Russia in Review

A digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for the week of May 27 – June 3, 2011

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

Nuclear security agenda:

• Leaders from the Group of Eight (G-8) major world economies agreed during a two-day annual summit in Deauville, France, to extend the Global Partnership Against the Spread of Weapons and Materials of Mass Destruction. “As such, we agree to extend the Partnership beyond 2012, based on the areas of focus enunciated at Muskoka (nuclear and radiological security, bio-security, scientist engagement, and facilitation of the implementation of UNSCR 1540),” says the G-8 summit declaration. (Arms Control Today, 06.03.11, White House, 05.27.11).

Iran nuclear issues:

• Russian Foreign Minister Sergei Lavrov challenged U.S. claims of an Iranian nuclear weapons program. "We have no proof whatsoever that Iran has taken the political decision to produce an atomic bomb," Lavrov said. "And nothing in the information which the International Atomic Energy Agency (IAEA) has available to it supports a conclusion, that Iran is producing such a bomb," he said. "We have to show to Iran that if it cooperates, if it answers satisfactorily the IAEA demands, then it should see the light at the end of the tunnel," Lavrov said. (Bloomberg, 06.01.11, 06.02.11).

NATO-Russia cooperation, including transit to Afghanistan:

• NATO and Russian fighter aircraft will take part in a counter-terrorism exercise this month designed to prevent attacks such as those on the United States on Sept. 11, 2001, NATO said on Wednesday. (Reuters, 06.01.11).
• Russia is to supply military helicopters to the US for use in Afghanistan, marking a significant arms contract between the former Cold War foes. Russia’s state arms exporter, Rosoboronexport, signed a contract with the U.S. army last week to supply 21 Mi-17 helicopters to boost the capacity of the Afghan air force, the company said. (Financial Times, 05.30.11).

Counter-terrorism cooperation:

• No significant developments.

Missile defense:

• Russian President Dmitry Medvedev said: "So far, I'm not very pleased with the reaction to my proposal from the Americans, and from all the countries in NATO in general. Why? Because we're losing time.” (Rossiya 24, 05.27.11).
• President Obama's term is likely to end without an agreement with Russia on missile defense, a senior U.S. envoy said on Friday. "I think Russia and the United States will not manage to reach a consensus on this issue by the end of Obama's presidential term," Ambassador to Russia John Beyrle said. (GSN, 05.31.11).
• There is little hope that Russia and NATO will agree on building a joint missile shield, a report released here on Sunday at the NATO Parliamentary Assembly spring session stated. According to Raymond Knops, who presented the Draft General Report titled "Missile Defence: the Way Ahead for NATO," the realization of a genuine collaborative missile defense effort between Russia and NATO appears to be more difficult than the technical hurdles facing the NATO system. (Xinhua, 05.29.11).
• A senior Russian lawmaker has called on the United States to halt fielding of missile shield elements in parts of Europe. In order to prevent another arms race, the United States should first not "take any practical steps immediately to create a future global antimissile system," said Konstantin Kosachyov, head of the Russian State Duma international affairs committee . (GSN, 06.01.11).
• The “sectoral missile defense” suggested by Moscow for Europe is rejected by Western states, while the U.S. initiative of “a cooperative missile defense system” is not acceptable for Russia, said Viktor Zavarzin ,Chairman of the State Duma Defense Committee. (Interfax, 05.30.11).
• Former special adviser to the secretary of state Stephen Sestanovich said: “The U.S. line is this isn't just a matter of our intentions and of our declarations and our pledges; it's a matter of physics. The U.S. capabilities being discussed and contemplated do not impact the Russian deterrence. But what the Russians say is, ‘Yes, but what if ten years from now, you might decide to go further?’”  (Council on Foreign Relations, 06.01.11).

Nuclear arms control:

• Russia has already cut its nuclear arsenal below the level required in an arms control treaty signed with the United States last year, according to figures released by the U.S. State Department on Wednesday. Russia has 1,537 deployed strategic nuclear warheads, just under the 1,550 ceiling it is obliged to reach by 2018 under the New START nuclear arms reduction pact, while the United States has 1,800, according to a State Department fact sheet.  (Reuters, 06.02.11).

Energy exports from CIS:

• Deputy Chief Executive Alexander Ananenkov said Wednesday that Gazprom, which supplies 25 percent of Europe's natural gas, now expects in 2013 to reach its pre-financial crisis production level. Mr. Ananenkov said the company is aiming by 2013 to produce about 550 billion cubic meters of natural gas—a peak reached in 2006—and 570 billion cubic meters of gas by 2014. Gazprom currently expects to produce 519 billion cubic meters this year, which would be more than initially planned.  (Wall Street Journal, 06.01.11).
• Russia's oil output edged up 0.2 percent to 10.26 million barrels per day in May, matching a post-Soviet record seen in October, as companies including Rosneft ramp up production on the back of high crude prices.   (Reuters, 06.03.11).
• The U.S. administration strongly supports the Southern Corridor project which is to deliver Caspian gas to Europe, bypassing Russia, while Moscow plans its own South Stream pipeline to deliver gas to Europe. Richard Morningstar, U.S. energy envoy for the Eurasian region, told a House Foreign Affairs subcommittee on Thursday that Azerbaijan and Turkmenistan are likely to supply natural gas for the project. (Itar-Tass, 06.03.11).
• Russia is preparing to auction "quite a lot" of licenses to oil and gas deposits this year and will soon offer rights to the East Siberian Lodochnoye field, Natural Resources Minister Yury Trutnev said Tuesday.  (Bloomberg, 06.01.11).

Access to major markets for exports and imports:

• The head of a group negotiating Russia's accession to the World Trade Organization has instructed its members to try to finish the process by the end of 2011. (Reuters, 06.01.11).

Other bilateral issues:

• President Obama has decided to send the architect of his so-called Russia reset policy to Moscow as the next United States ambassador there, seeking to further bolster an improved relationship as both countries head into a potentially volatile election season. Mr. Obama plans to nominate Michael McFaul, his top White House adviser on Russia policy, for the post, according to administration officials. Mr. Obama told the Russian president, Dmitri A. Medvedev, of his choice during a meeting in France last week, officials said. In choosing someone from his own inner circle, Mr. Obama underscored his determination to keep Russian-American relations a centerpiece of his foreign policy after his early push to reset the relationship following years of growing tension.  (New York Times, 05.29.11).
• Joel Brenner, the National Counterintelligence executive from 2006 to 2009, said most if not all of the big U.S. defense contractors' networks had been pierced. “This has been happening since the late '90s,” he told Reuters Tuesday. He identified the main threats as coming from Russia, China, and Iran. (Reuters, 05.31.11).

II. Russia news.

Domestic Politics, Economy and Energy:

• Russian President Dmitry Medvedev said Friday his G8 partners quizzed him on his plans for 2012 when Vladimir Putin may seek a return to the Kremlin. "I told them the absolute truth about what I and some of my colleagues are planning to do," a grim-faced Medvedev said.  (AFP, 05.27.11).
• The results of the poll, which was commissioned by the Japanese newspaper Asahi Shimbun and published on May 27, show the number of opponents of nuclear energy account for 52 percent of respondents in Russia while 36 percent are in favor. (Bellona, 02.06.11).
• Sixty-nine percent approved of Dmitry Medvedev's performance as the president and as many of Vladimir Putin's as the premier, this month. (Vedomosti, 05.31.11).
• About 450 social organizations and activist groups have rallied to a new political coalition launched by Vladimir Putin, the prime minister's spokesman, Dmitry Peskov, said on Wednesday. (RIA Novosti, 06.01.11)
• Russia will spend $285 billion over the next decade to double the rate of road building, Prime Minister Vladimir Putin said on Monday, addressing one of the most sensitive issues for Russian voters.  (Reuters, 05.30.11).
• The birth rate in Russia has increased by a quarter over the past five years, Russian President Dmitry Medvedev said. (Interfax, 06.01.11)
• In Boston Consulting Group's Global Wealth 2011 report Russia ranks among the top five countries by the number of super-rich families. On the other hand, Russia failed to make it into the top 15 countries when a per capita view is taken. Moreover, the report revealed a shortage of "common" millionaires in Russia—that is, those with $1 million or more in investible assets. "Russia is unique because 2–2.5 percent of the population control 70–80 percent of all assets," said Alexander Rubinstein, director of the Institute for Social Economy at the Russian Academy of Sciences (RIA Novosti, 06.02.11).
• The poor or nearly poor account for almost three-fourths of the Russian population. (Nezavisimaya Gazeta, 06.02.11).
• The European Court of Human Rights said on Tuesday it had found irregularities in the fraud case against Russian oil tycoon Mikhail Khodorkovsky and ordered Moscow to pay him 24,500 euros (21,382 pounds) compensation.  Khodorkovsky kept up his fight against the Kremlin on Monday, filing for parole following a recent court decision to keep him in jail for 13 years. (Reuters, 05.30.11, 05.31.11).

Defense:

• Russia intends later this month to conduct at least one new trial launch in a series of five planned tests of the experimental Bulava ballistic missile.  "In case of successful tests, the Bulava missile might be added to the navy's arsenal as early as in 2011 or in the beginning of 2012," the Defense Ministry said. (GSN, 06.02.11).
• Fire tore through an ammunition depot in the central Russian region of Udmurtia Friday, still causing shells to explode more than 13 hours after it began. Tens of thousands of people were evacuated from their homes. (AP, 06.03.11).

Security and law-enforcement:

• A Chechen native was jailed for 12 years on Tuesday for triggering an explosion in a Danish hotel while preparing a letter bomb to send to a Danish newspaper that had stirred controversy with cartoons of the prophet Muhammad.   (Reuters, 06.01.11).
• A jury in Vienna on Wednesday convicted three Chechen exiles in the murder of Umar S. Israilov, a bodyguard who had turned against his former employer, the Chechen leader Ramzan A. Kadyrov. (New York Times, 06.02.11).
• Rustam Makhmudov, the suspected triggerman in the 2006 killing of journalist Anna Politkovskaya, has been arrested in Chechnya and charged with murder. (AP, 06.02.11).
• "No administrative or legal measures have been taken" after the deadly terror act in Beslan in September 2004, President Dmitry Medvedev acknowledged during a meeting with representatives of the Mothers of Beslan Committee in Moscow. (Russia Today, 06.02.11).
• The head of the Defense Ministry's medical department pleaded guilty to accepting large kickbacks from medical equipment makers, the Investigative Committee said Thursday. (Moscow Times, 06.03.11).

Foreign affairs:

• The Shanghai Cooperation Organization will start talks on admitting new members, SCO Secretary-General Muratbek Imanaliyev said. Imanaliyev said, “We are ready to start talks with interested parties on admitting new members, primarily with India, Iran and Pakistan.” (Itar-Tass, 06.01.11).
• A new visa agreement between Russia and Europe's Schengen zone could significantly reduce red tape and travel restrictions by next year — but only for professionals, not tourists, a European diplomat said Thursday. Lawmakers, businessmen, journalists, members of governments—along with their families—and representatives of nongovernmental organizations could be entitled to five-year multiple entry visas. (Moscow Times, 06.03.11).
• Russia is lifting its ban on grain exports, effective July 1, amid expectations for a good harvest, Prime Minister Vladimir Putin said Saturday.  (Wall Street Journal, 05.29.11).
• The European Union's envoy to Moscow said on Friday that Russia's ban on imports of raw vegetables from the EU was not justified and contradicted World Trade Organization rules.  (Reuters, 06.03.11).
• Brazil's beef industry and its regulators were taken by surprise when Russia announced a temporary ban on imports of animal produce from three Brazilian states, citing sanitation concerns.  (Wall Street Journal, 06.03.11).

Russia's neighbors:

• The far-flung Pacific island nation of Vanuatu has become the fifth country to recognize Georgia's rebel region of Abkhazia as independent, an Abkhaz official said on Wednesday. (Reuters, 06.01.11).
• Russian Prime Minister Vladimir Putin today made an unannounced visit to the breakaway Georgian region of Abkhazia to attend the farewell ceremony of its leader, Sergei Bagapsh. During his visit, Putin met with Abkhazia's acting President Alexander Ankvab and Prime Minister Sergei Shamba. (RFE/RL, 02.06.11).
• Georgian officials say they have arrested two residents of Abkhazia, alleging they were preparing a terrorist bombing for Russia.  (AP, 06.03.11).
• Georgia will destroy Soviet-era monuments and change any street names which refer to its Communist past, lawmakers decided on Tuesday. (Reuters, 05.31.11).
• Belarus has asked the International Monetary Fund for a loan to help stabilize its plummeting economy as it struggles to manage the country's most severe financial crisis since the Soviet collapse, the government said Wednesday.  (AP, 06.01.11).
• The international human rights monitoring organization Freedom House has released its list of the world's worst human rights abusers, and Turkmenistan and Uzbekistan were listed among the nine countries that were "worst of the worst."  (RFE/RL, 06.01.11).
• Turkmenistan is poised to explore space by setting up its very own National Space Agency, which would operate under the auspices of the presidential office. (RFE/RL, 06.01.11).