Russia in Review

An update from U.S.-Russia Initiative to Prevent Nuclear Terrorism for the week of July 9-16, 2010.

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

Nuclear security agenda:

Russia has begun the disposal of a Soviet nuclear submarine (K-431), whose reactor exploded in 1985, killing 10. (Interfax, 07/12/10).

Iran nuclear issues:

President Dmitry Medvedev: "It is obvious that Iran is getting close to acquiring nuclear capability that can be used, in theory, to create nuclear weapons... the Iranian party is not behaving the best possible way."(Kremlin.ru, 07/12/10).
- Obama administration official: "This is about as blunt as Medvedev has ever been about Iran's nuclear program and should be taken as a good sign." (Reuters, 07/13/10).
- Iranian Foreign Minister Manouchehr Mottaki: "These remarks are opposite to the reality." (Fars, 07/13/10).
CEO of Russian Technologies Sergei Chemezov: The advanced S-300 air defense system Russia contracted with Iran has not been cancelled. (Bloomberg, 07/14/10).
Russia's Energy Minister Sergei Shmatko met with Iranian Oil Minister Mir-Kazemi in Moscow and signed a "roadmap" on long-term cooperation in the energy sphere. (Russia Profile, 07/15/10).
- Any energy related projects would violate recently passed U.S. sanctions.

NATO-Russia cooperation, including transit to Afghanistan:

Centers where U.S. troops will train Afghan security forces are expected to be built in Turkmenistan, Uzbekistan, and Kyrgyzstan. (Nezavisimaya Gazeta, 07/13/10).

Counter-terrorism cooperation:

Missile defense:

Frank Rose, deputy assistant secretary of state: U.S. would consider a new global treaty to ban deployment of weapons in space if it meets its security concerns and includes safeguards against cheating. (Reuters, 07/13/10).

Ratification of the New START treaty:

Former US Secretary of State George Shultz and former US Senator Sam Nunn: "We believe the threat of nuclear terrorism remains urgent.... While this is a global issue, there are two countries-the United States and Russia-whose cooperation is absolutely essential in order to successfully deal with current nuclear threats. With New START, our odds of establishing a more cooperative relationship with Russia improve." (States News Service, 07/15/10).

Sergei Ryzhkov, chief of Russia's National Nuclear Risk Reduction Center: "Russia will not have to deactivate combat-ready strategic weapons and destroy them" because of the New START treaty. The problem of "recurring potential" given sufficiently high levels of available warheads is not that critical. What is really of crucial importance: unacceptable damage will be inflicted on one nation or the other three or four times." (Krasnaya Zvezda, 07/14/10).

Energy exports from CIS:

Access to major markets for exports and imports:

Other bilateral issues:

The exchange of U.S. and Russian spies:
- President Barack Obama was first told about the case on June 11. It took16 days before the Russian agents were actually arrested and a swap emerged as an option that could resolve this potentially volatile situation. (WP, 07/09/10).
- Alexey Karetnikov, the 12th Russian alleged spy acting inside the U.S., worked at Microsoft before his arrest and deportation. (FT, 07/15/10).

II. Russia news.

Politics, Economy, and Energy:

Natural Resources and Environment Minister Yuri Trutnev: Russia currently has enough oil reserves for about 25 years and enough gas reserves for around 70 years. (Itar-Tass, 07/15/10).
President Medvedev said his administration had made almost no progress in fighting corruption since he took power two years ago. (AP, 07/14/10).
Russia's grain harvest will drop by at least 20 % from last year, to 77 million metric tons, (Bloomberg, 07/15/10).
Russian industrial production gained 9.7 % in June compared with the same month last year and 12.6 % annual growth in May. (Bloomberg, 07/15/10).
Russia's international currency and gold reserves, the world's third largest, jumped $6.5 billion in the week ended July 9 to $467.3 billion. (Bloomberg, 07/15/10).
Russia's government will set aside $5.6 billion for the construction of a technology hub in the Moscow suburb of Skolkovo. (Bloomberg, 07/15/10).
Premier Vladimir Putin: Russia's 2010 budget deficit may be less than 5 % of GDP. (Bloomberg, 07/12/10).
Russia carried out half of the world's 37 space rocket launches in the first half of 2010. (Interfax, 07/13/10).
Federal Prisons Service: Of Russia's 846,000 prisoners, the overwhelming majority of whom are men, just under half are ill, including 55,000 infected with HIV. (Reuters, 07/14/10).
Long-time governor of the Volga River region of Bashkortostan Murtaza Rakhimov has resigned. (AP, 07/15/10).

Defense policy:

President Medvedev signed a decree disbanding the system of military districts and ordering the creation of four joint strategic commands to replace them. The decree also provides for formation a unified logistical system for the military. (Source)
Air Force chief Alexander Zelin: S-500 SAM system will become the main component of Russia's prospective missile-defense system. Russia is ready to provide S-400's to Belarus. (Interfax, 07/14/10).
MoD: SLBM Bulava missile to be test-fired in mid-August. (Interfax, 07/15/10).

Security policy:

French police have arrested three Chechens suspected of preparing acts of terrorism in Russia. (Reuters, 07/16/10).
FSB has detained a suspect in a suicide bomb attack that killed at least 40 people on the Moscow metro in March and arrested six women preparing new attacks on central Russia. (Reuters, 07/12/10).
Rebels killed two policemen in Dagestan. (AP, 07/13/10).
The bill, passed by Duma, allows the FSB to summon and issue warnings to people whose actions it deems could lead to a terrorist or extremist crime. President Medvedev warned foreign countries against meddling in Russia's domestic security issues. (MT, 07/16/10).
Levada Center poll: 65% of Russians believe the problem of terrorism should be addressed purely by destroying terrorists, 22% believe that they need to be engaged in negotiations. (Interfax, 07/12/10).

Foreign policy:

July 15^th Russian-German summit in Yekaterinburg: Chancellor Angela Merkel spoke out strongly on human rights in Russia, and discussed liberalization of the visa regime with Medvedev, as German companies signed an array of deals worth billions of dollars.
- Siemens signed a $2 billion contract to supply more than 200 regional trains to Russia, announced a venture with two Russian partners to produce wind turbines, and promised to help develop the Skolkovo complex (the Russian equivalent of Silicon Valley).
- Russia is negotiating with Airbus to supply 11 Airbus A330s to Russia for $2.2 billion, or about $2.8 billion. (NYT, AP, 07/15/10).

Russia's neighbors:

Dozens of top officials from Western and former Soviet countries will meet Saturday in Kazakhstan for the OSCE summit to redress international inaction over Kyrgyzstan. (AP, 07/16/10).
US-Ukrainian Breeze 2010 military exercise held in the Crimea on July, 12-23. (BBC, 07/12/10).
Ukrainian President Viktor Yanukovych's sent a letter to President Obama that calls for a strategic partnership. (RFE/RL, 07/14/10).