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Russia in Review

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Russia in Review: a digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for November 21-26, 2014

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

Nuclear security agenda:

  • David M. Luna of the U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs said: “Following the break-up of the Soviet Union, we saw nuclear scientists from around the post-Soviet landscape smuggling material out of their labs and attempting to sell it on the black market…. There have also been unsubstantiated reports in the past of Chechen rebels planning to attack Moscow with WMD acquired in Russia's own black markets.” (U.S. State Department, 11.20.14).

Iran nuclear issues:

  • Moscow hopes another extension of the six-party talks with Iran will be the last, says Russian Deputy Foreign Minister Sergei Ryabkov. "With respect to the decisions, the last four days have been more important than the last four months, and the issues that remain are so obvious and clear that we are very hopeful that the extension that was announced will really be last," Ryabkov said. (Interfax, 11.25.14).

NATO-Russia relations, including transit to and from Afghanistan:

  • The US army plans to station about 150 tanks and other armored vehicles in Eastern Europe next year, a top American general Ben Hodges said. (Sputnik, 11.26.14)

Missile defense:

  • No significant developments.

Nuclear arms control:

  • No significant developments.

Counter-terrorism agenda:

  • U.S. ambassador John Tefft said he was encouraged by comments made by Russian President Vladimir Putin last week that Moscow was "ready for practical cooperation with our American partners" on issues of international security such as combating terrorism threats. (Moscow Times, 11.24.14).

Cyber security:

  • A cyber snooping operation reminiscent of the Stuxnet worm and billed as the world’s most sophisticated computer malware is targeting Russian and Saudi Arabian telecoms companies. Cyber security company Symantec said the malware, called “Regin”, is probably run by a western intelligence agency and in some respects is more advanced in engineering terms than Stuxnet. Twenty-eight percent of the infections occurred in Russia, with another 24 percent hitting Saudi Arabia. Five percent more were in Pakistan, and another 5 percent in Iran. (Financial Times, 11.23.14, Washington Post, 11.24.14).
  • A state system to detect and warn against computer attacks is being created in Russia under the guidance of the Federal Security Service. (RBTH, 11.25.14).

Energy exports from CIS:

  • Russia's oil czar Igor Sechin said the country wouldn't reduce production to support prices, raising the stakes ahead of a crunch summit of the Organization of the Petroleum Exporting Countries on Thursday. And Russia’s Energy Minister Alexander Novak said Wednesday that his country’s oil companies will keep production steady in 2015. (Wall Street Journal, 11.26.14, Reuters, 11.26.14).

Bilateral economic ties:

  • No significant developments.

Other bilateral issues:

  • “The president of the United States and I know each other. I can’t say that we have quite close relationships, but he is a clever person,” Russian President Vladimir Putin said. (Moscow Times, 11.24.14).
  • The new U.S. Ambassador to Russia, John Tefft, has said the current crisis between Moscow and Washington can be resolved and that Western sanctions may be rolled back if Russia implements the terms of the Minsk peace plan for Ukraine that it co-signed. (Moscow Times, 11.24.14).
  • A recent survey by Russia’s Public Opinion Foundation showed that 37% of Russians have a negative attitude toward the U.S., compared with 33% in March and 17% in 2001. Only 11% have a positive attitude to the U.S., compared with 35% in 2001, the poll showed. POF survey allows respondents to say that they are indifferent to the U.S.—an option chosen by 46%. (Wall Street Journal, 11.24.14).
  • Sanctions on Russia are defeating U.S. companies’ efforts to automate compliance using screening software.  The complexity of U.S. sanctions against Russia is forcing firms to manually check thousands of transactions, slowing deals and raising the cost of compliance. (Wall Street Journal, 11.25.14).
  • Oleg Potapenko, editor-in-chief of independent Russian news website Amurburg,  says he will seek political asylum in the United States. (RFE/RL, 11.26.14).

II. Russia news.

Domestic politics, economy and energy:

  • Vladimir Putin said he did not intend to rule Russia for the rest of his life and that he would obey the Russian constitution, which mandates that he step down as president in 2024 if he wins another six-year term in 2018. Staying in office throughout his life would be "detrimental for the country, and I don't need it either," Putin said. (Washington Post, 11.24.14).
  • In an interview published Sunday, Russian President Vladimir Putin said that by imposing the sanctions, the West was trying to “to sow discord within the elites, and then maybe into the society.” On Saturday, Russian Foreign Minister Sergei Lavrov accused the West of “seeking regime change” in his country by imposing the sanctions against Moscow. (Wall Street Journal, 11.24.14).
  • Russian President Vladimir Putin will present an annual address to the Federal Assembly on December 4. (Interfax, 11.26.14).
  • Lower oil prices are here to stay for the long term and the country’s budget should be adjusted accordingly, Russia’s finance minister said Wednesday. “The new oil prices, between $80 and $90 a barrel, most probably will stay in the mid to long-term,” Anton Siluanov told the upper house of parliament, before it formally approved the country’s budget for the next three years. The country’s budget for the next year is still based on an average oil price of $100 per barrel and economic growth of 1.2%. (Wall Street Journal, 11.26.14).
  • Lower oil prices and Western financial sanctions imposed over the Ukraine crisis will cost Russia around $130-140 billion a year — equivalent to around 7 percent of its economy — Finance Minister Anton Siluanov said Monday. "We're losing around $40 billion a year because of geopolitical sanctions, and about $90 billion to $100 billion from oil prices falling by 30 percent," he told a news conference. (Reuters, 11.24.14).
  • The ruble fell for a second day on Wednesday on fading hopes that OPEC will agree to cut oil output and as foreign-currency sales dried up after exporters finished paying a major tax to the state budget. At 1130 GMT, the ruble was around 1.2 percent weaker against the dollar at 46.81 and 1.3 percent weaker at 58.29 versus the euro. (Reuters, 11.26.14).
  • Standard & Poor's said in its medium-term outlook that gross domestic product would grow 0.7 percent next year and 1.4 percent in 2016. (Moscow Times, 11.25.14).
  • Russian economic growth will fall from 0.3 percent this year to zero percent in 2015, the Organization for Economic Cooperation and Development said Tuesday as it cut its forecasts for Russia's struggling economy. (Moscow Times, 11.25.14).
  • A planned high-speed railway stretching some 7,000 kilometers between Moscow and Beijing will cost about 7 trillion rubles ($153 billion) to build, said Alexander Misharin, who heads Russian Railways' subsidiary High-Speed Rail Lines. Over half of the sum, or 4 trillion rubles ($87.5 billion), is expected to come from Chinese investors, he said. (Moscow Times, 11.21.14).
  • Russia is heating up 2.5 times faster than the rest of the world, but may yet stand to benefit from it, the country's chief meteorologist said.  (Moscow Times, 11.25.14).

Defense:

  • No significant developments.

Security, law-enforcement and justice:

  • A court in Russia’s North Caucasus Republic of Kabardino-Balkaria is set to open proceedings on November 24 against 22-year-old Murat Nagoyev accused of fighting with militant groups in Syria.  (RFE/RL, 11.24.14).
  • Officials in Russia's volatile North Caucasus Republic of Dagestan say local police have killed two suspected militants. Security troops started a counterterrorism operation in Dagestan's southwestern Caspian Sea port city of Derbent shortly after midnight on November 21. (RFE/RL, 11.21.14).

Foreign affairs and trade:

  • “We realize the malignity of the Iron Curtain for us,” President Vladimir Putin said. “There were periods in the history of other countries, which tried to isolate themselves from the rest of the world and paid very dearly for that, practically by degradation and collapse. Undoubtedly we are not taking this path. And nobody is going to build a wall around us. It is impossible!” (Moscow Times, 11.24.14).
  • French President Francois Hollande on Tuesday suspended the delivery of a Mistral-class carrier to Russia, a move that risks deepening tensions with the Kremlin over its incursions into Ukraine. Russian officials struck a cautious tone, saying Moscow wouldn't make any immediate claims for compensation for the delayed delivery. (Wall Street Journal, 11.26.14).
  • Norway has suspended all political contact with Moscow and has canceled a previously planned joint military exercise with Russia because of the conflict in Ukraine, the Norwegian prime minister said. (Moscow Times, 11.24.14).
  • President Vladimir Putin has discussed Russia's relations with Syria with visiting Syrian Foreign Minister Walid al-Moallem in Sochi.  (RFE/RL, 11.26.14).
  • The first-ever contract for exports of Russia’s  S-400 Triumph air defense missile system has been signed with China. (Interfax, 11.26.14).
  • German authorities have released a woman convicted of spying for Russia and deported her after she served half of her prison sentence. (RFE/RL, 11.24.14).
  • France's far-right National Front party, led by Marine Le Pen, says it has borrowed 9 million euros from Moscow-based First Czech Russian Bank.  (RFE/RL, 11.24.14).

Russia's neighbors:

  • Russia's annexation of the Crimean Peninsula was a "strategic decision," Russian President Vladimir Putin said. "When a Russian feels he is right, he is invincible," Putin said. "I never take arbitrary decisions, decisions that may entail consequences I don't foresee. And if I cannot see the consequences, I prefer to wait." (Washington Post, 11.24.14).
  • Ukrainian President Petro Poroshenko said Ukraine was committed to making the reforms and investments necessary to meet NATO requirements but that a referendum would be held after those milestones are reached, sometime around 2020, to determine whether or not to join what is now a 28-nation alliance. A poll this month found 51 percent of Ukrainians in favours of joining NATO, up from just 20 per cent a year ago. Only a quarter are now opposed. (AFP, 11.25.14, Wall Street Journal, 11.24.14).
  • German Chancellor Angela Merkel's government is alarmed by President Petro Poroshenko's plan to hold a referendum on Ukraine joining NATO. Ukrainian membership of the North Atlantic Treaty Organization is not on the table for Merkel, according to one German official, who said that a referendum wouldn't bring Ukraine closer to NATO since decisions on membership are made by Alliance countries and not voters. Any bid to join NATO can only end badly, a second official said.  (Bloomberg, 11.26.14).
  • Germany's Foreign Minister Frank-Walter Steinmeier has said he is against Ukraine joining NATO. In an interview with Der Spiegel, he said he considers “that it is possible for NATO to have a partnership with Ukraine, but not membership.” He also added that he does not believe it is realistic for Ukraine to join the European Union in the foreseeable future, as the economic and political modernization of Ukraine is a “project for a few generations.”  (RT, 11.23.14).
  • Ukraine should not enter NATO, the country should be neutral and its Finlandisation should be implemented, Czech President Milos Zeman said in Kazakhstan. (Ceska Tiskova Kancelar, 11.25.14).
  • German Chancellor Angela Merkel on Wednesday accused Russia of violating Europe’s peaceful order, insisting that economic sanctions against the country will remain in place due to its actions in Ukraine. Russia denies involvement in the conflict despite what Ukraine and NATO say is clear evidence of direct military support for the separatists. (RFE/RL, 11.26.14, Wall Street Journal, 26.14).
  • In Kiev U.S. Vice President Joseph R. Biden Jr. condemned Russia for its ''unacceptable'' military intervention in Ukraine, while exhorting Ukraine's newly elected government to complete its democratic and anticorruption reforms. Mr. Biden did not address lethal aid during his remarks on Friday, announcing only a further $20 million in aid for law enforcement and judicial reform. (New York Times, 11.22.14).
  • U.S. General Philp Breedlove who is NATO's senior commander in Europe has said in Kiev that there is a large number of Russians providing "backbone guidance and training" to separatist forces in eastern Ukraine, and promised that the United States will support Ukraine in the face of an "immediate threat from Russia" to its sovereignty. NATO is also concerned by Russian armed forces in Crimea, he said. (RFE/RL, Interfax, 11.26.14).
  • NATO's door for Ukraine remains open, but Kiev has not applied for membership, the bloc's Chief Jens Stoltenberg said Monday. (Sputnik, 11.24.14).
  • "We have agreed on supplies of concrete elements of concrete armaments for the Ukrainian armed forces," Ukrainian President Petro Poroshenko said after talks with Lithuanian President Dalia Grybauskaite. (Reuters, 11.24.14).
  • Ukrainian President Petro Poroshenko has compared the Holodomor of 1932-33 with the current war in eastern Ukraine, saying the war is a continuation of imperial genocide against the Ukrainian people. (RFE/RL, 11.21.14).
  • Ukraine has received a total of $8.6 billion in foreign loans, the country's Prime Minister Arseniy Yatsenyuk said on Wednesday after a government meeting. (Tass, 11.26.14).
  • A total of 28,000 people have been let go as a result of the reduction in costs of keeping Ukrainian public officials, Ukrainian Prime Minister Arseniy Yatsenyuk said. (Interfax, 11.26.14).
  • Ukrainian officials estimate that the cutoff of defense contracts with Moscow could mean the loss of at least $1.5 billion a year, slashing government revenue at a time when the nation's economy is already on its knees. (LA Times, 11.25.14).
  • Fifty five percent of Russians believe that the current cease-fire in Ukraine will eventually give way to renewed military action, a poll by the independent Levada Center showed. As for how Russia should hypothetically respond to any spike in military activity in eastern Ukraine, fifty-eight percent were opposed to military intervention. (Moscow Times, 11.25.14).
  • Russia and Georgia's breakaway Abkhazia region have signed a treaty that Tbilisi has condemned as a step toward Russian annexation of the Black Sea province. The treaty says that an armed attack on Abkhazia will be considered an armed attack on Russia, and vice-versa. Russia has rejected accusations that it is planning to annex Georgia's breakaway regions of Abkhazia and South Ossetia. (RFE/RL, New York Times, 11.25.14).
  • Russia's lower parliament house on November 21 ratified an agreement governing economic cooperation with Kyrgyzstan as it integrates with "Eurasian" structures. Kyrgyzstan could receive $1 billion in cash and loans under the deal. (RFE/RL, 11.21.14).
  • Belarusian Defense Minister Yury Zhadobin has resigned in a move observers said could be part of an attempt by President Alyaksandr Lukashenka to improve the military's combat-readiness. (RFE/RL, 11.25.14).
  • Nagorno-Karabakh says its forces have killed two Azerbaijani soldiers in an operation to recover the bodies of three crew members whose helicopter was shot down by Azerbaijan earlier this month. Azerbaijan's defense ministry denied there had been any rescue operation. The crewmen were then buried with full military honors. (RFE/RL, 11.22.14, 11.25.14).
  • A former Azerbaijani deputy defense minister, Mehman Salimov, has been arrested on corruption charges. (RFE/RL,11.25.14).

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