threats, this party would develop an illusion that it is allowed to do anything and then the aggressiveness of its actions will increase numerously, and the threat of global confrontation will reach a very dangerous level," Putin said in an interview with Japanese media on the eve of his visit to Japan.

Moscow has been at loggerheads with Washington over plans to deploy a missile defense system in Central Europe. The United States has signed agreements with the Czech Republic on hosting a radar station and with Poland on the deployment of 10 interceptor missiles by 2013.

Russia says the missile shield would be a threat to its national security while the United States has argued it is necessary to guard against the threat of missile attacks from states such as Iran.

Considering that the current nuclear arms reduction treaty expires this year, Moscow is ready to return to this issue and agree on a new pact, Putin said.

Russia's Foreign Ministry earlier said that the first round of negotiations between Russia and the U.S. on a new nuclear arms reduction treaty would be held in Moscow on May 18-20.

The Strategic Arms Reductions Treaty (START 1), signed in 1991, obliges Russia and the U.S. to reduce nuclear warheads to 6,000 and their delivery vehicles to 1,600 each. The treaty expires on December 5 this year.

In 2002, a follow-up agreement on strategic offensive arms reduction was concluded in Moscow. The agreement, known as the Moscow Treaty, envisioned cuts to 1,700-2,200 warheads by December 2012.

Russian President Dmitry Medvedev and his U.S. counterpart Barack Obama agreed during their London meeting in early April on an immediate start to talks on a new strategic arms reduction treaty.

Russia and the United States possess 90% of the world's nuclear weapons.

Moscow, which proposed a new arms reduction agreement with Washington in 2005, expects the United States to agree on a deal that would restrict not only the numbers of nuclear warheads but also place limits on all existing kinds of delivery vehicles.

Moscow also insists on the effective use of control mechanisms and procedures, "which the previous administration ignored categorically," according to Foreign Minister Sergei Lavrov.

Posted for fair use....
http://www.nytimes.com/2009/05/07/opinion/07iht-edcourtney.html

Op-Ed Contributor
A Russia Test
By DENIS CORBOY, WILLIAM COURTNEY, and KENNETH YALOWITZ
Published: May 6, 2009

Reports of military mutinies and Russian plots in Georgia, while still unclear, have heightened tensions which were already building this spring. The U.S. should lead preventive diplomacy now, underscoring to Russia the high costs of intervention in Georgia while seeking to engage Moscow in a broad security dialogue.

The West’s stake in Georgia is high. The United States and the European Union have made support for the independence of former Soviet states a hallmark of their foreign policies. In January, Washington elevated Georgian independence to a “vital” interest.

Already before the latest developments, the E.U. mission monitoring the cease-fire between Russia and Georgia registered extra Russian forces at the boundary between Georgian-controlled territory and the separatist regions of South Ossetia and Abkhazia. Reports of gunfire across the cease-fire lines have increased. The Russian Black Sea Fleet is undertaking a large exercise, including amphibious ships of the kind already on patrol off the Abkhazia coast.

The Russian president, Dmitri Medvedev, has asked NATO to cancel a long-planned NATO “Partnership for Peace” exercise scheduled for this week in Georgia. And in Luxembourg recently, the Russian foreign minister, Sergei Lavrov, expressed misgivings about the E.U. Eastern Partnership, which he characterized as “meddling in the region.” After Presidents Obama and Medvedev met on April 1, a senior U.S. official said they had “real disagreements” about Georgia.

Russian leaders probably see a good deal of unfinished business in Georgia. President Mikheil Saakashvili is still in power. Georgia continues to seek membership in NATO and control over the export of Caspian oil and gas through Georgia still eludes Moscow.

Russian leaders might think the U.S. and its allies have higher priorities than Georgia, what with the economic crisis and NATO’s problems in Afghanistan and Pakistan.

Moreover, Russian leaders think they got away with a slight price for the August war — a short delay in their dialogue with the E.U. and NATO and some capital flight. Moscow may also misjudge ongoing political demonstrations in Georgia as a sign of weakened national resolve.

In fact, bitterness about the occupation of Georgia’s territory is the most unifying factor in its politics. And the costs to Russia of intervention in Georgia would be high. With an economy in free fall, Russia would lose access to needed international capital. The West would impose financial, technology and political sanctions. Western participation in the 2014 winter Olympics in Sochi would be unthinkable.

Russia might also overestimate its leverage with the West. It sees Europe as dependent on Russian energy, and the West needs Russia’s help help on Iran, North Korea and Afghanistan. Important as these interests are, an intervention in Georgia would create a political firestorm in the West with pressure for sanctions.

What is urgently required is exactly what did not happen prior to the August war — vigorous preventive diplomacy.

The U.S. must signal to Moscow that steps to take over Georgia, including any plotting to overthrow Saakashvili, would kill any “restart” of relations. At the NATO-Russia Council meeting scheduled for this month in Brussels, and at the Obama-Medvedev summit set for July in Moscow, U.S. and NATO leaders should make clear the likely costs of any aggression. At the same time, they should offer to engage Moscow in a broad security dialogue on regional security, NATO and the OSCE in which mutual interests and intentions could be clarified and potential disputes averted.

Preventive diplomacy with Georgia is also important. The U.S. and Europe should firmly warn Tbilisi against overreacting to Russian provocations. Last summer’s foolhardy actions caused Tbilisi to squander international support. The West should also intensify efforts to foster political dialogue between Saakashvili and the opposition. In the long term, the development of Georgia as a stable and prosperous democracy is its best guarantee of security.

A year ago, Russian-Georgian tensions resulted in war. The signs now are not yet clear. What we do know, however, is that Georgia is weak and a real risk exists that Russia could again overreach. America and Europe ought to do all they can to lessen the chances of a new tragedy.

Denis Corboy is director of the Caucasus Policy Institute at Kings College London and was European Commission ambassador to Georgia. William Courtney was U.S. ambassador to Kazakhstan and Georgia. Kenneth Yalowitz is director of the Dickey Center for International Understanding at Dartmouth College and was U.S. ambassador to Belarus and Georgia.

Posted for fair use....
http://www.realclearworld.com/articles/2009/05/the_czechs_eu_leadership_an_ex.html

May 08, 2009
Don't Mock the Czech's EU Leadership
By Anne Berg

Conventional wisdom in Brussels these days has it that the sooner the Czech Republic vacates the European Union presidency, the better.

Better for big-government statists in Brussels, sure. But for the E.U. - or rather, for the 490 million citizens that comprise it - the much-maligned Czechs' imminent exit from center stage will be a sore loss.

On Friday, toppled Czech Premier Mirek Topolanek will yield to a caretaker government that will lead the Czech Republic through the end of its E.U. presidency, expiring on June 30, and into early elections in October.

It is not yet known what role, if any, Czech President Vaclav Klaus will play in E.U. affairs for the remainder of the Czech term, though Eurocrats fervently hope he will remain in Prague and Friday's handover will effectively mean a premature end to the Czechs' maverick presidency.

Or, as a recent Economist piece put it, the Czechs' presidency leads "euro-types in Brussels" to "one blindingly obvious conclusion: as soon as possible, all 27 E.U. members must ratify the Lisbon Treaty, which creates the new job of a full-time E.U. president, so that small, incompetent countries like the Czech Republic no longer take turns to speak for Europe."

Incompetent? Hardly.

The real gripe against Prague is simple -- that it has used its turn at the rotating six-month presidency to champion a very different idea of what the bloc should be: rather than an unelected and increasingly powerful superstate, it instead should be a simple league of democracies, engaged in robust free trade and working to expand individual liberties within its own borders and beyond.

This idea is not some contrarian fantasy dreamed up by Mr. Klaus to send Jose Manuel Barroso to the tanning booth in high dudgeon. Rather, to many Europeans east and west, inside and out of E.U. borders, this freedom-purveyor's role would be the highest aim to which the E.U. could and should aspire. Yet it is precisely in this role that, prior to the heroic example the Czechs have set since January, the E.U. has failed miserably.

A brief word on this rotating E.U. presidency business: practically speaking, the six month term means nothing. Whichever country, large or small, holds the nominal post can not affect the decisions of the unelected European Commission, the bloc's executive and legislative branch, or even set the agenda at gatherings of the 27 national ministers, whose dockets are invariably dictated by France, Germany and the commission.

Thus, the "presidency" has traditionally been nothing more than a national grandstanding opportunity for whichever government holds it, a chance to vamp in the spotlight while the bloc's bureaucratic wheels of power roll on heedless of the desires of elected national leaders and their constituents.

Enter Prague.

The Czechs, rather than using the chance to preen or to make a sycophantic show of allegiance to the Brussels cabal, have instead broken new ground by wielding the presidency as a megaphone to champion the ideals of economic freedom and self-determination they so value, and to push for the expansion of these ideals within the E.U. and abroad.

Consider just some of the ways Prague has used its temporary soapbox in the past four months:

-Consistently demanded the E.U. make good on its promise to resist Russia's campaign to retake power over the fledgling democracies along its border.

- Launched a name-and-shame campaign against those E.U. countries -- limited today to Germany and Austria, thanks to the Czechs' indecorous prodding - still refusing to open their labor markets to eastern European workers who have been contributing taxes to the E.U. and have been subjected to Brussels' decrees since 2004.

-Fought against other forms of economic protectionism in the bloc, for example by rallying opposition to French measures to shield its car industry from foreign competition.

- Doggedly resisted Brussels', and now Washington's, line that the unproven theory of anthropomorphic global warming is reason enough to cripple industry, erode consumer choice and dismantle the engines of economic growth.

- Pushed the E.U. to envelop more central and eastern European countries as a way to reward and cement free-market reforms in the region. As most western European countries use the recession as an excuse to reject new E.U. hopefuls, the Czechs have improbably succeeded in keeping Croatia's accession rolling, and last week accepted Albania's application for membership.

- Stood up for human rights far beyond the continent, beginning with outraging E.U. poobahs just as its presidency kicked off by supporting Israel's right to self-defense when it launched military operations against Hamas in Gaza. Since then, the Czechs have not missed a single opportunity to condemn human rights abuses in, among others, Iran, Burma and North Korea, and Mr. Topolanek even stumped for the rights of American taxpayers when he bluntly denounced President Barack Obama's economic policies.

To say Prague has violated continental etiquette and punched above its weight in international matters is an understatement. For this courage and immodesty, Europe and the world should be doubly grateful.

If the goal of the E.U. Presidency is to help propel the E.U. 27 into a binding, undemocratic federation that will leave the competing interests of the many at the mercy of a select, like-minded few, then yes, the critics are correct: the Czech Republic's reign has been a disaster and an aberration.

But if the aim is to nurture and grow a union of independent democracies, benefitting from commerce with one another and working to advance freedoms abroad, the Czechs' stewardship of the E.U. has been an unprecedented success.

As Mr. Klaus told the European Parliament in February, to boos and walkouts no less, "One or another institutional arrangement of the European Union is not an objective in itself; but a tool for achieving the real objectives. These are nothing but human freedom and such an economic system that would bring prosperity. That system is a market economy."

Would that every world leader shared his objectives.

To dismiss the Czechs' presidency as an embarrassing mess is not only unfair, it
dangerously misses the point of what should be the E.U.'s true purpose. Perhaps, after the chorus of jeersand condescension aimed at Prague die down, leaders in the bloc will look to the Czechs' nonconformist reign as an example to be followed, not mocked.

If so, Europeans should count themselves lucky.

Anne Berg is a Brussels-based American journalist who covers Belgian and E.U. affairs.

Posted for fair use....
http://www.independent.ie/world-new...president-his-job-is-on-the-line-1734763.html

Putin tells Russian president his job is on the line
By Adrian Blomfield in Moscow

Monday May 11 2009

Vladimir Putin sought to assert his authority as Russia's most powerful man yesterday, telling his successor as president that the economic downturn has made his position vulnerable.

Mr Putin linked Dmitry Medvedev's post to a recovery in the country's battered economy and simultaneously delivered a belligerent message to Washington that dampened hopes for reconciliation between the Cold War rivals.

The Russian prime minister, who was constitutionally obliged to abandon the presidency last year, said: "Medvedev will look at his own political future, taking into account the interests of the country and the results of our joint work.

"Depending on the effectiveness of our work, myself and President Medvedev will take a decision about what we do in the future, both me and him."

Mr Putin was speaking to Japanese reporters before an official visit to Tokyo.

As prime minister, he is officially in charge of economic policy, but despite soaring unemployment, an economy predicted to shrink 6pc this year and a major corporate debt crisis, he signalled the president will be held accountable for Russia's financial woes.

Deviated

Rewarded with the presidency for his many years of loyal service to his predecessor, Mr Medvedev initially deviated little from Mr Putin's course.

But in recent months, the former lawyer has displayed his liberal credentials by giving an interview to Russia's most pro-opposition newspaper and meeting human rights leaders who Mr Putin once derided as "jackals".

Barack Obama, the US president, struck up a rapport with his Russian counterpart after years of difficult relations with Moscow. In a significant diplomatic breakthrough the US and Russia began work on a new treaty to eliminate some of their nuclear weapons.

Yet Mr Putin has linked progress on disarmament talks to the much more controversial issue of a missile defence shield that the US is planning in central Europe.

He also called into question renewing diplomatic relations in the wake of Nato peacekeeping exercises in Georgia. (© Daily Telegraph, London)

- Adrian Blomfield in Moscow

Posted for fair use....
http://www.jamestown.org/single/?no_cache=1&tx_ttnews[tt_news]=34945&tx_ttnews[backPid]=7&cHash=9a68df0d8a


Moscow Tightens its Grip on the Regions as Wealth Declines
Publication: Eurasia Daily Monitor Volume: 6 Issue: 85
May 4, 2009 07:06 PM Age: 7 days
Category: Eurasia Daily Monitor, Home Page, Economics, Russia
By: Yuri Zarakhovich


Map of Birobidzhan

On February 26, Moscow ordered an inspection of the Far Eastern Jewish Autonomous Region (Birobidzhan) which borders China. Since 1991, the population of this region has declined by 15 percent, while there has also been a steady influx of Chinese migrants. Now, some local night clubs do not admit ethnic Russians. Nonetheless, it was fiscal issues rather than the rights of Russian nationals that caused anger in Moscow. The regional authorities have been accused of using federal budget transfers to finance Chinese businesses, even if their produce does not reach Russian markets. Chinese farmers, subsidized by the Russian authorities within its territory, are selling their produce in China. Under the protection of the local authorities, the Chinese migrants mine gold and export it to China, with nothing being re-invested within Russia, or taxes paid on the profits (NTV, February 26).

Over the past decade, Vladimir Putin's policies, federal in name and unitary in substance, deprived units of the Russian Federation of their own money. Not unlike in the "good old" Soviet era, the federal center claimed all the collected revenues, and then decided on the allocation of subsidies. Though such stringent cash control helped keep the local authorities under control, it also badly hurt the Russian economy. In 1999, 31 of the existing 89 units of the Russian Federation functioned as "donor regions," which provided subsidies to support the rest of the country (Novyye Izvestia, March 15, 2007). Now, just 12 regions among the incumbent 84 function as "donors," supporting the rest of the country at Moscow's discretion (Paralmentskaya Gazeta, March 27, 2008).

As the ongoing systemic financial crisis is markedly worsening, the long subjugated units of the Russian Federation are increasingly displaying signs of discontent. The specter of separatism threatens to become as menacing as it did briefly in the 1990's. However, this time the separatists will hardly attempt to hoist their banners over regional capitals, and fight federal troops in the way seen in Chechnya. Now, they prefer to claim allegiance to the center, paying lip service to the "Czar and the flag," and make sure their cash flows abroad, rather than go to Moscow.

The Jewish Region is the first such major case on record with Moscow launching a major probe. However, it is an open secret that the Russian Far East's economy -and virtually its entire foreign trade- is oriented towards China, Japan and South Korea rather than to Russia. Even Putin's envoy to the Far East General Konstantin Pulikovsky said in 2003 that "the Far Eastern Economy is 80 percent oriented to Asian-Pacific region's countries, with only 20 percent to Russia" (www.top.rbc.ru, June 20, 2003).

Moscow is now facing the possible risk of losing its Far East and Siberia entirely, both economically, and in the longer term politically. Surprisingly, the federal authorities seem quite indifferent both to the plight of their main and richest territories, or to the serious possibility of their gradual dislocation from the state. Some still believe they can put down any attempt at independence by resorting to crude force, though they fail to show success in the separatist North Caucasus, where they have been trying to crush separatism since 1994.

On April 29, Vladimir Ryzhkov, a scholar from the Altai in Siberia, formerly a liberal deputy in the Duma and now a professor at Moscow's Higher School of Economics, told the Irkutsk-based Baikalskiye Vesti that Moscow has "cast aside" Siberia (www.politirkutsk.ru, April 29). Ryzhkov made a very strong case, suggesting that Moscow's policies had turned the formerly prosperous region into a dying territory. According to Ryzhkov, it is now cheaper to fly from Moscow to Western Europe than from the capital to Vladivostok. As a result, Ryzhkov pointed out, "six of the ten poorest regions of the Russian Federation are Siberian."

Ryzhkov sees one basic solution - Moscow must "leave a greater part of the taxes collected there" to Siberia. But that is exactly what Moscow, scared by a potential challenge to its "power vertical," stubbornly refuses to do - increasingly pushing regional elites to seek solutions for their economic ills across the border.

Economic discontent is serving to fuel political tensions. Some major republics within Russia seem to be asserting or preparing new legal grounds for their independence in the event of further trouble. On February 19, the legislature of the diamond-rich Siberian Sakha-Yakutia ruled not to drop provisions in its constitution affirming its sovereignty - and its people as the source of that sovereignty rather than exclusively belonging to the Russian Federation (Kommersant, February 19).

National republics within Russia, such as Sakha, Tatarstan, Bashkortostan, or Chechnya all have similar provisions within their constitutions, which Moscow views as potentially separatist and still cannot remove -even though these federal entities are run by members of the ruling United Russia Party, chaired by Putin. Meanwhile, the ethnic Russian regions, such as Krasnoyarsk or Yekaterinburg (also ruled by Putin loyalists) discuss their withdrawal from the much-touted Putin-Medvedev "national projects," decreed to upgrade Russia. Now, these regions do not want to be part of them, citing the failure of the federal authorities to deliver the promised funds. (www.newsru.com, February 11).

Kaliningrad Governor Georgy Boos, another staunch Putin loyalist, called on Moscow to "increase the independence of the regions" so that they will be better able to combat the consequences of the economic crisis. Moscow remains firmly determined to collect and harshly control the distribution of regional revenues in order to retain its central authority. Meanwhile, the economic potential of the poorer regions is flowing abroad, ironically reducing Moscow's political influence and power to the point of a dangerous national breakup.

Posted for fair use....
http://online.wsj.com/article/SB124198687030304449.html

* OPINION EUROPE
* MAY 11, 2009
Europe Betrays Its Mission In Prague
Its eastern partnership plan is just seven pages of ramble.
By BORUT GRGIC From today's Wall Street Journal Europe.

The much-anticipated Prague Summit between the European Union and our eastern partners was a flop. The eastern partnership declaration published last Thursday is not worth the paper it was printed on.

The EU has once again taken a bold proposal -- initially designed by Sweden and Poland -- and turned it into seven pages of ramble. It was a sad day for all. The EU is clearly without good ideas and without the bold leadership necessary to do what is needed in the east. The countries invited to the summit -- Ukraine, Moldova, Belarus, Georgia, Armenia and Azerbaijan -- are all European. Yes, they are also Caucasian, Caspian, and Black Sea nations, but Europeans nonetheless. So why was a membership concept for these countries missing from the document?

Strategic thinking was never a European forte. American think-tankers poke fun at their European counterparts for superbly managing day-to-day affairs but never quite getting the big picture. In Prague we definitely missed the big picture.

The EU is a project in the making, which is why we have an enlargement policy, which has been the single best tool for reuniting the Continent. It has turned Europe into the biggest market in the world, and it has injected dynamism into the European economy. Now, it seems, someone wants to reverse this progress and halt enlargement.

The story of Europe, the dreams of Churchill and Roosevelt and Truman, later embraced and championed by Helmut Kohl, was a united, free and prosperous Europe. When the Berlin Wall fell, tyranny cracked. Millions of oppressed were free to speak, to act and to create. The splash of creativity that was reborn in the East is still surging and radiating energy across all of Europe. This is what the European dream is all about -- hope. Enlargement is the policy that gives our European brothers and sisters stuck on the margins of Europe the hope to be brave, to continue with reforms and political transformation despite the risks.

Enlargement is not about the political elites, but about the European citizens. It was always about improving the lives of the citizens across Europe. It is easy to dismiss our eastern neighbors on account of their leaders. Eurocrats with big egos dismiss the prospect that Ukraine, Georgia or Azerbaijan may one day become full members of our EU family. They criticize their leaders and their systems: there's too much corruption, too little political pluralism, and they are too slow at embracing economic change.

This all may be true today, but enlargement is about tomorrow. Having a strategy is having a vision, and the EU has no strategy for the East, which suggests there is no vision of what Europe ought to look like in 2030. In the powerful film, "The Lives of Others," one is wrenched watching the destruction of the human soul by the Stasi regime in East Germany. Tyranny preys on hope. When hope was gone from the lives of individuals, the state won. The iron fist of the murderous regime became a haven for empty souls.

Europe owes a new draft document to its eastern partners spelling out an integrated approach aimed at creating the Europe of the 21st century: whole, united and free.

We began this project in the 1940s, shortly after the end of World War II. A major breakthrough was achieved in the 1990s with the fall of the Iron Curtain, which then led to the big bang enlargement -- the first of its kind -- in 2003, when 10 central and east European states joined the EU. Our next job is to finish this story, which means welcoming into Europe Turkey and the Balkan and eastern countries.

Mr. Grgic is an independent investor in the Balkans and the Caucasus, and the founder of the Institute for Strategic Studies.

Posted for fair use....
http://www.eurasianet.org/departments/insightb/articles/eav051109b.shtml

Monday, May 11, 2009
EURASIA INSIGHT

GEORGIA: NO BREAKTHROUGH IN SAAKASHVILI-OPPOSITION TALKS

5/11/09

After a month of street demonstrations during which protesters have agitated for President Mikheil Saakashvili’s resignation, the Georgian leader and opposition envoys sat down for talks on May 11. The discussions did not appear to resolve any of the issues dividing the two sides.

The opposition was represented by Levan Gachechiladze, a former presidential candidate; Irakli Alasania, leader of the Alliance for Georgia coalition; Salome Zourabishvili, leader of the Georgia’s Way Party; and Kakha Shartava, leader of the National Forum.

Aside from Saakashvili, the government’s side included Parliamentary Chairperson Davit Bakradze, parliamentary majority leader Petre Tsiskarishvili, parliamentarian Giorgi Gabashvili and Minister for Corrections and Legal Assistance Dimitri Shashkin.

"He thinks that everything is very good, and we think that everything is very bad. And that’s the result of the meeting," Gachechiladze told reporters afterwards. The talks lasted about 2 ½ hours.

Irakli Alasania, Georgia’s former ambassador to the United Nations, indicated that additional talks were likely. "We could not hope to resolve all these issues on the first meeting," Alasania said. "I think the continuation of the dialogue is very important." No concrete plans exist, however, for another meeting with the president, he said. The opposition on May 12 plans to release details about its next steps.

In a televised speech after the meeting, President Saakashvili called the conversation a victory for Georgian democracy. He said that he had offered the opposition chairmanship of a committee on constitutional reforms and "various responsible positions" within the government. Equal representation on the board of Georgian Public Television and a freeze on unspecified criminal investigations launched since the protests began on April 9 were also proposed.

"[O]ur message to both the radical and constructive opposition was and always will be a proposal of dialogue, an insistence on harmonious relations and an open, civilized discussion because the ’90s have shown what the result of radicalization ... can be," he said, in reference to Georgia’s civil war of the early 1990s.

Many in Tbilisi earlier hailed the meeting as a potential way to defuse political tensions, but some experts believed that the outlook for reconciliation remains bleak. "The opposition cannot just drop their main demand, the resignation of Saakashvili," independent analyst Archil Gegeshidze told Rustavi-2 television. Given that Saakashvili will not give in to the opposition’s pressure and resign, the meeting is unlikely to bring change, Gegeshidze said.

Posted May 11, 2009 © Eurasianet

Posted for fair use....
http://www.stratfor.com/analysis/20090511_georgia_political_wrangling

Georgia: Political Wrangling
May 11, 2009 | 1652 GMT

VANO SHLAMOV/AFP/Getty Images
Georgian opposition leaders at a rally near the parliament building in Tbilisi on May 9

Georgian President Mikhail Saakashvili met with opposition leaders on May 11 for the first time since the movement began demonstrations calling for the president’s resignation on April 9. Saakashvili said he offered a compromise to the opposition movement comprised of over a dozen parties (though only four opposition leaders met with the president), in which he would create a “balanced system, in which there will be place for both the strong president and the strong parliament.” Along with the constitutional reform on balanced power within the government, Saakashvili is also proposing the opposition to place representatives in “various responsible positions,” as well as ceasing his investigations on the opposition leaders.

Saakashvili is touting his proposal as a major concession to the opposition that has held protests locking down cities across the nation for over a month. In addition to the pressure from domestic opposition movements, Saakashvili faces an increasing Russian troop presence not far from Tbilisi that has shifted the balance of power in the region.

Saakashvili is attempting to resolve one of those major issues on his plate through starting to counter the opposition. But in reality, his proposals are for a government in which Georgia is already supposed to have constitutionally. Georgia is a semi-presidential state, in which the president and legislature are supposed to have equal say. However, since Saakashvili took the helm after the Rose revolution in 2003, he has mostly ignored the legislature and taken the lead on all decisions within the government. This was evident in the decision to get involved in a war with South Ossetia — opposed by many within the government — since it was known that Russia would then step into the war should Georgia make that decision. But, Saakashvili ignored the cabinet and members of his own party and went forward with its decision in August 2008, which led to the Russian-Georgian war.

Should Saakashvili start to adhere to the laws that seek to strike a balance between the legislature and executive offices, it will be little use since his political party currently dominates the parliament.

The opposition has already started denouncing Saakashvili’s offer. One of the key opposition leaders, Nino Burjanadze, said that the movement would not accept any power-sharing deal or even early elections — that their purpose was to get the president out. Consequently, it appears that the state of negotiations have returned to the point before the “breakthrough” meeting between Saakashvili and the opposition.

Saakashvili has not progressed with the opposition to cease their protests and disruption of daily life in Georgia. And the opposition’s problems are still numerous because they still have not settled on a real leader among them to challenge the president — and the president still has no intentions to leave, especially while the opposition is still fragmented.

Does it strike anyone else as strange that the signs are in english?

Posted for fair use....
http://www.atimes.com/atimes/Middle_East/KE12Ak01.html

May 12, 2009
UN seeks therapy for disarmament depression
By Kaveh L Afrasiabi

"Words must mean something."
- US President Barack Obama, Prague April 2009.

NEW YORK - In preparation for the 2010 nuclear Non-Proliferation Treaty (NPT) review conference, the United Nations (UN) is holding a two-week conference that theoretically should culminate in a "consensus report containing recommendations" for next year's conference. There are common concerns about the threats posed by nuclear weapons, but the world community continues to have conflicting priorities with respect to the twin agendas of the NPT, namely, disarmament and non-proliferation.

The NPT, which entered into force in 1970 and was extended indefinitely in 1995, requires that review conferences be held every five years. The treaty is regarded as the cornerstone of the global nuclear non-proliferation regime. Its objective is to prevent the spread of nuclear weapons, to further the goal of achieving nuclear disarmament and complete disarmament and to promote cooperation in the peaceful uses of nuclear energy.

Forty years after its adoption, the general appraisal regarding the NPT's achievement is mixed: the states that are parties to the NPT have by and large avoided proliferation yet the disarmament pillar scores "much lower," to paraphrase Brazil's envoy to the conference, ambassador Luiz Filipe de Macedo Soares. He has criticized the nuclear weapons states (NWS) for using "anachronistic concepts such as 'credible deterrent' even though they could lead to convince non-nuclear weapons states of the usefulness of these weapons."

As China's speaker at the conference, Cheng Jingye, reminded the audience, China is the only one among the five NWS that has made a commitment "not to use or threaten to use nuclear weapons against non-nuclear weapon states or nuclear weapon-free zones".

No wonder, then, that global consensus on nuclear weapons is in short supply, despite glimmers of hope regarding a new US-Russia nuclear engagement that may or may not culminate in any significant breakthrough.

With respect to US-China relations, a new study by the Council on Foreign Relations dismisses the idea of a similar arms limitation agreement between Washington and Beijing due to their nuclear "asymmetry". It instead calls for renewed military-to-military discussions with China to encourage transparency and a serious dialogue about outer space militarization, including seeking a trilateral ban by China, Russia, and the US on testing anti-satellite weapons.

In a largely unnoticed message to the UN's preparatory conference for the 2010 NPT Review Conference, US president Barack Obama reiterated his strong commitment to disarmament that he spelled out in Prague last month. He elaborated on his speech in the Czech capital, saying his administration is now seeking to "achieve reductions [in its strategic nuclear arsenal to] lower than those in existing arms control agenda." Also, Obama stated that "universal adherence to the NPT itself - including by India, Israel, Pakistan and North Korea - remains a fundamental objective of the United States".

"Words must mean something," Obama also said in his landmark speech in Prague, yet it remains to be seen if his administration can achieve any of the nuclear goals it has publicly set for itself. It has laid down plans such as a new comprehensive test ban treaty, a nuclear fissile material cut-off treaty, a strengthened nuclear inspection regime and closing the NPT loophole for unilateral exit by NPT signatories.

Moscow does not quite have the same level of optimism that is projected by the White House, going by Russian ambassador Anatoly Antonov's frank admittance at the conference that "many plans approved at the 2000 NPT Review Conference have never been implemented." Antonov listed the NPT's vulnerabilities:

"The ABM [Anti-Ballistic Missile] Treaty, which ensured the maintenance of strategic stability as regards strategic offensive arms reductions and limitation, is no longer effective. The START-II has never entered into force. We are also a long way to go to bringing the CTBT [test ban treaty] into force. Far from completed - as the participants in the 2000 NPT Review Conference planned - the negotiations on the prohibition of production of fissile materials for nuclear weapons have not even started. ... [T]he decision of the 1995 NPT Review Conference to establish a zone free from nuclear weapons, as well as from all other weapons of mass destruction and their delivery means, has never been implemented.

UN Secretary General Ban Ki-moon echoed this rather gloomy sentiment at the conference's opening session by admitting that "for a long time, the nuclear disarmament and non-proliferation agenda has been stagnating in a Cold War mentality". Still, Ban was optimistic about "emerging from a low point" in light of the last NPT review conference's dismal failure to reach any consensus, citing the hopeful signs of cooperation between US and Russia, who together possess some 95% of the world's nuclear weapons.

US and Russia have fulfilled obligations to reduce their strategic nuclear arsenal to the limit of 1,600 strategic delivery vehicles and 6,000 nuclear warheads. But such "disarmament" has been offset by so-called vertical proliferation through new types of nuclear weapons, not to mention the complete failure of NWS to implement the "13 practical steps" toward disarmament that were adopted at a previous NPT review conference. This has caused a backlash on the part of the non-nuclear weapons states (NNWS) who have criticized the NWS' failure to adhere to their disarmament obligations.

Cuba's representative, ambassador Abelardo Moreno, speaking on behalf of the Non-Aligned Movement countries that make up a solid majority of the UN's member states, called for "a specific timeframe" for the implementation of Article IV on disarmament, as a part of "non-discriminatory" and balanced approach to the NPT. Moreno also defended the NPT members' "right of withdrawal", which has been under fire in the West ever since North Korea's unilateral exit from the NPT in 2002, insisting that "proposals on this issue go beyond the provisions of the NPT".

But, if "words must mean something" as Obama said, then perhaps the less said the better. This may explain the limited presentations by the European nuclear weapon states of England and France, both of which mentioned disarmament without offering any tangible disarmament steps. The European Union did express concern over proliferation through the statement delivered by a representative of the Czech Republic, Tomas Pojar:

"[The] European Union is committed to the pursuit of nuclear disarmament," Pojar said. He then went on to express the EU's concerns about Iran, "If Iran was to acquire a military nuclear capability, this would constitute an unacceptable threat to regional and international security."

This is a good example of nuclear Euro-centrism, as if the same speaker had come from a different part of the world, say the Middle East, and expressed similar concerns about France or England's current modernization of their nuclear arsenal, let alone disarmament, that would certainly have left a different connotation.

Iran's main speaker, Deputy Foreign Minister Mohammad Ali Hosseini, criticized the "unbalanced, discriminatory and double-standard approach in implementing this treaty," citing, among other things, the US's nuclear sharing with the NPT states and the "rejection of any commitment to grant NSAs [negative security assurance] [1] to the non-nuclear weapon states".

Interestingly, although the US and its European allies continue to accuse Iran of marching toward nuclear weapons, the Assistant Director General of the International Atomic Energy Agency (IAEA), Vilmos Cserveny, admitted in his speech that Iran has been implementing the terms of its safeguards agreements with the IAEA. He added that the agency has declared the peaceful nature of Iran's declared nuclear activities, and all the agency now requires from Iran was some "clarifications regarding its past nuclear activities."

Not only that, Cserveny's speech made it clear that the agency has confirmed the non-diversion of nuclear material of only 70 of the 163 states with safeguard agreements with the IAEA, adding that one-fourth of the IAEA member states have yet to implement the intrusive Additional Protocol. This raises the question of on what grounds the nuclear issue has been assigned such an exceptional status by the UN Security Council, which has imposed several rounds of sanctions on Iran despite the absence of any evidence of nuclear militarization.

Citing this as a flagrant example of discriminatory behavior, Iran's officials at the conference pledged to raise this at next year's NPT review conference. Going by the positive reception that Hosseini's speech received by the developing nations that are members of the Non-Aligned Movement, this promises to be simply one of several challenges that the UN will face in formulating a consensual report ahead of the 2010 conference.

"If we fail next year, like we did in 2005, the NPT runs the risk of gradual erosion and possible marginalization, Such a development would undermine our own common security," said Norway's ambassador Nona Juul. How true, but then again, the problem is rooted in the conflicting interpretation of "common security" in a world that is riveted between the nuclear haves and nuclear have-nots.

Of all the speeches delivered at the conference, Japan seemed to have the best idea of how to push the NPT's mutli-faceted agenda forward in a practical and realistic manner that would translate into "gradual downward reductions" of nuclear arsenal. Ambassador Nakasone last month unveiled Japan's 11-point initiative to push for global disarmament. It included improved transparency, the US and Russia taking leadership, a freeze on nuclear development activities and the closing of nuclear weapons test sites. It also covered related steps such as stepped up efforts against nuclear terrorism. enhancing the IAEA's abilities, and globalizing the intermediate-range nuclear forces treaty.

In light of a Japanese diplomat's current bid to become the next head of the embattled IAEA, such a comprehensive approach was timely and yet another reminder why Japan, the world's sole victim of nuclear weapons, remains at the forefront of the disarmament movement.

Note
1. See Iran's paper on this.

Kaveh L Afrasiabi, PhD, is the author of After Khomeini: New Directions in Iran's Foreign Policy (Westview Press) . For his Wikipedia entry, click here. His latest book, Reading In Iran Foreign Policy After September 11 (BookSurge Publishing , October 23, 2008) is now available.

Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved.

28 Carl, lol

Double_A said:

28 Carl, lol

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Well you know how it can be; a "quiet day", a good news search engine protocol and the tech to take advantage of it....
___________________

Posted for fair use....
http://www.upi.com/Top_News/2009/05/12/Russia-seeks-US-input-on-stored-nukes/UPI-84321242145423/

Russia seeks U.S. input on stored nukes
Published: May 12, 2009 at 12:23 PM

MOSCOW, May 12 (UPI) -- Russia says it is waiting for the United States to make a proposal to reduce both countries' stored nuclear warheads.

So far, the Obama administration has not indicated it wants to include those devices on its agenda for upcoming strategic arms reductions talks. But Russian Foreign Minister Sergei Lavrov said Tuesday in Moscow he's awaiting a proposal from Washington on the topic, RIA Novosti reported.

"As to stored nuclear warheads, it is important to understand how they will be counted (toward new arms limits)," he said. "We are waiting for U.S. proposals in order to analyze them in line with the principle of equally assured security."

Lavrov told reporters Russia isn't saying "no" on whether to count stored warheads, but added, "We are convinced that the new treaty must cover all (nuclear) warheads and all delivery vehicles."

Officials have set the first round of talks to replace the expiring START 1 treaty for next Monday in Moscow, with hopes of having a treaty ready for the signatures of Presidents Barack Obama and Dmitry Medvedev by July.

MOSCOW (Reuters) - Russian Prime Minister Vladimir Putin said NATO military exercises in Georgia did not help efforts to rebuild Moscow's relations with the United States in comments published on Sunday.

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NATO war games bad, Russia sending in troops and building bases in the Arctic good.

March 28, 2009
http://www.timesonline.co.uk/tol/news/world/europe/article5989257.ece

Russia sends troops to frozen north to claim Arctic resources.
Russia signalled its determination to win the race for the Arctic's mineral wealth yesterday by announcing plans to establish military bases along its northern coastline.

A new national security strategy includes plans to create army units in Russia's Arctic region to “guarantee military security in different military-political situations”.
The strategy, approved by President Medvedev, declares the Arctic to be Russia's most important arena for “international and military security” in its relations with other countries.

A coastguard unit of the Federal Security Service, the successor to the KGB, is planned to advance Russia's policy in the region. The strategy calls for the creation of an intelligence network to provide “effective control of economic, military, (and) ecological activity” in the Arctic.

The Kremlin is preparing legislation that will impose tough restrictions on the Northern Sea Route. It would allow Russia to block foreign military ships, levy fees on shipping and require vessels to be escorted.

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Posted for fair use....
http://www.jamestown.org/single/?no_cache=1&tx_ttnews[tt_news]=34974&tx_ttnews[backPid]=7&cHash=507e3454d7

Medvedev's Presidency After the "Second Parade"
Publication: Eurasia Daily Monitor Volume: 6 Issue: 90
May 11, 2009 11:12 AM Age: 1 days
Category: Eurasia Daily Monitor, Home Page, Domestic/Social, Russia, Featured
By: Pavel K. Baev

President Dmitry Medvedev marked the end of his first presidential year exactly the same way as he started - by presiding over the military parade on Red Square. There was, however, a different feeling about this picture-perfect display of military muscle, not only because Medvedev in his short speech mentioned a lesson for those who "are interested in embarking on military adventures," or because of the increased number of combat planes -still insufficient to erase the memory of embarrassing losses over Georgia. In May 2008, Russia was proud of its rising power and its marching battalions just added to that confidence; now Russia is worried about the depth of the ten months old (and counting) recession, so the missiles which rolled through Moscow were rather irrelevant.

Medvedev's first year was certainly not what he had expected. It included an extra-tough test of the war with Georgia, though he proved unable to supply a definite answer about his ability to exercise authority. Only 12 percent of Russians now believe that real power lies in his hands, while around one third consider Putin as the power-holder, while half think that it is shared between the two (www.levada.ru, May 6). The president has not promoted a single loyalist to the higher echelon of bureaucracy, while making many appointments in the lower levels, including regional governors, so Putin's team has successfully adapted to the tricky task of serving two masters (Kommersant, May 7).

While treading very carefully in establishing his authority, Medvedev has successfully dispelled the impression that he is just a figurehead -making it clear that he is not going to resign before the end of his term. The delicate mechanism of harmonizing decision-making between the two leaders is non-transparent, but there have been few signs of the tension or clan wars that escalated in the last year of Putin's "era" (Vremya Novostei, May 7). Where Medvedev differs most from his mentor is in his softer style of issuing commands and listening to dissenting voices; his liberal "signals" to the human rights activists and independent journalists have not amounted to much (the parole of Svetlana Bahmina brought their collective sigh of relief), but strictly hierarchical systems of governance are generally responsive to stylistic nuances (Novaya Gazeta, April 21; www.gazeta.ru, May 8).

It is the sinking economy that determines change within Russia's political climate, and the key indicators continue to slide "south," with the latest forecast for GDP decline from the European Bank of Reconstruction and Development revised downwards to 7.5 percent (www.newsru.com, March 8). Medvedev is attempting to stay above the immediate tussle of crisis management, emphasizing only his attention to social issues, but Putin is also distancing himself from bad economic news. Consequently, the main newsmakers are Finance Minister Aleksei Kudrin, First Deputy Prime Minister Igor Shuvalov, and presidential aid Arkady Dvorkovich, who too often point in different directions. The only anti-crisis strategy that the ruling duo is able to embrace can be summarized as "it-will-pass," but many economic experts, such as Sergei Aleksashenko, argue that the crisis has not yet performed its function of clearing the economy of deadwood (Moscow Echo, May 7).

Where Medvedev successfully boosts his profile and personal networking is in foreign policy. This amounted to visiting 26 states (Germany twice, and Kazakhstan three times) and included launching several grand initiatives (Gazeta, May 7). He is probably disappointed that his position paper for the G20 summit did not attract sufficient attention and the "conceptual approach" to energy matters was ignored by the EU, which confirmed its commitment to the Energy Charter. Medvedev's true ambition is apparently to promote a new European security treaty, which was mentioned again in the Victory Day speech, but this persistence hardly adds much force to this dubious idea, which in reality aims at undermining NATO and compromising the OSCE. What Medvedev appears unable to grasp is to what degree the August war with Georgia damaged his international reputation and each "big-brotherly" meeting with the leaders of Abkhazia and South Ossetia adds to that self-imposed discrediting.

The tactics of "small steps" might suit Medvedev's uncharismatic personality and answer his goal of gradually escaping from the shadow of his predecessor without upsetting the system of power (Moskovsky Komsomolets, May 7). He may sincerely hope that time is on his side, so one year from now the question about who will run for president in 2012 - and the Kremlin-watchers are already trying to put a spin on it - would be answered in his favor. He is smart enough not to try to become a new Putin, but his Prime Minister also cannot be resurrected as the Putin of yesterday - a national leader delivering stability and prosperity (www.grani.ru, May 7). That image is gradually fading away and each new economic setback - particularly the decline of real income, which has already reached 40 percent - further diminishes Putin's reputation as an efficient manager (Kommersant, May 6).

The problem with this natural evolution is that the "muddle through" pattern is hardly sustainable for another year, both in Russia's economic dislocation and political degeneration. The accumulated financial reserves are very useful for easing the pain of the crisis. However, this cushioning of a "hard landing" does not help in setting the economy on a new upward track. Non-viable state corporations, such as the vast conglomerate Rostehnologii, need to be dismantled, but the whole system of bureaucratic rent-extraction from every profitable economic activity has to be reduced to a level where investments will become a sensible business strategy. Before Medvedev could even contemplate the scale of this task, he has to answer for the verdict in the Kafkaesque trial of Mikhail Khodorkovsky and Platon Lebedev, and there is no hiding behind the notion of the "independence of the court" for him (New York Times, April 27). Year three will see a different president -possibly with the same name.

Double_A said:

28 Carl, lol

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I'm afraid I don't see the funny part...