In this issue:

Primakov Speaks on Progress of Russia-India-China Triangle

Arab League Secretary General Holds Talks in Moscow

Arab League Secretary General Holds Talks in Moscow

Manufacturing Slows in Russia

Mont Pelerin Society Devotee Mau Heads Russian National Economy Academy

Russia To Produce Floating Nuclear Plants

Kazakhstan Will Build a Tokamak Thermonuclear Reactor

Russia and Ukraine Establish Gas Transport Consortium

British Petroleum Scouts Batumi Port in Ajaria, Georgia

From Volume 1, Issue Number 41 of Electronic Intelligence Weekly, Published Dec. 16, 2002
Russia and Central Asia News Digest

Primakov Speaks on Progress of Russia-India-China Triangle

Interviewed on Russian television Dec. 7, former Russian Prime Minister Yevgeni Primakov noted the progress made towards the "strategic triangle" concept for relations among China, India, and Russia during President Vladimir Putin's Dec. 1-5 visits to Beijing and New Delhi. Asked if Putin's trip had helped advance the idea of a triangle, which Primakov had proposed in December 1998 in New Delhi, Primakov answered "Yes!" This is not a military or political bloc, Primakov said. "It is a geometric figure where ties between the poles should be strengthened."

He said that the political declarations signed by Putin in China and India reflect the close identity of views among the three countries on a range of international issues, including terrorism, Iraq, West Asia, the United Nations, non-proliferation, and regional security. Especially the shared interest in maintaining security and stability in Central Asia and Afghanistan, could promote this idea of the Moscow-Beijing-Delhi triangle. "When applied to the region, the triangle will no doubt work as a factor of stability," Primakov said.

Putin's proposal to cooperate on the situation in Central Asia "met with a ready response in Beijing and in New Delhi," the Indian newspaper The Hindu reported on Dec. 7. The continuing turmoil in Afghanistan is of special concern. Before Putin left Moscow on Dec. 1, a senior Russian diplomat had warned about a possible return of the Taliban to power in Afghanistan. The basis for cooperative action on Central Asia would be created when India joins the Shanghai Cooperation Organization (SCO), in which New Delhi has indicated strong interest.

Arab League Secretary General Holds Talks in Moscow

Amr Moussa, Secretary General of the Arab League, and Russian Foreign Minister Igor Ivanov see eye to eye on major international questions, according to a statement from the Russian Foreign Ministry. Ivanov characterized his Dec. 10 talks with Moussa in Moscow as "very substantive, interesting, useful, and frank," and praised Moussa as "a big friend of Russia," since his tenure as Egyptian Foreign Minister. He said that Russia and the Arab League enjoy "very intensive and constructive consultations ... on key international and regional problems," and that he hoped the "sphere of interaction" could be expanded to include cooperation in trade, economics, humanitarian matters, etc. He announced they had set up a working group to draft proposals.

"Naturally," he went on, "we gave much attention to examining the situation around Iraq." They agreed to continue advocating a "peaceful, political solution," including full implementation of UN Security Council Resolution 1441, pertaining to Iraq. Ivanov stated: "We proceed from the assumption that compliance with this resolution must open the way to lifting the sanctions imposed on Iraq." In answer to a question regarding what would ensue if it became clear that Iraq did not possess weapons of mass destruction, Ivanov reiterated: "When the Security Council adopted Resolution 1441, Russia's representatives in the UN Security Council made it very clear that the implementation of this resolution connected with the disarmament file would pave the way to the lifting of sanctions on Iraq." He added that Russia had "insisted the inspectors resume their work as soon as possible because only their work and only their conclusions may provide the basis for raising the question of lifting the sanctions on Iraq." This is important, because one reason that Iraq agreed to the UN inspectors' return, was that it had negotiated with Russia the understanding that this should lead to lifting the sanctions.

Ivanov made another important point in reference to the competencies in the UN regarding Iraq. In answer to a question about the United States's having taken possession of the Iraqi report first, reproduced it, and circulated it to the other members of the Security Council Permanent Five (Russia, China, Great Britain, and France, rather than allow Hans Blix and his weapons inspectors' team to review the document first), he said: "The report was prepared by the Iraqi side in accordance with Resolution 1441 and it was presented to the Security Council on time. The report will be studied by UNMOVIC and IAEA experts, who will present their assessments to the Security Council. I repeat, it is precisely UNMOVIC and the IAEA that should present their assessments and conclusions after studying the report and its appropriate sections. At the same time, an understanding and agreement have been reached in the UN Security Council to make copies of the report and hand them out to the permanent members of the UN Security Council to study certain questions that have a confidential nature. However, this does not in any way throw into doubt the competence of UNMOVIC or the IAEA, and only their assessments will be considered by the UN Security Council."

The other item discussed was the Palestinian-Israeli conflict. Here, Ivanov stressed that the "Quartet" (Russia, the U.S., the UN, and the European Union) who should push through the "road map" for peace.

Russian Presidential Spokesman Voices 'Calm Disapproval' of NATO Expansion

An international conference on Russia-NATO relations was held at the Metropol Hotel in Moscow Dec. 6. Sergei Yastrzhembsky, foreign policy adviser to President Vladimir Putin, told the meeting that Moscow's reaction to the NATO expansion summit in Prague could best be described as "calmly negative." He added that Russia has "never concealed and does not conceal our negative attitude toward the expansion model of European security, as it is presented by NATO." Especially after the attacks of Sept. 11, 2001 in the United States, he added, "I believe practically all international institutions created during the Cold War period happened to be unprepared to deal with the rapidly changing situation."

Manufacturing Slows in Russia

New data from the Russian manufacturing sector confirm the Academy of Sciences' announcement of a halt in Russian industrial growth (see Dec. 9 RUSSIA/EURASIA DIGEST), the Moscow Times reported Dec. 3. The Manufacturing Purchasing Managers' Index of 300 manufacturers, published by Moscow Narodny Bank, fell in November for the first time since 1998. MNB cited fewer orders, rising costs, and a lack of working capital. Layoffs rose for the third month in a row.

Mont Pelerin Society Devotee Mau Heads Russian National Economy Academy

Despite the devastation of Russian science, manufacturing, and labor power at the hands of radical liberal economists and the imposition of their policies during the 1990s, some of the most extreme among them continue to promote their poison in Russian government cricles. An example is Vladimir Mau, collaborator of Mont Pelerin society activist Lord Harris of High Cross and his fellow Hayekians at London's Institute of Economic Affairs; in November Mau secured an appointment as rector of the National Economy Academy under the Government of the Russian Federation, succeeding Academician Aganbegyan, who retires. At a press conference on Nov. 25, Mau made a special point of denouncing state investment programs, any "broadening of state investment in the economy, whatever the goals presented to justify [it]," as "dangerous." Mau's explanation of this "danger" reflects the utter inability of free-market ideologues in the East, as in the West, to think at all, under conditions of world economic crisis.

Mau's argument against state investment policies was that it is not presently possible either to forecast economic developments, or to form any efficient concept of how they will unfold. "We are in an area of low ability to forecast real priorities and real trends of economic development," said Mau. "We have—objectively by virtue of the extreme dynamism of the economy—no ability to say what will be our worldwide and national priorities. The concentration of resources must yield to maximum stimulation of the adaptive efforts of private investors...."

Mau previously headed the Institute for the Economy in Transition, a Moscow outpost of Harris' IEA, where he succeeded Yegor Gaidar. The IEA project produced most of the first generation of destructive reformers, grouped in Gaidar's cabinet in 1992, who looted Russia after the break-up of the Soviet Union.

On Dec. 2, former Minister of Economics Yevgeni Yasin presented a proposal for what he called a "liberal alternative" for the country's economic policy, claiming that another sharp reduction in the number of state-owned enterprises and halving the "army of bureaucrats" who work for the government would open the pathway to growth. Yasin worked closely with Gaidar, Mau, et al. in the early 1990s. These has-beens have begun strenuous promotion of their failed policies, just when the Russian economy is faltering and the dirigist approaches outlined by Member of Parliament Sergei Glazyev and other members of the Academy of Sciences appear increasingly attractive.

Russia To Produce Floating Nuclear Plants

BBC carried a report Dec. 10 on the Russian Atomic Energy Ministry's plans to build small nuclear power plants that would be sited on ships. The first plant, it is reported, will be situated near the Arctic Circle, near Severdvinsk, and will be linked to that city's energy grid in the port by cables. The report states that if the project is "profitable," a dozen such plants could be built, many for export. Orders will be accepted no sooner than 2010.

At a news conference in Moscow on Nov. 29, Deputy Minister Andrey Malyshev said each plant would cost about $150 million, and that China had shown interest in floating power plants. Each plant would have a 70-megawatt capacity. The Ministry is asking the government to fund the development of the reactor they have designed.

Kazakhstan Will Build a Tokamak Thermonuclear Reactor

Deputy Prime Minister Aleksandr Pavlov announced the project at a press conference Dec. 4 on the passage of Kazakhstan's 2003 budget by Parliament. "We are the only country in the CIS," he said, "that will undertake the construction of such a complex physics and engineering facility next year." The budget will allocate 198.02 million tenge (US$1.3 million) for the project.

This is part of a broader plan to increase financing of scientific research next year, he said. "The financing of fundamental science will be increasing by 250 million tenge (US$1.6 million), and scientific research by 450 million tenge (US$2.9 million)."

The Interfax release announcing the news gave background on the tokamak, prototypes of which exist in Britain, the U.S., and Russia, and stressed that "these plants use deuterium, a cheap and inexhaustible fuel source, which is contained in sea water," and that they are environmentally clean and safe.

Russia and Ukraine Establish Gas Transport Consortium

During bilateral talks in Moscow, Russia and Ukraine selected the top management for their new natural gas transport consortium, Kommersant daily reported Nov. 22. It will be co-chaired by Russia's Vice Premier Victor Khristenko and Ukraine's First Vice Premier Oleg Dubina. Anatoli Tsymbala, former director of the Russian natural gas monopoly Gazprom's office in Kiev, is appointed executive director of the consortium.

The two countries were long divided by disputes over Ukraine's debt to Russia for previous natural gas imports, and disputes over fees and security for the pipelines, which carry Russian gas to European customers across Ukrainian territory. Now they are preparing through the new consortium to seek investments from Ruhrgas and Gaz de France, for help in the maintenance and upgrading of the pipelines.

British Petroleum Scouts Batumi Port in Ajaria, Georgia

A delegation of top executives from British Petroleum and Petrofac, visiting the Georgian capital of Tbilisi in mid-November, made a side trip to Batumi, the main town in Georgia's Ajaria Autonomous Republic. There, according to TV reports, they "thoroughly examined" the Batumi port for its potential as a crucial link in the Baku-Tbilisi-Ceyhan oil pipeline project. Accompanied by Giya Chanturia, head of Georgia's National Oil Company, the guests met with Ajarian President Aslan Abashidze, Batumi Mayor Georgi Abashidze, and the top management of the port. "The experts of the international consortium proposed to carry out a security study of Port of Batumi," reported Ajara TV. "The high-ranking guests concluded that Batumi Port, with its modern facilities, is quite appropriate for receiving cargos of pipes for the Baku-Ceyhan pipeline. Mr. Chanturia announced that the first cargo of pipes will arrive already in late January."

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