Russia and Central Asia News Digest
Putin In Europe
Russian President Vladimir Putin arrived in Rome Nov. 5, for bilateral talks with Prime Minister Silvio Berlusconi and the EU-Russia Summit. On Nov. 7 he traveled on to Paris, for a bilateral meeting with President Jacques Chirac. While in Rome, Putin also had a private audience with Pope John Paul II at the Vatican. Several other Russian leaders, including Finance Minister Alexei Kudrin and the new special Presidential envoy for the Northwest District, Ilya Klebanov, came to Italy the same week, for the Russia-Italy Business Conference, featuring events in Milan, Genoa, and Venice.
Italy and Russia signed several agreements on economic and cultural cooperation, including one to hold a big exposition in Rome and Moscow in 2004-2005 "dedicated to the multisecular history of their cultural connections." In the context of the cultural cooperation, President Putin brought to Rome the famous "Madonna Litta" painting by Leonardo, to be displayed at the Presidential Quirinale Palace. The painting was commissioned by the Litta family and brought to Russia in 1786 by Marquis Giulia Litta, who acquired Russian citizenship. In the final release, Italy and Russia, among other things, "stress the central role of the United Nations in preventing and managing international crises, as well as to achieve fundamental goals of freedom, well being and democracy for all peoples of the world."
On the eve of his trip, Putin granted an interview to the Italian newspaper Corriere della Sera, in which he replied to questions about the arrest of Mikhail Khodorkovsky and changes in the Presidential Administration (see In-Depth), as well as Russian nuclear strategy, his visit with the Pope, Iraq, and Chechnya. He said that the recently announced upgrade of Russia's nuclear arsenal will occur, "independent from what NATO will do. The difference between now and the Soviet era is that now, our nuclear force is not directed against anybody, it has only tasks of defense and national security." Russia opposes the use of force without a mandate of the UN Security Council, he added: "Russia has never violated this international principle, and we intend to keep respecting it, just as we wish that everybody does. But if the use of preemptive strikes should become common practice, Russia reserves the right to adopt it too."
Putin expressed his condolescences "to the American people for the terrible loss of human lives" in Iraq, commenting: "This scenario, unfortunately, we had foreseen. We must absolutely join international efforts to create conditions so that the control of the situation can go into the hands of the Iraqi people. We have supported the last resolution of the UNSC, which is a necessary step, but not a sufficient one. We must hurry up. The resistance begins to have a life of its own. We must not allow the permanence of a power vacuum, otherwise the ghost of terrible situations from the past could really pop up." Russia does not intend to send troops to Iraq because "there are no conditions for that. We have been since the beginning against a military intervention. It would be incoherent and stupid to say today that we are ready to send troops."
About his visit with the Pope, Putin said that "my personal position is that we must make all efforts to promote unity among the various Christian confessions. Christianity is at the foundations of European culture and identity. Divisions existing between Catholics and the Orthodox Church exist for instance also between Catholics and Anglicans. All these differences must be reconciled. Therefore I consider my target to be not so much to make it possible that the Pope come to Russia, as rather to favor the unification of Christianity by taking all steps which are opportune. For Russia, that is the more important so, because it represents also a step of integration in the European space. But it is clear that we must integrate without losing our culture and identity. Therefore we must proceed with great caution on this road. The Pope is an intelligent and wise person, and I think that he will realize it."
Russian-Italian Agreement On Industry Zones
Among the economic agreements signed by Putin and Berlusconi is a "Memorandum of Agreement on the Formation of Industrial Districts on the territory of the Russian Federation," which is intended to replicate in Russia a typical feature of Italian small and middle-sized entrepreneurship. Industrial districts are geographically delimited areas where a myriad of small, medium, and micro enterprises specialize in producing all the same product. Lyndon LaRouche visited a typical such district in Montegranaro, Ascoli Piceno, in 1999, the "shoe district". The characteristic of such a model is that from the standpoint of output volume and supplies, it works as if it were a giant corporation, creating a specialized industrial culture in a concentrated area. The advantage is that of a multiplicity of family ownerships instead of a corporate one, a technology- and quality-based competition, and general reinvestment of surplus in production instead of shareholder value.
Russian trade representative Dmitry Inkin said to Itar-Tass that industrial districts in Russia will be formed "around major Italian enterprises interested in building up their presence in the Russian market." Work is being conducted intensively to form industrial districts in the Lipetsk and Sverdlovsk regions. Merloni ELettrodomestici, which owns a factory manufacturing Stinol refrigerators, intends to invest 78 million dollars in the creation of an industrial district in the Lipetsk region, and Duferco Group plans to invest up to $100 million in the creation of a similar model in the Sverdlovsk region.
Inkin also stressed that work had begun to create industrial districts in the Moscow region on the basis of the factory that is being built by the Merazzi Ceramiche group for manufacturing ceramic tiles.
Sharon In Moscow
Israeli Prime Minister Ariel Sharon was in Moscow for three days, beginning Nov. 2. According to the daily Haaretz, Sharon's goal was to dissuade Russian President Vladimir Putin from trying to get the Quartet's Road Mapjust recently introduced by Russia into the UN Security Counciladopted as a UN Resolution for peace in the Middle East. Sharon also wanted discuss the Russian-Iran relationship.
Accompanying Sharon were the Absorption Minister Tzipi Livni and Russian-born Transport Minister Avigdor Lieberman, currently under investigation for various crimes in Israel. With Putin standing firm on the issue of the arrest of Yukos Oil financial oligarch Khodorkovsky, a signal has been sent regarding the cash flows from Russia's raw materials trade into Israel. This touches on other Russian exiles in Israel, such as aluminum king and Marc Rich buddy Mikhail Chernoy. Minister Lieberman is but one fish in that Russia-to-Israel stream.
Russia Promotes Peaceful Nuclear Trade With India
The Hindu reported Nov. 3 that Russian Atomic Energy Minister Alexander Rumyantsev is pushing for international bans on nuclear deals with India to be lifted, saying, "I always raise the problem of India whenever I meet my colleagues from other countries." He is leading a delegation to a nuclear technologies exhibition in the U.S. this month. The exhibition commemorates the 50th anniversary of the peaceful use of nuclear energy.
"There is a pressing need to review the guidelines of the Nuclear Suppliers Group (NSG) and work out a special arrangement for India to allow it to cooperate with other countries in the nuclear field," Rumyantsev said in an interview with The Hindu. He said that Russia is trying to get the NSG to treat India as a special case, because it had indigenously developed its nuclear weapons technologies, rather than receiving them from another country; and has a flawless record on nuclear non-proliferation, and has no alternative to nuclear power to meet its growing energy needs.
Russia And China Broaden Nuclear Cooperation
The professional nuclear societies in Russia and China signed an agreement in Beijing on November 3, broadening the array of joint projects in which they are engaged. Russia has already been involved in building two commercial nuclear power plants in China, and plans to bid on two more reactors to be built on the same site in Lianyugang. Russia has already helped build a uranium-enrichment facility in China, which is producing 500 tons of nuclear fuel per year. And an experimental fast-neutron reactor is being built by Russia at present, for which components and fuel are imported from Russia. Russian nuclear society president Valeriy Kryukov told Itar-Tass that Chinese experts are also showing considerable interest in Russian nuclear power plants for use in spacecraft.
Khodorkovsky Quits Yukos
In a statement issued by YukosSibneft on November 3, imprisoned CEO Mikhail Khodorkovsky announced his resignation from all posts at Yukos Oil. From now on, he said, he personally will work through his Open Russia organization, on education and civil initiatives for "an open and truly democratic society" in Russia. Khodorkovsky claimed that within seven years, Yukos had achieved business success, unparalleled in world history, and would surely go forward into the "globalization of [its] business." Strana.ru headlined its report, "Khodorkovsky Opts To Become Soros, Not Berezovsky" (the latter now lives in London).
The next day, YukosSibneft named Russian-born American citizen Simon Kukes as its CEO today, replacing the jailed Mikhail Khodorkovsky. Kukes, 56, emigrated to the United States in 1977, then came back to Russia in the 1990s as an executive of Amoco. He worked at Yukos briefly, returning to the company as a member of its board in June of this year. In between, Kukes headed up TNK, the West Siberian oil company owned by Pyotr Aven's Alfa Group, playing a key role both in TNK's dealings with Dick Cheney's Halliburton, and in the takeover of TNK by British Petroleum. Currently, Yukos-Moscow is being run by American Steve Theede, a former Conoco exec, while the chief financial officer of YukosSibneft is another American, Bruce Misamore.
Russia Rebuffs State Department's Yukos Complaint
On Oct. 31, U.S. State Department spokesman Richard Boucher stated, "We think the Russian authorities need to dispel concern that the Yukos case is politically motivated. They need to ensure that it is judged fairly and with full regard for due process of law applied in a non-selective fashion.... There is always the issue in a case like this, as to whether it's a single event, or whether it has some sweeping implication for the rule of law in Russia." (Like other sophists rising to the defense of Mikhail Khodorkovsky and company, Boucher did not suggest that the "rule of law" was being violated because Yukos Oil had acted legally, but rather because since others also violated the law Yukos was being singled out.) The Russian Foreign Ministry strongly rejected Boucher's complaint, in statements by spokesman Alexander Yakovenko and Foreign Minister Igor Ivanov.
On RTR TV's News of the Week program Sunday evening (Nov. 2), Ivanov said, "This statement, regrettably, is yet another manifestation of the well-known policy of double standards, of which the U.S. administration is sometimes guilty." Like Putin last week, Ivanov alluded to Enron and other cases, asking, "How many major bankruptcies have there been in the United States? This involved companies with billions of dollars in turnover, there were arrests and detentions.... But for some reason the State Department has not expressed its anxiety over any one of those loud scandals, and decided against interfering in the affairs of the judicial authorities. And in this case they are calling into question the actions of our judicial authorities or, at least, are trying to call them into question and this represents interference in the affairs of the judicial authorities of another state, which is, in general, something that is not done and must not happen in the normal conditions of a democratic society, about which they care so much in Washington."
Speaking on TV the previous day, Foreign Ministry spokesman Yakovenko also talked about double standards, noting that, "I do not remember the Department of State making any such statements when similar incidents occurred in other countries. I am referring to Asian and European countries, as well as the United States itself." He elaborated on U.S. human rights violations: "Russia remembers those double standards that were applied to Chechnya, when remarks about the disproportionate use of force were made. But if one takes a look at how American soldiers are now acting in Iraq, it will become clear that human rights are not observed appropriately there. I am also referring to the situation with the Guantanamo base, where a lot of people have been kept for two years virtually without any investigation and trial. All this has raised very serious questions among human rights organizations about the observance of human rights.... Moscow views such statements by the U.S. Department of State as, at the least, tactless and disrespectful."
Glazyev Denounces Critics of Khodorkovsky's Arrest
On Nov. 1 ORT TV's Zerkalo (Mirror) program carried a joint interview with State Duma members Sergei Glazyev and Grigori Yavlinsky, leaders of the Rodina and Yabloko electoral blocs, on the Yukos Oil case. There, and in a separate statement about the new appointments to the Presidential Administration, Glazyev supported the law enforcement measures and Putin's choices, while denouncing hysteria and speculation. In particular, he said, Union of Right Forces leader Anatoli Chubais displayed hysterics, "saying that the President should intervene [to protect Khodorkovsky], i.e., directly appealing for the President to violate the Constitution."
The courts have to decide if law enforcement authorities have a case, said Glazyev, but "the privatization program that took place earlier" in the 1990s has left Russia's financial markets strictly the terrain of speculators. "Long-term investors, who want to put money into developing companies, don't play the market; speculators do," he said. And the abiding doubts about the legitimacy of property rights in Russia, feed the pattern of speculation. Therefore, "if the prosecutors have some pretensions, everything should be put on the table, and reviewed by the courts, so as finally to determine which companies were privatized legally, and which ones illegally. If we don't draw this line, the redivision of property could go on into the indefinite future.... I don't advocate administrative police measures, but the question of dubious deals during privatization should be settled.... All the dubious cases are well known, thanks to investigations by the Accounting Chamber and Prosecutor General's Office."
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