Russia in Review

A digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for the week of November 26-December 3, 2010

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

Nuclear security agenda:

Russia announced Wednesday that it had created the world's first international atomic fuel bank as part of a global effort to curb the spread of nuclear arms to nations such as North Korea and Iran. The Rosatom state atomic energy corporation said the Siberian fuel reserve -- which will operate under the auspices of the United Nations' International Atomic Energy Agency (IAEA) nuclear watchdog -- will have enough material to refuel two civilian nuclear power plants. (AFP, 12.01.10).
The former Soviet republic of Belarus announced Wednesday that it will give up its stockpile of material used to make nuclear weapons by 2012. According to the James Martin Center for Nonproliferation Studies, Belarus has 170 kilograms (375 pounds) of highly enriched uranium at its Sosny nuclear research institute, but other unofficial sources have made estimates as low as 40 kilograms (88 pounds), which would be enough to make at least several nuclear bombs. (AP, 11.01.10).
In a Feb. 24 State Department cable on WikiLeaks' website, a Russian Foreign Ministry official laid out concerns about the safety and fate of Pakistani nuclear facility workers ambushed by Islamic militants in the last few years."Some were killed, and a number were abducted, and there has been no trace seen of them," the cable reported Russian official Yuriy Korolev as saying during a December 2009 meeting of U.S. and Russian diplomats and security officials in Washington. The cable also expressed concerns that some Pakistani nuclear workers may share extremist religious beliefs similar to those held by Islamic militant groups and could be susceptible to recruitment. He added, "there are 120,000 to 130,000 people directly involved in Pakistan's nuclear and missile programs, working in these facilities and protecting them.... Regardless of the clearance process for these people, there is no way to guarantee that all are 100% loyal and reliable." (Los Angeles Times, 11.29.10).
Russian universities need to be more vigilant to prevent foreign students from acquiring sensitive information concerning nuclear weapons, Deputy Prime Minister Sergei Ivanov said on Wednesday."It is very important to prevent situations where in higher education establishments, economic or financial reasons prevail over questions of national security and international obligations in the field of non-proliferation," Ivanov said. (AFP, 12.01.10).

Iran nuclear issues:

Russia believes that in order to meet the International Atomic Energy Agency's legitimate interest, Iran could open its programs to the maximum, Russian Prime Minister Vladimir Putin said. "At the same time we have no grounds for suspecting Iran of seeking to possess nuclear weapons," he said. (Interfax, 12.02.10).
Russia calls for forming a long-term negotiating mechanism to reach the comprehensive settlement of Iran's nuclear problem, Foreign Ministry Deputy Spokesman Alexei Sazonov said on Thursday ahead of the Sextet-Iran meeting in Geneva. (Itar-Tass, 12.02.10).
Iran has accepted a date for talks with the major powers, President Mahmoud Ahmadinejad said on Monday, and the Islamic state's envoy to Russia suggested they would take place in Geneva in early December. (Reuters, 11.29.10).

NATO-Russia cooperation, including transit to Afghanistan:

The United States will reconsider its military presence in the Central Asian nation of Kyrgyzstan once it winds down its combat mission in Afghanistan in 2014, U.S. Secretary of State Hillary Rodham Clinton said Thursday. She offered no indication whether the Obama administration hopes to maintain a presence at the Manas air base, which plays a central role in moving troops and supplies to support the war effort in Afghanistan. (AP, 12.02.10).
The United States will agree to a demand by Kyrgyz officials that their impoverished country be given a share of lucrative fuel contracts for a critical transit hub here for troops headed to Afghanistan, Secretary of State Hillary Rodham Clinton said Thursday. (Washington Post, 12.02.10).
U.S. Secretary of State Hillary Clinton has praised Kyrgyzstan for what she describes as having proven that parliamentary democracy can work in Central Asia. (RFE/RL, 12.02.10).
Leaders of NATO have rebuffed a proposal from Russian President Dmitry Medvedev to unite Russia's missile defenses with those of the West, said diplomats and NATO officials. People attending the summit said President Barack Obama and other leaders diplomatically rejected the Russian leader's proposal, saying the issue should be looked at by the countries' technical experts. (Wall Street Journal, 11.26.10).

Counter-terrorism cooperation:

No significant developments.

Missile defense:

The Obama administration, despite public denials, held secret talks with Russian officials aimed at reaching a ballistic missile defense agreement that Moscow ultimately rejected in May, according to an internal State Department report. The document stated that administration officials held four meetings with the Russians and last spring presented a draft Ballistic Missile Defense Cooperation Agreement (BMDCA) to Russian negotiators. "The BMDCA was designed to be a framework agreement under which the United States and Russia could begin missile defense cooperation while not limiting either party's missile defense capabilities in any way," states the report, which is labeled "sensitive but unclassified." A senior State Department official said the proposed BMDC agreement is still being negotiated. (The Washington Times, 11.30.10).
The Obama administration "maneuvered to win Russian support for sanctions. It killed a Bush-era plan for a missile defense site in Poland - which Moscow's leaders feared was directed at them, not Tehran - and replaced it with one floating closer to Iran's coast. While the cables leave unclear whether there was an explicit quid pro quo, the move seems to have paid off." (NYT, 11/28/10).
Three key Republican senators, including Senate Majority Whip Jon Kyl (R-AZ) wrote to President Obama Monday to demand more information about the administration's dealings with Russia regarding missile-defense cooperation. (Foreign Policy, 12.01.10).
U.S. diplomats were also instructed that they could tell foreign governments they were being briefed before the Russians on the Obama administration's decision to drastically alter U.S. plans for ballistic missile defense in Europe, although that was not always the case. In a section outlining talking points to be given to Russian diplomats, the cable read, "The National Security Advisor, General [Jim] Jones, will be delivering a similar message to [Russian] Ambassador [Sergey] Kislyak before the [president's] announcement." (Foreign Policy, 11.29.10).
RS-24 (Yars) intercontinental ballistic missiles with splitting warheads, which are being supplied to the Russian Strategic Rocket Forces, will enhance Russia's strategic potential, a Defense Ministry representative told Interfax-AVN."The RS-24 rockets put into service will build up the combat potential of the assault component of the Russian Strategic Rocket Forces in the suppression of missile defense systems and the nuclear deterrence potential of the Russian Strategic Nuclear Forces," Strategic Rocket Forces spokesman Lt. Col. Igor Shevchenko said.The first regiment with an RS-24 mobile missile system was put in service at the Teikovo missile base in the Ivanovo region in early 2010, he noted. (Interfax, 12.02.10).
The S-500 advanced antiballistic missile system is due to enter service in the Russian Air Force over the next decade, Air Force spokesman Col. Vladimir Drik said. (Interfax, 12.02.10).

Ratification of the New START treaty:

In a state-of-the-nation speech Tuesday that dwelled on overcoming the persistent weaknesses sapping Russia, President Dmitry Medvedev suggested that failure to reach agreement on missile defense cooperation in Europe could set off a new arms race in the decade ahead. (AP, 12.01.10).
Russian Prime Minister Vladimir Putin is warning that his country will find it necessary to build up its nuclear forces if the United States doesn't ratify a new arms reduction treaty. Putin told CNN that if the treaty isn't ratified "we'll have to react somehow," including deploying new nuclear technology. (AP, 12.01.10).
President Barack Obama on Tuesday reiterated his call for the Senate to ratify a new nuclear arms control treaty with Russia, calling it "absolutely essential" to U.S. national security. (Reuters, 11.30.10).
The GOP leader on the New START treaty with Russia, Sen. Jon Kyl (R-AZ), linked the administration's drive to ratify the treaty this month to the extension of the George W. Bush-era tax cuts for the wealthy today. "If the taxes all can't be resolved and voted on and completed and spending for the government for the next 10 months completed by, like, next Monday, I don't know how there's enough time to complete START," Kyl said. (Foreign Policy, 12.01.10).
On Tuesday two key Senate Republicans, John McCain of Arizona and George Voinovich of Ohio, expressed confidence that the agreement could be ratified before the end of the year. (Wall Street Journal, 12.01.10).
Lamar Alexander of Tennessee, the No. 3 Republican in the Senate, said Thursday he is "wide open" to supporting the treaty if the administration addresses his concerns about modernization of the remaining U.S. nuclear arsenal. Several more Republican senators, including Olympia Snowe of Maine and Johnny Isakson of Georgia, emerged more positive about completing the treaty in the lame-duck session. (AP, 12.02.10).
Republican Senator Jim DeMint wrote a letter to National Review that says "I will use every tool available to oppose an attempt to rush the debate over the START Treaty during this lame-duck session of Congress." (National Review, 12.02.10).
The directors of the nation's three nuclear laboratories said Wednesday that they were satisfied with the Obama administration's 10-year plan to modernize their facilities, a declaration Democrats hope will clear Republican obstacles to a new arms control treaty with Russia. (New York Times, 12.01.10).
Key Senate leaders and the White House appeared closer to striking a deal in which a vote to ratify a new nuclear arms treaty might be held before year's end, in exchange for setting aside legislative measures that many Republicans oppose. The outlines of a possible agreement appear to be emerging that would allow for floor debate and potential ratification this month of the U.S.-Russian "New START" accord -- signed by Washington and Moscow in April -- but only if Democrats are willing to drop or vote down legislation on immigration and permitting gays to serve openly in the military. (GSN, 12.01.10).
Senate Foreign Relations Committee Chairman John Kerry (D-Mass.) said this morning that he hopes to have a deal on a New START treaty "in the next days," even as the top GOP negotiator continued to insist that Congress must first cut a deal on expiring income tax cuts. (GSN, 12.02.10).
Majority Leader Harry Reid expressed confidence on Thursday that the U.S. Senate would debate the New START nuclear treaty with Russia this year, as he gave no sign of yielding to Republican pressure to scale back his agenda for the coming weeks. (Reuters, 12.02.10).
Five former secretaries of state urged the Senate to ratify in a recent op-ed. "Although the United States needs a strong and reliable nuclear force, the chief nuclear danger today comes not from Russia but from rogue states such as Iran and North Korea and the potential for nuclear material to fall into the hands of terrorists," wrote Henry Kissinger, George Schultz, James Baker, Lawrence Eagleburger, and Colin Powell. "It matters because Russia's cooperation will be needed if we are to make progress in rolling back the Iranian and North Korean programs. Russian help will be needed to continue our work to secure "loose nukes" in Russia and elsewhere," they wrote in the Washington Post op-ed. (Washington Post, AP, 12.02.10).
The U.S. believes Russia has moved short-range tactical nuclear warheads to facilities near North Atlantic Treaty Organization allies as recently as this spring, U.S. officials say, adding to questions in Congress about Russian compliance with long-standing pledges ahead of a possible vote on a new arms-control treaty. When asked to comment, Chief of Russian General Staff Nikolai Makarov said Russia has not deployed missile systems in the Kaliningrad region. (Wall Street Journal, 11.30.10, Interfax, 11.30.10).

Energy exports from CIS:

Russia and Ukraine have reached a settlement over a dispute involving billions of dollars worth of natural gas, bringing a controversial gas trader back into the center of the supply chain to Ukraine and possibly other European markets. (Financial Times, 11.30.10).

Access to major markets for exports and imports:

Russia and the European Union will sign a document next week on Russia's accession to the World Trade Organization (WTO), following the results of bilateral negotiations on the issue, EU delegation to Russia head Fernando Valenzuela said on Monday. (RIA Novosti, 11.29.10).

Other bilateral issues:

Russian President Dmitry Medvedev Friday said leaked diplomatic cables showed the "cynicism" of U.S. diplomacy but suggested they would not seriously upset improving ties with Washington. (Reuters, 12.03.10).
Prime Minister Vladimir V. Putin responded Wednesday to criticism of Russia revealed in United States diplomatic cables published by the Web site WikiLeaks, warning Washington not to interfere in Russian domestic affairs. His comments referred to a cable that said "Russian democracy has disappeared" and that described the government as "an oligarchy run by the security services," a statement attributed to the American defense secretary, Robert M. Gates. Mr. Putin said in the interview that Mr. Gates had been "deeply misled." Asked about a cable that described President Dmitry A. Medvedev as "playing Robin to Putin's Batman," he said the author had "aimed to slander one of us." (New York Times, 12.01.10).
The leaked U.S. diplomatic cables that portray Russia as a virtual mafia state are "total nonsense" of doubtful authenticity, the spokesman of Russian Prime Minister Vladimir Putin said Thursday. "We don't know whether these dispatches, cables are authentic or some kind of fakes," Dmitri Peskov said. "They look like total nonsense." (AP, 12.02.10)
There is nothing new or unexpected for Russia in U.S. State Department cables leaked by the WikiLeaks website, Foreign Ministry spokesman Alexei Sazonov said on Thursday. (RIA Novosti, 12.02.10).
Among the latest revelations are a series of cables about the Alexander Litvinenko case of November 2006, when ahe was murdered in London by a toxic use of the radioactive element polonium. In a meeting recounted in a cable, Maurice Gourdault-Montagne, a senior French diplomat, told Dan Fried, then the state department's top official on Europe, he thought "the murder probably involved a settling of accounts between services rather than occurring under direct order from the Kremlin." The cable then adds: "Fried, noting Putin's attention to detail, questioned whether rogue security elements could operate, in the UK no less, without Putin's knowledge." (Financial Times, 12.02.10).
Russian and U.S. officials will meet next week in Washington to complete talks on more stringent adoption regulations with a view to signing a treaty in the "near future," State Department spokesman Philip J. Crowley said. (Bloomberg, 12.01.10).
PepsiCo Inc will buy control of Russian juice and dairy company Wimm-Bill-Dann for $3.8 billion, its most ambitious overseas purchase, making it Russia's largest food and beverage maker. (12.02.10).
Russian Federal Space Agency and NASA may sign a joint protocol this month which is to define further steps in implementation of different space programs, according to Roscosmos Head Anatoly Perminov. (Interfax, 12.02.10).

II. Russia news.

Domestic Political, Social and Demographic News

President Dmitry Medvedev did not say a word about political stagnation or United Russia's monopoly on power during his annual state-of-the-nation address Tuesday, passing up a chance to elaborate on remarks he made last week. Instead, the 72-minute speech focused on social issues, mainly demography, child protection and public utilities, treading lightly into territory where the ruling tandem's dominant partner, Prime Minister Vladimir Putin, rules unequivocally. (Moscow Times, 12.01.10).
Russian President Dmitry Medvedev said on Monday he was stunned by a migration rule that limits foreigners' business travel around the country to 10 days per year. (RIA Novosti, 11.29.10).
Russian President Dmitry Medvedev fired the head of police in the Krasnodar region after a massacre that killed 12 people, accusing officers of conspiring with criminals. (Bloomberg, 12.01.10).
A recent study has shown that Russians are tiring of excessive stability and want more change. The poll was conducted by the Levada sociology center last week. Only 24 percent of those polled believe Russia is still in the development stage. On Wednesday, President Dmitry Medvedev posted an entry in his video blog in which he called for the country's political system to be revitalized through more competition. (Russia Today, 11.26.10).
Interior Minister Rashid Nurgaliyev urged his personnel to analyze information on organized criminal groups and step up the fight against corrupt government officials. The damage sustained by the Russian budget because of crimes in 2010 has exceeded 160 billion rubles, Nurgaliyev said. A recent poll showed that the average bribe in Russia had almost doubled over the past four years from 5,048 rubles in 2006 to 8,887 rubles in 2010. (Itar-Tass, 11.27.10).
About 30,000 Russian scientists are employed outside Russia, the head of the Federal Migration Service (FMS), Konstantin Romodanovsky, told the Federation Council this week. (Itar-Tass, 11.27.10).
In Russia about 880,000 people are being kept in places of detention, Russian Justice Minister Aleksandr Konovalov told journalists. (Itar-Tass, 11.27.10).
Starting Monday, any Russian citizen can put the new residence registration rules to use. They make it possible to remotely register for temporary residence by mail, or go through the entire procedure via the state services portal, Gosuslugi.rf. (Izvestia, 11.29.10).

Economy and Energy:

In his annual address Russian President Dmitry Medvedev singled out the Russian nuclear industry as a ‘hi-tech' growth engine, noting volume of procurement in this industry grew by 10 times in the past three years and by 25 times compared to 2005. (Belfer Center, 11.30.10).
Russia will balance its budget next year, four years earlier than the government estimates, and post a surplus in 2012 as oil prices "move sharply higher," Goldman Sachs Group Inc. said. (Bloomberg, 12.03.10).
Russia's inflation rate rose to the highest in 11 months in November, putting pressure on the central bank to increase interest rates to keep a lid on consumer-price growth. (Bloomberg, 12.03.10).
Russian stocks advanced to their highest in more than two years as oil rallied and some investors speculated the European Central Bank may step up measures to alleviate the region's debt crisis. OAO Gazprom and OAO Novatek, Russia's two largest natural gas producers, both surged by more than 4 percent. Oil producer OAO Lukoil gained 3 percent, helping push the Micex Index 2.3 percent higher to 1,601.76 by the 6:45 p.m. close in Moscow, its highest since July 2008. (Bloomberg, 12.01.10).
Royal Dutch Shell PLC and Russian gas giant OAO Gazprom signed an agreement on Tuesday that will deepen their existing partnership within Russia and see them work together outside Russia for the first time, Shell said in a statement. (Wall Street Journal, 11.30.10).
Russia may relinquish state control of some companies after 2015 when it completes the first stage of the government's privatization program, Deputy Finance Minister Dmitry Pankin said in a speech in London. (Bloomberg, 12.01.10).
Russia's government will get 20 billion rubles ($636 million) less revenue than previously planned in 2011 because of tax breaks for small businesses, Finance Minister Alexei Kudrin told reporters. (Bloomberg, 12.01.10).
OAO AvtoVAZ, Russia's largest automaker, said domestic sales rose 45.3 percent in the first 11 months from the same period last year to 467,550 vehicles as the government's cash-for-clunkers program boosted demand. (Bloomberg, 12.01.10).
Russia's 2010 coal output may reach 320-322 million metric tons, including 110 million tons for export, Energy Minister Sergei Shmatko said in Moscow. Ten-month output rose 8 percent to 261 million tons, Shamtko said. (Bloomberg, 12.01.10).
Global warming in the next 40 years will allow Russian authorities to save on central heating, increase agricultural production and extend sea navigation in the north, a leading Russian climatologist told a Russian-German conference Wednesday. (Moscow Times, 12.02.10).

Defense policy:

Russian President Dmitry Medvedev said in his annual address to the federal parliament on Tuesday that $637 billion will be spent on modernizing the armed forces. (Belfer Center, 11.30.10).
The Russian armed forces reform in which six military districts were replaced by four have finally been established, said Lt. Gen. Andrei Tretyak, deputy chief of the General Staff, on Wednesday. (Interfax, 12.02.10).
On December 17 Russia intends to conduct the 15th test launch of its experimental Bulava submarine-launched ballistic missile. (GSN, 11.29.10).

Security policy:

The Russian military recently announced that it will form three new battalions in Dagestan, staffed entirely by locals. The first of these battalions, to be located near Makhachkala, is already being trained, while the other two will be formed in the near future and will be stationed in the northern and southern parts of the republic. The total force strength will be around 700-800 people. (Dmitry Gorenburg's blog, 12.01.10).

Foreign policy:

Vladimir Putin, Russia's prime minister, has appealed to German business leaders in Berlin to open the way for more Russian investment in the European Union, with a call for a free-trade zone from the Atlantic to Vladivostok. But the most powerful man in Moscow received a distinctly chilly response on Friday from his German hosts, after bitterly criticizing EU regulations, and general hostility to Russian investors. Putin likened ill-considered economic policy to terrorism and religious intolerance in his speech. (Moscow Times, 11.29.10, Financial Times, 11.27.10).
Silvio Berlusconi, Italy's leader, made an official visit to Russia on Friday, just as a leaked U.S. diplomatic cable alleged an uncomfortably close relationship between him and Russian premier Vladimir Putin. The cable, released this week by WikiLeaks, claims that meetings between Berlusconi and Putin include the exchange of lavish gifts and that Berlusconi and his allies are believed to be personally profiting from Italy's extensive energy contracts with Russia. Berlusconi on Thursday denied allegations, contained in U.S. diplomatic cables released by WikiLeaks, that he personally reaped profits from energy deals between Italy and Russia. (Wall Street Journal, AP, 12.03.10).
The State Duma on Friday issued a declaration condemning the Katyn massacre and for the first time directly blamed Soviet leader Josef Stalin for the 1940 execution of more than 20,000 Polish officers. (Moscow Times, 11.28.10).
Arriving at Russia's World Cup party, Prime Minister Vladimir Putin said Thursday that hosting the 2018 tournament can help end his country's frightening Cold War image. Putin flew to Zurich soon after FIFA gave Russia a convincing victory. Russia may spend as much as 300 billion rubles ($9.6 billion) to host the 2018 World Cup, not counting infrastructure investments, Finance Minister Alexei Kudrin said. (Bloomberg, 12.03.10, AP, 12.02.10).

Russia's neighbors:

The Organization for Security and Cooperation in Europe's (OSCE) first summit in more than a decade has concluded in Kazakhstan's capital, Astana. What was meant to be its final session did not haveany apparent breakthroughs, but efforts appeared to continue to salvage some consensus on the group's future course. World leaders at the summit acknowledged that the OSCE has been unable in recent years to fulfill its task of preventing and resolving conflicts in Europe and former Soviet republics. (RFE/RL, 12.02.10).
OSCE's so-called Minsk Group issued a statement on December 1 saying the presidents of Azerbaijan and Armenia had agreed that the time has come for more decisive efforts to resolve their dispute over the Nagorno-Karabakh conflict. The December 1 statement says Armenia's President Serzh Sarkisian and Azerbaijan's President Ilham Aliyev reaffirmed their commitment to seek a final settlement to that conflict. (RFE/RL, 12.02.10).
Armenia has threatened to formally recognize the breakaway Azerbaijani region of Nagorno-Karabakh as an independent state if Baku tries to use force to win back the disputed enclave and other Armenian-controlled territories near it. (RFE/RL, 12.03.10).
Ukrainian President Viktor Yanukovych has vetoed a tax bill that sparked mass protests across the country. (RFE/RL, 11.30.10).
For the third time in two years, Moldovan voters have failed to give a clear signal as to how they view the country's political future. With some 95 percent of the votes from the November 28 legislative elections tallied, the country seems set for a continuation of the long-running political deadlock between the Communist Party and the West-leaning, center-right governing coalition. (RFE/RL, 11.29.10).
Lithuania's strategy for gaining greater energy independence from Russia has been dealt a setback, when South Korea's KEPCO-the only bidder to build a nuclear power plant-withdrew its offer. (RFE/RL, 12.03.10).
The United States government has allocated $2 million for the upgrade and maintenance of the Georgian Coastal Guard patrol watercraft, U.S. Deputy Chief of Mission in Georgia Kent Logsdon told journalists. (Interfax, 11.30.10).
U.S. diplomats in Georgia knew Tbilisi concentrated military force prior to the war over South Ossetia in 2008, the classified documents exposed by WikiLeaks show. The U.S. ambassador to Tbilisi, John Tefft, reportedly urged the Georgian Foreign Minister and the Deputy Minister of Defense "to remain calm, not overreact, and to de-escalate the situation," the document reads. Meanwhile, foreign military observers in the region issued "numerous reports that the Georgians are moving military equipment and forces toward the north." (Russia Today, 10.29.10).
Russia waged a covert war against Georgia that included missile attacks, arms shipments to anti-government rebels and car bombings since 2004, a newly disclosed U.S. Embassy cable says. Known inside the Russian security services as "active measures," the tactics employed against Georgia included political disinformation campaigns, industrial sabotage and assassinations. A spokesman for the Russian Embassy in Washington, Yevgeniy Khorishko, declined to discuss the cable. But he said there was no proof that Russia had engaged in any covert actions inside Georgia and that the allegations were false. (Washington Times, 12.03.10)