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Let Us Never Forget
Dear Friends,
It seems hard to believe that it’s been seven years since the horrendous attack on America by Islamic terrorists. On the one hand, it seems like ages ago. On the other, I remember exactly where I was and what I was doing, and it seems like only yesterday. As I reflect on that day seven years ago, tears well up in my eyes. Let us never forget the lives and families that were shattered. Let us never forget the courage and the tenacity of the first responders, many of whom were killed or injured. Let us never forget the cost our country endured. Let us never forget how we as a nation pulled together and overcame this tragedy. Let us never forget that we have a sworn enemy who wants us either dead or subjugated. And let us never forget that the price of liberty is eternal vigilance. Always devoted, Brigitte
ACT for America P.O. Box 6884 Virginia Beach, VA 23456
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Plunging Russian Shares Start to Concern Kremlin
Medvedev Forecast Of Rebound Fizzles; Foreign Funds Flee
By GREGORY L. WHITESeptember 11, 2008; Page C2
MOSCOW -- With stock prices plunging to two-year lows, Russian President Dmitry Medvedev sought to boost investor confidence, predicting an impending rebound. But his assurances had little impact amid concerns about the outlook for Russia's economy.
Over the past few weeks, Russian share prices have fallen more than 40% from their May highs, battered by fears about Kremlin pressure on companies as well as the surge in tensions between Moscow and the West after the war in Georgia.
Russia's dollar-denominated RTS index fell 4.4% Wednesday to 1334.33 as foreign funds continued to unload Russian shares in what Ron Smith, a strategist at Alfa Bank in Moscow, described as "capitulation on the country."
Russian officials, including Mr. Medvedev, initially brushed off the past weeks' declines as transitory, driven mainly by weak global markets. But as stock prices and the ruble's exchange rate against the dollar have continued to slide, official concern appears to be growing.
In a meeting with the country's top securities regulator, shown on state TV, Mr. Medvedev called Russian stocks "undervalued" and predicted "the situation will straighten itself out and return to the levels seen at the beginning of the year." Mr. Medvedev endorsed a series of steps proposed by the regulator to shore up the market over the medium term by attracting new domestic investors and issuers.
Though relatively few Russians own stocks or investment funds, market performance is a sensitive political issue beyond the business elite. For years, Mr. Medvedev and other top officials touted the surging market capitalizations of big state-controlled companies such as OAO Gazprom as evidence of Russia's growing might.
The government also pitched shares in state companies such as bank OAO VTB to ordinary Russians in "people's IPOs."
Now, those companies' shares have dropped sharply. Gazprom, whose executives this past spring predicted a $1 trillion market capitalization, is valued at less than $200 billion.
Many investors and analysts share Mr. Medvedev's view that Russian shares are cheap, but they are more cautious about a rebound. "It's probably true, but it might not be until 2011," Alfa Bank's Mr. Smith said. Mr. Medvedev blamed Russia's troubles on the U.S. "Let the Americans solve the problems with their mortgage system," he said. "To put it simply, they let almost everyone else down."
But investors and analysts say that while the Russian market's swoon has occurred in part because of the global credit crunch and weak foreign markets, Moscow's behavior has been a big contributor.
Even before the Georgia crisis, a public attack by Prime Minister Vladimir Putin against a major steelmaker spooked investors, as did a conflict involving BP PLC and its Russian partners in their TNK-BP Ltd. joint venture.
With prices falling for oil, metals and other commodities that are vital Russian exports, analysts question the outlook for the Russian economy. Growth began to slow in the second quarter, according to government data released Wednesday that showed gross domestic product increased at an annual rate of 7.5% over the period.
That was down from 8.5% in the first quarter, a level that had prompted fears the economy was overheating. Data on industrial output from June and July have shown an even deeper slowdown, especially in the red-hot construction sector.
Asia, Europe Pull Back;
Jarkata Slides 3.8%
Falling commodity prices helped drag down Asian stock markets, and Hong Kong's Hang Seng index once again dropped below 20000. Banking stocks were generally weaker as talks between Korea Development Bank, which isn't traded, and Lehman Brothers Holdings were called off, reawakening concerns about the damage the credit crunch has done to balance sheets.
In JAKARTA, the selloff in commodity prices hit stocks particularly hard. The main index fell 3.8% to 1885.04, its lowest close since April 2007. Big decliners included coal miner Bumi Resources, which tumbled 12% and palm-oil company Astra Agro Lestari, down 9.5%.
In SYDNEY, Australia's resource-laden S&P/ASX 200 index shrank 1.5% to 4905.50.
In HONG KONG, the Hang Seng Index fell 2.4% to 19999.78, hurt by Tuesday's big decline on Wall Street. Leading the day's blue-chip declines was property developer China Overseas Land, which skidded 11% to its lowest close since May 2007 after it reported that August property sales had dropped 28% from a year earlier.
In TOKYO, the Nikkei Stock Average shed 0.4% to 12346.63. Inpex Holdings and commodity trader Mitsubishi each fell 2.7% on Tuesday's drop in the price of oil in New York.
In MUMBAI, India's 30-stock Sensitive Index fell 1.6% to 14662.61. Metals, led by steel shares, fell on worries that prices might fall amid a slowdown in global economic growth. A strengthening U.S. dollar also weighed on the sector. Tata Steel fell 5.2%.
In Europe, banking stocks pushed down markets after Lehman Brothers' hefty third-quarter loss reignited worries about the health of the sector. The pan-European Dow Jones Stoxx 600 index fell 0.8% to 277.35. Among the big decliners were Barclays, down 5.3% in London, and Natixis, down 6% in Paris.
In LONDON, shares of Old Mutual fell 3.5% after the insurer said earnings will be hit by a write-down in the value of preferred shares of Fannie Mae and Freddie Mac and by the need to strengthen reserves at its U.S. arm. Miners fell as gold prices tumbled. Kazakhmys dropped 8.8% and Rio Tinto shed 2.7%. The U.K. FTSE 100 index fell 0.9% to 5366.20.
In PARIS, shares of Sanofi-Aventis jumped 7.2% in Paris after the drug maker said Chris Viehbacher, a former GlaxoSmithKline executive, will become its chief executive. The CAC-40 index shed 0.2% to 4283.66.
Write to Gregory L. White at greg.white@wsj.com
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http://online.wsj.com/article/SB122107452709820381.html?mod=googlenews_wsj
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Brussels vs. Moscow
By ANDRZEJ OLECHOWSKI and PAWEL SWIEBODA FROM TODAY'S WALL STREET JOURNAL EUROPESeptember 9, 2008
The European Union is finally getting a decent grip on its foreign policy, courtesy of Russia's engagement in Georgia. Some commentators said last week's EU summit failed to show enough resolve in the face of Russian aggression. But these critics are missing the point. The meeting in Brussels showed that EU leaders have finally begun to think in strategic terms, recognizing that we face a new problem in Europe: a resurgent nuclear power prepared to use military force in pursuit of its interests.
Much still needs to be done to consolidate European foreign policy given the different traditions, historical experiences, interests and perceptions of EU member states. But last week's summit resulted in the promising beginnings of a common view. For years, Russia was the issue on which EU leaders differed the most. Now they all subscribe to a loud and clear message that calls on Moscow to come to its senses.
The main point is not to prevent Russia from recovering its position as a global power, a position it certainly deserves. The challenge is to convince Moscow that instead of using the barrel of the gun to achieve its goal, it should use the irresistible power of attraction.
Given its vast reserves of natural resources, Russia will of course play a major role in the world. But it has chosen the wrong model, repeating the bankrupt patterns from past centuries: tightly controlling its neighborhood; building spheres of influence; taking unilateral action; and aggressively pursuing national interests, including with the use of force. Russia's anachronistic principles and objectives pose a threat for Europe and the international order.
If Russia succeeds in re-establishing its dominance over much of the former Soviet empire, we will have two competing blocs on the continent. The Russia of Vladimir Putin and Dmitry Medvedev is about a return to the confrontation of the past. To meet this challenge, the EU would be increasingly pressed to contradict itself. It would have to depart from the very policies and principles that are at its core. Instead of seeking cooperation with its neighbors, if not outright enlargement, the EU would have to build new walls. We must stop this bleak outlook.
Former Georgian Foreign Minister Salome Zurabishvili is right when she says it is possible to "win over Russia with the help of intelligence and political experience but not with a demonstration of strength."
What needs to happen is threefold: First, while Europe must continue to talk with Russia, the dialogue cannot be as open and romantic as in the past. We need strategic discipline, distance and caution. The EU should monitor the behavior of Russian enterprises on its markets to ensure they are not pursuing any hidden agendas on behalf of the Kremlin. Brussels must also warn European investors against excessive engagement in Russia and do its homework on energy policy.
Energy security has to be factored into the equation when the EU considers its climate change package, the flagship project of the current European Commission. To achieve Brussels' emissions targets, Europe would have to switch around 430 terawatt-hours, 13% of its energy production, from coal-fired to gas-powered plants, according to Swiss bank UBS. This would enormously increase our dependency on Russian gas.
If the European Union is serious about dealing with Moscow with self-confidence, it needs to introduce safety mechanisms, such as price ceilings and floors, into the emissions trading system. This would prevent an excessive rise of the price of carbon, which would only further fuel the demand for Russian gas.
Second, EU accession must become a credible perspective for our eastern neighbors, especially Ukraine. Only a tangible "Western option" can convince public opinion in the region that their fate is not irrevocably linked to Russia. Such a European perspective does not mean immediate membership but a binding promise of membership once these countries meet all the criteria. Europe's leaders need to make the region a strategic priority and reject the logic of division.
Third, we should edge toward defining a place for Russia in the European architecture. Today we are incapable of conceptualizing a role for Moscow that would be both satisfactory for Russia and useful for Europe. That lack of a concept is one of the reasons for our policy failure.
Without such a concept, Europe has little to offer to Russia, which in turn will find it hard to think of a different role for itself than that of a separate power without any allies. As opposition politician and Putin critic Boris Nemtsov has put it, unless Russia can be embedded in some sort of Western security concept, Moscow will "venture around threatening everybody in search for an enemy."
Much of Russia's resurgent self-confidence is built on a weak foundation. Russia's economic growth is largely based on raw materials. Its infrastructure and industry is in desperate need of modernization. Russia's population is aging rapidly. To solve its problems, Moscow needs cooperation with the West. It can't afford to be isolated and lose its standing in global political and economic institutions and among investors -- as the withdrawal of foreign funds and the fall of Russia's stock market since the invasion of Georgia illustrates.
Russia's self-perception as a country without friends and allies has become a self-fulfilling prophecy. The war in Georgia has led to Moscow's total isolation. No one supported its blitzkrieg.
There is much for Russians and their leaders to reflect upon. A united and principled European Union with a strategy for the whole continent would be able to help Russia choose cooperation over confrontation.
Mr. Olechowski is a former foreign and finance minister of Poland. Mr. Swieboda is president of demosEuropa -- Center for European Strategy.
See all of today's editorials and op-eds, plus video commentary, on Opinion Journal1.
URL for this article:http://online.wsj.com/article/SB122090684786811593.html
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CAIR Attempts to Sabotage Law Enforcement Terrorism Training
September 09, 2008 10:40 AM EST
by Jim Kouri, CPP - (The following is based on material obtained by the National Association of Chiefs of Police.)The Council for American Islamic Relations has been trying in vain to stop a counter- terrorism program in Sarasota Florida, aimed at providing first responders with information on subjects such as building safety, suicide terrorism, technologies against terrorism and more.
This is part of CAIR's program to stop Security Solutions International (SSI) -- an organization that has trained more than 500 Federal, State and Local agencies since 2004. SSI officials, CAIR attempted to stop a training program for cops and security personnel in Seattle last Memorial Day. Fortunately, they failed."As Americans, we can not allow the civil liberties of our great country to be exploited by groups that are intent on creating a fundamentalist Islamic regime here in the USA", says Sol Bradman, CEO of Security Solutions International, the organizers of the Sarasota Sheriffs 3rd Annual Gulf Coast Terrorism conference being held in Sarasota from the 15th to the 19th of September for the benefit of Homeland Security professionals -- coming from as far as Australia to attend what is being called the most innovative terrorism prevention conference in the USA."This is not about incitement against Muslims, as CAIR wants us to believe. Our mission is to protect all Americans against terrorism but also against the abuse of our laws." This is Lawfare against US First Responders and therefore against the USA by the pseudo legal wing of the Global Jihad in America," says Bradman. "The modus operandi is simple; use the freedoms and loopholes of the most liberal nation on earth to help finance and direct the world's most violent international terrorism cells," he added.Daniel Pipes, the Harvard Professor, publisher and head of the Middle East Forum, has consistently pointed out that CAIR is riddled with extremists and has been closely linked to organizations that have been convicted or individuals convicted of terrorism. The group, that claims to represent US Muslims but is cited by many US Muslims as being a thinly veiled cover group for extremists, is losing membership. Nonetheless, they mount campaigns to get training and other valuable help to US First Responders stopped, canceled, delegitimized and several jurisdictions have folded attempts to hold counter terror training. On September 3rd, a Sarasota blog published an article claiming that sources have produced solid information that Morris Days, the Manager for Civil Rights at the CAIR MD/VA chapter, who was widely publicized by CAIR as one of its civil rights attorneys, was in fact not an attorney, and failed to provide services for Muslim American clients who came to CAIR for assistance and who paid for Days' services. Not only has CAIR not revealed the facts about Days and his fraudulent, criminal behavior, but as of yesterday, September 2, 2008, the CAIR National office in Washington, D.C. continued to post articles at its website naming Days as an attorney.The Florida representative of CAIR has been sending everyone in Sarasota pleas to stop the program under the argument that it represents an attempt to stereotype all Muslims as Terrorists. SSI is well known for fair and balanced training at a highly professional level and actively discourages racial and ethnic profiling because this bad counter terrorism practice. Not only was CAIR Florida actively touting the innocence of convicted Terrorist, Sami Al-Arian but CAIR Florida also claimed that two students at South Florida University in Tampa were carrying 4th of July firecrackers in the trunk of their car but later the two admitted to carrying explosives for the purposes of committing terrorist acts. Tampa has often suffered from the effects of Radical Islam.To counter this, SSI is offering a special day: "Allah in America". Speakers such as Andrew Whitehead, the founder of Anti-Cair will attend and speak as a result of his ceaseless dedication in fighting radical extremism in the US,channeled through the Anti-CAIR organization including frequent posts based on investigative reporting that exemplify the very essence of Islamic radicalism, including repeated attempts to threaten our constitutional freedoms. SSI's program, the Threat of Radical Jihadist to the World, prepared by a Muslim counter terror law enforcement officer from California will also be presented with an emphasis on CAIR and other extremist groups that operate under the guise of civil rights. So-called anti-terrorist organizations, aligned with Islamic extremism, blatantly abuse the laws, freedoms and loopholes of the most liberal nation on earth to help finance and direct the world's most violent international terrorism cells.The "Protecting the Homeland" organization charter embodies two main objectives: ceaseless dedication in counter-acting Islamic radicals who repeatedly attempt to threaten our constitutional freedoms, and channeling funds to educate US First Responders through sponsorship of training programs in the USA and Israel.Jim Kouri, CPP is currently fifth vice-president of the National Association of Chiefs of Police and he's a staff writer for the New Media Alliance (thenma.org). In addition, he's the new editor for the House Conservatives Fund's weblog. Kouri also serves as political advisor for Emmy and Golden Globe winning actor Michael Moriarty. He's former chief at a New York City housing project in Washington Heights nicknamed "Crack City" by reporters covering the drug war in the 1980s. In addition, he served as director of public safety at a New Jersey university and director of security for several major organizations. He's also served on the National Drug Task Force and trained police and security officers throughout the country. Kouri writes for many police and security magazines including Chief of Police, Police Times, The Narc Officer and others. He's a news writer for TheConservativeVoice.Com and PHXnews.com. He's also a columnist for AmericanDaily.Com, MensNewsDaily.Com, MichNews.Com, and he's syndicated by AXcessNews.Com. He's appeared as on-air commentator for over 100 TV and radio news and talk shows including Oprah, McLaughlin Report, CNN Headline News, MTV, Fox News, etc. His book Assume The Position is available at Amazon.Com. Kouri's own website is located at http://jimkouri.us
http://www.theconservativevoice.com/article/34361.html#
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How to Manage Savagery
By BRET STEPHENSSeptember 5, 2008
"Islam has bloody borders." So wrote Samuel Huntington in "The Clash of Civilizations?," his 1993 Foreign Affairs article later expanded (minus the question mark) into a best-selling book. Huntington argued that, eclipsing past eras of national and ideological conflict, "the battle lines of the future" would be drawn along the "fault lines between civilizations." Here, according to Huntington, was where current and coming generations would define the all-important "us" versus "them."
At the time of its writing, "The Clash of Civilizations?" had, beyond the virtues of pithiness and historical sweep, something to recommend it on purely empirical grounds. It seemed especially plausible as applied to the "crescent-shaped Islamic bloc" from the Maghreb to the East Indies.
In the Balkans, for example, Orthodox Serbs were at the throats of Bosnian and later Kosovar Muslims. In Africa, Muslims were either skirmishing or at war with Christians in Nigeria, Sudan, and Ethiopia. In the Caucasus, there was all-out war between Orthodox Russia and Muslim Chechnya, all-out war between Christian Armenia and Muslim Azerbaijan, and violent skirmishes between Orthodox Ossetia and Muslim Ingushetia.
In the Middle East, some 500,000 U.S. troops had intervened to expel Iraq from Kuwait. Israel had just endured several years of the first Palestinian intifada, soon to be followed by a fraudulent peace process leading, in turn, to a second and far bloodier intifada. Further to the east, Pakistan and India were at perpetual daggers drawn over Kashmir. There were tensions—sometimes violent—between the Hindu majority and the large Muslim minority in India, just as there were between the Christian minority and the Muslim majority in Indonesia.
For Huntington, all this was of a piece with a pattern dating at least as far back as the battle of Poitiers in 732, when Charles Martel turned back the advancing Umayyads and saved Europe for Christianity. Nor was the pattern likely to end any time soon. "The centuries-old military interaction between the West and Islam is unlikely to decline," he wrote. To the contrary: "It could become more virulent."
As predictions go, Huntington's landmark thesis seemed in many ways to have been borne out by subsequent events. Long before 9/11, and long before George W. Bush came to office, anti-American hostility within the Muslim—and, particularly, the Arab—world was plainly on the rise. So was terrorist activity directed at U.S. targets. Meanwhile, the advent of satellite TV brought channels like al-Jazeera and Hizballah's al-Manar to millions of Muslim homes and public places, offering their audience a robust diet of anti-American, anti-Israel, and often anti-Semitic "news," propaganda, and Islamist indoctrination.
It should have come as no surprise, then, that Muslim reaction to the attacks of September 11, 2001 tended toward the euphoric—in striking confirmation, it would seem, of Huntington's bold thesis. And that thesis would seem to be no less firmly established today, when opinion polls show America's "favorability ratings" plummeting even in Muslim countries once relatively well-disposed toward us: in Turkey, for example, descending from 52 percent in 1999 to 12 percent in 2008, and in Indonesia from 75 percent to 37 percent in the same period (according to the Pew Global Survey). These findings are all the more depressing in light of the massive humanitarian assistance provided to Indonesia by the U.S. after the 2004 tsunami. The same might be said of Pakistan where, despite similarly critical U.S. assistance after the 2005 earthquake, already low opinions of the U.S. have sunk still further.
Read the entire essay via active link: http://online.wsj.com/article/SB122059157681303377.html?mod=opinion_journal_federation
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Russia courts old allies, steps up defiance of the West
President Dmitry Medvedev said Saturday that Russia is 'a nation to be reckoned with.'
By Fred Weir Correspondent of The Christian Science Monitor
from the September 8, 2008 edition
Moscow - Russia is groping for fresh ways to engage with the world after its lightning-fast summer war with Georgia chilled relations with the West and dismayed even some of its closest regional allies.
"We are facing the beginning of a complete review of Russian foreign policy," says Fyodor Lukyanov, editor of Russia in Global Affairs, a leading Moscow foreign-policy journal. "Things have changed and, based on what Russian leaders are saying, our long effort to integrate with Western institutions, to become part of the Western system, is over. The aim now is to be an independent power in a multipolar world in which Russia is a major player."
Analysts here are divided over whether a "new cold war" between Russia and the West is in the offing, but a growing sense of isolation is leading Moscow to circle the wagons closer to home and to revive alliances with former Soviet allies such as Syria and Cuba, and new partners such as Venezuela.
At a State Council meeting with Russian regional leaders Saturday, President Dmitry Medvedev announced that national security will have to be bolstered to counteract unnamed forces "who are trying to exert political pressure on Russia."
In a series of statements over the past week Mr. Medvedev has spelled out what amounts to a Russian version of the Monroe Doctrine, warning that Moscow will intervene to protect its citizens and business interests, particularly in the "near abroad," meaning the former Soviet Union. "The events in [Georgia's breakaway province of South Ossetia] showed that Russia will not allow anyone to infringe upon the lives and dignity of its citizens, that Russia is a state to be, from now on, reckoned with," he told the regional leaders.
The basic message to the West is "don't even think of parking here," says Natalya Narochnitskaya, former deputy chair of the State Duma's foreign relations commission and now an executive of the Moscow-based Institute for Democracy and Cooperation, which is funded by Russian business interests.
After a decade that has seen NATO – a 26-nation Western military alliance – absorb all the former USSR's allies and move to the borders of Russia itself, and the US move to install strategic antimissile weapons in Poland and the Czech Republic, Moscow has had enough. "There is a red line, where Russia cannot accept further pressure on its borders in its traditional geopolitical arena," Ms. Narochnitskaya says.
Multipolar era emerging?
Russian policy-makers say the world order has shifted from the bipolar arrangement of the four-decade-long standoff between the US and the USSR, to a brief period of American preeminence, to an emerging multi-polar era in which many powerful players will have to learn to work out their differences.
"We need new mechanisms for strategic security cooperation, because the old ones are not working," says Andrei Klimov, a member of the State Duma's international affairs committee. "There is a new reality in the world, and we need to discuss it openly."
At the center of the current storm are Georgia and Ukraine, both NATO aspirants that Vice President Dick Cheney visited last week with a message of support that is bound to further antagonize Moscow.
Ukraine, a nation deeply divided between pro-Western and Russified parts that is currently sliding into a renewed political crisis, could face intense Russian pressure if it presses on with its bid for NATO membership. "In many Western countries there are already protests against this crazy idea of getting Georgia and Ukraine into NATO," says Mr. Klimov. "It's a formula for crisis inside NATO."
Narochnitskaya, like many other Russian experts, insists that Moscow probably wouldn't attempt to break up or annex Ukraine if it declared neutrality and became a kind of buffer state between East and West, akin to Finland's unique status during the cold war. They insist that Moscow's objection is to Ukraine joining a military alliance, and not to its economic or political cooperation with the West in general. "The majority of Ukrainians identify themselves as an independent Slavic nation," Narochnitskaya says. "But they don't need to build their national identity on hostility to Russia."
Moscow has been putting out feelers to former Soviet allies, such as Syria and Cuba, as well as emerging partners like Venezuela. A Russian delegation led by Deputy Prime Minister Igor Sechin visited Havana in early July to explore rebuilding Soviet-era economic and security ties. Medvedev discussed sophisticated arms sales and the possibility of the Russian Navy using former Soviet port facilities at Tartus, on the Mediterranean, when Syrian President Bashar al-Assad visited Moscow in late August. The Russian Foreign Ministry expressed "deep satisfaction" last week when another old Soviet crony, Nicaraguan President Daniel Ortega, became the first foreign leader to extend diplomatic recognition to South Ossetia and the other breakaway Georgian territory, Abkhazia.
New contacts a warning to the US
But any talk of reviving the USSR's alliance system may be deliberate disinformation intended to remind Washington of its own regional sensitivities. "Russia doesn't have any resources [to match the US around the world], and no desire to do so anymore," says Mikhail Delyagin, director of the independent Institute of Globalization Problems in Moscow.
But even in its own backyard, Moscow is finding its tough new stance a hard sell. On Friday, at a summit of the Moscow-led, seven-member Collective Security Treaty Organization (which includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Uzbekistan, and Tajikistan), Medvedev won backing for Russia's crushing military rebuff of Georgia's attempt to retake South Ossetia, but found not one ally willing to follow Moscow's lead in establishing diplomatic ties with the tiny pro-Moscow enclave.
Experts say Medvedev has received an even cooler response from Russia's traditional Asian friends, China and India. Both nations generously supported Moscow's decade-long effort to suppress its own separatist challenge in Chechnya and backed its angry opposition to Western recognition of Kosovo's self-declared independence earlier this year. At a summit of the influential Shanghai Cooperation Organization last week, where China is a leading member and India an observer, participants would only agree to a tepid statement that expressed "support [for] Russia's active role in facilitating peace and cooperation" in the Caucasus region.
But being a neighbor of Russia has just gotten harder, say experts.
"Russia has demonstrated that it's ready to use force outside its own borders, and this means countries of the region are going to have to take note and choose whom they listen to," on big geopolitical issues, says Mr. Lukyanov.
"The space for maneuvering between East and West [for Russia's neighbors] is definitely shrinking," he says.
French President Nicolas Sarkozy travels to Moscow on Monday with European Commission President Jose Manuel Barroso and European Union foreign-policy chief Javier Solana to encourage Medvedev to comply with a month-old peace plan for Georgia. Meanwhile, Georgia seeks a ruling from The Hague over its claims of human rights abuses against ethnic Georgians in South Ossetia and Abkhazia.
Find this article at: http://www.csmonitor.com/2008/0908/p01s06-woeu.html
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Russia’s “ Russia problem”
by Linas Kojelis
August 17, 2008
In his successful bid to topple incumbent President Gerald Ford in 1976, Governor Jimmy Carter made very effective use of the “misery index.” This index is simply the sum of the unemployment and inflation rates, by which Carter compared and contrasted very simply the results of the Nixon/Ford administrations with those of their predecessors.
In 2008, as the world again recoils at the sight of Russian tanks brutally crushing the hopes and aspirations of a small neighboring country, it’s a good time to consider the concept of an “international misery index” -- the sum of devastation caused by a country to both its neighbors and own citizens. For many international observers, the single obvious champion of such an index is Russia . For the past several centuries that country has won so many gold medals consistently in both categories that its national anthem seems to be on a continuous loop as the Russian bear once again ascends the victory stand.
In considering the category of “The Most Misery Caused Internationally,” let it be said that since the dawn of civilization the world’s been a tough place. First tribes battled tribes then kingdoms battled kingdoms until the 18th and 19th centuries when the consolidation of European nation states and their empires established and defined, for better or worse, the international stage we see today. In terms of the positive and negative social and economic consequences of their rule, one could argue there wasn’t much difference between, for example, Queen Victoria ’s empire and that of her royal Russian cousins.
However, it is striking to contrast the enthusiasm with which her Highness’s former subjects, upon attaining independence, re-established both warm and official relations through the British Commonwealth against the driving desire of states arising from both the royal and communist Russian empires to quickly distance themselves culturally, economically and politically as far as possible from Moscow . Since the collapse of the USSR, every country of the former Warsaw Pact and the Baltic States have joined NATO, perceived by both Russia’s hierarchy and a majority of its citizenry as a Great Satan. In short, it is not illogical to surmise that the Russian occupation of much of Europe in the 20th century was especially brutal and worthy of many medals for “international misery.”
As regards current events in Georgia , the key point of divergence between modern European and Russian mentalities relates to the self-identification of average citizens, i.e., what does it mean to be a “proud Frenchman” or “proud German?” Before 1945, the pounding of Teutonic boots on the streets of Amsterdam and Brussels gave Germans pride. The French took pride in African and Asian colonies, and the British in an empire upon which the sun never set.
But by the 1950’s and 60’s, modern west European states came to realize that national pride comes not from foreign occupation but by building dynamic, successful and generous societies benefiting as many citizens as possible within their own national borders. One can argue that some social programs (ex. French vacation policies, German labor laws or Swedish public health) went too far, but no one can argue that the vast majorities of people in these countries aren’t content, and have no desire to invade their neighbors in the name of “national pride.”
This then is the first part of Russia ’s “ Russia problem.” In the 21st century Russian national pride continues to base itself on brutal domination of its neighbors. It can come in the form of Russians goose-stepping through Georgia . Or it can be more subtle, such as the use of energy policy against Ukraine when it flirts too openly with the West.
Perhaps, and most dangerously, it can take the form of cyber-warfare, as was Russia ’s response to Estonia ’s decision last year to respectfully move the Soviet Bronze Soldier monument from downtown Tallinn to a military cemetery. In this case it wasn’t the Russian military, but an army of Putin-jugend who turned their cyber talents against Estonian-based internet servers. Consider the spam that comes to your computer, and then multiply it by ten thousand. That was Russia ’s tactic.
This attack on the websites of the Estonian parliament, banks, ministries, newspapers and broadcasters was so devastating that NATO ( Estonia is a member) began a substantial review of its entire military doctrine. If the Russians could shut down Estonia , why couldn’t they do the same to France , Norway or even the United States ?
In contrast to the sophisticated strategies and technologies of the international part of Russia ’s misery index rating, the domestic side – the misery Russians exact on each other – is based on crudeness and indifference.
Starting at least with Ivan the Terrible in the 16th century, the Russians people consistently acquiesce to rulers with national sadomasochistic tendencies. This pattern culminated with the reign of Josef Stalin in the 20th century. Stalin orchestrated notorious purges and ethnic cleansings (e.g. state sponsored famine in Ukraine ), which sent untold millions of Soviet citizens to their graves at the hands of their own military and security personnel.
But that’s just the tip of Russia ’s domestic misery index. In contrast to the flourishing capitalist societies in the West, life throughout the vast majority of the largest country in the world was and continues to be miserable. The simplest and most basic health and sanitation needs go unmet for the average Russian. As poor as West Virginia or Pennsylvania coal miners might have been, they never had to make availability of plain soap a strike demand, as their Russian counterparts did in the 1990’s.
Today Russia spends billions of dollars invading tiny neighbors, training its Olympic teams and hiring American image consultants, while alcoholism, smoking, drug abuse, prostitution, STDs, tuberculosis and untold environmental horrors devastate her citizens. At the Woodrow Wilson Center for International Scholars in Washington, Murray Feshbach, America’s leading expert on Russian demographics, predicts that, due to these maladies and low birth rates (especially of healthy babies), “by 2050 Russia's current population of 144 million could fall to 101 million or as low as 77 million if factoring in the AIDS epidemic.”
In short, the second part of Russia ’s “ Russia problem” is that they don’t value their own lives. In 2008, if the Russians really cared about themselves, they wouldn’t invest in foreign invasions and international intrigue, but would tend to their own social, political, health and cultural ailments first, for they are many and multiplying rapidly.
Russia is not a poor country and former President and current Prime Minister Vladimir Putin is given great credit for stabilizing Russia ’s economy. In reality, he has simply ridden a wave of success solely dependent on skyrocketing prices for oil and gas, these natural resources being in great supply in his country.
The Russian “middle class” in Moscow or St. Petersburg is simply a tiny fraction of lucky suckers sipping cream from the Russian energy cow, for that country manufactures nothing – save Kalashnikovs and nuclear power plants – for global consumption. Go a few kilometers beyond the grand boulevards of Russia ’s big cities and you return to almost medieval conditions. Repeating the pattern of preceding centuries, the 21st century Russian elites hold the masses in disdain.
In sum, Russia ’s greatest “problem” is Russia itself. Pogo’s quaint observation, “We have met the enemy and they are us,” is appropriate for the sad Russian people as for few others.
But a handful of other nations have the cultural achievements, grand landscape and bountiful resources of Russia . If only the Russians were more introspective and mindful of their God given gifts and dutiful in meeting the needs of their own people, both their lives and those of their long-suffering neighbors would be much, much improved.
Linas Kojelis served as Deputy Assistant Secretary of State and Special Assistant to the President at the White House during the Reagan Administration, and is a co-founder of the U.S.- Baltic Foundation (http://www.usbaltic.org/). He can be contacted at linas@koco2.com.
===========================================================================
Putin wants a new Russian empire
By Con Coughlin
Last Updated: 12:01am BST 05/09/2008
Have your say Read comments
Just how far is Russia prepared to go in its attempts to build a new Russian empire? As the West struggles to digest the aftermath of Moscow's audacious land grab in Georgia, all the signals emanating from the Kremlin suggest that, far from being cowed by the international condemnation it has received for its dramatic intervention in South Ossetia and Abkhazia, this is just the start of Russia's quest to establish a new era of imperial glory.
That is certainly how senior officials across Whitehall are interpreting the new mood of territorial expansionism that seems to be sweeping through the Kremlin. "The Russians may be able to come to terms with the collapse of the Soviet Union, but they will never get used to the idea that they are no longer an empire," one senior Whitehall official told me this week. "The desire to build a new empire is far stronger than any desire to rebuild the Soviet Union, and that is what is currently driving Moscow's behaviour in the Caucasus."
Vladimir Putin displays his hunter instincts tracking tigers in Russia
There was a time when the mere sight of the American vice-president, Dick Cheney - the éminence grise of the Bush administration - making his considerable presence felt in the Caucasus would be sufficient to bring the Kremlin to its senses. Unlike some of the younger and less-experienced members of President George W Bush's foreign policy team, Mr Cheney is a veteran Cold War warrior who, even after the collapse of the Soviet Union, warned that the threat of resurgent Russian nationalism could never be discounted.
Read more from Con Coughlin
EU moves to loosen Russia's 'energy stranglehold'
When Mr Bush said he had looked the former Russian president Vladimir Putin in the eye and got "a sense of his soul" after their first encounter in Slovenia in the summer of 2001, Mr Cheney remained deeply sceptical about Mr Putin's ultimate intentions. This might have been the high point in the thaw in relations between the Kremlin and the White House, but that did not stop Mr Cheney forging ahead with his Nato enlargement agenda, signing up as many of the former Soviet republics for membership as possible, and building a network of oil and gas pipelines linking the West to the vast new energy resources coming on stream in central Asia. For all Moscow's talk of becoming a trusted ally of the West, the hawkish Mr Cheney simply did not trust it to deliver.
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And so it has proved. Whether the Kremlin ordered last month's invasion of Georgia to prevent it from joining Nato, or because it was concerned that the new oil pipeline might jeopardise Russia's stranglehold over the West's energy supplies, what is clear is that Moscow simply could not tolerate the notion that any country occupying what Mr Putin defines as "post-Soviet space" has the right to think and act for itself.
Yesterday Mr Cheney, during his stopover in Georgia, said America remained "fully committed" to Georgia's efforts to join Nato, but it is highly unlikely that it president, Mikheil Saakashvili, can continue with Tbilisi's pursuit of Nato membership while a third of his country remains under occupation by Russian troops.
Indeed, as Mr Cheney will have discovered during his hastily arranged tour of the Caucasus this week, the Kremlin's success in undermining the Georgian government has served only to strengthen Moscow's determination to prevent the West from making any further advances into territory it considers part of its historic sphere of interest.
Mr Putin's lament that the collapse of the Soviet Union was "the greatest geopolitical catastrophe" of the 20th century has often been taken to suggest that Russia, buoyed by its vast oil wealth, is intent on re-establishing the old Cold War boundaries in central Europe. But a more accurate insight to the Kremlin's current thinking is contained in Mr Putin's book First Person, published in 2000, in which he talks about establishing a new Russian empire, rather than resurrecting the Soviet Union.
This would certainly explain Moscow's current preoccupation with the Caucasus, which, under the tsars, was always regarded as a prime target for Russia's expansionist aims and parts of which are now the subject of a sustained campaign of destabilisation by the Kremlin.
Having dealt the Saakashvili government what could still prove to be a lethal blow, Moscow hardly missed a beat before turning its attention towards Ukraine, another post-Soviet state that nurtures aspirations to join both the European Union and Nato. Russia has made no secret of its disdain for the pro-Western government of President Viktor Yushchenko that took office after the 2004 Orange Revolution, at one point turning off the oil and gas supply taps just to demonstrate the extent of Kiev's dependence on Russian goodwill.
Now Moscow can take comfort from the fact that the presence of Russian military hardware in neighbouring Georgia has provoked deep political divisions in Kiev, where Yulia Tymoshenko, Ukraine's strong-willed prime minister, has been accused by Mr Yushchenko of siding with the main pro-Russian opposition leader, Viktor Yanukovich.
Moscow will not always need to rely on military hardware to redraw geographical boundaries in its favour - sometimes all that will be required is clever manipulation of local politics, as is currently happening in Ukraine.
Nor are Russia's imperial ambitions confined to the Caucasus. It has already been active in Central Asia - another favourite imperial hunting ground - where Moscow has established close relations with the deeply unpleasant despots who currently hold power in Tajikistan, Uzbekistan and Turkmenistan. It has taken a keen interest in the separatist movements that are currently active in Moldova and the disputed Azerbaijan enclave of Nagorno-Karabakh. Moscow has also made clear its determination to protect the Russian minorities who remain in the plucky little Baltic states liberated at the end of the Cold War, but which continue to be on the receiving end of Moscow's intimidatory tactics.
Nobody knows whether, lying somewhere in the dark recesses of the Kremlin, there is a map containing a definitive outline of the new Russian empire Mr Putin and his acolytes would like to create. But that is what they are undoubtedly seeking to achieve and there's very little - or so it seems - the West can do to stop them.
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/09/05/do0505.xml
===========================================
Russia’s Oligarchs May Face a Georgian Chill
By LANDON THOMAS Jr.
Alexander Nemenov/Agence France-Presse — Getty Images
Roman Abramovich, a former oil baron, has combined close ties
to the Kremlin with personal and business ties to the West.
LONDON — As Russia’s hot war with Georgia threatens to become a colder, drawn-out conflict with the West, the global ambitions of some of its politically connected, controversial billionaires could suffer a setback.
The oligarchs, as they are widely known, have already paid a price from Russia’s forceful assertion in South Ossetia: the stock market recently hit a two-year low as foreign investors left in droves.
And while the sharpest of stock market swoons would only nick the oligarch’s giant fortunes, of more lasting effect, perhaps, is the notion gaining currency in some financial circles that their close ties to Prime Minister Vladimir V. Putin and his handpicked president, Dmitri A. Medvedev, may elevate the risk of doing business with them.
As the European Union seeks a diplomatic approach to Moscow, some policy makers are starting to suggest that the best way to influence the Kremlin would be to put more pressure on the Russian business community in Europe, particularly here in London, where many of the oligarchs have financial interests.
“This is a big blow, a shock for all these people,” said Anders Aslund, a critic of the Russian government who is an expert in Russian and East European studies at the Peterson Institute for International Economics in Washington. “Relations with the West will be difficult. There will be sanctions, the stock market is down and governance is going down the drain, and it is all Putin’s doing.”
Russia’s clash with the West follows a six-year, commodity-fueled boom that has pumped new life into a once destitute economy and catapulted the country’s business elite to the ranks of billionaires. It also comes as some of the country’s businessmen have begun to expand their international operations and loosen ties to Russia.
Roman Abramovich, the 42-year-old onetime oil baron with close ties to Mr. Putin, has established deep ties in London by turning part of his estimated $23 billion fortune into ownership of the Chelsea soccer club. He has plans to turn a 19th-century apartment residence in London’s Lowndes Square into a mansion with a pool and parking garage. Although he recently sold much of his Russian portfolio and resigned as governor of Russia’s Chukotka region, his ties with the Kremlin have helped him avoid the fate of oligarchs like Mikhail B. Khodorkovsky, the former billionaire owner of the Yukos oil company who sits in a Siberian jail cell after failed efforts to oppose Mr. Putin’s policies.
Another oligarch with close ties to Mr. Putin is Oleg V. Deripaska, 40, an aluminum magnate with a net worth of $28 billion who has also moved beyond Russia’s borders. His holding company, Basic Element, with $27 billion in revenue, has invested in Magna, a Canadian auto parts company. It has purchased large stakes in two construction companies in Austria and Germany and is a large investor in Montenegro. Mr. Deripaska is weighing a public offering of Rusal, the aluminum company that he controls.
For Boris Berezovsky, a billionaire whose once-powerful stature was cut down after Mr. Putin began scrutinizing the nation’s richest men, Russia’s conflict with Georgia opens the door for the West to consider influencing the Kremlin by going after its favored oligarchs — including Mr. Abramovich and Mr. Deripaska. “They are part of his regime,” Mr. Berezovsky said.
“The West plays with the rules of a democrat, but Putin is a gangster,” he declared, sitting at the head of a boardroom table in his London office. “He understands only power.”
Since his 2000 escape to London, where he was granted asylum, Mr. Berezovsky has been a ceaseless (if not perhaps self-interested) scold, calling for the United States and Europe to cut ties with Mr. Putin.
With regard to Mr. Abramovich Mr. Berezovsky does not pretend to be objective. He has filed a £2 billion ($3.5 billion) lawsuit against his former business associate, claiming Mr. Abramovich forced him to sell his shares of the Russian oil company Sibneft and other assets for far less than their real value.
To support his claim that Mr. Abramovich and Mr. Putin are “business partners,” he cites an encounter with Mr. Abramovich in 1999 where he was asked to split the cost of a $50 million yacht for Mr. Putin — an offer Mr. Berezovsky says he refused.
Bankers in Moscow also say there will be lasting results from Russia’s diplomatic estrangement. Raising capital from Western banks, already difficult with the tighten credit markets, will become harder, and securing visas may become more difficult.
Mr. Deripaska has already had a visa to the United States revoked over concerns about his business practices. And last month David Cameron, the British Conservative Party leader, called for a review of his country’s visa policy toward Russia’s elite — without naming names. To some observers, the mere mention of the idea by a leading British politician shows that international attitudes toward Russia’s leading oligarchs may have further to fray.
Spokesmen for Mr. Abramovich and Mr. Deripaska disputed the notion that their expanding business operations would feel the sting of an anti-Putin effort.
Speaking for Mr. Abramovich, John Mann declined to address Mr. Berezovsky’s claims, citing the continuing litigation.
A spokesman for Mr. Deripaska said: “Basic Element maintains normal and constructive relations with Russian authorities.”
According to Mr. Aslund, Mr. Abramovich has the closer relationship to the Russian leadership. He pointed to Mr. Abramovich’s $13 billion sale in 2005 of his stake in the oil company Sibneft to Gazprom, where Mr. Medvedev was a top executive.
For years these cozy links were played down by investors. But the outbreak of war, coming on top of the conflict between the oil company BP and its partners in a Russian joint venture, suggests that in the future the compact between big business and big government in Russia will no longer be looked upon so benignly.
“The risk premium has to be applied more broadly in Russia,” said John-Paul Smith, a strategist for Russia and Central Europe at Pictet, a Swiss asset manager. “You are never sure where private business ends and government starts.”
For the moment, there is little immediate likelihood that Mr. Deripaska or Mr. Abramovich would suffer an indignity here. The breadth and scope of Mr. Deripaska’s and Mr. Abramovich’s businesses should be enough to protect them from any kind of investor strike. Mr. Abramovich and Mr. Deripaska have built strong personal and business ties to the West as well. Mr. Deripaska, for example, has relied on the financial advice of Nathaniel Rothschild, the man in line to be the fifth Baron Rothschild. He is also an investment partner with Peter Munk, chairman and founder of Barrick Gold, in several projects.
“The fact that he is close to Putin is neither a plus or a minus,” said Mr. Munk, who sits on the advisory board of Rusal. “I judge him by his behavior, and my trust in him is complete.”
http://www.nytimes.com/2008/09/05/business/worldbusiness/05oligarchs.html?_r=1&oref=slogin&ref=business&pagewanted=print
=====================================================
LUKOIL says output growth hinges on more tax cuts
Thu Sep 11, 2008 9:57am EDT
By Tanya Mosolova
MOSCOW (Reuters) - LUKOIL (LKOH.MM: Quote, Profile, Research, Stock Buzz), Russia's second-largest oil producer, cannot guarantee its oil production will grow if the government decides against extending tax breaks to the industry, its vice president said.
Leonid Fedun told the Reuters Russia Investment Summit that the industry needed at least 400 billion roubles ($15.6 billion) in extra tax breaks in addition to the alleviation of 140 billion roubles already approved.
"The state should decide what is more important: Tax stability or growth," Fedun said at the event, held at the Reuters office in Moscow.
"If Russia plans to grow (production) by 1.5 percent we should understand that annual investments in oil production should exceed $100 billion," he said.
"LUKOIL can have an investment programme of $7 billion, $12 billion or $14 billion. Under the first scenario we do not grow, under the second scenario we grow very slowly, under the third we grow faster," he said.
U.S. oil major ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz) holds one fifth of LUKOIL's stock.
LUKOIL's production amounts to around one-fifth of Russia's total output, which has been falling since the beginning of the year, making it almost impossible for the country to avoid its first annual output decline in a decade.
Poor oil output performance in Russia, the world's second-largest oil exporter after Saudi Arabia, has become a major concern for the country's government, which depends heavily on oil revenues, as well as for global markets.
Many officials have said a second stage of oil tax reform is needed but Finance Minister Alexei Kudrin, the main fiscal hawk in the government of Prime Minister Vladimir Putin, has said oil firms should not expect further cuts before 2011.
Fedun said the first stage of the tax reform, when the government agreed to cut the mineral extraction tax and introduce tax holidays for depleted and new fields from next year, will allow LUKOIL to invest more in deposits in the Arctic Timan Pechora region and speed up its offshore Caspian fields.
LUKOIL cut its oil output growth forecast for 2008 earlier this year to 1.4-1.7 percent from over 2 percent before. It produced 91.5 million tons (1.8 million barrels per day) last year.
(Additional reporting by Dmitry Zhdannikov, Michael Stott, Robin Paxton and Katya Golubkova; Editing by Jason Neely)
http://www.reuters.com/articlePrint?articleId=USLB1688420080911
============================================
Russian generals should weigh words and not attempt to scare Europe - Polish FM Sikorski
Last Updated: 12:01am BST 05/09/2008
Have your say Read comments
Just how far is Russia prepared to go in its attempts to build a new Russian empire? As the West struggles to digest the aftermath of Moscow's audacious land grab in Georgia, all the signals emanating from the Kremlin suggest that, far from being cowed by the international condemnation it has received for its dramatic intervention in South Ossetia and Abkhazia, this is just the start of Russia's quest to establish a new era of imperial glory.
That is certainly how senior officials across Whitehall are interpreting the new mood of territorial expansionism that seems to be sweeping through the Kremlin. "The Russians may be able to come to terms with the collapse of the Soviet Union, but they will never get used to the idea that they are no longer an empire," one senior Whitehall official told me this week. "The desire to build a new empire is far stronger than any desire to rebuild the Soviet Union, and that is what is currently driving Moscow's behaviour in the Caucasus."
Vladimir Putin displays his hunter instincts tracking tigers in Russia
There was a time when the mere sight of the American vice-president, Dick Cheney - the éminence grise of the Bush administration - making his considerable presence felt in the Caucasus would be sufficient to bring the Kremlin to its senses. Unlike some of the younger and less-experienced members of President George W Bush's foreign policy team, Mr Cheney is a veteran Cold War warrior who, even after the collapse of the Soviet Union, warned that the threat of resurgent Russian nationalism could never be discounted.
Read more from Con Coughlin
EU moves to loosen Russia's 'energy stranglehold'
When Mr Bush said he had looked the former Russian president Vladimir Putin in the eye and got "a sense of his soul" after their first encounter in Slovenia in the summer of 2001, Mr Cheney remained deeply sceptical about Mr Putin's ultimate intentions. This might have been the high point in the thaw in relations between the Kremlin and the White House, but that did not stop Mr Cheney forging ahead with his Nato enlargement agenda, signing up as many of the former Soviet republics for membership as possible, and building a network of oil and gas pipelines linking the West to the vast new energy resources coming on stream in central Asia. For all Moscow's talk of becoming a trusted ally of the West, the hawkish Mr Cheney simply did not trust it to deliver.
advertisement
And so it has proved. Whether the Kremlin ordered last month's invasion of Georgia to prevent it from joining Nato, or because it was concerned that the new oil pipeline might jeopardise Russia's stranglehold over the West's energy supplies, what is clear is that Moscow simply could not tolerate the notion that any country occupying what Mr Putin defines as "post-Soviet space" has the right to think and act for itself.
Yesterday Mr Cheney, during his stopover in Georgia, said America remained "fully committed" to Georgia's efforts to join Nato, but it is highly unlikely that it president, Mikheil Saakashvili, can continue with Tbilisi's pursuit of Nato membership while a third of his country remains under occupation by Russian troops.
Indeed, as Mr Cheney will have discovered during his hastily arranged tour of the Caucasus this week, the Kremlin's success in undermining the Georgian government has served only to strengthen Moscow's determination to prevent the West from making any further advances into territory it considers part of its historic sphere of interest.
Mr Putin's lament that the collapse of the Soviet Union was "the greatest geopolitical catastrophe" of the 20th century has often been taken to suggest that Russia, buoyed by its vast oil wealth, is intent on re-establishing the old Cold War boundaries in central Europe. But a more accurate insight to the Kremlin's current thinking is contained in Mr Putin's book First Person, published in 2000, in which he talks about establishing a new Russian empire, rather than resurrecting the Soviet Union.
This would certainly explain Moscow's current preoccupation with the Caucasus, which, under the tsars, was always regarded as a prime target for Russia's expansionist aims and parts of which are now the subject of a sustained campaign of destabilisation by the Kremlin.
Having dealt the Saakashvili government what could still prove to be a lethal blow, Moscow hardly missed a beat before turning its attention towards Ukraine, another post-Soviet state that nurtures aspirations to join both the European Union and Nato. Russia has made no secret of its disdain for the pro-Western government of President Viktor Yushchenko that took office after the 2004 Orange Revolution, at one point turning off the oil and gas supply taps just to demonstrate the extent of Kiev's dependence on Russian goodwill.
Now Moscow can take comfort from the fact that the presence of Russian military hardware in neighbouring Georgia has provoked deep political divisions in Kiev, where Yulia Tymoshenko, Ukraine's strong-willed prime minister, has been accused by Mr Yushchenko of siding with the main pro-Russian opposition leader, Viktor Yanukovich.
Moscow will not always need to rely on military hardware to redraw geographical boundaries in its favour - sometimes all that will be required is clever manipulation of local politics, as is currently happening in Ukraine.
Nor are Russia's imperial ambitions confined to the Caucasus. It has already been active in Central Asia - another favourite imperial hunting ground - where Moscow has established close relations with the deeply unpleasant despots who currently hold power in Tajikistan, Uzbekistan and Turkmenistan. It has taken a keen interest in the separatist movements that are currently active in Moldova and the disputed Azerbaijan enclave of Nagorno-Karabakh. Moscow has also made clear its determination to protect the Russian minorities who remain in the plucky little Baltic states liberated at the end of the Cold War, but which continue to be on the receiving end of Moscow's intimidatory tactics.
Nobody knows whether, lying somewhere in the dark recesses of the Kremlin, there is a map containing a definitive outline of the new Russian empire Mr Putin and his acolytes would like to create. But that is what they are undoubtedly seeking to achieve and there's very little - or so it seems - the West can do to stop them.
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/09/05/do0505.xml
===========================================
Russia’s Oligarchs May Face a Georgian Chill
By LANDON THOMAS Jr.
Alexander Nemenov/Agence France-Presse — Getty Images
Roman Abramovich, a former oil baron, has combined close ties
to the Kremlin with personal and business ties to the West.
LONDON — As Russia’s hot war with Georgia threatens to become a colder, drawn-out conflict with the West, the global ambitions of some of its politically connected, controversial billionaires could suffer a setback.
The oligarchs, as they are widely known, have already paid a price from Russia’s forceful assertion in South Ossetia: the stock market recently hit a two-year low as foreign investors left in droves.
And while the sharpest of stock market swoons would only nick the oligarch’s giant fortunes, of more lasting effect, perhaps, is the notion gaining currency in some financial circles that their close ties to Prime Minister Vladimir V. Putin and his handpicked president, Dmitri A. Medvedev, may elevate the risk of doing business with them.
As the European Union seeks a diplomatic approach to Moscow, some policy makers are starting to suggest that the best way to influence the Kremlin would be to put more pressure on the Russian business community in Europe, particularly here in London, where many of the oligarchs have financial interests.
“This is a big blow, a shock for all these people,” said Anders Aslund, a critic of the Russian government who is an expert in Russian and East European studies at the Peterson Institute for International Economics in Washington. “Relations with the West will be difficult. There will be sanctions, the stock market is down and governance is going down the drain, and it is all Putin’s doing.”
Russia’s clash with the West follows a six-year, commodity-fueled boom that has pumped new life into a once destitute economy and catapulted the country’s business elite to the ranks of billionaires. It also comes as some of the country’s businessmen have begun to expand their international operations and loosen ties to Russia.
Roman Abramovich, the 42-year-old onetime oil baron with close ties to Mr. Putin, has established deep ties in London by turning part of his estimated $23 billion fortune into ownership of the Chelsea soccer club. He has plans to turn a 19th-century apartment residence in London’s Lowndes Square into a mansion with a pool and parking garage. Although he recently sold much of his Russian portfolio and resigned as governor of Russia’s Chukotka region, his ties with the Kremlin have helped him avoid the fate of oligarchs like Mikhail B. Khodorkovsky, the former billionaire owner of the Yukos oil company who sits in a Siberian jail cell after failed efforts to oppose Mr. Putin’s policies.
Another oligarch with close ties to Mr. Putin is Oleg V. Deripaska, 40, an aluminum magnate with a net worth of $28 billion who has also moved beyond Russia’s borders. His holding company, Basic Element, with $27 billion in revenue, has invested in Magna, a Canadian auto parts company. It has purchased large stakes in two construction companies in Austria and Germany and is a large investor in Montenegro. Mr. Deripaska is weighing a public offering of Rusal, the aluminum company that he controls.
For Boris Berezovsky, a billionaire whose once-powerful stature was cut down after Mr. Putin began scrutinizing the nation’s richest men, Russia’s conflict with Georgia opens the door for the West to consider influencing the Kremlin by going after its favored oligarchs — including Mr. Abramovich and Mr. Deripaska. “They are part of his regime,” Mr. Berezovsky said.
“The West plays with the rules of a democrat, but Putin is a gangster,” he declared, sitting at the head of a boardroom table in his London office. “He understands only power.”
Since his 2000 escape to London, where he was granted asylum, Mr. Berezovsky has been a ceaseless (if not perhaps self-interested) scold, calling for the United States and Europe to cut ties with Mr. Putin.
With regard to Mr. Abramovich Mr. Berezovsky does not pretend to be objective. He has filed a £2 billion ($3.5 billion) lawsuit against his former business associate, claiming Mr. Abramovich forced him to sell his shares of the Russian oil company Sibneft and other assets for far less than their real value.
To support his claim that Mr. Abramovich and Mr. Putin are “business partners,” he cites an encounter with Mr. Abramovich in 1999 where he was asked to split the cost of a $50 million yacht for Mr. Putin — an offer Mr. Berezovsky says he refused.
Bankers in Moscow also say there will be lasting results from Russia’s diplomatic estrangement. Raising capital from Western banks, already difficult with the tighten credit markets, will become harder, and securing visas may become more difficult.
Mr. Deripaska has already had a visa to the United States revoked over concerns about his business practices. And last month David Cameron, the British Conservative Party leader, called for a review of his country’s visa policy toward Russia’s elite — without naming names. To some observers, the mere mention of the idea by a leading British politician shows that international attitudes toward Russia’s leading oligarchs may have further to fray.
Spokesmen for Mr. Abramovich and Mr. Deripaska disputed the notion that their expanding business operations would feel the sting of an anti-Putin effort.
Speaking for Mr. Abramovich, John Mann declined to address Mr. Berezovsky’s claims, citing the continuing litigation.
A spokesman for Mr. Deripaska said: “Basic Element maintains normal and constructive relations with Russian authorities.”
According to Mr. Aslund, Mr. Abramovich has the closer relationship to the Russian leadership. He pointed to Mr. Abramovich’s $13 billion sale in 2005 of his stake in the oil company Sibneft to Gazprom, where Mr. Medvedev was a top executive.
For years these cozy links were played down by investors. But the outbreak of war, coming on top of the conflict between the oil company BP and its partners in a Russian joint venture, suggests that in the future the compact between big business and big government in Russia will no longer be looked upon so benignly.
“The risk premium has to be applied more broadly in Russia,” said John-Paul Smith, a strategist for Russia and Central Europe at Pictet, a Swiss asset manager. “You are never sure where private business ends and government starts.”
For the moment, there is little immediate likelihood that Mr. Deripaska or Mr. Abramovich would suffer an indignity here. The breadth and scope of Mr. Deripaska’s and Mr. Abramovich’s businesses should be enough to protect them from any kind of investor strike. Mr. Abramovich and Mr. Deripaska have built strong personal and business ties to the West as well. Mr. Deripaska, for example, has relied on the financial advice of Nathaniel Rothschild, the man in line to be the fifth Baron Rothschild. He is also an investment partner with Peter Munk, chairman and founder of Barrick Gold, in several projects.
“The fact that he is close to Putin is neither a plus or a minus,” said Mr. Munk, who sits on the advisory board of Rusal. “I judge him by his behavior, and my trust in him is complete.”
http://www.nytimes.com/2008/09/05/business/worldbusiness/05oligarchs.html?_r=1&oref=slogin&ref=business&pagewanted=print
=====================================================
LUKOIL says output growth hinges on more tax cuts
Thu Sep 11, 2008 9:57am EDT
By Tanya Mosolova
MOSCOW (Reuters) - LUKOIL (LKOH.MM: Quote, Profile, Research, Stock Buzz), Russia's second-largest oil producer, cannot guarantee its oil production will grow if the government decides against extending tax breaks to the industry, its vice president said.
Leonid Fedun told the Reuters Russia Investment Summit that the industry needed at least 400 billion roubles ($15.6 billion) in extra tax breaks in addition to the alleviation of 140 billion roubles already approved.
"The state should decide what is more important: Tax stability or growth," Fedun said at the event, held at the Reuters office in Moscow.
"If Russia plans to grow (production) by 1.5 percent we should understand that annual investments in oil production should exceed $100 billion," he said.
"LUKOIL can have an investment programme of $7 billion, $12 billion or $14 billion. Under the first scenario we do not grow, under the second scenario we grow very slowly, under the third we grow faster," he said.
U.S. oil major ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz) holds one fifth of LUKOIL's stock.
LUKOIL's production amounts to around one-fifth of Russia's total output, which has been falling since the beginning of the year, making it almost impossible for the country to avoid its first annual output decline in a decade.
Poor oil output performance in Russia, the world's second-largest oil exporter after Saudi Arabia, has become a major concern for the country's government, which depends heavily on oil revenues, as well as for global markets.
Many officials have said a second stage of oil tax reform is needed but Finance Minister Alexei Kudrin, the main fiscal hawk in the government of Prime Minister Vladimir Putin, has said oil firms should not expect further cuts before 2011.
Fedun said the first stage of the tax reform, when the government agreed to cut the mineral extraction tax and introduce tax holidays for depleted and new fields from next year, will allow LUKOIL to invest more in deposits in the Arctic Timan Pechora region and speed up its offshore Caspian fields.
LUKOIL cut its oil output growth forecast for 2008 earlier this year to 1.4-1.7 percent from over 2 percent before. It produced 91.5 million tons (1.8 million barrels per day) last year.
(Additional reporting by Dmitry Zhdannikov, Michael Stott, Robin Paxton and Katya Golubkova; Editing by Jason Neely)
http://www.reuters.com/articlePrint?articleId=USLB1688420080911
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Russian generals should weigh words and not attempt to scare Europe - Polish FM Sikorski
WARSAW. SEPTEMBER 11. INTERFAX CENTRAL EUROPE - Poland will try to build trust and will proceed in a predictable way with regard to a planned U.S. anti-missile shield to be based on Polish territory - but Russian generals should not attempt to scare Europe with harsh rhetoric, Polish Foreign Minister Radoslaw Sikorski in Warsaw Thursday during a joint press conference held with Russian Foreign Minister Sergei Lavrov.
"We've said today that the generals should weight their words a little more in order not to scare Europe," Sikorski said. "Poland will try to build trust and will proceed in a predictable and transparent way."
Russia has long opposed the anti-missile system, elements of which will be installed on Polish and Czech territory.
For his part, Lavrov said that Russia does not see a threat from Poland, but that the shield still poses a risk to Russian security.
"We don't see any threats from PL, but we said there are risks for the security of the Russian Federation that arise as a result of the U.S. infrastructure coming closer to our borders," Lavrov said.
"We appreciate that the Polish side is trying to understand our concerns, as well as what Minister Sikorski said about consultations and building trust and transparency," he added. "We will wait for concrete proposals and on that base we will be holding those consultations."
Lavrov went on to add that Russia sees the missile shield as part of U.S. strategy, noting that parity between the two countries was long regulated by agreements between the U.S.S.R. and the U.S.
"We don't see a threat for the Russian Federation that would come from Poland," Lavrov said. "We cannot ignore, however, that those elements are an integral part of a strategic installation of the U.S.A. - a system that has so far been regulated by agreements between USSR and USA and this was the base of the parity in the military system.
Lavrov said that the U.S. has moved forward on an international missile shield and that it is considering placing elements of the shield in space, which is opposed by some EU countries.
"The U.S. some time ago cancelled the agreement on the missile shield," he added. "At this point they try to install shield systems in various parts of the globe and even plan to place elements of the system to outer space, which is opposed by a number of countries, including some in the EU.
"The U.S. is currently developing a project for a rapid global assault, which is a serious threat for the concept of the parity that used to exist, especially that there are plans for installing non- nuclear warheads on strategic vessels," Lavrov continued. "This is why the authorities of the Russian Federation must take steps to ensure safety."
For his part, Sikorski said that Poland is ready to go the extra mile to reassure Russia regarding the shield.
"We've talked about the Polish-U.S. agreement on antiballistic missiles," Sikorski said. "I've confirmed to the minister our readiness to discuss the tools for building trust. Our deputies will meet soon to discuss details.
"Our deputies will meet by the end of this year to determine the formula."
The Warsaw meeting is Lavrov's first visit to a European Union state following the conflict in Georgia, which saw Russian forces drive deep into Georgia, following Georgiat's attempt to regain control over the breakaway region of South Ossetia in early August.
MS/PS
For further information please e-mail newsroom@interfax.pl or phone (+48) 22 630 83 88.
http://www.interfax.cn/
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Arabians ask to provide land from City of Tallinn for Islamic centre
BC, Tallinn, 08.09.2008.
Representatives of Sheikh Sultan bin Mohammed Al Qasimi are asking the City of Tallinn to provide land for building an Islamic religious and culture centre in Tallinn, the Baltic Business News channel informed, based on information provided by Äripäev.
Sheikh Sultan bin Mohammed Al Qasimi, UAE Supreme Council Member and Ruler of Sharjah, the third largest emirate of the United Arabian Emirates, considers building of the first Islamic centre in Estonia.
The plan was unveiled in March by Jamal Al Taraifi, the Director General of Sharjah Secretariat General for Auqaf, during a meeting with visiting Muft of Estonia Eldar Muhammed Shun.
Al Tarifi said the centre is expected to be built in coordination with the Organisation of Islamic Conference.
http://www.baltic-course.com/eng/baltic_news/&doc=1538
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Realism about Russia
Author: Joschka Fischer, Germany’s Foreign Minister and Vice Chancellor from 1998 to 20058 September 2008 - Issue : 798
Joschka Fischer, Germany’s Foreign Minister and Vice Chancellor from 1998 to 2005, led Germany’s Green Party for nearly 20 years.
Russia’s strategy to revise the post- Soviet order in what it calls its “near abroad” will be pursued with even more perseverance follow ing its victory over Georgia. Europe should have no illusions about this and sh - ould begin to prepare itself. But, as the Euro - pean Union ponders what to do, cold rea - lism, not hysterical overreaction, is in order. Unfortunately, equating the current situation in the Caucasus with the Soviet Union’s invasion of Czechoslovakia in 1968 does not attest to this kind of realism. Neither the West nor NATO constitutes the decisive strategic threat facing Russia, which comes from the Islamic South and from the Far East, in particular the emerging superpower, China. Moreover, Russia’s strength is in no way comparable to that of the former Soviet Union. Indeed, demographically, Russia is undergoing a dramatic decline. Apart from commodity exports, it has little to offer to the global economy. Notwithstanding booming oil and gas revenues, its infrastructure remains underdeveloped, and successful economic modernization is a long way off. Likewise, its political and legal system is authoritarian, and its numerous minority problems remain unsolved. As a result, Russia’s current challenging of the territorial integrity of Georgia might prove to be a grave error in the not-so-distant future. Given this structural weakness, the idea of a new Cold War is misleading. The Cold War was an endurance race between two similarly strong rivals, the weaker of which eventually had to give up. Russia does not have the capacity to wage another struggle of that type. Nevertheless, as a restored great power, the new Russia will for the time being attempt to ride in the slipstream of other great powers for as long as doing so coincides with its possibilities and interests; it will concentrate on its own sphere of influence and on its role as a global energy power; and it will otherwise make use of its opportunities on a global scale to limit America’s power. But it will not be able to seriously challenge the United States – or looking towards the future, China – in ways that the Soviet Union once did. It is now clear that in the future, Russia will once again pursue its vital interests with military force – particularly in its “near abroad.” But Europe must never accept a renewal of Russian great power politics, which operates according to the idea that might makes right. Indeed, it is here that Russia’s renewed confrontation with the West begins, because the new Europe is based on the principle of the inviolability of boundaries, peaceful conflict resolution, and the rule of law, so to forgo this principle for the benefit of imperial zones of influence would amount to self-abandonment. Further eastward expansion of NATO, however, will be possible only against fierce Russian resistance. Nor will this kind of policy in any way create more security, because it entails making promises that won’t be kept in an emergency – as we now see in Georgia. For too long, the West has ignored Russia’s recovery of strength and was not prepared to accept the consequences. But not only Russia has changed; so has the entire world. America’s neo-conservatives have wasted a large part of their country’s power and moral authority in an unnecessary war in Iraq, willfully weakening the only global Western power. China, India, Brazil, Russia, and the Persian Gulf today are the world economy’s new growth centers and will soon be centers of power to be reckoned with. In view of these realities, the threat of exclusion from the G8 doesn’t really feel earth shattering to Russia. Europe’s disunity and impotence underline this image of a West that has partially lost touch with geo-political realities. The response to the return of Russia’s imperial great power politics has nothing to do with punishing Russia, and a lot to do with establishing innately Western – especially European – positions of power. This requires several measures: l a new political dynamism vis-à-vis Turkey to link this country, one crucial for European security, permanently to Europe; l putting a stop to Moscow’s divide-and-conquer politics by adopting a common EU energy policy; l a serious initiative for strengthening Europe’s defense capabilities; l a greater EU commitment to Ukraine to safeguard its independence; l a greater freedom of travel for all the EU’s Eastern neighbors. All of this, and much more, is needed to send a clear signal to Russia that Europe is unwilling to stand idly by as it returns to great power politics. Presumably, none of this will happen, and it is precisely such inaction that is, in large part, the cause of Russia’s strength and Europe’s weakness. At the same time, however, one shouldn’t lose sight of the joint interests linking Russia and the West. Cooperative relations should be maintained as far as possible. It is blatantly obvious that for Russia’s elites, weakness and cooperation are mutually exclusive. Therefore, whoever wants cooperation with Russia – which is in Europe’s interest – must be strong. That is the lesson from the violence in the Caucasus that Europe must urgently take to heart.
http://www.neurope.eu/articles/89602.php
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Baltic tigers face fears of economic jungle
By eNews 2.0 Staff 14:09, September 8th 2008
Three tiny post-communist countries earned the nickname Baltic Tigers with years of spectacular economic growth that made them the envy of the European Union's old economies. But Monday brought new evidence that Estonia and Latvia risk recession amid a worldwide credit crunch and plummeting domestic demand, while Lithuania also faces economic woes. Estonia's gross domestic product (GDP) shrank 1.1 per cent year-on-year in the second quarter of 2008, down from growth of 0.2 per cent in the previous quarter, Statistics Estonia said in revised figures. Latvia's economy grew by 0.1 per cent in the second quarter, down from 3.6 per cent in the previous three-month period, the office of statistics said in second estimates on Monday. Once part of the fastest-growing economy in the European Union, Latvians now face a gruelling winter of rising heating costs and a shrinking labour market. "This will be the year when each Latvian resident will suffer from the economic crisis and there will not be the privileged ones who will suffer less," Latvian President Valdis Zatlers told LNT TV Monday morning. Major employers say Latvians are now less likely to demand higher wages, and less frequently change jobs in the volatile economy. "People more seriously evaluate why they want to change a job and whether this is the right time to do it," human resources manager at Latvia's largest bank Hansabanka Kristine Sneidere told a daily newspaper recently. That is likely to dampen Latvia's high annual inflation which ran at 15.7 per cent in August, compared to 17.7 per cent in May, according to the statistics bureau. The central bank of Latvia has forecast growth this year will be between 2.5 and 3 per cent, though commercial bank forecasts are lower. SEB bank sees growth this year at zero to 0.5 per cent, while Nordea expects an economic contraction of 0.4 per cent this year and 0.7 per cent next year. Not everything is doom and gloom for the Baltics. Latvia's current account deficit, once the largest in the European Union, has been shrinking. "The government has been forced to question the effectiveness of the budgetary spending, to revise the employment figures in the public sector and to listen to the advice from the business community," SEB economist Andris Vilks said in a research note. A slowing economy and dwindling revenues are confronting Baltic governments with tough choices when they present their budgets to their parliaments later this month. The Latvian government last week decided to freeze wages for state employees, putting it under pressure from unions. Unions of police employees and doctors are planning to stage one-day warning strikes this month. International investors pulled their funds out of the Baltic market about one year ago, said Kestutis Celiesius, head of the brokerage unit for Danske Bank in Lithuania. As a result all major Baltic stock exchange indexes have lost 30-40 per cent in a year, he said.
http://www.enews20.com/action-print-n_id-11213.html
http://www.neurope.eu/articles/89602.php
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Baltic tigers face fears of economic jungle
By eNews 2.0 Staff 14:09, September 8th 2008
Three tiny post-communist countries earned the nickname Baltic Tigers with years of spectacular economic growth that made them the envy of the European Union's old economies. But Monday brought new evidence that Estonia and Latvia risk recession amid a worldwide credit crunch and plummeting domestic demand, while Lithuania also faces economic woes. Estonia's gross domestic product (GDP) shrank 1.1 per cent year-on-year in the second quarter of 2008, down from growth of 0.2 per cent in the previous quarter, Statistics Estonia said in revised figures. Latvia's economy grew by 0.1 per cent in the second quarter, down from 3.6 per cent in the previous three-month period, the office of statistics said in second estimates on Monday. Once part of the fastest-growing economy in the European Union, Latvians now face a gruelling winter of rising heating costs and a shrinking labour market. "This will be the year when each Latvian resident will suffer from the economic crisis and there will not be the privileged ones who will suffer less," Latvian President Valdis Zatlers told LNT TV Monday morning. Major employers say Latvians are now less likely to demand higher wages, and less frequently change jobs in the volatile economy. "People more seriously evaluate why they want to change a job and whether this is the right time to do it," human resources manager at Latvia's largest bank Hansabanka Kristine Sneidere told a daily newspaper recently. That is likely to dampen Latvia's high annual inflation which ran at 15.7 per cent in August, compared to 17.7 per cent in May, according to the statistics bureau. The central bank of Latvia has forecast growth this year will be between 2.5 and 3 per cent, though commercial bank forecasts are lower. SEB bank sees growth this year at zero to 0.5 per cent, while Nordea expects an economic contraction of 0.4 per cent this year and 0.7 per cent next year. Not everything is doom and gloom for the Baltics. Latvia's current account deficit, once the largest in the European Union, has been shrinking. "The government has been forced to question the effectiveness of the budgetary spending, to revise the employment figures in the public sector and to listen to the advice from the business community," SEB economist Andris Vilks said in a research note. A slowing economy and dwindling revenues are confronting Baltic governments with tough choices when they present their budgets to their parliaments later this month. The Latvian government last week decided to freeze wages for state employees, putting it under pressure from unions. Unions of police employees and doctors are planning to stage one-day warning strikes this month. International investors pulled their funds out of the Baltic market about one year ago, said Kestutis Celiesius, head of the brokerage unit for Danske Bank in Lithuania. As a result all major Baltic stock exchange indexes have lost 30-40 per cent in a year, he said.
http://www.enews20.com/action-print-n_id-11213.html
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