In this issue:

Putin Calls For Enhanced Ties With China, India

Russian Air Base Opened At Kant, Kyrgyzstan

Russia Plans To Decrease Dollar Portion of Reserves

Russia-EU Energy Cooperation May Be Deepened

Putin Underscores Russian 'Preventive Strike' Prerogatives

Russia: No Funds for Iraq Operations

Russia To Bring Road Map to UN Security Council

Berezovsky Involved in Bizarre Story of Assassination Plot Against Putin

Putin And Kuchma Move To Cool Out Border Dispute

Russia Sends Three to Space Station

From Volume 2, Issue Number 43 of Electronic Intelligence Weekly, Published Oct. 28, 2003
Russia and Central Asia News Digest

Putin Calls For Enhanced Ties With China, India

In an Oct. 19 interview with Star TV, Russian President Vladimir Putin reviewed the priority items on the agenda of his tour of Asia, which included attendance at the Organization of the Islamic Conference and Asia-Pacific Economic Cooperation summits. The Russian President stressed the importance of developing the natural resources in Russia's Far East, in the context of enhanced Asia-Pacific cooperation. Though problems remain concerning the definition oil-pipeline routes from East Siberia to China and/or Japan, Putin said he was optimistic that those problems will be solved soon.

Putin also called for more to be done in economic cooperation between Russia and India: "Our volume of trade with India is almost 10 times lower than our trade with China. This absolutely does not fit either the level of our cooperation or of our possibilities. I could use all my fingers and more to count the potential areas for our cooperation, for there really are many of them, and they are all of great interest for both countries. We will work with the Prime Minister [of India] to look for opportunities to develop and diversify our relations."

Asked about reports that his two daughters are studying Chinese, Putin confirmed: "One of my daughters did become interested in this, after she went to China at the invitation of the wife of former Chairman of the People's Republic of China, Jiang Zemin. But I think you are right; I think this is a sign of growing interest in Russia in China, its language and culture. This is not happening just by chance. It is not chance because our ties with the People's Republic of China are growing.

"We also want to develop our ties with other countries in the region that have large Chinese communities playing a significant role in the economy. We also take this into account and think that there are interesting opportunities here, for example in the high-technology, aviation, and space sectors. I don't think there is anything unusual about this. I think it is natural, but at the same time complicated."

(Additional reports on Putin's speech at the APEC summit and his subsequent state visit to host country Thailand appear in the Asia Digest.)

Russian Air Base Opened At Kant, Kyrgyzstan

President Putin wound up his nine-day Asia tour on Oct. 23 in Kyrgyzstan, where he and President Askar Akayev opened the Kant military base. It is the first new Russian base outside the country, since the end of the Soviet Union in 1991. The base is at Kant, 19 km from Bishkek, the capital. Ten Russian Sukhoi-27 and Sukhoi-25 fighter jets, five Sukhoi-25 bombers, helicopters, and 500 pilots and maintenance personnel will be stationed there.

In his statement, Putin said: "We intend to strengthen the security of a region whose stability is a growing factor in the international situation." The Russian base is only about 50 km from the Manas military base where 2,000 American troops are stationed. Putin said that the Kant base is specifically to protect Kyrgyzstan. "The terrorists came here as if they were at home. If there had been a base here, events would have developed differently."

Russia Plans To Decrease Dollar Portion of Reserves

Russian Deputy Finance Minister Aleksei Ulyukayev said Oct. 22 that the share of dollars in Russia's gold and foreign currency reserves will be reduced by 5%, and the share of euros increased by the same amount. At present, those shares are 70% and 25%, respectively. Ulyukayev noted the growing importance of European markets for Russia, and the euro's gains against the dollar internationally (17% this year). Russian companies denominate 40% of their settlements in euros, Ulyukayev said.

Russia-EU Energy Cooperation May Be Deepened

Russia is considering cooperation in building up the strategic oil and gas reserves of the European Union, Russian wires reported Oct. 18. According to Russian Vice Premier Viktor Khristenko, the issue of building up such reserves was on the agenda of talks between Moscow and Brussels. The EU wants to take a decision on that by the end of the year, Khristenko said. Russia and the EU are also discussing a framework agreement, which would enable Euratom to allow EU countries to import uranium from Russia, Khristenko hinted.

Despite the mutual interest in increasing trade and investment, not everything was rosy during the talks with the EU delegation, led by Pascal Lamy. Russian papers reported Oct. 17 that the EU did not bend on any of its proposed conditionalities for collaboration with Russia, even after pointed remarks by President Putin—earlier in the month, after talks with German Chancellor Gerhard Schroeder—that Russia would not be "arm-twisted" by the EU or the World Trade Organization (WTO). Specifically, the European Commission representative reiterated its six demands: increase of Russian domestic natural gas prices; demonopolization of Russia's gas exports; free transit of gas; the right for foreign investors to build pipelines; equal gas transport rates for domestic consumers and for exports; elimination of export duties on gas.

In addition, Lamy reportedly demanded free access for foreign companies to Russia's telecommunications market, and the as elimination of duties for European carriers' flights over Siberia. Invoking "free trade" dogmas, Lamy threatened Russia with anti-dumping challenges, if Russia did not bring domestic prices into line with world prices. "In order to enter WTO, each country has to pay," he lectured, "The price for each country is different."

Putin Underscores Russian 'Preventive Strike' Prerogatives

In his Oct. 16 interview to the Arab channel Al Jazeera, Russian President Vladimir Putin again presented possible Russian responses to the "preemptive war" postures, including possible use of nuclear weapons, taken by the Chickenhawk clique grouped around U.S. Vice President Dick Cheney. Putin was asked about recent Russian Ministry of Defense warnings that Russia itself could resort to preemptive military actions. He replied, "Concerning preventive strikes, we base ourselves above all on the primacy of international law. Any use of force must occur only according to a decision of the UN Security Council. But you are right, the Defense Minister did in fact speak of the possibility of preventive strikes. But he had in mind—and this is also my view—that we are against such a policy [of preventive strikes], but if it were to continue to be upheld in the practice of international affairs, then Russia would retain its right to act in exactly the same way."

In the same interview, Putin was also asked about Russia's announced intention to deploy multiple-warhead SS-19 intercontinental ballistic missiles. Putin replied: "Concerning our heavy missiles, the SS-19, there was never any secret about the fact, that Russia possesses these rockets. These are today probably the most powerful missiles in the world. They are called heavy, because they can carry larger payloads into space, which means, they can carry many separable warheads. These are missiles, that can easily penetrate any system of anti-missile defense, that could be built in this decade.

"But there is something new, in what we are now saying. It is contained in the following. Many experts suggested, that these missiles were going to be withdrawn from service during the next five or six years, as a consequence of their natural aging process. [But] in discussions with the Defense Ministry we reminded people, that Russia possesses a significant quantity of such missiles, which were never operationally deployed. In this sense, they are new, they have been in dry storage; and when now-operational missiles are retired from service, we are going to replace them by these new, heavy rockets. That means, Russia will have this kind of weaponry, not just for the next three, four, five years ... [but much longer] ... by which time, we will go over to the production of new types of strategic armaments."

Russia: No Funds for Iraq Operations

Russian Deputy Prime Minister Fedotov, who led Russia's delegation to the Madrid donors' conference, said Oct. 21 that Russian companies are ready to invest even billions of dollars, but Russia is not planning any donor assistance. Russia would push at the conference for the fulfilling of existing contracts, he said. Russian wire services reported Fedotov's words: "There are other non-financed contracts, which we believe are crucial to meeting the fundamental needs of the Iraqi population, including the construction of power plants, water purification facilities, and elevators. We will call for providing funds to them and for implementing them in the framework of new programs and funds."

Russia To Bring Road Map to UN Security Council

Russia is expected to introduce the Road Map for a Middle East peace into the United Nations Security Council in order to make it official UN policy, the Israeli daily Ha'aretz reported Oct. 23. The United States is expected to back the proposal. This is something Israel has been opposed to because it will serve to "internationalize" the conflict.

Berezovsky Involved in Bizarre Story of Assassination Plot Against Putin

On Oct. 19, the Sunday Times of London ran a story with the dramatic headline, "UK plot to kill President Putin," which claimed that Scotland Yard had "thwarted a suspected plot to assassinate Vladimir Putin, the Russian president, after arresting a renegade Russian intelligence agent in London." Two alleged would-be assassins were arrested a week earlier, interrogated for five days about their attempts to hire Russian exiles in Britain, by whom Putin would be "shot dead by a sniper while on a foreign trip," and then, "released on Friday on condition that they return to Moscow." One of the men is identified as an FSB major.

A tip to Scotland Yard supposedly came from ex-FSB officer Litvinenko, living in Britain the past three years, and an associate of tycoon Boris Berezovsky—now also living in the UK. Here the story gets fishy, as the assassin-hirers supposedly told their plans to Litvinenko, who told Berezovsky, who made sure Litvinenko went to Scotland Yard. Berezovsky's own Kommersant newspaper slants its coverage: "Berezovsky saves Putin!" The report in the Sunday Times surfaced exactly when Putin was touring Southeast Asia, in a most complex effort of foreign diplomacy.

Berezovsky himself, in a long interview to Moskovskiye Novosti of Oct. 21, spun out an analysis about how an FSB faction would want to kill Putin and install "somebody like Yevgeni Primakov." The only related "on-the-ground" activity reported from Russia, was the arrest this week on a road near Moscow, of a lawyer who represented Litvinenko before he defected.

Putin And Kuchma Move To Cool Out Border Dispute

President Leonid Kuchma of Ukraine cut short an important tour of South America Oct. 22, "in connection with growing tensions around Tuzla Island," his press service announced. The next day, Kuchma was on the phone with Russian President Putin, who reportedly pledged to get leaders in Russia's Krasnodar Territory to halt construction of a dam from Taman out to that island, which Ukraine claims as its territory. The location of the controversy is the Strait of Kerch, between the Black Sea and the Sea of Azov. On the eastern side is the Taman Peninsula in Russia, to the west is the Crimean Peninsula—Ukrainian territory, to the disgruntlement of many Russians. Tuzla Island, in the straits, used to be the Tuzla Spit, until a huge storm in 1925 washed away part of the sandbar.

There are conflicting stories about who started building the dam on Sept. 29. Russian Foreign Minister Igor Ivanov, replying to an official Ukrainian protest earlier this week, upheld the line that it is being built out of "economic and ecological considerations, and has nothing to do with Ukrainian-Russian talks about border delimitation in the Sea of Azov." Various speculation attributes the project to a committee of Kuban Cossacks in Krasnodar; to Ukrainian Parliamentarian Leonid Hrach, who favors more Crimea-Russia trade; or, to various politicians who would like to make themselves look good by solving the crisis.

Whatever its origin, the dispute escalated quickly. On Oct. 16, Ukrainian authorities sent in heavy machinery to block the dam-builders as they approached Tuzla Island. Oct. 20, Ukraine officially protested again and Kuchma termed the construction an "unfriendly act." Oct. 21, Kiev papers reported that Kremlin chief of staff Alexander Voloshin had burst out at a private briefing for Ukrainian journalists, "It's bad enough that Ukraine has Crimea! Just leave us alone, or we'll drop a bomb there." Oct. 22, Kuchma hurried home. Today, before the Kuchma-Putin phone call, Ukraine began installing pontoons with the Ukrainian flag to mark a line beyond which the dam must not go.

Russia Sends Three to Space Station

Russia launched a Soyuz space ship to the International Space Station on Oct. 18, with a Russia, an American and a Spaniard on board. It was the second Soyuz sent to the space station since the American space shuttle Columbia blew up in February. Russia's ability to launch Soyuz ships is the only way to reach the ISS currently, and demonstrates international cooperation on the project.

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