Russia in Review

A digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for the week of December 3-10, 2010

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

Nuclear security agenda:

A newly approved civilian nuclear accord between Russia and the United States will help ensure Moscow supports U.S. efforts against nuclear proliferation, U.S. Deputy Energy Secretary Daniel Poneman said on Friday. The so-called 123 agreement, which creates a foundation for closer cooperation on nuclear research, production, and trade, is set to enter force after surviving a review period that ended on Thursday in the U.S. Congress. The 123 agreement "reinforces our ability to work with Russia to make sure that Iran comes back into compliance with their international obligations," he said. (Reuters, 12.10.10).
Russia and the United States agreed on Tuesday to study the possibility of making Russian research reactors less of a nuclear proliferation risk by converting them to use low-enriched uranium fuel. U.S. Deputy Energy Secretary Daniel Poneman signed the agreement with the head of Russia's state nuclear corporation Rosatom, Sergei Kiriyenko, during a visit aimed to further cooperation on nuclear security and peaceful atomic energy. (Reuters, 12.07.10).
Condoleezza Rice wrote that: "The real threat was that the world's most dangerous weapons could end up in the hands of the world's most dangerous regimes-or of terrorists who would launch attacks more devastating than 9/11..It is in this context that we should consider the potential contribution of the New Start treaty to U.S. national security." (Wall Street Journal, 12.07.10.)
Former Senator Sam Nunn wrote: "The list of national security challenges facing America today is daunting. A short list of key priorities must include: preventing nuclear weapons and materials from falling into the hands of terrorists... yet the linchpin for our strategic cooperation with Russia - the New START Treaty - is at risk." (Atlanta Journal Constitution, 12.06.10).
In a surprise move, Norbert Röttgen, German Minister for Environment, Nature Protection and Reactor Safety, announced "after extensive examination" that he will not grant an export license for the shipment of spent research reactor fuel to Russia. (Fissile material, 12.09.10).
In 2011, Russia's nuclear safety watchdog Rostekhnadzor will draft two federal bills that will aim to strengthen the state's oversight over "use of atomic energy." One bill would amend federal law on "Use of Atomic Energy" while the other would amend federal law "On State Regulation of Nuclear and Radioactive Safety." (Rostekhnadzor, 12.07.10).
Norway contributed $500,000 for deployment of radiation detection technology at the Almaty Airport in Kazakhstan, the U.S. National Nuclear Security Administration announced. (GSN, 12.06.10).

Iran nuclear issues:

A cable recounting a meeting between U.S. Defense Secretary Robert Gates and Herve Morin, his French counterpart quotes Gates recalling that Russian Prime Minister Putin once told him Iran was Russia's greatest threat. (Foreign Policy, 12.08.10).

NATO-Russia cooperation, including transit to Afghanistan:

Russia's foreign ministry said it was "bewildered" by revelations that the NATO military alliance had drawn up secret contingency plans for the defense of Eastern Europe from Russian military aggression. Classified US diplomatic cables show that nine NATO divisions - US, British, German and Polish - have been identified for combat operations in the event of an attack on Poland or the three Baltic states. (Guardian, 12.07.10).
Ties with Russia are improving, NATO insisted Thursday, despite strains created by the release of confidential U.S. cables regarding NATO defense plan for the Baltic countries, code-named Eagle Guardian. In Moscow, Russian Foreign Minister Sergey Lavrov noted that the plans released on WikiLeaks originated in December 2009, when the alliance and Russia were moving to mend ties strained by the 2008 war between Russia and Georgia. "It raises a question when was NATO sincere," Lavrov said. (AP, 12.09.10).
The NATO defense plan for the Baltic countries is a mistake and should be revised, Russian permanent envoy to NATO Dmitry Rogozin said on Tuesday. (Interfax, 12.08.10).
It was no secret for Moscow that a few years ago the U.S. and NATO leaders devised a conceptual document on combat operations against Russia in the Baltic region, a military diplomatic source said in Moscow on Tuesday. (Interfax, 12.07.10).
Alexander Kramarenko, director of the policy planning department at the Foreign Ministry, wrote: "Of course, Russia will never knock at the alliance's door, but if NATO invites Russia to join, it will be difficult to decline." (Moscow Times, 12.09.10.)
A new Kyrgyz state company that will provide 50 percent of all fuel needed by the U.S. transit center at Manas airport near Bishkek was officially launched. (RFE/RL, 12.08.10).

Counter-terrorism cooperation:

U.S. Ambassador John Beyrle's Nov. 5, 2009 cable to FBI Director Robert S. Mueller makes clear that FSB Director Alexander Bortnikov, SVR Director Mikhail Fradkov and Internal Affairs Minister Rashid Nurgaliyev, with whom Mueller was to meet in Moscow, "feel threatened - ideologically and materially - by the 'reset' in [Russian-U.S.] relations." But, he added, they appreciate the benefits from cooperation with Washington. (Washington Post, 12.07.10).

Missile defense:

NATO must ensure that Russia is fully involved in the Atlantic alliance's plans for missile defense or risk triggering a new arms race, Russia's President Dmitry Medvedev was quoted as saying Monday. "If Russia does not find a place for itself within that system, in 2020 it may be that an anti-missile defense umbrella will become a factor destabilizing the nuclear equilibrium and diminishing Russia's defense capacity, and this may lead to a new arms race," Medvedev said. (Reuters, 12.06.10).
Russia's envoy to NATO Dmitry Rogozin identified "red lines" for Russia-NATO cooperation on a joint missile defense. "The system should be oriented exclusively at the (areas) outside the Euro-Atlantic space, the concentration of ABM facilities should correspond to the real challenges and risks and only in the areas which are recognized by experts as missile hazardous. If missile defense elements appear near the north-west border of the Russian Federation under the pretext of setting up a global ABM system, we will consider this a threat to our security with all the ensuing military and technical consequences," he said. (Itar-Tass, 12.09.10).
A planned U.S.-NATO missile shield could counter potential attacks from Syria and Iran but also "missiles coming from elsewhere," according to leaked U.S. State Department dispatches. "With regard to how NATO might defend itself from missiles coming from elsewhere than Iran or Syria, [then-Brig. Gen.] John Hesterman of the joint staff said that sea-borne platforms could provide surge capability against threats from an unforeseen direction," the cable states. (GSN, 12.07.10).
The Russia-NATO Council is expected this week to finalize a "roadmap" for potential Russian participation in the military alliance's antimissile initiative. (GSN, 12.03.10).
When Poland learned in 2008 that the U.S. would not be giving it operational Patriot missiles to bolster its defenses, one minister dismissed what his nation would be getting instead as "potted plants," according to a newly released diplomatic cable. (AP, 12.07.10).

Ratification of the New START treaty:

The State Duma is preparing amendments to the New START arms treaty in case U.S. legislators request changes, Speaker Boris Gryzlov said. "We have numerous amendments requiring significant debate to the treaty as well as the resolution of ratification that we would like to offer and have votes on," the senators wrote. "It would be unwise and improper to do this in a hurried fashion over the course of only a few days." (Moscow Times, 12.06.10).
The New START treaty may now hinge on the fate of President Barack Obama's top domestic goal, winning approval of a contentious tax cut plan. (AP, 12.07.10).
Obama said Wednesday that he had discussed holding a vote on the New START treaty with Russia this year with Senate Minority Leader Mitch McConnell (R-KY), and that he expected this to happen. But if the Senate GOP leader on this issue, Sen. Jon Kyl (R-AZ), is close to striking a deal, he is keeping that information to himself. "Senators don't want to feel like they're being cheated of that adequacy of time. They don't want to be jammed," Kyl said. Kyl said last week that Republican lawmakers could prevent the Senate from weighing ratification until March. Kyl reiterated again on Wednesday there wasn't enough time left in this lame-duck session of Congress to consider it. (Foreign Policy, 12.08.10, GSN, 12.06.10).
A huge fight is brewing on Capitol Hill over the dozens of amendments GOP senators are preparing to bring up during the debate, several of which the administration could consider "treaty killers." The amendments being circulated now cover the whole litany of concerns that GOP senators have raised about the New START treaty for months, including missile defense, nuclear modernization, Iran policy, tactical nuclear weapons, and verification of the treaty's provisions. (Foreign Policy, 12.09.10).
Sen. Richard Lugar "is hopeful we can get to it right away next week," Lugar spokesman Mark Helmke said. (RealClearPolitics, 12.08.10).
New START chief negotiator Rose Gottemoeller defended the Obama administration's decision to withhold the negotiating record between the United States and Russia -- a key factor fueling Republican opposition to the treaty. (Washington Examiner, 12.09.10).
U.S. Deputy Energy Secretary Poneman said: "We've been over a year without inspectors on the ground, so we are pressing very hard for this to achieve the consent and ratification it needs from the U.S. Senate, and we're going to keep pressing that case." (Reuters, 12.10.10).
Republicans weighing a White House bid fiercely oppose a new nuclear arms treaty with Russia."It's an obsolete approach that's a holdover from the Cold War and a bilateral treaty without taking into account multilateral threats," former House Speaker Newt Gingrich said. Gingrich joins Mitt Romney, Tim Pawlenty, John Thune and Sarah Palin - all outspoken critics of the pact. (AP, 12.09.10).
Former President George H. W. Bush yesterday added his name to the list of big-time Republican officials endorsing the New START treaty. (National Journal, 12.09.10).
Former Soviet leader Mikhail Gorbachev is appealing to Republicans to put aside "domestic politics" and ratify the strategic nuclear arms agreement that Obama recently negotiated with Russia. (Newsmax, 12.08.10).
Eighty-two percent of those polled in U.S. said they favor the idea of the U.S. and Russia coming to an agreement to limit nuclear weapons, a huge show of support for the Obama administration's push to have Congress ratify the new START treaty. (CBS News, 12.03.10).
Evangelicals and Roman Catholic bishops called on Congress Tuesday to ratify the new nuclear arms reduction treaty. (CNN, 12.07.10).

Energy exports from CIS:

Russia may again offer oil and gas deposits under so-called production sharing agreements after years of government opposition and Royal Dutch Shell Plc's sale of control over the Sakhalin-2 project, Energy Minister Sergei Shmatko said. (Bloomberg, 12.08.10).
U.S. officials on Monday denounced a WikiLeaks posting that catalogs hundreds of crucial overseas facilities that, if attacked by terrorists, could harm American interests. The catalogue includes a gas facility in Russia's Nadym described as "the most critical gas facility in the world." (LA Times, 12.07.10).
In spite of the trouble in the world economy, Russia will continue to develop the Shtokman gas condensate field, said Russian Prime Minister Vladimir Putin. (Barents Sea Observer, 12.10.10).

Access to major markets for exports and imports:

President Obama on Thursday voiced strong support for Russian membership in the World Trade Organization. Obama and President Medvedev in June set a September 30 deadline for resolving bilateral issues that blocked Russia's entry. The two sides made significant progress, but the United States still has a few issues to be addressed, U.S. Trade Representative Ron Kirk told the Export Council. (Reuters, 12.09.10).
ARMZ, the uranium mining division of Russia's state-owned Rosatom nuclear power group, is set to control up to half of U.S. uranium output by the middle of the decade, after American authorities gave the go-ahead to the partial takeover of Uranium One of Canada by ARMZ. (Financial Times, 12.05.10).

Other bilateral issues:

Prime Minister Vladimir Putin assailed Washington on Thursday for comments in diplomatic cables released by the WikiLeaks group, raising fresh doubts about the revelations' effect on U.S.-Russian relations. U.S. Ambassador John Beyrle told The Moscow Times earlier this week that he was "heartened" by the official reaction from Foreign Minister Sergei Lavrov, who said relations should be based on actions, not words. (Moscow Times, 12.10.10).
Russian planes flew in the region of joint U.S.-Japanese naval training drills in the Pacific Ocean but did not violate airspace rules, Russia's Interfax news agency reported on Wednesday. (Reuters, 12.08.10).

II. Russia news.

Domestic Political, Social, and Demographic News

The Kremlin's top economic aide Arkady Dvorkovich said he believes President Dmitry Medvedev wants to seek a second term in Russia's 2012 presidential election.
He also said he believed Medvedev and Prime Minister Vladimir Putin had not yet decided who will run. (Reuters, 12.10.10).
Democracy cannot be built in a poor country while an effective economy is impossible in conditions of dictatorship, President Dmitry Medvedev believes. (Interfax, 12.06.10).
Former Soviet leader Mikhail Gorbachev has warned that Russia's undemocratic political landscape is threatening its stability. Gorbachev said that the lack of political competition, flawed elections, shrinking media freedom, and rampant corruption have slowed down Russia's development. (AP, 12.10.10).
U.S. Ambassador John Beyrle's Nov. 5, 2009 cable spelled out the "tandem" relationship between Russian President Dmitry Medvedev and Prime Minister Vladimir Putin, noting that "although there is evidence that their closest advisors spar privately over policies and personnel matters, the two leaders appear united and project complete ease with one another in the media." (Washington Post, 12.07.10).
Two passengers were killed and 83 others injured on Saturday when two engines failed on a Russian passenger jet shortly after takeoff and the third engine cut out as the plane made an emergency landing, skidding off a snowy runway and breaking apart, officials said. (AP, 12.04.10).
A majority of Russians are weary of rampant corruption, with 52 % ready to report graft, according to an annual corruption report by Transparency International released Thursday. Russia is the world's most corrupt major economy, according to Transparency International's 2010 Corruption Perceptions Index. The report ranked Russia 154th among 178 countries and placed it alongside Tajikistan and Kenya. Russia will continue to cooperate with international anti-corruption bodies, Presidential Aide Sergei Naryshkin said in an interview published in the Rossiiskaya Gazeta newspaper on Thursday. He said that Russia was taking systemic measures as part of an international crackdown on corruption. (Bloomberg, Rossiiskaya Gazeta, Moscow Times, 12.10.10).

Economy and Energy:

Oil could slip below $60 a barrel for a six-month period within three years, Russian Deputy Prime Minister Alexei Kudrin said. "If the price is not $82, but $50, then the deficit could be around 3% of GDP, and if in 2015 we have a deficit of 2% of GDP (with oil at $82/barrel), then at $50 per barrel we'd have a 5% deficit," he said. (Interfax, 12.06.10).
Russia is set to become the largest consumer market in Europe within ten years. After bottoming spectacularly in early 2009, Russian equities rebounded sharply to double by the end of the year. The gains have continued in 2010, with the RTS index up around 20% so far this year. The recovery in the economy, while less spectacular, has picked up in 2010, when growth of around 4.5% is forecast. Economists predict a similar pace in 2011. (Wall Street Journal, 12.10.10).
Russia's budget deficit widened in the first 11 months, swelling to 911.5 billion rubles in November, or 2.2 % of gross domestic product, from 783.6 billion rubles in the previous month, the Finance Ministry said on its website today. (Bloomberg, 12.10.10).
Russia's Federal State Statistics Service maintained its estimate of third-quarter gross domestic product growth at 2.7 %, the service said on its website today. (Bloomberg, 12.10.10).
Russia is protected from a sovereign- debt crisis similar to the one gripping Europe because of the size of its international reserves and the low level of state borrowing, Finance Minister Alexei Kudrin said. The world's biggest energy exporter had accumulated $481.5 billion of gold and foreign-currency reserves, the third-largest after China and Japan, as of Dec. 3. Russia's sovereign debt reached 3.7 trillion rubles ($119 billion), or 11.5 % of gross domestic product, as of Oct. 1, according to Bloomberg calculations. (Bloomberg, 12.09.10).
Net capital outflow from Russia was about $9 billion last month, raising the figure to $29 billion so far this year, central bank Chairman Sergey Ignatiev said. (Bloomberg, 12.08.10).
Russia's biggest bank OAO Sberbank on Monday said net profit in the third quarter jumped tenfold to $1.46 billion as it set aside lower provisions against bad loans and amid a spike in corporate lending. (Wall Street Journal, 12.06.10).
Preliminary trade for the yuan-ruble pair will begin on Moscow's Micex exchange next week, with China looking to use rubles to pay for Russian timber, seafood, and coking coal as the two countries seek to strengthen currency ties while sidestepping the dollar. (Wall Street Journal, 12.06.10).
Two of Russia's largest grocery store chains, Pyaterochka and Kopeika, said on Monday that they would merge their operations in a move that would better position them to compete with Wal-Mart, which is expected to enter the Russian market. (New York Times, 12.07.10).
Telecom gear maker Nokia Siemens Networks is set to become the latest foreign company to pledge its support to the Kremlin's new flagship technology hub near Moscow, the head of the hub said on Thursday. (Reuters, 12.09.10).
Adverse weather conditions - and the resulting threat of power outages - are said to have caused the shutdown of six research reactors in operation at the State Scientific Centre "Research Institute of Atomic Reactors" in Russia's Dimitrovgrad. (Bellona, 12.10.10).

Defense:

Russia and Kazakhstan are looking to cooperate on a ballistic missile early warning system and Moscow is planning to sell Astana its S-300 defense missile system. (Reuters, 12.08.10).
Russian President Dmitry Medvedev has directed that the nation's air and missile defense systems be integrated prior to next December. (GSN, 12.06.10).
Israel has supplied a batch of drones to the Russian Defense Ministry and trained Russian specialists to operate them, a military diplomat said. (Interfax, 12.09.10).
The presidents of all member states of the Collective Security Treaty Organization (CSTO) have confirmed they will attend a planned session of the Collective Security Council in Moscow on Friday. (Interfax, 12.09.10).
Russian news reports say a rocket and its payload of three communications satellites has fallen into the Pacific Ocean after failing to reach orbit, the latest setback to that country's attempts to develop a system to rival the U.S. Global Positioning System. (AP, 12.054.10).
On December 5 the Strategic Rocket Forces successfully launched a Topol (SS-25) missile from the Kapustin Yar test site toward the Sary-Shagan test site in Kazakhstan. (Russian strategic nuclear forces, 12.06.10).
Russia has prepared nuclear warheads that would be carried by new submarine-launched ballistic missiles, RIA Novosti reported. (GSN, 12.08.10).

Security and law-enforcement:

Drug control agencies from Russia, Afghanistan, Pakistan, and Tajikistan agreed Wednesday to step up cooperation to stop the flow of drugs through Afghan borders. (AP, 12.08.10).
Russian financial institutions reported 120 trillion rubles ($3.8 trillion) of suspicious transactions to the anti-money laundering watchdog in the first nine months of 2010. (Reuters, 12.06.10).
Manifestations of terrorism and extremism in 2010 show the high level of terrorist danger in our country, Russian Interior Minister Rashid Nurgaliyev said at a meeting of the military council of the ministry's Interior Troops central command. These troops guard nuclear facilities. (Interfax, 12.03.10).

Foreign affairs:

Polish and Russian leaders vowed Monday to open a new chapter in their relations, a move that could eventually end centuries of enmity and distrust between two great nations. The United States has pushed the "reset" button to improve its relations with Russia, but Poland's president said on Wednesday his country was not yet able to push that button all the way down. (Reuters, 12.08.10, New York Times, 12.06.10).
Visa-free travel should be introduced between Russia and the European Union in a way that it does not destabilize the European Union, Russian President Dmitry Medvedev said at the EU-Russia summit. (Interfax, 12.08.10).
The European Union and Moscow have reached a deal settling outstanding trade issues which should smooth the way for Russia to become a member of the World Trade Organization next year. EU Commission President Jose Manuel Barroso met with Russian President Dmitry Medvedev on Tuesday and said that the agreement marked a "milestone" in relations. President Dmitry Medvedev said on Tuesday that European Union backing for Russia's bid to join the World Trade Organization had made accession "a reality." (AP, Reuters, 12.07.10).
Russia may join the World Trade Organization in the first half of 2011, attracting investors and opening markets for the country's exporters, Economy Minister Elvira Nabiullina said after the EU-Russia summit. (Bloomberg, 12.09.10).
Russian Prime Minister Vladimir Putin said the continued existence of visas for travel between Russia and the European Union is politically motivated and an "atavism of the past" that must be eliminated. (Bloomberg, 12.10.10).
Lawyers for Ekaterina Zatuliveter, a Russian woman detained in Britain on suspicion of spying, challenged her deportation order Thursday, claiming she was the innocent victim of a bungled secret service operation. (AP, 12.09.10).
Nineteen nations have declined invitations to attend Friday's Nobel Peace Prize ceremony - an event overshadowed by a Chinese boycott. Russia, Saudi Arabia, Colombia and Pakistan are among the stay-away nations. (Financial Times, 12.08.10).

Russia's neighbors:

Tajikistan on Thursday denied allegations in leaked U.S. diplomatic cables published by WikiLeaks this week that Tajik Foreign Minister Hamrokhon Zarifi has promised to help carry out a supposed Washington-backed plot to remove the Central Asian country's pro-Russian president, Emomali Rahmon. (TCA, 12.03.10).
The former Soviet republic of Georgia wants the United States to outline the steps necessary for it to join NATO, Deputy Prime Minister Georgia Baramidze said in Washington, D.C. (AP, 12.09.10).
"A decision to move towards a more robust military relationship with Georgia will imperil our efforts to re-start relations with Russia," read a June 2009 cable signed by U.S. Ambassador John Beyrle. (Foreign Policy, 12.07.10).
Georgia accused a Russian military officer of organizing a series of bomb attacks in Tbilisi, the capital, last month. Six Georgian citizens have been arrested and charged with planning bomb attacks near the U.S. embassy, railway stations, and the Labor party headquarters in Tbilisi. But a Russian parliamentarian dismissed the accusations on Tuesday. (Financial Times, 12.08.10).
During the 2008 armed conflict between Russia and Georgia, some websites spread tools that average Russian users could download to join denial-of-service attacks on Georgian government and media sites. (Financial Times, 12.08.10).
Belarusian President Aleksandr Lukashenka said in televised comments today that his government in turn had agreed to pass on to Russia the export duties it charges on products it makes from the imported Russian oil. (RFE/RL, 12.09.10).