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The ISCIP Analyst

Volume XV, Number 11 (16 April 2009)

Back Issues

Volume XV

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Volume II
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Volume I
No. 4 (18 December 1996)
No. 3 (4 December 1996)
No. 2 (20 November 1996)
No. 1 (6 November 1996)

Russian Federation

Executive Branch by Susan J. Cavan

Domestic Issues & Legislative Branch by Rose Monacelli

Security Services by Fabian Adami

Armed Forces by Lt Col Erik Rundquist

Foreign Relations by Shaun Barnes

Energy Politics by Creelea Henderson

Special Feature: Russia and Iran by Blake Brunner

~~~~~

Caucasus by Robyn Angley

Central Asia by Monika Shepherd

Western Regions by Tammy Lynch

~~~~~

RUSSIAN FEDERATION

EXECUTIVE BRANCH

President and Prime Minister shine in different spheres
We have managed to avoid the worst-case scenario (1)
On April 6, Prime Minister Putin addressed the members of the State Duma with a report on the economic situation in Russia, along with a government plan to ameliorate the impact of the current crisis.  Putin's remarks, which, as several analysts have noted, focused on 2008 financial figures, without incorporating first quarter 2009 data, traced the difficulties of lost currency and market values, rising debt, straitened credit, and inflation with the less bleak indicators of increasing wages, housing improvements and infrastructure reforms, and expansion of natural resource extraction, production, and transportation.

Retracing previously trod rhetorical paths to emphasize that the source of Russia's restrained circumstances originated abroad, Putin sketched some of the difficulties facing foreign governments and the knock-on effects that have shaken the Russian economy, in particular the constraints on credit and the flight of capital for Russian investments and exports. 

While Putin's ability to identify positive trends (including the birth of 1.717 million children this year and an increasing life expectancy over the past five years) struck a calming tone, (2) the overall economic picture does not lend itself to positive assessment.  Despite some calls from the Communist Party to initiate ministerial dismissals, response to Putin's address was muted.  While the format provided for questions from the members of parliament, the inquiries were described as "notably timid." (3) The prime minister, regardless of his obvious preeminence in the current political array, is, constitutionally and by recent tradition, inextricably bound to issues of economic management and Russia's fiscal wellbeing, and in the current economic climate this leaves Putin short-stacked in a long haul game.

As the pressures of the economic crisis spread through Russian workplaces and markets, Putin's scenarios for action likely will narrow and be characterized by dismissals and reshuffles of government ministers and personnel.  The prime minister's strong suit remains his effective control and direction of both the security services and the dominant political party in parliament.  Ideally for Putin's government, the anti-crisis measures would stave off the intrusion of economic pressures on the political scene.  However, if necessary, Putin has significant, if distasteful, resources to protect himself and his allies.

Democracy was, is, and will be (4)
At the bottom of its website home page, the "opposition" newspaper Novaya gazeta urges its readers to remember Igor Domnikova, Yuri Shchekochikhin, and Anna Politkovskaya, three of its journalists killed since 2000.  The silence of the Putin administration in the face of an alarming number of journalists' deaths was a stain that surely will taint its legacy.  However, President Dmitri Medvedev demonstrated his willingness to break the silence by agreeing to an interview with the editor of Novaya gazeta, Dmitri Muratov.  While the issue of the investigations into and prosecutions of those responsible for the journalists' deaths was not raised, the new criminal case against Yukos founder Mikhail Khodorkovsky, who is pending trial on new charges, was mentioned.  Muratov asked Medvedev to predict the outcome of the case and to urge the judges to be mindful of their independent status.  Medvedev's response, "For the President, predictability of judicial decisions is illegal, it is a sign that the law is being violated." (5)

Medvedev addressed a range of key issues, including the recent ideological debate over whether or not a social contract—the trading of democracy for prosperity, or "sausages in exchange for freedoms"—existed in Russia. (6) While flitting briefly over the philosophical evolution of the social contract theory as having a "significant role in the development of democratic institutions" and referring to the Russian Constitution as containing the "framework" of a "modern social contract," Medvedev managed to differentiate his presidency from that of his predecessor.  Muratov drove the point home:
[Muratov (Novaya gazeta)] Are you suggesting that you can offer Russia both freedom and prosperity?
[Medvedev] Yes. (7)

While the tangible results of Medvedev's interview may be few, with the benefits accruing only to his personal prestige, the president's decision to speak publicly with the editor of Novaya gazeta is a hopeful signal, following a regime that has provided scant opportunities for difficult questions, dissent, or independent investigative journalism. 

In contrast to Putin's dour appearance before the Duma to describe Russia' economic difficulties and his government's plans to resuscitate the economy, Medvedev's interview signals a new start, perhaps a new "openness" for the press in Russia.  For those scanning the Russian political firmament for signs, Medvedev's star seems brighter, if not ascendant, for his decision to forge a different relationship with the media. It seems that the "institutional shift" that occurred in last year's presidential selection-election has ramifications for the individuals now occupying the presidency and prime minister's seat.  Constitutionally, they represent distinct spheres of authority; in practice, they are obliged to address disparate topics.  It has been thought that the overlap of their obligations and interests would produce friction in the diarchy, but perhaps it is their dissimilarities where discord may arise.   With one working through an economic slog, and the other sounding a hopeful new tone, the differences between Putin and Medvedev suddenly are stark. 

Source Notes:
(1) "Prime Minister Vladimir Putin reported to the State Duma on the Russian Government's performance in 2008," Text of address by Vladimir Putin, 6 Apr 09 via http://premier.gov.ru/eng/events/2490.html, last accessed 16 Apr 09.
(2) Ibid.
(3) "A Confident Putin Reports To Russian Duma On Crisis Measures," by Robert Coalson, RFERL, 6 Apr 09 via http://www.rferl.org/content/A_Confident_Putin_Reports_To_Russian_Duma_On_

Crisis_Measures/1602778.html.
(4) Comment by Dmitri Medvedev in "Declarations of Medvedev, 2009 – interview with Novaya gazeta," 13 Apr 09, Novaya gazeta via Johnson's Russia List, 2009-#71, 16 Apr 09.
(5) Ibid.
(6) See ISCIP Analyst, Volume XV, No. 8, 19 Feb 09) via http://www.bu.edu/iscip/digest/vol15/ed1508.shtml; Ibid.
(7) Novaya gazeta, Ibid.

By Susan J. Cavan (sjcavan@bu.edu)

~~~~~

DOMESTIC ISSUES AND LEGISLATIVE BRANCH

The price of dissent        
On April 1, former State Duma member and prominent human rights activist Lev Ponomarev was attacked and beaten outside his home in Moscow. Ponomarev was walking from his car to his apartment after arriving home late, when an unidentified man stopped him to ask for a cigarette.  Before he could continue moving, another man jumped him from behind and the two, possibly three assailants kicked him for 10 to 15 minutes until a doorman heard the commotion and ran over. (1)

Although he suffered bruises and contusions on his face and his upper body, Ponomarev fortunately escaped without serious injury.  In fact, during his brief hospitalization, he was already in contact with the press, telling the Financial Times that "This is not a casual attack by hooligans but revenge. When hooligans beat someone, they usually shout something. There was not a single sound. I wasn't robbed. This was an attack made to order.” (2) This may be because Ponomarev recently reentered the national spotlight as he focuses his efforts on drawing critical media attention to the government’s second trial against Mikhail Khodorkovsky, former oil tycoon and a Kremlin opponent who has been in jail since 2005. On the night of the attack, he had been returning home from a meeting with EU human rights officials. (3)

This is not the first time that Ponomarev’s willingness to speak out against injustice has led to trouble. Ponomarev founded the human rights group The Memorial Society and currently heads the All-Russia Republic Movement for Human Rights. His reputation as a prominent and influential opposition activist was formed through years of outspoken criticism of the Russian prison system that nearly led to his arrest last February, after authorities accused Ponomarev of slandering the Russian Federation (specifically General Yuri Kalinin, head of the Russian prison system). Ponomarev repeatedly accused Kalinin of condoning inhumane treatment, including torture and abuse, during an international speaking tour that included stops at Harvard and Boston University. (4) Upon his return to Russia, Ponomarev’s travel documentation was revoked, leading many to surmise that he was being punished for this tour, which also had included several meetings with human rights NGOs and US State Department officials. (5)

Despite Ponomarev’s grim message—he remarked openly on then-President Putin’s (and his administration’s) commitment to suppressing political and civil dissent by any means necessary—his interviews with American news outlets during his trip to the US were cautiously optimistic about the forthcoming election of Dmitri Medvedev. Medvedev, at the time, was campaigning on the promise of recommitment to the rule of law in Russia. Ponomarev told the Washington Post that “[he didn’t] have any big illusions," but that the election “provid[ed] an opportunity to follow up on the rhetoric about the rule of law ... specific steps for restoring and enforcing legal norms." (6) He also offered suggestions for reform, including an end to the misuse of the law as an instrument of political repression, closing “torture camps,” and safeguarding individuals who speak out against the government on these and other issues. (7)

None of these reforms have come to fruition; in fact, over the past few years there has been an increase in the number of high-profile attacks on those who speak out critically about government actions. The most prominent include the October 2006 death of journalist Anna Politkovskaya, (8) who documented human rights abuses committed by Russian soldiers in Chechnya for Novaya gazeta and last November’s brutal beating of Mikhail Beketov, editor of the local opposition paper in the Moscow suburb of Khimki. (9) In January 2009, both noted human rights lawyer Stanislav Markelov and Novaya gazeta journalist Anastasia Baburova were killed in the middle of the day on a busy Moscow street as they left Markelov’s press conference. (10) All of these cases remain unsolved.

Another sign that reporters and activists in Russia are becoming less, not more safe, is that Ponomarev was not the only dissident to be attacked last week. Strangely, there are several conflicting reports surrounding the circumstances of Grazhdanskoye soglasiye page designer Sergei Protazanov’s death.  In one story, Protazanov was found passed out from alcohol and possibly painkillers outside his apartment in the Moscow suburb of Khimki on March 29. He was taken to the hospital before being released to his family the next day.  The next day, he was discovered unconscious in his apartment and taken to a nearby hospital, where he died on March 31. Other reports indicate that he died after he was poisoned with an unidentified substance. (11)

To be sure, some relatives are claiming that Protazanov had been abusing alcohol seriously for the past week and that his death was a result of alcohol poisoning. (12) Other supporters maintain that Protazanov died because of his work for Khimki’s local opposition paper, Grazhdanskoye soglasiye. Anatoly Yurov, editor of Grazhdanskoye soglasiye, told reporters that Protazanov had called him over the weekend before his death and said that he had been severely beaten. This was not Yurov’s first experience with violent attempts to repress dissent; Yurov was attacked in February 2008 by unknown assailants who stabbed him repeatedly. (13)

In addition to Beketov, Protazanov, and Yurov, other recent victims include the editor-in-chief of Solnechnegorsky forum, who was assaulted on February 3, and the managing editor of Molva yuzhnoye podmoskove, who was beaten in Serpukhov, another of Moscow’s suburbs, on March 12. In each of these incidents, the victims were local reporters covering grievances at the municipal, rather than state or regional levels. Beketov, for example, wrote passionately about the environmental damage that would result from the planned construction of a superhighway between Moscow and St. Petersburg. (14) At the time of his death, Protazanov was investigating allegations of election falsification after the March local elections in Khimki. (15)

It seems clear that there is a trend toward stifling dissent, even when the focus of criticism involves local issues. If these violent responses to dissent indeed are coordinated efforts, then it remains to be seen if the growing economic crisis will provoke both more dissent and a more crushing response.

On Saturday April 4, thousands of people gathered in town squares across Russia to ask “Where is the money, Dima?” (16) The boisterous but peaceful riots, which were allowed to continue unchecked, were sponsored by Russia’s Communist Party with the support of other opposition parties eager to capitalize on falling confidence in the current administration.  To an outside observer, the government acted perfectly during the demonstrations. Authorities in Moscow even detained dozens of pro-Kremlin Youth Guard group members after they started to drop anti-Soviet leaflets into the crowd. (17) Perhaps, taking into account the increasingly bold responses against government critics over the past few months, the Kremlin is only interested in picking fights it can win.

Source Notes:
(1) Philip P. Pan, “Rights Activist is Attacked Outside Home in Moscow,” The Washington Post, 2 Apr 09 via http://www.washingtonpost.com/wp-dyn/content/article/2009/04/01/AR2009040101665.html. Last accessed 4 Apr 09.
(2) Tony Halpin, “Murder and beatings return to Russia as Medvedev soaks up sunshine at G20,” Times Online, 2 Apr 09 via http://www.timesonline.co.uk/tol/news/world/europe/article6017390.ece.
(3) “Rights Activist is Attacked Outside Home in Moscow,” Ibid.
(4) “Ponomarev since Chicago: Another activist criminalized,” CEERES Blog, 25 Feb 08 via http://ceeres.blogspot.com/2008/02/ponomarev-since-chicago-another.html.  Last accessed 5 Apr 09.
(5) Ibid.
(6) Jackson Diehl, "Holding Medvedev to His Words," The Washington Post, 25 Feb 08 via http://www.washingtonpost.com/wp-dyn/content/article/2008/02/24/AR2008022401667.html. Last accessed 5 Apr 09.
(7) Ibid.
(8) Rose Monacelli, “Journalism: Still Russia’s most dangerous profession,” The ISCIP Analyst, Volume XV, Number 6, The Institute for the Study of Conflict, Ideology, and Policy, 11 Dec 08 via http://www.bu.edu/iscip/news.shtml#domestic.  Last accessed 4 Apr 09.
(9) Ibid.
(10) Rose Monacelli, “The debate over arming reporters: Are we asking the right questions?” The ISCIP Analyst, Volume XV, Number 7, The Institute for the Study of Conflict, Ideology, and Policy, 5 Feb 09 via http://www.bu.edu/iscip/news.shtml#domestic.  Last accessed 4 Apr 09.
(11) “Moscow Regional Journalist Dies Mysteriously,” Radio Free Europe / Radio Liberty, 1 Apr 09 via http://www.rferl.org/content/Moscow_Regional_Journalist_Dies_Mysteriously/1565896.html.  Last accessed 4 Apr 09.
(12) Ibid.
(13) Ibid.
(14) “Journalism: Still Russia’s most dangerous profession,” Ibid.
(15) “Moscow Regional Journalist Dies Mysteriously,” Ibid.
(16) Anna Malpas, Alexandra Odynova, “Communist Rallies Draw Thousands,” The Moscow Times, 6 Apr 09 via http://www.themoscowtimes.com/article/600/42/375953.htm.  Last accessed 6 Apr 09.
(17) “Communist Rallies Draw Thousands,” Ibid.

By Rose Monacelli (monacelr@bu.edu)

~~~~~

SECURITY SERVICES

FSB to create Arctic force
According to the United States Geological Survey, the Arctic is one of the world’s largest sources of untapped fossil fuels. Figures published in 2007 indicate that the region contains 90 billion barrels of oil and 30% of the world’s undiscovered natural gas. (1) These discoveries have turned the Arctic into a potential source of conflict among countries (Norway, Denmark, Russia, Canada, and the United States) with territorial aspirations there, and Moscow has not been hesitant about asserting its claims to the region.
  
In the fall of 2007, a Russian scientific expedition used deep-submersible vehicles to explore the Lomonosov Ridge, in the hopes of proving that this underwater mountain is a direct extension of the Russian land mass. Article 76 of the United Nations Conventions on the Law of the Sea grants sovereignty up to 150 miles on the sea-bed. In the hopes of bolstering Russia’s claim, the expedition planted a flag on the ocean floor. (2)
  
Late last month, Russia’s Security Council published the country’s new National Security Strategy. Given the country’s economic reliance on hydrocarbon sales, it was not surprising that the document devoted considerable space to the Arctic question. Moscow expects that the region will surpass the Caspian as the nation’s main “resource base” no later than 2020. (3) In light of this projection, the Security Council ordered the establishment of “a group of general purpose forces...to guarantee military security” in Russia’s “Arctic Zone.” (4) Because the zone is defined as a border area, the specialized force is to be created and run by the FSB, (5) which re-absorbed the Border Guards Service and Coast Guard several years ago. Although the precise make-up of the force is as yet unclear, the strategy document laid out some of the measures planned to secure the Arctic, including “optimizing” border controls, introducing “administrative territorial formations” (closed areas?) in Russia’s northern reaches, and increasing the frequency of Coast Guard and aviation patrols. (6) The FSB also has been instructed to impose stricter “instrumental and technological control,” (presumably radar and sonar surveillance), on the “Northern Sea Route,” while the restoration of several northern naval and air bases also has been mooted. (7)
  
Territorial claims and disputes in the Arctic are unlikely to be resolved quickly. However, it is important to note that Russia is ahead of its rivals in preparing to defend and monitor what are viewed as sovereign resources. By contrast, the United States lags behind, having yet to ratify the 1982 UN Conventions on the Law of the Sea, meaning that it has no voice at the negotiating table at this time. (8)

Litvinenko: Russia maintains pretence
Early in February, Russia launched what appeared to be a concerted diplomatic effort to cool the dispute with Britain over the Litvinenko murder case. Yuri Fedotov, Russia’s ambassador in London noted that passions had risen too high, and urged a more constructive dialogue. Fedotov implied that Moscow was prepared to allow the prime suspect, Andrei Lugovoi, to be prosecuted using British materials, but only if the proceedings took place in Russia.  Fedotov also insisted that Lugovoi’s attendance at any trial would be purely voluntary. These two conditions alone made British acquiescence highly unlikely. (9)
  
Russian officials have continued to maintain a somewhat cooperative façade in the last month, with Saak Karapetyan, Head of the Prosecutor General’s office on International Legal Cooperation telling Izvestiya that although “evidence” of Lugovoi’s complicity could not be “detected” in British extradition requests, authorities were “still ready” to investigate and “solve” the Litvinenko murder if the case files were “made available” in full. In Karapetyan’s view the case has stalled only due to “artificially inflated” diplomatic-political issues. (10) It is abundantly clear that the Kremlin’s position on the Litvinenko case has not changed, and that every statement issued is designed purely to maintain the image of cooperation, while blaming British intransigence for the lack of progress.

Killing for Kadyrov?
On 28 March, Sulim Yamadayev was gunned down in the parking garage of his apartment building in Dubai. During the early 1990s, Yamadayev was a rebel commander in Chechnya, but changed sides in the 1999 conflict. Upon his defection to pro-Moscow forces, Yamadayev was appointed commander of the notorious Vostok Battalion, one of GRU’s ethnic-Chechen commando forces. (11) In this capacity, Yamadayev apparently developed a rivalry with Chechnya’s pro-Moscow President, Ramzan Kadyrov. In April 2008, Yamadayev’s force participated in a running gun battle against Kadyrov’s bodyguard, which was escorting the President’s convoy; eighteen men were killed, and Yamadayev was placed on Moscow’s “wanted” list. (12) Russian authorities apparently did not look too hard for Yamadayev (indeed, the attack on Kadyrov’s guard may have been a warning from Moscow): the Vostok battalion under his command allegedly played a major role in the Georgian conflict last fall, being one of the first units inserted into South Ossetia to strengthen the Russian “peacekeepers” in that region. (13) At some point in the aftermath of the Georgian conflict, Yamadayev apparently had such serious concerns for his safety that he fled to Dubai, where he was living under an assumed name at the time of his assassination. (14)
  
Emirati authorities reacted with some speed to the assassination, claiming that Yamadayev was killed as part of a “dirty settling of accounts” among rival Chechen clans. Dubai Police Chief Lieutenant Colonel Dahi Khalfan Tamim alleged that the murder was ordered by Adam Delimkhanov, Duma Member for United Russia (15) and a cousin of Kadyrov’s. Tamim claimed that two Russian and one Kazakh national, all of whom fled the Emirate shortly after the murder, were wanted for questioning, (16) and portrayed the hit as having been well planned. Yamadayev had been under expert “surveillance for some time,” according to another statement by Dubai’s police. (17)
   
Tamim’s rival clan theory seems likely. Yamadayev’s assassination is but the latest in a spate of murders of Kadyrov’s potential rivals—all carried out outside Chechnya—that have occurred in the last year. Each of the hits has been well planned, with the victims’ daily routines apparently known in minute detail, and in each case, the assassins have ex-filtrated the target area successfully. These facts indicate that the murders were carried out by professionals with intelligence support—read state backing—and were not simple mob hits. It is not surprising that President Kadyrov is seeking to remove his rivals, but it is deeply concerning that he may be doing so with direct acquiescence and assistance from Moscow. The idea floated by some media outlets that rogue elements of the FSB (18) are at work simply is not viable, given the political power and hierarchical discipline of the agency. Motivations for the hits mix business with the personal: Moscow may be considering withdrawing its forces from Chechnya, (19) and is seeking to ensure that Kadyrov remains completely unchallenged as its local strongman after its troops have departed.

Source Notes:
(1) “Arctic ‘Has 90Bn Barrels of Oil,’” BBC News, 24 Jul 08 via www.news.bbc.co.uk/2/hi/business/7523118.stm.
(2) “Russia Ahead in ‘Arctic Gold Rush,’” BBC News 1 Aug 07 via www.news.bbc.co.uk/2/hi/in_depth/6925853.stm.
(3) “Russia Outlines Arctic Force Plan,” BBC News, 27 Mar 09 via www.news.bbc.co.uk/go/pr/-/2/hi/europe/7967973.stm.
(4) “Russia Intends To Form Group Of Forces In Arctic,” Interfax-AVN Online, 27 Mar 09; OSC Transcribed Text via World News Connection.
(5) Ibid.
(6) “Russia Ready To Create Arctic Group of Forces, Region To Be Under FSB Control, Article by Mikhail Zyagar, Kommersant: ‘The North Pole Is Turning Into A Hotspot; Russia Is Prepared To Create Arctic Troops,’” Kommersant, 31 Mar 09; OSC Translated Text via World News Connection.
(7) “Russia Bound To Defend Its Slice of Arctic Pie,” ITAR-TASS, 30 Mar 09; OSC Transcribed Text via World News Connection.
(8) “Russia Ahead in ‘Arctic Gold Rush,’” BBC News 1 Aug 07 via www.news.bbc.co.uk/2/hi/in_depth/6925853.stm.
(9) See The ISCIP Analyst, Volume XV, Number 8 (19 Feb 09).
(10) “Russian Prosecutor’s Office Representative Comments on Litvinenko Murder Case,” 25 Mar 09; BBC Monitoring via Lexis Nexis.
(11) “Dubai Police Call On Kremlin To ‘Reign In Killers,’” The Times of London, 7 Apr 09 via Lexis-Nexis.
(12) “Chechen Ex-Field Commander Put On Russia’s Wanted List,” RIA Novosti, 8 Jun 08 via www.en.rian.ru/russia/20080806/115849496.html.
(13) “Accused GRU Battalion Commander Revealed In Battlefields in Georgia,” Axis Globe Eurasian Secret Services Daily Review, 14 Aug 08 via www.axisglobe.com/article.asp?article=1622.
(14) “Foe Of Pro-Moscow Chechnya Leader Shot in Dubai-Reports,” Reuters, 30 Mar 09 via www.reuters.com/article/europeCrisis/idUSLU167106.
(15) “Dubai Police Call On Kremlin To ‘Reign In Killers,’” The Times of London, 7 Apr 09 via Lexis-Nexis.
(16) Ibid.
(17) “Anti-Kremlin Chechen Warlord Shot Dead In Dubai,” The Daily Telegraph, 31 Mar 09 via Lexis-Nexis.
(18) “There May Be A Warm Glow of Détente, But The Murders Go On,” The Daily Telegraph, 1 Apr 09 via Lexis-Nexis.
(19) “Russian leader tells security chief to end anti-terrorist operation in Chechnya,” Russian Channel One TV, 27 Mar 09; BBC Monitoring via Lexis-Nexis.

By Fabian Adami (fabs_adami@hotmail.com)

~~~~~

ARMED FORCES

Russian military reform – the art of “bean counting”    
Senior commanders and political leaders continue to examine every facet of Russia’s military transformation into a more agile, responsive, and technologically-adept fighting force.  Analysis and information have percolated into public discussion with last month’s meeting of an expanded session of the Defense Ministry Board, which President Dmitri Medvedev chaired for the first time as Supreme Commander.  At this meeting, Medvedev outlined the Russian military’s top priorities, namely: combat readiness, optimizing structure/numerical strength, rearmament, military education, and servicemen’s social issues. (1)  At this conference, General Secretary Nikolai Bordyuzha noted he had “no doubt” that the global economic crisis may affect reform efforts, in particular the reequipping and rearming tasks that Medvedev has required.  However, based upon the President’s statements, Bordyuzha surmised, “One gets the feeling that the armaments programme (sic) still will not be curtailed.” (2)  Added to the economic challenge, Medvedev’s “new look” for the armed forces (particularly force reduction) may present a political hurdle with respect to delivering on social promises.  A high-ranking source admitted, “A million servicemen are a substantial part of the electorate, and he has to think about future elections.  If he doesn’t keep his word, they may not vote for him a second time.” (3)  The military’s “new look” ostensibly was designed to save money by increasing training efficiencies (facility closures) and lowering manpower requirements (force drawdown).  The political reality may reveal something different. 

Manpower savings?
One of the cornerstones of the reforms led by Defense Minister Anatoli Serdyukov is a significant drawdown in forces from all branches of service. (4)  In theory, manpower cuts of more than 150,000 officers and warrant officers will save substantial amounts of money.  The savings reaped here (as well as the income from foreign weapon sales and defense ministry land sales) can assist in modernizing Russia’s armed forces.  Part of the manpower cuts are focused on combat support services that are vital to the military, but may be “civilianized.”  The Oboronservis’ (Defense Services) role in providing material and technical support may be broadened to include the construction and maintenance of military facilities, weapons/equipment repair and upkeep, and even administrative support. (5)

At the top end of the command chain, four key Russian generals recently left their military posts and stayed on in a “federal civil servant” capacity.  On March 31, 2009 Russian Army Generals Vladimir Popovkin, Nikolai Pankov, Vasili Smirnov, and Mikhail Vozhakin all were dismissed from the armed forces and now will hold their respective posts as civilians. (6)  Pankov noted that these four positions were still slated for general officers, but also can be held by civil servants.  He further recognized that these retirements from the general officer ranks were related directly to Serdyukov’s reforms and are “setting an example.” (7)  More importantly, Pankov acknowledged that the Oboronservis holding company will be filled largely by officers who were cut as part of the drawdown.  The company will use the talents, experiences, and “potential” of these former officers in order to bolster the Defense Services agency. (8) 

Another category of “civilianization” of the military involves the conscription office centers.  More than 10,000 officer and 5,000 warrant officer positions were eliminated throughout Russia as of April 1, 2009.  Deputy Chief of the General Staff (formerly Colonel-General) Vasili Smirnov noted that approximately 40 percent of the officer posts within the conscription offices have been transformed into civilian positions.  This reform measure has taken place at the local and district levels. (9)  While military manpower is being cut, it appears that savings may not be maximized, with servicemen departing in uniform, only to return to federal service in civilian clothes.  Although this may be good for the officers and perhaps the military, it also may cut into the proposed military reform’s savings.  In reality, this may be a case of moving the “beans” from one pile to another.

Combat support savings? 
Medical care is a critical combat service support element to maintain the health and morale of fighting forces.  Serdyukov has continued to look upon the medical services as a logical candidate for conversion to civilian posts or for being cut altogether. (10)  Lieutenant General Vladimir Shappo, head of the Main Military Medical Directorate, recently identified at least 22 of 191 hospitals that will be closed, along with three military medical colleges considered unnecessary in their present form. (11)  The Baltic Fleet is following this pattern, with only 19 of 79 medical doctors remaining at the main hospital in Kaliningrad, and two of five hospitals closing within the same region.  One officer noted the “negative effect” this will have on treating servicemen, veterans, and their families. (12)  Cutting back on medical services is perfectly sound for a smaller and more agile combat force.  However, medical services maintain an extremely important and direct linkage to the community of retired veterans and military families.  The seemingly innocuous issue of reducing a service may have strong political implications for a valuable voting block.  Closing a few hospitals or reducing medical care demonstrates Medvedev’s juggling act between reducing services, saving money, increasing combat efficiency, and maintaining morale.  All represent the proverbial “beans” moving from one pile to another. 

Conscription force savings?
Despite the Russian military’s requirements for a more professionalized and modern fighting force (especially within the NCO ranks), Russia is getting ready for its spring conscription call-up.  Recently, the length of conscription was reduced from a two-year period to one year of service.  This spring, over 300,000 conscripts will be called to service. (13)  Some pundits and leaders are beginning to predict problems of meeting this goal.  The most obvious challenge resides with the conscription offices themselves.  As mentioned earlier, this function is in the midst of a reorganization.  In addition, the sheer size of this recruitment “class” (almost double that of the Spring 2008 call-up) is coinciding with the  demobilization of the first 18-month conscripted force that came on duty in Fall 2007. (14)

Moreover, if history is a guide, only about ten percent will be summoned, while the other 90 percent will be excused for reasons such as health or educational deferments.  This reality has led police agencies to launch various undercover operations and ruses to ferret out draft dodgers. (15)  Other officers, such as Lieutenant General Arkadi Bakhin, the Volga-Ural Military District Commander, are concerned with the shape of those conscripts who will make the cut and show up to their units.  He laments, “What do we have today?  A large percentage of draftees that do not part with the cigarette.  We encounter those who are inclined to alcoholism and drug addiction.” (16)

Another challenge for the conscription force is the one-year turnover rate.  Serdyukov and his generals have built an ambitious training schedule for the armed forces this year.  More than 1,200 tactical exercises are planned for the ground troops, including 1,100 at the company and battalion levels, 31 at the brigade-level, and at least two division-level exercises. (17)  With the conscription time cut in half to only one year, it seems to follow that the frequency (number of classes) and density (size of classes) of training for the raw recruits would increase.  This may result in a “bulge” in the training pipeline, regardless of whether this is formal basic training or just conscripts reporting directly to their assigned units.  The training cadre, professional officers, and NCOs who survived the manpower cuts certainly will be earning their pay. 

General Vladimir Boldyrev, commander of the Russian Ground Troops, notes that problems seen in last year’s conflict with Georgia would have to be solved and built into the one-year recruitment period.  Basic issues such as insufficient knowledge of equipment, logistical transport and loading, subunit coordination, and poor physical conditioning would need to be tackled immediately. (18) 

The increased frequency and density of conscripted force training may not prove to be a cost saving measure in the long run.  When added to the officer and warrant officer positions that will be converted to federal civil servant jobs or fall under the Oboronservis, the cost savings to Serdyukov’s reforms may be reduced.  The juggling act between national strategy, politics, and economics causes the straightforward science of “bean counting” to be raised to a true art form.       

Source Notes:
(1) “Russia paper analyses Defence (sic) Ministry board meeting, reform plan corrections,” Nezavisimaya gazeta, 18 Mar 09; BBC Monitoring Former Soviet Union – Political, 24 Mar 09 via Lexis-Nexis.
(2) Ibid.
(3) Ibid.
(4) See The ISCIP Analyst, Volume XV, Number 4 (6 Nov 08) for discussion on manpower cuts.
(5) “Russian newspaper looks at president’s proposals for army reform,” Rossiyskaya gazeta, 19 Mar 09; BBC Monitoring Former Soviet Union – Political, 25 Mar 09 via Lexis-Nexis.
(6) “Russia: Four top officers dismissed from army, retain civilian posts,” RIA Novosti, 31 Mar 09; BBC Monitoring Former Soviet Union – Political, 01 Apr 09 via Lexis-Nexis.
(7) “Top generals leave military service but retain posts in Defence (sic) Ministry,” ITAR-TASS, 01 Apr 09 via Lexis-Nexis.
(8) “Defence (sic) Ministry to leadership won’t become civilian overnight – official,” ITAR-TASS, 01 Apr 09 via Lexis-Nexis.
(9)“Russian military conscription offices to be reformed by 1 April 2009,” Interfax-AVN, 25 Mar 09; BBC Monitoring Former Soviet Union – Political via Lexis-Nexis.
(10) See The ISCIP Analyst, Volume XV, Number 6 (11 Dec 08) for discussion on manpower cuts to combat support/medical forces.
(11) “Official explains changes in Russian military medical service and structures,” Ekho Moskvy radio, 21 Mar 09; BBC Monitoring Former Soviet Union – Political, 24 Mar 09 via Lexis-Nexis.
(12) “Russia: number of Baltic Fleet hospitals, medics to be cut,” Interfax-AVN, 2 Apr 09; BBC Monitoring Former Soviet Union – Political via Lexis-Nexis.
(13) “Russian website examines spring call-up forecast figures,” Gazeta.ru, 19 Mar 09; BBC Monitoring Former Soviet Union – Political, 25 Mar 09 via Lexis-Nexis.
(14) “Moscow, St Petersburg record-holders in number of conscription dodgers,” Komsomolskaya pravda, 1 Apr 09; BBC Monitoring Former Soviet Union – Political, 3 Apr 09 via Lexis-Nexis.
(15) Ibid.
(16) “Russian military district head discusses social issues, facilities modernization,” Krasnaya zvezda, 11 Mar 09; BBC Monitoring Former Soviet Union – Political, 26 Mar 09 via Lexis-Nexis.
(17) “Russian general details new chain of command for Ground Troops,” Vo Slavu Rodiny, 21 Mar 09, BBC Monitoring Former Soviet Union – Political, 26 Mar 09 via Lexis-Nexis.
(18) Ibid.

By Lt Col Erik Rundquist, USAF (erundqui@bu.edu)

The thoughts and opinions expressed in this article are those of the author and do not necessarily reflect the official position of the United States Air Force, Department of Defense, or the United States government.

~~~~~

FOREIGN RELATIONS

Few surprises from Medvedev-Obama meeting
On April 1st, Dmitri Medvedev met for the first time with his American counterpart, Barack Obama, on the fringes of the G20 summit in London.  The meeting lasted for just over an hour, covering a number of issues ranging from arms control to terrorism, but the end result of the talks held few surprises.  The two leaders issued a pair of joint statements that essentially amounted to a mutually agreed agenda for future discussions and highlighted pre-existing areas of agreement and disagreement.  Although the outcome was hailed as a positive step by Russian officials and pundits, a number of deep rifts between Moscow and Washington will need to be bridged before the relationship between the two is fully “reset.”

The more general of the two joint statements issued by Medvedev and Obama after their London meeting offered a roadmap to the issues that will dominate the bilateral dialogue in the months to come.  It called for cooperation in combating terrorism and nuclear proliferation, endorsed Russian accession to the World Trade Organization, spoke positively about cooperation in stabilizing Afghanistan, and noted differences over “the military actions of last August,” skirting any direct reference to Georgia, South Ossetia, and Abkhazia. (1) 

The meeting also covered the two most significant bilateral security issues still outstanding between the United States and Russia: missile defense and strategic arms reduction.  On the former, the joint statement was brief and general, noting that “differences remain” over American plans to deploy rudiments of an ABM system in Poland and the Czech Republic.  It also stated, however, that “new possibilities for mutual international cooperation in the field of missile defense” were discussed, without any elaboration. (2)  It is unclear whether this refers to the long-standing Russian offer to use its radar facility in Azerbaijan as part of the system, Russian involvement in the proposed US installations, or something else entirely.

For Medvedev, the tenor of discussion on the issue was positive.  When asked about ABM after a speech at the London School of Economics, he responded by contrasting Obama’s approach to ABM with that of the previous US administration, saying “[O]ur partners on this issue are not taking any primitive position, but instead are ready to discuss alternatives. … Today, the issue is presented in a different way, with a totally different approach to discussing it, and I am very happy with that.” (3)

A separate statement was issued on the renewal of negotiations on a replacement for the Strategic Arms Reduction Treaty of 1991 (START-1), following the schedule outlined at last month’s ministerial level meeting between Foreign Minister Sergei Lavrov and Secretary of State Hillary Clinton.  According to the statement, talks are slated to begin immediately with a first official progress report due to the heads of state in July. (4) 

Notably, Moscow appears willing to consider President Obama’s goal of cutting strategic offensive arms to a level of around 1,000 warheads per party, as the statement calls for “record levels of reductions … that will be lower than those in the 2002 Moscow Treaty on Strategic Offensive Reductions” which set a ceiling of 1,700-2,000 warheads each. (5)  Moreover, the Russian newspaper Vedomosti suggests - based on Foreign Minster Sergei Lavrov’s assertion that talks on a treaty will “include everything” - that the possibility of limiting delivery systems in addition to warheads also will be on the table. (6)  If this is the case, it would be a significant step forward for Moscow and the new treaty and perhaps a sign of increasing willingness for concessions on Washington’s side.

In Russia, state officials and pundits interpreted the meeting as a success.  The Russian Foreign Ministry stated it was “extremely satisfied with the outcomes of the summit.” (7)  The head of the Duma Committee on International Affairs, who participated in the talks, remarked “the inertia of thinking that has been accumulating in recent years on both sides has been interrupted.” (8)  Media analysts considered the results of the summit “moderately positive,” while noting the difficulty of moving from a framework for dialogue to specific actions. (9)

The degree of that supposed difficulty was put in perspective by Medvedev the day after the meeting.  Responding to another questioner during his appearance at the LSE, he called the deployment of missile defenses in Central Europe “a mistake which lies on the conscience of the USA.”  Though he hailed the improved nature of the dialogue with Obama, he warned “[S]olemn declarations to the effect that the system is not directed against us do not satisfy us.” (10)  This should serve as a reminder that, on a number of issues including arms reduction and ABM, the real test of the Russian-US “reset” will be in the months to come.

Russia challenges the Dollar’s dominance
In the run-up to the G20 conference in London, Russia initiated a systematic critique of the current financial system, ultimately culminating in a call for the eventual creation of a supranational reserve currency.  In particular, skepticism about the efficacy of the dollar as a global reserve currency in light of the current financial crisis appears to be driving these pronouncements.  China has arrived at a similar point of view and has joined the Russian call for the creation of a new reserve currency.

While not mentioning it by name, a sharp criticism of the United States is implicit in much of the rhetoric being offered by Russian officials on the state of the global financial system.  Arkadi Dvorkovich, a Presidential Aide on Economics, suggested that “today’s [financial] system is inadequate and contains too many risks associated with unilateral actions of a small number of countries that answer for the emission of reserve currencies.” (11)  Dmitri Medvedev scolded these same, unnamed states for not taking “enough economic responsibility for the situation and the macroeconomic indicators in their own countries.” (12)  The proposed solution to this problem is the “establishment of strong regional reserve currencies and the emergence of new reserve currencies” in addition to the possibility of one day creating a “supranational currency” that would approximate the special drawing rights (SDR) now offered by the International Monetary Fund (IMF). (13)

Although Moscow readily admits that the idea stands little chance of coming to fruition, it has at least one other powerful backer in the international economy: China.  The governor of the People’s Bank of China, Zhou Xiaochuan, made a similar suggestion in the week before the London summit, arguing for a new supranational asset. (14)  As major holders of foreign exchange reserves and dollar denominated assets, Russia and China both have reason for concern about the status of the dollar, particularly with the US in the throws of a recession aggravated by a banking crisis and rapidly accumulating a substantial national debt. 

Still, the creation of a supranational currency is hardly possible for the foreseeable future.  Pressure for other changes to the financial system, such as the promotion of regional reserve currencies in defiance of Washington’s financial hegemony, are more realistic prospects.  It would not be surprising to see these issues raised again at the summit of the BRIC countries (Brazil, Russia, India, and China) later this year.

Another change that Russia is likely to pursue more actively is the addition of the ruble and the Chinese yuan to the basket of currencies used to calculate the value of IMF special drawing rights. (15)  The composition of the SDR currency basket is reexamined every five years, with the next review coming in 2010. (16)  As such, calls for SDR reform could mark the beginning of a concerted effort to increase Russian influence at the IMF.

Source Notes:
(1) “Joint Statement by President Dmitriy Medvedev of the Russian Federation and President Barack Obama of the United States of America,” 1 Apr 09 via http://www.whitehouse.gov/the_press_office/Joint-Statement-by-President-Dmitriy-Medvedev-of-the-Russian-Federation-and-President-Barack-Obama-of-the-United-States-of-America/.
(2) Ibid.
(3) Medvedev, Dmitri, “Meeting with Students and Staff of the London School of Economics and Political Science,” 2 Apr 09 via http://www.kremlin.ru/eng/speeches/2009/04/02/2200_type82914type84779_214720.shtml.
(4) “Joint Statement by Dmitri A. Medvedev, President of the Russian Federation, and Barack Obama, President of the United States of America, Regarding Negotiations on Further Reductions in Strategic Offensive Arms,” 1 Apr 09 via http://www.whitehouse.gov/the_press_office/Joint-Statement-by-Dmitriy-A-Medvedev-and-Barack-Obama/.
(5) Ibid.
(6) Nikolskiy, Aleksey and Mariya Tsvetkova, “Experts doubt that new Russia-US arms reduction treaty will be concluded in 2009,” Vedomosti, 2 Apr 09; BBC Monitoring via Lexis-Nexis.
(7) “Russian ministry ‘extremely satisfied’ with outcomes of Medvedev-Obama summit,” ITAR-TASS, 2 Apr 09; BBC Monitoring via Lexis-Nexis.
(8) “Medvedev-Obama talks broke ‘vicious circle’ in relations - Russian participant,” ITAR-TASS, 1 Apr 09; BBC Monitoring via Lexis-Nexis.
(9) “Pundits give cautious welcome to Russian-US summit,” Interfax, 1 Apr 09; BBC Monitoring via Lexis-Nexis.
(10) Medvedev, Dimitry, “Meeting with Students and Staff of the London School of Economics and Political Science,” 2 Apr 09 via http://www.kremlin.ru/eng/speeches/2009/04/02/2200_type82914type84779_214720.shtml.
(11) Artemyev, Aleksandr, “‘Fundamental Differences’ in Russian, US G20 Programmes,” Gazeta.ru, 30 Mar 09; BBC Monitoring via Lexis-Nexis.
(12) Medvedev, Dimitry, “Meeting with Students and Staff of the London School of Economics and Political Science,” 2 Apr 09 via http://www.kremlin.ru/eng/speeches/2009/04/02/2200_type82914type84779_214720.shtml.
(13) Ibid.
(14) “China’s central bank proposes new reserve currency,” Xinhua, 25 Mar 09 via http://news.xinhuanet.com/english/2009-03/26/content_11076375.htm.
(15) Shuster, Simon and Sue Thomas, “Russia wants rouble, yuan, gold in SDR basket,” Reuters, 28 Mar 09; via http://www.reuters.com/article/marketsNews/idUSLS37648120090328.
(16) “Special Drawing Rights (SDR),” International Monetary Fund, Feb 09 via http://www.imf.org/external/np/exr/facts/sdr.htm.

By Shaun Barnes (scbarnes@bu.edu)

~~~~~

ENERGY POLITICS

Hungary: “Gazprom’s Most Cheerful Barracks?”
In 2007, with Russia’s then-President Vladimir Putin courting East European leaders on behalf of Gazprom, Viktor Orban, the head of Hungary’s opposition party, warned that the country once described as “the Soviet Union’s most cheerful barracks,” was now in danger of becoming “Gazprom’s most cheerful barracks.” (1) Two years later, his prediction appears to be coming true.

In mid-March, Hungarian Prime Minister Ferenc Gyurcsany joined Russian Prime Minister Vladimir Putin in Moscow for the signing of a deal that commits the Hungarian government and the Hungarian Development Bank to finance a branch of Gazprom’s South Stream gas pipeline across Hungarian territory. In addition, MOL, Hungary’s national oil and gas company, agreed to form a joint venture with Gazprom to establish a Hungarian storage facility for Russian gas. (2) The deal signals a reversal for Gyurcsany, who recently claimed to support South Stream’s rival, the EU-sponsored pipeline, Nabucco.  After signing on with Russia, however, Gyurcsany says that he sees no conflict in supporting both South Stream and Nabucco. Few analysts agree with his assessment on the feasibility of twin pipelines, and most of the parties involved view the projects as an either-or scenario. (3)

Both pipelines represent an ambitious undertaking to supply Europe with Russian, Central Asian and, perhaps, Middle Eastern gas volumes. South Stream, a joint venture between Russia’s Gazprom and Italy’s Eni, is expected to provide Gazprom with a new route to Europe in 2015, a route that would cut Ukraine out of Russia’s export regime. South Stream would start in Russia and run through Bulgaria, Serbia, and now Hungary, to the Baumgarten gas trading hub in Austria. Cost estimates for the project vary. In February, Russian President Dmitri Medvedev suggested that costs for the pipeline could run as high as $26 billion; in March, Putin’s estimate pulled the cost back down to $13 billion. (4)

The Nabucco pipeline on the other hand, represents a bid by the European Union to diversify its energy sources and reduce its gas dependency on Russia. The pipeline would carry gas from Azerbaijan, and eventually from Iran, via Turkey and the Balkans, to Baumgarten in Austria. The project is expected to come online in 2013 and cost about $11 billion. (5)

In the midst of the current global recession, there simply is not enough money to finance the construction of both projects. Nor is there enough gas to fill two pipelines, unless Iran is brought on board the Nabucco project. Therefore, Hungary’s recent decision to throw its weight behind South Stream comes as a heavy blow to backers of Nabucco.

After signing on with Gazprom in March, MOL had to adopt a protectionist stance in April, when Russia’s fourth-largest oil producer, Surgutneftegaz, announced its purchase of a 21 percent stake in the Hungarian company through which it intends to increase its access to customers in Europe. (6) MOL quickly made clear that Surgutneftegaz would be nothing more than an investor with limited voting rights. (7) At MOL’s request, Hungary’s financial markets watchdog was called in to investigate the sale of MOL shares between Austrian oil and gas company OMV and Surgutneftegaz. (8) The Russian company bought the shares for approximately $1.9 billion, nearly twice MOL’s trading price on Hungarian markets; however, the coincidence between the sale price to Surgutneftegaz and the original purchase price by OMV has aroused suspicions that the sale of MOL shares was merely a shell game in which OMV acted as a front for the Russian party. (9) "Suspicion arises ... that because the Russian investor bought this stake at exactly the input price, [OMV] was just a front," MOL head Zsolt Hernadi said. (10) The deal caught the attention of the Hungarian government and opposition parties, and both released statements supporting MOL’s independence and pledging to prevent its takeover by the Russian company. (11)

Meanwhile, back in Moscow, a fog of intrigue has descended on Surgutneftegaz. Two days after its Hungarian shopping spree, the company posted a 50 percent drop in fourth quarter earnings. (12) Nevertheless, Surgutneftegaz is rumored to retain a stockpile of about $20 billion, making the company an attractive target for a take-over by Rosneft, Russia’s cash-strapped state oil company. (13) The CEO of Surgutneftegaz, Vladimir Bogdanov, already has been cherry-picked for a seat on the board of Rosneft, and is presently awaiting government approval. (14) Given the history of rivalry between Russia’s two state-run giants Gazprom and Rosneft, it is possible that Rosneft is using Surgutneftegaz as its entrée into the Hungarian energy market, just as Gazprom seals its own agreements with MOL. With ties so tangled between Budapest and Moscow, it may be hard to discern the motives underlying actions and results.

Source Notes:
(1) “Hungarian opposition raises spectre of communism in pipeline debate,” Europe News, 30 Mar 07 via (http://www.monstersandcritics.com/news/europe/news/article_1284937.php/Hungarian_opposition_raises_spectre_of_communism_in_pipeline_debate).
(2) “Two Natural Gas Deals Tie Hungary Closer to Russia,” The New York Times, 17 Mar 09 via (http://www.nytimes.com/2009/03/18/business/worldbusiness/18gas.html).
(3) “Rescuing Nabucco,” The Moscow Times, 18 Mar 09 via (http://www.moscowtimes.ru/article/1016/42/375422.htm).
(4) “South Stream gas pipeline to be laid by 2015 no matter what,” ITAR-TASS, 11 Mar 09 via (http://www.itar-tass.com/eng/level2.html?NewsID=13666860).
(5) Project statistics at Nabucco website. Via (http://www.nabucco-pipeline.com/).
(6) “MOL Suspects OMV Was a Surgut Front,” The Moscow Times, 2 Apr 09 via (http://www.moscowtimes.ru/article/600/42/375875.htm).
(7) Ibid.
(8) “Hungarian watchdog says probes MOL stake sale,” Reuters, 3 Apr 09 via (http://www.reuters.com/article/rbssEnergyNews/idUSL310161820090403).
(9) Ibid.
(10) “MOL Suspects OMV Was a Surgut Front,” The Moscow Times, 2 Apr 09 via (http://www.moscowtimes.ru/article/600/42/375875.htm).
(11) Ibid.
(12) Ibid.
(13) “Rosneft, Surgutneftegaz Tie-up Unnecessary Now, Minister Says,” Bloomberg, 23 Mar 09 via (http://www.bloomberg.com/apps/news?pid=20601207&sid=ab_0nQU7p__o).
(14) Ibid.Hungary: “Gazprom’s Most Cheerful Barracks?”
In 2007, with Russia’s then-President Vladimir Putin courting East European leaders on behalf of Gazprom, Viktor Orban, the head of Hungary’s opposition party, warned that the country once described as “the Soviet Union’s most cheerful barracks,” was now in danger of becoming “Gazprom’s most cheerful barracks.” (1) Two years later, his prediction appears to be coming true.

In mid-March, Hungarian Prime Minister Ferenc Gyurcsany joined Russian Prime Minister Vladimir Putin in Moscow for the signing of a deal that commits the Hungarian government and the Hungarian Development Bank to finance a branch of Gazprom’s South Stream gas pipeline across Hungarian territory. In addition, MOL, Hungary’s national oil and gas company, agreed to form a joint venture with Gazprom to establish a Hungarian storage facility for Russian gas. (2) The deal signals a reversal for Gyurcsany, who recently claimed to support South Stream’s rival, the EU-sponsored pipeline, Nabucco.  After signing on with Russia, however, Gyurcsany says that he sees no conflict in supporting both South Stream and Nabucco. Few analysts agree with his assessment on the feasibility of twin pipelines, and most of the parties involved view the projects as an either-or scenario. (3)

Both pipelines represent an ambitious undertaking to supply Europe with Russian, Central Asian and, perhaps, Middle Eastern gas volumes. South Stream, a joint venture between Russia’s Gazprom and Italy’s Eni, is expected to provide Gazprom with a new route to Europe in 2015, a route that would cut Ukraine out of Russia’s export regime. South Stream would start in Russia and run through Bulgaria, Serbia, and now Hungary, to the Baumgarten gas trading hub in Austria. Cost estimates for the project vary. In February, Russian President Dmitri Medvedev suggested that costs for the pipeline could run as high as $26 billion; in March, Putin’s estimate pulled the cost back down to $13 billion. (4)

The Nabucco pipeline on the other hand, represents a bid by the European Union to diversify its energy sources and reduce its gas dependency on Russia. The pipeline would carry gas from Azerbaijan, and eventually from Iran, via Turkey and the Balkans, to Baumgarten in Austria. The project is expected to come online in 2013 and cost about $11 billion. (5)

In the midst of the current global recession, there simply is not enough money to finance the construction of both projects. Nor is there enough gas to fill two pipelines, unless Iran is brought on board the Nabucco project. Therefore, Hungary’s recent decision to throw its weight behind South Stream comes as a heavy blow to backers of Nabucco.

After signing on with Gazprom in March, MOL had to adopt a protectionist stance in April, when Russia’s fourth-largest oil producer, Surgutneftegaz, announced its purchase of a 21 percent stake in the Hungarian company through which it intends to increase its access to customers in Europe. (6) MOL quickly made clear that Surgutneftegaz would be nothing more than an investor with limited voting rights. (7) At MOL’s request, Hungary’s financial markets watchdog was called in to investigate the sale of MOL shares between Austrian oil and gas company OMV and Surgutneftegaz. (8) The Russian company bought the shares for approximately $1.9 billion, nearly twice MOL’s trading price on Hungarian markets; however, the coincidence between the sale price to Surgutneftegaz and the original purchase price by OMV has aroused suspicions that the sale of MOL shares was merely a shell game in which OMV acted as a front for the Russian party. (9) "Suspicion arises ... that because the Russian investor bought this stake at exactly the input price, [OMV] was just a front," MOL head Zsolt Hernadi said. (10) The deal caught the attention of the Hungarian government and opposition parties, and both released statements supporting MOL’s independence and pledging to prevent its takeover by the Russian company. (11)

Meanwhile, back in Moscow, a fog of intrigue has descended on Surgutneftegaz. Two days after its Hungarian shopping spree, the company posted a 50 percent drop in fourth quarter earnings. (12) Nevertheless, Surgutneftegaz is rumored to retain a stockpile of about $20 billion, making the company an attractive target for a take-over by Rosneft, Russia’s cash-strapped state oil company. (13) The CEO of Surgutneftegaz, Vladimir Bogdanov, already has been cherry-picked for a seat on the board of Rosneft, and is presently awaiting government approval. (14) Given the history of rivalry between Russia’s two state-run giants Gazprom and Rosneft, it is possible that Rosneft is using Surgutneftegaz as its entrée into the Hungarian energy market, just as Gazprom seals its own agreements with MOL. With ties so tangled between Budapest and Moscow, it may be hard to discern the motives underlying actions and results.

Source Notes:
(1) “Hungarian opposition raises spectre of communism in pipeline debate,” Europe News, 30 Mar 07 via (http://www.monstersandcritics.com/news/europe/news/article_1284937.php/Hungarian_opposition_raises_spectre_of_communism_in_pipeline_debate).
(2) “Two Natural Gas Deals Tie Hungary Closer to Russia,” The New York Times, 17 Mar 09 via (http://www.nytimes.com/2009/03/18/business/worldbusiness/18gas.html).
(3) “Rescuing Nabucco,” The Moscow Times, 18 Mar 09 via (http://www.moscowtimes.ru/article/1016/42/375422.htm).
(4) “South Stream gas pipeline to be laid by 2015 no matter what,” ITAR-TASS, 11 Mar 09 via (http://www.itar-tass.com/eng/level2.html?NewsID=13666860).
(5) Project statistics at Nabucco website. Via (http://www.nabucco-pipeline.com/).
(6) “MOL Suspects OMV Was a Surgut Front,” The Moscow Times, 2 Apr 09 via (http://www.moscowtimes.ru/article/600/42/375875.htm).
(7) Ibid.
(8) “Hungarian watchdog says probes MOL stake sale,” Reuters, 3 Apr 09 via (http://www.reuters.com/article/rbssEnergyNews/idUSL310161820090403).
(9) Ibid.
(10) “MOL Suspects OMV Was a Surgut Front,” The Moscow Times, 2 Apr 09 via (http://www.moscowtimes.ru/article/600/42/375875.htm).
(11) Ibid.
(12) Ibid.
(13) “Rosneft, Surgutneftegaz Tie-up Unnecessary Now, Minister Says,” Bloomberg, 23 Mar 09 via (http://www.bloomberg.com/apps/news?pid=20601207&sid=ab_0nQU7p__o).
(14) Ibid.

By Creelea Henderson (Creelea@gmail.com)

~~~~~

SPECIAL FEATURE

RUSSIA AND IRAN

Ambiguity clouds Russian-Iranian missile deal
Iranian Defense Minister Mostafa Mohammad Najjar was on a “missile quest,” according to Agence France Presse, when he met his Russian counterpart, Anatoli Serdyukov, in Moscow on Tuesday, February 17. (1)  The missiles in question belong to Russia’s S-300 medium-range surface-to-air defense system. Iran signed an agreement to purchase them approximately two years ago. The missile system would provide Iran with the ability to fend off putative assaults from Israel’s air force.  That Iran would still be on a “quest” to obtain these missiles, despite the years-old purchase agreement is a testament to the ambiguity and mystery surrounding the affair.

Official Russian sources have downplayed the S-300 agreement, with some going so far as to disavow it completely.  Last October, Russian Foreign Ministry spokesman Andrei Nesterenko negated the possibility of selling the S-300 system to Iran, saying, “Our high-ranking politicians have declared many times that we will not supply such weapons to countries located in what we call perturbed regions.” (2)  Even after the Najjar-Serdyukov meeting, a Russian Foreign Ministry spokesman told Interfax on March 18, “We confirm the fact that Russia is not shipping S-300s to Iran or to any other Middle East countries.” (3)  Iran’s Fars New Agency reported March 26 that Konstantin Kosachev, the Duma’s Foreign Affairs Committee chief, said that S-300 missiles were “out of the question” for Iran. (4) 

Iran, on the other hand, has never hesitated to contradict Russia on the subject of the S-300s.  Last December, the deputy head of the Iranian Parliament's Commission for Foreign Affairs and National Security declared, “Now the S-300 system is being delivered.” (5)  Najjar himself emerged from his meeting with Serdyukov boasting of “success.” (6)  And on April 3, the vice president of Iran’s National Security and Foreign Policy Committee told the Tehran-based Hamshahri daily, “We have talked with the Russians about this issue for several years and we have achieved good agreements that are being implemented now.  This missile system will be used to reinforce the … borders and territory of Iran.” (7)

Of course, the truth of the matter seems to lie somewhere in between the two countries’ respective accounts.  On March 18, an anonymous official from Russia’s Federal Service of Military-Technical Cooperation told ITAR-TASS, “Air defense systems S-300 were not supplied to Iran under the contract concluded two years ago. … [T]he contract is being fulfilled gradually [depending on] the current international situation and the decision of the country’s leadership.” (8) 

Russian newspaper Izvestiya followed up on April 3, reporting that Russia had delivered S-300 launchers to Iran, but not the actual missiles.  Izvestiya also reported that the original S-300 contract was worth $800 million, and that there is a new incentive for Russia to fulfill the contract sooner rather than later: China has just unveiled its own copy of the S-300, which it plans to sell more cheaply, thereby undercutting Russia.  Russian analyst Ruslan Pukhov told Izvestiya, "In view of diminishing arms exports to India and China, it would be foolhardy of us to allow ourselves also to lose the Iranian market." (9)

In light of the financial motive, it is likely that Russia eventually will fulfill the terms of the contract and transfer the missiles to Iran.  However, as mentioned in the previous issue of The ISCIP Analyst, Russia’s arms sales to Iran have proved to be a contentious issue in Russian-American relations, given that Iran funnels arms to Hizballah in Lebanon.  Last September, then-Vice President Dick Cheney described the arms sales as “aggressive” on Russia’s part, (10) and there are signs that the issue may have been taken up by the Obama administration.  At a press conference following his early-March meeting with US Secretary of State Hillary Clinton, Russian Foreign Minister Sergei Lavrov made a point of stating, “We are not violating anything in our military-technological cooperation with Iran, and at the same time we fully take into account all concerns expressed by our partners from the U.S. and Israel.” (11)

Weighing the high price of the S-300 deal against US and Israeli concerns about Russian weapons winding up in the hands of Hizballah, Russia may have adopted a pro-government, pro-security stance toward Lebanon, in order to shield itself from criticism when (or if) it finally fulfills its contract with Iran.

For example, in April 2008 Russia donated $500,000 to the UN trust fund for the Special Tribunal for Lebanon, which seeks to determine who is the culprit behind the 2005 assassination of Lebanon’s then-Prime Minister Rafiq al-Hariri.  Along with its donation, Russia gave its support to “ensuring the stable and peaceful development of [Lebanon] on the basis of Lebanese national consensus and consideration for the interests of all political and ethno-confessional forces.” (12)

Presumably to further that end, Russia made another donation to Lebanon in December 2008, this time in the form of 10 MiG-29 fighter planes, which Russia has promised to modernize (at its own expense); it also will provide a limited warranty and train Lebanese pilots to fly the planes.  The reaction from the Lebanese ruling coalition, which opposes Hizballah, has been overwhelmingly positive, with Rafiq al-Hariri’s son Saad saying, “Russia gives a good example of how to deal with Lebanon's cause, and we hope that all those calling for Lebanon's independence and sovereignty would do the same.” (13)  Even a subsequent report in Russia’s Kommersant stating “one-third of the MiG-29 should be written off as obsolete because they are too rusty to take off without crashing” was not enough to stop Lebanese parliament member (and famed political survivor of Lebanon’s civil war) Walid Jumblatt from flying to Moscow in late February, reportedly to express his gratitude. (14)

Considering the strategic and monetary value of the S-300s, as well as Israel’s increasing vigilance concerning weapons shipments to hostile neighbors, it is unlikely that Iran would find it easy to funnel the missiles to its Hizballah clients.  However, with its charitable approach toward Lebanon, Russia seems to be investing political capital for the future, in case a finalized sale of the S-300s again leads to accusations that it indirectly provides the tools that Hizballah uses to destabilize the region.  And, as with its approach to neighboring Syria, in Lebanon Russia is wielding influence where the US for decades has had trouble finding a receptive audience.  Likely in response to Russia’s generosity, the US will increase its military aid to Lebanon to $189.1 million from $90.7 million, if an anonymous report in the Lebanese An-Nahar daily is accurate. (15)

Regardless of the results of Russia’s arms deals with Iran, both Russia and the US may be forced to reconsider their respective approaches to Lebanon following the latter country’s general elections on June 7, 2009.  The Western-aligned Sunni Muslim, Christian, and Druze ruling coalition that benefited from Lebanon’s so-called Cedar Revolution in 2005 has been fracturing and is not predicted to remain in power, at least in its current state.  A coalition of Shiite Muslim Hizballah, Christians, and leftists is expected to fare well, in which case any dealings with Lebanon would become much trickier for all involved. 

Source Notes:
(1) “Iranian defence minister in Russia on missile quest,” Agence France Presse, 17 Feb 09 via Lexis-Nexis Academic Universe.
(2) “Russia Won’t Supply S-300 Missile Systems to Iran – Ministry,” Russia & CIS Diplomatic Panorama, 9 Oct 08 via Lexis-Nexis Academic Universe.
(3) “Russia Denies Shipping S-300 Missiles To Mideast Countries, Including Iran,” Interfax, 18 Mar 09; OSC Transcribed Text via World News Connection.
(4) “Russian official says Moscow not to provide S-300 missile to Iran,” Tehran Press TV, 26 Mar 09; OSC Transcribed Text via World News Connection.
(5) “Russia Denies Selling Missile System to Iran,” The New York Times, 23 Dec 08 via Lexis-Nexis Academic Universe.
(6) “Iran defence minister says Moscow trip was success,” Press TV Tehran, 20 Feb 09; BBC Monitoring Trans Caucasus Unit via Lexis-Nexis Academic Universe.
(7) “Delivery of S300 Missile System to Iran Started,” Hamshahri, 2 Apr 09; OSC Translated Text via World News Connection.
(8) “Russia concludes contract with Iran on S-300 supply,” ITAR-TASS, 18 Mar 09 via http://www.itar-tass.com/eng/level2.html?NewsID=13689099&PageNum=0.
(9) “Iran's Waiting for the Russian SAM Launchers Finally Ended; but So Far They Still Have No Missiles," Izvestiya, 3 Apr 09; OSC Translated Text via World News Connection.
(10) “Cheney: Russian arms reaching Hizbullah,” YnetNews, 06 Sept 08 via http://www.ynetnews.com/Ext/Comp/ArticleLayout/CdaArticlePrintPreview/1,2506,L-3592868,00.html.
(11) “Russia's cooperation with Iran does not violate any agreements – Lavrov,” Interfax, 7 Mar 09; OSC Translated Text via World News Connection.
(12) “Statement by Russian MFA Spokesman Mikhail Kamynin Regarding the Russian Federation’s Contribution to Finance the Special Tribunal for Lebanon,” 4 Apr 08 via http://www.un.int/russia/new/MainRoot/docs/off_news/040408/newen1.htm.
(13) “Lebanon's supersonic solution?” The Guardian, 21 Dec 08 via http://www.guardian.co.uk/commentisfree/2008/dec/21/lebanon-russia.
(14) "Arab Unity Being Restored," ITAR-TASS, 2 Mar 09; OSC Translated Text via World News Connection.
(15) “US wants to boost military aid to Beirut – report,” Daily Star, 14 April 09, via http://www.dailystar.com.lb/article.asp?edition_id=1&categ_id=2&article_id=100948.

By Blake Brunner (brunner@bu.edu)

~~~~~

CAUCASUS

GEORGIA

Protests tense but still nonviolent
On 9 April, tens of thousands of demonstrators gathered in front of the parliament building in Tbilisi to protest President Mikheil Saakashvili’s role in the events that led to the Russian invasion of Georgia in August and to call for his resignation. The choice of date was emotionally charged – the day marked the 20th anniversary of protests demanding independence from the Soviet Union that were violently suppressed by Soviet elements. These particular opposition protests are similar to earlier attempts by the country’s disparate opposition parties to unseat the president in November 2007, but with several notable additions to the opposition cast. They include former government officials such as former speaker of the parliament Nino Burjanadze, former Georgian ambassador to the United Nations Irakli Alasania, and former prime minister Zurab Noghaideli. Burjanadze and Alasania, in particular, are respected greatly in the West, and are considered to be among the more credible figures in the Georgian opposition. However, the depth of their support in Georgia remains unclear. These protests mark an attempt by the non-parliamentary opposition parties to work in concert, with most of the prominent actors taking part. Despite the infusion of new opposition figures, the parties that oppose Saakashvili lack a mutually agreed upon leader. Of the former government figures, Burjanadze, especially, is viewed somewhat suspiciously by her opposition fellows.

Though the opposition continues to demand that Saakashvili step down and has widened the protests to encompass three different locations (parliament, the Georgian public television station, and the president’s home), the protests largely have been peaceful. In this respect, they are in sharp contrast to the November 2007 protests, when Interior Ministry police responded to protesters with water cannons, a noise machine, and beatings. Tensions escalated sharply in the weeks leading up to the planned demonstrations, with increasingly critical rhetoric from opposition leaders and the arrest of several members of Burjanadze’s party for possession of weapons and allegedly plotting violence during the protests. The Interior Ministry, led by Vano Mirabishvili, a mainstay of the Saakashvili administration, announced that it was setting up cameras and a monitoring room from which foreign diplomats and observers could keep an eye on the protests and any police response. (1) A late night clash on 11 April between protesters and city employees cleaning up in front of the parliament (and, according to the opposition, damaging opposition computers and equipment) was caught on one of those cameras, but what exactly happened remains unclear, even on the footage released by the Interior Ministry. (2) The late night incident has provided the impetus for Nino Burjanadze to declare that her group will hold permanent protests until Saakashvili resigns. (3)

Nevertheless, despite the large size of the crowd and the potential for violent escalation, the protesters and police have remained relatively calm.  If the demonstrations continue in a peaceful manner, with neither opposition provocations nor a violent government reaction, then they will mark a considerable step forward for Georgia’s democratic process, signaling a willingness by the Saakashvili administration to tolerate dissent, while retaining its elected right to govern.

The current impasse has its roots in the attitudes of both the opposition and the government. The opposition has proved intractable in its demands, the central tenet of which is Saakashvili’s resignation. The opposition members have denied government positions, even when they have won them. Last spring, following a smaller series of protests, one of which included the semi-permanent erection of numerous tents outside parliament, several opposition leaders won positions in parliament, but refused to take their seats, preferring to boycott a legislature that was dominated by Saakashvili’s National Movement party. They alleged that the elections had been manipulated in favor of the ruling party, but their decision to boycott has left them permanently outside the official political process. Opposition leaders joined in a temporary moratorium of criticism of the government following the Russian invasion in August, but quickly returned to their traditional role as the official government commission conducted its public hearings on the war in the fall. Although agreeing that the war was the result of Russian provocations, they nevertheless hold Saakashvili responsible for accepting the bait. The war has become a central point of criticism for the opposition and a rallying point of societal support for those groups.

While the opposition has proven unwilling to compromise or discuss alternatives to Saakashvili’s resignation, the government often has acted in such a way as to seem remote and unreceptive to societal input or criticism regarding its plans. Under the current structure of the Georgian administration, Saakashvili is not simply the central figure in a broader group of state officials; instead, he is the locus of all important policy decisions. The president often compares himself to historical figures such as Peter the Great and Georgian leader David the Builder, both of whom were renowned for their contributions to consolidating statehood. Building on that metaphor, Saakashvili has assumed the role of state-maker, imposing reforms from above with little societal collaboration. These actions have antagonized not only the segments of society most affected by his reforms, but also opposition figures who have used the president’s zealous implementation of reforms as a means of rallying his critics. Many of the members of the Georgian government are relatively young, and Saakashvili’s habit of frequently replacing his ministers has prevented many of them from gaining tenure and experience in their posts, and exacerbated the loss of institutional memory in the various departments hit with such high turnover. Saakashvili has implemented some much needed reforms, but his pro-democracy campaign makes the lack of societal participation in these reforms an obvious complaint.

In dealing with the opposition, the government alternates between ignoring it, claiming that it is financed by Russia and part of a Moscow planned coup, and offering trivial concessions that retain an advantage for the government. These methods might be effective if the opposition represented a relatively small section of a disenfranchised Tbilisi elite, whose main goal was to take power by forcing Saakashvili’s resignation and an impromptu election. However, the Russian invasion has raised broader concerns about the direction (and, for some, the continued existence) of Georgia under Saakashvili’s leadership. If opposition leaders are able to position themselves effectively as representatives of general societal concerns, they could evolve into a more powerful force than they have proved to be in the past. However, it is to be hoped that the external threat of another war with Russia will prove to be a restraining hand on any attempts to overthrow the president by force.

Georgia has yet to achieve a strictly constitutional transfer of power. Its first president, Zviad Gamsakhurdia, was chased from Tbilisi by a military coup that plunged the country into civil war; Georgia’s second post-Communist leader, Eduard Shevardnadze, was forced to resign by mass demonstrations following elections that were alleged to be fraudulent by the opposition, then under the leadership of Mikheil Saakashvili. Even Saakashvili’s election to a second presidential term was held early, in response to the November 2007 protests. Both the Rose Revolution and the 2007 protests set a precedent of political action in response to mass demonstrations. While these gatherings can be a means to express societal discontent, a reliance on them as the expected way in which to effect a transfer of power is dangerous and undermines the legitimacy of the constitution and government institutions. If Saakashvili can restrain his tendency to impulsive behavior, his continuance in the presidency and replacement in 2013 in regularly scheduled elections may prove the best outcome for Georgia from the perspective of long-term institutional and democratic development.

Source Notes:
(1) “Police Set Up Rallies’ Monitoring Center,” Civil Georgia, 8 Apr 09 via http://www.civil.ge/eng/article.php?id=20677.
(2) “Portion of CCTV Footage of Protest Venue Incident Released,” Civil Georgia, 12 Apr 09 via http://www.civil.ge/eng/article.php?id=20716.
(3) “Georgian president's opponents rally,” Sky News, 11 Apr 09, as cited in georgiandaily.com via http://georgiandaily.com/index.php?option=com_content&task=view&id=11073&Itemid=133.

By Robyn E. Angley (rangley@bu.edu)

~~~~~

CENTRAL ASIA

KYRGYZSTAN

Kyrgyz president begins working toward his reelection
Perhaps sensing further troubled times ahead and hoping to take advantage of a moment when Kyrgyzstan’s opposition movement is weak and disorganized, President Kurmanbek Bakiev advised his Central Election Commission to call early presidential elections for July 23, 2009.  Although Bakiev’s nomination as a candidate in the elections likely will not become official until the Ak Jol Party hold its congress in May, the incumbent president already has begun taking steps to ensure that he will remain in power. (1)  Opposition members are being implicated in corruption scandals and arrested at a record pace, while Bakiev and his prime minister attempt to assure voters that their current leaders are those most capable of resolving the country’s economic shortcomings.  Russia’s recent decision to subsidize Kyrgyzstan’s budget with a direct donation of $150 million, as well as promises to write off a significant amount of its debt and finance the construction of two languishing Kambar-ata hydroelectric stations undoubtedly also played a key role in Bakiev’s decision to call for snap elections.  Now, the race is on to see whether or not Russia’s hand-out will be sufficient to keep Bakiev’s administration afloat for the next three months and, if not, whether the opposition can rally its forces sufficiently enough to capitalize on the country’s economic misfortunes.

Over the past year, several well-known opposition politicians have been targeted by the Prosecutor-General’s Office: Omurbek Tekebaev was arrested on charges of illegal weapons possession, although the charges were dropped later; Isa Omurkulov (Social Democratic Party member and parliamentarian) recently was charged with accepting a $60,000 bribe; (2) Ishenbai Kadyrbekov (former director of the State Architecture and Construction Agency) is under house arrest on corruption and abuse of power charges; (3) former defense minister Ismail Isakov (now a leader of the People's Revolutionary Movement with Azimbek Beknazarov), once expected to be a strong contender for Bakiev’s seat, is under criminal investigation for abuse of power and financial mismanagement charges;  (4) and former foreign minister Alikbek Jekshenkulov (now leader of the opposition movement For Justice) is in pre-trial detention after having been detained for his alleged involvement in the murder of a Turkish businessman who was killed with a pistol allegedly belonging to Jekshenkulov. (5)

The arrests of such prominent opposition members undoubtedly have cast a pall over their supporters’ enthusiasm to participate in the upcoming presidential campaign as evidenced by the noticeable lack of strong candidates willing to challenge Bakiev for his seat.  The United People’s Movement (UPM – a coalition of several opposition parties), led by former Prosecutor-General Azimbek Beknazarov, did manage to organize protest demonstrations in Bishkek and other cities in late March, at which a list of demands was presented to the government.  This list included the now oft-repeated call for Bakiev’s resignation with the addendum that he be prohibited from running for re-election in July, as well as a demand that electoral commissions at every administrative level be restructured to incorporate a ratio of at least fifty percent opposition members. Estimations of how many people turned out for the demonstrations vary widely, with the UPM claiming that the Bishkek event attracted as many as 5,000 and government counts much lower. (6)

Regardless of the actual number of protestors, the March 2009 numbers were considerably smaller than those of the anti-Bakiev protests in 2007 and 2006, and although the UPM’s ranks are full of erstwhile Bakiev supporters, some of his most well-known former allies, such as Feliks Kulov, appear to be keeping a very low profile in the run-up to the 2009 elections.  The fact that politicians not only are being targeted in criminal investigations, but that two have been killed recently, could keep Bakiev’s critics fairly quiet during this campaign.  Neither death is thought to be connected directly to the campaign, in fact, Medet Sadyrkulov’s (the former presidential chief of staff, who resigned last January and was expected to challenge Bakiev for the presidency) death thus far is being considered an accident, although a number of opposition representatives already have branded it as a political assassination undertaken to weaken their battle against the president. (7)  Interior Ministry authorities have not yet ascribed any particular motive to Ak Jol member and parliamentarian Sanjar Kadyraliev’s shooting only a few days ago, but according to a ministry press release, they are investigating both his political and business activities. (8)

So far, the slate of presidential hopefuls includes Ismail Isakov, Dr. Jenishbek Nazaraliev (a medical doctor who runs two clinics for drug and alcohol rehabilitation and who ran against Bakiev in the last election, but withdrew early), (9) Tursunbai Bakir uulu (Kyrgyzstan’s former ombudsman), Nurlan Motuev (co-chair of the Union of Moslems, leader of the Joomart patriotic movement, and formerly under criminal indictment for taking over the Kara-Keche coal mines and for tax evasion in June 2005 – for more details, see The ISCIP Analyst, Volume XII, Number 6, 15 June 2006), (10) former prime minister Almazbek Atambaev, who was just chosen to represent the group of opposition parties which comprise the UPM, (11) and, of course, Kurmanbek Bakiev.  The majority of these candidates, including Bakiev, have not been officially approved and registered yet by the Central Election Commission (CEC).  Two candidates who had been officially sanctioned by the CEC, Wisdom Party leader Damira Omurkulova and deputy editor in chief of the newspaper Vecherny Bishkek Erlan Satybekov, suddenly and without explanation withdrew their candidacies on April 13. (12)  Oddly, Isakov’s registration has been approved and since all charges have been dropped against Motuev, ostensibly due to lack of evidence, (13) it appears that the CEC and its masters may have decided to grant him a place on the ballot, as well.  At this point in time, the candidate who represents the greatest threat to Bakiev is most likely Atambaev and it remains to be seen whether or not the CEC will permit him to run.

However, receiving the CEC’s blessing is only the first hurdle – for this election, all candidates also must pass a state language exam testing their knowledge of Kyrgyz.  The exam will be both written and oral and will be monitored by a nine-member commission, which will pass judgment on the candidates’ proficiency in Kyrgyz.  Tashboo Jumagulov, the commission’s chairman, has not yet commented on whether President Bakiev will be subjected to the same test. (15)

The president’s control over media outlets gives him an enormous advantage in the campaign, and although he has not been nominated officially as a candidate for the Ak Jol party, he already is making public appearances and campaigning.  By continuing his crusade of criminal investigations into prominent opposition figures and using the CEC to block the candidacy of anyone who seems to pose too large a threat, Bakiev undoubtedly can guarantee his win at the polls.  But, if Kyrgyzstan’s economic situation does not improve—and thus far all signs point in the opposite direction—public discontent once again may triumph and result in regime change.  On April 3, Tatiana Ankudovich, a spokesperson for the Ministry of Industry, Energy and Fuel Resources, announced that by April 15 there would be a sufficient volume of water in the Toktogul Reservoir to allow the government to end electricity rationing. (15)  On April 13, the prime minister’s office issued a press release stating that rationing would have to be continued, due to the fact that the water outflow from Toktogul still exceeded water inflow. (16)

This is an ominous, if not entirely unexpected, sign.  Irrigation demands on the Syr Daryo and Amu Daryo rivers will increase in coming months and rainfall levels will drop precipitously, as summer sets in.  Furthermore, foreign remittances from Kyrgyz citizens working in other FSU countries likely will decrease even more, unemployment is growing as migrant laborers return home, inflation is rising as the cost of basic services increases, and the Kyrgyz government has announced that it is planning a gradual devaluation of the som.  The country’s GDP is falling and gold reserves are at an all time low.  In short, President Bakiev’s ability to convince his citizens to trust him to lead the country back to even the 2005 status quo will face some hard challenges over the next few months.  If he can spend Russia’s check quickly and effectively enough, he may be able to perpetuate the illusion that his government is leading the country out of the economic morass in which it is mired, but given his and his cronies’ propensity to siphon off such funds for their personal gain, even Russia’s help may not prove sufficient this time.

Source Notes:
(1) “Kyrgyz ruling party set to field incumbent in presidential polls,” 9 Apr 09, Kyrgyz Television 1; BBC Worldwide Monitoring via Lexis-Nexis Academic.
(2) “Another member of Kyrgyz opposition faces criminal charges,” 2 Apr 09, Central Asia General Newswire; Interfax via Lexis-Nexis Academic.
(3) “Former Kyrgyz Interim President Released,” 14 Apr 09, Radio Free Europe/Radio Liberty via <http://www.rferl.org/Content/Former_Kyrgyz_Interim_President_Released/1608372.html>, last accessed 16 April 2009.
(4) “Committee To Protect Kyrgyz Opposition Leader Set Up,” 19 Feb 09, Radio Free Europe/Radio Liberty via <http://www.rferl.org/Content/Committee_To_Protect_Kyrgyz_Opposition_Leader_Set_Up/1496025.html>, last accessed 16 April 2009.
(5) “Bishkek court rules to extend ex-Foreign Minister's detention for one more month,” 7 Apr 09, AKIpress; Al Bawaba via Lexis-Nexis Academic.
(6) “Kyrgyzstan: The opposition forces demand the resignation of Kurmanbek Bakiev,” 27 Mar 09, Ferghana.ru Information Agency, Central Asia news via <http://enews.ferghana.ru/article.php?id=2516>, last accessed 16 April 2009.
(7) “Kyrgyzstan confirms death of former chief of staff,” 10 Apr 09, Associated Press via Lexis-Nexis Academic.
(8) “Kyrgyz Interior Ministry releases details of lawmaker's murder,” 15 Apr 09, AKIpress; Al Bawaba via Lexis-Nexis Academic.
(9) “Dr. Jenishbek Nazaraliev to run for president,” 13 Apr 09, AKIpress; Al Bawaba via Lexis-Nexis Academic.
(10) “CEC not confirmed information on registration of N.Motuev as presidential candidate,” 9 Apr 09, The Times of Central Asia via Lexis-Nexis Academic.
(11) “Kyrgyzstan: Almazbek Atambaev is elected as single presidential candidate from opposition forces,” 16 Apr 09, Ferghana.ru Information Agency, Central Asia news via <http://enews.ferghana.ru/news.php?id=1118&mode=snews>, last accessed 16 April 2009.
(12) “Two candidates withdraw from presidential election campaign in Kyrgyzstan,” 14 Apr 09, ITAR-TASS via Lexis-Nexis Academic.
(13) “Kyrgyz Interior Ministry dismisses prosecution of Nurlan Motuev,” 14 Apr 09, The Times of Central Asia via Lexis-Nexis Academic.
(14) “Kyrgyz presidential candidates have to pass state language test,” 3 Apr 09, AKIpress; BBC Worldwide Monitoring via Lexis-Nexis Academic.
(15) “Kyrgyzstan will cancel blackouts starting from April 15,” 3 Apr 09, The Times of Central Asia via Lexis-Nexis Academic.
(16) “Prime Minister's Office expects delay in cease of rotating blackouts,” 13 Apr 09, AKIpress; Al Bawaba via Lexis-Nexis Academic.

By Monika Shepherd (moshep@bu.edu)

~~~~~

WESTERN REGIONS

UKRAINE

Ukraine rushes to elections
 
This week, Ukraine plunged head first into presidential election campaigning, as two former government officials declared themselves future candidates in the upcoming poll, and the current president announced his intention to seek re-election.

President Viktor Yushchenko made his non-binding re-election announcement in an interview with Kommersant on 15 April.  (1) The announcement will not be welcomed by many of his current or former allies, who view the president’s minimal approval ratings of 3%-9% as an anchor dragging down their political projects and careers.

Ironically, Yushchenko made his declaration two days after a Ukrainian poll found him to be the population’s least favorite president since independence.  In the TNS Ukraine poll, 39% of Ukrainians named Leonid Kuchma the country’s best president.  First president Leonid Kravchuk was chosen by 21% and Yushchenko by 7%.  The remaining 33% could not or would not answer – itself a ringing commentary.  (2)

Former Defense Minister Anatoliy Hrytsenko and former Speaker of Parliament and Foreign Minister Arseniy Yatsenyuk both contend that they should replace Yushchenko, in order to lead Ukraine out of its current economic and political crises.  Not coincidentally, both men have embraced the word “change.” 

They aren’t the only ones.

Two weeks earlier, the opposition Party of Regions (PoR), led by defeated 2004 presidential candidate Viktor Yanukovych, staged a noisy anti-government demonstration on Kyiv’s Independence Square (the Maidan). The primary demand of the party – change.  Yanukovych is widely expected to be a candidate in 2009’s election.

This campaign-like atmosphere developed following the parliament’s sudden and overwhelming vote to hold Ukraine’s presidential election on 25 October. (3)  The vote was a serious blow to President Viktor Yushchenko, who had attempted to convince parliament to set the election for 17 January 2010 – five years to the day after his inauguration.  Instead, lawmakers chose to hold the election almost five years from the date of the first round of the presidential election.  The second round was held on 21 November, but because of the “orange revolution” protests, Yushchenko’s inauguration occurred nearly two months later.  The naming of the October election date surprised most political observers—and even some politicians—who had been planning for the January 2010 date.

Although Yushchenko is challenging the October date in the Constitutional Court, it seems more likely that it will remain unchanged; the two major candidates expected to compete—Yanukovych and Prime Minister Yulia Tymoshenko (against Yushchenko)—support that date and are said to have influence over the court.  Realizing this, Yushchenko has announced his readiness to accept the earlier date, but only in return for holding simultaneous parliamentary elections.  (4) The next parliamentary election is not due until 2012. Should all political leaders agree to an early parliamentary poll, it would be the third in the last four years.

Yushchenko’s maneuvering suggests a possible deal with Yanukovych, although both deny this possibility.  The Party of Regions probably would increase its representation in a new parliament at the expense of Tymoshenko’s eponymous bloc, which has seen its support diminish somewhat (although exactly how much is unclear), thanks to the economic crisis.  It is in the PoR’s interest, then, to move as quickly as possible toward new elections.  For this reason, Yanukovych and his allies have been demanding a new parliamentary election for weeks.  (5) At the same time, the economic crisis has given Yanukovych a bump in presidential elections polls, and he now consistently is ahead of Tymoshenko for first place (but usually well within the polls’ margins of error).

The President is not so lucky.  His personal poll numbers stand somewhere between five and ten percent, while his party can expect four to six percent in a parliamentary election.  At the time of his election in 2004, Yushchenko’s Our Ukraine bloc controlled 23 percent of parliament.  Despite the low level of support for his bloc, however, on 15 April, Yushchenko told reporters that he would run as a candidate in an early parliamentary election – at the same time that he is running for president.

This move is illegal currently, but not prohibited constitutionally.  It is unclear whether the president could muster enough votes to force parliament to allow him to run in two elections simultaneously.

Yushchenko’s support for a parliamentary election likely signals that he understands the limited possibility of a second term as president, but is looking to remain politically involved in the future.  Yushchenko may see himself as a future speaker of Parliament or even as a prime minister, although this scenario seems highly unlikely.   It should be noted that former President Leonid Kravchuk has served as a member of parliament almost from the time he lost his re-election bid.

Yushchenko’s returning to parliament additionally may allow him to protect the assets gained by him and/or his allies during his term, as well as provide parliamentary immunity from prosecution for any so-called “corruption” discovered in the future.  This would be useful particularly if his archrival Tymoshenko were to win the presidential election.  On the other hand, if Yushchenko is not elected to parliament, a previous agreement with Yanukovych may provide the same protection.

Tymoshenko is striving to point out the possibility of such an agreement. "There is cooperation between Viktor Yanukovych and the president here,” she said recently.  “They want to call fresh parliamentary elections and this means that the country will be hanging in mid-air for 8 months, destroying all the remnants of stability." (6)

As if confirming the prime minister’s words, Yanukovych’s PoR blockaded the parliamentary chamber on 3 and 4 April.  This blockade stopped all action on the government’s economic crisis program.  Deputies piled chairs against doors and spent the night in the chamber, apparently to defend it from other deputies who might want to work.  (7)

Three laws demanded by the IMF—including balancing the pension fund and guaranteeing funding for Naftohaz—had been on the agenda on the first day of the blockade.  (8) Ironically, Yanukovych demanded that the government take action on an economic crisis program in order to unblock the chamber. (9)  Suggestions from the government that these laws were meant to deal with the economic crisis, as well as to free up stalled IMF funding, fell on deaf ears.  The PoR also seemed to forget that they had voted one day earlier for two laws on customs duties and excise taxes, both of which were meant to help balance the budget during the crisis.   In fact, following the passage of these laws, an IMF statement said, “We welcome the measures on excise taxes passed today by the parliament as part of the government's anti-crisis package."  (10) 

Parliament is now back to work, but the government was unable to muster enough support to pass its crisis legislation because Yushchenko’s allies abstained from the vote. Tymoshenko responded on 14 April by ignoring the parliament and unilaterally introducing the changes found in the legislation through direct decree.  (11)

Although continuing to withhold the second tranche of a $16.4 billion emergency package, the IMF praised Tymoshenko’s move and acknowledged recent progress made in negotiations.  Not surprisingly, the Fund seems to have abandoned its previous demand that Ukraine’s leaders work together and show unity.

Source Notes:
(1) “Yushchenko could run in both presidential and parliamentary polls,” RIA Novosti, 1117 CET, 15 Apr 09 via en.rian.ru/world.
(2) “Ukrainians rate Yushchenko country's worst president – poll,” 1454 CET, 13 Apr 09 via en.rian.ru/world.
(3) “Ukraine presidential vote called,” BBC News, 1513 GMT, 1 Apr 09 via http://news.bbc.co.uk/2/hi/europe/7976325.stm.
(4) “President ready to discuss simultaneous early parliamentary and presidential election,” Press office of President Victor Yushchenko, 1607 CET, 3 Apr 09 via
http://www.president.gov.ua/en/news/13404.html.
(5) “No agreement between Regions Party and president on snap parliamentary elections,” Kyiv Post, 1839 CET, 2 Apr 09 via www.kyivpost.com.
(6)  “No agreement between Regions Party and president on snap parliamentary elections,” Kyiv Post, 1839 CET, 2 Apr 09 via www.kyivpost.com, and “Yulia Tymoshenko: Party of Regions wants early parliamentary elections,” Internet Press Service of Yulia Tymoshenko, 1602 CET, 2 Apr 09 via www.tymoshenko.com.ua/eng
(7) “Party of Regions lawmakers continue blocking work of VR,” 1037 CET, 3 Apr 09 via http://unian.net/eng/news/news-309261.html.
(8) “Rada to vote on 3 IMF anti-crisis bills,” Ukraine Journal, 30 Mar 09 via http://www.ukrainianjournal.com/.
(9) “Ukraine’s Party of Regions decided to block parliament’s work on April 2-3,” ITAR-TASS, 2115 CET, 1 Apr 09 via http://www.itar-tass.com/eng/.
(10) “IMF welcomes tobacco and alcohol excise rise in Ukraine,” Interfax-Ukraine, 0920 CET, 2 Apr 09 via http://www.kyivpost.com/nation/38770.
(11) “Tymoshenko bypasses parliament for IMF loan,” Financial Times, 15 Apr 09.

By Tammy Lynch (tammymlynch@hotmail.com)

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