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Press Release

Russia in Review

Published: August 25, 2011

An update from U.S.-Russia Initiative to Prevent Nuclear Terrorism for August 18-25, 2011

A digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for August 18-25, 2011

  1. I. U.S. and Russia priorities for the bilateral agenda.

Nuclear security agenda:

  • After the meeting in Ulan-Ude with Russian President Dmitry Medvedev, North Korean leader Kim Jong Il agreed to impose a nuclear test and production moratorium if international talks on Pyongyang’s atomic program resume. Medvedev proposed gas, electricity, and railway projects during the talks that may lead to concessions on Kim Jong Il's nuclear weapons program. Kim Jong Il greenlighted the construction of a trans-Korean gas pipeline during the talks. "If in fact they are willing to refrain from nuclear testing and missile launches, this would be welcome but it would be insufficient," U.S. State Department spokeswoman Victoria Nuland said. (Bloomberg, Moscow Times, AP, 08.25.11).
  • The Russian Foreign Ministry is expressing concern that, amid the chaos in Libya, conventional weapons, and also nuclear materials which may be stored in the country, could end up in the hands of terrorists. (RIA Novosti, 08.24.11).

Iran nuclear issues:

  • The output of the reactor of Iran's first nuclear power at Bushehr has been increased to 40 percent of its capacity, Russia's Atomstroyexport said. (RIA Novosti, 08.25.11).
  • Russia said Thursday it was surprised by Iran's move to lodge a legal complaint against Moscow over the cancellation of a S-300 missile contract, insisting that sanctions had tied its hands. Iran's ambassador to Moscow, Mahmoud Reza Sajjadi, announced on Wednesday that Tehran had lodged a complaint against Russia with an international court of arbitration. He also said Iran will be ready to consider receiving Russian S-300 systems through Venezuela, should Russia show such an intention. (AFP, 08.25.11, Interfax, 08.24.11).

NATO-Russia cooperation, including transit to Afghanistan:

  • No significant developments.

 

Counter-terrorism cooperation:

  • According to the U.S. State Department’s Country Reports on Terrorism 2010, the U.S.-Russia Counterterrorism Working Group (CTWG) met twice last year and operational and intelligence information related to terrorism-related threats continues to be shared among U.S. and Russian intelligence and security agencies on a regular basis. (State Department, 08.18.11).

Missile defense:

  • No significant developments.

Nuclear arms control:

  • No significant developments.

Energy exports from CIS:

  • No significant developments.

Access to major markets for exports and imports:

  • No significant developments.

Other bilateral issues:

  • Russia has boosted its holdings of U.S. debt by more than 1,600 percent since September 2006, according to U.S. Treasury Department data. (Bloomberg, 08.19.11).
  • Renaissance Capital has put together a model that analyzes how a 1 percent decline in U.S. gross domestic product (GDP) would affect Russia's economic growth depending on whether the central bank allows the rouble to depreciate, or not. If the central bank intervenes to prop up the rouble, Russian GDP could contract by 2.5 percentage points by the third quarter after the shock, with an average annual decline of 1.5 percentage points. If it does not intervene, the maximum contraction would be 2.2 percentage points in the third quarter, and an annual decline of 0.9 percentage points. (Financial Times, 08.20.11).
  • Russia's Atomstroyexport, which is technically supposed to build Bulgaria's Belene NPP, is facing severe shortages, according to a freshly leaked diplomatic cable of the U.S. ambassador in Moscow. It is entitled "Russia's Atomstroyexport Cannot Fulfill Existing International Nuclear Energy Contracts, But Seeks New Ones." (Novinite.com, 08.25.11).
  • The idea to construct a $60 billion railway tunnel under the Bering Strait was, this week, backed by some of President Dmitry Medvedev's top officials. (Times, 08.21.11).

  1. II. Russia news.

Domestic Politics, Economy and Energy:

  • Russian Prime Minister Vladimir Putin and President Dmitry Medvedev will probably wait until December to reveal which of them will run for president in 2012, according to two people familiar with the matter.  (Bloomberg, 08.22.11).
  • Trust in Prime Minister Vladimir Putin dropped to 39 percent in August, from 40 percent in July, or far below the 50 percent trust level he enjoyed even at the peak of the financial crisis in early 2010, according to the Levada Center’s August poll.  Medvedev's trust rating dropped more sharply, slipping to 31 percent in August from 35 percent a month earlier. Medvedev's presidential approval rating sank to 63 percent from 66 percent a month earlier and 77 percent in early 2010. The percentage of Russians who think "things are gong in the right direction" sank to 36 percent in August from 40 percent a month earlier and 55 percent in August 2008. (Wall Street Journal, 08.25.11).
  • About 200 demonstrators have marked the 20th anniversary of the end of a failed Soviet coup with a march in central Moscow. The Levada Center, an independent polling organization, reports that 36 percent describe the Aug. 19, 1991 coup and what followed as a tragic event that had disastrous consequences for the country and its people, compared to 27 percent in 1994. Only 8 percent see it as the victory of democracy over communism. (Washington Post, 08.19.11, AP, 08.22.11).
  • Georgy Poltavchenko, a former KGB officer and staunch ally of Prime Minister Vladimir Putin, emerged Monday as the prime pick for the St. Petersburg governor's seat, which was vacated by Federation Council-bound Valentina Matviyenko. (The Moscow Times, 08.23.11).
  • The Justice Ministry has approved the registration of a nationalist group led by opposition politician-turned-envoy to NATO Dmitry Rogozin that is expected to ally itself with Prime Minister Vladimir Putin’s All-Russia People’s Front. (Moscow Times, 08.22.11).
  • Foreign-currency holdings and gold reached $540.2 billion in the week ending Aug. 12, the highest level since October 2008, Bank Rossii said. (Bloomberg, 08.19.11).
  • Russia’s 30-stock Micex has lost 16 percent in the past month. Russia's dollar-denominated RTS index is the fifth worst-performing in the world this month out of 92 indexes surveyed by Bloomberg.  (Bloomberg, 08.22.11).
  • Foreign direct investment in Russia surged 30 percent to $7 billion for the first half of 2011, compared with last year, with manufacturers and the financial industry receiving the most capital. (Moscow Times, 08.25.11).
  • Russia may allow state-controlled gas giant OAO Gazprom to raise domestic prices by 15 percent next year. (Wall Street Journal, 08.25.11).
  • Tax reforms due in October will encourage crude output and exports by lightening the burden of a tax system that captures more than 90 cents of every $1 increase in the price of exported crude. (Reuters, 08.25.11).
  • Russia will go ahead with the launch of a navigation satellite on Friday only after it has carried out additional safety checks following the crash of a supply craft, the Russian space agency said on Thursday. An unmanned Progress spacecraft using a Soyuz booster rocket failed to reach orbit. It had been carrying food and fuel to the International Space Station. Russia suspended launches of its chief Proton-M rocket on Tuesday over the loss of a communications satellite. (Reuters, 08.24.11).
  • The number of plane accidents has doubled compared with last year, and the number of deaths has quadrupled, Deputy Prime Minister Sergei Ivanov said Tuesday in a report criticizing small airlines. (Moscow Times, 08.24.11).

Defense:

  • Six soldiers have been killed and 12 have been wounded in an explosion during the disposal of ammunition at the Ashuluk firing range in the Astrakhan region. (Interfax, 08.24.11).

Security and law-enforcement:

  • According to the U.S. State Department’s Country Reports on Terrorism 2010,  Russia continued to endure terrorist attacks linked to instability in the North Caucasus. Officials in mid-December cited 529 terrorist attacks over the course of the year in which 218 victims were killed and 536 injured. (State Department, 08.18.11).
  • A Russian former police officer was detained on Tuesday in an investigation into the 2006 killing of journalist and Kremlin critic Anna Politkovskaya, according to the newspaper she worked for, Novaya Gazeta. (Reuters, 08.23.11).

Foreign affairs:

  • Russian President Dmitry Medvedev on Wednesday called on Muammar Gaddafi and Libya's rebels to stop fighting and sit down for talks. Russia’s Foreign Ministry said on Thursday that the United Nations should play the central role in international efforts to help rebuild Libya once the war between Muammar Gaddafi's loyalists and the rebels ends. (Reuters, 08.24.11,08.25.11).
  • Russia's U.N. Ambassador Vitaly Churkin said Tuesday that Moscow did not think it was time to impose sanctions on Syria over its harsh five-month crackdown on pro-democracy demonstrators.  (Reuters, 08.23.11).
  • Iran's ambassador to Moscow on Wednesday assailed Gazprom Neft for a "delay" in developing the country's oil reserves. (Moscow Times, 08.24.11).

Russia's neighbors:

  • The United States expressed disappointment Friday over the suspension of plans to eliminate highly enriched uranium from Belarus amid an escalation of a human rights row. Belarus has suspended an effort to fully give up its Soviet-era stockpile of HEU with U.S. assistance in response to new American sanctions. (AFP, AP, 08.19.11).
  • Russian President Dmitry Medvedev ruled out a compromise deal with Ukraine which would have allowed Kyiv to pursue free-trade pacts with the European Union and a Russian-led regional bloc. (RFE/RL, 08.24.11).