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Government.ru
April 21, 2015
Government report on its performance in 2014
The State Duma of the Russian Federation, Moscow

"The Government of the Russian Federation (...) shall submit to the State Duma annual reports on the Government's performance, including on issues formulated by the State Duma." (Constitution of the Russian Federation, Article 114, Clause 1, Subclause "a")

Report by Dmitry Medvedev:

Transcript:

Dmitry Medvedev: Good afternoon, Mr Naryshkin, State Duma deputies and colleagues. I'd like to begin by expressing gratitude for the deputies' support for the Government's key initiatives, for their proposals on improving our initiatives and, of course, for your numerous critical but constructive remarks.

We have always cooperated with you, and we'll continue to do this. However, last year our cooperation entered a fundamentally new stage in terms of speed and content, due to changes on the foreign policy stage and for economic reasons. Hence, many results about which I will speak in this report were achieved thanks to smoothly running cooperation.

Of the draft laws which the Government prepared and submitted to the parliament, 256 became laws last year. You know this very well. Thank you again for our cooperative work. During the current session, the State Duma has adopted 58 laws submitted by the Government. We prepared many draft laws in close coordination with the parliament, which was considering, as of 13 April, 226 Government-submitted draft laws, including documents that are directly connected to the implementation of the Plan of Priority Measures to Ensure Sustainable Economic Development and Social Stability in 2015.

In addition, we have actually reworked the 2015 budget twice this year and made amendments again only recently. I also want to thank everyone who supported the Government; these were not easy decisions. I hope as we work on next year's budget, which will not be easy either, we'll communicate with you just as effectively to identify the possibilities to balance it and to find additional reserves, which again, I hope will be there.

I'd like to begin by saying a few words about the conditions in which the Government has been working in the past 12 months, which, in fact, the entire country had as well. Standing here at this podium a year ago, I told you we were in for a very difficult period.

At that moment, you probably thought, at least some of you, that it was a figure of speech, an exaggeration. But reality proved even more difficult.

For the first time in Russia's modern history after the Soviet Union's collapse, and possibly even in our Soviet and post-Soviet history in the 20th century, our country faced two external challenges simultaneously: plummeting oil prices and unprecedentedly harsh sanctions. We had never faced this combination of challenges before. There were periods in Soviet and Russian history when our economy seriously depended on hydrocarbons, and when oil prices were very low. In 1998, oil prices plunged to $9 per barrel. By the way, this plunge is comparable to the current fall in oil prices, considering the current purchasing power of the dollar along with several other economic indicators and factors.

Sanctions have been imposed on the Soviet Union and Russia before. Overall, as I said more than once last year, there were approximately ten such sanction cycles. The latest wave of sanctions is probably the most powerful one. But we had never encountered such a hugely negative multiplier effect, as economists say, in the Soviet or post-Soviet period, with several elements factoring in, compounding each other's influence immensely.

In short, our economic situation is indeed very complicated. GDP growth was only 0.6 percent in 2014. The situation was the worst at the end of last year and at the beginning of this year. Plummeting oil prices pulled the rouble rate along, inflation soared to 16 percent, real incomes were falling, GDP registered negative growth, and investment activity and domestic consumption seriously slackened. And the backdrop for this was a politicised downgrade of Russia's investment rating and large-scale capital flight.

These negative trends continued into this year. In January-March 2015, GDP declined by approximately two percent and industrial production by 0.4 percent from the first quarter of last year. But investments decreased most significantly. However, this is far from the worst-case scenario. In fact, the situation with prices and unemployment, in the banking sector and in many industries, could have been much worse. I'd like to remind you that we faced much bigger problems in 2009, when GDP plummeted by nearly eight percent and industrial production by over 10 percent, and the quoted prices of Russian shares dropped abruptly. The situation on the employment market was much, much worse too. Of course, this doesn't mean that we can breathe a sigh of relief. But we must see the whole picture.

Even last year, we began to take the necessary steps, bearing in mind the experience from the previous crisis. Many of our decisions then found their way into the priority plan for sustainable economic and social development in 2015. These moves have already produced at least some effect.

The foreign exchange market has calmed down, and the economy is gradually adapting to a floating rouble exchange rate. Public debt remains low. The federal budget deficit, although somewhat increased, remains at an economically safe level, and the unemployment rate remains within reasonable limits, meaning it is lower than in other countries, in comparable figures.

The Bank of Russia cut its key rate along with the downturn in inflation. If we assess the situation as a whole, it has stabilised, but we had better not delude ourselves.

Today we are faced with more than short-term meltdowns. Yes, we were able to overcome most of them, but if the external pressure increases, and oil prices remain at this extremely low level for a long time, we'll have to live and grow in a different economic reality, which will test and challenge all of us. So we will all need to learn to work in that reality, solving the complex and important tasks for our country's development.

I am confident that we will be able to live in that reality. Our recent experience shows that we have learned what we needed to know, although it might not be the best development.

Now I want to ask whether our country could have avoided this economic scenario. The answer is no, and we all know why. This strong external economic pressure was triggered by a major political decision last year - Crimea returned to Russia. It was the only decision possible. So we all supported it - the country as a whole, the Government and Parliament - knowing what the consequences would be, and here we are all in this together, needing to work to minimise the economic problems, maintain stability and social development in our country.

There are moments in every country's history when it turns a page to a new era. It is obvious that 2014 was one of those for modern Russia. Last year was the year of Crimea for all of us, for the whole country, without exaggeration, as it was returned to Russia, as how the overwhelming majority of people on both sides of the Kerch Strait felt was given legal clearance. The Crimean peninsula, despite its formal post-Soviet border, has always been our land, our common pain, and common pride, common challenge and common victory.

I am sure every citizen of Russia and every responsible politician is aware of how important this event is. For many, the return of Crimea means the restoration of historical justice, something comparable - in intensity and importance  - to the fall of the Berlin Wall and German reunification, or the return of Hong Kong and Macau to China.  

Moments like these always have an enormous geopolitical impact. As Pyotr Stolypin once said, "There is no revenge in politics, but there are consequences." The unprecedented political and economic pressure is payment for our position. However, both the authorities and society understood that we do not have an alternative, whatever the consequences.

Now the development of Crimea has become solely our country's internal concern. For the first time in the history of modern Russia, the Government was faced with a challenge that was unique in its complexity and scale: to ensure the full-fledged integration of new regions, i.e., the Republic of Crimea and Sevastopol, into the country's administrative, legal and economic system. We did it. We put in place a legal framework for the economy and the social sector to operate in accordance with Russian laws. Eight constitutional laws, 32 federal laws and over 600 bylaws were adopted with your participation. To reiterate, the Government has accomplished a significant portion of this work in conjunction with our colleagues from the State Duma. Almost immediately after the reunification, internal Russian passports began to be issued. By now about 2 million Crimeans have already received them.

The social sphere involves a great number of issues. I will enumerate the main results. Pensions for Crimeans have been raised. As a result, their pensions have come close to average Russian levels. The introduction of Russian labour regulations has led to the doubling of average wages.

Last year, Crimeans were fully integrated into the Russian social security system. As we promised, Crimeans retain the benefits and allowances that were previously provided for under Ukrainian law, but which are not provided for under Russian law.

Healthcare modernisation programmes for Crimea and Sevastopol, worth over 6 billion roubles, were approved and are now in effect.

All specific steps toward the development of the peninsula are now part of the federal targeted programme, Socio-Economic Development of the Republic of Crimea and Sevastopol to 2020. It may be recalled that its funding will be about 700 billion roubles over five years, including 660 billion from the federal budget. This is very big money.

However, it is only a fraction of the work done in the Crimean Federal District. I made a point of mentioning this because, apart from funding, Crimea will require our active cooperation in the very near future. This is why we all often go there - both our State Duma colleagues and my colleagues in the Government - not because Crimea has a good climate but because this territory is significantly behind our country. Significantly behind. Our goal is to make up for ground lost in the last 25 years, so that we don't regret later the decisions that have been made. This is especially important, which is why I opened my presentation with it, despite the fact there was no question about Crimea in the questions that were put to me in writing.

The reunification of Crimea has influenced the economy. There is practically no economic sector that hasn't been affected by some or other political measures, from the financial sphere and restrictions on access to foreign credit to technology imports. Losses caused by these restrictions are considerable, let's not conceal them. As estimated by a number of experts, Russia has suffered damage worth about 25 billion euros, or 1.5 percent of the GDP. In 2015, this damage may increase several times over.

But, certainly, the economic consequences of the Crimean decision would have been easier if a number of internal problems had not piled up in the economy, problems that we had failed to solve. And this should be admitted frankly as well. All regions in this country have felt in full measure the repercussions of the deteriorating foreign economic situation and foreign policy upheavals. Budget revenues have sunk, while expenditures have, on the contrary, risen.

This situation made the Government take prompt action to support the regions. Of course, we will help the regions - there is no doubt about it. Generally, the regional financial situation makes us devise non-routine solutions. All of you asked me to answer these questions, and we will possibly discuss them later today. I invite you to do this both during today's discussion of the Government report and at a meeting which I am going to hold soon in order to look at this problem at a slightly different angle because, in all likelihood, the backlog of problems is such that it requires, let me stress it once again, some out-of-the-box solutions.

Nevertheless, if we go back to the existing commitments, the amount of budget credits to be issued to constituent entities of the Russian Federation has been increased from 150 to 310 billion roubles under the plan of priorities for 2015. These funds will serve to balance the regional budgets and reduce the cost of commercial credits. But local heads, for their part, will certainly have to do all they can to consolidate financial stability. It is important to adjust the main budget parametres for 2015 and stick to regional anti-crisis plans. We have come to terms in this regard with all constituent entities of the Russian Federation. These plans have been approved everywhere, and there are anti-crisis teams everywhere, which should do their job. We mustn't relax even if we have generally managed to stabilise the situation. This is why the exact and timely fulfilment of the regional plans and the government plan of priorities will make it possible to launch the optimal real sector support mechanisms in the regions, which would guarantee that the money will be invested in new promising businesses rather than siphoned off to the money market, as our colleagues from A Just Russia, who asked this question, fear. Well, those who are ready to produce high-quality and sought-after goods should, of course, receive subsidies and incentives and, most importantly, fairly priced credits. I know that practically all deputies, specifically members of the LDPR, the Communist Party, and A Just Russia, are concerned over this issue. We understand their concern.

The terms of crediting that have taken shape in this country are certainly far from being ideal, for well-known reasons. We have, therefore, extended the range of measures and incentives to support investment activity, primarily in order to mitigate the consequences of the interest-rate stress for the real sector of the economy.

What has been accomplished so far? First, we are conducting an unprecedented campaign to increase the capital of banks that are actively financing agricultural and industrial projects. We have allocated 831 billion roubles for this purpose through the Deposit Insurance Agency.

I'd like to say that this is being done not through infusions of money but through state bonds. So it's not correct to say that we are providing priority assistance to banks at this difficult time. What we are doing is a vital necessity. Banks are the circulatory system of the economy. It is banks that bring money to the real economy, including industry and agriculture. In the event of problems in the banking system, the first to suffer are industry and agriculture. I think that we should realise this.

Second, we are investing the National Wealth Fund, up to 40 percent of the fund, in large projects of system-wide importance for national economy. This year we will be financing the upgrade of the BAM and the Trans-Siberian railways - we haven't abandoned this project - as well as the construction of the Central Ring Road (TsKAD) in the Moscow Region and several other projects.

Third, we have a system of project financing for smaller projects ranging between 1 billion and 20 billion roubles, which are usually undertaken by medium-sized businesses. Borrowers who present a good investment plan will be able to take out loans at a fixed rate of up to 11.5 percent in the current financial conditions.

Fourth, we will also increase financial assistance to the projects of small and medium-sized businesses. It has been proposed that we rally the resources of the Credit Guarantee Agency and SME Bank to create an integrated development institution for supporting small and medium-sized companies. This institution would have additional powers to ensure that small companies are comprehensively involved in state and municipal procurement, in the acquisition contracts of natural monopolies and state-owned companies as well as in import substitution programmes.

I'd like to remind you that the plan of priority measures stipulates measures that should help producers not only to adapt to new conditions as soon as possible, but also to grow by exploiting the positive conditions that have been created by restrictions on certain imported goods and the weakening of the rouble. As our colleagues from the Liberal Democratic Party said, import substitution takes time and money. We are well aware of this. I'd like to quote Lee Kuan Yew, the man who engineered Singapore's economic miracle. He said that if you want to succeed, you must rely only on yourself.

We have prepared import substitution programmes for all sectors: industry, the energy sector and agriculture. They comprise over 2,500 projects.

Import substitution is not just a nice-sounding slogan, but concrete work, which has recently gathered momentum. Of course, we are not advocating economic self-isolation. Here is an example to prove my point. Some of our colleagues, in particular from the Communist Party, claim that foreign retail chains occupy too much space in the country. This idea should be analysed, but consumers believe that the more diversity, the better. Besides, we have not only foreign chains, but also Russian chains that have been built from scratch and have developed in accordance with Russian laws. All of us remember empty store shelves in the Soviet era. I don't think anyone, including our colleagues in the Communist Party, would like to see this again. It's another matter that we are focused on creating favourable conditions for competitive Russian suppliers, and not only in the food market. We are pinpointing sensitive areas where import substitution will be economically substantiated.

The instruments of our economic policy have recently become more diversified. We have adopted a law on industrial policy, which has streamlined state support mechanisms. The industry development fund has started working. Budget allocations are being used to subsidise interest rates on investment loans and spending on research and design projects, and loans to replenish working capital are being subsidised as an antirecession measure.

One more powerful investment resource, which we have recently been using, is government procurement and purchases for state-owned companies. Experts have estimated them at over 24 trillion roubles. At least 15 percent of federal and municipal purchases must be made from small companies. The share of such purchases for large state-owned companies and infrastructure monopolies must be even larger, at least 18 percent. Of course, we should also support the companies that are ready to emerge on foreign markets, and so we'll continue our loan and guarantee support programmes for industrial exports, including by subsidising interest rates.

Our export companies, both big and small ones, must be able to receive the necessary financial and other services in the one-stop-shop system. With this purpose in mind, we are creating an integrated export support centre at the Export Insurance Agency and Eximbank. Recent changes to the road map to support exports have been approved to ease the customs, fiscal and administrative procedures to the maximum extent possible. All these measures, as well as others, are expected to give an impetus to industrial production, which last year was up 1.7 percent from 2013.

I would like to cite some figures, although I am sure that my colleagues - the deputies - know them well. The manufacturing sector showed growth of slightly over two percent and the growth in the heavy engineering industry was close to 1.3 percent. The chemical industry grew by a little over 100 percent, and can be described as fairly stable. Mineral fertilisers remain a major Russian export. Work is underway to carry out priority projects in the timber industry.

Of course, this year the situation is not straightforward. The engineering industry has been facing challenges since the beginning of the year, as the majority of its subindustries showed a decline in production. We expect that the Government's measures to encourage consumer spending will help significantly make up for the decline. First of all, this applies to car sales. A decision was taken to extend the old car scrapping programme as part of the Government plan for priority measures. Ten billion roubles have been allocated to implement this programme. In addition, a soft loan programme for car buyers has been approved and a programme to rent a car on favourable terms will be launched before long. We have extended the programme for purchasing vehicles running on a more environmentally-friendly gas fuel for at least another 12 months. Government funding for these purposes totalled 3 billion roubles. These measures are expected to help bring down the rate of market decline by 25 percent. Of course, we will not be able to make up for the negative impact in full, however, we can significantly alleviate this impact in order to keep people employed and keep manufacturing companies afloat.

The situation in the machine-tool industry remains complicated enough, with an extremely high proportion of certain imported items. Of course, this causes deep concern. It is very important for us to encourage the manufacturing of competitive equipment in the country. Certain bans and restrictions regarding deliveries for defence and national security purposes have already been introduced, and they also apply to some Government-funded construction projects. These requirements will be getting tougher as domestic manufacturers step up production. At the same time we are looking forward to cooperation with foreign companies, including engineering firms. However, all design work and production should be based in our country. This will be the right thing to do.

Regretfully, there has also been a decline in pharmaceutics, an industry of social importance. I think that we'll get back to this issue later today. Our efforts to support this industry will certainly continue in order to ensure national pharmaceutical security.

Our country's energy sector operated smoothly. Last year, 30 new power-generating units were installed at heat stations, a record number for our country. The construction of the Boguchanskaya hydro power station was completed while the Sayano-Shushenskaya hydro power station was completely restored after the 2009 accident.

Over 50 billion roubles in private investment have been raised to develop renewable power facilities. Of course, this is an important sector. Work is underway to improve access for consumers to the electric power infrastructure. Starting 1 October, the fee to connect to the city's power grid will be cut in half for small business.

Last year we made strategic decisions to eliminate systemic problems in the sector. This includes overlapping subsidies, something we talked about a great deal, as well as reducing losses in the power grids and the introduction of a new thermal energy market model. All of these are long-term goals that will take a few years to achieve.

The situation in the nuclear power industry is stable. It stands out for its unified technological processes and technologies both for energy needs and for arms production, so this stable development of the nuclear sector is of critical importance to us. As you know, there are some cutting-edge, breakthrough technologies there of which we are proud.

Rosatom's portfolio of orders includes 29 power units, 19 of which will be built in China, India, Turkey, Belarus, Bangladesh, Finland, Vietnam, Armenia, and Hungary. To compare, in 2008, the portfolio included 19 power units. In other words, we are growing.

Oil production has stabilised at about 527 million [metric] tonnes, a slight growth on the previous period. This level is enough to meet our own needs and our exports.

Natural gas production is 640 billion cubic metres. There was a slight fall, but we reached an agreement to build a new gas pipeline to Turkey and Greece, as you know, instead of South Stream. A breakthrough 30-year contract was signed on gas supplies to China. A section of the pipeline to China along the Sila Sibiri [Siberian Might] eastern route is under construction.

Now, a few words about the transport sector. It was largely thanks to state support that air transport continued to grow, including, which is especially important, on domestic routes - something we have been working on in recent years and which we finally managed to restore. Excluding Moscow, domestic air transport was up 22 percent, with over 10 million passengers carried. A total of 93 million people used air transport, which is 110 percent on 2013. Let me remind you that under the priority measures for domestic air travel, we set a 10 percent VAT rate to support carriers and therefore support our passengers.

The situation in the commuter railway service was difficult. Under the priority action plan, a zero VAT rate was introduced for this sector. The situation has on the whole stabilised and is under control.

Last year, over 700 kilometres of federal motorways and 1,500 kilometres of regional roads were built or upgraded.

The year 2014 was very successful for housing construction. More housing was built in Russia than in the Russian Soviet Federative Socialist Republic in the record year of 1987. Remember, 73 million square metres of housing were built at that time, as compared to 81 million square metres in 2014.

This was greatly facilitated by the Agency for Housing Mortgage Lending and the Housing Development Foundation. In order to create a centre of competences, we plan to merge these two organisations and establish an institute for the development of the housing sector. I am asking you to support this initiative. The new agency will finance the Russian Family Housing Programme, as a result of which over 10 million square metres of housing will be built in 49 regions, and it will also support the creation of the utility infrastructure, the building of rental housing and mortgage lending programmes, which also grew substantially last year.

Construction development was expedited by the streamlining of administrative procedures. It may be recalled that of 220 procedures, only 130 remained as a result. In 2015, Russia significantly improved its positions in the Doing Business ratings, placing 12th in the world in the "Registering Property" index, which in and of itself is not bad because this means that administration activity and administration standards are approaching the world's highest levels.

With active input from our colleagues in parliament, amendments have been made to the Land Code. They make it possible to remove unnecessary administrative barriers to providing land plots, and to improve conditions for the implementation of investment projects.

The priority action plan includes a number of important steps to support mortgage lending programmes.

First, this includes subsidising the interest rate on mortgage lending for those buying flats in new development projects. Now it is 12 percent. A total of 20 billion roubles were provided to subsidise mortgage programmes. I hope that as the Central Bank reduces the key interest rate, mortgage rates will also be reduced.

Second, we are taking some measures to help those who have problems with mortgage payments due to the changed economic situation. Banks approach each specific case individually. The Government plans to allocate 4.5 billion roubles to address this issue.

We also work to help people who are dealing with unreasonable increases in their utility bills. It is the Government's decision that the increase in the total public utility services charges across Russia should not exceed inflation. Naturally, this year's utility figures will be higher than last year's, about 8.7 percent, because of higher inflation.

Another field we are doing a lot in has to do with major repairs of residential buildings. Let me remind you that we launched a large programme in 2014. Some of our colleagues insist on initiating the suspension of the legislation that would allow using the property owners' contributions to finance major repairs until 2020. It is clear that the reasons behind it may be different, and obviously, this initiative may appeal to some. But we still have to think about what to do with a vast array of residential properties that are currently in the private rather than state ownership, because by 2020 many of them will become dilapidated and dangerous, so we need a source to repair them sooner.

The growing debt for utility services remains a major  headache for housing and utility companies. Parliament members from the United Russia party have pointed out this problem. The industry's total debt has almost reached 1 trillion roubles. The Ministry of Energy and the Ministry of Construction have drafted the necessary amendments and submitted them to the State Duma. Once they are passed, we expect to be able to resolve this debt problem. The document stipulates liability for nonpayment of utility bills. This mostly applies to chronic defaulters; in fact, what they do is parasitism, including the so-called consumers who cannot be cut off and who have currently become the biggest debtors.

The Government is focusing on the defence industry for obvious reasons. I think that here we have been able to maintain all the positive trends of the last 5-7 years. We almost completed the consolidation of all the defence sector assets in 2014. All of the defence industry segments showed growth in production from 2013: 24 percent in the electronics industry, 17 percent in aviation, nearly 15 percent in shipbuilding, 13 percent in munitions, and 8.5 percent in the aerospace industry. The share of high-tech products increased to 63 percent in 2014.

The defence procurement system finally began operating properly. Its funding increased to over 1.9 trillion roubles last year, from 1.5 trillion in 2013. State guarantees were provided for loans defence companies borrowed to fulfill their state defence orders based on contracts with the Ministry of Defence worth over 470 billion roubles.

As in previous years, state defence contracts primarily aimed to reequip the Russian Armed Forces. In 2012-2014, the weapons systems were upgraded comprehensively. Over this period, military units received about 20,000 various types, systems and complexes of military equipment and weapons for the first time in many years.

Russia remains a leading global arms exporter. According to preliminary estimates, arms sales accounted for 3.2 percent of total 2014 export volumes. In 2013-2014, arms export revenues totaled over $15 billion which is rather impressive. As you may know, the current portfolio of contracts is worth about $49 billion.

We launched our import substitution programme back in 2008-2010 under the federal targeted programme for expanding our defence industry. Last year, we formulated and approved detailed timeframes to substitute for components being made in Ukraine, NATO countries and the European Union. This programme has to be implemented completely.

Positive results were also achieved in the aerospace sector. Our orbital cluster received 17 more satellites, for a total of 134, or about 10 percent of the global orbital cluster. Despite pretty tough competition, Russia has retained its leading position in the global market, and it accounted for almost 50 percent of all space launches worldwide.

The aerospace industry is being restructured under a programme to improve the management system. I would like to remind you that we have established a shareholding company in this area, and it's already up and running. There are plans to set up a specialised state corporation based on this and also the Federal Space Agency.

The agricultural sector has posted impressive growth rates for the second consecutive year. Last year, Russia gathered an almost record-breaking harvest and posted a 13 percent increment on 2013. That was a good harvest; it is second only to the 2008 harvest, although we almost reached 2008 levels this time. These are not mere statistics. First of all, this proves that food security is a very realistic objective. Moreover, this makes us feel confident that speculations about empty Russian grocery stores coming from abroad have been and are a myth. Second, this proves the effectiveness of the state policy in the agrarian sector which received almost 189 billion roubles in 2014.

The agricultural sector development programme was expanded by quite a bit. We drafted an import substitution road map for the sector and pinpointed all the main import substitution priorities: The development of the agrarian sector remains our top priority.

We approved a list of 464 specific investment projects in the area of import substitution worth over 265 billion roubles. Import substitution programmes should create favourable conditions for major agro-industrial holding companies (we have agreed on this issue) and small businesses.

In 2014-2015, new farmers received about two billion roubles. In this area, the Government worked rather actively with its colleagues-legislators and with representatives of industry unions. The majority of proposals from the Government-approved Plan of Priority Measures have been implemented.

The agriculture industry has received additional support and will receive more funds this year. The allocations, nearly 188 billion roubles, have been included in a state programme, and another 50 billion roubles have been stipulated in the priority measures plan. I believe that we're moving in the right direction. I hope our people will gradually come to see that the best products are marked "Made in Russia."

To be sure that everything we make - whether it's food or other products - satisfy market requirements and ultimately result in satisfactory market growth rates, we must continue to improve the business climate. We've moved forward with the National Business Initiative roadmaps, have simplified the customs procedure at vehicle checkpoints (it now takes barely an hour), have accelerated the registration of legal entities and sole proprietorships at state extra-budgetary funds (it takes three days now), and have reduced paperwork by approximately 50 percent. We are on the home stretch for regulatory acts, but it's more important for these regulations to be effective, so that improvements do not remain only on paper and our business people see positive change.

Efficiency is important not only for private businesses, but also for state-owned and state-run companies. We have adopted decisions on improving their performance. First, it has been proposed to create corporate treasury systems for companies and their subsidiaries. The funds that were distributed among many accounts should be held in a single purse.

Second, our companies have created long-term development strategies adjusted to government priorities in their respective industries. Special audit mechanisms with independent auditors will be sued to monitor the implementation of these programmes. We have also selected the key performance indicators on which the career and remuneration of top management will directly depend. We have also decided to return government representatives to the boards of some large companies to better coordinate their performance in the current situation.

Our investment attractiveness definitely depends on capital amnesty. A bill on capital amnesty is being discussed in the State Duma, as well as with the business community and with Russian and foreign experts. Truth be told, it is a very complex bill, and we'll need to work together to find reasonable compromises on a number of issues.

As I promised last year, the Government has not increased the fiscal weight on business, even though proposals to this effect were made. On the contrary, VAT rates have been decreased for some economic sectors (I mentioned them here). The tax system will be moderated for small companies. At the same time, some tax decisions will be made at the regional level. For example, the regions now have the power to introduce two-year tax holidays for startup proprietors.

Now I'd like to say a few words about support for small and medium-sized businesses. First, we've increased the number of small companies that are eligible for the simplified taxation system. The regions are able to reduce the tax rate for some companies from six to one percent.

For some types of activities the unified tax on imputed income may be cut in half - from 15 to 7.5 percent. Second, we have expanded the range of small and medium companies that may take part in government support programmes. We have also raised the ceiling of annual revenues by which companies are categorised as micro-, small, or medium-sized businesses (up to 120 million, 800 million and two billion roubles, respectively). We continue discussing this issue.

Third, innovative small business projects that are likely to become commercial are eligible for grants. We will increase their support via the Small Business Assistance Fund and have set aside about five billion roubles for this purpose in our anti-crisis plan.

Fourth, the recently adopted law on priority development territories in the Far East and single-industry cities provides for tax benefits as well.

I'd like to speak about the Far East in more detail. We all remember the aftermath of the 2013 flood, which was the worst in almost a century. It left about 13,000 people homeless. Much was done to recover from it and by last autumn all who were left homeless were able to move into new housing. Despite all the upheavals last year, the economy of the Far East registered solid growth. I'll simply remind you that industrial production increased by 5.5 percent and agriculture almost by 19 percent (while the economy of the Far East is not large, these figures are significant). They show that the adopted measures have had a positive effect on the economy. We have endorsed six investment projects that will receive government support.

We will submit a draft law on a free port in Vladivostok for your consideration in the near future.

No matter what measures the Government may take, their ultimate goal is to alleviate the consequences of the crisis for our people. Our task is to help them through this period as painlessly as possible.

I'd like to emphasise that despite all problems we are fully meeting our social commitments. Nobody should have any doubt that no matter how difficult this may be, salaries will be paid and pensions adjusted for inflation. Social stability is one of our most important recent achievements and we'll do everything to preserve it. The plan of priority measures is not only an anti-crisis plan but also a social one because it builds on the decisions that were made in the social sphere and has produced results.

I'd like to point out that demographic success is probably our main achievement of recent years. If more babies are born in the country, we have a future.

Last year natural population growth was double that of 2013. Average life expectancy has reached 71 years. I won't quote the figures of a decade ago - you know them well. No doubt, this is a result of a purposeful social policy and improved healthcare. Now our task is to preserve this trend under any circumstances. I'd like to recall that this year is the year of combatting cardiovascular diseases, which remain the main cause of death in the country. All this has been done to change people's attitude to their own health. Doctors are part of this effort, which also has a sport component. I hope the revived GTO (Ready for Labour and Defence) programme will help people improve their athletic performance and physical fitness.

Almost two million babies were born in 2014. This is more than in 2013. The infant mortality rate fell by almost 10 percent. Naturally, this is not a result of just one year - we consistently worked to this end. We did much to improve our healthcare, especially for mothers with babies, and built many kindergartens and perinatal centres. Understandably, families with two or more children have been the hardest hit by the crisis. We adopted measures to help them in addition to the existing forms of support. In 2015 they will receive a lump sum of 20,000 roubles in the form of maternity capital. We have also expanded what maternity capital can be used for - now it can be spent to pay off both the principal and the interest and make the down payment without waiting for a baby to reach the age of three.

Support for orphans and preventing social orphanhood and child neglect remains one of the key areas of work in the social sphere. In February, several decisions were made that should help implement the National Action Strategy for Children until 2017.

Despite the existing difficulties - and there are plenty - we will not economise on children. This year, we planned to allocate 10 billion roubles for the modernisation of regional preschool systems, in addition to the funds provided last year and the year before last, but we are also ready to provide extra funding. Let's discuss this.

I'd like to thank the regions for the effort, in conjunction with the government, to reduce waiting lines at kindergartens. In 2013-2014 alone, 788,000 new openings were created. This is a huge figure. Never before have kindergartens been built at such a pace. I suppose, generally, the building of kindergartens is one of the best social programmes of recent years. The most important thing is that people can see the results.

We'll do all we can to prevent the crisis from affecting the quality and availability of medical care, including high-tech care. Last year, the number of healthcare organisations providing this increased to 435, while the number of patients who received high-tech treatment paid for from the federal and regional governments exceeded 715,000.

One of the main priorities today is to stabilise the situation on the medication market. It is crucial for us to prevent a shortage and the unjustified growth of prices for medications, especially vital medications. I believe that we'll discuss this later today. Measures are being taken to increase the share of domestic products. We introduced restrictions on purchases abroad, except of course for the Eurasian Economic Union countries, of all those types of medical products that are manufactured in our country by at least two producers. Yet another indicator that should be used to assess the present situation is the state of the labour market. Under the present circumstances, it is important to prevent mass unemployment and to support the people who have already lost their jobs. This is a challenging goal. Remember that the situation was very difficult in 2009, when unemployment was over 9 per cent.

The present situation is not so acute. The situation has stabilised. In recent years, unemployment in our country was the lowest in Europe. In 2014, it reached an all-time low. At present, some companies need to reorganise, lay off staff and reduce working hours. The situation varies in the regions, of course.

The present unemployment level is 5.8-5.9 per cent - just slightly above last year's, and I think it is vitally important to keep it at that.

Today, we can say with confidence that pessimistic predictions regarding our labour market haven't come true. We have introduced additional measures to support the labour market in a timely manner. The regions have formed their own training and internship programmes. We must support young people with no work experience and people with disabilities who are already struggling to find a job.

Finally, we have used targeted subsidies to support several regions and key enterprises that found themselves in a difficult situation. I have already mentioned them - KAMAZ and AvtoVAZ auto plants and Altaivagon and Tver Carriage Works. Such targeted solutions will be practiced in the future as well, if necessary.

I know that a number of deputies from the parliamentary groups, particularly from the Just Russia, are concerned with hidden unemployment. Of course, we will continue to create a variety of alternative forms of employment, including in company towns.

Employers who create jobs will receive financial assistance in the amount of 225,000 roubles per employee. This will help create the proper conditions for the people who are prepared to relocate to other Russian regions.

With regard to education and science, technical development - or any development for that matter - is impossible without ground-breaking research or innovative products. Last year, overdue reform began at the Academy of Sciences, which caused lively debate. Perhaps, that's the way it should be. Meanwhile, our scholars continued to work producing world-class research, which in itself is significant.

Research funding from the federal budget amounted to 372 billion roubles in 2014.

The Government continued to implement Russia's Innovative Development Strategy to make the economy more focused on innovation.

The foundations of such a system have been established and allowed us to gain a foothold in the innovation activities rankings.

Over 500 small innovation-driven businesses open yearly sponsored by the Foundation for Assistance to Small Innovative Enterprises in Research and Technology. The Russian Venture Company helped create 18 venture capital funds.

The more efficient use of intellectual property is yet another area of our focus.

Last year, we adopted a number of decisions, including amendments to Part IV of the Civil Code on intellectual property that govern these relations.

We will continue this work with our colleagues from the State Duma.

The system of grants and scholarships and support for gifted children and young researchers will continue. The project to make Russian universities included in the world's top 100 universities is implemented rather successfully. A number of our universities enjoy a fairly good reputation today, and are consistently moving up in the university rankings. To boost the number of such educational centres, 10.5 billion roubles have been allocated to support 14 leading federal universities.

We also focus on promoting blue-collar occupations. In 2014, we took part in the WorldSkills Europe international championship. We also held a national championship of cross-sectional occupations for the first time in Yekaterinburg. We will continue to support such work because skilled labour is in short supply in our country. The Worldskills Russia Union was created by Government decision. We will enter the contest for the right to host the 2019 Worldskills championship.

As you are aware, 2014 was the Year of Culture. This year is the Year of Literature, and I hope that it will similarly be a success. As much as 3 billion roubles were allocated for the Year of Culture in 2014. Seventy cultural sites in different Russian regions from St Petersburg to Khabarovsk were commissioned or renovated.

We consistently improved the living standards of workers of culture. The average salary increased by 63 per cent, doubling in certain categories.

Colleagues, we address some of our economic and social problems as they arise.

We use the anti-crisis plan that we are implementing together as a blueprint.

The Government submitted this plan to the State Duma and discussed it with the deputies. We are now working together on its implementation.

You submitted proposals to enhance it with additional measures. First, it has been proposed to step up measures to support people with disabilities and families with children with disabilities. Standard tax deductions may be increased for such families. Let's do this.

Additional benefits can be provided for Russian public organisations of people with disabilities who work under government contracts. They will be entitled to provide goods and services worth up to 1 million roubles as compared to the current 100,000 roubles. To be sure, this will not be based on a competition. I think that it is also a reasonable measure.

Another legislative initiative focuses on the preservation of the zero VAT rate for domestic air travel to and from Crimea, which I have already mentioned.

I want to specifically focus on this once again from this important rostrum - the anti-crisis plan is not set in stone. It is a document we have painstakingly created with you. It can be adjusted depending on the situation. It can be adjusted based on your proposals and whenever we deem it necessary. The same goes for our big Government plan - Policy Priorities of the Government to 2018. The previous revision was adopted two years ago.

The circumstances and our living conditions have changed, and this should be reflected accordingly. Therefore we have drafted a new version of our Policy Priorities. This draft document will be posted on the Ministry of Economic Development's website tomorrow. Just like my colleagues, I would find it very useful to hear your opinion and specific proposals. I will sign the final version of the document after the discussion involving our colleagues, State Duma deputies.

At the end of our conversation, I would like to specially note that various assertions that we must change and adjust everything and live in line with a different model are incorrect. All our priorities and long-term directives should remain the same, and they will remain the same. This includes the concept for the long-term socioeconomic development of the Russian Federation up to 2020 and other documents. Even the current crisis should not change our intentions.

In the long run, the entire Russian economy, specific businesses and individuals should opt for new living conditions. For this purpose, the Russian economy should create a foundation for growth rates that should be no lower than average global rates by 2018.

We can only conduct this work on the basis of public accord, coordinated actions of all branches of government and a broad dialogue between various political forces.

Ladies and gentlemen, we have, indeed, lived through a very difficult and critical year. We have scored major victories during that period, and we have also faced major difficulties. These difficulties are forcing all of us to realise that the end result is more important than any momentary political goals.

We can belong to different parties, and we can voice the most diverse stances. Or, like you, esteemed colleagues, members of parliament, we can represent the interests of Russians expressing all sorts of convictions. This is correct and normal. But all of us have a common goal: we must live through this difficult period together, so that the country will eventually become economically strong and modern, so that we will feel proud of our country, which needs the talents and energy of every one of its citizens.

Over 100 years ago, Sergei Muromtsev, a famous Russian jurist (whose books, incidentally, I read during my university years) made the following statement: "A great cause also compels us to accomplish a great feat and calls on us to work really hard. Let's wish each other and ourselves the ability to muster enough strength, so that we would be able to accomplish this objective for the benefit of the people who have elected us and for the benefit of our Fatherland." These are great words. Thank you for your attention.

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 #3
Moscow Times
April 22, 2015
Poll: Russians Haven't Been So Positive About Their Country in 5 Years
By Peter Spinella

Russians are more positive about their country than they have been since the state-run Public Opinion Research Center began surveys for its social sentiment index five years ago, the pollster said Tuesday.

The index, based on a comparison of respondents' assessments ranging from "everything is terrible" to "everything is excellent," reached its high of 70 points regarding attitudes toward the country in March this year, compared with 22 points in early 2010 and 2011.

Respondents were even happier about their own lives, with that aspect of the index reaching 81 points, slightly below the previous month's high of 84 points, compared with 55 and 53 in 2010-11.

The index is established by calculating the difference between the number of people who had positive responses and the number who had negative responses.

While the pollster did not give any specific reasons for the high spirits, Russia's isolation from the West amid the Ukraine crisis may have something to do with it.

Russia's severe economic downturn amid the sanctions war, as well as a deluge of criticism of the West in the national media, has contributed to a surge of patriotism among the Russian people. The annexation of the Crimea Peninsula on the Black Sea from Ukraine last March was also a hit with the Russian public, sending President Vladimir Putin's approval ratings soaring.

The Public Opinion Research Center, commonly known by its Russian acronym VTsIOM, said the survey considered the opinions of 1,600 respondents across 46 Russian regions.

The poll had a statistical margin of error of no more than 3.5 percent, the researcher said in an online statement.

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 #4
Gallop.com
April 21, 2015
Russia Receives Lowest Approval in World; U.S. Highest
by Jon Clifton
[Charts here http://www.gallup.com/poll/182795/russia-receives-lowest-approval-world-highest.aspx]

This article is based on the findings from Gallup's first-ever report -- Rating World Leaders: What People Worldwide Think of the U.S., China, Russia, the EU and Germany -- on the status of how the world rates the leadership of five of the world's major powers.

WASHINGTON, D.C. -- Russia in 2014 earned the lowest approval ratings globally for the eighth consecutive year and posted the highest disapproval ratings it has received to date. U.S. leadership received the highest approval rating in the world, with the median 45% approval topping ratings of the leadership of the European Union, Germany, Russia and China -- as it has most years since 2009.

Do you approve or disapprove of the job performance of the leadership of ______?

For the past six years, the U.S. has typically received the highest approval ratings and Russia the lowest. But what the trend line does not show is that countries affiliated with the West, particularly NATO countries, soured on Russia dramatically. And, at the same time, Russians and people in many of its former republics -- chiefly Kazakhstan, Belarus, Kyrgyzstan and Tajikistan -- all felt much more negatively about the leadership of the U.S., the EU and Germany.

Russia's ratings dropped by 10 percentage points or more in 21 countries, nine of which are members of NATO. Despite its already low approval ratings, no other world power Gallup examined had this many sizable declines. Additionally, majorities of residents in 41 countries disapproved of the job performance of the leadership of Russia -- nearly three times the number of countries where majorities disapproved of U.S. leadership.

Russia Biggest Losses in Leadership ratings

High disapproval of Russia's leadership was centralized in Western countries. Many EU member countries and Canada reported their highest disapproval ratings of Russia's leadership since the beginning of Gallup tracking. In fact, the nine countries with the highest disapproval ratings of Russia are all in Europe.

Highest Disapproval of Russia's Leadership

Russians, in turn, largely feel the same way about the leadership of the EU, U.S. and Germany. Russians gave the U.S. and the EU the lowest approval ratings in the world and the highest disapproval ratings. Russians' disapproval of the U.S. nearly doubled from 42% in 2013 to 82% in 2014 and their disapproval of the EU's leadership more than doubled from 26% to 70% in that same period. Germany's highest disapproval ratings are a statistical tie between the Palestinian Territories (67%) and Russia (66%).

But even as relations frayed with the West, Russians looked East with more favor. Russians' approval of China's leadership jumped to a record 42%, likely reflecting the $400 billion gas deal the country inked with China in May 2014.

Disapproval of EU, U.S., and Germany leadership

Russia also was not the only country that soured on the West's leadership. Kazakhstan, Belarus, Kyrgyzstan and Tajikistan all reported the highest disapproval ratings for the U.S., the EU and Germany in 2014 than at any previous point in the past that Gallup has measured.

Implications

The deteriorating leadership ratings between the West and Russia reflect the tense divisions over the Ukraine crisis in the last year. However, the growing attitudinal divide between the former Cold War adversaries does not bode well for future negotiations. Recent research suggests that the way the people in one country feel about another country can actually affect foreign policy. While it does not seem like the relationship between Russia and the West is anywhere near what it was during the Cold War years, the emerging gulf in attitudes among their respective publics is troubling.

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 #5
Moskovskiy Komsomolets
April 16 2015
Popular Russian daily gives critical analysis of Putin phone-in
Mikhail Rostovskiy, Col Putin humbly petitions Col Boris; he can order everyone else about

Finally, a man has been found in the Russian Federation to whom Reserve State Security Colonel Vladimir Putin cannot give orders. This lucky man is called Boris, and he is also a retired colonel. A friend of the inflexible colonel's wife in the best traditions of Soviet party committee work appealed to the Supreme Commander in Chief, asking him: Tell him to give his wife a dog for her birthday.

The highly experienced VVP [Putin] did not fall for the provocation and instead of issuing an order, he politely asked "Colonel Boris" to respect his wife's wish. Why do I believe this episode in the phone-in with Putin merits special attention? Because "Col Boris" is, in Putin's opinion, the only force on earth who can successfully tell him where to get off. As for all the rest, Vladimir Putin radiated confidence: Everything is under control! Everything is proceeding as planned! Everything is going the right way!

The phone-in began, as it became the custom long ago, with an upbeat report from Putin on "the successes over the recent period." And some of the "successes" indicated by VVP caused me personally to have a few questions. "We have come up against certain external restrictions and in one way or another that has affected growth rates... But as a whole now we can also see the rouble getting stronger," Vladimir Putin said.

Yes, the rouble has indeed gotten stronger. But why did Vladimir Vladimirovich not deem it necessary to remind us that before its "strengthening," our national currency had wasted away to the point where it had turned into a living skeleton? After all, if you look at it from the viewpoint of April 2014, not only has the rouble not gotten stronger - it has lost considerable ground. It is clear that I was not the only one with thoughts of this kind. And you must pay the phone-in organizers and participants their due: The seditious doubts as to whether everything really is as good as that were not left unsaid.

"Wages have dropped and prices have risen. We are not living now, we are surviving. Will it continue this way for long?" a Primorskiy Kray resident asked VVP. Former Finance Minister Aleksey Kudrin essentially put the same question, but in science-like form. It emerged from the words of the man who for many years was Putin's economic right hand that despite all the "the sanctions can only help us" rhetoric, if the present trends continue, Russia is doomed to lag substantially in its development.

The squabbling that followed between the good old friends Vladimir Vladimirovich and Aleksey Leonidovich - about which of them was more to blame for this state of affairs - made me start seriously thinking: Why are they sorting this out live on national television and not by themselves? Clearly because Putin was able to derive benefit even from the accusations made against him by Kudrin, that symbol of Russian economic liberalism. In my view, the president managed to present Kudrin as a politician for whom, in contrast to VVP, the problems of ordinary people are of only secondary or tertiary interest. With almost the same ease and serenity, VVP also beat off most of the other tricky questions. I was unpleasantly struck by Putin's view of the problems of the holders of currency mortgages. It followed from what the president said that he is 100 per cent certain that the state should support the holders of rouble mortgages who have found themselves in difficulties. But Putin clearly did not have that certainty when it came to the holders of currency-based mortgages. Naturally, the president did not refer to them outright as "traitors" to the fatherland but there was an absolutely clear negative attitude towards them to be traced in Putin's utterances. In accusatory tones the president wondered why they had not taken a loan in the same currency in  which they receive their wages. I am prepared to answer Putin: Probably, for reasons that include the fact that our own state has persuaded them that the rouble is a really strong currency but then suddenly started engaging in rhetoric about the inevitability of "currency risks and fluctuations."

But that episode with a frankly weak burden of proof on Putin's part was the exception rather than the rule during the phone-in. Questions about "Russia's enemies" and about "the difference between Stalinism and Hitlerism," or about "the relatively small number of world leaders who plan to attend the Victory parade," all these and other serious topics Putin commented on without the slightest strain. And this calm countering of difficult questions was not simply a demonstration of his skill as a speaker. Behind each of VVP's confident replies, it seems to me, there stood the sincere conviction: A year ago I made the right decision - both about Crimea and about the need to finally say "stop!" to the West.

Putin was asked whether it did not seem to him that his friends were taking advantage of his kindness. "Why just my friends? Everyone is taking advantage of it," Vladimir Putin replied with a charming smile. That reply might seem cynical to some people. But it brilliantly illustrates Putin's view of the world. VVP sees himself as the bearer of moral right. As the man who is changing life in Russia for the better before our eyes and finally putting the presumptuous West in its place.

At the end of the phone-in Putin told a bath time story about his bosom pal, former German Federal Chancellor Gerhard Schroeder: The bath in which the friends were steaming themselves caught fire. But Schroeder finished his beer and only then left the burning building. I saw a kind of symbolism in this story - a veiled reference by Putin to his own role in Russian history. I may be wrong. But it seems to me that reserve Col Putin sees himself as a warship captain who is keeping entirely calm despite the  fierce and frenzied fire from the enemy.

Well, let's hope that this confidence of VVP's is justified and that our "Russia" ship of state does not catch fire like the bath house in which Putin and Schroeder were steaming themselves.

 #6
Novaya Gazeta
April 16, 2015
Russian liberal paper sees Putin avoiding difficult questions in latest phone-in
Irina Petrovskaya, The truth about life is on the ticker tape. The main event - the 13th to date - of the television season is over

On the eve of "Direct Line With Vladimir Putin," I was somewhat fearful, although I am personally none too superstitious and do not believe in all those black cats breaking a mirror with an empty bucket, or what have you. But nevertheless, the current edition is the 13th to date. However you slice it, an unhappy number. The devil's dozen. In some countries, to be on the safe side, there are no homes, apartments, or transport routes with the number 13. In our case, too, this doubtful sequential number could have been passed over and this edition of "Direct Line" announced without further ado as the 14th - no-one would have said a word. But no, we have bold guys sitting both in the government, and on the TV. It's the 13th edition - so be it.

They began to inform the people about the coming event in advance and extremely abundantly. This time, to calls, letters, and communications, video questions were added, and correspondents recorded people willing to ask their president about their most urgent and burning problems in every town and village. "How does he cope with all this enormous country?", some people asked their deputy sympathetically. "Will there be even more attention shown to the elderly?", others inquired. Reports about what great activity was being shown by the population in their attempts to communicate with President Putin filled in the space between programmes on the main state channels and also became one of the main stories on news programmes, squeezing out the traditional Ukraine, fires in Khakassiya, and the upcoming [Orthodox] Easter Sunday. On the eve of the "main event of the year," television programmes activated a "timer": "Sixteen, 14, 12 hours remain until 'Direct Line With the President." The Rossiya-1 channel, relishing in advance the enormous significance for the country of "the most frank answers from the man who is responsible for the entire country," redrew its entire daily schedule: Immediately after "Direct Line," they scheduled a one-and-half hour edition of "Vesti" ["News"], then "An Evening With Vladimir Solovyev" for two-and-a-half hours, then "Vesti" again, and after the "off-topic" [long-running TV serial] "Sklifosovskiy", "An Evening With Vladimir Solovyev" again, with a detailed discussion of what had been seen and heard during the president's interaction with the people.

Despite the superstitions, "Direct Line" began precisely on time. By that moment in time, specially invited people - politicians, journalists, heroes of TV spots - had already been sitting in the auditorium, probably, for several hours, waiting for the meeting. The first 90 minutes were reminiscent in structure of the programme of broadcasts of Soviet Gosteleradio [State Committee for Television and Radio Broadcasting]: "The Lenin University of Millions" [programme of lectures on the work of Vladimir Lenin or Marxist-Leninist theory], "Country Hour," "For Children About Animals."

"The rouble is rallying, we have managed to prevent real inflation, one of the richest grain harvests has been gathered, and positive demographic dynamics is being observed," Putin reported cheerfully. "To judge by the questions, everything is not so radiant," Kirill Kleymenov, one of the anchors of "Direct Line," unexpectedly objected to the president, and cited the following question: "Prices have gone up and pay has gone down, it said, and cuts are occurring everywhere; we are not living, but surviving; how long will this continue?" Our hero was not at a loss, however, admitting that "we do have difficulties," but we will, of course, overcome them. And to [former Finance Minister] Aleksey Kudrin, who predicted Russia's inevitable technical and economic backwardness compared to the entire rest of the world in the event that there are no real reforms, he answered as follows: "It is necessary to have not only a head, but also a heart."

"An ordinary Russian farmer with the ordinary Russian name of John," who had been invited to the meeting with Putin, complained that, in 20 years in Russia, his farm has not brought him in a single kopek in profit. And he expressed his special opinion: "The future can be built only on truth... Do you believe the statistics that they show to you, or do they lie to you because they are afraid to tell you the truth?"

"How did you end up here?", Putin asked in amazement, clearly meaning not Gostinnyy Dvor, but Russia, which farmer John has swapped for Great Britain. "Cherchez la femme?" The farmer raised his eyebrows in surprise: "What? Je ne parle [pas] francais." "Look for the woman," the president magnanimously translated his scintillating joke, adding: "You think that the government and I do not know the realities - we do know the realities."

Farmers from the village of Stepanova in Kostroma Region, who had been lined up to talk to  Putin against the background of a cowshed, puddles, and impassable Russian mud, also complained about their impoverished situation and asked for the help. The head of state obviously confused his cows and his milk yields, admitting at the same time: "On the whole, milk yields across Russia are rather low at the moment," at which point the call centre was hooked up to act as an air vent to the conversation. The female correspondent working there, radiating joy, reported on the unprecedented activity of Russian citizens: "In the 90 minutes of 'Direct Line,' the number of appeals has exceeded 2.8 million. Four thousand calls per minute and 43,000 text messages - from five-year-olds and from 70-year-olds. Here is one of them: 'My friend is 40 years old. She is 40 years old. She wants a dog, but her husband, a retired colonel, is against this. Perhaps you would say to him, as supreme commander in chief: "Boris, you are not right!"'"

Those sitting in the auditorium smiled sweetly, and the president felt himself in his element: He likes this kind of sincere, simple-hearted, human interaction that allows him to demonstrate his knowledge of folklore, his sense of humour, and his understanding of popular aspirations alike. And on this occasion, too, he cited a jocular song with the words "And I love military people, handsome ones, strapping ones," adding, however, in his competent opinion, that military people are not loved for the fact that they are strapping. And he advised the woman who craves a dog to choose the place and time so that her husband will want to gift her not only a dog, but an elephant too, and maybe even a fur coat.

Meanwhile, the ticker tape was demonstrating quite different popular sentiments: "Putin, send money. Things are hard." "How can anyone live on 10,000 [roubles]? Although there is no way that Putin will answer this kind of question." "When will the president and the government turn to face their own people?" And also - outcries about forest fires, the arbitrary behaviour of functionaries, uncollected garbage, and the high cost of medicines. No one read out this ticker tape to the president, although even then he would not have been at a loss: He stated that everything is under control, that everything is going according to plan, and that sooner or later things will look up.

The trickiest questions - about the contractors of Nemtsov's murder, the impossibility of cross-examining the suspects in this case who are hiding in Chechnya, the presence of Russian troops in Ukraine - the president, according to his custom, span cleverly, or avoided altogether. However, the true picture of Russian life, despite the enthusiasm of the organizers of and participants in "Direct Line", shows through all the same. Everywhere you turn, it is the same old story, though someone did write to the president: "With your arrival, we began to feel pride in our country." This topic will no doubt be developed, expanded, and deepened in the evening on Solovyev's programme, where it will be explained how lucky Russian citizens are in their president and how thoroughly he delves into the people's misfortunes and problems, which is in itself the pledge of a happy future for a great country. They know how to do this - to develop and to deepen. Although the 13th "Direct Line" passed off this time without Putin's customary ardour, fire, and sparkling humour. Evidently, something is wrong after all, but people who believe in their president as a saviour do not need to know this. Faith and knowledge are two incompatible things. "Do you not think that your friends take advantage of your good nature?", Kirill Kleymenov read out a TV viewer's question. "Why only my friends?", Putin chuckled. "Everyone takes advantage of it."

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#7
Moscow Times
April 22, 2015
As Crisis Mounts, Russians Open Up Their Pocketbooks to Charities
By Anastasia Bazenkova

Even as Russia's economic crisis sees corporate donations decline dramatically, charitable organization are seeing more and more ordinary Russians step up to the plate.

"The number of donations from big companies has fallen considerably since the beginning of last year," said Victoria Agadzhanova, the executive director of charitable foundation Zhivoi ("Alive").

But the number of donations from individuals has increased and now represents 90 percent of all money given to Zhivoi. Many donations are small, between 5 rubles (0.1 cent) to 150 rubles ($3), according to Agadzhanova.

"Maybe people who have faced [past] crises can better understand those who are in need and therefore are more willing to help them," Agadzhanova said.

Russia's economy is expected to contract by as much as 5 percent this year as low oil prices and Western sanctions over the Ukraine crisis strangle investment.

Private Donations

In the West, individual giving makes up the vast majority of contributions received by charity organizations. For instance, in the United States over 70 percent of donations are private, according to the U.S. National Center for Charitable Statistics.

In Russia the situation is the reverse: 10 percent of all donations are spontaneous private giving, while 90 percent of donations come from corporations and corporate foundations, according to the Russian Donors Forum, a partnership of major Russian and foreign aid organizations working in Russia.

Private donations are typically the main source of funding globally for the World Wide Fund for Nature (WWF). But in Russia individual donations account for only about 11 percent of total giving, according to Olga Bandalova, the head of the membership program at WWF's Russian branch.

But as Russia's crisis grows, more and more people are donating individually to the WWF.

The WWF has seen the number of private citizens donation rise 19 percent in the last 9 months compared to the same period last year, from 17,800 to 22,000 people.

"[There is] an understanding by people that everybody is struggling now but charity organizations are struggling even more," Bandalova said.

Children have traditionally been the main focus of charitable donations in Russia. However, even children's charities have seen a steep decline in donations from companies and businessmen.

Since it was founded in 2006, the charity organization Detskiye Domiki ("Children's Homes"), which provides support to orphanages, has been almost entirely funded by corporate donations. "Before the economic crisis 95 percent of all donations we received were from companies," said Svetlana Rozanova, the director of Detskiye Domiki.

Corporate donations so far this year have fallen to hit 70 percent of total donations.

Detskiye Domiki expects the face value of corporate donations to fall 33 percent this year compared to last year, from around 60 million rubles ($1.2 million) last year to just 40 million rubles ($800,000) this year.

Individual donations are still relatively low, averaging 500,000 rubles ($10,000) a month, but Rozanova says more people are giving than ever before, even if each person is giving less than in past years.

"Some people supporting our organization had to cut their expenses due to the economic crisis, while many others got involved," Rozanova said.

Transparency Brings Money

In March of this year the Donors Forum polled more than 100 Muscovites about their willingness to participate in charity and the forms of participation they prefer.

Over 90 percent of respondents said they would like to help those in need, and over 50 percent of those polled said they would prefer personal involvement rather than cash donations due to the economic difficulties they face.

Many charitable organizations are balancing lower donations by offering opportunities for volunteering. "Now more and more companies are contacting us offering to provide personal assistance rather than money," Agadzhanova said.

Nevertheless, 39 percent of respondents to the Donors Forum poll were ready to provide financial support. The main thing is to know for sure where the money goes, the respondents said.

As well as the population's reduced income, mistrust of charity organizations, caused by lack of transparency, is one of the main obstacles for those who are not involved in charity work.

Overcoming mistrust and cultivating regular giving - rather than the mostly spontaneous giving that dominates Russia - is among the main challenges the public charities face, according to international British nonprofit organization Charities Aid Foundation.

Two months ago Zhivoi launched a website with a new payment system, which allows donors to view real-time transactions and the balance of the organization online. "It increased the percentage of donations in general by 120 percent," Agadzhanova said.

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 #8
Moscow Times
April 22, 2015
Snubbing Russia's Victory Day Achieves Nothing
By Mark Galeotti
Mark Galeotti is professor of global affairs at New York University.

Moscow is preparing for the 70th anniversary of the end of the Great Patriotic War. With 16,000 soldiers due to parade on May 9, it'll be quite a party - but there will be quite a number of empty seats at the table as Western leaders stay away.

Even the Czech Republic's famously Russophile President Milos Zeman has been forced to rescind his original decision to attend the actual parade. The aim is to further emphasize Western unhappiness with Moscow's interference in Ukraine, but the outcome may well prove counterproductive.

This is symbolic politics, of course, and symbolism can be very powerful. However, it is crucially important to understand the meanings and impacts if such methods are going to be productive. In this case, that's questionable.

First of all, it plays to a narrative that has served President Vladimir Putin well, that Russia is being belittled and isolated by a petty and hostile West. Chinese leader Xi Jinping will be there, and India's President Pranab Mukherjee. Even North Korea's Kim Jong Un will put in an appearance, making his first foreign visit as leader of his nation.

More specifically, it seems to add weight to the notion - raised by Putin during his call-in show last week - that Washington bullied European countries into following its lead in boycotting the event. This may be false - though it probably contains more than a grain of truth - but it seems to be a view held by many in Moscow, and I have even encountered it among serious foreign policy professionals.

But perhaps most important, this is a measure guaranteed to irritate without either hurting the regime enough to make it take notice or even having any lasting effect.

After all, some sanctions - and this is a sanction of sorts - have a clear and meaningful practical impact. The restrictions on officials associated with the annexation of Crimea and intervention in the Donbass, for example, not only had a real effect on the targets, they explicitly offered a deal: change Russian policy and you can travel again, and access your foreign assets.

Considering that this is the only the Victory Day that celebrates 70 years since the war ended, and probably the last major anniversary at which veterans will be present in any numbers, this is a simple snub, one which will hardly impel Russia to mend its ways.

Nor will the Russians respond at all well to a snub over this event. They are keenly - and rightly - aware of their role in World War II. Without diminishing the importance of British perseverance, or Lend-Lease, or the Western Front, ultimately the war in Europe was fought and won on the Eastern Front. There the Soviets blocked and then broke the Axis powers at extraordinary human cost.

To do anything that seems to diminish this is not simply a snub to the Kremlin, it is a snub to most Russians. In two weeks recently spent in Moscow, no one I talked to about this had sympathy or understanding for the Western position. Even anti-government activists whose main critique of the earlier sanctions were that they did not go far enough express at best bewilderment, at worst outright anger.

After all, while an outsider may wonder quite why a 70-year-old victory is so important for Russia, much the same could be said of Independence Day in the United States ("seriously, that was almost 240 years ago"). No one who has been in the United States on the Fourth of July, though, could doubt the genuine passion behind it.

Victory Day has become symbolic of national unity and triumph for a country that is aware it needs both. It recalls days of superpower status, when the world seemed at Moscow's feet.

It is a chance to honor the veterans, and tellingly as their numbers dwindle, there is the emergence of the "Immortal Regiment" movement in which young people honor fathers and grandfathers who fell in the war, parading with their grainy photographs.

It is also a reaffirmation and reinforcement of national will, something that Putin seems to regard as Russia's ace in the hole. He feels that while the West may have more money, better tanks and a longer reach, NATO and the European Union flounder to achieve a mealymouthed lowest-common-denominator consensus. Putin's Russia is willing and able to act with what it has.

So even without U.S. President Barack Obama, British Prime Minister David Cameron, German Chancellor Angela Merkel and French President Francois Hollande, Victory Day will run its course.

There will be passionate and hyperbolic rhetoric. There will be the latest military hardware clanking and rumbling through Red Square. There will be patriotic songs played over speakers in the metro, and youngsters in wartime caps. There will be veterans wearing their medals and clutching the flowers that children, egged on by proud parents, will thrust at them.

And even Russians embarrassed by their government and angry at its record will wonder just what the West is playing at.

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#9
New York Times
April 22, 2015
Unpaid Russian Workers Unite in Protest Against Putin
By ANDREW E. KRAMER

MOSCOW - In the far east, the teachers went on strike. In central Russia, it was the employees of a metallurgical plant. In St. Petersburg, autoworkers laid down their tools. And at a remote construction site in Siberia, laborers painted their complaints in gigantic white letters on the roofs of their dormitories.

"Dear Putin, V.V.," the message said. "Four months without pay."

After months of frustration with an economy sagging under the weight of international sanctions and falling energy prices, workers across Russia are starting to protest unpaid wages and go on strike, in the first nationwide backlash against President Vladimir V. Putin's economic policies.

The protests have been wildcat actions for the most part, as organized labor never emerged as a strong political or economic force in modern Russia. Under the Soviets, labor unions had been essentially incorporated into management.

Russian companies tend to avoid laying off workers in a downturn to limit severance payments - or to evade the wrath of officials trying to minimize unemployment in their districts. So with the Russian economy expected to contract this year and next, many workers are going unpaid or being sent away from their factories for a few days at a time of unwanted "vacations."

Unpaid wages, or wage arrears, an old scourge in Russia, rose on April 1 to 2.9 billion rubles, or about $56 million, according to the Russian statistical service. That is a 15 percent increase over a year earlier, but experts say that still does not capture the scope of the diminished pay of workers involuntarily idled during the slowdown.

Discontent over unpaid wages was tamped down for a while by a surge in national pride after the annexation of Crimea from Ukraine a year ago, and by repeated messages on state television that the hardship was an unavoidable price to pay for standing up for Russia's interests. The strikes, in any case, have not been widely publicized in the state news media.

Yet the strikes and protests in the hinterlands, like the huge graffiti addressed to the president, are posing a new challenge to Mr. Putin's government, which presided over an energy-driven economic expansion for most of the past 15 years.

During that time, most high-profile antigovernment protests, including the so-called White Ribbon movement in Moscow in 2011, promulgated political causes rather than economic ones. Those were met with corresponding political measures by the Kremlin, such as arrests and stricter laws on staging rallies. A further chill fell over the liberal political opposition this winter after the assassination of a prominent leader, Boris Y. Nemtsov.

But the labor actions are putting forward financial demands, and are being staged in Russian rust belt towns where the government is unlikely to find easy economic solutions to resolve the grievances so long as the recession lasts and oil prices remain low.

Regional newspapers described the teachers' strike this month - in Zabaikal Province, bordering China - as the first such labor action by teachers in Russia in years. The strike went ahead even though a regional governor had implored the teachers to work unpaid for patriotic reasons, which suggested some waning of the nationalistic pride over the Crimean annexation.

"Yes, it is serious when salaries are not paid, but not serious enough not to come to work," the governor, Konstantin Ilkovsky, had insisted. Mr. Ilkovksy said the federal government had delayed transferring tax revenue to the region, causing the delay in payments.

In the Ural Mountains, workers at the Kachkanarsk metallurgical plant that enriches vanadium, a metal used in steel alloys, went on a work-to-rule strike in March over layoffs.

In the nearby city of Chelyabinsk, managers at the Chelyabinsk Tractor Factory, which has a rich and storied history as a showcase of industry in the Communist era, sent workers home on mandatory vacations for one day a week, presumably to spend in their apartments in the wintertime.

And not far from the Estonian border, automobile workers at a Ford assembly plant went on strike to protest cutbacks brought on by the dismal automotive market in Russia.

The actions are in line with economists' predictions that the recession caused by the Ukraine crisis and falling oil prices will bite Russia hardest in rural areas and single-industry towns.

In those places, public-sector employees like teachers and postal workers, whose salaries are capped under austerity measures this year, make up a larger percentage of the population than they do in cities, according to Vladimir Tikhomirov, the chief economist at BCS Financial Group.

Russia's one-factory towns, called monotowns, barely tread water economically in the best of times. After the collapse of the ruble in December, the rising cost of imported parts hurt manufacturers such as automotive assembly plants.

"If they are not laid off, workers could be sent on unpaid vacation because of falling demand," Mr. Tikhomirov said.

The construction worker protest in Siberia was all the more remarkable for coming at a highly prestigious site, the new national space center, the Vostochny Cosmodrome. There, deep in a coniferous forest off a spur of the Trans-Siberian Railway, laborers laid concrete and built gigantic hangars for rockets long after salaries stopped being paid in December.

"We haven't seen a kopeck since December," Anton I. Tyurishev, an engineer, said in a telephone interview. Some people walked away, but he stayed on his job burrowing tunnels through the frozen soil for communications wires near the launchpad, hoping to be paid. "The company should have laid people off if they didn't have enough money."

In all, 1,123 employees of a main subcontractor, the Pacific Bridge-Building Company, have not been paid since December. Most work stopped on March 1, though dozens of employees stayed at the site to guard equipment. Their labor protest took the form of writing the giant message to Mr. Putin on the roofs of their dormitories.

In a rare twist for Russia's unpaid workers, somebody finally noticed this time.

After the message appeared, a Russian state television crew showed up to ask the workers to appear on a televised call-in show with Mr. Putin on Thursday. Hours before the show, the general contractor paid about 80 percent of the salaries to the 70 or so employees who remained at the space center, Mr. Tyurishev said. The contractor, Spetsstroy, had earlier paid a portion of back wages for all employees for December.

"Because of the indifference toward us, we just despaired and decided on this original means to appeal directly to you," Mr. Tyurishev told Mr. Putin on the call-in show, referring to the sign the workers had painted. "So you saw us and helped in our situation, to resolve our problem."

Mr. Putin said he would ensure the whole group was paid in full.

"It is one of the most important construction projects in the country," he said of the new space center. "Not because I initiated the project, but because the country needs a new launchpad."

Before the show, a boss had asked the remaining workers to paint over their message, to show that this dispute, at least, was resolved.

Mr. Tyurishev said no, not until all the employees had been paid in full. But in a compromise, he agreed to update it to read, "Three months without pay."
 

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 #10
http://readrussia.com
April 21, 2015
Russian Economy as a Cockroach
by MARK ADOMANIS

There are many ways in which Russia's economy has been described, very few of which are flattering. "Zaire with permafrost" might be the most popular, but John McCain's quip that it was a "gas station masquerading as a country" is both of more recent vintage and more representative of the genuine contempt felt by most American politicians.

Personally speaking I would say that, if you only look at the numbers, Russia is actually a rather standard emerging economy. By that I mean that it has exactly the sorts of problems, including unreliable courts, excessive regulation, corrupt bureaucrats, underdeveloped transport infrastructure, and weak political institutions, that bedevil most emerging markets. Are there some parts of Russia that are different? Absolutely. But there is little that is uniquely Russian about corruption, corporate raiding, or judges who are on the take.

Clifford Gaddy and Barry Ickes, who are, respectively, senior and nonresident fellows at the Brookings institution, settled upon a more nuanced, and from my perspective rather more accurate description of Russia's economy last summer when they wrote the following:

"Were it not so likely to be considered disrespectful, we might describe Russia as the cockroach of economies - primitive and inelegant in many respects but possessing a remarkable ability to survive in the most adverse and varying conditions. Perhaps a more appropriate metaphor is Russia's own Kalashnikov automatic rifle - low-tech and cheap but almost indestructible."

Nuanced and accurate? But they just called Russia's economy a cockroach! How is calling something an insect better than calling it a gas station?

What distinguishes Gaddy and Ickes' outlook from those of their peers, what makes it far more nuanced and insightful as a guide for how Russia has responded to the sanctions, is their ability to admit that the Russian economy's structure comes with certain advantages. These advantages have made it unexpectedly robust in the face of external pressure.

Russia's economic institutions aren't very much like ours: they're not nearly as efficient nor are they anywhere near as good at facilitating growth. Gaddy and Ickes certainly aren't going to be confused for members of United Russia anytime soon. But, as was demonstrated during the 1990's, Russian economic institutions can withstand an awful lot of punishment, levels of distress that would have totally demolished other, less robust ones.

So if "cockroach" sounds too harsh maybe it's better to think of Russia's economy as being like Rocky Balboa: it's not the fastest or most technically adept, but it's exceedingly good at getting punched in the face and staying on its feet.

Very few people, particularly people working in the US foreign policy establishment, are willing to admit this. Everyone knows that Russia's economy is a pathetic joke and that the whole rotten structure would come crashing down around Putin's ears if it was given a sufficiently strong kick at the right time.

Well, we've now seen Russia simultaneously absorb both a fairly strict sanctions regime imposed on it by the West (which was compounded by the Kremlin's additional "self-sanctions" on food imports) as well as an enormous and extremely rapid decline in the world price of oil. If the sanctions advocates' arguments were actually true this should have led to significant changes in Russia's position.

However even a cursory glance shows that the impact that all of this deliberate and incidental economic pain has so far had on Russian policy has been nil. Russia still occupies Crimea and Sevastopol and continues to openly support the separatists in Donbass (one could even argue that this hitherto cloaked assistance has grown increasingly blatant). Even when its economic outlook was most uncertain and precarious, Russia managed to successfully negotiate an (oft-violated) ceasefire that essentially creates a brand new "frozen conflict" in Lugansk and Donetsk.

It should go without saying that Russia's strategy in Ukraine was violent and brutal. But, on its own terms, this strategy has been very successful in ruining Ukraine's attempt at Western integration: so long as there is a frozen conflict in the East, neither the EU nor NATO will make any meaningful steps towards bringing Ukraine into the fold.

The reluctance to admit that Russia's economy has strengths as well as weaknesses, that its economic system is not simply an endless list of "minuses" indistinguishable from those of the Congo, has not only led to a lot of mistaken analysis, it's led to some very poor policy decisions. Western sanctions have not only caused a lot less pain than initially anticipated, but what pain there was heavily concentrated precisely on the relatively open, transparent, and pro-Western parts of the business world.

Does this mean that the West needs to simply throw up its hands? No. The fact that Russia's economy can absorb a lot of punishment does not make it all-conquering. It simply means it can withstand external shocks without collapsing. But the robustness of Russian economic institutions, as accurately noted by Gaddy and Ickes, comes at the price of efficiency: in "normal" times they just don't work very well. The West, then, would be well advised to play a long game, to nurture economic growth in Central and Eastern Europe so that these countries (even the most successful of which are currently at Russia's level of development) offer their citizens a clearly superior standard of living and so that their governments are many more resources at their disposal.

Or, to play off of Gaddy and Ickes' formulation: they best way to deal with a cockroach isn't chase it around and try to stamp it out. Rather, it's better to repair the house so that the roach can't get in in the first place.

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 #11
Strengthening of ruble due to growth of oil prices over - Yudayeva

MOSCOW. April 22 (Interfax) - The strengthening of the ruble due to growth in prices for oil has ended, First Deputy Central Bank Governor Ksenia Yudayeva told journalists at the Forum for Financial Stability on Wednesday.

"The strengthening of the ruble has ended, it has partially ended, what we saw was connected with the sharp movement upwards in prices for oil - by 30%, it has ended. Now the stabilization has begun," Yudayeva said, answering a question from journalists about the risks for financial stability due to the strengthening of the ruble.

She said that risks may always emerge both with a weakening and with a strengthening of the exchange rate of the national currency.

"In principle, now the level of risks for financial stability are substantially lower that they were a few months ago," Yudayeva said.

"I don't think that this volatility, which we are seeing, is now dangerous, that it presents a very serious danger for markets," the first deputy governor said.

She said that market is already accustomed to volatility. "Our banking sector, in connection with the control over forex positions, is sufficiently protected from forex risks," Yudayeva said.

She said that not only prices for oil but also European antimonopoly requirements for Gazprom (MOEX: GAZP) may have affected the volatility of the rubles recently.

The European Commission has sent Gazprom (MOEX: GAZP) a statement of objections alleging breach of EU antitrust rules.

"On the basis of its investigation, the Commission's preliminary view is that Gazprom is breaking EU antitrust rules by pursuing an overall strategy to partition Central and Eastern European gas markets, for example by reducing its customers' ability to resell the gas cross-border. This may have enabled Gazprom to charge unfair prices in certain Member States. Gazprom may also have abused its dominant market position by making the supply of gas dependent on obtaining unrelated commitments from wholesalers concerning gas transport infrastructure," it said.

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 #12
Forbes.com
April 21, 2015
Here's How Much Russian Stock Values Have Eroded Since Sanctions
By Kenneth Rapoza

Outside of the Western world, a handful of cities are fast becoming important global business players. Some of their home countries are recognizing that power and seek to create a multi-polar world that isn't so reliant on the U.S. and Europe. These are the power cities outside of the core economies of the west.

Foreign investors have been busy in Russia this year and anyone holding the Market Vectors Russia (RSX) exchange traded fund couldn't be happier.  More demand for Russian stocks has meant a nice 30.9% gain for the biggest Russia ETF year-to-date.  That's better than China's A-shares and H-shares market, and surpasses the MSCI World Index by about 20 basis points.

"There's a reason we're buying Russia," Arent Thijsen, CEO of T&E Inmaxxa in The Netherlands told FORBES recently. "It's value, value, value."

Just how cheap? Gazprom , one of the biggest energy companies in the world, is trading at just 4 times earnings. Sberbank , one of the biggest banks in the region by cash deposits, is trading at 5.4 times.  Of course there is a reason for the Russian fire sale on the RTS-Micex: sanctions. Russian GDP is contracting, declining nearly 2% in the first quarter. Consensus has real GDP contracting by 4.5% this year.   The ruble, while strengthening from its weakest point since the fall of the Soviet Union on Dec. 16, is still relatively weak against the dollar. It is currently trading in the low 50s.  Then there is oil. Russia's exports and its federal budget are dependent on oil. But with crude prices falling into the $40s this year, Russia's large cap energy companies took it on the chin.

Things are turning around for oil. It's closer to $60 than it is to $40. But the Russian bear economy is not out of the woods yet.

According to CEIC data compiled from the Moscow Exchange, the market capitalization of the broad RTS market was $204 billion in June 2014. Then sanctions hit the financial sector and in July market cap fell to $182 billion. In March, despite the rally, the RTS broad market index's capitalization was $133.6 billion, for a decline of $70.4 billion in 8 months.  To put that into perspective, that is a little more than the market cap of Gazprom. So it is like Gazprom - Russia's biggest company - going belly up.

Total sectoral index capitalization is not just the summation of the index constituents' capitalizations. The capitalization of each company is adjusted on a free-float and restricting coefficient by the Russian Trading System. On its face, it looks like the market caps are way too low. For instance, the full market cap of the top three constituents in the oil and gas index is over $140 billion.

Accounting for those differences, here is what has been lost.

The RTS Oil & Gas Index had a market cap of $46.9 billion in June 2014, falling to $45 billion in July once it became clear sanctions were going to get harsher for Russia.  Come March, the market cap for the index fell to $33 billion.

High inflation and consumer confidence falling off a cliff in the first quarter has crushed the market cap of the RTS Consumer & Retail Index.  In July, when sanctions were in full effect, the index had a market cap of just $1.1 billion. In March, the most recent month for data, it was $286 million. Market cap for Russian retailers fell by nearly 50% between July and February, then fell another 50% in March.

Russian telecoms have not done well either.  VimpelCom - one of Russia's Nasdaq listed ADRs - saw its share price drop by 32% since late July 31.  The RTS Telecom Index had a market cap of $12.4 billion in July. It fell to $6.9 billion as of March.

For Russia investors, timing was everything.  Those who bought on the bad news of last summer were hit with more bad news come the end of summer when the U.S. sanctioned Gazprom, Rosneft and Lukoil. Then the Russian Central Bank went into panic mode and raised interest rates to save the ruble. The market sensed that the bank was getting nervous. It sure looked that way. They raised rates three times, by over 200 basis points in less than two weeks.  The ruble rose over 70 to 1, a historic low. That was the true bottom. At least for now.

Last week, HSBC said Russian government bonds were a buy. The government is more than solvent. It has very little leverage in the economy, including government, corporate and household debt. That's one of the signs investors give as evidence that Russia can turn the corner quickly.  Not everyone is a believer.

"I don't see Russia recovering this time as fast as they did, at least no without a rebound in oil or a clear resolution from the Ukraine conflict," says Alex Wolf, an economist with Standard Life Investments in the U.K. "There are two factors driving the ruble and they are oil and Ukraine. My base case now is that Europe will extend the July sectoral sections but will not add new ones."

Maybe. Maybe not.  German companies are busy lobbying the European Commission to give Russia a pass. Washington, meanwhile, will likely play the role of bad cop here. As summer approaches, investors will have a better sense of the sanction regime. If it looks like an extension is in place, Russia's equity gains of the last four months could be drawn down.

Surprisingly, there are some sectors in Russia that have weathered this storm.  Mining companies for instance have not been sanctioned.  Severstal is up 70.53% in ruble terms since July 31.  The RTS Metals & Mining Index had a market cap of $8.8 billion in July. As of March, it's on the cusp of $10 billion.

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 #13
RFE/RL
April 21, 2015
Some Who Left: A New Wave Of Russian Emigration
by Robert Coalson

Hundreds of thousands have left Russia over the last two years, citing a variety of political, economic, and personal reasons.

According to Russian government statistics, 203,000 people left the country permanently in the first eight months of 2014.

That's up from 186,000 in 2013, and very likely to break Russia's one-year brain-drain record of 215,000 set in 1999.

Leading Russian environmental activist Yevgenia Chirikova is the latest prominent Russian to decide to emigrate. She said she made her decision to protect her children from the possibile consequences of her activism.

Here are a few other prominent Russians who have decided in recent months to seek their fortunes abroad:
Rustam Adagamov, photographer and blogger. Adagamov emigrated to the Czech capital, Prague, in March 2014 after Russian authorities investigated him on accusations of statutory rape -- accusations that he denies.
Sergei Guriyev, economist and former rector of Moscow's New School of Economics. He left Russia on vacation in May 2013 and decided not to return after being contacted repeatedly by prosecutors investigating possible new criminal charges against former oligarch Mikhail Khodorkovsky. "I left Russia for personal reasons," he wrote in The New York Times. "I personally prefer to stay free." Guriyev lives in France.
Oleg Kashin, journalist and blogger. Kashin immigrated to Switzerland in May 2013. He had been savagely attacked in 2010 for his reporting and said that he feared persecution for his opposition political activity.
Garry Kasparov, former world chess champion and Russian opposition political activist. He left Russia in June 2013, saying that he has not emigrated, but that he will not return to Russia until he feels he can do so safely. "Russia is and will always be my country," he wrote at the time. Kasparov lives in the United States.
Masha Gessen, writer, journalist, activist, and former director of RFE/RL's Russian Service. In December 2013, Gessen -- who holds dual U.S.-Russian citizenship and has lived in both countries -- announced that she was returning to the United States because of statements from some Russian officials calling for children to be taken away from gay parents. "Once they started talking about removing children from families," she told CBC television, "I felt like no risk was small enough to be acceptable. So we just had to get out."
Mikhail Khodorkovsky, once the richest man in Russia, he spent 10 years in prison on embezzlement and tax-evasion charges he says were politically motivated. Khodorkovsky was granted a presidential pardon and released in December 2013. He has since lived in Switzerland, where he has been granted residency. He said in March that if he returned to Putin's Russia, "I'd end up back in a prison cell."
Pavel Durov, entrepreneur and founder of the social media site VKontakte. In early 2014, amid a ferocious business dispute at VKontakte, Durov left Russia. In April 2014, he announced he had been granted citizenship by the Caribbean nation of St. Kitts and Nevis. He says that VKontakte is now controlled by Putin insider Igor Sechin and Kremlin-friendly oligarch Alisher Usmanov.
Galina Timchenko, journalist and former editor of Lenta.ru. After the owners of Lenta.ru fired Timchenko in March 2014 over its coverage of the conflict in Ukraine, almost the entire staff of the site quit. In April, Timchenko and her team announced a new media project called Meduza, based in Riga, Latvia. She told The Daily Beast in November 2014 that she feels safe from Russian government pressure now. "I don't believe, not for a single second, that the Kremlin is able to throw their little cages over the huge Russian Internet," she said.
Leonid Bershidsky, journalist and founding editor of the Vedomosti daily. Bershidsky announced he was leaving Russia for Germany in June 2014, citing the conflict in Ukraine. "I have no desire to stay in Russia and pay a single kopek for Crimea," he wrote. "Stolen goods are stolen goods."
Marat Gelman, art curator and political consultant. Guelman announced in January 2015 that he was leaving Russia with the intention of setting up an art gallery in Montenegro. He ran into trouble in 2013 when he curated a show at the Perm Museum of Contemporary Art that ridiculed the 2014 Sochi Winter Olympics and Soviet dictator Josef Stalin.

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#14
Muscovites Not Russians are the Problem, Shekhtman Says
Paul Goble

Staunton, April 22 - Four years ago, liberal Russians began to refer to the hurrah-patriots who opposed them as "vatniks," a reference to the padded jackets such people often wore but used to designate their slavish support of the Kremlin and their hostility to the West and civilization.

But now, Pavel Shekhtman suggests, that term should be replaced by another, more comprehensive one: "Muscovites" who want imperial rule and are as crude in their own way as were their namesakes of pre-Petrine times.  After all, he argues, "to name an evil is to be half way along the path of defeating it" (kasparov.ru/material.php?id=5536751B3EEB1).

It is quite wrong, he says, to blame Russians "in general" for what their government is now doing. Not only do not charges have racist overtones, but they ignore the act that "in the final analysis, Muravyev-Apostol, Herzen, Bakunin, Milyukov and Sakharov also were Russians."

But clearly some term is needed to designate those who are the source of the problem, and the Russian commentator suggests that one "without any racist connotations" that can be helpful in this regard is "'Muscovites'" - along with the term that designates their qualities "'Muscovitism.'"

"Above all," he writes, "Muscovites are anti-Europeans." In the nineteenth century, many used the term "Tatarsism" to refer to this set of attitudes; more recently, people have talked about "the Sovs," a reference to the anti-Western attitudes embedded in the Soviet understanding of the world.

"As is well known," Shekhtman continues, "'Muscovite' is the designation used in Europe for pre-Petrine Russians," a term that included connotations of the ultimate anti-European, "of a crude barbarian ... limited ... xenophobic and aggressive, lacking the basics of education and science, understanding religion only as ritual, hostile to freedom, .. an inborn slave who deifies the authorities and constantly lives under the knout."

"This is approximately the complex of qualities which we would call Muscovitism," allowing of course for a certain update in some manners, he writes.  But it is important to see just how deep in history this particular complex goes in order to understand its continuing vitality today.

While some might trace it to Aleksandr Nevsky, who allied himself with the Mongols to fight the Europeans, "the first full-fledged Muscovite was undoubtedly Ivan Kalita," and the particular culture it represented took form under Ivan III with the complete suppression of Novgorod's freedoms and the rise of unlimited autocracy.

Peter the Great, Shekhtman says, "struggled with Muscovitism but with Muscovite methods." Then Elizabeth taught the elite French and gave it a cover which confused people but did not change the essence of the situation. By 1825, Muscovitism "went over to the attack already in European dress."

With the 1917 revolution, it appeared that Russia had finally broken with this past and become a European state, but the Soviet state in fact restored archaic approaches to such an extent that the feudal period looked "extraordinarily progressive" in comparison with the Stalinist system.

"Bolshevism gave the Muscovite Lenin instead of God, Stalin instead of the tsar, and the Third International instead of the Third Rome," and in 1945, Stalin in giving his famous toast to "the Great Russian People," again put Muscovitism at the center of the country's political life for the ensuing decades.

In the same year, "our contemporary Vatnik" was born, a person who may best be defined as "a Muscovite who has passed through the stage of Sovietism."  One can only hope that this all will be defeated and that the Russia of Herzen will ultimately defeat the Muscovy of Stalin.

As the Russkaya semerka portal notes, coming up with such national "nicknames" has become so widespread that scholars are studying it and now call "neutral" nicknames "exonyms" and those with negative connotations "ethnophaulisms." Those who know the origins of such names, it continues, "can understand a great deal about themselves, about their neighbors and about the neighbors of their neighbors" (russian7.ru/2015/04/kacapy-moskali-i-prochie-tybly/).

Not surprisingly those so described are anything but happy about it; and when they have the power to strike out and punish are inclined to do so.  Shekhtman's proposal is likely to be attacked on that basis, especially if one considers how Moscow has reacted to the use of the Ukrainian term "Moskaly" for the same phenomenon.

Evidence of this is provided from a somewhat unexpected source: the website of the Ingermanland movement. Since December 2012, it has felt compelled to run on the first page of its portal the following explanation of its use of the term "Moskal" or "Muscovite" (ingria.info/component/content/article/7-interview/741-2012-12-23-10-14-58).

On the Ingria site, the editors say, they "actively use" these terms. "That requires an explanation" because "a Moskal can be a resident of any city of any nationality ... it is not a nation or an ethnos but rather a state of mind, a way of thinking, in the final analysis, a diagnosis."

A Muscovite, they continue, "is distinguished from a normal individual by his 'sovietness," his attachment to imperial ideals, his sympathies for authoritarianism, violation of human rights and anti-Western attitudes." The roots of these attitudes go back to the Tatar-Mongol yoke. Indeed, the Muscovite is "the spiritual heir" of that yoke.

Muscovites can be of "various types and subtypes," the Ingermanland editors say, including "Stalinists, 'Orthodox great power chauvinists,' Putinists and others. But the above named characteristics unify them together." And Muscovitism is directed at the destruction of the Russian super ethnos and also all the other peoples in "the Muscovite Empire Russia."

The Muscovites discriminate against the Russian people in the first instance because "Russians represent the greatest danger for Muscovitism and the imperial idea since for Russians the preservation of the empire is not profitable - it brings them only additional burdens for the support of 'fraternal peoples'" and opens the country to gastarbeiters.

"At the present tie in Russia, power is in the hands of a regime which actively uses the attitudes of the Muscovites for its own selfish interests. Under the pretext of preserving 'the one and indivisible' and of the necessity of reviving 'a great power,' it is thus in a position to steal our natural wealth and throw those who are dissatisfied into jails or graves."


 

 [return to Contents] 

 #15
The Atlantic
www.theatlantic.com
April 21, 2015
How the Media Became One of Putin's Most Powerful Weapons
After decades of wielding Soviet-style hard power, Russia is developing a subtler form of influence.
By Jill Dougherty
Jill Dougherty is a public-policy scholar at the Woodrow Wilson International Center for Scholars in Washington, D.C., and the former Moscow bureau chief for CNN.

Vladimir Putin is a news junkie.

The Russian president's press secretary, Dmitry Peskov, didn't use that expression when we talked by phone, but that's what he described to me: a man at the center of an ever-churning machine processing vast amounts of news and data at his command.

"Sometimes we're wondering what is the limit for a human being for absorbing this huge amount of information," Peskov told me, "but, well, it's really a very, very, very heavy job."

Peskov, speaking fluent English, described the operation. "First of all, the information and press department of the presidential administration prepares digests on print media, on Internet sources, on domestic media-federal and regional.

"We have special people working around the clock, preparing TV digests. We're recording TV news on the [Russian] federal channels for him during the day. Obviously, it's very hard for him to watch news so we make digests, let's say, zip versions of TV news, divided into issues."

Putin views these summaries in his car, plane, and helicopter, Peskov said.

"It's quite convenient when he's going home, let's say, from [the] Kremlin, when he is not spending a night here ... he can use this 20 minutes for really understanding what happened during the day in terms of information." He watches TV news channels in English and German-a language he speaks fluently thanks to his posting in Dresden as a KGB agent in the late 1980s-and receives English- and German-language newspapers.

"Frankly speaking, I wouldn't say that [Putin] is a fluent user of [the] Internet," Peskov added, "but he is fluent enough to use some resources, plus, definitely, he is comparing what he sees and hears from [the] press ... with the news he's receiving-when it comes to foreign affairs-from his foreign ministry, from his special services, from intelligence, from various ministries, and so on."

As a former KGB officer and head of the KGB's successor agency, the FSB, Putin knows the value of information. His concept of the media, however, is a far cry from the First Amendment. For him, it's a simple transactional equation: Whoever owns the media controls what it says.

"There should be patriotically minded people at the head of state information resources," Putin told reporters at his 2013 annual news conference, "people who uphold the interests of the Russian Federation. These are state resources. That is the way it is going to be."

From his first days as president, Putin moved quickly to dominate the media landscape in Russia, putting not only state media but privately owned broadcast media under the Kremlin's influence.

"The limitations on the media have existed for the 15 years that Vladimir Vladimirovich has been in power," Alexey Venediktov, editor in chief of Echo of Moscow, Russia's only remaining independent radio station, told me during a December visit to the Russian capital. The war in Ukraine, he added, has solidified Putin's view of the media: "It's not an institution of civil society, it's propaganda. [The Russian broadcasters] First Channel, Second Channel, NTV, Russia Today internationally-these are all instruments for reaching a goal inside the country, and abroad."

Early in his presidency, Venediktov said, Putin told him how he thinks the press works: "Here's an owner, they have their own politics, and for them it's an instrument. The government also is an owner and the media that belong to the government must carry out our instructions. And media that belong to private businessmen, they follow their orders. Look at [Rupert] Murdoch. Whatever he says, will be."

Putin pursues a two-pronged media strategy. At home, his government clamps down on internal communications-primarily TV, which is watched by at least 90 percent of the population, but also newspapers, radio stations, and, increasingly, the Internet. State-aligned news outlets are flooded with the Kremlin's messages and independent outlets are pushed-subtly but decisively-just to the edge of insignificance and extinction. At the same time, Putin positions himself as a renegade abroad, deploying the hyper-modern, reflexively contrarian RT-an international news agency formerly known as Russia Today-to shatter the West's monopoly on "truth." The Kremlin appears to be betting that information is the premier weapon of the 21st century, and that it can wield that weapon more effectively than its rivals.

When Western news outlets report on a "takeover" of the press by the Russian government, it usually evokes images of Putin, a puppet master behind Kremlin walls, ordering armed men to break down doors and haul away journalists. But in Russia, there are other ways to control the media-less dramatic, less obvious, but just as potent.

You can, of course, take a gang of men, give them some guns, and send them off to seize a broadcasting center. That's what happened in October 1993 when Russian lawmakers revolted against Putin's predecessor, Boris Yeltsin. They failed, but 69 people died in the attack on the government's Ostankino Television Center. In 2000, shortly after Putin was inaugurated as Russia's president, government security forces arrived at the offices of the parent company of NTV, an independent channel generating high ratings for its investigative reporting, and began seizing documents. The authorities chalked the raid up to a business dispute, claiming that NTV's owner, media mogul Vladimir Gusinsky, owed his creditors $300 million and wouldn't pay them back. State-controlled Gazprom-Media took over the channel less than a year later. While NTV is still one of Russia's biggest channels, it has been politically neutered and now hews closely to the Kremlin's viewpoint.

But there's also a bloodless, modern approach: apply pressure, and wait. Pass laws that constrict the space available for independent media. Set legal traps, citing anti-terrorist legislation. Send the tax police to carry out endless inspections of a recalcitrant broadcaster or their business associates, denying that political views have anything to do with the investigation. Don't kill them, just maim them. Try to squeeze them into irrelevance.

Such has been the fate of TV Dozhd (TV Rain), named after a popular radio station called Silver Rain. Dozhd is the only remaining television channel in Russia that presents a non-governmental perspective on politics and public life. Founded in 2010, it has reported on politically sensitive issues like corruption, the 2011-2012 Moscow street protests, and the war in Ukraine. But in January 2014, the station got into trouble when it polled viewers on whether the Soviet Union should have allowed the Nazis to capture Leningrad in order to save the lives of hundreds of thousands of Russians who died during the Siege.

For many Russians, including Putin, whose families starved and died in Leningrad, even asking the question was sacrilege. That, at least, was the justification Russia's media authorities gave as several cable providers took Dozhd off the air and the state telecommunications operator temporarily suspended all of its broadcasts. Now the channel is watched mostly on the web, though it's still available as part of a few cable packages.

In December, the channel's landlord broke its lease. I was visiting Moscow that month, and one of Dozhd's anchors invited me to do a live interview on Ukraine. When I asked where the studio was located he gave me an address that I knew, from nearly a decade living in the Russian capital, was in a residential area. "Yes, it's an apartment building," the staff told me. "Just come up to our floor."

With a light snow falling, I walked to the neighborhood, located the building, took the elevator up, and found myself in a tangle of bikes, baby strollers, and other homely equipment. Yes, it was a private flat, and yes, it was now also a studio. Inside, to the right, a young woman was seated at a computer. To the left, in the living room, was the studio, complete with a camera, lights, and a TV news desk where an anchor and his guest were discussing the economy. I took some pictures, but the staff asked me not to reveal the location of the apartment.

They asked if I wanted makeup. "Down the hall in the bathroom," they told me. That's where I found a professional makeup artist, her powder and lipsticks arrayed near the sink. "My friends ask me where I work and I tell them, 'In a bathroom!'" she laughed.

The anchor, political journalist Mikhail Fishman, took it all in stride. "Just like Soviet times," he quipped. Dozhd was broadcasting from a private apartment, he told me, because the Kremlin had made it clear that no one should rent space to the channel. It was the second time that the staff had been forced to move.

Fishman was convinced that Dozhd's travails had all been orchestrated by the Kremlin. "There were some reasons, formal reasons, having to do with economics," he said, "but no one has any doubts it was a decision issued from above."

"Does President Putin himself give the order?" I asked him.

"That could be," he said, "but I don't think that's really crucial. There is not a significant event in the media business that can happen without the direct sanction of President Vladimir Putin. ... So, in that sense, as an experienced journalist, I have no doubt that, before shutting Dozhd off from the cable system, [the authorities] got permission from Putin. Other things that are less significant can just happen by themselves."

Putin indicates the direction and his bureaucrats, eager to please the Kremlin, push to shut down what remains of free media, Fishman said. "In that sense, we are all in a position of threat. I think, in the next year or two, it will be very tough for journalists in Russia, very tough."

If the Kremlin wanted to eliminate Dozhd, the channel's founder, Natalya Sindeyeva, told me later, "they would have shut us down. We would have been one of the first it would happen to.

"There was no mission to shut us down, no." Sindeyeva added, "but to make us, let's say, weak-there was that task. They squeezed us."

No knock at the door by the police? No armed men? "No, of course that's not the way it is," she observed. "At least not yet, and I hope it will never happen."

Like Fishman, Sindeyeva told me that Putin sets the course at the Kremlin but doesn't issue direct orders to stifle the press. "It's definitely not coming from the president," Sindeyeva said. "Let's say, he's not exactly a nice guy, but he doesn't know about all these details. It does come from the presidential administration, however. It's not his order, though. It's the general context." That context, she pointed out, can also include vengeful businessmen angered by particular coverage-the kind of banal complication that news outlets around the world must contend with.

Somehow, Dozhd has survived, fundraising to pay salaries and expenses and charging its Internet viewers roughly $10 a month. Adding to the confusing welter of political signals coming from the Kremlin, the channel's editor in chief, Mikhail Zygar, was one of five TV journalists invited in December to interview Russian Prime Minister Dmitry Medvedev. By mid-February, Dozhd had found a new home in Moscow's Design Factory Flakon, a hip space for media, design, and events that wouldn't be out of place in New York or London.

But the pressure took a toll. "Before we were shut down we had approximately 12 million viewers per month, which, for a not-very-large channel, is not bad," Sindeyeva told me. Current viewership is about 5 or 6 million.

Sindeyeva does not consider her channel an "opposition" broadcaster. "We're just one of a few who try to do their journalistic job to inform people and tell them what's happening," she said. "We never had any position on the government. Simply, we do what others aren't doing. We have people on the air from all points of view-bureaucrats, even hide-bound propagandists from the Kremlin, and the opposition."

In other words: in Russia, it's complicated. Writing for Global Voices, Dozhd's chief editor, Ilya Klishin, observed that, when he visits the United States, people "expect horror stories about the daily nightmare I endure under the pressure of a totalitarian regime." But, as he described it, "Many aspects of living in Russia are strangely difficult to explain to someone who's never experienced life here." For instance, Klishin wrote, "You can't say Russia has no independent media; I work at an independent TV station, after all. But the devil is in the details, and, in this case, we're hopelessly outgunned."

"What's happened in Russia would be like Fox News taking over the airwaves in the U.S., booting MSNBC from cable TV, and reducing liberals to broadcasting online from a small private apartment in Brooklyn," Klishin said.

Echo of Moscow still broadcasts from its studios in the 1960s-era, Soviet-style high-rises that line New Arbat Street, a main thoroughfare in Moscow. When I stopped by in December to see Alexey Venediktov, a friend for more than two decades, the office was buzzing with preparations for the day's shows, with Venediktov good-naturedly barking orders to his young staff. His wild mane of curly hair and beard were gray; in a few days he would turn 59. He's a cat with more than nine lives-a journalist who has managed to pursue objective, critical reporting without being shut down by the Kremlin, or by businessmen.

Everything seemed reassuringly similar to what I remembered from visiting the station as CNN's Moscow bureau chief in the late 1990s and early 2000s: the same long hallway with a well-worn carpet, lined with framed photos of newsmakers whom he has interviewed, from Hillary Clinton to the late Russian activist Boris Nemtsov. But Venediktov had just survived another battle royal for survival.

One of his reporters had tweeted a crass remark about the death of the elder son of Putin's chief of staff. In an end-run around Venediktov, the station's main shareholder, Gazprom-Media, had fired the reporter and locked down Echo's offices. Several journalists I spoke with predicted the end, finally, for the station. But the reporter apologized and Echo is still on the air. The story behind the story is anything but clear. One former Russian media executive told me in confidence that Venediktov was just a pawn in a bigger battle between two media clans feuding over money and influence.

But for Venediktov, on that cold Moscow morning, victory-even fleeting-was sweet.

"You're still alive," I jokingly told him.

"Half alive!" he laughed. Like TV Dozhd's Sindeyeva, Venediktov knows he lives beneath the sword of Damocles. He used almost her same words to explain that there was no direct order from Putin to shutter his station. "If there had been we would have been destroyed. But there was no command, no command."

"I always said if someone's not satisfied with me-goodbye!" he sighed. "I'm almost 60 years old. Everything's fine. I know how to do the right thing for myself. I will act correctly, otherwise my girl won't love me! She'll despise me and my son will despise me. He'll say 'Pop, you're acting like a coward!'"

Some of Venediktov's supporters think he caved to the Kremlin in the case of the errant reporter. "I defended our editorial policy," he countered. "Every reporter who was on the air before the crisis is still in place, in spite of the fact that they asked me not to let this person or that person on the air."

"They," of course, is the Kremlin. But did officials in the Kremlin actually call him directly and say that?

"No, the Kremlin did not summon me, happily, but my friends in the Kremlin, they expressed their displeasure. They don't even call, they just pour it on me-not in the Kremlin but in this or that cafe. They meet with me and they say, 'Why do you need Parkhomenko on air? Why Albats? Why Latynina?'" he told me, referring to journalists who are identified as liberal and who criticize the Kremlin. "And I always say 'ratings and ads.'"

The crisis, Venediktov said, actually boosted visits to Echo's website. But on the radio side, the station has lost 15 percent of its listeners who don't agree with Venediktov's editorial policy on Ukraine, which includes criticism of the Russian government. "We had a million and now it's 850,000 in Moscow daily," he said.

"Those listeners [that Echo lost] didn't want to hear that side of the story. ... Before, they were prepared to listen to both sides but now, sectarianism-from both sides-has significantly sharpened. It's a mental war."

If a "mental war" is raging inside Russia, internationally Moscow is waging an information war, with media the weapon of choice. As Putin sees it, the West started this particular conflict and Moscow's mission, as he told journalists from RT, Russia's global broadcasting arm, is to break the "Anglo-Saxon monopoly on global information streams."

During a recent interview with the National State Television and Radio Company (VGTRK), a reporter asked the president why the world "doesn't see the truth"-meaning Russia's truth-about the war in Ukraine.

"First of all, the world is complex and diverse," Putin answered. "Some people see it, while others don't want to see it and do not notice it. [The] world media monopoly of our opponents allows them to behave as they do."

Russia is locked in "informational confrontation, ideological confrontation," Peskov, Putin's press secretary, explained to me. "Sometimes information begins to dominate the reality and to change the reality like a broken mirror. So that's why, the more you ensure your presence in the informational flows globally, the more you succeed in delivering your point of view. ... You have to have a very sophisticated and a very developed system of communication of your ideas and your point of view to an international community."

RT is the Kremlin's most important weapon in that communications war. Its editor in chief is 34-year-old Margarita Simonyan, who was appointed to her position when she was only 25. I knew her then, when I was working for CNN in Moscow, and we've stayed in touch since. In December, I visited her in her office not far from the Russian Foreign Ministry.

RT was created in 2005 as "Russia Today," with the mission of trying to explain the country to the rest of the world, but Simonyan told me that she soon gave up on that effort. "Been there, done that!" she said. "We're over with that. We don't think that works." The channel now broadcasts in English, Arabic, and Spanish, and its website also appears in Russian, French, and German. Simonyan proudly reported that the channel had just surpassed 2 billion views on YouTube.

She bristled when I noted that RT seems fixated on the foibles of American democracy. I mentioned the network's coverage of fracking, a process to extract oil and gas that has helped the United States become the world's leading oil producer. Russia, another major oil producer, sees this development as a threat, and RT offers a constant stream of stories on the health dangers of fracking. It shoots video reports from small American towns where the technique is being employed, interviewing affected residents and harping on the U.S. government's failure to protect them.

"We're not focused on the United States," Simonyan insisted. "We're focused, more or less, on opposing mainstream media. ... We feel the world has been, for decades and decades and decades, informed in a very biased and very narrow and shortsighted way."

Besides, she challenged me, "when was the last time you saw something non-critical about Russia anywhere in the mainstream media? Show me! I haven't seen anything, ever, in my life! Show me a single piece that is positive about Russia, a single piece about anything in the mainstream media. Can you remember any?"

After the outbreak of war in Ukraine and allegations of Russian involvement in the conflict, it was hard to find positive stories about Russia in the Western press, I conceded. But I told her-with the exception of major newspapers like The New York Times and the Washington Post-there wasn't much reporting on Russia, period. Only the most sensational (and usually negative) stories received substantial coverage.

Sitting at her computer, she told me that she has trouble sleeping these days, thinking about the carnage in Ukraine, and she blames it all on the United States. "We feel like we're at war," she said angrily. "What are we supposed to think? That's exactly the opinion of many Russians-that the conflict in Ukraine is a result of American meddling."

But it didn't start with Ukraine, she went on; Russia has felt under threat for 15 years, ever since NATO bombed Belgrade. "I mean, we were completely in love with the United States before that. Completely," she said. "You had Russia wrapped around your little pinkie! Then, for some ugly reason, you bombed our little brother. We more or less hate you ever since, I mean, as a country."

"If you talk with anyone in Russia," she explained, "all of them will tell you that America is out there to get us, to expand NATO to all our borders, to get Ukraine into NATO, Georgia into NATO. To have their bases all over the place, in order to make us weak and to make us-basically, to destroy the nuclear parity."

Our conversation soon turned to American "exceptionalism," which the United States, Simonyan said, exploits to justify bombing other countries. "Why do you think that you are the wisest, the fairest, the most, the best?" she asked me. "Whenever Obama says, 'We are an exceptional nation,' seriously, people here in Russia get really angry, and many feel threatened. Because the last person we heard such words from was Hitler."

A little over a year ago, Svetlana Mironyuk was one of the most influential figures in the Russian media. She was editor in chief of RIA Novosti, a Soviet-era news agency, which she transformed into a sophisticated, modern, and influential digital behemoth-a network covering more than 45 countries and reporting in 14 different languages. She hired a number of popular, influential journalists from liberal media outlets, and her website carried live reports from anti-Putin protests in Moscow during the winter of 2012. Yet Mironyuk was able to preserve a good relationship with the Kremlin. In September 2013, for instance, RIA Novosti hosted Putin's annual, high-profile Valdai Conference, with Mironyuk on stage introducing the Russian president.

But by December 2013, Mironyuk, suddenly, was out. RIA Novosti was shut down by the Kremlin, then reorganized as part of a new agency headed by a Kremlin-friendly broadcaster known for his high-voltage on-air presence and frequent rants against the West. Mironyuk eventually left Russia.

Last November, I met with her at a coffee shop in New York. Sipping her latte, she explained what had happened. In the early days of his presidency, she said, Putin was aware of Russia's negative image around the world and was intent on changing it. The Kremlin began soliciting proposals on how to do it.

She and her husband, Sergey Zverev, former deputy chief of staff in the Yeltsin administration, had started a public-relations company, and they had an idea. "In the current world," she said, "it makes no sense to do propaganda, or to lie, because everything is absolutely visible."

Positive changes like economic reforms were underway in Russia, and Mironyuk and Zverev thought the Kremlin should spread the word by approaching international lobbying firms, PR companies, and experts. "If you try to communicate with them on a realistic basis," she explained, "in three to five years they will change their minds because changes in the country would be visible, not only for people on the inside but for Westerners as well."

But by 2006, she could see that Putin was losing interest in slow, steady steps to burnish the image of Russia. When Russia Today, now RT, went on the air, Mironyuk recognized that the new network would be the lead agency for Russia's international propaganda and decided to refocus her efforts on improving RIA Novosti, where she had played various leadership roles since 2003.

If anyone understands how the Russian press operates, it is Mironyuk. And when we spoke, she was adamant that the perception in the West that the people running Russia's media outlets are Soviet-style ideologues is wrong. They have no ideology, she said.

"It's control, control, control. The only strategy they all have is 'whatever it takes.' No ideology. No strategy. No new approach, no understanding. No, no, no! They are struggling for influence on Putin, for being closer to him."

"Big decision-making in Russia is big money," she added. "When you have a monopoly on media, on advertising, on everything, then you have all power ... and this is a daily struggle for survival because, if you don't struggle, somebody will eat you."

In the Soviet Union, she explained, at least there were rules. Now, in Russia, "there are no rules. You never know where you step and what can happen and what, yesterday, was not a mistake or breaking the rules, it can be tomorrow."

The war in Ukraine has sent Russian domestic TV ratings soaring. Federal channels have increased their news lineups-a half hour, then an hour, and now two hours. The programming has paid off in popularity for Putin; a poll in March by the Levada Center found that 83 percent of Russians trust the president.

Yet some Russian journalists question whether that mood can last. "The level of propaganda is so disgusting that people who earlier believed in it now are beginning to doubt it," TV Dozhd's Sindeyeva told me. "This propaganda has begun to do its thing, to unite people around a certain idea that the country has risen from its knees and is strong. But right now, they have made the propaganda so coarse, so clumsy, that people have begun to doubt it."

She claimed to have seen data showing a decline in the public's belief in the accuracy of news on Russian TV, "and that is the first sign that trust is going to drop." Sindeyeva recalled how, during Soviet times, many people completely lost faith in what they read and what they saw, becoming cynical experts in "reading between the lines" of propaganda.

But RT's Simonyan rejects the idea that what she's doing qualifies as propaganda, and the notion that Kremlin-controlled media is turning free-thinking Russians into zombies: "Russian television is not as mighty as it's usually written about in the Western press. ... It would be so easy to govern this country if all you have to do is get all the TV stations and make them all do what you want. It doesn't work that way! It never worked like that!

"You remember what TV told people in the Soviet Union?" she asked me.

"They didn't believe it," I replied.

"That's the point!" she said. "That's the point! If you tell people what they don't feel, they just don't believe it."

Simonyan is convinced that viewers around the world don't believe the "mainstream" (read "Western") media, and RT has turned that doubt into a marketing slogan: "question more." For Putin, controlling the means of mass communication domestically is crucial in establishing a single, unchallenged narrative to unite the nation. Internationally, however, the Kremlin has taken a different approach: RT doesn't need to monopolize its version of the truth. It simply has to undermine the viewer's faith in the Western media and inundate them with a tidal wave of "alternative" information.

"We supplement the mainstream media, to the audience," Simonyan told me. "That's the point. We show what they don't show."

Vladimir Putin has moved methodically to monopolize the Kremlin's control over Russian media, both inside and outside the country. But when it comes to RT, the Russian leader says he's only trying to counter Western attempts to brainwash the world.

Last October, Putin flew to Argentina for the launch of RT's Spanish-language broadcasting. "The right to information is one of the most important and inalienable human rights," he proclaimed.

But he said he saw a dark side to the growth of electronic media: It had turned news reporting into "a formidable weapon that enables public-opinion manipulations." Certain nations, Putin argued, were attempting to monopolize the truth and bend it to their own interests. Under these conditions, "alternative information sources become especially needed." RT, he said, is that alternative.

When I spoke with Peskov, Putin's press secretary, I asked him if Russia has a message for the world. "That's very interesting the way you ask this question," he answered. "Because to send a message is not a premier goal. The premier goal is to make people ask themselves, 'Are we OK with a single point of view? With a one-sided point of view? Or do we want to get a real variety?'"

Yet inside Russia, a real variety of viewpoints is fast disappearing. The shocking assassination of opposition leader Boris Nemtsov in February, on a bridge beside the Kremlin, has unnerved the shrinking band of independent journalists still working in Russia.

Meanwhile, unofficial estimates suggest that the Russian government now spends close to $1 billion on international broadcasting, much of it on RT. Peskov called that figure an exaggeration, but added: "As a matter of fact, we would be happy to spend more, and we would be happy to spend billions of dollars, because the whole world is a hostage to information." 

 [return to Contents] 

 #16
Russia Beyond the Headlines
www.rbth.ru
April 21, 2015
Russia third in world in military spending, according to report
In 2014, Russia's share in world military spending reached 4.8 percent, which puts it in third place in the world after the U.S. and China. However, Russia is ahead of the world's major powers in terms of the share of GDP allocated to defense, which, according to experts, is already putting the country at risk of falling into an arms race, just as the Soviet Union did.
Alexei Lossan, RBTH
 
Russia's share in world military spending reached 4.8 percent in 2014, placing it third in the world after the U.S. and China, whose shares were 34 and 12 percent, respectively.

This conclusion was the result of a report published by the Stockholm International Peace Research Institute (SIPRI), the Russian news agency TASS reported. According to the document, Russian military spending in 2014 increased compared to the previous year by 8.1 percent to $84.5 billion, or 4.5 percent of GDP.
According to Vasily Zatsepin, a senior researcher with the Laboratory of Industrial Market and Infrastructure Studies at the Russian Presidential Academy of National Economy and Public Administration, Russia's third place by its share in world military expenditures does not correspond to its place in the global economy (it was eighth in nominal GDP with a share of 3.4 percent in 2013; data for 2014 is not yet available).

Zatsepin said this is evidence of the increased and totally excessive militarization of the Russian economy. "In the economic situation Russia is in at the moment, nothing can justify such high military spending," he added.
 
Misbalance in Russia's state budget?

According to experts, the burden on the budget is more frequently defined not by the country's share in the global arms market, but by the ratio of military spending to GDP. By this indicator, Russia is also one of the leaders in the world. According to Zatsepin, the world average military burden on the economy in 2014 was 2.4 percent of GDP, which is the relative amount countries allocate to military spending on average.

For example, according to NATO requirements, alliance member countries are obliged to allocate at least 2 percent of GDP to defense, though only four members of NATO usually follow this rule, one of which is the United States. The U.S. spent $610 billion on defense in 2014, or 3.5 percent of GDP, while China spent $216 billion, or 2.2 percent of GDP.

While SIPRI's estimate of military spending in Russia is 4.5 percent of GDP, according to official figures it is 4.8 percent, which is twice the world average, says Zatsepin. Furthermore, in terms of the share of GDP spent on military purposes Russia is well ahead of the two largest world economies.

However, according to Dmitry Baranov, a leading analyst at investment holding Finam Management, the share in the world military spending market is also used by experts to compare the militarization of the economies of different countries. According to him, this is an appropriate marker, and it can be used in comparison with equivalent markers in other countries.

"Unfortunately, both of these markers suggest a substantial misbalance in Russia's state budget in favor of military expenditures," said Zatsepin.
 
The danger of falling into an arms race

According to Zatsepin, the militarization of the budget has resulted in Russia crossing the threshold generally seen as marking a country's entry into an arms race - about 4-5 percent of GDP.

It was participation in an arms race that ultimately resulted, among other things, in the collapse of the Soviet economy at the time. According to the calculations of Yegor Gaidar, former head of the Russian government and the author of the market reforms of the early 1990s, expressed in his book Collapse of an Empire, the USSR produced more tanks than it could use in any military conflict.

However, the drop in oil prices has forced the Russian authorities to cut military spending: In 2015, it should see a 5-percent reduction.

On the whole, according to the report, the United States and Western Europe decreased military spending in 2014, but this reduction was offset by growth in Eastern Europe, Asia, Oceania, Africa and the Middle East. According to the head of the SIPRI's military expenditure department, Sam Perlo-Freeman, "in many cases, 'growth of military spending' is the result of corruption, personal interests and autocratic rule."

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 #17
Business New Europe
www.bne.eu
April 22, 2015
BOOK REVIEW: The lessons Russia learnt in Chechnya
Nicholas Watson in Prague

"Russia's Wars in Chechnya 1994-2009". By Mark Galeotti, Osprey Publishing (2014).

As Russia begins a new period of military adventurism, it's an opportune time to review what happened when the country previously waged war in its backyard, so Mark Galeotti's "Russia's Wars in Chechnya 1994-2009" is a timely piece of work. Not least because many of the lessons that the Russians learnt to their heavy cost in Chechnya appear to have been applied to Crimea and East Ukraine.

At first glance, it might seem the Russians are headed towards another disaster. As Galeotti begins his highly detailed yet very readable work: "In effect, it lost: a nation with a population of 147 million was forced to recognize the effective autonomy of Chechnya, a country one-hundredth its size and with less than one- hundredth of its people. A mix of brilliant guerrilla warfare and ruthless terrorism was able to humble Russia's decaying remnants of the Soviet war machine."

Yet history does not repeat itself, but, as Mark Twain once remarked, it does occasionally rhyme.

Two times go to war

Before getting into the meat of the two Chechen wars, Galeotti establishes the history of the Chechen people - a mountainous, feud-ridden raider people that were "politically fragmented but culturally united" - and their first real, unhappy contact with ethnic Russians in the 18th century. Russian attitudes towards the Chechens, Galeotti describes, were "complex, a mix of fear, hatred and respect".

To the Russians, the Chechens were better left alone, their territory of no real interest or economic value to Imperial Russia. But once the real prize in the Caucasus, Georgia, was annexed in 1801, secure routes to its newest possession began to matter and so the Imperial court in St Petersburg decided it was time to extend its rule to the North Caucasus. Thus began the complex relationship that continues today.

Through 150 years of battles, victories, rebellions and other assorted setbacks and skirmishes - "generation after generation rose against Russian rule, only to be beaten back down" - Russia's brutal attempts to bring Chechnya to heel culminated in the 1944 Ardakh, or Exodus. Stalin, worried that the Chechens might take the opportunity to rise up against the Soviets while it was preoccupied with fighting the Nazis, took the decision to deport the entire Chechen population over a single night of February 23, in Operation Lentil, scattering 480,000 (of whom 200,000 died) across Central Asia and Siberia. The Chechens were only allowed to return to their homeland in 1956, after Stalin's death.

All remained relatively quiet until Mikhail Gorbachev's reforms inevitably rekindled dreams of independence. After the break-up of the Soviet Union in 1991, Chechnya was still formally part of the Russian Federation, though it became de facto independent. This state of affairs was enough to convince nationalist leader Dzhokhar Dudayev that Moscow had no stomach to fight to keep Chechnya within the federation, so immediately after winning a referendum in October 1991 held to confirm him as president, he declared the republic independent.

Russia under the late Boris Yeltsin rejected out of hand any independence moves and after several failed attempts to convince the Chechens of the dire consequences of its actions with small-scale incursions, on November 20, 1994 he signed Presidential Decree No.2137, 'On steps to re-establish constitutional law and order in the territory of the Chechen Republic'. And so kicked off the First Chechen War (1994-1996), which ended in humiliating defeat for the Russians.

Asymmetric

The main problem the Russians encountered, Galeotti identifies, was essentially two-fold: the federal troops dispatched to fight in the First Chechen War were part of "a war machine whose gears were rusty, whose levers were broken and whose fuel was sorely lacking". Unreformed and largely unfunded, it was "an exhausted fragment of the old Soviet armed forces", whose poorly trained, motivated and equipped troops were geared towards fighting mechanized wars on the plains of Europe or China. "The painfully won lessons of Afghanistan had often been deliberately forgotten or ignored by a high command that thought it would never again be fighting a similar war. Likewise, the last specialized urban-warfare unit in the Russian military had actually been disbanded in February 1994."

The asymmetrical war left the Russian army resorting to indiscriminate firepower to fight an unseen, highly nimble enemy that was expert in using the lay of the land to its advantage. In the process, of course, while rebels were dying, others were signing up.

The First Chechen War ended with the Khasav-Yurt Accord signed between Russia and the new rebel leader Aslan Maskhadov in 1996, which shelved the question of Chechnya's constitutional status, but instead recognized Chechen autonomy and ordered a full withdrawal of all federal forces by December 31.

There followed a period of 'hot peace', 1996-99, until the unknown Vladimir Putin arrived on the scene. Keen to reassert central control and drag Russia back to becoming a world power, he needed a "high-profile triumph, some dramatic opportunity to prove that the Kremlin was now occupied by a determined and powerful leader." Chechnya seemed ideal. This time, though, Russia and its military was a different beast and prepared for the coming guerrilla war. "By 1999 the military and political leadership had learnt many of the lessons of their initial humiliation."

After a series of mysterious bombs that exploded in apartment buildings in Moscow - which some believe were intended to 'soften up' the Russian public for the expected casualties - a bombing campaign began that created more than 5,000 refugees. "Draining the sea" of guerrillas, in Mao's strategy, the borders were then sealed and three times as many men, both regular troops and special forces, that were used in the 1994 war were sent in. By April 2000, Grozny had been retaken and while there were still up to 2,500 rebels scattered around the country, "they posed relatively little serious challenge to federal control".

Ambushes continued, accompanied by persistent human rights abuses, though with puppet Akhmad Kadyrov appointed as head of the Chechen government it was going to be largely his problem to deal with on a day-to-day basis - until he was assassinated in 2004 and his son, Ramzan, who is rumoured to be causing so many headaches for the president today, eventually took over in 2007.

Throughout this tale, Galeotti intersperses his narrative with a cast of muftis, brigands and warlords who appear straight out of a Rudyard Kipliing novel: a Russian conscript who used the conflict to burn 'the anger out of me';  Maskhadov, a brilliant guerrilla commander who couldn't quite master Chechen politics as well; and the innocent civilians, caught between the brutal occupiers and their puppets and the increasingly Islamist Chechen guerrillas.

The region continues to feel the effects of the historical subjugation of Chechnya, often in attacks in Moscow, but also today in neighbouring Ukraine, where a resurgent (or desperate, whoever you listen to) Russia is using its newfound military might to redraw the post-Cold War borders of Europe and project power across the Continent.

The main differences between the first and second Chechen wars were in Moscow's preparations made beforehand, a willingness to adapt to Chechen tactics - such as by creating special 'storm detachments' for urban warfare and using Chechens to fight Chechens - and a more sophisticated overall strategy. And this neatly encapsulates the current strategy in Ukraine, which fell into two parts: a highly organized and planned Crimea operation, and a rather more ad hoc war on the cheap in the east of Ukraine. Both took many lessons learned from the Chechen wars and applied them to different effects. The Crimea operation was a resounding success, though East Ukraine is a much more fluid and broader conflict, and has mired Russia in a conflict in which, as Galeotti has written in bne IntelliNews, "defeat is unthinkable, but victory - without a massive escalation - appears unwinnable".

For the Chechens, Galeotti sees more than a glimmer of hope. "Looking beyond Kadyrov, there is no reason why the Chechens could not take advantage of the autonomy he has carved out within the Russian Federation and build for themselves the kind of country they want to see - and to be able to do so without another round of murderous war and rebellion."

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 #18
www.rt.com
April 22, 2015
EU charges Gazprom with 'abusing' market position in Central & Eastern Europe

Russia's biggest gas utility, Gazprom, was hit with an antitrust case by European Union regulators for "abusing" its dominant position and overcharging customers for gas supplies. The investigation against the Gazprom has been ongoing for 2 years.

"We find that it (Gazprom) may have built artificial barriers preventing gas from flowing from certain Central Eastern European countries to others, hindering cross-border competition," European Competition Commissioner Margrethe Vestager said in a statement. Vestager said there is no political element to the case.

Gazprom, with annual sales of some $100 billion, supplies about 30 percent of the natural gas used by the 28 countries of the EU.

Gazprom is under investigation for market dominance in Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, and Bulgaria.

The Russian gas major has individual contracts with these countries that allow company to charge each a different price for gas supplies.

"Keeping national gas markets separate also allowed Gazprom to charge prices that we at this stage consider to be unfair," Vestager said.

Gazprom's unfair prices partly result from the firm's formula that link gas prices to oil product prices and "have unduly favored Gazprom over its customers," the EU said.

With several clients, Gazprom has a 'take-or-pay' clause, which forces customers to pay for deliveries they may not necessarily need or use.

Gazprom responded to the accusations, and said that it considers the claim against the company "unreasonable."

The gas supplier has 12 weeks to respond to the claim and call a hearing.

EU antitrust fines cannot exceed 10 percent of global yearly revenue, which for Gazprom in 2013 was $164.62 billion, so the EU could hit the company with a more than $16 billion fine. To compare, Google's maximum fine is €6 billion.

"Gazprom considers the European Commission's submitted claims baseless. At the same time, accepting the European Commission's 'Statement of Objections' is just one phase of the anti-monopoly investigation, and does not mean that Gazprom is guilty of any violation of EU antitrust legislation," the company said in a statement.

The EU has been discussing the creation of an 'energy union' which would force companies like Gazprom to sell gas supplies at a fixed rate to the entire 28-nation bloc.

The European Union first launched an investigation into Gazprom in 2012, blaming Russia's biggest gas producer for anti-competitive practices in Central and Eastern Europe. It said Gazprom was hindering the free flow of gas to member nations, preventing the diversification of gas supplies, and imposing unfair prices on customers by linking the price of gas to oil prices.

The antitrust case against Gazprom comes just days after the commission launched a similar case against American search supremo Google for abusing its dominance in the European market.

Gazprom shares on the Moscow Exchange reacted negatively to the news, dropping 2.54 percent at 1:07pm Moscow time, just 30 minutes after the antitrust probe was announced.

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 #19
Russia Direct
www.russia-direct.org
April 21, 2015
The end of the INF Treaty, or how to destroy the world in several minutes
As the U.S. continues to accuse the Kremlin of violating the 1987 Intermediate-range Nuclear Forces (INF) Treaty, a new arms race between Moscow and Washington looms on the horizon.
By Artem Kureev
Artem Kureev is an expert from the Moscow-based think tank "Helsinki+" that deals with protecting interests of Russians living in the Baltic countries. Kureev graduated from Saint Petersburg State University's School of International Relations. His research interests include domestic policy of the Baltic countries, ecology of the Barents Sea, national minorities in Latvia, Lithuania and Estonia, Russia-NATO relations.

Speaking at a conference on nuclear weapons and international security in Colorado Springs on Thursday, April 16, Assistant Secretary of State Frank Rose stated that the U.S. would retaliate if Russia did not stop violating the Intermediate-Range Nuclear Forces (INF) Treaty, signed in Washington in 1987.
It is by no means the first such statement by the U.S. government. The finger pointing at Moscow began before the Ukraine crisis - for instance, in December 2013 when Iskander missile systems were deployed to the Kaliningrad region.

Moscow's response to Rose's statement followed the next day. Russian Deputy Defense Minister Anatoly Antonov said that America had no proof that Russia was in violation of the treaty. The Russian Foreign Ministry also underscored that in March of this year it had invited the Americans to back up their statements with facts, which they declined to do.

The agreement on the elimination of intermediate-range nuclear forces is considered a cornerstone of security in the modern world. However, over the 27 years since its signing, the geopolitical situation in Europe and the world has changed drastically.

How to destroy each other and the world in several minutes

The main objective of Cold War strategists was to develop an effective nuclear strike against the enemy, while avoiding, or at least minimizing, retaliation. It was overly ambitious. The first concepts of nuclear war foresaw massive air raids into enemy territory with the purpose of annihilating cities and knocking out military installations.

Both sides knew that the flight time was long enough to make retaliation almost inevitable. Intercontinental missiles are more effective, but if deployed, the opponent would still have time to evacuate its government and order a response.

But missile weapons and guidance systems were improving. As early as 1973, U.S. Secretary of Defense James Schlesinger proposed the concept of a so-called "counter-elite" strike. It consisted of deploying intermediate and shorter-range missiles from so-called forward-based launchers. At just 6-8 minutes, the flight time would not allow the enemy to evacuate its government or activate similar systems, and ideally, not even permit the command for a retaliatory strike to be given.

The concept was purely offensive: who attacks first, wins. Although the sides were similarly matched, initially the United States had a slight advantage, since the Soviet Union relied primarily on silo-based intercontinental ballistic missiles.

However, the parity did not last long. By the late 1970s, the Soviet Union had deployed around 300 RSD-10 Pioneer missile systems (NATO reporting name: SS-20) on its western borders, capable of destroying the Alliance's entire European infrastructure in just a few minutes, including, chiefly, all major ports, which would not give the U.S. time to come to the aid of its allies. In response, NATO took the decision in 1983 to site 572 Pershing-2 missiles in Europe.

As a result, by the early 1980s a situation had developed in which nuclear weapons had morphed from being a deterrent (the concept of "inevitable retaliation") into an offensive strategy (the concept of "winner strikes first"). Naturally, the situation had to be resolved.

The first talks on limiting nuclear weapons in Europe commenced in October 1980, but to little avail. In exchange for Moscow's withdrawal and elimination of its Pioneer missiles, Washington was prepared only to remove its missiles from European soil.

Moreover, the fact that America's NATO allies France and the UK had their own shorter- and medium-range missiles was not considered. Soviet proposals for the withdrawal of tactical nuclear weapons from Europe and the elimination of French and British medium-range missiles were rejected by Washington under the pretext of the Warsaw Pact countries' superior conventional weapons.

In 1983, following a statement by the White House on the commencement of the Strategic Defense Initiative (SDI) program, the situation deteriorated even further. According to Soviet military forecasts, a fully operational SDI (known informally as "Star Wars") would be able to destroy intercontinental missiles in the boost phase, significantly undermining the Soviets' strike capacity. That meant that for Moscow, any negotiations on the elimination of INF were now dependent on America's scrapping of SDI.

The INF Treaty: How to save the world from nuclear disaster

The Kremlin softened its stance only after Mikhail Gorbachev came to power. The first suggestion was to relocate Europe-based U.S. missiles to North America, and Soviet systems to a position beyond the Urals. But that sparked protests in Japan and China. Finally, December 8, 1987, saw the signing of the Washington Treaty on the Elimination of INF, which entered into force on July 1, 1988.

The agreement clearly defined the terms "Ground-Launched Ballistic Missile" (GLBM) and "Ground-Launched Cruise Missile" (GLCM), as well as the terms "shorter-range missile" (range 500-1,000 km) and "medium-range missile" (1,000-5,500 km).

Under the treaty, the United States destroyed its Pershing-1A, Pershing-2 and BGM-109G, and the Soviet Union its RSD-10, R-12, R-14, OTR-22 and OTR-23 (NATO reporting names: SS-20, SS-4, SS-5, SS-12, SS-23) missiles. Launchers were also dismantled, save for 35 units intended for research purposes. The OTR-23 Oka was not typically classified as a shorter-range missile, since its radius of destruction was only 400 km (approximately 250 miles). However, due to its high-tech specifications and near impossibility of intercepting it, U.S. negotiators managed to get it included in the list slated for destruction.

What problems the INF failed to resolve

Nevertheless, many issues remained unsolved. First, the treaty did not take into account the presence of INF in Britain and France; second, both the U.S. and Soviet fleets retained such missile systems; and third, it was not adaptable to the changing international climate.

It is no trivial matter that over the 25 years since the signing of the Washington INF Treaty, many countries have armed themselves, some of which border Russia. To date, Iran, China, North Korea, India and Pakistan have successfully tested similar missiles, and all save for Iran have nuclear weapons.

Furthermore, the deployment of aircraft capable of carrying nuclear weapons to Russia's borders has virtually nullified all the benefits of the INF Treaty from Moscow's vantage point. U.S. aircraft could fly from bases in Lithuania, Estonia and Poland to Russia's largest cities in 15-20 minutes - not that much longer than the flight time of the scrapped missiles.

Therefore, since 2007 Moscow has described the INF Treaty as an ineffective tool in the field of international security. Then Commander of Russia's Strategic Missile Forces Nikolai Solovtsov openly stated that Russia was ready to resume making these types of missiles.

What is more, Russian President Vladimir Putin, in talks with U.S. Secretary of State Condoleezza Rice and Defense Secretary Robert Gates in October 2007, noted that the INF Treaty could only retain its significance if acceded to by other powers in possession of such weapons.

Will Russia resume production of INF?

Most Russian military experts assert that resuming production of INF weapons is the only symmetric response available to Moscow in light of NATO's encroachment on Russia's borders and development of a missile defense complex in Europe. However, significant investment will be required, and the infrastructure for their production is sorely lacking.

That said, Russia does have the engineering base and certain new technologies, but its withdrawal from the Washington Treaty and INF rearmament effectively implies a return to the arms race and a change in Russia's military doctrine, which would henceforth include a preventive massive nuclear strike.

Indeed, as already mentioned, these types of missiles are intended primarily for such purpose. The Kremlin's desire to avoid such extreme measures is clear from the numerous proposals issued by the Russian authorities to revise the INF Treaty and expand the list of signatories, which, regrettably, the West chooses to ignore.

The INF Treaty is certainly in need of revision. The issue should be considered within the framework of reducing the military tension in Europe and the world as a whole (suffice it to recall the smoldering Indo-Pakistani conflict).

NATO's attempts to circumvent the Washington INF Treaty are producing a counter response from Russia, when what humanity needs is a new integrated security system in which nuclear weapons and their means of delivery are not regarded as offensive weapons. Deterrent status is sufficient. After all, there would be few winners from a nuclear war, and the most likely loser would be the entire human race.

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 #20
www.rt.com
April 22, 2015
Washington prepares for diplomatic war of attrition with Russia

The US reportedly expects that the ongoing confrontation with Russia would continue until at least 2024 and involve many directions. Washington wants to rally support of its European allies to continue mounting pressure on Moscow.

The expected diplomatic and economic war of attrition is being outlined in a Russia policy review currently prepared by Celeste Wallander, special assistant to President Barack Obama and senior director for Russia and Eurasia on the National Security Council, reports Italian newspaper La Stampa. The publication said it learned details of the upcoming policy change from a preview that Washington sent to the Italian government to coordinate the future effort.

US diplomats say Russia changed the cooperative stance it assumed after the collapse of the Soviet Union and is now using force to defend its national interests, the paper said. The change is attributed to the personality of Russian President Vladimir Putin, who, Washington expects, will remain in power until at least 2024.

The change became apparent with the conflict in Ukraine, but was emerging since at least the 2008 conflict in South Ossetia, when Russia used military force after Georgia sent its army to subdue the rebellious region, killing Russian peacekeepers in the process.

Washington's solution to the new Russia is keeping sanctions pressure on it while luring its neighbors away with economic aid and investment, La Stampa said. The current round of sanctions, it reports, was designed not to have too much impact on the Russian economy so that a threat of harsher sanctions could be applied.

While the tug of war in Europe continues into the next decade, Washington wants to continue cooperation with Russia in other areas like nuclear non-proliferation and space exploration. However until Putin is out of the picture, the US does not expect for things to go back to where they were, the newspaper said.

The strategy was hardly unnoticed in Moscow, as evidenced by the annual report of the Russian Foreign Ministry published on Wednesday. The document said the US is pursuing "a systematic obstruction to Russia, rallying its allies with the goal to damage domestic economy" through blocking credits, technology transferee and an overall destabilization of the business environment.

The ministry said Washington had some success with the policy that resulted in an almost 8 percent drop of Russia's trade with EU members in 2014. However some European countries like Austria, Hungary or Slovakia are pragmatically keeping bilateral ties with Russia active. In European heavyweight Germany, whose government is among the leading supporters of the anti-Russian sanctions, there is a strong business resistance to keeping them.

Non-EU members in the region like Serbia and Turkey are among priority partners for Russia in the current environment, the ministry added.

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 #21
AFP
April 22,2015
ISIS is 'Russia's greatest enemy,' not US: Lavrov

MOSCOW: Russian Foreign Minister Sergei Lavrov said Wednesday that ISIS was Moscow's greatest enemy, notwithstanding the strained relations with the United States over the Ukraine conflict.

"I believe ISIS is our greatest enemy right now," Lavrov said in an interview with Russian radio stations when asked whether he considers China, ISIS or NATO Russia's greatest threat.

Lavrov said "hundreds of Russian citizens, hundreds of Europeans, hundreds of Americans are fighting for ISIS, along with CIS [former Soviet] countries."

"They are already returning home. They come here to rest after fighting and can get up to dirty tricks at home," he said.

"As far as [relations with the] United States are concerned, these are state issues, these are issues of the world order, which have to be resolved through talks."

Russia's relations with the West, particularly with the United States, have plummeted to a post-Cold War low over the war in Ukraine and sanctions imposed over Moscow's role in supporting pro-Russian militants.

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 #22
The National Interest
April 22, 2015
Countdown to War: The Coming U.S.-Russia Conflict
Putin and Obama think they've got this crisis contained. Two prominent experts say they may be wrong.
By John Allen Gay
John Allen Gay, an assistant managing editor at The National Interest, is coauthor of War with Iran: Political, Military, and Economic Consequences (Rowman and Littlefield, 2013). He tweets at @JohnAllenGay.

The United States and Russia may be unwittingly stumbling down a path to deeper confrontation and even war, cautioned two prominent American national-security experts at a panel in Washington, D.C. Tuesday. Graham Allison, director of Harvard University's Belfer Center for Science and International Affairs, and Dimitri K. Simes, president of the Center for the National Interest and publisher of this magazine, suggested that while leaders in both countries may not intend to escalate their disagreements on matters like the Ukraine crisis, poorly structured decision processes, opposing goals and divergent narratives can still produce conflict. "Even as they state that they don't want a confrontation-with full conviction," said Simes, "they are seeking a victory without war...Both sides show little inclination to compromise on what they consider to be fundamental and what they believe they are entitled to."

Worse, warned Allison, Russia may believe that the use of threats and military force will produce the best outcomes in a serious confrontation with the West. "Russia has escalation dominance," said Allison, and "from a Russian point of view," shaping the confrontation in such a way "sends a very powerful message, especially to the Europeans." Allison and Simes suggested that a diplomatic resolution is still very possible-"we are not predicting World War Three," in Simes' words-but that "this is not [a] time in the U.S.-Russian relationship when you want to be too polite about stating what the danger is."

Allison, who had held responsibility for coordinating the Pentagon's policy toward Russia as an assistant secretary of defense during the Clinton administration, argued that Russia's competitive strengths vis a vis the United States and its European allies are principally military, and further that Russians have told him that they believe that the Europeans won't fight "for anything," while the United States has been worn out by more than a decade of warfare. For the United States, meanwhile, Russian action in the Baltic states-which are NATO members-would create enormous political difficulties, noting that if one asked most ordinary Americans what they thought about the prospect of sending American troops to go to war with Russia over Estonia, "maybe they'll get out their iPhones and search for 'Estonia.'"

Simes added that the national-security bureaucracy in Russia would be unlikely to offer Russian president Vladimir Putin a "vigorous debate" on policy approaches in the event of a confrontation, and that there would be little space for dissenting voices, particularly in a political system where all officials effectively serve at the pleasure of Putin and where there are few opportunities for officials who fall out of the political system. The human tendency to see the world as we wish to see it could, in this case, produce an echo chamber, making it less likely that policymakers would identify lurking dangers.

Russia's ambassador to the United States, Sergey Kislyak, was in the audience and offered an extended objection to Simes' and Allison's characterization of the situation, saying that it was "mind boggling even to hear" talk of Russia in the Baltics. From Russia's perspective, since the start of the crisis in Ukraine, there has been a "stark increase" in the presence of NATO forces around its borders, including aircraft in the Baltics and warships in the Black Sea. "We are not going to . . . be coerced militarily," stated Kislyak. Kislyak criticized the notion that the crisis had isolated Russia, suggesting that the G7 was now less credible without Russia's presence, and argued that Russia's economy was not in shambles, saying that on all but a few metrics Russia was even doing better than Germany.

After Kislyak's remarks, both Simes and Allison noted that perception gaps between countries can present a very real problem. Allison mentioned the "security dilemma," a well-known concept developed by international-relations scholars in which one side takes actions that it regards as defensive, but the other perceives these actions as threatening. "What one side considers brinksmanship," added Simes, "is viewed by the other side as a minimum appropriate response."

F. Stephen Larrabee, who had served as a specialist on the Soviet Union in the Carter administration's National Security Council, offered a similar reaction to Kislyak's comments, noting that American officials asked about those maneuvers in the Baltics would say that they were reacting to Russian actions. "Both sides see themselves as justified," he said, "as doing something defensive." He warned that this presented a danger of a "spiral" of confrontation, but expressed concern that on the other hand Putin may be learning that risk-taking "works." If America backs down now, he asked, "isn't there a danger . . . that brinksmanship pays?"

Simes and Allison's remarks drew upon "Stumbling to War," an article they wrote in TNI's just-released May/June issue. In the article, they further warned that the nuclear dimension of a potential U.S.-Russian confrontation must not be ignored. An "expanding group" in Russia's national-security establishment believes that "Russia's nuclear arsenal is not just its ultimate security blanket but also a sword it can wield to coerce others who have no nuclear weapons, as well as those who are unwilling to think the unthinkable of actually exploding a nuclear bomb." Said Simes Tuesday, "President Obama and President Putin may genuinely believe that we are not on a dangerous track." They may be wrong.

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 #23
Russia Beyond the Headlines
www.rbth.ru
April 21, 2015
Yemen: Yet another friction point in the Russia-West relationship?
The conflict between Houthi rebels and government forces in Yemen is just another manifestation of the regional rivalry between Saudi Arabia and Iran, which had earlier echoes in Syria and Iraq, say Russian observers. Meanwhile, Russia and the West have yet again found themselves on different sides of the conflict. How likely is a new confrontation between Moscow and the United States over the situation in Yemen?
Nikolay Surkov, RBTH
 
After a coalition led by Saudi Arabia launched air strikes targeting Houthi forces in Yemen, the civil war raging in the country quickly went regional. In fact, according to Russian experts, the conflict, while technically pitting Shiites against Sunnis, was not caused by religious differences, but by the rivalry between Iran and Saudi Arabia, especially since the main reason for the intervention cited by Saudi government were the actions of Iran, accused by the Saudis of supporting the Houthis.

Professor Grigory Kosach of the Russian State University for the Humanities believes the issue is primarily related to the rising tensions between Saudi Arabia and Iran, while the religious aspect appears to be serving as a convenient pretext. This is especially evident if one takes into account the situation within Iran, where as Kosach points out, "the Zaidi (the branch of Shia Islam most Houthis belong to) are really far away from the mainstream."

Kosach is also convinced that Tehran is simply not interested in participating in any conflict at the moment when the nuclear deal is so close. "Iran will not interfere in the conflict. It is simply impossible both militarily and logistically. All they can do is provide moral support", he explains.

Leonid Isayev, an orientalist at the Moscow Higher School of Economics, also believes that Riyadh is deliberately emphasizing the religious dimensions to the conflict: "To provide grounds for the intervention, Saudi Arabia is picturing this conflict as one between Shiites and Sunnis. But tensions between confessions is not something Yemen is famous for," he says. According to Isayev, the conflict is actually being stoked by the Saudi authorities, who have no need for a strong, united and therefore uncontrollable Yemen.
 
Moscow backing for the Shiites again

Still, the Yemeni conflict may eventually lead to serious consequences both inside the region and far beyond. The international community does not want another hot spot that will inevitably become a stable source of both armed rebels and refugees for the neighboring countries. "Yemen has always been considered an underdeveloped country to begin with, and its infrastructure, poor as it is, is now being reduced to rubble by the Saudi air strikes," says Grigory Kosach.

Russia has expressed concern about the escalating conflict and is strongly opposed to any intervention, calling for a diplomatic solution. "As in the case of Syria, there is but one motivation: Protect the basic principles of international law," says Leonid Isayev. "It is about respect for the sovereignty of other countries and non-interference in their internal affairs. Moscow believes it is irresponsible to foment new conflicts in the region." Thus, he notes, having previously supported Syria and Iran and opposed any attempts to interfere in their affairs, Moscow has once again ended up on the side of the Shiites.
 
Yemen: Syria 2.0 for Russia and the West?

Meanwhile, the United States, while taking a rather cautious approach to the Yemeni crisis, has still supported its traditional partner, Saudi Arabia. In other words, Russia and the West are once again supporting opposing sides.

"Relations between Russia and the U.S. are incredibly tense. Heated arguments in the [UN] Security Council are inevitable," says Grigory Kosach. "That said, it will not go further than that, as Yemen is a peripheral country. The Ukrainian crisis is a much more important factor."

As for Leonid Isayev, the expert believes that, unlike Syria, Yemen will not become a bone of contention for Russia and the West. "Generally speaking, both Russia and the West want the Yemeni war to end as soon as possible," he says. "The Americans and their allies have no intention of wasting resources there, while Russians are wary of the emergence of another hotbed of instability. I think Moscow will readily provide a neutral platform for negotiations, if asked to do so."

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 #24
UNICEF Connect
http://blogs.unicef.org
April 21, 2015
Children - the true victims of conflict in Ukraine

Marie-Pierre Poirier, UNICEF Regional Director for Central and Eastern Europe and the Commonwealth of Independent States, recently visited Kramatorsk and Slovyansk in eastern Ukraine and witnessed the impact of the year-old conflict on civilians, especially children.

As we arrive at a humanitarian aid distribution centre in Kramatorsk, I see children queuing with their mothers and fathers - children who should be attending school or playing outside with their friends - waiting to receive basic hygiene supplies like soap, diapers, buckets and detergent.

The centre's tiny supply room is crowded with anxious families. Among them, I spot a young mother cradling an infant and go over to her. She tells me that her son Damir was born in the midst of relentless fighting in and around their hometown of Yasinovataya in the Donetsk region of eastern Ukraine. His birthday, 13 January, is the same as mine. Yet in his two and a half months on this planet, Damir has known enough turmoil, insecurity and fear to last a lifetime.

At the end of January, the fighting was so intense that Damir's family was forced to flee their home for refuge in the city of Kramatorsk. Like thousands of other families displaced by the violence in Ukraine, they now lack the most essential items for daily survival.

Mothers standing in the supply-queue look bewildered as if they cannot fully comprehend what has happened to their lives. They are now unable to care for their children without humanitarian assistance. They have been left facing an uncertain future, having to start again with nothing.

In Slovyansk, I visited School No. 9, which was severely damaged by shelling in May 2014. In cooperation with the Ministry of Education of Ukraine, UNICEF has trained school psychologists to identify and respond to children's heightened stress.

It was clear from my time interacting with over 30 children during a psychosocial support session that all of them are paying a heavy toll for this protracted conflict. Each had a story to tell, how they were not sleeping for weeks, how they were scared when their mothers went out to get groceries. Yet these children were only a few of the 100,000 currently in need of support to reduce their psychological distress.

After the session, I met a nine-year-old girl who showed me her drawing. It portrayed the story of her family when they went through checkpoints to escape shelling in Slovyansk. It showed volunteers who helped her family to find a temporary place to live before returning home.

I am amazed by the tremendous sense of solidarity and mobilization of the Ukrainian people to help those in need. When she was finished telling her story, the girl said, "I want that war never happens again. I want that we live in peace and everything is good."

One year after the fighting broke out in eastern Ukraine, the humanitarian needs are enormous. Of the 5 million people, including 1.7 million children, now affected by the conflict, nearly 700,000 are in need of safe drinking water, while an estimated 950,000 are in need of hygiene supplies. Some 35,000 people in bomb shelters and collective centers for internally displaced persons need proper sanitation facilities, particularly those close to the frontline.

Children in conflict-affected areas are at risk of diseases due to the lack of vaccines, ruined infrastructure, water shortages and hampered access to medical facilities. The conflict in eastern Ukraine has disrupted education for up to 25,000 children, as 82 schools remain closed in the non-government controlled areas in Donetsk and Luhansk oblasts.

Beyond the immediate risks to children is the longer-term impact of the conflict - one that not only threatens the well-being of each and every child affected by the crisis, but also the future of an entire generation of Ukrainian children.

We need to accelerate our actions to help children in Ukraine and ensure their well-being and survival as well as re-establish a sense of normal life. UNICEF together with partners needs to scale up our emergency response in the country and pave the way for a future where they can be healthy and learn in a peaceful environment. Children should not have to pay the price of the conflict in Ukraine.

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 #25
Newsweek.com
April 22, 2015
Millions of Ukrainian Children at Risk From New Epidemics
BY MAXIM TUCKER

Ukraine is in imminent danger of experiencing the first polio epidemic Europe has seen for decades, health experts have revealed, warning that millions of children are at risk from a range of crippling or fatal infectious diseases, including measles, diphtheria and rubella.

The rate of protection against contagious disease in the country has dropped rapidly since 2008, when a 16-year-old boy died days after he was given a shot against measles and rubella, leading to a media storm.

Although the United Nations concluded that the death was unrelated to the vaccine, demand for vaccines fell dramatically to what the UN describes today as "zero coverage". With an average of 500,000 children born each year in Ukraine, the number of infants vulnerable to infection is approaching three million.

Now the risk has been exacerbated by the conflict raging in the east of the country, which has driven hundreds of thousands of refugees into crowded camps and shelters where diseases can spread rapidly.
"Countries in conflict or financial crisis are usually the ones that fall prey to these types of epidemics," Dorit Nitzan, head of the UN World Health Organisation mission in Ukraine, explains. "It is a terrible, terrible situation. We are totally in fear of an outbreak. I'm surprised it hasn't happened yet."

Nitzan's team in Ukraine have already had one scare. A handful of civilians fleeing the fighting in eastern Ukraine came to a WHO clinic with high fever, rashes and red eyes in the last week of March, leading to UN doctors sounding the alarm about a possible measles outbreak.

Patients were isolated and health workers raced to retrace their movements to discover who else may have been exposed, before the laboratory results came back negative.

UN humanitarian aid is propping up Ukraine's crumbling primary care system in government-held territory, but east of the conflict line, the situation is far worse.

Government restrictions and security concerns prevent UN aid crossing the front line, with only three UN humanitarian aid convoys dispatched to rebel-held territories since the conflict began. The WHO has also yet to persuade the rebels to allow them to treat patients.

"We're negotiating how and when [the next convoy] will be done and through which checkpoints it will be sent," says Dr Ogtay Gozalov, who leads the WHO's mobile teams in eastern Ukraine. "We can't send the convoys unless both sides agree."

Hundreds of thousands of vaccines are en route from Canada and expected to arrive in the next fortnight, but Nitzan warns they won't cover all the country's needs.

The UN says that Ukraine urgently needs more international medical support if it is to prevent an outbreak, one which could have far-reaching consequences for a Europe increasingly complacent about preventable diseases.

"In many countries where parents were not exposed to polio and other diseases in their youth they feel safe," Nitzan adds. "Without the vaccines it's clear that we will have outbreaks."

The Ukrainian Health Ministry played down the problem, saying it had a vaccination programme but required international support. The ministry declined to comment further.

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 #26
Moscow Times
April 22, 2015
Tefft Says Obama Would Be 'Happy' to Get Involved in Ukraine Peace Talks
By Anna Dolgov

Moscow would welcome the involvement of any country that could pressure Kiev into observing a cease-fire with separatists, the Kremlin said, after the U.S. ambassador to Russia suggested President Barack Obama would readily participate in the Ukrainian peace talks if he were invited.

Ambassador John Tefft said U.S. officials had spent "a lot of time" discussing ways to resolve the Ukraine conflict with Russian President Vladimir Putin and his Ukrainian and European counterparts, in an interview broadcast Tuesday with Ekho Moskvy radio.

Asked why Obama was not directly participating in the peace talks, Tefft told Ekho Moskvy that the U.S. president "would be happy to be involved" if he received an invitation. Tefft said he had not discussed the possibility with Obama personally.

The so-called Normandy format of Ukrainian peace talks - agreed to by the leaders of Ukraine, Russia, France and Germany - involves negotiations between the heads of the four countries on resolving the conflict between pro-Moscow separatists and Kiev government forces in Ukraine's east.

But Kremlin spokesperson Dmitry Peskov said his government would welcome other countries joining the peace process - if the goal was to pressure Ukraine into holding up its part of a peace plan, TASS reported. Ukraine's government and separatists have repeatedly accused each other of failing to abide by the fragile ceasefire reached by the four Normandy participants in Minsk earlier this year.

"We regret to state that there is significant skidding in Kiev's fulfillment of its obligations under Minsk-2," Peskov was quoted as saying Tuesday by TASS. "If any country is ready and able to exert influence over Kiev to push it toward fulfilling the Minsk-2 agreement, then naturally, Moscow would welcome it,"

Ukraine and Western governments have repeatedly cited evidence that they said demonstrates Russian supplies of weapons and fighters to separatists, though Moscow denies the accusations.

Tefft in his interview with Ekho Moskvy also blamed the Ukraine crisis on the alleged supply of Russian weapons to rebels, and their failure to meet the so-called Minsk agreement by withdrawing all heavy armaments from a buffer zone and observing a fragile cease-fire.

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 #27
Interfax
April 21, 2015
No U.S. plans to deliver anti-tank systems to Ukraine - U.S. ambassador to Russia

The U.S. does not plan to deliver Javelin shoulder-mounted anti-tank missile systems to Ukraine for the moment and is sending defensive gear alone to that country, U.S. Ambassador to Russia John Tefft said on Ekho Moskvy radio.

He said that the U.S. is supplying bullet-proof jackets, glasses and night-vision systems to Ukraine, all of which are defensive, not offensive gear, unlike the numerous types of weapons Russia is supplying to the "separatists."

Tefft also said that cooperation between the U.S. and Ukraine in training Ukrainian servicemen has a long history. The training program under which U.S. airborne troops have arrived to train Ukrainian servicemen has been in action since the Partnership for Peace program was launched in 1994, the U.S. diplomat said.

The program was being developed with Russia's support and aims to train servicemen and to strengthen the security of all former Soviet republics, he said.
The U.S. is not doing anything new. In the past all this was agreed upon with and supported by Russia, he said.

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 #28
Bloomberg
April 22, 2015
Russia Says Ukraine Must Be 'Neutral' as It Accuses U.S., NATO
By Henry Meyer, Daryna Krasnolutska, and Volodymyr Verbyany

Russia said it wants a "neutral" and unified Ukraine as it accused the North Atlantic Treaty Organization of seeking to turn its neighbor into a hostile state.

The U.S. wields enormous influence over Ukraine, while Russia wants the people of its "near neighbor" to have a good life, Russian Foreign Minister Sergei Lavrov said in an interview with three Moscow radio stations on Wednesday.

"It's in our interests not to divide Ukraine, it's in our interests to keep it neutral in military terms," Lavrov said. "We want Ukraine to be peaceful and quiet. To achieve that, it's necessary to keep Ukraine unified and not allow it to be torn into pieces."

The U.S., NATO and the European Union accuse Russia of sending troops and weapons to support separatists fighting government forces in eastern Ukraine in a yearlong conflict that has cost more than 6,100 lives, a charge Russia rejects. The U.S. and the EU imposed sanctions after Russian President Vladimir Putin annexed Ukraine's Crimea in March last year, while Ukraine and the pro-Russian rebels repeatedly blame each other for breaches of a fragile truce negotiated in Minsk, Belarus, in February.

Implementing the Minsk peace agreement is the way to maintain Ukraine's unity, Lavrov said. A split in the country will mean that "from the European side, the NATO side, there'll be attempts to make Ukraine anti-Russian," he said.

'Constructive Approach'

With the insurgency devastating the Ukrainian economy, the government is seeking to agree with its creditors on reducing its debt payments to accompany a $17.5 billion bailout from the International Monetary Fund. Government debt due in July 2014 was up 2.3 cents to 47.10 cents on the dollar. The hryvnia, which has lost 30 percent against the greenback this year, the world's worst performer, weakened 0.6 percent to 22.61 per dollar at 2:08 p.m. in Kiev.

Ukraine expects to reach a deal in talks with creditors by the time an IMF mission visits Kiev at the end of May, Finance Minister Natalie Jaresko said at a government meeting on Wednesday. "We are waiting for a constructive approach, that creditors will cooperate with us," Jaresko said.

The hryvnia is becoming less volatile and "we see signs of stability and support every day," she said. The first tranche of IMF bailout funds doubled Ukraine's reserves, helping to stabilize its monetary and financial systems.

Ukraine's governing coalition must stay united and approve draft laws needed to secure the release of the second tranche of IMF money, Prime Minister Arseniy Yatsenyuk told the cabinet.

No government troops were killed or wounded in rebel attacks in the past 24 hours, Ukrainian military spokesman Andriy Lysenko told reporters in Kiev on Wednesday. Ukrainian forces broke the cease-fire 32 times in the same period, the separatist-run DAN news service reported, citing the Defense Ministry of the self-declared Donetsk People's Republic.

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 #29
Ukraine's Kharkiv region begins construction of 14 fortifications

KIEV, April 17. /TASS/. Residents of Ukraine's Kharkiv region have started the construction of 14 fortifications in the Luhansk region, Kharkiv region governor Igor Rainin said during the inspection of one of the facilities.

"We'll build the first such stronghold before May 1, and the Kharkiv region will be the first among all regions in Ukraine involved in the construction of such strongholds," the Ukrinform news agency quotes Rainin as saying.

He noted that the concrete structures for the construction of fortifications in the Luhansk region were made by Kharkiv enterprises.

Earlier, Rainin said that more than 30 fighting positions would be built on the border between the Kharkiv and Luhansk regions.

According to Ukrainian Vice-Premier Gennady Zubko, the construction of fortifications in eastern Ukraine should be completed by mid-May. Prime-Minister Arseniy Yatsenyuk said the government would allocate 860 million hryvnias (about $37 million) for the purpose.

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 #30
UNIAN (Kiev)
Surveillance cameras installed around Ukraine's Kharkiv amid security concerns

Kharkiv, 21 April: Some 700 surveillance cameras have been installed on the streets of Kharkiv.

The press service of the Kharkiv Region state administration informed UNIAN that the head of the Kharkiv Region state administration, Ihor Raynin, made a relevant during a conference call with the state emergencies commission.

According to him, the number of video surveillance cameras on the streets of Kharkiv has increased 4.5 times in the past two months.

Raynin added that specialists in the region are currently finishing work on the "Secure Region" project.

"The network of mobile patrols is being expanded, and representatives of the public are being invited to take part in joint efforts to protect public order and public safety. Armoured equipment is deployed near the most important facilities. A total of 2,033 police officers are taking part in the patrols," he said, adding that 115 facilities had been identified whose security requires special attention.

"Special attention is devoted to cars of private companies used in the taxi system," Raynin added.

As UNIAN reported earlier, the installation of video surveillance cameras in the city was begun in the framework of the "Secure Kharkiv City" programme, which was elaborated in late 2014 in response to the difficult social-political situation in the country and the possibility of terrorist attacks.

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 #31
Christian Science Monitor
April 22, 2015
Walled off: In non-rebel eastern Ukraine, frustrations with Kiev mount
No one in Russian-speaking Kharkiv wants to follow rebels into open revolt. But locals say Kiev has no idea how badly it's aggravating the region with its initiatives, including the 'Great Wall of Ukraine.'
By Fred Weir, Correspondent

KHARKIV, UKRAINE - It's been nicknamed the "Great Wall of Ukraine." Its planned combination of barbed-wire fences, watchtowers, berms, and tank traps along Ukraine's 1,300-mile border with Russia look like something you'd find on one of Israel's borders with its hostile neighbors.

If it's ever completed, the wall will seal a frontier that, until last year, had always been wide open. Inaugurating construction here last fall, Prime Minister Arseniy Yatsenyuk indicated that much more than just a physical barrier was intended. "This will be the eastern border of Europe," he said.

But in nearby Kharkiv, an overwhelmingly Russian-speaking city of one-and-a-half million, mention of the wall is mostly greeted with snorts of irritation. The idea of splitting permanently and irrevocably from Russia wins virtually no acceptance. Many people here have family and friends in Russia, the local economy is heavily dependent on trade with Russia, and some say they just can't wrap their heads around the idea of a frontier being there in the first place.

Recommended: How much do you know about Ukraine? Take our quiz!
"The Russian city of Belgorod is an hour's drive away; until recently there were almost no border formalities. It's a scene of my childhood; I love that place," says Yury Smirnov, a taxi driver. "Now the border inspections take hours, and it's humiliating. Belgorod might as well be on the moon."

The tension between Kharkiv and Kiev is all too obvious these days. While pro-Kiev patriots are visible - groups of activists tore down three prominent Soviet-era monuments under cover of night last week - most conversations with people quickly reveal varying degrees of anger and disillusionment with the new revolutionary government. Everybody here, on both sides of the barricades, agrees that they are horrified by what's happening in next door Donbass and do not want to see the war come to Kharkiv. But experts from both sides of the argument admit it will be an uphill slog for Kiev to win their hearts, in part because of the economic crisis that many here blame on a government they never voted for.

"People in the western Ukraine are inclined to tighten their belts and think 'we're at war with Russia, of course there must be sacrifices.' But people here say, 'we lived better under [deposed President Viktor] Yanukovych, before these new people came,'" says Alexander Kirsch, a deputy of the Rada, Ukraine's parliament, who is from Kharkiv and an adviser to Prime Minister Yatsenyuk.

A balancing act

People here overwhelmingly voted for Mr. Yanukovych in 2010. When he was overthrown, separatists started raising their banners and occupying buildings even before unrest broke out in Donbass, where the rebel oblasts of Donetsk and Luhansk lie. But the city's popularly elected mayor, Gennady Kernes, after briefly flirting with separatism, started strongly advocating reconciliation with the new government, and passions calmed.

Still, when parliamentary elections were held last October, barely 45 percent of people here turned out to vote - remarkably, nowhere in the entire Russian-speaking east and south of Ukraine did voter turnout reach 50 percent. And those who did mostly backed the newly recreated version of Yanukovych's party, now known as the Opposition Bloc.

In a still unsolved assassination attempt, Mr. Kernes was shot while jogging in Kharkiv a year ago. He spent several weeks recuperating in Israel but, now in a wheelchair, he is back at the city's helm and more than ever at loggerheads with the Kiev authorities. Later this month he faces trial on charges of abduction brought by the Kiev prosecutor. His supporters insist the charges are without foundation and were trumped up to punish the mayor for his independent stance.

He may be in even more trouble over his defiance of a resolution unanimously passed in January by the Rada that makes it illegal to deny that Russia is an "aggressor" state. Asked point blank by a journalist whether he agrees, Kernes answered, "Personally, I do not consider Russia to be an aggressor."

Due to his ill health, Kernes was not available to talk with the Monitor recently. But the spokesman for the pro-mayor city council, Yury Sidorenko, said the mayor is doing his best to keep the lid on in a city where people are not only being battered by the most severe economic crisis since the 1990s, but are also being riled up by Kiev initiatives that they do not see any need for.

"Kiev is risking a social explosion here," Mr. Sidorenko says. "It's as if they have no understanding whatsoever in Kiev of how people think and feel in Kharkiv. They behave like revolutionaries, treating us like putty to be molded into their new form. They don't have the vaguest idea of how badly they are aggravating things here."

Grim outlook

A new set of laws passed earlier this month will ban Soviet-era symbols and grant "hero of Ukraine" status; they will also add May 8 - World War II "Victory in Europe" Day - to the traditional May 9 Victory Day celebration.

"We are really dreading May 9 this year," Sidorenko says. "There are many thousands of people who are Red Army war veterans, their children or supporters, who are going to march, and they are going to be carrying Soviet symbols and flags. This is usually a happy day. But this year it could be trouble."

The longer term outlook is even worse. Like most cities of the eastern Ukraine, Kharkiv was tightly integrated into the Soviet industrial machine. Trade with Russia has fallen by almost half amid mutual sanctions over the past year. The city has a huge plant that makes electrical turbines, most of which were formerly sold to Russia. An assembly plant for Antonov aircraft is near bankruptcy, with most workers furloughed, for similar reasons. The only local factory that does seem to be prospering is the Malyshev Works, which makes tanks for the Ukrainian army.

"The war in Donbass will be over one day, and normalizing relations with Russia will be a priority," says Vadim Karasyov, director of the independent Institute of Global Strategies in Kiev. "But by that time, we may have lost our industrial base. Ukraine had positions in aviation, space industry, and we were a big arms producer. All of it depended heavily on the Russian market. The way things are going, a one-time great industrial power is going to end up joining Europe as an agricultural country."

But Mr. Kirsch, the only member of the prime minister's party to get elected in the entire eastern Ukraine, says these industries are part of Russia's stranglehold on Ukraine, and they must be broken up and sold off so that smaller, independent businesses can grow amid their ruins.

"Deindustrialization is not the goal. The point is to make business profitable and efficient. The market will decide," he says. The huge and badly paid work forces of those dying factories, along with their corrupt managers, are holding Ukraine back, he says. Yes, it will be painful. "But the alternative, to leave everything as it was and remain friends with Russia, is much worse."

Unlike many Kiev officials, Kirsch admits there is a sharp public split between east and west Ukraine, and it may prove very difficult to heal.

"Since the beginning of the war, changes in attitude have occurred, but it's happening too slowly," he says. "We're all headed toward Europe, but Kharkiv is bringing up the rear, and griping all the way."

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 #32
Miners break through security cordons near Ukrainian Presidential Administration building

KYIV. April 22 (Interfax) - Over a thousand miners who approached the Presidential Administration edifice on Wednesday morning to deliver their demands have broken through security cordons on Bankova Street in downtown Kyiv and came close to the building.

The protesters are pounding their helmets against the ground and shouting. They have not expressed their demands but their behavior is aggressive, an Interfax correspondent reported.

About a hundred police officers have formed several cordons near the Presidential Administration building. National Guard servicemen have been attached to them as well.

The third congress of Ukrainian miners held in Kyiv on Tuesday demanded that the president dismiss Energy and Coal Industry Minister Volodymyr Demchushyn.

The congress attended by approximately 800 delegates also wants a meeting of the Ukrainian National Security and Defense Council to elaborate measures against the coal industry crisis.

The congress appealed for the adjustment of the Ukrainian national budget and sufficient support to the mining industry.

The miners said national strikes would be organized if the resolutions of their congress are ignored.

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 #33
www.rt.com
April 21, 2015
Kiev says 'no extreme right organizations in Ukraine'
[Graphics here http://rt.com/news/251545-ukraine-ultra-right-extremism/]

There are no officially registered far-right organizations in Ukraine, the security service head said. Foreign observers have repeatedly pointed out that ultra-right extremists are actively participating in Kiev's military operation in the east.

"We have no information available about any kind of radical far-right parties, organizations or groups," the head of the Central Investigation Department of Security Service of Ukraine (SBU), Vasily Vovk, told Ukraine's ICTV channel.

"Certainly, there are people with different views who could pose a certain threat. Probably, there are unofficial groups sharing such [extremist] views, but in this case we deal with individual cases. Ultra-radical groups and organizations are neither registered, nor identified [in Ukraine]," Vovk said.

The statement from the SBU boss came a mere two weeks after Ukraine's leader of extremist group Right Sector, Interpol-wanted Dmitry Yarosh, was appointed as an adviser to the chief of general staff. He has agreed to legalize thousands of fighters as an assault team subordinate to the regular army.

Heavy presence of Ukrainian ultranationalists praising Nazi ideology has been exposed on many occasions. In early March USA Today reported from headquarters of Ukraine's Azov volunteer battalion that a considerable part of its members open support Nazi ideology.

Last year, troops from the Ukrainian Azov and Donbass Battalions were reportedly observed wearing swastikas and SS badges.

According to a video on German TV station ZDF, Ukrainian soldiers were shown wearing swastikas and the 'SS runes' of Adolph Hitler's elite corps. The footage was shot by a camera team from Norwegian broadcaster TV2.

Last year BBC Newsnight journalist Gabriel Gatehouse paid a visit to Kiev to investigate the links between the new Ukrainian government and neo-Nazis.

Having reported "groups of armed men strut through [Maidan] square with dubious iconography" - including German symbols used by SS divisions during WWII - the British journalist's investigation found that "the most organized and perhaps the most effective were a small number of far right groups."

"When it came to confrontation with the police, it was often the nationalists who were the loudest and the most violent," Gatehouse said.

On April 18 Vasily Vovk made a statement that the Ukrainian Insurgent Army (UPA) organization that had allegedly taken responsibility for murders of journalist Oles Buzina and ex-MP Oleg Kalashnikov, who were gunned down in Kiev last week, does not exist. During the WWII cognominal Ukrainian Insurgent Army composed of Ukrainian nationalists fought on the side of Nazi Germany.

Also on Tuesday, SBU's Vasily Vovk advised the 'Ukrainophobes' to play down their rhetoric with the regard to a number of high-profile deaths that have taken place in Ukraine lately.

"As a head of Central Investigation Department, I believe that at present time, when there's practically a war out there, the Ukrainophobes should either shut up or play down their rhetoric to zero level. There should be no people making a stand against Ukraine and Ukrainian-ness," Vovk said.

When asked about a scientific or a legal definition of 'Ukrainophobe,' Vovk said "There's none. But we do know what we're talking about."

Last Friday, UN General Secretary Ban Ki-moon released a statement expressing "serious concern" about the spate of murders in Ukraine, demanding a thorough investigation that will restore "the primacy of law."

"This string of deaths has put the Ukrainian authorities in the hot seat," wrote Amnesty International.

Last week an online database of 'enemies of the state' was exposed in Ukraine. The volunteer-made website dubbed 'Mirotvorec' (Peacekeeper) posts very thorough and comprehensive information on anyone who happens to make the list - journalists, activists, MPs opposing the current Kiev authorities' policies and rebels fighting against the government in the east. The information includes addresses, phone numbers and other personal info.

The website enjoys the support of at least one high-profile Ukrainian official: Anton Gerashchenko, an adviser to the interior minister and member of the Ukrainian parliament.

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#34
The New York Review of Books
May 7, 2015
Ukraine: Inside the Deadlock
By Tim Judah
Tim Judah is a correspondent for The Economist. For The New York Review he has reported from, among other places, Afghanistan, Serbia, Uganda, and Armenia.
(Kiev, April 8, 2015)

Last September, a few weeks before Ukraine's general election, Arseniy Yatsenyuk, then as now prime minister, issued a pamphlet listing his aims. One was stark: "To get through the winter." Given that rebel soldiers in the eastern part of the country paint "To Kiev!" on their tanks, that Ukraine relies on Russia for much of its energy, and that its economy is in dire straits, it is nonetheless safe to say that he has succeeded. The rebels, despite inflicting two major recent defeats on the government forces, have not advanced significantly. Winter power cuts in regions unaffected by the war were short and survivable. Also, while the current cease-fire, agreed to on February 12, is not expected to last, Ukraine and its government have not collapsed, nor do they show any signs of being on the brink of doing so, as some of the Russian media keep saying hopefully.

As winter turns to spring, soldiers on both sides of the front line are anything but tired of the war. Spirits are high and demoralization and exhaustion have not yet set in. Both sides are better organized than before and their commanders are trying to second-guess where the other will attack when the cease-fire breaks down completely, as they all assume it will soon. If and when it does, there are three main possible outcomes. The first is that the rebels, with the Russian support they need, will take more territory and, depending on how easy it is for them to advance, will push north, west, and south as far as they can. The second is that the Ukrainians will retake territory and push the rebels back, but this can happen only if Vladimir Putin decides not to help the rebels any longer. The third is that even with the front line moving somewhat one way or another, the conflict will morph into a frozen one.

In the latter case, the self-declared Donetsk and Lugansk People's Republics together will become a giant version of all the other post-Soviet frozen conflicts, such as Transnistria in Moldova or Abkhazia and South Ossetia in Georgia. In these places Russia is in de facto control of slices of other countries, but they have not much of an economy or prospects of a brighter future for their people, and so the young and dynamic leave. We cannot know what Putin may decide to do, but right now this third outcome seems the most likely.

There is a big gap between what leaders on either side want and what is attainable. On the Ukrainian side the maximum and, for now, unattainable objective is to reconquer the lost eastern territories. (No one is even talking about Crimea, which, as far as Russia is concerned, has formally become a part of the Russian state.) What is far more realistic, though, is for Ukraine to hold the line to prevent further losses, while over the next few years its armed forces are transformed into a far more formidable fighting force. British military trainers are already in Ukraine and American ones are due to arrive in April, while shipments of American army vehicles have already begun to arrive.

According to the two cease-fire agreements signed in Minsk, the second on February 12, the two breakaway regions of eastern Ukraine are supposed to gain a higher degree of autonomy than other parts of the country. Legislation has been passed to that effect by the parliament in Kiev. But while we can safely assume that the rebels were forced to agree to this by Putin, who certainly wanted to avert the imposition of new economic sanctions on Russia by Western countries, it is clear that the rebels have no intention of letting their regions ever become functioning parts of Ukraine again. Andrei Purgin, one of the most powerful men in Donetsk and the speaker of its parliament, told me that this could only happen if Ukraine became a "different country" from the one it is now. That is to say that its government would be so pro-Russian that Ukraine would be a Russian satellite.

In the short term, however, the rebel leaders have other immediate goals. Now that they control about one third of the territory of their two eastern "oblasts," or provinces, they have declared that at the very minimum they want to go to their oblast borders (see the map below).

In theory, the Donetsk and Lugansk People's Republics, or to use their Russian acronyms the DNR and LNR, are supposed to be uniting as the federal state of Novorossiya, or "New Russia." In fact, apart from a flag and to a certain extent the army, that project has remained on paper, as have its territorial ambitions, which take in much of the east and south of Ukraine. But for some, even those territories would not be enough.

Sergei Baryshnikov, one of the leading local ideologists of Novorossiya and the rector of Donetsk University, told me that we were now "at the first stage" of the recreation of a Russian state that would eventually take in everything that had once belonged to pre-revolutionary, imperial Russia. That would mean most of modern Ukraine and the three Baltic states. The exception would be Lviv and the far west of Ukraine, which before 1941 had belonged to Poland, and to the Austro-Hungarian Empire until 1918. They might be left out of the new expanded Russia. But he sees the restoration of the imperial Russian borders as "our historical mission." The very idea of a Ukrainian nation was like a cancer and needed to be extirpated, he said.

Whether or not everyone in the local leadership agrees with Baryshnikov and his call for a struggle that he believes could last years or decades is not so important. What is important is that his are ideas that feed into the creation of a general worldview, not just of the rebels but in policymaking circles close to Putin, whom Baryshnikov described as "our president" and "de facto, our leader."

The problem for the DNR and LNR leaders is that even taking control of their entire oblasts, let alone advancing as far as, say, Odessa, has proved, as Purgin says, "impossible" thus far. Likewise it has proved impossible for the Ukrainians to achieve more than the odd minor victory in pushing the rebels back during the last seven months. In January, Donetsk airport, which had been fought over in bouts of varying intensity since the beginning of the war, finally fell to the DNR, as did Debalsteve, three days after the February cease-fire was supposed to come into effect. Here the Ukrainians had found themselves trapped on three sides.

Ukrainian President Petro Poroshenko tried to downplay the significance of these defeats, and the rebels trumpeted their victories. The reality was that while the Ukrainians were indeed defeated, they had managed to hold on for a very long time in both places. As interviews with disillusioned soldiers from Russia in the Russian and foreign press have shown, there are constantly fluctuating numbers of regular Russian troops and volunteers aiding the rebels. Why, in that case, did the rebels take so long to conquer these places? Perhaps militarily the Russians and the rebels may not be that good and the Ukrainians, who originally were hopelessly disorganized, may not be so bad.

The test of whether the conflict has reached a stalemate will come at Mariupol. In late August rebel forces advanced rapidly along the coast of the Sea of Azov, to within shelling distance of the eastern outskirts of this grimy steel town and port. It is home to some 500,000 people, including an estimated 30,000 refugees. Then there was panic and many fled, thinking an assault was imminent.

Ever since, not only have the rebels failed to advance, but in one place they have been pushed back by the Ukrainians, including men from the small but highly motivated Azov Battalion. It is notorious for having neo-Nazi members and a Nazi-like symbol, though many may join the unit not for these reasons, but because it is successful. Moreover, while the Azov Battalion gets all the headlines, other Ukrainian military units have also spent months preparing the defense of the city. For whatever reason the rebels and the Russians hesitated to attack in the autumn, and taking the city today would be far harder than it would have been then. Ukraine's forces, one security source told me, are in much better shape than before, although he conceded that "that is still not enough."

Then as now, Mariupol and this region along the coast are divided. Here I met both staunch pro-Ukrainians and people who think their future would be better if they were part of the DNR and Russia. But above all, as the war drags on, it is clear that many of those who dislike Ukraine are not prepared to sacrifice lives or property for the sake of the rebels or Russia. They just want the war to stop. On social media pro-Russians are constantly announcing the beginning of one anti-Ukrainian uprising or another; in the end they let their fantasies get the better of them. The uprisings are not happening. Part of the problem is that on the rebel and Russian side, so much of the political and media narrative constructed about Ukraine goes back to World War II, with the Ukrainians now playing the part of the Nazis. Many thus mistake a small number of real neo-Nazis flaunting their swastikas on Facebook for a horde of millions, and are thus disappointed when eastern towns do not revolt in a glorious rerun of the Warsaw Uprising.

Many of those in the east who never felt pro-Ukrainian have also begun to see that the DNR and LNR have become twilight zones. Banks in rebel territory have closed. ATMs are dead screens. Cash is hard to come by and those who still have jobs are lucky if their employer can find any to pay them. More and more easterners are unemployed and the economy has begun to wither and die. Pensioners can't get their pensions there. It is becoming harder to get Ukrainian passes to cross back and forth from rebel territory. Large numbers of shops have closed and while food is available, there is less and less choice. In Donetsk, Maksim Petrovich Kalinichenko, acting dean of the economics faculty at Donetsk University, summed up the situation succinctly: "There is no economy today." When it came to the future, he could not really say anything, because it depended on how the war ended.

Donetsk is the hometown and business heartland of Rinat Akhmetov, Ukraine's richest oligarch. Last summer the rebels threatened to nationalize his property, coal mines, and steel plants. In the end they did no such thing. Akhmetov employs some 300,000 people. When the war began some muttered that the oligarch, who had been close to deposed Ukrainian President Viktor Yanukovych, had somehow helped the separatists as a means of furthering his own interests. There was never any proof of this. Now, while the management of his firms has moved from Donetsk, all his workers who have not left rebel territory are still being paid, even if their mines or factories are not operating, though some still are. Akhmetov is also helping to feed tens of thousands of people with humanitarian aid. If he were not doing this, then the rebels and Russia would have to look after these people.

The complexity of the situation is even clearer in Mariupol. Here there are two giant steel plants owned by Akhmetov's Metinvest company, plus a third business. Together they directly employ 45,000 people. When you take account of how many families that means, plus how many jobs depend on the plants indirectly, from suppliers to port workers and so on, it is no exaggeration to say that Mariupol is a company town. The Ilyich iron and steel plant, which has been operating here since 1897, covers an area that straggles for nine miles from end to end.

The war has already placed the plant under huge strain. It used to get 100 percent of the coke it needs for its furnaces from Akhmetov's coke and steel plant in Avdiivka, just on the Ukrainian side of the front line near Donetsk. Rebel shells have hit the Avdiivka plant, but some two thousand workers have literally moved in to help keep it running because if its furnaces ever all went cold, it would cost $1 billion to restart them. If that happened, then the factory would probably never reopen and the workers would have lost their livelihoods in an area that no one would invest in again for many years.

Now, according to Yuriy Zinchenko, the general director of the Ilyich plant, only 20 percent of the coke he needs comes from Avdiivka. He has managed to find more in other places, including Russia, but he says that he firmly believes that his plant has a future only in a united Ukraine, and he has explained this to the workforce in no uncertain terms. If they become part of the twilight zone of the DNR, there would be no access to finance and exports to the West might end, as also might business with the rest of Ukraine. Today only 8 percent of their steel goes to Russia while the rest goes to the US, Italy, and elsewhere.

Inside the Ilyich plant huge vats spew flame and sparks and then slabs of bright glowing-amber steel plates roll out along the production line. Following an attempt to seize Mariupol last year, workers were asked to help patrol the town. According to Vitaly Voroshenko, a factory official, of 1,500 workers who were asked, 1,200 responded positively. Many pro-DNR activists from Mariupol, Odessa, and other southern towns have fled, thus decapitating the leadership of the pro-rebel cause in those parts of the south and east under Ukrainian control.

So the rebels have stalled. Mariupol is now far better defended than before and many have understood that coming under DNR control would deal a fatal blow to the economy of the town. And there is another factor at work here. According to Alex Ryabchyn, a young pro-Ukrainian economist from Donetsk who in October became a member of Ukraine's parliament, Putin has been given to understand that an assault on Mariupol is a red line.

Germany has opposed calls, especially from the US, to supply the modern arms that Ukraine needs. The German leaders believe that Russia would always respond by upping the ante because it regards Ukraine as belonging to its sphere of influence. But Ryabchyn told me that he had been told on a recent trip to Brussels that Angela Merkel would reconsider this position if Mariupol were attacked. Likewise, Western nations would reopen the possibility of banning Russia from the SWIFT financial payment information system that underpins banking transactions around the world. This, said Russian Prime Minister Dmitri Medvedev in September, would result in an "unlimited" reaction. A Western source in Kiev, who wanted to remain anonymous, told me however that what Ryabchyn had heard was a story being deliberately planted by certain Western officials, not because their governments were deadly serious about such threats, but because they wanted Putin and the Kremlin to think they were.

On January 24 a salvo of missiles lasting less than a minute hit Mariupol, killing thirty. Then nothing happened. In theory the rebel forces could isolate and surround the city if they moved westward to link up to Russian soldiers moving out from Crimea; but this would leave the rebels and the Russians with long supply lines and long lines to defend. None of this is impossible, but it would be very difficult and for Putin a huge gamble. If they have not done it until now, then maybe they will never do it.

In Kiev, the mood is gloomy. Most people realize that they are in for a long conflict. Mykola Kapitonenko, an adviser to parliament's foreign affairs committee, said that suing for peace now would be tantamount to accepting a deal "in which Putin is offering, 'I stop the war and you come under my control.'" A new IMF loan package will help keep the economy running but salaries have been cut or eroded by inflation. The currency has fluctuated wildly, which is of huge concern to everyone, especially since imports are now more expensive. In January last year a dollar cost eight hryvnias. During the last two months it has oscillated between forty and twenty-two hryvnias, making it extremely hard to do business.

In March President Poroshenko came into conflict with Igor Kolomoisky, another Ukrainian oligarch. The government passed legislation that had the effect of diminishing Kolomoisky's control of two energy companies. Kolomoisky, who has funded Ukrainian military battalions and is credited with doing much to keep his home region of Dnipropetrovsk out of rebel hands, sent armed men to defend his interests in the two companies in Kiev. It seemed as if a violent showdown was about to take place. Then Kolomoisky was sacked from his position in Dnipropetrovsk and capitulated without a fight.

There are two credible explanations of what this means. One is that the government is actually trying and succeeding in curbing the power of the oligarchs, who retain, in one form or another, deputies in parliament to defend their interests. The other is that in the constant oligarchical battle for assets and power, Kolomoisky overstepped and had his wings clipped by a more powerful oligarch-Poroshenko himself. Meanwhile parliament has been passing laws to reform everything from taxes to the traffic police to regional decentralization but much remains to be done and, especially in the current circumstances, it will take time, years even, before the results make a tangible difference to people's lives, and this is making them angry.

So Ukraine is in a race against time. If Putin's goal is simply to destabilize the country, rather than actually take more territory from it, then its angry people suit his aim. His problem is that the longer the war drags on, the worse it is for Russia's economy and future too. Will he react by discreetly moving to help the rebels even more or by moving to delicately extricate Russia from the conflict? Only zealots who see Putin as some sort of messiah still believe that he is not fueling it. For the rebels themselves and their supporters, the reality is that militarily the campaign has stalled, at least for now.

In Adminposiolok, a badly shattered rebel-held suburb of Donetsk, I met Ivan Tokarev, aged seventy-eight, who had come to try to clean up his apartment in a large block. Every single apartment in the front of the building facing the Ukrainian lines had been destroyed or had been rendered uninhabitable. His was in the back. He showed me a hole in the floor of one apartment in which a shell or rocket had fallen, blowing up the flat of his son below. No one lived in the block anymore. His son and his family had gone to Russia. Tokarev and his wife, who had moved to a safer part of town, did not want to join them because, he said, it might be fine for a month or two but then everyone would start arguing, so it was "better to die here."

On the Ukrainian side of the lines, stories are similar. But it is clear that some of the changes that the war has wrought are going to be irreversible. In Kiev the price of renting an apartment has shot up because so many people have come from the east. Many of these people are from the educated middle classes; the longer the war drags on, the less chance there is of their ever going back. On the other side, hundreds of thousands have gone to Russia, and likewise, as they settle down, find jobs, and put down roots, many of them will never come back either. Of the region's pre-war population of some 4.5 million, more than 1.5 million are estimated to have left.

In the east aid comes from Russia, and while the Ukrainians say that these aid convoys carry military equipment, they carry food too. By chance I saw one such shipment of food being unloaded at Donetsk University. It is baffling, however, why the Ukrainian government has not sought to win over the easterners by trying to send them its own aid convoys, even if the rebels prevented them from crossing into their territory. To ordinary people in the east it looks like Kiev does not care much about them and considers them the enemy.

When it comes to Ukrainian fighters in the east, however, lots of aid is getting through. Volunteer doctors from a group called Hospitallers have boxes of food and medicine donated by supporters at home and abroad. In Pisky, a mile or so from Adminposiolok, but on the Ukrainian side, they have a modern ambulance with a mobile surgical station to treat the wounded that has been donated by supporters in the US; it used to belong to the Fairfax County Fire and Rescue Service in Virginia.

In the central Ukrainian heartlands, in places where there is no ambivalence about which side people are on, the war no longer seems something utterly remote. In the village of Karapyshi, ninety minutes' drive south of Kiev, Galya Malchik, aged seventy, told me that a local man with a big truck called on everyone to give him potatoes, pickles, and salo, a traditional Ukrainian salted pork fat, which he would drive to the front to help the army. But before she got to deliver her contribution, he had already left because he had so much. Now she is waiting for the next time.

It has often been said recently, by way of warning, that Russians can endure phenomenal hardship and that in any Western calculations about the future of the war, this needs to be kept in mind. But the people who say this forget that in this fratricidal war, the same is true of Ukrainians. The cellars of Karapyshi and thousands of other villages are full of potatoes, pickles, and carrots covered in sand to better preserve them. A large proportion of city people throughout Ukraine still have relatives in their ancestral villages and if things become really dire they will look to them to help with food. Hardly anyone's stocks are depleted yet, and while some on both sides are hiding from the draft, there are still more than enough men ready, willing, and able to fight.

RECENT BOOKS ABOUT UKRAINE

A number of recent books provide essential background on Ukraine. Conflict in Ukraine: The Unwinding of the Post-Cold War Order by US academics Rajan Menon and Eugene B. Rumer (MIT Press, 2015) is a short and insightful primer that concentrates on the current crisis to give readers a brief but useful introduction to the history of the country.

Coming at the subject from a different angle is Ukraine Crisis: What It Means for the West by British scholar Andrew Wilson (Yale University Press, 2014), who in 2000 wrote The Ukrainians: Unexpected Nation, which is now in its third edition (Yale University Press, 2009) and takes the country's modern history up to 2009. For the new book he observed the Maidan revolution.

To anyone who wants to delve deeper into the history of eastern Ukraine, two books will be of interest. In The Iron Tsar: The Life and Times of John Hughes (Author Essentials, 2010), Roderick Heather tells the extraordinary tale of a barely literate Welshman who founded Donetsk in 1870, bringing his knowledge of coal, iron, and steel from his native Wales. A shorter book on the history of Donetsk is Dreaming a City: From Wales to Ukraine by Colin Thomas (Y Lolfa, 2009), which comes with a DVD of three documentaries made by Thomas and a Welsh historian about the history of the city

 

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#35
Business New Europe
www.bne.eu
April 22, 2015
Agriculture eases Ukraine's economic pain
Sergei Kuznetsov in Kyiv

While Ukraine's steel, heavy engineering and power sectors have been crippled by the war in the east and the economic crisis, agriculture has become the country's leading source of export revenue and the only sector putting in a positive performance. Even so, farmers are facing difficulties from the sharp devaluation of Ukraine's currency and a lack of access to credit  markets.

"Since  [Russia's] aggression against Ukraine destroyed the industrial potential of Donetsk and Luhansk regions and caused a reduction in exports from the mechanical engineering and metallurgical complexes, the agricultural sphere has become a locomotive for export revenues," Petro Poroshenko, Ukraine's president, said on March 30 during a meeting of the country's advisory body on reform.

Indeed, last year agriculture became the leading source of export revenue for Ukraine, worth $16.7bn. Despite agricultural exports falling 2% from the year before, this sector surpassed metallurgy, whose exports dropped by 13% to $15.2bn. "Such a dynamic was the result of a record harvest, which led to an increased volume of exports that cancelled out the negative [global] price environment," Ivan Dzvinka, research associate at Kyiv-based Eavex Capital, tells bne IntelliNews.

Agriculture was also the only economic sector showing a positive performance in 2014, at 2.9% growth, whilst the country's economy as a whole shrank by 6.8%. "Other sectors demonstrated contraction by 10% and more," Dzvinka notes.

However, 2015 will not be so positive. Kyiv-based experts expect agricultural exports to decline by 5-10% as a result of a predicted smaller harvest and "sluggish" global prices for agricultural products. Ukraine, which is the world's sixth largest grain producer and third largest exporter of corn, produced 63.8m tonnes of grain in 2014.

Reap what ye shall sow

The annexation of Crimea by Russia seems not to have had too serious a negative impact on this year's harvest, due to the peninsula being an insignificant area for grain cultivation (up to 30,000 hectares). However, the situation in eastern Ukraine, wracked by fighting between pro-Russian separatists and Kyiv-controlled troops, is more complicated. "Sowing is under way in the part of Donetsk region that is under government control," Dzvinka says. "The situation in the equivalent part of Luhansk region is worse. There is a higher risk that these territories will be seized by the terrorists [pro-Russian rebels], and their close proximity to the border with Russia is also a cause for uncertainty. These factors will, probably, lead to low level of land use in Luhansk region."

Meanwhile, up to 200,000 hectares of farmland are under the control of the Russia-backed separatists. Eavex Capital predicts that the area for spring grain sowing could be reduced by 5-7% this year as a result of the crisis. On the other hand, the Ukrainian Agribusiness Club, a Kyiv-based farmers' association, estimates that the sowing area will be reduced by 9%. In such a scenario, this year's harvest could fall to 50.5m tonnes, the association said in a press release published in March.

The Donbas crisis will add to the challenges faced by Ukraine's farmers, who are struggling with low prices for agricultural products on global markets amid rising production costs due to the devaluation of Ukraine's domestic currency and a lack of access to debt markets. "When it comes to crop nutrition, Ukraine is dependent on imports [of fertilizers]. That is why the farmers are very much affected by the devaluation [of the hryvnia], which has practically doubled the cost of nutrition and crop protection. This is one of the reasons why farmers will rely on organic agriculture and extensive technologies [using small amount of labour and capital]," Jean-Jacques Herve, counselor for agriculture to the board of directors at France's Credit Agricole Bank in Ukraine, tells bne IntelliNews.

The Ukrainian Agribusiness Club underlines that up to 39% of Ukraine's farmers are experiencing a deficit of mineral fertilisers. "Due to the devaluation and the lack of sufficient loan resources, agrarians are suffering from a significant shortage of funds," the association also said, adding that small and medium-sized producers are facing the biggest problems, having sold forward the majority of their production at the beginning of the season and failed to convert their revenues into either foreign currencies or production resources.

Herve also believes that Ukraine's agriculture sector will have to endure a serious lack of investment for at least the next two years.

However, some small farmers who are experiencing funding shortages may get some relief in the form of financial support from larger traders, which can cover some of the expenses for sowing, cultivation and harvesting in exchange for the farmer's commitment to sell the harvest to these traders at a discount, Dzvinka notes.

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 #36
RFE/RL
April 21, 2015
Champagne Tastes On Beer Incomes: Tax Declarations In Ukraine Suggest Enduring Corruption
by Katya Gorchinskaya

KYIV -- Yulia Tymoshenko didn't have much of an income in 2014.

The former Ukrainian prime minister spent part of the year in prison, part of it rehabilitating in the hospital, and much of it in back-to-back campaigns for president and parliament.

But nevertheless, she managed to buy a luxury car, according to her tax declaration. And that's despite having no savings at all.

Tymoshenko's mysterious finances are by no means unique among Ukrainian politicians. As they begin to make their 2014 income declarations public -- something that they are legally obliged to do every April -- it became painfully obvious that such financial discrepancies are commonplace.

And they cross party affiliation, age, and background.

The gaps between officials' incomes and their assets are a painful reminder of the deep-rooted corruption and insider deals that continue to plague Ukrainian politics, despite being the main cause of two revolutions.

Tymoshenko declared that last year her family purchased a Mercedes Benz GL-350, worth about $78,000, in Ukraine.

"My husband had a business outside of Ukraine, and when repressions started, he sold the business and part of the money he directed to buy the car," she said.

Tymoshenko's husband sought political asylum in the Czech Republic after former President Viktor Yanukovych stepped up pressure against his political opponents soon after coming to power in 2010.

Oleksandr Tymoshenko has had a business in that country for many years, but the family income for last year is declared as zero. Yulia Tymoshenko's personal earnings cover about one-third of the cost of her new car.

On top of that, Tymoshenko declared that she rents a 588-square-meter house, which eats up more than one-third of her income.

Likewise, Oleh Lyashko, leader of the populist Radical Party that was elected to parliament for the first time last year, managed to buy a Mazda СХ-5, an off-road vehicle worth some $30,000 in Ukraine.

A parliament member's average annual income hovers a little over $3,000 in Ukraine.

Asked by RFE/RL's Ukrainian Service how he could afford it, he simply said: "I will ask Rosita," referring to his wife.

Lyashko, a former journalist, also said that he sold an old car and used his wages to buy a new car.
 
Apart from expensive cars parliament members cannot seemingly afford, another common problem that consistently shows up in declarations is nontransparent income in the form of dividends from unidentified businesses.

For example, former presidential chief of staff Serhiy Lyovochkin made more than 10 million hryvnya last year (more than $430,000), but the origin of this money is unclear.
Another opposition politician, Ihor Yeremeev, made 24 million hryvnya (more than $1 million) in dividends.

Asked to name the companies that brought him his impressive income, Yeremeev said the information was "confidential."

When pressed to declare company names to show that his work as a parliament member contains no conflict of interest and his decision-making does not benefit his own business, Yeremeev said: "Look, I am not making a secret out of it. I am a shareholder of the Continuum group of companies." The group owns the WOG network of gas stations across Ukraine.

Olha Aivazovska, leader of the OPORA election watchdog, says that under Ukraine's law, parliament members are only obliged to declare the value of income but not the names of companies that pay dividends.

The companies themselves in their own tax declarations reveal the unique tax code of the person who received the income.

"The tax office simply compares the data," Aivazovska said. "So this data, in aggregated form, only exists in the tax service, but access to it is closed by the law on protection of personal information."

There have been no public cases when tax discrepancies were discovered, however. Aivazovska said such cases might be solved privately by tax authorities directly with the individual in question.

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 #37
ICTV television (Kiev)
April 21, 2015
Ukrainian TV examines high-profile murders, threat of "terrorist war"

[Presenter] Russia will not leave Ukraine alone anytime soon, Ukrainian and foreign analysts have said. A large-scale war might not break out, but the Russians will not stop doing us harm and threatening us. They want to split the country from inside and this is why our country should be ready to resist terrorist threats and provocations of the Kremlin special agencies.

The guests of the "Freedom of Speech" TV show discussed how to hold the internal front.

"Terrorist" war looming?

[Correspondent] Who promotes radicalism and is our country ready for terrorist war? The guests and experts of the "Freedom of Speech" TV show debated this yesterday.

According to the head of the SBU [Security Service of Ukraine] main investigations directorate, Vasyl Vovk, all the Ukrainephobes should tone down their rhetoric to zero, if not shut their mouths at all, for the sake of their own security in connection with the latest high-profile crimes.

The official stressed that there was economic background in the murder of [former MP] Oleh Kalashnikov. The brother of the former MP got in a car accident on the day of his brother's murder. Law enforcers found six million hryvnyas [around 270,000 dollars] during the search in the car. At the same time the SBU confirmed that Kalashnikov was one of those engaged in funding anti-Maydan [rallies against the opponents of the Ukraine's ousted President Viktor Yanukovych]. As for possible killers, Vovk expressed doubt they were right radical movement's followers.

[Vovk] We do not have information on the existence of far-right radical parties or organizations or groups in Ukraine. Of course, there are people with different views who might pose some threat. Probably there are unofficial groups sharing these views, but these are isolated cases.

[Correspondent] MP Artur Herasymov said that the fight against everything pro-Ukrainian was taking place in the east, and [Russian President Vladimir] Putin has been preparing Ukraine's split for 10 years, having failed during the first Maydan [rallies in support of presidential candidate Viktor Yushchenko in 2004]. In 2010, the Russians took the posts of defence minister and SBU head, but the Russian president did not expect Ukrainian society would unite in the fight against the enemy, and that conscious citizens lived even in militant-held areas, the MP says.

[Herasymov] When a person with firearms is in front of you, it happens that very often you cannot express your opinion, that is why all the pro-Ukrainian views and pro-Ukrainian positions are being suppressed there now.

Military involvement

[Correspondent] Meanwhile, up to 9,000 Russian servicemen are on the temporarily occupied territories. There are over 50,000 of them near the Ukrainian border, a representative of the General Staff HQ said. And about 30,000 more members of illegal armed groups spread terror in the eastern regions of Ukraine. The Ukrainian servicemen are sent to fight with the militants. They are encouraged to return to the troops after demobilization. Very often they become instructors and train the newcomers.

[Andriy Ordynovych, deputy head of the main directorate of military cooperation of the HQ of the Armed Forces of Ukraine] One in eight is a volunteer and has better skills. In terms of education, these are the people with college and university degrees. These people are 35 to 37 years old on average.

Possible ways to settle down the conflict

[Correspondent] The elections in eastern regions will help keep Donbass as part of Ukraine and stabilize the situation, the opposition representative Vadym Rabinovych says and accuses Ukrainian officials of releasing the militants engaged in terrorism during the exchange of servicemen.

[Rabinovych] A reasonable policy for a person who does not want the people to die in our country is to support the president in his peaceful initiatives, everything else is just talk and showing off.

[Correspondent] The experts stressed that all the Ukrainians, and politicians in the first place, should understand their place in society, since the authorities work inefficiently in the economic field and have not finished the investigation into the Maydan cases.

[Serhiy Taran, an expert of the Taran research centre] The atmosphere of fear is the final goal of terrorists. If we stop fearing, and start modernizing the country and reinforcing defence instead, this will be the best answer.

[Natalya Humenyuk, an expert, Hromadske TV online station] If vacuum is still there, if there is no real conversation, not with the armed people but with our citizens, this might be a tool of losing not winning. And this is what is in our power, and we can speak not only about the foreign factor, but about what we can do ourselves.

[Correspondent] The viewers in the studio expressed their opinion on the de-communisation law. Some 54 per cent said "yes", whereas 46 per cent do not support it.

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 #38
The Vineyard of the Saker
http://thesaker.is
April 21, 2015
Real world vs "TV reality" - is a war inevitable?

We have all heard the irresponsible statements coming from US politicians and, which is far more worrisome, generals: Putin must be 'stopped' and Russia must 'not be allowed' to achieve her various nefarious goals.  A typical such statement was recently made by retired four-star Gen. Barry McCaffrey:

"Because so far NATO's reaction to Putin's aggression has been to send a handful of forces to the Baltics to demonstrate 'resolve,' which has only convinced Putin that the alliance is either unable or unwilling to fight. So we had better change his calculus pretty soon, and contest Putin's stated doctrine that he is willing to intervene militarily in other countries to 'protect' Russia-speaking people. For God's sake, the last time we heard that was just before Hitler invaded the Sudentenland."

Nevermind that the "we" that "heard" such statements from Hitler let the Soviet Union shoulder roughly 80% of the war effort, including the most difficult part when the Soviet Union single handedly turned the tide of the war, and waited for Hitler to be certain to be defeated before opening a 2nd front.  McCaffrey clearly feels that the "indispensable nation" now needs to step into the mess it created in the Ukraine and stop the "new Hitler" again (former "new Hitlers" include Slobodan Milosevic and Saddam Hussein, both of whom allegedly presented an existential threat to the "Western Word").

The real danger of this kind of rhetoric is in the implications of the narrative which underlines it.  It goes like this:

There is a "Putin doctrine" which, under the disguise of protecting the rights of Russian minorities outside Russia, aims at reconquering all the territory of the former Soviet Union.  This is done by using propaganda to inflame these Russian minorities, get them to protest and make unreasonable demands, and then to intervene using a new form of warfare called 'hybrid warfare' which relies on a mix of military, intelligence, civilian and political activities as well as support from Russian mobsters, infiltrated "KGB" agents, etc.  This 'hybrid warfare' provides the Russians with a degree of 'plausible deniability' backed, if needed, by a perceived 'escalation dominance' (the ability to control how high and how fast the conflict can escalate).  The potential targets of this "Putin Doctrine" are quite literally all the former Soviet republics and, first and foremost, the Baltic Republics, Moldova, Georgia and, who knows, possibly even Poland.

All of the above is absolute and total nonsense.  There is no "Putin doctrine", "hybrid warfare" and "plausible deniability" as CIA-coined concepts, the very *last* thing Russia needs is to "conquer" any part of the former USSR, least of all the poor and useless Baltic states, Moldova or Georgia (which it could have easily conquered in 2008!).  But the fact that this entire theory is rubbish does not make it less dangerous, precisely because it is based entirely on paranoid ideas rather, than facts.  Think of it; is there anything at all Putin could do to signal that he has absolutely no intention of invading Lithuania, Latvia or Estonia?  No, there isn't.  Even if Russia did completely demilitarize Kaliningrad and move all her forces 300km away from these statelets, this would not remove the Russian minority there, nor would it remove this minority's desire to not live in a Apartheid-like status of "non-citizens".  So, any such withdrawal would be interpreted as a "new phase" of the "hybrid warfare" were "old KGB tricks" are used instead of "traditional military aggression".  The bottom line is this: this rhetoric cannot be disproved being, as it is, based on ideas.  Besides, how do you prove a negative?

This rhetoric also implies an inevitability.  Russians are imperialists, the KGB president is up to KGB tricks, and "new Hitlers" are popping up like mushrooms after the rain, they must be stopped, and only the 'indispensable nation" can do that.

There is an apocalyptic tone to all that.  Listening to these American ignoramuses, one gets the feeling that the fate of mankind is literally depending on these freedom loving generals to save civilization and mankind from the absolute darkness embodied in these "new Hitlers" who combine the features of Darth Vader, Sauron, and Lex Luthor.  Putin becomes a character which each American has been raised with, the notorious "supervillain" who, by necessity, must be opposed by a superhero à la Captain America.

Of course, Captain America is not quite what he used to be.  In fact, Captain America has not won a real war since 1945.  But nevermind, here comes the "Empire of Illusions" (to use Chris Hedges' expression) to the rescue of the sordid reality: as long as the American people, thoroughly zombified by the Idiot-tube, *believes* that "we kicked Saddam's ass", that "Slobo" "got the Hague" and that Gaddafi's "people" gave him some "well-deserved" "street justice" no amount of actual failure on the ground matters.  These are two parallel worlds which never touch each other: real life, and "life" inside the American TV set.

The big question is: which one will prevail?

Honestly, I don't know.

In a sane world it is quite impossible to imagine that a country which lost every single war it fought in the past 70 years would decide to top off this series of defeats by taking on the country which defeated both Napoleon and Hitler.  But in the TV-world to which American politicians and, apparently, generals cater to and, possibly, live in, the "exceptional nation" might well have to take on the "white man's burden" and save mankind from the looming Darkness from the East.

My biggest fear is that that Russia might have to smack down yet another "great leader of western civilization", but that the price in human lives this time around might be even much higher than the other two previous times.

There will be no American politicians in Moscow to celebrate Victory Day this year.  But for once, I sure hope that they will at least turn on their beloved TV sets, watch and think about what this celebration commemorates and ask themselves a simple question: are we really that stronger and that smarter than Napoleon and Hitler were?

The Saker

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 #39
Counterpunch.org
April 21, 2015
A Reporting Tour
In the War Zone of Eastern Ukraine
by ROGER ANNIS

I have just returned from participating in a four-day reporting tour to the city of Donetsk and the countryside that lies between Donetsk and the Russian city of Rostov to the south and east. I was part of a media tour group organized by Europa Objektiv, an initiative of citizens in Russia and Germany working to provide information about the war in eastern Ukraine to writers and journalists.

Our tour group consisted of writers and filmmakers from Canada, the United States, Italy, Holland, Switzerland and the Czech Republic. We learned a great deal about the political, economic and social situation in the people's republics of Donetsk and Lugansk.

For me, perhaps the most important part of the tour was the insight gained into the political aspirations of the leading social and political forces of the movement for political autonomy of these regions. The most difficult part was seeing the very harsh conditions which people living close to the ceasefire demarcation line with Ukrainian armed forces are suffering.

I will be writing a series of articles about the visit in the coming days and weeks. One place where they will all be compiled and easily accessible is on my author page on the website which I help to edit: The New Cold War; Ukraine and beyond and in CounterPunch.

The following is an overview of what I will try to bring to readers.

The Political Outlook of the Novorossiya Movement and the People's Republics of Donetsk and Lugansk

The term "separatist" or "pro-Russia separatist" is a false as well as pejorative description of the pro-autonomy movement in eastern Ukraine. This I already believed. What we learned is that the movement is not "separatist" at all. And it is pluralist. The final political outcome of the autonomy struggle in eastern Ukraine will be determined by the course of political events and a democratic process, not by a pre-determined goal, still less by assumptions by hostile outsiders.

Many people in eastern and southern Ukraine favour the creation of what they term 'Novorossiya', a political entity conforming to the historical arc of territory sweeping from eastern Ukraine across southern Ukraine to Odessa in the southwest. But is this to be a contiguous territory? Will it be a distinct or even independent political entity? What about future relations with Ukraine?

The one answer to these question held by everyone we encountered is that the Ukraine of oligarchs, of war and of monist Ukrainian language and culture that would discriminate against others must end. That is a precondition to future relations with or within Ukraine. Apart from that, all political options are open. For many, a decentralized and federated Ukraine would be just fine, provided it is democratic and not run by oligarchs, and provided it can live in peace with its neighbours, particularly with Russia.

Our delegation met with Minister of Foreign Affairs Alexandr Kofman of the Donetsk People's Republic and Acting Minister of Information Elena Nikitina. We also met members of the Novorossiya Parliament. I will bring you their views in my forthcoming articles.

Social and Economic Prospects

Our delegation had a meeting with the director of the finance and budget committee of the Donetsk People's Republic. A comprehensive economic plan for the republic is in preparation. We learned there is a very strong anti-oligarch and social egalitarian determination amidst the autonomy movement in eastern Ukraine.

A nascent banking system has been established in the two republics by nationalizing the banks of the billionaire bankers, notably the Privat Bank of the rightist oligarch Igor Kolomoisky. The grocery distribution and retail systems have been nationalized, as have electricity generation and supply. Industry, notably the large metallurgical holdings of Rinat Akhmetov, has not been nationalized and it is unlikely this would or should be done in any immediate future. Akhmetov's enterprises provide employment to thousands and they are paying taxes to the people's republics. At the same time, the days of oligarchs dominating government (including being appointed as provincial governors) are over.

The currency situation is difficult due to Ukraine's economic blockade. Four currencies are legal or de facto tender-the Ukrainian hryvnia, Russian ruble, Euro and U.S. dollar.

The Humanitarian Situation

Our delegation saw the two extremes of Donetsk city. In the center of the city (a very beautiful city center, located on the Kalmius River and full of green spaces, public art and attractive buildings) there is little visible war damage. Shops are reasonably full of provisions. But in the outskirts of the city, particularly near the ceasefire demarcation line, residential districts have been heavily damaged by the shellings and ground forays by Ukrainian armed forces and extremist militias. The provision of humanitarian aid is uneven. (See here maps of the demarcation lines in eastern Ukraine and a listing of the damages to the territory caused by Kyiv's 'Anti-Terrorist Operation'.)

Due to the escalation of shelling in the past several weeks, adults and children are once again spending nights underground in dank and cramped basement shelters. We toured one neighbourhood near the shattered Donetsk airport as shells were falling a few kilometers away. The resumption of daytime shelling is new. Residents are distraught and angry. They condemn the shelling and wonder why the large countries of Europe let it happen. They expect that their most immediate needs should be met by humanitarian aid. Governing authorities as well as countless citizen volunteers and agencies, including from Russia, are working mightily to meet humanitarian needs. But the needs are many and the resources are limited.

The people old enough to remember the German Nazi invasion of World War Two (80 years of age or older) told us they cannot believe they are re-living the nightmare of their childhoods. This generation of citizens of the former Soviet Union call themselves "children of war". I suppose they are beginning to call themselves "the elders of war".

In a background briefing provided to our delegation in Moscow, we learned of the two reports that have been published by the Foundation for the Study of Democracy on the widespread use of torture by Ukraine forces in this war. I will devote a specific forthcoming article to this subject. (Here is the first report, issued on Dec. 24, 2014, and the second report, issued on March 1, 2015.)

Ukraine has imposed an economic blockade on Donetsk and Lugansk, including cessation of payment of old age pensions and other social benefits since last June. One piece of good news while we were in Donetsk is that the new government is in a position to assume payment of old age pensions as of April 1. We talked to elderly people lined up at the branches of the new banking system to receive their pensions. They were happy to be receiving payment, finally, but none too happy with the war that finds them in such a lineup.

Realistically, the string of killings in the streets of Kyiv recently of journalists and opposition politicians does not bode well for peace in the short term.

Personal Reflections

I have never before traveled in a war zone. (Two visits to Haiti almost qualify as a war zone, but not quite.) Our safety and personal protection were paramount in the plans of tour organizers. We never once felt endangered.

We were emotionally disturbed at times by what we were seeing and hearing. The most difficult was to see the poor and elderly people living with shelling going on around them and nowhere to go for complete safety and peace of mind.

Something I did not expect to see were the large numbers of schools, hospitals and medical centers that were damaged by shelling.

One large school we stopped to observe had every window blasted out. It was a solid building, structurally sound. A colleague commented, "They sure knew how to build solid public buildings during the Soviet era."As I walked around the schoolyard, I began to notice large numbers of metal fragments on the ground. I bent down to look and discovered they were shards of ghastly-looking shrapnel, some the size of fingers. Shrapnel lying everywhere on a school ground? In Europe in the year 2015? It was too much, a rough end to a long day already packed with emotional reactions to things heard and seen. More than a few tears were shed as we boarded our vehicle to head back to our hotel for the night.

Roger Annis is an editor of The New Cold War: Ukraine and beyond. In mid-April 2015, he joined a four-day reporting visit to the Donetsk People's Republic. He is reporting from Moscow for one week after that.

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#40
Russia Beyond the Headlines
www.rbth.ru
April 22, 2015
Ukraine crisis: We're facing a Cold War mindset
Russian Ambassador to the UK Alexander Yakovenko speaks out on the West-Russia relations.
 
The Ukraine crisis triggered a broader crisis in the West-Russia relationship. What are the stakes and the bets today?

First, the declared objective of the EU's Ukraine policy is to have it firmly integrated in a Greater Europe. We have no problem with that. But why act secretly and unilaterally, rather than openly and multilaterally? We had always been told by the EU that a routine Association Agreement with Ukraine was in the works. But then, all of a sudden, it turned out that a Deep and Comprehensive Free Trade Agreement was going to be part of that. We were told that it was none of our business. Why, then, not full membership?

The Financial Times admitted that "in Ukraine's case, the European Neighbourhood Policy's mechanical approach blinded EU policy makers in 2013" and said "such mistakes should be avoided". A report by the House of Lords EU Sub-Committee on External Affairs in February also concluded that the EU "sleepwalked" into the crisis. Alfred Tennyson's line "Someone had blunder'd" comes to mind. Why lay the blame for one's errors at Russia's door?

Second, we will never put up with a war by proxy on our border. When we got the response from Nato generals' mouths, rather than their guns' muzzles, it would have been laughable, had it not been for the death and destruction wrought by Kiev's Orwellian anti-terrorist operation (ATO). The New York Times rightly described Kiev's decision not to extend the June truce as a fateful step.

Ed Lucas, writing in The Times in August, was appalled by the prospect of the West "bankrolling indefinitely a failing state, run by corrupt politicians, oligarchs and paramilitary thugs". So far, it looks like prophecy. Kiev still insists on the military solution, which undermines the Minsk agreement and efforts by the Normandy Four (France, Germany, Russia and Ukraine).

Third, President Obama admitted in a CNN interview in February that the US "had brokered a deal to transition power in Ukraine", ie, behind the backs of German, French and Polish foreign ministers who helped reach the February 21 deal between President Yanukovych and the parliamentary opposition. For Russia, when the cause of Ukraine's territorial integrity was lost in the coup, the interests of the people on the ground became of paramount concern.

Fourth, Russia is accused of waging effective propaganda, with the West and  Brussels' eurocrats "outgunned". Maybe they cannot accept the truth: the ATO and its consequences. But first, the West cannot explain why Kiev has chosen war over political settlement. Where are European values and the ideas of the Maidan?

Finally, on rules-based order and Russia's revisionism. In this particular case the EU laid down the rules of unilateralism which we thoroughly followed. There was no formal post-Cold War settlement in Europe. The Ditchley Foundation conference recently recognised the need for "a new security system" in Europe.

George Friedman of the US-based analyst Stratfor told the Chicago Council on Global Affairs that the Ukraine crisis represents America's grand strategy to establish a cordon sanitaire to keep Russia and Germany apart. Hopefully, the Europeans will not allow their continent to be raped by divide-and-rule tactics.

The revisionism outcry betrays politics and policies of the status quo, which are challenged not only by Russia, but by the EU electorate. The present systemic European crisis testifies to the unsustainability and untenability of an order and mindset, rooted in the Cold War era.

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 #41
Wall Street Journal
April 22, 2015
From Putin, a New Tune on Ukraine?   
By STEPHEN SESTANOVICH
Stephen Sestanovich, a professor at Columbia University and senior fellow at the Council on Foreign Relations, is the author of "Maximalist: America in the World From Truman to Obama." He is on Twitter: @ssestanovich.

Vladimir Putin's annual call-in show is not where I usually look for important statements of Russian policy. Most of the four-hour event is devoted to semi-comical political pandering (Mr. Putin presenting himself as the friend of struggling dairy farmers, for example). Still, last week's extravaganza contained unmistakable hints of a new line on Ukraine. To cope with Russian policy in this next phase, Western governments should be ready for a Putin who is more bored than bellicose toward Ukraine.

Consider these new themes:

* Moscow used to complain that former Ukrainian President Viktor Yanukovych was the innocent victim of neo-Nazi mobs in Kiev. On Thursday Mr. Putin explained his ouster differently. Ukrainians had grown "sick and tired of poverty, stealing and the impudence of the authorities, their relentless greed and corruption." This sort of misrule always generates populist anger. It happened in Russia in the 1990s-and now, Mr. Putin said, it has happened in Ukraine.

* Last year Mr. Putin rhapsodized about "Novorossiya" ("New Russia"), an 18th-century label implying territorial claims on much of Ukraine. On Thursday he reiterated his interest in how Russians fare in other countries, but the emphasis was on expanded economic ties-on "collaboration and cooperation." With more trade, he implied, Russians everywhere will be better off.

* Mr. Putin's press secretary had hinted that his boss would say something about upgrading the status of separatist enclaves in eastern Ukraine. And he did: He seems to be against it. Having recognized Ukrainian independence in 1991, Mr. Putin said, Russia respects it now. He urged Kiev and the separatists to "find new elements for restoring a sort of common political field in Ukraine."

* Finally, there was a calmer view of the Ukrainian government's military action in the east. Separatists say that they are under constant threat, and Russian nationalists warn of spreading conflict. But when a woman from a refugee camp just over the Russian border complained of Ukrainian shelling, Mr. Putin reassured her. It surely wasn't intentional, he said.

No one should think Russian pressure on Ukraine is over, nor that Russian lying has ended.  (We heard again on Thursday that Russia has no troops in eastern Ukraine.) But Mr. Putin presents himself as someone more satisfied with the status quo, more ready to discourage new separatist offensives, more inclined to deflate Russia's nationalist hysteria just a little.

In its dealings with Western governments going forward, Russia's line on Ukraine will be all practicality. Time to turn the page, to move on. Last year's Vladimir Putin was an open disturber of the peace. The United States and its allies may find this year's version more difficult to handle

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 #42
Wall Street Journal
April 22, 2015
Notable & Quotable: Edward Lucas
Russia is winning because it is strong-willed, not because it is strong.

From British journalist Edward Lucas's "Let's Make Putin's London Cronies Sweat" in the April issue of Standpoint magazine:

The looming target for Russia now is the Baltic states. Unlike Ukraine, Estonia, Latvia and Lithuania are core members of the Western alliance. If one or more of these frontline states can be humiliated with impunity, it will be the end of Nato. That could happen with startling speed: imagine that one morning Russia stages a provocation-say involving a train in transit across Lithuania to Kaliningrad. In the afternoon it declares a no-fly zone to stop Nato bringing in reinforcements, and in the evening announces that it has loaded its battlefield nuclear warheads onto their delivery systems and will use them if provoked. Would President Obama respond in kind? If he doesn't, Nato is over by breakfast.

That dismal prospect is still ahead. But Russia is already systematically testing our willpower and finding it wanting. Russian warplanes repeatedly violate Baltic airspace. A senior Estonian official, Eston Kohver, was kidnapped and is now hostage in Moscow. Mendacious, vicious propaganda spews over the border, portraying the Baltic states as fascist, friendless failures.

Russia is winning because it is strong-willed, not because it is strong. Unlike the West, the Putin regime is prepared to take risks, accept economic pain, threaten the use of force (and on occasion carry out those threats), and use a brazen and well-financed propaganda machine to cover its tracks.

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 #43
The London Review of Books
April 21, 2015
Where is Ukraine?
By Peter Pomerantsev
Peter Pomerantsev is the author of Nothing Is True and Everything Is Possible: The Surreal Heart of the New Russia, a BBC Radio 4 Book of the Week.

One of the problems with Ukraine is that no one really knows where it is. For many people, not least Vladimir Putin, it's an extension of neo-tsarist Russia. For others it's a Central European state of frustrated blood-and-language nationalism which just needs the chance to build strong institutions to express its essence. The Nestor Group, a collection of Ukrainian thinktanks and intellectuals, has meanwhile concluded that Ukrainian value systems reject both the Russian model (deification of paternalistic authority) and the language-and-bureaucracy-makes-a-state logic of Central Europe. Instead, Ukrainians lean towards horizontal civil society bonds: the 'sotni' who made up the revolution on the Maidan, the volunteers who fund and feed the army, church congregations and small business associations, criminal gangs and football hooligans. According to Yevhen Hlibovitsky, a member of the Nestor Group who was involved in both the Orange Revolution in 2004 and Maidan in 2014, this puts Ukraine in the same bracket as Mediterranean countries such as Italy or Greece.

This has policy implications. As Viktor Yanukovych found to his doom, attempts to impose a neo-tsarist model in Ukraine fail. Even the Ukrainian attitude towards corruption, Hlibovitsky argues, is different from Russia's: in Russia, corruption is a way to self-enrichment; in Ukraine it is about buying security. 'Ukrainians have... little affection for the rules and institutions that govern them,' he says, 'traditionally treating them as imposed from outside.' Corruption is viewed as a way of tailoring unfair rules 'to suit the needs of the individual'.

Attempts to cut-and-paste the 'development' formulas that were applied in Central Europe won't work either. Police reform, one of the big test cases for whether Ukraine can make it, ought not to be run from the top down, Hlibovitsky says, but instead should use local civic groups to create and control the police.

Language may define identity in Latvia or Estonia, creating a distinct 'Russian speaking minority', but Ukraine is more at ease with being bilingual or even, in areas such as Transcarpathia, where people switch between Hungarian, Slovak, German and Romanian as well as Ukrainian and Russian, multilingual.

Hlibovitsky's re-envisioning of Ukraine as a Mediterranean culture seems strikingly original, but as I listened to him present his findings last month I had the odd feeling I'd encountered the idea before. Suddenly I realised it was a theme in the writings of my father, Igor Pomeranzev, a Russian-language Ukrainian poet and essayist who was raised in Czernowitz and grew up in Kiev before leaving the Soviet Union in the 1970s.

'I am not a cosmopolitan, I am a patriot,' he said in an interview a couple of years ago.

'But I have a different patria. I feel a sense of home in Istanbul cemeteries, Rome, Czernivtsi, London, Sergeev Posad. Scandinavia is not a home for me - it is not part of the greater Mediterranean. When I'm asked whether I'm a Russian or Ukrainian writer I find the distinction irrelevant - the only thing that matters is whether you are a talented writer. But my perceptions are Southern - does that mean the same as Ukrainian?'

In 1976, when he was in his twenties, he wrote:

    On a map for fingers
    Kiev
    is somewhere near
    Alexandria

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 #44
Washington Post
April 22, 2015
Confronting chilling truths about Poland's wartime history
By Laurence Weinbaum
Laurence Weinbaum is director of the Israel Council on Foreign Relations, which operates under the auspices of the World Jewish Congress, and a historian specializing in modern Polish Jewish history.

The transmission of history requires knowledge but also nuance. Nowhere is this more evident than when examining the torturous relations between Jews and the local people among whom they lived in Poland and elsewhere in German-occupied Europe. Sadly, the carelessly drafted, though presumably well-intentioned, words of FBI Director James Comey displayed neither.

Comey's reference to "the murderers and accomplices of Germany, and Poland," in a speech that was given at the U.S. Holocaust Memorial Museum and adapted for an op-ed in The Post last week, suggested that in terms of responsibility for the Holocaust, Poles are somehow to be compared with the Germans (never mind the Austrians, whom Comey failed to even mention). Poland was the first nation in Europe to resist the German onslaught - and it did so, ferociously, both at home and in exile, from the first day of the war in 1939 when it was invaded until the last. Hopelessly outmanned and outgunned, Poles suffered staggering losses in blood and property. The Germans on the other hand were the architects and executors of the Final Solution - a state policy carried out with murderous efficiency - and nothing can alter that reality.

However, the furious reactions to Comey's remarks by at least some of Poland's spirited defenders would also suggest a lack of knowledge and nuance, or something more disturbing - a disinclination to confront certain chilling truths about their country's wartime history, as recently revealed by Polish scholars of the post-Communist generation.

The Roman scholar Tacitus implored practitioners of the historian's craft to approach their research sine ira et studio (without anger and fondness). He insisted that equanimity was essential to credible scholarship. Of course, this call for dispassion is especially challenging where a perceived stain on the national escutcheon is concerned.

Nevertheless, Polish scholars have displayed not only equanimity, but also admirable determination and inspiring courage in ferreting out the vilest skeletons in Poland's collective closet. They believe that in the long run, Polish society - which was jolted by their findings - will be better off for their efforts. It is a credit to the success of the new Poland in shattering the shackles of Communism that not only can such scholarship flourish, it can even precipitate intense national debate. This bodes well for the vitality of its democracy and civil society - and the striking new museum of Polish Jewry in Warsaw is a symbol of the present ambiance in Poland. No other country in post-Communist Europe has undergone any similar process of historical introspection. Certainly not Hungary, which was mentioned by Comey and which was an ally of Nazi Germany.

Thanks to the efforts of Polish researchers, we now know that more Poles participated in the destruction and despoliation of their Jewish neighbors than was previously believed. Many Poles saw the removal of the Jews from Poland as the one beneficial byproduct of an otherwise grievous occupation. For the least scrupulous local people, the Holocaust was also an El Dorado-like opportunity for self-enrichment and gratification. For some, this temptation was irresistible, and they did not recoil from committing acts of murder, rape and larceny - not always orchestrated by the Germans.

Those who see themselves as defenders of Poland's good name are often quick to point out that in Poland there was no Quisling regime comparable to that which existed in other countries occupied by Germany - and that the Polish underground fought the Germans tooth and nail. However, this phenomenon requires further elucidation.

In 1985, in a Polish émigré journal, Aleksander Smolar observed that in wartime Polish society, whether on the Polish street or in the underground, there was no stigma of collaboration attached to acting against the Jews. The late Father Stanislaw Musial, a Polish Jesuit scholar, noted in the wake of the revelations about the mass slaughter of the Jews of Jedwabne that during the German occupation, many Poles believed that Poland had two enemies: an external one - the Germans - and an internal one - the Jews. He also believed that it was only due to Hitler's unremitting contempt for the Poles that the Germans did not consciously seek collaboration on a national level. In other words, there was no inherent contradiction between Polish patriotism and participation in the plan to bring about a Poland free of Jews. Comey claims that "good people helped murder millions." People who murder, rape and steal certainly cannot ever be called "good," not even figuratively.

In the winter of 1940, the Polish underground state's daring emissary, Jan Karski - who went on to become a legendary professor at Georgetown (where I was privileged to be one of his students and teaching assistants) and is now seen as a Polish national hero - delivered his first report to the government in exile. He described the Polish attitude toward Jews as "ruthless, often without pity. A large part avails itself of the prerogatives that they have in the new situation...to some extent this brings the Poles closer to the Germans." Anti-Semitism, he wrote, "is something akin to a narrow bridge upon which the Germans and a...large part of Polish society are finding agreement." The truth is that local authorities were often left intact in occupied Poland, and many officials exploited their power in ways that proved fatal to their Jewish constituents.

It is not easy to accept this painful truth. In an interview with the daily Haaretz during an official visit to Israel in 2011, Poland's then-foreign minister Radoslaw Sikorski declared: "The Holocaust that took place on our soil was conducted against our will by someone else."

The meticulous scholarship of Barbara Engelking, Jan Grabowski, Alina Skibinska and a number of other researchers has compelled us to look more closely at the phenomenon of abettors of the Holocaust, alongside the perpetrators, bystanders, rescuers and victims. Even as we bow our heads before the extraordinary heroism and sacrifice of the thousands of Poles who risked their lives to save Jews - and in so doing, wrote a glorious page in their nation's history - we have to recognize that without the participation (not mere indifference or apathy) of local people, more Jews would have survived. Certainly, the repetition of sweeping characterizations based on widespread misunderstanding and even appalling ignorance of the past can only inflame passions and lead to a lamentable distortion of history. Sadly, the pronouncements of Comey and some of his more sanctimonious detractors have done just that.

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 #45
Dances With Bears
http://johnhelmer.net
April 21, 2015
SO LONG SIKLEBAUM - POLAND UNDER US PRESSURE OVER FAILURE OF WAR AGAINST EASTERN UKRAINE, RUSSIA
By John Helmer, Moscow
[Footnotes, links, and photos here http://johnhelmer.net/?p=13204]

The Eastern European alliance in the war against Russia is cracking up.

In Poland, voters will elect a new president on May 10, and then a new parliament and prime minister by October 30. On present polls, the pro-American war factions are unlikely to win. That will mean the elimination, at least in Poland, of Radosław Sikorski (lead image, left), last year's Anglo-Polish foreign minister, this year's speaker of the Polish parliament (Sejm); and of his Anglo-American wife, Anne Applebaum (right).

The Siklebaums aren't the only casualties. Victoria Nuland, leader of the war party at the State Department in Washington, tweeted [1] from Warsaw last week: "I think countries like the United States and Poland, need to do everything we can to support the Ukrainians." Polish officials told Nuland, after downgrading her meetings to the lowest possible protocol level, that enough is enough.

Sikorski is currently under investigation by the Polish authorities for fiddling state budget funds for personal expenses. Next month, like other Polish public officials, he must disclose how much of his life style is subsidized by the earnings of his wife, who is paid in turn by a State Department-financed propaganda outlet in London. For more on the Siklebaum subsidies, read this [2].

Last year [3] the couple tried but failed to exit from Warsaw when Sikorski was rejected for a NATO post in Brussels, and then for a European Union post.

This year Applebaum has launched her own eastern front offensive [4], berating the Czechs, Slovaks, Hungarians, Serbs, Greeks, and finally the Poles for fiddling their own expenses, and failing to do more in cash and arms to support the Kiev government's war in eastern Ukraine. They were all pawns, she claims, in the Kremlin's "grand strategy...to delegitimise Nato, undermine the EU, split the western alliance and, above all, reverse the [post-communist] transitions of the 1990s." "No one is fond of Russia in Poland, but that isn't the point: Russia doesn't need Poland, Hungary or Slovakia republic to be ruled by pro-Russian governments. They just need anti-German governments in central Europe, or anti-western governments, or simply incompetent governments that can persuade the rest of Nato to throw up their hands and say 'we won't fight for these people'."

On April 13 [5], the State Department announced that Nuland was arriving in Warsaw to "meet with senior government officials to discuss a broad range of bilateral and regional issues." In fact, she was relegated to mid-level officials. According to the Polish Defence Ministry communique [6], Robert Kupiecki (below left), a vice minister, was decidedly non-committal in what was reported as a discussion of "the state of regional security in the light of current events in the eastern and southern flank of NATO... including measures to further adaptation of NATO to the changes in the security environment [and] the American presence in the region."

At the Foreign Ministry, Nuland was met by Undersecretary Leszek Soczewica (right), a military officer who ranks seventh in his ministry's pecking order [8], and is responsible for the US, not Europe. His communique disclosed that he and Nuland had "focused on the prospects of deepening cooperation in the field of innovative technologies and in the energy sector."

Nuland was followed into Warsaw by Rose Gottemoeller, an under secretary of state, one rank higher than Nuland. She calls [9] herself an expert on Russian military affairs; nine years ago Gottemoeller, who describes [10] her origin as a "big German Catholic family", headed the Moscow office of the Carnegie Endowment for International Peace. In Warsaw her greeter was also General Soczewica; neither he (left) nor she (right) issued a communique.

Gottemoeller "discussed allied efforts to support Ukraine", according to US Embassy tweets.

Applebaum missed the Nuland-Gottemoeller blitz. She was touting, er tweeting [11] on her husband's behalf: "for those who missed it 18 years ago, "Full Circle" by @sikorskiradek is back in stock on amazon."

James ComeyThey were all relegated by the Polish government's fury following last week's speech at Washington's Holocaust Museum by James Comey, the director of the Federal Bureau of investigation (FBI). Comey gave his remarks [12] on April 15, then repeated them in the Washington Post the following day. A lawyer, state prosecutor, and practicing Catholic, Comey said: "Good people helped murder millions. And that's the most frightening lesson of all-that our very humanity made us capable-even susceptible-of surrendering our individual moral authority to the group, where it can be hijacked by evil. Of being cowed by those in power of convincing ourselves of nearly anything. In their minds, the murderers and accomplices of Germany, and Poland, and Hungary, and so many, many other places didn't do something evil. They convinced themselves it was the right thing to do, the thing they had to do. That's what people do. And that should truly frighten us."

Comey's reference to himself, to Americans, to everyone - "our" humanity, capability, moral authority - has been ignored. Instead, the Polish president, prime minister, parliament, and state media issued protests. The foreign ministry summoned the US ambassador in Warsaw to hear them. Poland had been a victim in the world war, not a perpetrator, the government protests claimed, avoiding mention of Germany.

The Siklebaums protested too. "Our envoys begged U.S. for help in stopping the Holocaust. We await the Director's correction," tweeted [13] pater. Comey "got it wrong on the Holocaust," wrote [14] mater, conceding that "many [Poles] were frightened by or indifferent to the fate of the Jews, and some murdered in order to avoid being murdered."

In Moscow the Russian assessment is that the Polish protests are cynical. "Not only the American, but also the Polish Government does not deny itself the pleasure of distorting the history of the Second World War", commented [15] Leonid Kalashnikov (below, left) , deputy chairman of the Foreign Affairs Committee of the State Duma. He was referring [16] to declarations in January, first by Polish Foreign Minister, Grzegorz Schetyna (right), then by Sikorski, that it had been Ukrainians, not the Red Army, which had liberated the Auschwitz concentration camp in 1945.

Moral duplicity had been the FBI Director's point; taking sides is the Siklebaums' point - as it has become increasingly evident in Washington that Polish politicians and their voters are unwilling to be drawn any further into the Ukraine civil war, or into US military escalation on Polish territory against Russia.

"We can see that after Sikorsky's dismissal from the Foreign Ministry, there is much less barking about Ukraine in Warsaw", comments an influential Polish analyst. "The Comey remarks demonstrate that basically Poland has no allies. Even historically good relations with Hungary have now been destroyed through the attack on [Hungarian Prime Minister Victor] Orban by the Polish government [Warsaw, February 15 [17]] The Weimar Triangle group of Poland, Germany and France is more and more a diplomatic formality, not an alliance . And as we know [former Polish Prime Minister Donald]Tusk in Brussels is a mere puppy of Auntie Merkel, and not the influential representative of a strong and powerful Poland in the EU. After Poles sabotaged the career of the Sikorsky-Applebaum couple and cooled on Ukraine, Poland is now being reminded how low it ranks in Washington, Brussels and London, too."

On April 3 [18], the Polish Foreign Minister hosted the French and German Foreign Ministers, dubbed the Weimar Triangle, at a conference in an empty sports stadium at Wroclaw. The communique claimed there was a "single voice of France, Germany and Poland...considering the current political situation in the EU's neighbourhood."

Sources in Warsaw say they suspect officials in the US and Israeli governments of threatening to revive a campaign claiming $65 billion in compensation from Poland and other European governments for losses of life and property caused to their Jewish nationals during the war. The project, launched in 2011, is called the Holocaust Era Asset Restitution Taskforce (HEART [19]). It is based in Israel, headed by Rafi Eitan, the Mossad agent directing espionage against the US in the 1980s. In Milwaukee HEART has been managed by a Democratic Party consultant called Bruce Arbit and his A.B. Data [20] company who have run several earlier Jewish restitution campaigns. HEART was suddenly suspended last July [21], without explanation.

In Warsaw, according to Polish sources, officials believe it would be a small price to pay to allow more US troops into the country and spend more on the war against Russia than to risk having to pay the bill for Operation HEART. The Siklebaums are among them, the sources say.

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 #46
Deutsche Welle
April 21, 2015
High-profile killings in Ukraine sow hatred

The murder of a pro-Russian opposition politician and a journalist in Kyiv threaten to further divide Ukraine. While many are pointing the finger at Moscow, others are blaming the government for not doing enough.

It is bitter cold. Rain mixed with sleet is pelting down on red carnations in front of a high-rise building. An elderly woman passes by, stops, bends down and sets the candles, overturned by the wind, upright again. Here, near the center of Kyiv, Ukrainian writer Oles Buzyna was shot dead last Thursday in broad daylight.

Murderers among us

"I respect him," says the woman, a neighbor, who asked to remain anonymous. "He told the truth, so they killed him." She means those who have been in power since the revolution in Ukraine a year ago. Buzyna was one of their opponents. The 45-year-old wrote non-fiction books, newspaper editorials and was a passionate proponent of Ukraine as part of a "Russian empire." Most recently, he was attacked in Russian talk shows because of his sharp tongue.

Pro-Russian journalist Oles Buzyna was killed in broad daylight

Another neighbor, out for a walk with her dog, thinks Russian intelligence agencies were responsible for Buzyna's death. "President (Vladimir) Putin knew about it before we did," says the woman in her early fifties, shrugging her shoulders.

Indeed, the Kremlin chief spoke about the murder in Kyiv during a live broadcast on Russian television only about an hour after it had taken place.

"Many in our building did not share Buzyna's views, but we got along well, there were never any conflicts," the neighbor said.

Dubious claims

The presumed assassination of the controversial journalist is particularly sensitive. Only a day earlier, on Wednesday evening, opposition politician Oleh Kalashnikov was shot dead in the Ukrainian capital. He too articulated Kremlin-friendly views. The 52-year-old was a former member of parliament for the pro-Russian Party of Regions.

When the pro-Western opposition engaged in street protests in Kyiv in the winter of 2013-14, Kalashnikov joined the opposite event, the so-called "anti-Maidan." "Here, an attempt is being made to carry out a coup," he told DW in January 2014. The Ukrainian activists on the Maidan, Kyiv's central Independence Square, called Kalashnikov a "radical and terrorist."

Did Buzyna and Kalashnikov pay for their political views with their lives? This question is being hotly debated right now in Ukraine.

A letter from a group of Ukrainian nationalists supposedly claims responsibility for this and other killings of pro-Russian politicians. The group calls itself the "Ukrainian Insurgent Army," or UPA. There actually was an organization of that name in Western Ukraine during the Second World War. It fought against the Soviet Union, but its members collaborated in part with Nazi Germany. But the SBU, the Ukrainian intelligence service, says the claim of responsibility is a fake.

Police protection

The murders of Buzyna and Kalashnikov are the latest in a series. Ukrainian media have tallied around a dozen murders and suicides of members of the former ruling class in less than a year. That is why the government is now taking unusual measures:

Opposition politician Olena Bondarenko has received police protection. "I have to leave Kyiv," she told DW by telephone. She did not want to reveal her current location. The 41-year-old lawmaker and former member of the Party of Regions is known for her pro-Russian views. But she evidently does not see herself as being in acute danger. "Now the police are more worried about me than I am," she said.

Bondarenko sees a connection between the recent killings in Kyiv and previous cases: "They were all opponents of the government." She says she considers it premature to speculate about who was behind the deaths, but says the government has a responsibility, because "it could not guarantee the security of its citizens and opposition politicians."

This is not new. Especially between 1993 and 2005, high-profile murders were carried out again and again in Ukraine. Prominent opposition politicians and businessmen, but also journalists, were killed by gunmen, died in car accidents or allegedly committed suicide. Most cases were never fully explained.

A new wave of hatred

The two recent murders have further fueled the already tense atmosphere in Ukraine. In early April, the parliament in Kyiv adopted several controversial laws that among other things prohibit communist and Nazi symbols and honor Ukrainian nationalists. Especially in eastern and southern Ukraine, these laws provoked much criticism. Whether on television talk shows or social networks, the division in the country has become noticeably deeper. Not infrequently, Ukrainian activists and ordinary citizens even go so far as to praise the killings of pro-Russian politicians, whom they consider "traitors."

In the meantime, notable writers like Serhiy Rachmanin of the Kyiv "Mirror Weekly " have been calling for tolerance. When a part of the population is happy about calls for murder, Rachmanin wrote in a recent issue, it is "a gift for the Kremlin." Such appeals, however, seem to have had little effect.

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 #47
www.rt.com
April 22, 2015
How mainstream propaganda works
By Margarita Simonyan
RT's Editor-in-Chief

The Western media's starkly different reactions to the murders of two opposition figures - Russian politician Nemtsov and Ukrainian journalist Buzina - is a case study in biased reporting.

Following the killing of a well-known Russian opposition figure Boris Nemtsov, US media outlets released over 100 articles, stories, live broadcasts and reports concerning Nemtsov's relationship with the Kremlin, the progress of the investigation, as well as statements by Russian and foreign public officials - all in the space of just four days. The rate at which the stories were published only increased with each day that passed. Nemtsov's funeral procession was extensively covered by CNN, Fox News, CBS News and ABC.

Following the killing of a well-known Ukrainian opposition figure Oles Buzina, leaders within the US media published about 20 articles in four days, the majority of which were short newswire notes. There were a handful of opinion pieces, too. Only Radio Liberty decided to report Buzina's funeral on April 19 and even this was miniscule in content: a one-minute video and a few words about Kiev suspecting Russia being behind his death!

It's all quite simple and highly effective.

May they both rest in peace. Senseless victims of a mad world.

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 #48
Cluborlov
http://cluborlov.blogspot.com
April 21, 2015
Notes from a Funeral
By Dmitry Orlov

Today I received the following report from Club Orlov's special Kiev correspondent, Yu Shan:

Yesterday I was at a funeral. The crowd was well over 500, much more than I originally thought would be possible. It was a deeply emotional event. The man to whom everyone bid farewell was Oles' Buzina, a writer, historian, free thinker, wacky conversationalist, warm friend, a man who identified deeply with both the complex yet incomplete Ukrainian culture and with the multifaceted entity of eastern Slavic Orthodox Russian civilization, a man who would not take sides easily, and would adhere to his lone stand even when death threats started to arrive at his doorstep on a weekly basis.

The event was all over the Russian language news. But there was precisely zero coverage of it in the English-language news. He was murdered at 1:25, Thursday, April 16. There were two masked men waiting for him in front of his house. Five shots were fired, and that was that. It was the third such hit in a span of four days.

At the funeral there were a few reporters from Russia who came specifically for this event. They were polite and talkative. But I noticed something which to me seemed off: yesterday was a profoundly emotional time for all the Kiev residents who made the decision to attend the funeral, and many people were crying openly in the cold wind, for several hours, and not just old women. However, some of the questions asked by the Russian reporters, and some of the things they said, had a mild undertone of Schadenfreude: "Oh, look at you poor Ukrainians, what have you all brought upon yourselves? Now do you see how wrong you were? Do you see where you end up without Russia?"

But of those present-every decrepit old man or woman, every young, unfashionably dressed girl or threadbare-looking young man-all were the kind of Ukrainians who throughout this year of madness have kept in their hearts an earnest, warm feeling towards Russia! They have clung to the idea of seeing themselves as a part of a great singular civilization, as citizens of the once-proud Soviet Union. They don't need Russian condescension!

After this one year, it has become plain that there can be no Ukraine without support from Russia. But it is also true that there can never be a genuine resurrection of Russian Civilization without a resurrection of the Ukraine. It is not a matter of territory; the ties are psychological, emotional and historical. How many among the contemporary Russian public actually appreciate this point? A regular Russian guy sympathizes with Donbass, supports Putin, and despises the USA. But does he consider the Ukrainians to be good-for-nothing losers-possibly including his own brothers who happen to live there?
And that isn't at all helpful. The combination of clueless American warmongering and disingenuous offers of "integration" from the EU have turned the Ukraine into a disaster area and its population of 40 million into paupers. The nightmarish regime in Kiev, whose brainwashed adherents go around defacing World War II monuments while idolizing and deifying Nazi war criminals, will be finished soon enough, but once it is gone there will be more bloodshed in this deeply self-conflicted society.

The Ukrainian identity and national brand are tarnished beyond all hope. After a prolonged and painful process of de-westernization and de-Nazification, all that will be left of it will be a memory of failure which few will recall willingly or pass on to their children. But to make healing possible, to allow this year (or two or three) of Ukrainian madness to be consigned to oblivion, something else must take its place. And that something can be just one thing: a compassionate, inclusive, supportive, pluralistic Russian identity.

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