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Press Release

Russia in Review

Published: April 08, 2011

An update from U.S.-Russia Initiative to Prevent Nuclear Terrorism for the week of  April 1-8, 2011.

A digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for the week of April 1-8, 2011

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

Nuclear security agenda:

  • The National Nuclear Security Administration (NNSA) and the Administration of the State Border Guard Service of Ukraine have announced the commissioning of radiation detection equipment at the Kharkiv International Airport, a significant milestone in their shared effort to combat nuclear terrorism.  (NNSA, 04.07.11).
  • Ukrainian border guards say they confiscated money from a vehicle in the eastern region of Sumy over the weekend after finding the cash was emitting radiation. (RFE/RL, 04.04.11).

Iran nuclear issues:

  • The reactor at Iran's Bushehr Power Plant is being loaded with nuclear fuel again after an inspection and a clean-up of the reactor and the plant's circulation piping, Russia's Atomstroyexport company said on Friday. (RIA Novosti, 04.08.11).

NATO-Russia cooperation, including transit to Afghanistan:

  • Afghanistan’s military forces will be getting 21 Mi-17 choppers, along with spare parts, servicing and training. Russia and the United States have agreed on the terms for supplying 21 Russian military helicopters worth $370 million to Afghanistan. (Moscow Times, 04.07.11).
  • Russia and the United States have successfully carried out four joint operations in recent months aimed at destroying drug laboratories in Afghanistan, said Viktor Ivanov, the director of the Russian Federal Drug Control Service.   More than 1,400 kilograms of highly concentrated heroin, 300 kilograms of opium, 4.5 tons of morphine, precursors and heroin-making equipment were disposed of as a result of the four operations, he said. Russia, the U.S., Tajikistan and Afghanistan will conduct similar operations regularly in the future, he said. (Interfax, 04.07.11).

Counter-terrorism cooperation:

  • No significant developments.

Missile defense:

  • Russia wants to join the planned U.S. missile shield in Europe with “red-button” rights to launch strikes at incoming weapons, Deputy Prime Minister Sergei Ivanov said.  “We insist on only one thing: that we’re an equal part of it,” said Ivanov. “In practical terms, that means our officer will sit, for example, in Brussels and agrees on a red-button push to start an anti-missile, regardless of whether it starts from Poland, Russia or the U.K.” (Bloomberg, 04.08.11).
  • U.S. Defense Secretary Robert Gates’ proposal to share missile-launch information and to set up a joint data center “doesn’t change the fact that a missile-defense system with a significant anti-Russian potential will appear on Russia’s borders,” Russian Deputy Defense Minister Anatoly Antonov said. “This will destroy decades of strategic parity and that’s why ideas about cooperation and building trust may well end up only on paper.” (Bloomberg, 04.08.11).
  • "If generals had been separated from the politicians, they would have set up a joint missile defense system long ago or would have been at war already," said Maj-Gen (retired) Vladimir Dvorkin, chief researcher from the Institute of World Economy and International Relations of the Russian Academy of Sciences. (Interfax-AVN, 04.08.11).
  • Russian and American missile defense technologies are fully compatible and so Russian technology can be used in building a proposed European missile defense, Lt. Gen. Yevgeny Buzhinsky, a former senior figure in the Defense Ministry's international relations department, said. "In the period from 2003 to 2008, we carried out several computer exercises in the format of the Russia-NATO Council in which we specifically studied aspects of compatibility of our means of early warning and interception. The conclusion was that they are compatible.  “We have no confidence in them, and they have no confidence in us. Before this shortfall is filled, it will be impossible to speak of any serious project," he said. (Interfax, 04.05.11)

Nuclear arms control:

  • According to former Russian and American chief foreign-policy officials Igor Ivanov and Madeleine Albright, Russia and the U.S. could slash their strategic nuclear arsenals by 2014, not by 2018, as the New Strategic Arms Reduction Treaty (New START) states, as well as cooperate on missile defense. If the early arms reduction initiative is realized, it could cut the number of warheads down to 1,300 on each side, they wrote in the International Herald Tribune. (Moscow News, 04.08.11).

Energy exports from CIS:

  • No significant developments.

Access to major markets for exports and imports:

  • Prime Minister Vladimir Putin said on Friday that Russia should not implement the rules of the World Trade Organization (WTO) until it becomes a member. "Why the hell should they take us in if we are implementing all the rules anyway," Putin said at a government meeting in the northern city of St. Petersburg. (Reuters, 04.08.11).
  • Russian Deputy Prime Minister Sergei Ivanov met with U.S. Secretary of State Hillary Clinton, Trade Representative Ron Kirk, U.S. president’s special assistant Michal McFaul, and several lawmakers to discuss Russia's entrance into the World Trade Organization. The "political window of opportunity" for Russia to enter the WTO may "start to close down" at the end of the year as the U.S. and Russia enter election years, Ivanov said. Ivanov also spoke at the Council on Foreign Relations where said the next step to “reset” Russian-U.S. relations is to improve economic links, trade, and investment between the two countries. In his speech he also warned that Libya risks degenerating into chaos similar to that in Somalia. (Interfax, 04.05.11, AP, 04.06.11, Bloomberg, 04.08.11).
  • The White House wants Congress to approve permanent normal trade relations with Russia, U.S. Trade Representative Ron Kirk said on Wednesday. Kirk said he expected Russia to finish its longtime bid to join the World Trade Organization in 2011 or 2012. That would require both the House and the Senate to lift a Cold War-era restriction on trade with Russia known as the Jackson-Vanik Amendment. (Reuters, 04.06.11).
  • "It is the number one priority for Washington today to push through Congress bills on Russia's accession to the WTO, including the abolition of the Jackson-Vanik Amendment," Konstantin Kosachyov, chairman of the State Duma International Affairs Committee, said in a blog. Kosachyov had meetings with U.S. State Department and National Security Council figures and members of Congress during his visit to Washington. (Interfax, 04.01.11).

Other bilateral issues:

  • Russia's Finance Minister Alexei Kudrin took the U.S. Federal Reserve to task on Tuesday for its ongoing stimulus program, which he said was hurting emerging markets. (Reuters, 04.05.11).
  • The heads of Roskosmos and NASA will meet in Moscow in the middle of April to discuss further joint space projects, including the creation of a nuclear-powered space engine, Roskosmos head Anatoly Perminov said. (Interfax-AVN, 04.04.11).
  • Russian lawmakers and pundits were quick to welcome the news that Barack Obama would stand for re-election next year. Konstantin Kosachyov, chairman of the State Duma's International Affairs Committee, also has enthusiastically embraced Obama as Moscow's obvious choice. "I will be very happy to see a second Obama term because this will mean a maximum in policy continuity regarding Russia," Mikhail Fedotov, head of Medvedev's human rights council, said. (Moscow Times, 04.06.11).

II. Russia news.

Domestic Politics, Economy and Energy:

  • President Dmitry Medvedev has given Prime Minister Vladimir Putin until July 1 to start removing government ministers from the boards of state companies, adding teeth for the first time to his long-floated initiative to improve the country's investment climate. There are 17 companies with government ministers who might have to quit their posts this summer. Among them are Rosneft, chaired by Deputy Prime Minister Igor Sechin, the close Putin ally responsible for the energy sector, and VTB bank, chaired by Finance Minister Alexei Kudrin, who is deemed a more liberal politician sensitive to the worries of investors.  (Moscow Times, 04.04.11).
  • President Medvedev plans to strip the government of the right to approve sales of 25% or more in shares of energy companies to foreign entities, if these entities are Russian-owned foreign companies, or to international financial organizations. (Gazeta.ru, 04.04.11).
  • President Medvedev on Thursday signed a law that allows opposition parties to field election candidates in regions and municipalities where they have no offices. (Moscow Times, 04.08.11).
  • In a bid to step up control over the country's notorious prison system, the Kremlin authorized on Thursday a range of senior officials and rights activists to access detention facilities without special permits. (Moscow Times, 04.08.11).
  • Russian President Dmitry Medvedev on Thursday called on law enforcement agencies to look into a cyber attack that previously took his blog offline for at least an hour a day. Medvedev’s blog was the target of a "denial of service" attack on LiveJournal, a hosting website popular with government critics in Russia, where the Internet is a channel for popular discontent. A cyber attack on Friday paralyzed the website of popular Russian independent newspaper Novaya Gazeta. (AP, 04.08.11, Reuters, 04.07.11).
  • The ruling United Russia party after the December elections to the lower house of parliament will lose its constitutional majority, while opposition factions will grow stronger, although the configuration of the State Duma will not change by and large, as follows from sociologists' latest forecasts. (Itar-Tass, 04.07.11).
  • The share of Russians who are interested in politics has declined over the past six years, from 48% to 39%, a poll by the national public opinion studies center (VTsIOM) found in March. (Itar-Tass, 04.06.11).
  • President Dmitry Medvedev and Prime Minister Vladimir Putin need to announce quickly which of the two will run for the presidency in 2012 or both could lose popular support, said Igor Yurgens, head of the INSOR political think-tank. (Reuters, 04.05.11).
  • An advisory council to Russian President Dmitry Medvedev says it is close to finishing a report into the death in custody of lawyer Sergei Magnitsky in 2009. (RIA Novosti, 04.06.11).
  • Russia's excise tax on cigarettes will be up 60 percent by 2012 and should continue to rise through 2015, Finance Minister Alexei Kudrin said. With State Duma elections approaching in December, and presidential elections following shortly in March, cutting state benefits seems like political suicide. (Russia Profile, 04.08.11).
  • Oil prices above $100 a barrel are discouraging Russia from diversifying its economy, Deputy Prime Minister Sergei Ivanov said. Ivanov said the current price was unsustainable and that Russia's budget will fall into a deficit when it drops. He would prefer oil and gas prices to be "around maybe $80 per barrel," which is a "more realistic" level. (Bloomberg, 04.08.11).
  • Siemens is considering exiting an atomic power joint venture with Russia's Rosatom after the nuclear crisis in Japan and mounting internal resistance. (Reuters, 04.06.11).
  • An arbitration tribunal has upheld an injunction prohibiting a $16-billion share swap between BP PLC and Russia's OAO Rosneft, but it allowed the U.K. oil major to discuss extending the deal's deadline with Rosneft while BP seeks to resolve a dispute with another Russian partner, BP said Friday. (Financial Times, 04.01.11).
  • Russia hopes to attract $60 billion to $90 billion in foreign investment over five years with a new government-backed fund that is aimed at private-equity investors now deterred by the country's rough business climate, according to Vladimir Dmitryev, head of Vnesheconombank. (Wall Street Journal, 04.04.11).
  • Russia faces a renewed bout of capital flight, with net capital outflows totaling $21.3 billion in the first quarter, as political concerns scared off investment and companies increasingly used domestic debt to repay foreign borrowings. (Wall Street Journal, 04.05.11).
  • Russia's “gray," or semi-legal, economy amounts to 16% of the country's gross domestic product, Statistics Service head Alexander Surinov said on Friday. (RIA Novosti, 04.01.01).
  • Russia is working to create a space nuclear propulsion unit, said Russian Prime Minister Vladimir Putin. Russia will boost its efforts to explore the solar system and seek a bigger share of the market for space launches in the next decade, he said. (Reuters, 04.08.11, Interfax-AVN, 04.07.11).

Defense:

  • President Medvedev announced that conscription will continue in the armed forces for another 10-15 years, following suit set by Yeltsin who also set a deadline for cancelling draft prior to the elections. Medvedev’s aides also announced the president doesn’t support the ministry of defense’s plan to extend term of compulsory service which is now 1 year. He said the monthly salary for an entry-level military specialist may be doubled to around 30,000 rubles ($1,000).  In line with the reform, the armed forces will be downsized to 1 million personnel by 2016. Deputy Chief of the General Staff Vasily Smirnov said on Saturday the reformed forces would be made up of 220,000 officers, 425,000 contract servicemen, and 300,000 conscript soldiers. (Gazeta.ru, RIA Novosti, 04.04.11).
  • Russian Air Force Deputy Commander Lt. Gen. Igor Sadofyev has said he was content with the flight tests of the fifth-generation fighter aircraft. The aircraft can be expected to enter service in the Air Force in 2015-2016, depending on the test results, he said. (Interfax, 04.05.11).

Security and law-enforcement:

  • The leader of Chechnya's Islamist insurgency said he is alive and well after Russian forces said they may have killed him and he hinted he would prove it by organizing more attacks. A man purporting to be Doku Umarov phoned Radio Free Europe late on Thursday to deny reports citing officials as saying he might have been killed in a March 28 assault on an insurgent base in the North Caucasus province of Ingushetia. (Reuters, 04.08.11).
  • The Russian security service is proposing to ban Skype, Hotmail, and Gmail as their "uncontrolled use" may threaten Russia's security, head of the FSB's information and special communication centre, Alexander Andreyechkin, said during a government meeting on Friday. Russian agencies quoted a Kremlin source later Friday as saying that Andreyechkin's statements were "his own opinion and don't reflect the government's policy regarding development of the Internet." "Andreyechkin overstepped his authority and made hasty remarks about these popular services," the source said, RIA Novosti reported. Prime Minister Vladimir Putin's spokesman Dmitry Peskov on the other hand defended Andreyechkin's view, calling it "based on the (FSB) service's duties" and "well-reasoned". (AFP, 04.08.11).

Foreign affairs:

  • Japan has asked Russia to send a floating radiation treatment plant, used to decommission nuclear submarines, which will solidify contaminated liquid waste from the country's crippled nuclear power plant. (Reuters, 04.04.11.)
  • Western military efforts to overthrow Libyan leader Muammar Qaddafi could backfire and fan extremism across the region, Deputy Defense Minister Anatoly Antonov said. (Bloomberg, 04.05.11)
  • The head of the political department of the United Russia party Aleksei Chadayev has sent in his resignation from the post, after he criticized President Medvedev’s official stance on the situation in Libya in his personal blog. Also Konstantin Zatulin, first deputy head of the Duma’s CIS Committee, will be demoted to a rank-and-file committee member, after praising Prime Minister Vladimir Putin for condemning the Western military operation in Libya but criticizing President Dmitry Medvedev on the issue. (Russia Today, 04.08.11, Moscow Times, 04.07.11).
  • Russia and France, the current holder of the presidency of the Group of 20 nations, called on Tuesday for coordinated international action to curb volatility on global commodities markets. The statement came after French Finance Minister Christine Lagarde and Agriculture Minister Bruno Le Maire visited Moscow to launch a French G20 initiative to set up a working group on commodities markets in which Russia would take a coordinating role. (Reuters, 04.05.11).
  • The Gazprom headquarters hosted a working meeting between Alexey Miller, Chairman of the Company’s Management Committee, and Ali Agha Mohammadi, Iranian Deputy Vice President for Economic Affairs.  The parties discussed the opportunities for Russia and Iran to develop cooperation in the oil and gas industry. (ENP, 04.06.11).
  • Russia called on Tuesday for an end to fighting and the start of talks in Ivory Coast, where more than 1,500 people have died in a violent standoff following a disputed presidential election. (Reuters, 04.05.11).
  • Uganda has bought at least eight fighter jets and other military hardware worth $744 million from Russia as it prepares to start oil production in the Lake Albert region. (Wall Street Journal, 04.04.11).
  • Prosecutors on Wednesday gave Poland more documents from their investigation into the plane crash that killed Polish President Lech Kaczynski and 95 others.  (Moscow Times, 07 04.04).

 

Russia's neighbors:

  • Veteran Kazakh President Nursultan Nazarbayev, sworn in for the fourth time on Friday, has retained his prime minister to push through ambitious plans to expand the largest economy in Central Asia. Nazarbayev was re-elected by a landslide on Sunday in an election in which European monitors found "serious irregularities."  (Reuters, 04.08.11).
  • Belarus said on Thursday a proposed international mission to investigate human rights in the country had "no foundation," accusing Western countries and Europe's main security and rights watchdog of double standards. (Reuters, 04.07.11).
  • Ukraine plans to sign an accord with the European Union this year and continue cooperation with the North Atlantic Treaty Organization even as it's "normalizing" relations with Russia, President Viktor Yanukovych said. He also said of Moscow-led customs union of Russia, Kazakhstan, and Belarus: "Development of relations with the customs union will be based on a new accord on free trade and a possible agreement on cooperation." Membership of the organization would entail annual savings of $8 billion on fuel purchases for Ukraine, which relies on Russia for more than 50 percent of its natural-gas needs, Gazprom Deputy CEO Valery Golubev said. Russian Prime Minister Vladimir Putin will visit Kiev next week as Ukraine seeks to review the gas accord signed in January 2009, Prime Minister Mykola Azarov said.  (Bloomberg, 04.07.11).