Russia in Review

A digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for the week of July 15 - 22, 2011

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

Nuclear security agenda:

Gazprom is preparing a plan to deliver natural gas to North Korea if the country agrees to shut its nuclear program. A Gazprom delegation that visited Pyongyang for talks on cooperation in energy estimates North Korea needs about 10 billion cubic meters of gas. (Bloomberg, 07.21.11).
Russian president Dmitry Medvedev has signed a federal law on radioactive waste management. The new bill establishes a legal framework for radioactive waste management in Russia and formally creates a unified state system for radioactive waste management. (WNN, 07.15.11).
The Moscow hub for an international organization established to prevent the proliferation of WMD expertise from Russia will continue operations in that country for another four years. The six-member governing board of the International Science and Technology Center unanimously voted on June 28 to allow the facility to continue overseeing and hosting existing scientific efforts until 2015, according to the facility's latest newsletter. (GSN, 07.15.11).

Iran nuclear issues:

Iranian President Mahmoud Ahmadinejad has cautiously welcomed a Russian proposal for bringing Iran back to talks over its nuclear program, the official news agency reported Thursday. “They have proposed step-by-step cooperation with Iran in the nuclear field,” the IRNA news agency quoted Ahmadinejad as saying. “All right, we have taken our step and cooperated with the U.N. nuclear watchdog. Now, you take your step and come to prepare a plan together. And you take one step; we take a step, too.” (AP, 07.21.11).

NATO-Russia cooperation, including transit to Afghanistan:

No significant developments.

Counter-terrorism cooperation:

No significant developments.

Missile defense:

Senior U.S. and Russian officials met this week in Washington to discuss how joint data-fusion and operations centers would work if the two countries could hammer out an agreement to cooperate on missile-defense. The talks didn’t produce any breakthrough. The talks were outlined Thursday by Dmitry Rogozin, Russia’s special envoy on missile defense, and Sergey Ryabkov, the deputy foreign minister. Ryabkov said Russia would like a formal, legally binding assurance that the missile defense system couldn’t be used against its forces. But he recognized that the administration was unlikely to provide such a treaty-like document, for political reasons. To allay Russian concerns that the system is aimed at them, the Obama administration has proposed collaboration through two joint centers. The first of the centers would fuse data collected from radars and other sensors deployed by Russia and the U.S., so that both sides could see all the information. The second would be a joint operations center where military officers would plan for different scenarios. (WP, 07.21.11).
During his trip to U.S. this week, Russia’s envoy Dmitry Rogozin was to meet Special Assistant to the U.S. President Gary Samore, and hold consultations at the National Security Council with representatives of the presidential administration, including Presidential Advisor Michael McFaul, Under Secretary of State for Arms Control and International Security Ellen Tauscher, Principal Deputy Under Secretary of Defense James Miller, and Vice Chairman of the Joint Chiefs of Staff James Cartwright. He also planned to visit Missile Defense Integration and Operations Center at Schriever Air Force Base in Colorado Springs. (Nezavisimaya Gazeta, 07.21.11).
Russia and the U.S. today discussed the issues related to international security and the proposed European missile shield. During a telephone conversation, Russian Defence Minister Anatoly Serdyukov and his US counterpart Leon Panetta also discussed the situation in Afghanistan and military cooperation between both the nations. (PTI, 07.20.11).
Deputy Defense Minister Anatoly Antonov said, “We propose: put these guarantees in writing. And not just on paper. We don’t want to depend on who is the U.S. President…. Everything can change should another president be elected tomorrow. Therefore we want this to be a law, we want these guarantees to exist regardless of who will be the next … in the White House.” (Nezavisimoye Voyennoye Obozrenie, 07.22.11).
Even though Russia and NATO are no longer considering the issue of establishing a sectoral missile defense system, they should make their final decision whether they are ready to compromise on European missile defense by the 2012 summit in Chicago, a member of the Russian negotiating delegation said. (Interfax, 07.15.11).
Steven Pifer of Brookings said: “Even if the United States and Russia signed a legally binding agreement on missile defense today, but, say, a hypothetical crisis that might require the use of that system would occur in 10 years, do you really think that the US president or the president of Russia would ban the military to use interceptor missiles?” (Rossiyskaya Gazeta, 07.19.11).

Nuclear arms control:

A review of NATO's deterrence posture should suggest reducing the role nuclear weapons play in assuring the alliance's security and removing short-range U.S. warheads from Europe, states a letter by a group of experts and former government officials to NATO Secretary General Anders Fogh Rasmussen. Signatories include former U.S. State Department Policy Planning Director Morton Halperin; former Assistant Defense Secretary Lawrence Korb; and former British Defense Secretary Malcolm Rifkind. (GSN, 07.20.11).

Energy exports from CIS:

No significant developments.

Access to major markets for exports and imports:

Debbie Stabenow, U.S. senator from a major auto-producing state, Wednesday urged the top U.S. trade official to demand Russia drop barriers to American cars before being allowed to join the World Trade Organization. (Reuters, 07.21.11).

Other bilateral issues:

Russian opinion studies group Public Opinion Foundation (FOM) said 47% of respondents in a survey on July 9-10 answered in the affirmative when asked whether they believed there were counties that pose a security threat to Russia while 31% replied in the negative, and 22% were undecided. Among those who believed in external security threats, 26% said the supposed danger came from the United States, 13% saw China as the chief menace, and 9% thought it was Georgia that needed to be feared most. In a 2000 poll by FOM, the United States, Afghanistan and China topped the security threat ranking. (Interfax, 07.17.11).
Moscow on Thursday declared it is now "the era of the Soyuz" after the U.S. shuttle's last flight left the Russian system as the sole means for delivering astronauts to the International Space Station. (AFP, 07.21.11).

II. Russia news.

Domestic Politics, Economy and Energy:

Russia will hold 2012 presidential elections on March 4, a Central Election Committee official said on Thursday. (Reuters, 07.21.11).
Russian President Dmitry Medvedev dropped what appeared to be a hint on Tuesday that he hopes to stay on as head of state after a March 2012 election. Ending his opening statement at the Petersburg Dialogue, Medvedev said he and German Chancellor Angela Merkel would not be chairing the annual forum anytime soon -- an apparent hint that they intended to remain in power in the coming years. (Reuters, 07.19.11).
Prime Minister Vladimir Putin's ruling United Russia party is set to lose its constitutional two-thirds majority but will win 291 of 450 seats in Russia's lower house, the State Duma, according to the state-run pollster VTsIOM. (Reuters, 07.20.11).
In what appeared to be a calculated pre-election appearance, Prime Minster Vladimir V. Putin on Friday reflected on his 11 years in power and acknowledged that elements of the system he created needed to change. He even admitted a moment of regret over what may be his most famous comment -- saying of Chechen terrorists in 1999, ''we will waste them in the outhouse.'' But with a presidential election looming in March -- and little indication of whether he or President Dmitri A. Medvedev will run -- Mr. Putin did not suggest that he was thinking of stepping aside. (New York Times, 07.16.11).
Mikhail Gorbachev says Prime Minister Vladimir Putin shouldn't seek a third term as Russian president as the country struggles to develop democratic institutions. (Bloomberg, 07.19.11).
Russian President Dmitry Medvedev has pledged to put more effort into further improving the country's laws on non-government organizations and called on the latter to show their worth. (Itar-Tass, 07.19.11).
Russia's economy slowed in the second quarter, according to Deputy Economy Minister Andrei Klepach, who expects growth to accelerate in the final six months of 2011. Gross domestic product expanded 3.7 percent from a year earlier in the March-June period, less than the 4.1 percent growth in the first three months of 2011, Klepach said. (Bloomberg, 07.21.11).
Foreign direct investment in the Russian economy increased by 39 percent year on year in January-June 2011, to over $27 billion, Russia's Prime Minister Vladimir Putin said on Wednesday. (RIA Novosti, 07.20.11).
By Finance Minister Alexei Kudrin’s reckoning, the books would only balance with oil at $125 per barrel next year, reflecting the impact on the public finances of the global slump that put an end to years of surpluses generated at much lower oil prices. Even then, the fiscal strategy abandons a previous goal of balancing the budget by 2015. After stripping out energy revenues -- which account for nearly half of the tax take -- the deficit will stay over 10 percent of GDP. In rough terms, a $10 fall in the oil price would translate into an increase of one percentage point in the deficit for Russia. (Reuters, 07.20.11).
In the pre-crisis year of 2007 social spending in Russia totaled 25.1 percent of the consolidated budget, in 2009 it had already reached 29.4 percent, and in 2011 this indicator is set to total 39.7 percent. Across the 27 EU countries this figure was at the level of 38.9 percent on the eve of the crisis and 39.5 percent in 2009. (Nezavisimaya Gazeta, 07.20.11).
Russia's reactor export firm has taken its Bulgarian customer National Electricity Company (NEK) to court over the non-payment of $58 million. (World Nuclear News, 07.22.11).
Illegal drug abuse in the capital has grown at least 10 times since 2001, Vyacheslav Davydov, head of the Moscow branch of the Federal Drug Control Service, said at a news conference Monday. (Moscow Times, 07.19.11).

Defense:

The Russian Defense Ministry will order the development of a new liquid fuel ballistic missile before the end of this year. The missile is supposed to replace the famed RS-20 'Voyevoda' (NATO code-name Satan). It will deliver up to 15 medium or ten heavy nuclear warheads to a distance exceeding 10,000 kilometers. (Interfax, 07.21.11).
Russia's aerospace defence system has already been set up, and it will be put on combat alert duty by 1 December this year, Lt. Gen Valeriy Ivanov, the commander of the VKO's Operational-Strategic Command, has announced. (Interfax, 07.22.11).
Russia began large-scale air force training in the North Caucasus on Monday in a step towards boosting security against an Islamic insurgency raging in the region. (Reuters, 07.18.11).
Russia's newest fifth-generation fighter plane will fly at this year's MAKS air show near Moscow. (Interfax, 07.19.11).
About 200,000 Russian conscripts dodge army service, and most of them are from Moscow, Deputy Chief of the Army General Staff Vasily Smirnov said on Friday. (Interfax, 07.15.11).
The damage caused to the Russian state by corruption in the armed forces has exceeded 600 million rubles in 2011, and six generals and over 170 senior military officers have been held liable for corruption this year, Chief Military Prosecutor Sergei Fridinsky said. (Interfax, 07.21.11).
Russian prosecutors have uncovered nearly 1,500 legal violations that accompanied the spending of budget funds as part of the state's defense order, Chief Military Prosecutor Sergei Fridinsky said. Prosecutors have detected around 1,500 legal violations that cost the budget hundreds of millions of rubles," Fridinsky said. (Interfax, 07.21.11).
Russia’s chief military prosecutor says assaults on soldiers by their superiors have risen sharply this year. Chief Military Prosecutor Sergei Fridinsky said in the first half of the year, assault cases have been brought against 75 lieutenants and more than 170 sergeants. He says that amounts to a 15-percent increase in beatings compared to the previous year. (AP, 07.21.11).

Security and law-enforcement:

There are no Russian citizens among those injured in the massive explosion that rocked a government district in Norway’s capital Friday, a spokesman for the Russian embassy in Oslo said. The Norwegian news agency NTB quoted police as saying that a bomb caused the explosion. (RIA Novosti, Washington Post, 07.22.11).
Russian authorities have arrested four people suspected of planning a ''major'' terrorist attack in the Moscow region, Aleksandr Bortnikov, the head of Russia's domestic intelligence agency, said Monday. The suspects, who were arrested several days ago, were from Russia's North Caucasus, a violence-plagued, mostly Muslim region that is a hotbed of terrorist activity in Russia. (New York Times, 07.19.11).
Several senior officials of Rosatom , federal state unitary enterprises supervised by the corporation and affiliated companies, are the subjects of a criminal investigation into cases of multi-million embezzlement in the agency, a source in the Russian Interior Ministry said. Earlier on Wednesday, it became known that officers of the Russian Interior Ministry's Main Directorate for Economic Security and Countering Corruption detained former deputy director-general of Rosatom, Yevgeny Yevstratov, over suspected embezzlement of tens of millions of roubles. (RIA Novosti, 07.20.11).
The average bribe paid in Russia to a government or corporate official rose to 293,000 rubles ($10,573) in the first half of the year, the Interior Ministry said. (Bloomberg, 07.22.11).
Interior Minister Rashid Nurgaliyev was amazed with the incomes and the amount of property owned by certain colleagues (revealed) during the reassessment of the top Interior Ministry officials. He said that one official, a regional deputy head, owned two restaurants, a hotel and "some more property". "Scared of the need to submit a declaration, the official backdated papers transferring ownership to his wife, and divorced her on paper," Nurgaliyev said. "Another (official) turned out to have had transfers through U.S. banks and off-shores," the interior minister said when talking about his experience of conducting the reassessment of senior ministry officials. (RIA Novosti, 07.21.11).
Russian investigators launched a criminal probe Monday against two prison officials for their suspected role in the death of jailed lawyer Sergei Magnitsky, who claimed to have uncovered a $230 million tax fraud by corrupt Interior Ministry officers. (AP, 07.18.11).
A Moscow court on Monday sentenced Spanish citizen Antonio Valdes-Garcia to eight years in prison after finding him guilty of embezzling $13 billion from a subsidiary of the now-defunct Yukos oil company. (AP, 07.18.11).
Gunmen opened fire on the convoy of Russia's top anti-extremism campaigner for the Dagestan region of the restive North Caucasus on Friday, killing two guards, local officials said. (Reuters, 07.22.11).
Russian investigators said on Thursday they will look into suspicions that Chechen security forces were involved in the murder of prize-winning rights campaigner Natalia Estemirova. (Reuters, 07.21.11).

Foreign affairs:

The leaders of Germany and Russia pledged on Tuesday to increase economic and political cooperation, with Russia agreeing to allow German companies to exploit its rare earth deposits and seeking more assistance and technological know-how from Berlin in order to modernize its economy. (New York Times, 07.19.11).
Russian President Dmitry Medvedev said on Tuesday that compromise was possible between Libya's rebels and government, adding that supporting one side in the conflict was "exceptionally bad" for Libya. (Reuters, 07.19.11).
Russia hosted Libya's foreign minister on Wednesday, pressing ahead with efforts to engage Muammar Gaddafi's government in contrast to what it calls a counterproductive Western "policy of isolation". Foreign Minister Sergei Lavrov said nations that recognised the rebel National Transition Council (TNC) were pursuing a "policy of isolation" he suggested could undermine efforts to end the five-month war. (Reuters, 07.18.11, 07.20.11).
Western nations clashed with Russia and developing countries Wednesday over whether climate change was a security matter meriting the attention of the Security Council. Diplomats said Russia initially blocked the adoption of a statement on the issue by the 15-nation council, but later agreed to a revised, weakly worded text that spoke of the ''possible security implications'' of climate change. (Reuters, 07.20.11).
A German nonprofit group canceled its annual prize ceremony on Saturday after its decision to honor Prime Minister Vladimir V. Putin of Russia sparked a public outcry. President Dmitry Medvedev on Tuesday lambasted the canceling of a German prize for Prime Minister Vladimir Putin as "cowardice". (New York Times, 07.17.11, Moscow Times, 07.20.11).
Russian flags were burned by angry protesters alongside those of Iran and the Hezbollah in the city of Hama, epicentre of Syria's pro-democracy uprising. (Australian, 07.22.11).

Russia's neighbors:

Three Georgian photographers were found guilty on Friday of spying for Russia but given suspended sentences and released after a 45-minute trial. (AP, 07.22.11).
Lithuania said on Monday it was recalling temporarily its ambassador from Austria in protest of Austria's decision to release a former Soviet officer wanted in connection with a bloody 1991 crackdown on independence supporters (Reuters, 07.18.11).
A powerful earthquake hit Central Asia's densely populated Ferghana valley early on Wednesday, shaking homes and sending residents of several Uzbek and Kyrgyz cities onto the streets in panic, residents said. (Reuters, 07.20.11).
Kazakh President Nursultan Nazarbayev was recovering well from a prostate operation he had at a hospital in Hamburg. (Reuters, 07.20.11).
Ukrainian prosecutors have detained the head of a state commission overseeing non-bank financial companies on corruption-related charges, the state prosecutor's office said on Tuesday. (Reuters, 07.19.11).