#2
Fort Russ
http://fortruss.blogspot.com
May 25, 2015
Opinion: The best result of last year is consolidation of Russian elites before global challenges
Pavel Shipilin [http://ext-1320878.livejournal.com/feed/]
Translated by Kristina Rus

Optimist Karaganov

This interview with "Banks and Business World" is not so much informative, as curious. Basically, because Sergei Karaganov, whom many, including myself, have always treated with suspicion, in recent times behaves as an intelligent patriot, whom we should listen to. In my opinion, he demonstrates the constructive opposition, which we desperately need.

"For a quarter century, the country has accumulated invaluable experience of survival in harsh conditions. Yes, we lost part of the territory and assets, but at the same time got rid of the need to subsidize socialist countries, most of the former Soviet republics and to maintain a monstrous war machine. While keeping the country, control over natural resources and high defense capabilities. We got rid of the ideological blinders and illusions - as towards adversaries and towards partners. And this new awareness of ourselves and the surrounding world - is the most important result of last year. And recent public opinion polls conducted under sanctions, increased prices and increasing uncertainty, only confirmed the willingness of the majority of the elite and society to fight for the interests of the country, even if they have to sacrifice a part of their own wealth. Believe me, this means a lot. Therefore my assessment is optimistic: never before has Russia been so focused and had such a strong position before global challenges."

It's nice when your own feelings coincide with the feelings of such a tested liberal, right?

Kristina Rus:

This is just one example of "unintended consequences" of  aggressive Western politics against Russia, which produced exactly the opposite result. Instead of dividing the country, it pushed the "intelligent opposition" to consolidate with the Russian mainstream for a common goal to overcome the Western threat, while the grant eating opposition completely lost any legitimacy and respect.

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 #3
Kremlin rejects criticism of Russia's new law on 'undesirable' NGOs

MOSCOW, May 26. /TASS/. The Kremlin disagrees with the criticism of Russian laws classifying the NGOs as "foreign agents" and "undesirable organizations," Russian presidential spokesman Dmitry Peskov said on Tuesday.

The claims against the law on "undesirable organizations" must be specific and not abstract, Peskov said, commenting on remarks by a number of human rights activists who have voiced concern over the passing of this law.

"Those who have concerns can formulate them clearly," Peskov said. "It must be based on specific facts," he stressed, adding that the claims of the organizations targeted by the laws cannot serve as grounds for revising them.

"This does not mean that the legislation is flawed," he said.

Peskov commented on including the Dynasty non-profit foundation to the register of NGOs listed as "foreign agents." "If it was not involved in political activities, they may cite this example," Peskov added.

"If it [foundation] receives funds from abroad, then it is a "foreign agent" in accordance with the legislation," Peskov explained. "If it is included on the list, but has not received any funds from abroad, then there are all the legal grounds to challenge this decision in court," he added.

The Kremlin spokesman said there are specific criteria here: either it receives money from abroad or not. "This cannot be a formal or informal characteristic," Peskov said.

"If you get money from abroad and are engaged in politics then you should declare yourself as a "foreign agent," the presidential spokesman said. "This does not mean that this activity is banned," he added, warning against distorting facts.

Peskov also explained that these two laws do not substitute each other.

"Undesirable" are those [organizations] that pose a threat to the national security and national interests," Peskov said. "Agents" do not necessarily pose a threat," he added. "These are completely different matters," he said.

Russia's Justice Ministry on Monday listed the scientific and educational Dynasty Foundation of businessman Dmitry Zimin and the Liberal Mission educational foundation led by research advisor of the Higher School of Economics (HSE) Yevgeny Yasin in the register of "foreign agents." Now there are already 67 NGOs listed as "foreign agents" in Russia.

Media reports said earlier the Dynasty foundation disagreed with including it to the list of foreign agents explaining that the organization used the funds of Zimin from his accounts abroad rather than of foreign sponsors.

The Dynasty Foundation, founded by Zimin in 2002, seeks talented scientists and backs their ideas and projects in the natural and social sciences. The organization has 20 programs and projects in the sphere of the development of fundamental scientific research and education in Russia.

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 #4
Washington Post
May 26, 2015
Editorial
Legally silencing Russia's undesirables

RUSSIA HAS just taken another step toward pernicious use of the law to buttress the authoritarian whims of its leader. Both houses of parliament recently passed legislation that would allow the government to label as "undesirable" - in effect, to outlaw - any foreign or international organizations deemed a threat to the "defensive capabilities or security of the state, to the public order, or to the health of the population." President Vladimir Putin then signed the bill into law. This is the legal version of a blank check for ­repression.

"Repression" sounds like an old-fashioned word. It connotes the Stalin purges, arrests in the middle of the night without cause from which people never returned. That kind of mass repression is not happening in Russia, but the new law contains an alarming principle drawn from the past. The language is so vague that it could apply against almost any foreign organization or business operating in Russia. This is the same heinous, arbitrary rule that was behind the Great Terror of 1936 to 1938, when millions of lives were torn apart by false accusations and the whims of Joseph Stalin and his henchmen.

The new law is aimed at further draining any oxygen for civil society in Russia. At its most elemental, civil society is what connects rulers and the ruled: the mass media and social media, churches and charities, and all kinds of nongovernmental groups. By its nature, civil society can be pesky, highlighting failures of the state and trying to fill the gap. Some Russian civil society groups have relied heavily on foreign funding. But Mr. Putin now declares that a resurgent Russia must rid itself of foreign influences, which he believes are out to get him and his regime.

This is just the latest brick in the wall of authoritarianism that Mr. Putin has been building. Now all he or his cronies must do is to declare any offending group to be undesirable, and the police and prosecutors will move in. Earlier, he signed a law forcing some organizations that receive money from overseas to register as "foreign agents," with a connotation of spying, and another limiting foreign ownership of Russian news media.

No independent civil society existed in Soviet times because the Communist Party was supposed to take care of everyone's needs, from cradle to grave. It was a utopian dream that, by the end, had become a colossal failure. Today's Russia is no closer to utopia, and the crushing of what remains of civil society will hurt the Russian population most of all.

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 #5
Interfax
May 26, 2015
Dmitry Zimin plans to stop financing Dynasty Foundation

Founder of Russia's non-profit Dynasty Foundation Dmitry Zimin has announced plans to stop providing money to the organization after it was assigned 'foreign agent' status by the Russian authorities.

"Certainly, I will not spend my own money acting under the trademark of some unknown foreign state. I will stop funding Dynasty," Zimin told Interfax on May 26.

The foundation's board is expected to meet on June 8 to decide the future of the organization, he added.

When asked whether or not the foundation has other sources of financing, and whether it would be able to exist without him, Zimin said: "It is unlikely."
Zimin also disagreed with the Russian Justice Ministry's decision to assign 'foreign agent' status to Dynasty because, he said, this organization is funded with his own money, which is kept abroad.

"I keep my money abroad. I have never concealed it. But Russia keeps some of its money abroad as well," he noted.

The Justice Ministry's press service reported on Monday that Dmitry Zimin's Dinastia non-commercial programs foundation had been added to the register of foreign-agent non-governmental organizations. Facts were uncovered during scheduled document checks by the Justice Ministry's Moscow department indicating that this organization matches the classification of noncommercial organization, the press service said.

Ten academics and 18 corresponding members of the Academy of Sciences from among the July 1 Club members, who protested against Russian Academy of Sciences reform, urged Justice Minister Alexander Konovalov two weeks ago not to enter the Dinastia Charitable Foundation into the register of foreign-agent nongovernmental organizations.

The letter was signed by members of the July 1 Club Vladimir Zakharov, Leonid Keldysh, Alexander Kuleshov, Valery Rubakov, Sergei Stishov, Viktor Vasilyev, Nikolai Kardashev, Alexei Starobinsky, Robert Suris and Alexander Chaplik. It was also signed by 18 corresponding members of the Russian Academy of Sciences, who are members of the Club.

The authors said that the foundation's activities were fully open and generally known, and "have nothing to do with defending the interests of foreign states." It is being financed from Zimin's private resources, even though they arrive from foreign bank accounts, it says.

 #6
Interfax
May 25, 2015
Russia agrees to remove some NGOs from its "foreign agents" register

Three nongovernmental organizations (NGOs) have become the first to be taken off the Russian government's register of "foreign agents" after changes to the law made their removal possible, Interfax news agency reported on 25 May.

In autumn 2014 an NGO in St Petersburg complained that it could not get itself off the register because there was no procedure to do so, the agency explained. This led the Russian human rights ombudsman, Ella Pamfilova, to raise the issue with President Putin. He agreed that something needed doing and the law was amended in March this year.

The register of foreign agents was amended on 22 May to remove the Centre for Social Policy and Gender Studies in Samara, the Birobidzhan branch of the Municipal Academy national organization, and the League of Female Voters in St Petersburg. This is because they have all ceased to exist, Interfax said.

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 #7
The Unz Review
www.unz.com
May 25, 2015
Russia Still Doesn't Have An AIDS Apocalypse
BY ANATOLY KARLIN
[Charts here http://www.unz.com/akarlin/russia-still-no-aids-apocalypse/?utm_source=twitterfeed&utm_medium=facebook]

The Guardian writes:

"Vadim Pokrovsky, head of the federal Aids centre in Moscow, predicted this month that at least two million Russians are likely to be officially registered as HIV-positive within five years, and a total of three million will have the virus."

All pretty worrying, except when we stop to consider that he also said the following - in 2002:

"We're talking about one-to-two million infected now, and in 2005, we could be talking about five-million being infected, and these are realistic, even conservative figures."

In reality, as of 2015, around 0.6% of the Russian population is officially registered as HIV positive. This is probably fairly comprehensive, since around 20-25 million people (one sixth of the population) are tested for it every year; though it should be noted that the unofficial figure is estimated to be around 50-100% higher. Even so, while that's pretty bad by industrialized country standards, of course - about 3-10x higher per capita than in West European countries, twice higher than in the US, and about the same as in Ukraine and Estonia - but is nowhere close to the cataclysmic levels you see in Sub-Saharan Africa. The alarmist articles that you see and have been seeing in the press since about 2000 about millions and even tens of millions of Russians succumbing to AIDS in the next X years are fantastic in the literal sense of the word.

The reality is that in Russia, as in the rest of the ex-Soviet world, AIDS is primarily driven by injecting drug users (IDUs). This is unlike in Sub-Saharan Africa (SSA), where transmission is primarily sexual, whose particular virulence there is probably due to its specific environment (cultural acceptance of soft polygamy, widespread malnourishment/compromised immune systems, and states too fiscally weak to support mass antiretroviral therapy). Hence the complete failure of models that relied on applying SSA HIV dynamics to Russia at predicting the course of the epidemic there. The graph below is from a 2006 report (pp.56) that collated all of the most high profile projections. The most pessimistic projection, that by Ruhl et al., featured Pokrovsky as a coauthor, incidentally, while the other highly pessimistic estimate came from Nicholas Eberstadt, an AEI demographer who has always been extremely bearish on Russia's demographic prospects.

I copied down the most important graphs from that report in this old post. In short, more realistic modeling that treats IDUs as the main driver and doesn't foresee any major deviations from current sexual and drug usage preferences from today's norms sees a rapid rise in infection rates throughout the 2010s, peaking around 2020, but never reaching much more than 1% of the population even at its peak, followed by a steady decline reaching an asymptote at around 0.5% of the population (note that this assumes no decline of Russia's huge problems with injecting drug usage which is likely very pessimistic).

This process has "momentum," on account of the relatively huge numbers of IDUs in Russia, and is very difficult to stop. But the chances it will spread to the general population to any degree - i.e., to people who don't have first-order sexual relations with IDUs - is all but zero. And this is indeed what we are seeing happen.

The actual trends are closely tracking another model, the TFRI, as well as of an original model to the cited report (pp.78):

This is not to say that Russia's "conservative" approach to fighting AIDS is without fault, nor that people like Pokrovsky have no right to make a din over it in the media (as he has in fact been doing for the past two decades). It is virtually certain that avoiding the government funding needle exchanges causes more harm than good, though its worth noting that syringes can be freely bought at any well-stocked pharmacy (though, of course, heroin addicts are not known for their high future time orientations). Methadone treatment is a much more questionable case, there being a legitimate debate over its efficacy; it is more addictive even than heroin. Treatment isn't a problem, even if prevention is. There is near universal access to anti-retrorival therapy amongst registered HIV positive people.

The Orthodox Church's "malign" influence on this issue is typically exaggerated; for instance, it does not oppose condom use. It is not at all clear to me to what extent progressive attacks on the "conservative" approach are merited. One of the root problems is that so many people feel so despondent or reckless that they are getting addicted to hard drugs. Religion and/or sports - the current emphasis - can indeed in many cases offer an alternative. Society has indeed become less favorably disposed to homosexuality in the past decade, in large part due to state policy. One can say this promotes "ignorance." But it's also a fact that HIV spreads much more easily via anal sex, and if it becomes less accepted as a result of changes in social mores, well, that statistically means fewer infections. Both at the national level (in Russia, as well as in Ukraine) and at the international level (they might take the anti-progressiveness a notch to far but the prevalence of AIDS is near zero in the Arab world) it is pretty clear that all else equal - i.e. adjusting for human capital, etc. - it is the more conservative/religious regions that have fewer problems with AIDS in the first place.

And I'm sure it's possible to come up with plenty of counter-arguments to the above. But that's not the main point, which is that at the end of the day, what we are ultimately dealing with here is not some kind of runaway pandemic that will result in SSA-level infections rates "in a few years" but a very much epidemic that will burn fiercely in affected communities (primarily IDUs and their close sexual partners) but remains contained in the IDU-sphere and peaks around 2020 and then declines. Likewise the real debate is not about how long it is before Russia collapses from AIDS (and brain drain, and Eurabia, and the Yellow Peril, and...) but whether the epidemic peaks at, say, 1% of the population, or 1.5% of the population, and whether it happens in 2018 or 2022. It's a lot less fun than constructing apocalyptic scenarios, sure, but it's also more realistic.

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 #8
Russian Internet community against over-regulation, hails government help for Runet
By Lyudmila Alexandrova

MOSCOW, May 25. /TASS/. A long-term program for the development of Runet - a road map for the national segment of the world web to follow - will be useful, but a great deal will depend on how it will be translated into reality, Russian experts say. The government should avoid excessive bureaucracy and any other ill-considered moves that might spoil its relations with the Internet community, they say.

Russian President Vladimir Putin has instructed the presidential staff and the Communications Ministry to draft a long-term plan for developing the Runet and the related branches of the economy by October 1. This work is to be conducted in conjunction with the Internet Initiatives Development Fund and the Internet Development Institute.

The government is expected to propose technological solutions for the protection of Russian copyright holders and prevent the illegal circulation of film copies. Also, it must draft measures to support those businessmen who develop Runet and promote Russian technological projects in the Internet sphere to foreign markets.

The Transport Ministry is expected to introduce electronic systems selling inter-city bus services tickets online; the tourist agency Rosturizm must give thought to how to use the Internet to promote internal tourism, etc. And the Health Ministry is to evaluate the introduction of standards for providing medical advice to patients online.

The director of the IT Research and Expertise at the Russian presidential academy RANEPA, Mikhail Braude-Zolotaryov, believes that it is essential to determine which way the domestic segment of the world web should develop.

"It is important to ensure no one should impair Runet's development or issue unequivocal instructions as to where it should be moving," Braude-Zolotaryov is quoted by the government-published Rossiiskaya Gazeta as saying. "Any groundless control hinders development. For instance, censorship in this or that form or struggle against pirate copies, even these which have not been found piratic by a court of law."

"This document surely has more pros than cons, although certain weaknesses may crop up," the deputy head of the public relations and media policies chair at the RANEPA academy, Lyudmila Vasilenko, told TASS. She is certain that to avoid these the government should coordinate its activities with the public at large and private businesses.

"If the government overdoes it with bureaucratic formalities and imposes excessively strict rules, the Internet community will not accept this," he warned.
The Internet community's participation in drafting the program should help prevent this and preserve the opportunity of using the web to discuss issues some officials may not like at all, Vasilenko said.

"The golden mean is to be identified. Nobody should be allowed to exert pressures on others," she said.

The chief analyst of Russia's Association of Electronic Communications, Karen Kazarian, has told TASS that just a couple of years ago the RAEC was asked to launch such a project.

"The way we see it, it is very useful to have such a road map. There are quite a few examples of successful projects around the world. The fundamental question is how to guarantee this plan should be implemented by bodies of state power," he said.

Kazarian still sees certain risks the government may try to establish excessive control of the Internet. For this reason the road map plan is so crucial to ensuring the authorities should realize at last that incentives are far more effective than bans, he said.

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 #9
President Putin calls for business to take advantage of sanctions and ruble weakening

MOSCOW, May 26. /TASS/. The weakening of the ruble and mutually imposed sanctions will have a time-constrained effect so exporters should take advantage of it before it's too late, Russian President Vladimir Putin said at the Delovaya Rossiya business forum Tuesday.

"The current environment is not simple if not to say complicated," President said. "At the same time changes in the ruble exchange rate improves the price competitiveness of the local production, opens up new opportunities to take control over new niches both at the national and at the international level," he said, adding that "those opportunities may be time-constrained, and they should be taken advantage of properly and as quickly as possible in order to boost non-resource export and tap the local market."

Putin also called for the local business to tap the domestic market faster. "What should we be doing when our partners in some countries see the light? We will have to react somehow otherwise we will find ourselves in rather tough conditions within the WTO," he said.

Currently, the Government and the Ministry of Industry and Trade and the Agriculture Ministry in particular, are setting necessary development programs, Putin said, adding though that the efficiency of such measures will depend on the Russian business itself in the first place.

"I would ask the Delovaya Rossiya /public association/ and other organizations to submit particular proposals on what business needs to actively join the process of import substitution and seriously boost export potential of non-resource companies," President said.

Import substitution is an opportunity to give impetus to further development in a number of areas, he added. "Import replacement is not a panacea, we are not going to have a total import replacement - that's stupid and pointless," President said.

It is necessary to replace import "where it is completely clear that we can have our own competence either revived or recreated," Putin said. "This is what we have to strive towards and use the current situation, related to the foreign currency exchange difference and limitations that for some reason our partners have imposed," he said.

President cited the economic growth in China as an example, saying that the country "has taken advantages of its natural competitive strengths and is still doing it - meaning cheap workforce /almost 20 mln people join the labor market annually/ and inflow of investment, foreign in the first place, and technologies, which is the second /factor/ that ensured the reforms' success."

Putin also spoke against creating administrative barriers for western companies, in particular from banning foreign companies from Russian government procurement.

"To totally exclude foreigners, taking advantage of the situation that our partners and competitors have put into our hands? Here we too have to be careful," President said. "Maybe we could do it, but do we need to totally deprive the domestic market of competition? Probably not," he added.

He went on to explain that "based on prices the domestic producer already has an advantage now." "Do we need to totally exclude foreigners? It is such a dangerous thing," he said.

The President does not consider it necessary to exclude state-owned companies from this system either. "We need to ensure that for the sake of small and medium business state-owned companies do not dominate the field," he said.

At the same time, Putin stressed that quality is a very important aspect for the consumer. He gave the American car maker Ford as an example. "He developed in his own time a mass production of cars, but not only due to the perfected assembly-line production, but also due to combination of the price of goods and the quality of the product, and it went into the masses. That is the golden rule for business and we shouldn't forget it," President Putin said.

The Delovaya Rossiya business forum is convened annually for discussing the most pressing economic problems. The issues on the agenda this time include the opportunities for Russian businesses on overseas markets, a new industrial policy, the philosophy of the common cause of business and government, and the problem of human resources in entrepreneurship.

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 #10
Forbes.com
May 25, 2015
Russia's International Reserves Have Stopped Declining (For Now)
By Mark Adomanis
[Chart here http://www.forbes.com/sites/markadomanis/2015/05/25/russias-international-reserves-have-stopped-declining-for-now/]

I've written before that Russia's economy at the moment is such a contradictory and confusing mixture of good and bad data that people can (and often do!) project virtually any narrative onto it.

Back in April I looked at the international reserves and how, despite some modestly good news on the output front, they were still decreasing at a worrying clip. During most of April, Russia's reserves continued to tick downward, hitting their lowest level since the spring of 2007. This suggested that the country still had not fully adjusted to the "new normal" of relatively cheap crude oil and a relatively weak ruble.

Then, a few weeks later, it turned out that the output news actually wasn't all that good good after all. After reasonably solid readings in the first quarter, in April industrial production fell off of a cliff. Total output fell by 4.5% with manufacturing accounting for virtually all of the decline (commodity production was essentially unchanged, and output from utilities actually grew). That was a nasty and unexpected jolt to an economy that looked as if it might have been on track to emerge from recession before the end of 2015.

Well in further confirmation of Russia's recent trajectory of one step forward one step back recent data from the Russian Central Bank show that the country's international reserves have finally stopped decreasing. Since bottoming out in mid April at $350.5 billion, Russia's reserves have slowly increased every week since, hitting $362.3 billion on the week ended May 15th.

The fact that Russia's reserves have started to slowly recover does not undo the bad news from April, but it hopefully attests to the complexity of the current situation and the fact that there is no clear, easy narrative to explain what's happening. To put things a bit simplistically, the April industrial production data showed an economy that was in need of some kind of jolt but the data from the Central Bank show that Russia is in a (slightly!) better position to do so.

That, of course, could change. There was a period of time in November, December, and January in which virtually all of the data coming out of Russia was uniformly terrible. Output, international reserves, inflation, the ruble: everything was heading (quickly!) in the wrong direction. It was hard to find much of a silver lining.

As of now that's simply not the case. Output is on a downward trajectory but inflation is also moderating. Unemployment is going up, but, at the same time, Russia's international reserves are rebounding. The ruble has recouped some, but by no means all, of its losses against the dollar. This doesn't mean that Russia's economy is some kind of hegemon in waiting, as I hope the above has made clear it is in quite a fragile situation at the moment, but it does suggest that what is happening is not a simple tale of recession and imminent collapse.

It would be great if there was a simple narrative into which one could fit Russia's current economic situation. But there isn't. Good, bad, ugly, pretty, positive, negative: it's all there. The only thing we can do is wait and see what further data suggest about the country's overall trajectory.

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 #11
Washington Times
May 25, 2015
Russia recovery talk premature as sanctions threaten to cripple economy
By Guy Taylor

Russian government officials - and even some outside banking institutions - are sounding increasingly confident that the Russian economy has weathered the storm brought on by U.S. and European sanctions, but some private analysts say the worst is yet to come.

Despite a small rebound in world oil prices, "Russia is not out of the woods yet because the sanctions are going to continue to have an impact," said Steven Pifer, a senior fellow at the Brookings Institution, a former State Department official who served in Moscow and a former U.S. ambassador to Ukraine.

While the ruble has risen in value during recent weeks and the World Bank and International Monetary Fund have pointed to signs of recovery for Moscow, Mr. Pifer and others say big Russian companies are mired in the throes of a debt crisis that threatens to drain the government of precious currency reserves.

"The ruble has certainly stabilized, and some of the numbers are doing a little better," Mr. Pifer said, but the bottom line remains that a significant number of major Russian firms are scrambling under sanctions that effectively prevent them from refinancing massive debts with Western lenders.

Ariel Cohen, a senior fellow at the Atlantic Council who also heads the Center for Energy, National Resources and Geopolitics at the Institute for the Analysis of Global Security in Washington, goes further.

"The Russian economy is not improving," said Mr. Cohen. "State-owned banks have no access to credit in the West, so the government needs to scramble to recapitalize companies that have debt right now.

"The sanctions have worked," he said. "Certainly, they have not worked enough to cause a full Russian retreat from Ukraine and to rout Mr. Putin externally or even hurt him domestically, but if these sanctions persist, those things may happen by the end of 2016."

The Obama administration and European Union leaders imposed sanctions on dozens of Russian individuals and companies after Moscow's annexation of the Crimean Peninsula in March 2014. The restrictions were subsequently ramped up to target certain government-owned banks and corporations as part of an effort to deter further Russian military support for separatist forces in eastern Ukraine.

Russian President Vladimir Putin has sought to downplay the effects of the sanctions. Appearing on an annual call-in TV show in April, he asserted that the nation managed to survive the economic assault from the West.

Although Obama administration officials dismissed the claim as propaganda, economic forecasting by key Western institutions is fueling debate on the matter.

The ruble plunged to record lows against the dollar at the end of 2014, but JPMorgan Chase & Co. recently ranked the ruble as the best-performing currency among emerging markets so far this year. The IMF revised its outlook for the Russian economy, predicting a less-severe downturn than initially thought this year and a "mild recovery" next year. The World Bank pointed to an uptick in global oil prices and noted that inflation appears to be subsiding in Russia.

The "worst-case scenario" for the Russian economy, in the recent words of first Deputy Prime Minister Igor Shuvalov, "has failed to materialize."

But a U.S. Treasury Department representative told The Washington Times that, despite the rosier forecasts, "the Russian economy is contracting, inflation is well above target and Russian financial market conditions remain poor."

Mr. Pifer offered a similar view, asserting that companies such as Moscow's oil giant Rosneft are desperate for cash but have nowhere to obtain it. By some estimates, Russian companies will need to refinance some $100 billion worth of foreign debt over the coming year in order to maintain operations.

"The question," Mr. Pifer said, "is, where can the Russians get the money?

"There was initially hope in Russia that China would open up its banks. But Chinese banks are really conservative and not oriented in a way to do large lending to Russian companies, so these companies may have to go to the Russian government for refinancing, and that would force the government to draw down reserves."

By most estimates, Moscow had roughly $510 billion worth of hard currency reserves heading into this year, but that is unlikely to be enough to bail out all of the Russian companies in need.

Leery of lending

Although U.S. and EU sanctions have targeted only a select group of firms - Rosneft among them - Mr. Pifer said the stigma from the sanctions has made Western lenders leery of working with a wide range of firms even if they weren't targeted by the restrictions.

At the same time, the Russian government reportedly has already burned through some $120 billion of its reserves as part of efforts to shore up the value of the ruble, which plummeted last year.

There is also ambiguity surrounding the value of the reserves the government can dole out.

Since late 2014, Russian companies have been lining up in pursuit of aid from the government's oil-revenue-financed National Welfare Fund.

The fund, reportedly worth about $83 billion, was supposed to serve as a backstop to Russia's pension system, but that did not deter Rosneft managers from calling on the Putin government to tap some $49 billion from it to help counter the Western sanctions.

If Rosneft is granted the request, there won't be much left to bail out anyone else, according to a report by The Moscow Times, which noted that government rules prevent the welfare fund from investing more than 60 percent of its reserves.

In essence, other struggling companies will have to find different pots of government money.

Of course, more money could become available if oil prices continue to rise. Russia is second only to Saudi Arabia as the world's top oil exporting country.

Mr. Cohen said the initial impact of Western sanctions on Russia last year was augmented significantly by a plummet in global oil prices. Oil went from more than $110 a barrel last June to a low of less than $50 a barrel at the start of this year.

Oil prices have crept back to $60 a barrel in recent months.

"It all depends on the oil price," said Mr. Cohen. "Russian production costs are high. They need oil north of $65 to $70 in order to have growth and not be afraid of emptying their currency reserves.

"If the oil price sticks around $50, they may run out of reserves at the end of 2015 and there will be dire circumstances," he said.

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 #12
Forbes.com/Forbes.ru
May 26, 2015
Russia's Brain Drain: Why Economists Are Leaving
By Andrei Kolesnikov
Mr. Kolesnikov is the chair of the Russian Domestic Politics and Political Institutions Program at the Carnegie Moscow Center

This article was originally published on Forbes Russia.

Foreign non-government organizations have become "undesirable" in Russia, along with Russian experts and specialists.

Tickets for Russia's modern-day "philosophers' ship" - a collective name for the exodus of educated Russians following the Bolshevik revolution - have been in demand ever since, as it continues to make its rounds of certain Western countries, regularly returning to Russia's shores to pick up new loads of precious cargo, so badly needed at home, yet essentially marked "undesirable".

In the latest wave, one of the first victims was Sergei Guriev - former provost of the New Economic School in Moscow and member of the Sberbank Supervisory Board (Sberbank is Russia's top three banks).

He was slammed with a criminal lawsuit, put through a torturous obstacle course at customs every time he tried to cross the border, and was made to understand in various other invasive ways that he ought to leave the country. He now teaches economics at the Paris Institute of Political Science.

Next, Sergey Aleksashenko - Senior Researcher at Moscow's Higher School of Economics, who had been vocally critical of the Kremlin's economic and international policies - began making his presence in Moscow scarce.

Now, the prominent liberal economist and commentator, Konstantin Sonin, has left Russia, after being offered a professorship at the University of Chicago.

Last week, the Russian Parliament increased pressure on foreign and international non-governmental organizations declared "undesirable" by adopting a new law that bars NGOs thought to be posing a threat to Russian constitutional order, defense or security.  The Office of the Russian Prosecutor General was asked to investigate Amnesty International, Carnegie Foundation, Human Rights Watch and Memorial Center to see if they might be declared "undesirable".

What do Russian economists with international reputations, Russian non-profits (now termed "foreign agents"), and foreign non-profits (soon to be dubbed "undesirable"), have in common? All of them, along with certain media outlets, have found themselves deemed undesirable in the Russian State.

Not undesirable for Russia, which actually needs them very badly, but undesirable for the regime currently ruling Russia.

Economists are to be let go, rather than fighting to keep them at home; "foreign agents" are not to be let in at all; and "undesirables" are to be booted out and shut down.

This is tantamount to harming the Russian economy, putting a stop to contemporary education, and turning a blind eye to practical professional ideas and opinions.

In recent years, the Russian Investigating Committee has investigated and harassed the panel of economic experts conducting an independent analysis of Mikhail Khodorkovsky's YuKOS's case (whose legal status remains unclear). Judging by that "experts case", the only use the government sees in high-class economic professionals is as witnesses for the state, who are to prove the criminal nature of the activities of oligarchs that hold political views that oppose the Kremlin. Nothing else.

Russian economists don't have much to do these days. The government and the administration are now working under a new mythology of "replacing imports with domestic goods and services", so the state doesn't need their expertise. Occasionally, they are invited to ornament the expert committees of large state corporations. Any initiative high professionals try to show goes unacknowledged.

But economists aren't the only ones who have borne the brunt of this new attitude from the State. Take, for example, the recent story with the Russian Academy's Institute of Scientific Information on Social Sciences in Moscow. First, the State refused to allocate funds to restore the Institute's library and other facilities. Which is understandable-who needs a library? Then, when a fire devastated the library, the blame went to the director of the institute, Yuri Pivovarov. He is a world-class expert in German studies, and could easily have left, rather than selflessly bearing the burden of running the unique library with practically no government financing. Now, he has been accused of criminal negligence.

When asked to comment on the immigration of Konstantin Sonin, the President's Press Secretary, Dmitriy Peskov said, "the Kremlin is sorry when well-known economists go to work abroad, just as the Kremlin is happy when well-known economists come to Russia to work-be they Russian, or foreign. This is a two-way street, so there's nothing special about this particular case."

Peskov's statement is not exactly true: the fact is, those leaving are the most prominent and prospective specialists, while the incoming contingent has shrunk to a measly trickle, which owes its existence only to the efforts of a handful of leading universities of social and economic sciences. Much like the flight of capital from Russia, the brain drain is significant and symptomatic. Just as the country has become unattractive to investors, it has also become unattractive to economics experts.

It's very telling that many experts who have spent their entire lives working with Russia have recently stopped coming here, even on short-term business trips. Paradoxically, the cause of this is very personal: it stems from a love of Russia, and a deep disappointment-a profound sense of enormous effort wasted.

In this climate, "undesirable" organizations will cease collaborating with Russia on their own, and no draconian or excessive laws will be required to shut them down. Meanwhile, the new law on "undesirables" mentions "foreign non-government organizations", and explains that this refers not only to non-profits but also to commercial companies from abroad. Thus, the legislators wall off not only the political and expert fields in Russia, but also the economic field.

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 #13
Moscow Times
May 26, 2015
Does Moscow Still Need Expats?
By Luc Jones
Luc Jones is the commercial director of Antal Russia, a British executive recruitment consultancy present in Russia since 1994.

The past year has seen a considerable exodus of expatriate, white-collar workers from Russia, and in most cases this has been involuntary. The majority cite Russia's flat rate income tax of 13 percent, coupled with low competition as the two main reasons why they can generally earn considerably more here than they could command back home. And that before you even begin to add in the "fun factor" that Moscow can offer.

Russians are often surprised that foreigners would voluntarily choose to come to Russia to work when the perception is that life is so much more comfortable in Europe and the United States.

One easy way to answer this is that in the West, everything works but nothing happens, whereas in Russia it is the exact opposite. This continues to appeal to many, despite the economic downturn.

Expats in Russia fall into two distinct categories which for clarity's sake can be referred to as Corporate Expats (Corp-Pats) and Russified Expats (Russ-Pats).

Typically a Corp-Pat works for a blue-chip multinational organization and has been sent to Russia in a senior role for a fixed-term period with specific objectives in mind, yet usually arrives without any previous Russia experience, let alone language skills.

Russ-Pats are more of a mixed bag, but are likely to have personal ties to Russia, speak the language, with some even running their own businesses. The majority have been here since the early 1990s, just after the fall of the Soviet Union and plan to remain in Russia for the long term.

Some Russ-Pats have acquired sufficient language skills to at least be able to compete with locals.

The market has localized considerably in the past decade and Corp-Pats are usually only imported when there is a particular skills shortage, and a local cannot be found.

One typical example is when a company is setting up a line of business that is new to Russia - the arriving Corp-Pat has already successfully helped to launch this in another market and has arrived in Russia to do it again.

Any foreigner wanting to work in Russia needs to be able to prove their ability to do something that the majority of qualified, experienced Russians can't do - which as the market matures, is becoming less common - or at the very least be able to do it better.

Re-Pats (Russians who have returned home after years of living and working abroad) help to bridge this gap, as do the children of emigre Russians who were possibly born abroad but have moved to Russia partly out of a sense of adventure.

In the same way that a German working in Italy or an American currently posted to London is simply viewed as somebody working abroad and is not generally referred to as an "expatriate," this will eventually be the case in Russia.

It is unlikely that foreign employees will ever disappear completely from Russia since often their key role is to instill a Western company's corporate culture into local staff before moving on.

It seems likely that the term "expatriate" will itself begin to disappear as globalization continues to spread, and the "Us versus Them" mentality will fade away.

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 #14
Russia Direct
www.russia-direct.org
May 26, 2015
How Chechnya is driving a wedge between Russia and the West
There is a widening gap between Russian and American values, as showcased in the latest scandal surrounding Chechnya. If this gap is allowed to widen further, it could hamper the resumption of ties.
By Eugene Bai
Eugene Bai, expert in USA, Latin America and international relations, contributor to Politcom.ru, The New Times, World and Politics magazine.

It is commonly thought that the West needs Russia, in particular in the fight against radical Islam. After all, Islamic State has been declared a serious threat to world peace and even to the very existence of Western civilization. But given that Russia has been turning a blind eye to internal developments within Chechnya - including some that appear to violate its own constitution - can Russia still be trusted by the West to make an effective ally?

Chechnya has been a major newsmaker in Russia this past year. Since January, Russian media has reported extensively on a giant rally of hundreds of thousands of Chechens organized by Chechen leader Ramzan Kadyrov against journalists from Paris-based satirical weekly Charlie Hebdo; highlighted the "Chechen trail" in the murder of opposition leader Boris Nemtsov; and reported on the many versions of the standoff between Russia's federal security forces and Kadyrov.

In the words of Radio Liberty commentator Sergei Medvedev, "In the information space Chechnya has eclipsed Ukraine, Donbas and Crimea."

"The wedding of the century"

The most recent Chechen-related sensation was the "wedding of the century" between 57-year-old local police chief Nazhud Guchigov and 17-year-old Luiza Goylabieva. Russian media and social networks dubbed it "the most scandalous marriage of the century." What happened exactly? Why was this family celebration not just outrageous, but a political event?

The furor arose not because the groom was three times older than his bride, but because he was already officially married to a woman roughly his own age - and polygamy in Russia is illegal.

Moreover, given that his new bride was a minor, the Chechen law enforcement officer could have been accused of pedophilia, especially if Russian newspaper Novaya Gazeta is correct in its assertions. The newspaper, following a special investigation, asserted that Luiza did not want to marry him, but was forced into it by Guchigov, who put pressure on the family and even posted sentries in the region so that her relatives could not take her away.

But what, you may ask, has this got to do with politics? The fact is that the marriage was sanctioned - and personally attended - by Kadyrov. However, he did not give his consent immediately. To begin with, Russian human rights activists complained to Russian President Vladimir Putin that polygamy and underage marriage were against Russian law.

Kadyrov took a timeout. In recent months he has been in Moscow's bad books, and therefore decided not to further antagonize his patron, Putin. But time went by and the wedding took place. It is quite obvious that Moscow gave the Chechen leader carte blanche, as in previous confrontations with his involvement.

First, the Kremlin made it clear that it still trusts Kadyrov and considers him the rightful ruler of Chechnya, able to resolve all local issues at his sole discretion. And second, Moscow essentially granted Chechnya the right to live according to its own Islamic norms, even if they violate federal law. At the same time the Kremlin pointedly distanced itself from all discussion of the Chechen incident.

"Weddings are not our business," retorted Putin's press secretary, Dmitry Peskov, in response to a journalist's request for comment.

Russia is becoming Chechnya, not the other way around

"Following the Khasavyurt Accord and the second war, Chechnya is not becoming Russia, but Russia is becoming Chechnya," says human rights activist and member of the Presidential Human Rights Council Svetlana Gannushkina.

Renowned political analyst of the Moscow Carnegie Center Alexei Malashenko goes even further in his findings.

"The recent wedding in Chechnya confirms the possibility and even the inevitability of an 'Islamic space' within the Russian Federation," he says. "In this context the question arises as to the purpose of separatism and the struggle for a caliphate and emirate if an Islamic way of life can be had inside Russia, one that happens to violate the constitution. We are seeing the creation of a de facto alternative legal space in which the norms of Islam can be established inside the Russian Federation in contravention of the constitution."

According to Malashenko, it "could give Russian Islamists pause for thought."

His conclusion is of no small importance, since Russia has declared that it is willing to cooperate with the United States and Europe in combating Islamic State and other radical Islamic groups that have stated their intention to fight the "infidels" on all continents.

How social and cultural values separate the US and Russia

But there are other reasons why such cooperation is highly problematic, stemming from the fundamentally different models of state development and disparities in the historical, cultural, legal and religious environments of Russia and the United States.

Take the way both nations approach an issue such as polygamy, as highlighted above in the Chechen example.

Polygamy is prohibited in the United States, as it is in Russia, although formally it is practiced in a number of states, particularly Utah. But there, matters of polygamy are not resolved at the state level, but in court.

As the result of one high-profile case that lasted three years, from 2011-2014, polygamy - which hitherto carried a prison sentence of up to five years - was struck off the list of state criminal offenses.

In Russia, it is a different story. Complex legal issues of this kind are resolved arbitrarily - by means of a presidential nod of the head or whisper in the ear, or simply by non-intervention in a particular conflict, which Kremlin aides interpret and convey to the interested parties.

This Russian tradition has seen a healthy revival of late. The discussion of ethical and legal issues has been joined by the spiritual spin-doctors of the Russian Orthodox Church, society's binding force in the eyes of many.

Latching on to the signals from the Kremlin, the Church delivers its own, often paradoxical verdicts. For instance, the head of the Synodical Department for Church and Society Relations, Archpriest Vsevolod Chaplin, views the debate surrounding the Chechen wedding as an information attack by opponents of the traditional family.

"It is curious that those who criticize polygamy in the North Caucasus are often in favor of same-sex marriage," he stated.

"The Russian Orthodox Church is opposed to same-sex marriage, but shies away from polygamy," writes prominent journalist Yulia Latynina on the matter.
The chorus of voices that sounded against the critics of the Chechen wedding included State Duma MPs. Elena Mizulina, head of the Duma Committee on Family, Women and Children Affairs, opposed the criminalization of polygamy.

True to form, in almost the same breath Mizulina broached another topic, which is on the agenda of many countries, including the United States, but is not a priority for Russia. The committee head proposed banning abortions in private clinics and excluding them from the system of compulsory health insurance.
"The problem of abortion exists, and involves aspects of a purely medical, moral and economic nature," says writer Lyudmila Ulitskaya. "But the State Duma's answer to everything is always prohibition."

The problem of abortion has been a part of every U.S. presidential campaign for a number of years, and often marks the dividing line between supporters of liberal and conservative values. However, no one in the United States is seeking a legislative ban, which would undoubtedly provoke opposition among the largest segment of society.

How well does the United States really understand Russia?

"Relations with the United States are not in poor shape because America does not understand Russia, but because, on the contrary, for the first time in 15 years it seems to understand Russia well," wrote former Russian Deputy Foreign Minister Georgy Kunadze. The senior diplomat says that, first and foremost, the United States has become more aware of the Kremlin's foreign policy objectives, in particular in respect of Ukraine. However, here relations have worsened rather than improved.

The gulf in understanding between Russia and America has perhaps grown wider in recent years, and pertains not only to foreign and domestic policy, but also the sphere of ethics and morality.

As the United States moves forward, erasing societal conflicts and outdated stereotypes, Russian society is failing to take the same types of progressive steps. In these circumstances, hopes for a new "reset" of relations, whatever the pragmatic interests of the opposing sides, are fading.

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 #15
Russia Direct
www.russia-direct.org
May 25, 2015
Law on 'undesirable organizations', prisoners in Ukraine and ISIS threat
Media Roundup: Russian media focused on the new law on undesirable foreign NGOs, the fate of Russian military prisoners in Ukraine and Islamic State's claims that it obtained nuclear weapons.
By Anastasia Borik

Last week, the Russian media focused on a highly controversial law that makes it harder for foreign NGOs to operate in Russia. In addition, the media pondered the fate of Russian military prisoners in Ukraine and analyzed the implications of recent political activities in Ukraine that appear to close the door on any Russian-Ukrainian cooperation in the near future.

Russia's new Law on Undesirable Organizations

Last week Russian President Vladimir Putin signed the so-called Law on Undesirable Organizations, which regulates the activities of foreign organizations in Russia.

Human rights activists believe that this law will put an end not only to the active work of foreign organizations in Russia but also to freedom of speech in the country. The law has generated the greatest interest among opposition and business papers.

Business paper Vedomosti published an opinion from political scientist Ekaterina Shulmann, who believes that, in reality, the law is not aimed at foreign organizations. Rather, she says, the law is directed against Russian citizens. The Russian government is operating on the logic of "defeat one's own so that they fear others."

Independent Slon expressed its outrage concerning the law, noting that it is aimed against the Russian opposition and also voluntarism (for example, closing "undesirable" organizations without courts or investigation). Slon experts emphasize the weak legal elaboration of the law, which provides almost unlimited room for wrongful and malicious use.

Opposition TV channel Dozhd reports the response from European and American political circles about the passage of the law, in particular, discussion within the U.S.

Russian military prisoners in Ukraine

Some time ago, Ukraine officially announced that the State Security Service of Ukraine were holding two Russian citizens who had been allegedly fighting on the side of pro-Russian fighters in Donbas.

The Russians are being shown as conclusive evidence of Russia's involvement in the conflict in Ukraine. In the meanwhile, opposition and independent media is concerned about the fate of Russian citizens.

Opposition Novaya Gazeta published a large amount of material as a Novaya Gazeta reporter attempted to get help for the prisoners at the Russian embassy and then at the Russian consulate in Kiev, but his attempts unsuccessful.

The Echo of Moscow radio station website published information on the Russians' interrogation. The soldiers talked about belonging to the Russian armed forces and also how they ended up in the war. Kiev is calling this evidence of Russian forces in Ukraine. Furthermore, Echo of Moscow published an interview with the wife of one of the prisoners. She believes that her husband has been tortured and forced to confess on camera.

Opposition Dozhd TV channel also discussed the fate of the prisoners. The TV channel observed that Russian representatives in Kiev had not provided any assistance to the prisoners of war. Furthermore, Dozhd contradicts the announcements made by the Russian Ministry of Defense that the prisoners of war left the Russian army a long time ago.

Ukraine rejects military cooperation with Russia

Last week the Ukrainian parliament denounced the 1993 treaty between Ukraine and Russia on military cooperation. Among other things, the denunciation will affect Russian Federation peacekeeping contingents in Transdniester, whose transit routes go through Ukrainian territory.

The populist Moskovsky Komsomolets points out that such actions by Ukraine could undermine the country's authority as a participant in the peace process regulating the Transdniester conflict.

Pro-government Rossiyskaya Gazeta states that the "Ukrainian parliament is churning out anti-Russian laws" and that this decision is drawing a line through many years of military and technical cooperation between the two countries.

Business paper Kommersant publishes the opinion of various military specialists, noting that essentially the same denunciation has been in place since spring 2014.

ISIS and nuclear weapons

Information leaked to the media last week that  the militants of the Isamic State of Iraq and the Greater Syria (ISIS) might gain access to nuclear weapons resulted in a great deal of interest in the Russian media.

Business paper Kommersant named possible channels for acquiring weapons through Pakistan, however, it observes that rumors of possible acquisition of technology may simply be an attempt by ISIS to wreak havoc and terrify people, after all, so far there is no confirmation of this.

Echo of Moscow radio station's website cites Elena Suponina, an expert from the Institute for Strategic Studies, stating that ISIS's announcement is a bluff and that terrorists cannot acquire nuclear weapons.

Populist Moskovsky Komsomolets cites Russian and foreign specialists who observe that ISIS would have difficulty getting hold of devices for delivering nuclear weapons and, in the event of them acquiring nuclear weapons, one should expect "dirty bombs" using normal explosive detonations with nuclear material.

ISIS and Palmyra

ISIS became one of the main newsmakers this week, not only due to the bold announcements about possibly acquiring nuclear weapons, but also because the Islamic State has captured the city of Palmyra in Syria by force.

Palmyra is a city in Syria between Damascus and the Euphrates River and is a UNESCO cultural heritage site. It has some of the best preserved examples of ancient Roman architecture. ISIS militants, sadly famous for their barbaric treatment of non-Islamic heritage, captured Palmyra last week and threatened to destroy the city to its very foundations.

Business newspaper Kommersant published a long, analytical article about the state of the Syrian regime, examining several possibilities for the development of events, including the deliberate relinquishment by Syrian President Bashar al-Assad of territory occupied by the Islamists and the potential for turning Syria into a tiny state centered around Damascus. One way or another, the capture of Palmyra, observe Kommersant experts, is the most serious blow to government forces during the four-year war.

Pro-government Channel One reported that Syrian forces, nonetheless managed to evacuate some of the treasures from Palmyra; however, the majority of the treasures comprise the ruins of the ancient city and they cannot be transported. Channel One expects that these architectural monuments will be barbarically destroyed, citing militant behavior in Iraq earlier this year.

Russia takes second place at Eurovision

Russia has always had a reverent attitude to the European song competition, and the current Eurovision competition in Vienna is no exception. Practically all Russian media reported on Russia's Polina Gagarina taking second place, while simultaneously discussing the political aspects of Europe's main musical competition.

Moskovsky Komsomolets believes that it is good news that Gagarina took second place, after all the "insidious" Europeans might have been able to arrange things so that, in the midst of a crisis, Russia would have to hold Eurovision at its own expense next year.

Official Rossiyskaya Gazeta believes that politics always affect the Eurovision results, however, this time European viewers remained distant from politics "voting with their hearts," feeling in its entirety the wonderful message Gagarina gave the audience with her song "A Million Voices."

Business paper Vedomosti observed, commenting on Gagarina's second place finish that this year, in contrast to last year, competitors focused not on shocking appearance or complicated dance numbers, but on the vocal components and ideas making up the song.

Selected quotes of the week

Irina Bokova, UNESCO head, on Palmyra: "Any destruction in Palmyra will not simply be considered a war crime. It will be a colossal loss to humanity. Unfortunately, over the past two years we have already witnessed destruction in the city. Palmyra has become a military camp."

Official statement from the Russian Ministry of Foreign Affairs on Palmyra: "As regards to Palmyra, there is an increasingly serious concern for the fate of objects in the city which are of world cultural and historical importance, and are justifiable items of pride for Syrians. Their destruction would be seen as an unforgivable act of vandalism, a violation of human values and an insult to civilization."

Human rights activist Lyudmila Alexeyeva on the Law on Undesirable Organizations: "I am certain that this law is aimed against organizations which are not included in the Law on Foreign Agents. I hope that this will not affect the Red Cross - it is a very quiet organization. But the obligations of Human Rights Watch or Amnesty International include monitoring human rights and freedoms, they often produce critical reports and many do not like this."

Captured Russian soldier Evgeny Erofeev on how he ended up in Donbas: "I don't even know how to put it... [it was] a tour of duty. I'm an unimportant person. They instructed me, I came."

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 #16
Valdai Discussion Club/Forbes.ru
http://valdaiclub.com
May 25, 2015
Russia-EU Gas Relations: Change of Course
By Grigory Vygon, Vitaly Yermakov, and Maria Belova
Grigory Vygon is Managing director, VYGON Consulting. Vitaly Yermakov is Research Director, VYGON Consulting. Maria Belova is senior analyst, VYGON Consulting.

Moscow and Brussels have switched their gas business from the model of "interpenetration and interdependence" to the model of "pure diversification".

At the conference entitled "Europe and Eurasia: Towards the New Model of Energy Security" organized by the Valdai Discussion Club in April 2015, Energy Minister Alexander Novak and Gazprom Head Alexey Miller presented a new concept of gas cooperation between Russia and European countries.

The innovations in their relations include the need to consider the Asian factor, which will have a great impact on pricing for European consumers, and the renouncement of the policy of mutual shares in the assets of Russia and Europe.

We agree to follow the European playbook, but it is unclear how beneficial it would be for Europeans.

Turkish Turn

EU economies may pay a dear price for the uncompromising position of the European Commission in the construction of the South Stream. The emergence of the Turkish Stream project forces them to invest in new infrastructure needed for imports of Russian gas, a substitute for the Ukrainian transit corridor.

Russia declared the decision to build the Turkish Stream and annul the gas transit deal with Ukraine in 2020 without preliminary consultations with the European Commission, and it doubtlessly took the European functionaries aback. The organization was accustomed to making new game rules, creating barriers for Russian gas in Europe: the EU's third package of energy market legislation, the purpose market model, and, finally, the concept of the European Energy Union with accent on intervention in commercial gas contracts.

The South Stream project, which received vast investments, allowed the EU to keep Russia in a suspended state.

Our country had to constantly concede to many states, the territories of which would be needed for the South Stream. The prospects of the project to gain a special status and a relief from the effects of the third package in reserving the capacity for third parties were still ambiguous. Now, instead of Russian investments in the construction of the South Stream on the territory of EU member-states, European bureaucrats got Turkey as an additional transit state outside the European Union, problems in the construction and expansion of internal infrastructure to supply the Southern and South-Eastern Europe after 2019.

We can say that Russia launched the "mechanism of early warming" by declaring the end of gas transit through Ukraine.

Russia and the EU signed the memorandum on the mechanism of early warning in the energy sector after the gas crisis of 2009 to cope with the emergency situations in the sector, including transit risks, with minimum repercussions. Appealing to the mechanism of early warning, Gazprom may as well declare a force majeure situation in supplies to Ukraine before the expiration of the transit contract.

The Turkish Stream has become the result of a cardinal change in the gas business of Russia and Europe. The business has switched from the model of "interpenetration and interdependence with elements of diversification" to the model of "pure diversification". While the European Union struggles to reduce dependence on Russian gas, Russia is trying to make a full-fledged turn to the East and diversify market outlets. After realization of the Power of Siberia project, Europe will cease to be the only market for Russian network gas, and will lose the priority status if the Altai project succeeds.

We follow European rules and win

Announcing the Turkish Stream gas pipeline project in December 2014, Gazprom declared that it would sell gas on the trading platform on the Turkey-EU border. The goal of Europeans was to create the needed transport infrastructure in the European Union in order to receive the gas volumes. Purchases of Russian gas at a hub instead of a delivery post, the reverse of existing gas pipelines, investments of the European systemic operator into construction of new gas pipelines via supply contracts are all the principles corresponding to the ideology and rules of the third package.

Russia is sort of telling European partners: we sell gas in Turkey, the rest is up to you.

Gazprom's demonstrative compliance with the third energy package in the case of the Turkish Stream can be regarded as reductio ad absurdum, proving the inconsistency of the European regulatory system by demonstrating absurd controversies arising from their application.

Paradoxically, the rules of the third energy package have never been fully applied in the construction of the new gas infrastructure in the European Union. In order to attract investors, the European Commission was forced to make exceptions in the rules when reserving 50% of gas pipeline capacities for third parties. A good example is the Trans-Adriatic Pipeline (TAP) with a capacity of 10 billion cubic meters a year, which will transport Azerbaijani gas to Europe.
 
Formation of an interface for connection of the Turkish Stream to the European gas infrastructure will in fact become an experiment to verify the adequacy and firmness of the new game rules on the European gas market.

What does Russia get from realizing the Turkish Stream? First of all, lower transit and commercial risks, compared to transit through Ukraine, the situation around gas shipments that has become absolutely unacceptable and encumbered by constant negotiations under the duress of the European Commission as the guarantor of negotiability of the Ukrainian side.

Secondly, the Turkish Stream is proactive and competes with gas supplies to Europe within the framework of the Southern Gas Corridor through Turkey (for example, via the Trans-Caspian Pipeline), snatching the potential consumer demand from competitors.

Finally, reaching an agreement with Turkey - a non-member of the European Union - Russia no longer needs to make a deal on the construction of the gas pipeline with the European Commission, note the case of Bulgaria within the framework of the South Stream.

In order for many European consumers to receive Russian gas through Turkey by 2020, they need to create transport infrastructure in the European Union. The third energy package frees Russia from incentives for the construction of gas infrastructure in the EU, albeit enabling Gazprom to take a minority part in gas transport consortiums in association with European companies. Furthermore, Russia will take advantage of the European rules on 50% access to transport capacities of third parties, demanding access to European gas infrastructure, for example, the second TAP branch.

The problem of the compulsory 50% reserve of capacity in the new infrastructure on the territory of the EU can be solved by striking a deal with European companies to move the delivery post of gas from Baumgarten to the Turkey-Greece border. However, it would most likely involve a discount for gas in Baumgarten comparable with the cost of its delivery from the Greek border.

Motivation and risks of EU states

Many countries of the Southern and South-Eastern Europe are highly dependent on Russian gas supplies delivered through Ukraine and want to reduce related transit risks. The European Commission has made it clear that it was absolutely opposed to the Turkish Stream. Is there any logic in the position of the European Union and does anyone in the Old World back it?

The European Union has a set of countries indifferent to Russia's ceasing gas transit through Ukraine, so they can painlessly take a neutral or a hostile position towards the Turkish Stream. For example, Slovakia and the Czech Republic - located on the outlet of gas transit through Ukraine - prefer to pump it further to the West, buying gas from the Nord Stream. France, making a clean sweep of Ukrainian transit via the Nord Stream, and Baltic states, that have never been dependent on it, can naysay construction of any gas pipelines bypassing Ukraine indefinitely.

Reduction of Russian gas transit through Ukraine means less income for Naftogaz, hence deficit of funds to keep the gas transport system running. After that, contracts on gas shipments may be revised to the extent of total cease of supplies from Russia by 2020. As a result, Ukraine will have to buy reverse gas, possibly of Russian origin, from the Turkish Stream or the Nord Stream. It would mean higher prices for Ukraine and, in the end, additional financial aid from the European Union within the framework of the realization of the EU Association Agreement. Russia, on the contrary, will take hold of new arguments to encourage full use of the Nord Stream.

At the best of times (for example, in 2011, when transit through Ukraine amounted to 103 billion cubic meters and imports of Russian gas numbered 45 billion cubic meters), "the tribute for Ukraine's loyalty" from Russian gas transit and discounts was worth about $7.8 billion a year, $3.6 billion of which were the payment for transit, $4.2 billion were the gas discount. However, Russia has managed to halve dependence on transit through Ukraine.

The European Union continues relying on reduction of dependence on Russian gas using alternative sources, notably the LNG. It bids on structural excess of gas which will be accrued after 2016, with the launch of shipments of American and Australian LNG to the world market.

Yet, even at the current prices of $2.8/MBTU at the Henry Hub, American LNG in Europe will cost about $300 per thousand cubic meters of gas, which would not make it competitive in comparison to the pipeline gas from Russia sold according to contracts with oil price indexing and other sources. In any case, the premium Asian market will remain the priority for American LNG. The same concerns the more costly Australian gas, 80% of which has been reserved for APAC.

Scenarios

The transit of Russian gas to Europe through Ukraine in 2014 amounted to 59 billion cubic meters. Completion of the Turkish Stream with a capacity of 63 million cubic meters (about the same volume as the South Stream design) will render the Ukrainian transit pipeline obsolete as scrap metal.

The first two branches of the Turkish Stream with a total capacity of 32 billion cubic meters will enable redirection of the contracted volumes to Turkey, Bulgaria, Greece, Macedonia, Romania and Moldova. They are currently delivered to the said states through Ukraine with minimum modification in the existing transport infrastructure (in particular, it would require reversing the Trans-Balkan Pipeline. The gas volumes at the level in 2013 (which meets the contracted gas volumes) may fill about 85% of the capacity of both lines of the Turkish Stream. With account of the growing demand in Turkey and the perspective supplies to Ukraine using the route, the load may go even further up.

The third and the fourth lines of the Turkish Stream will supply gas to Italy, Hungary, Austria, Serbia and Slovenia. Baumgarten in Austria is the main delivery post for gas to the said countries according to the contracts. Theoretically, the Turkish Stream may deliver gas to Baumgarten from the Greece-Turkey border. Moreover, the third energy package stipulates construction of the additional pipeline capacity for the cause by European system operators on condition that gas contracts will be signed. However, judging by the positions of the European Commission, the 30-35 billion cubic meters of the Turkish Stream will be the main subject of disputes.

The transit contract of Russia and Ukraine will expire in 2019, many Gazprom's contracts to deliver the gas currently transited through Ukraine to European consumers have much longer terms (in particular, the contract with Italy's ENI to deliver 25 billion cubic meters expires only in 2035).

There are obviously three prospects

The first one implies embroidery of European gas infrastructure with European sources of finances within the framework of the European playbook. Countries friendly towards Russia (Italy, Austria, Hungary, Serbia, Slovenia and Croatia) and supporting the Turkish Stream are building infrastructure within the framework of the third energy package. Ukraine will completely lose its transiting role for Russian gas.

The second prospect is the extension of the transit contract in 2019 with a switch of delivery posts with unspecified volumes of contracted Russian gas to the Russia-Ukraine border. In this case, Gazprom's contracting parties in Europe will have to take the transit risks in transporting gas through the territory of Ukraine. Russia will sell gas on the border of Ukraine before the expiration of related contracts. The contracts will not be extended because European consumers will have to either seek alternative sources, most likely costlier suppliers, or change the gas delivery post in the outstanding deals with Gazprom with account of the new routes.

The third prospect stipulates signing of a new Russia-Ukraine transit deal on different conditions, the transit volume in this case would make a steep drop, Russia would hardly go for the "pump or pay" condition.

In fact, some combination of the three approaches would most likely appear by 2020, for example, the realization of two-three lines of the Turkish Stream and partial embroidery of receiving transport capacities for the gas in the EU. Part of Gazprom's contracts may be modified within the framework of changing gas delivery posts on the Russia-Ukraine border and/or signing of a new transit deal with much lower transit volumes and new obligations.

As the existing contracts expire, detailed contours of mutually beneficial cooperation will be outlined with more precision. The commercial conditions of the new Russian-Hungarian gas contract (the current contract expires this year) will serve as the determining indicator for the course of future configuration of Russian gas exports to Europe.

This article was originally published in Russian on www.forbes.ru

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 #17
Russian analysts: Eastern Partnership is a process without an end goal
By Tamara Zamyatin

MOSCOW, May 25. /TASS/. Europe launched its Eastern Partnership project as a means of pushing former Soviet republics away from Russia, but now it has no idea at all where to move in the company of its newly-acquired partners. This explains why it keeps postponing the cancellation of the visa regime and admission to the EU, polled experts have told TASS in the wake of the just-ended Eastern Partnership summit in Riga.

"Eastern Partnership is not a tool of expanding the European Union, but a means of rapprochement with the EU," Germany's chancellor Angela Merkel said. The European Union has promised that in December it will tell Kiev and Tbilisi what the outlook for the cancellation of the visa regime is in reality. At the same time the summit in Riga confirmed that a zone of free trade between the European Union and Ukraine will take effect on January 1, 2016. The summit's declaration enumerated such guidelines for Eastern Partnership cooperation as reforms, economic development, liberalization of trade and energy security.

The program for a rapprochement with the European Union, launched in 2009 for Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine is obviously stalled with no success in sight. Euro-integration aspirants are invited to take a seat on folding chairs in the EU's antechamber. At best. Only Moldova has been granted a rather restricted version of a visa-free regime in relations with the EU. Neither Ukraine, nor Georgia have been promised it yet," political scientist Georgy Bovt has told TASS.

"As far as Ukraine is concerned, a real civil war has erupted in Ukraine since the 2013 summit in Vilnius, where the then Ukrainian president, Viktor Yanukovich, avoided putting his signature to the association agreement. Europe is now tired of calls by the Ukrainian authorities for putting pressures on Russia, which, if they are to be believed, is responsible for provoking the crisis in Ukraine. Kiev's demands for more loans look annoying, too. Of course, Ukraine had expected far greater support from the summit in Riga. But the EU, for its part, is waiting for Ukraine to follow a more sensible line of conduct in terms of compliance with the Minsk Accords, which is clearly seen in the summit's resolution," said Bovt, the editor-in-chief of the Russky Mir (Russian World) magazine.

"Europe, which conceived the Eastern Partnership scheme as a means to drive a wedge between former Soviet republics and Russia, has no idea at all where it should lead its newly-acquired partners. In the eyes of many Europeans Eastern Partnership has ended in failure. It has proved unable to contain Russia. The idea of competing with Moscow in a tug-of-war in the post-Soviet space had been doomed from the outset," Bovt believes.

"Even a uniform pattern of partnership has failed to materialize. Only Moldova, Georgia, and Ukraine have put their signatures to agreements of association with the European Union. Belarus and Armenia have preferred Eurasian integration. And Azerbaijan apparently sees the essence of 'partnership' in the opportunity for taking part in the South Transport Corridor project," Bovt said.

The chief of European political studies at the Institute of World Economy and International Relations, Nadezhda Arbatova, believes that the Eastern Partnership summit in Riga was convened for the sole purpose of keeping the project afloat. "The just-ended summit highlighted all defects of that project.

The main of these is the Eastern Partnership sets no final tasks, but presses for developing relations with the EU for the sake of the process itself. This explains why the Riga summit caused disappointment in Ukraine and Georgia, which heard no promises of the cancellation of visas or EU membership prospects," Arbatova told TASS.

"The other major flaw of the project is the involvement of very different countries, which very often pursue conflicting aims. Ukraine, Georgia and Moldova seek NATO membership. Armenia and Belarus are members of the Collective Security Treaty Organization and Russia's allies. Azerbaijan is in no way interested in political reforms the European Union has proposed. Baku's sole interest is energy cooperation with the European Union. Eastern Partnership participants were also greatly divided over the item of the summit's resolution on Crimea. Belarus and Armenia disagreed Crimea's return to Russia's fold was 'annexation.'

"One cannot but note the influence of the Ukrainian conflict on public sentiment in the Eastern Partnership countries. Opinion polls in Ukraine, Moldova and Georgia ever more often find the people there are skeptical about the European choice. The people do not trust their political elites, which discredit the Eastern Partnership. Also, nobody is eager to agree to the EU-proposed reforms, for they will entail economic and social problems but promise no clear prospects regarding accession to the European Union," Arbatova said in conclusion.

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 #18
Carnegie Moscow Center
May 25, 2015
A Policy of Pretending
The EU should think less about winning Eastern Partnership countries away from Russia, and more about instituting lasting economic and political reforms.
By Balázs Jarábik
Jarábik is a visiting scholar focusing on Ukraine and Eastern Europe.  

Let's not pretend: the European Union's Eastern Partnership (EaP) clearly excludes Russia.  Launched in 2008, the EaP was designed to strengthen Brussels's relationships with Ukraine, Belarus, Azerbaijan, Moldova, Georgia, and Armenia and to push back against those who favor a "Russia first" policy when it comes to integration with Eastern Europe. Context matters though: creation of the EaP was heavily influenced by the EU`s reaction to Ukraine`s Orange Revolution in 2004. Given that 2004 was the year of EU`s big bang expansion, it took several years for Brussels to take proper notice of its new neighbors.  But at last week's Riga Summit, the EaP demonstrated that it has become the de facto dividing line between Russia and "not Russia".  Unfortunately  thanks to  its exaggerated rhetoric about EU integration and membership, the EU has created unrealistic expectations among partner states that have exacerbated divisions between east and west.

The disparity between rhetoric and reality is neither new nor surprising: the EU's lack of political will and capacity to expand eastward, the post-Soviet states' disappointing and protracted transitions to democracy and free markets, and a resurgent Russia have put pressure on European diplomats to make promises they cannot deliver. The most senior EU diplomat in Kyiv after Ukraine's Orange Revolution in 2004 summed up the dilemma well: Ukraine knows that the EU cannot offer it membership but pretends otherwise; the EU knows but refuses to admit that Ukraine is not going to fulfill the criteria for membership.  

This policy of pretending should have changed as a result of the Ukraine crisis. After all, it was the EuroMaidan Revolution, precipitated by Viktor Yanukovych's refusal to sign an Association Agreement with the EU before the EaP summit in Vilnius in November 2013, that gave the partnership new life.
But between Vilnius and Riga, the EU's eastern policy began to reveal its impotence. The EU has little to show for the two institutions it created to support Ukraine in response to the Russian annexation of Crimea and invasion of the Donbas -i.e., the Ukraine Support Group and the EU Advisory Mission.  The announcement of 1.8 billion euros in financial assistance to Ukraine, the most money Brussels has ever given to a non-EU country, is meager in comparison to the EU's potential to help and its level of rhetorical solidarity. Still, Ukraine is also to blame for creating its own gap between rhetoric and reality: e.g., a visa liberalization agreement between the EU and Ukraine was not finalized because Kyiv failed to implement key technical elements.

The consequences of such a gap are also unfolding in Moldova. Once dubbed a "success story," Moldova signed an Association Agreement and a visa liberalization regime with the EU, and is the largest recipient of EU assistance per capita.  But these initiatives have not brought Moldova closer to EU accession, nor have they stimulated support for further integration among Moldovans. Rather, enthusiasm for the EU has plummeted as support for the Russian-sponsored Eurasian Union has grown. Moldovans are not displeased with the EU, but with their pro-EU government, which the Europeans have backed nearly unconditionally even though such support has done little to facilitate reform or economic growth.

Georgians are souring somewhat on the EU as well, even though Tbilisi was held up as the poster child of the EaP in Riga. Georgia has undergone a series of tremendous political and economic change through democratic elections and wide-ranging reforms, and signed an Association Agreement with the EU. But anxiety about Russia's intentions with regard to the frozen conflicts in South Ossetia and Abkhazia, a worsening economy, partisan feuding, and an onslaught of Russian propaganda have made Georgians more ambivalent about further integration with the EU.

To the chagrin of many in the West, the words "illegal annexation of Crimea" were removed from the lengthy declaration that the Riga summit produced, at the request of Belarus and Armenia. These countries were not concerned with the three words, but with possible Kremlin retribution. Their reluctance epitomizes the gap between Western expectations and Eastern realities.

After Riga, the EU and EaP countries should focus on deliverables. The greatest question going forward is not what the EU can offer the EaP countries, but rather what kind of states the latter can become. Re-opening the membership debate would most likely lead to a new stage of geopolitical struggle between Moscow and Brussels rather than a new impetus for reform, which actually should be the priority at the moment.

The EU should continue to prioritize Ukraine and help Georgia and Moldova on their path to reform , but table the idea of membership for the time being. Indeed, the EU should think less about winning the EaP countries away from Russia, and more about instituting lasting economic and political reforms. The EU should not punish countries that choose closer association with the Eurasian Union. There is a precedent for this: Brussels did not punish Armenia for its U-turn away from the EU in the run-up to the Vilnius summit. Given Russia`s own difficulties at home, the risk that other countries might turn their attention eastward appears limited.  The EU would be well-served to offer support for reform rather than more unrealizable promises.

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 #19
Fulfillment of S-300 deal with Iran will take time - Russian official

MOSCOW. May 26 (Interfax) - The right time to begin implementing a contract for the delivery of S-300 surface-to-air missile systems to Iran has not yet come, Deputy Secretary of Russia's Security Council Yevgeny Lukyanov told Interfax on Tuesday.

"A decision concerning S-300 deliveries to Iran has been adopted, but the implementation of this project will take time. As far as I understand, the right time to make such deliveries has not yet come," he said.

However, when speaking to reporters on Tuesday, Lukyanov refused to name any specific timeframe for S-300 deliveries to Iran.

"If you want details, you should ask the producer - Almaz-Antey - to provide them. You can also ask them at what technological stage this system is now," he said.

When asked by Interfax whether these systems could be delivered before the end of 2015, Lukyanov said: "I do not know".

Secretary of Iran's Supreme National Security Council Ali Shamkhani told Interfax in Moscow on April 14 that, hopefully, Russia would start to deliver S-300 systems to Iran this year.

The Russian president's aide for military-technological cooperation Vladimir Kozhin said earlier that deliveries of Russian S-300 surface-to-air missile systems to Iran would be governed by the countries' earlier signed contract, but would also take into account today's realities, including inflation.

On April 13, 2015, Russian President Vladimir Putin repealed a ban on the delivery of Russian-made S-300 missile systems to Iran.

The presidential decree lifts the ban on the transit of S-300 air defense missile systems through Russian territory, including by air, their exports from Russia to Iran, and also the transfer of such systems to Iran outside the territory of Russia both by sea and by air.

An $800-million contract for the delivery of five S-300 divisions to Iran was signed in 2007. But in 2010 the deal was put on hold by Russia's then-President Dmitry Medvedev after the UN Security Council passed Resolution 1929 on Iran.

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 #20
Chatham House
www.chathamhouse.org
May 22, 2015
A 'New Cold War'? Abusing History, Misunderstanding Russia
By Dr Andrew Monaghan
Senior Research Fellow, Russia and Eurasia Programme
[Full text here http://www.chathamhouse.org/sites/files/chathamhouse/field/field_document/20150522ColdWarRussiaMonaghan.pdf]

Summary

An increasingly prevalent 'new Cold War' narrative is impairing Western understanding of today's Russia and its role in European security.

The war in Ukraine suggests a new era of competition between the West and Russia. It has (again) revealed both fundamental differences in how European security is understood, and increasing friction in values. Together, these problems suggest an emergent 'clash of Europes' that pits the West's relatively liberal vision for the region against a more conservative 'Russian Europe'.

A 'new Cold War' narrative, increasingly popular, interprets this competition as a resumption of the Cold War. Many Western political figures and observers have asserted that Russia's president, Vladimir Putin, is trying to turn back the clock, even to rebuild the USSR, and therefore that the experience of the Cold War could offer useful lessons for politicians today.

This narrative, though seductive, is misleading. It too often frames the discussion in a repetitive and simplistic polemic that inhibits understanding of Russia and its relationship with the West. This makes it harder for the West to craft realistic policies with respect both to the Ukraine crisis and Russia generally.

The use of other sensationalist historical analogies - such as comparing modern Russia's actions to those of Nazi Germany in the late 1930s - further detracts from the understanding of a complex international crisis. It is an abuse of history in which political myths and abstractions obscure informed arguments about Russia and blur the differences between the presumed and the known.

The 'new Cold War' debate traps Western thinking about Russia in the 20th century. It reflects, and encourages, a dangerous tendency on the part of politicians and military strategists to prepare for past wars. It also offers a misleading sense of familiarity and predictability about Russia that does not take into account either the different international situation today or Russian adaptability to changing geopolitics.

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#21
Defusing the Nuclear Threat
https://nuclearrisk.wordpress.com
May 25, 2015
Solving "a Riddle Wrapped in a Mystery Inside an Enigma"
By Martin Hellman
Professor Emeritus of Electrical Engineering Stanford University

Most people have heard Winston Churchill's description of Russia as "a riddle wrapped in a mystery inside an enigma." I also suspect that most took it as I did: Who can figure out that crazy nation?

So it was a real surprise when I read the entire quote: "[Russia] is a riddle wrapped in a mystery inside an enigma; but perhaps there is a key. That key is Russian national interest." Now that makes sense!

If Churchill had taken his own wisdom to mind, we might have avoided the Cold War with all of its attendant nuclear risk. But Churchill, as most people, only exercised empathy for potential adversaries when he saw an immediate advantage to himself in doing so. In this case, Churchill's insight was part of an October 1, 1939 BBC broadcast, in which he was rallying the British people in their war effort, so it helped him to note that it was in Russia's national interest to keep Hitler at bay - which he did later in that broadcast.

When Churchill saw that it was in his interest to understand Russia, he did so. But when he failed to see anything in it for him, Russia became a rogue nation in his mind. We are doing the same thing today, and not just with Russia. North Korea is seen as a rogue nation run by a nut job, and Iran is portrayed as not much better. But, as I've pointed out, most of our puzzlement is due to our failing to understand North Korea's and Iran's perspectives.

Whenever we find another nation acting in ways that seem like "a riddle wrapped in a mystery inside an enigma," it would be well to remember that our perplexity is probably due to our not understanding how they see things. And, in the nuclear age, it is always in our interest to understand other nations as well as we can. Doing that reduces the risk of needless wars, with their attendant needless nuclear risk.

I can attest from personal experience that it also makes sense to work at understanding others in interpersonal relationships. Since we got our relationship on a good basis, every time that my wife's behavior has seemed crazy to me, I've found that there was a good reason behind her behavior that I was missing.

A good example, occurred recently.I had taken the older of our two cars in to the local service station and, when I picked it up, the owner told me that if I ever wanted to sell that car, he would like to buy it for his wife.

I mentioned this to Dorothie in an off-hand kind of way because the car was only six years old, and we usually keep them for at least ten. Yet, a week later, Dorothie was researching new cars. You don't buy a new car just because someone has offered to buy your old one! At least that's how I saw it initially.

But, I've matured some over our 48 years of marriage, so I went to Dorothie and told her, "It seems crazy to me that you're looking at new cars, but you're not crazy, so there must be something I'm missing. What is it?"

She then told me that this car lacked safety features, such as a backup camera and blind spot detection, that our newer car had, and with her health issues (heavy medication for migraines) she felt a lot more comfortable driving the newer car. Plus, over the last few years, more safety features had come out, which would relieve even more of her anxiety about driving. Adaptive cruise control, collusion avoidance systems, and lane keeping assistance all were new.

As soon as I understood Dorothie's reasoning, not only did her seemingly crazy behavior make sense. It made my life better. I have been hoping that self driving cars would hit the market before I became too old to drive. While the car we bought doesn't drive itself, it's about half way there.

By "getting curious, not furious," (a great expression that a friend told me when I related this story), not only did I avoid an argument, I got a better outcome than what I thought I wanted going into the disagreement. I got a car that I love to drive, whereas I thought I wanted Dorothie to stop looking at new cars.

If the nations of the world were to get curious before they got furious, and in particular if my own nation were to do that, it would transform the world in unimaginable, positive ways. Let's start solving those riddles wrapped in mysteries inside enigmas before a misunderstanding blows us all up.

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 #22
Euromaidan Press
http://euromaidanpress.com
May 26, 2015
Separatists in Donbas have more tanks than Germany, France, and Czech Republic combined
By Alya Shandra
Alya Shandra is the managing editor, translator, and coordinator at Euromaidan Press from its very start in early January 2014. She is a civic activist based in Kyiv and an expert in environmental and geography issues.
[Chart here http://euromaidanpress.com/2015/05/26/separatists-in-donbas-have-more-tanks-than-germany-france-and-czech-republic-combined/]

The armed forces of the self-proclaimed "Luhansk and Donetsk People's Republics" ("LNR" and "DNR") have accumulated significant reserves of heavy weapons. According to deputy commander of the Anti-Terrorist Operation, Col. Valentyn Fedychev, as of 8 April 2015 Russia's hybrid army in Donbas has 700 tanks, over 1 100 ACVs, 600 artillery systems, and 380 MRLS, as reported by news.liga.net.

Inforesist.org compared the military power of "LNR" and "DNR" to that of several European NATO states on the basis of the annual report, The Military Balance 2014, prepared by the British International Institute for Strategic Studies (IISS) think-tank. The Military Balance 2014 is a kind of reference book containing detailed data on the types and number of troops of the armies of the world as of 2013.

According to the IISS data, the tank fleet of the Russian-backed separatist "republics" is comparable to the total number of tanks in service with the armies of Germany, France and the Czech Republic. Poland boasts a more impressive fleet (893 tanks). As for artillery power, the volume of arms of the "DNR" and "LNR" surpasses all the Baltic countries together, as well as the German, French, and Czech armies. European NATO members, excluding the Czech Republic and the Baltic states, have an advantage over the separatists only in the number of combat armored vehicles. The French army's fleet of armored vehicles is five times greater than that of the "DNR" and "LNR."

An estimate of number of Ukrainian military vehicles opposing the "LNR" and "DNR" forces has been given by Aleksandr Sharkovskiy in an article in Nezavisimoye Voyennoye Obozreniye [Independent Military review] on 22 May 2015, who has stated that his estimates are based on open-source data of the blogosphere.

It is difficult to estimate how much the proportion of power has changed over the last months, as there are conflicting messages. The latest data is that new shipments of military vehicles for the Russian-backed forces and Russian army in Donbas have arrived via the Russian railroad. Dmitry Tymchuk, independent Ukrainian military analyst and coordinator of the group Information resistance, in a post dating 24 May 2015 has stated that at the beginning of May the Russian Railway has transferred 80 MRLS (including Tornados), over 200 tanks, around 100 IFVs and APCs, and nearly 1000 lorries with ammunition to Donbas.

The Russian Federation continues denying its support for the separatists in Ukraine's Donbas. However, the USA has recently changed its terminology, referring to the forces opposing the Ukrainian army to Donbas as "combined Russian-separatist forces."

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 #23
Fort Russ
http://fortruss.blogspot.com
Ukrainian militants executed a Novorossia militia man and his pregnant wife (video 18+)
May 21, 2015
Antifascist [http://antifashist.com/item/ukrainskie-diversanty-kaznili-opolchenca-i-ego-beremennuyu-zhenu-18.html]
Translated by Kristina Rus
[Video here http://fortruss.blogspot.com/2015/05/ukrainian-militants-executed-novorossia.html]

Information agency NewsFront posted a video discovered on the cell phone of one of the fighters of the Ukrainian battalion, liquidated by people's militia of Lugansk Republic.

His name and the date of liquidation were not disclosed.

On the video men in masks and camouflage with Ukrainian markings performed a cold-blooded execution of two people by hanging on a specially constructed gallows in the woods. A vehicle "Niva" was used as a scaffold. The event was recorded by the executioners on a cell phone camera.

One of the victims - a pregnant woman. The executioners put bags on the heads of the victims. The video had no sound.

NewsFront commented that it does not guarantee the authenticity of this video. The only sure thing is that the video was found on the phone of a murdered punisher, noted the agency. Judging by the twitches of the executed man, it is not likely to be staged.

Meanwhile, the General Prosecutor's office of LPR made a statement which confirmed that the video of the execution was really found on the phone of one of Ukrainian saboteurs from a subversive-intelligence group, which was liquidated by LPR people's militia forces.

"The group was engaged in subversive activities. In this case, this group (DRG) consisted of three people. A militia man was killed. His name and callsign are not disclosed in the interests of the investigation. He was killed by hanging. And his wife in the last stage of pregnancy was hanged. In a course of a law enforcement operation one of the members of this DRG was killed. Currently we are trying to establish his identity, his unit and connections. The rest, unfortunately, managed to escape. The video you're about to see, I think, needs no comment. Other then bastards you cannot call the persons who did it", - said the head of the investigative department of the Prosecutor General of LPR, Leonid Tkachenko.

"It is not a montage and it's not staged, - said the investigator.- This is an authentic footage. Identification of the other participants is a matter of time".

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 #24
Fort Russ
http://fortruss.blogspot.com
"Right Sector" fighter posted pictures of Novorossia soldier with chopped fingers and thanked Americans for helping in the attack (18+)
May 23, 2015
@ttower [http://twower.livejournal.com/1673245.html]
Translated by Kristina Rus
[Graphics here http://fortruss.blogspot.com/2015/05/right-sector-fighter-posted-pictures-of.html]

One of the fighters of the "Right Sector" did not hesitate to publish the pictures of a captured militiaman, who had his fingers cut off on both hands. The characteristic notches and the blood itself are quite visible on the box in the photo.

In the comments the severed fingers caused a wave of joy and jokes

Yashka Tsygankov:

"Successful practice of an advance on Donetsk. At first, on a checkpoint. Turned out to be not a checkpoint, but a stronghold. Killed everyone. One surrendered. Saying, he is "just a local", and started "just recently". Just a friend invited him who knows where, and he had to stay there for 5 days.  Commander of a unit of the 5th brigade of the republican guard. Will exchange him for Cyborgs.

In the battle the commander of the 2nd unit of the 7th battalion of Volunteer Corp, Monk, was wounded by a fragment of a grenade in his neck, and a bullet in his arm. Already in a hospital.

Three cars have been shot by bullets, need help with fixing. Thank you to Georgian spetsnaz, their snipers worked super! Thank you to the American fire location systems, located perfectly! The storm troopers, the back up group and mobil support consisted of the Right Sector units of the 7th battalion, Dnepr-1, 93rd brigade, Georgian sniper spetsnaz, American fire spotters in American hammers. Whoever follows DPR news, let me know their info on losses near Donetsk, just curious))

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 #25
DPR accuses Kyiv of pulling heavy weapons towards contact line

DONETSK. May 26 (Interfax) - The Ukrainian army has deployed a Tochka-U tactical missile system in the Kramatorsk area, Eduard Basurin, a senior official of the Defense Ministry of the self-proclaimed Donetsk People's Republic (DPR), has said.

"A Tochka-U system has been tracked down near the town of Kramatorsk. It is possible that the Ukrainian authorities may stage an act of sabotage using this weapon," the Donetsk news agency has quoted Basurin as saying.

Intelligence reports confirm the deployment of other heavy weapons by Ukraine near the contact line, which is prohibited by the Minsk agreements, he said.

For instance, a battery of 9K57 Uragan rocket launchers has been moved to Kramatorsk and platoons of BM21 Grad and 9K57 Uragan rocket launchers have been seen near Olhynka.

"This is a demonstration of the complete disregard of the Ukrainian commitments to the international community," Basurin has said.

Kyiv is accumulating its forces near Volnovakha and in populated localities along the road from Kramatorsk to Dzerzhinsk, where, according to intelligence sources, "numerous pieces of forbidden artillery are concentrating," he said.

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#26
Kyiv Post
May 26, 2015
Spring rhythm in Donetsk: Little war, little opportunity
By Stefan Huijboom

DONETSK, Ukraine - The beautiful spring weather in Russian-separatist controlled Donetsk shouldn't fool anybody.

In the protected central part of the city with a pre-war population of one million people, families gather in Pushkinska Park for a Slavic literature and music festival. They stroll through nice parks. Restaurants are full. Teenagers strum their guitars to Pink Floyd tunes.

Russia's war against Ukraine seems far away.

But outside the center, the destruction of war is more visible. Drunks and drug addicts are easy to stop.

"They've made the center look nicer than the outskirts, because only the rich come there. They don't care about the outskirts where the poorer people live, some even still in bomb shelters," a woman told the Kyiv Post.

She, like everyone else interviewed for the story, did not want to be identified because of fear of reprisals from the Kremlin-backed separatists who, according to many residents, have turned Donetsk into a lawless mafia zone.

The rich "don't represent the real situation in Donetsk, but rather the huge inequality," this woman said. "It's inevitable they all have close ties to the DNR (Kremlin-separatist) government and probably even work for them. The situation for much of the population has worsened, but the people you see here only care about their new phones and cars. Authorities here created this artificial reality. They want the outside world to know that the so-called 'republic' tries to function as a whole, but instead it has become like a mafia state."

An office building where humanitarian aid is distributed on billionaire Rinat Akhmetov's behalf is almost people.

An administration, a young woman, is reluctant to identify herself as anyone other than Nataliya.

"Most people come in during the morning or go the Donbas Arena as there's more aid available there," she explained, refusing to allow pictures inside.

Two brothers who picked up aid display the contents of their plastic bag: pasta, milk, eggs, oil, flower and drinks. The youngest, Maksym, 22, is a university student studying to be an architect.

"The chances of finding a job in architecture here are slim. I don't know if my diploma would even be recognized outside Donetsk, but I've always dreamt of becoming an architect. Since I was little I've been drawing buildings," he said.

Maksym, like many young people here, has no vision for the future beyond: "The war has to stop, that's what I care about the most."

Outside the office building, a man in camouflage clothes and Nike sneakers studies the humanitarian aid. He identifies himself as a Russian-trained soldier named Konstantin. He is 33 years old.

He goes to receive painkillers for his war wounds.

"I've been wounded in Shryrokyne," he said, pointing to his hips. "Shrapnel got through my legs, and also through my head,' he added. He shows some of the stitches on his head.

Despite the severe wounds and an ongoing war, Konstantin cannot imagine living anywhere else than Donetsk.

"It's a beautiful city. There are no traffic jams. There's no smog. It's better than Moscow, and the people are happier," he said. He has no plans to return to Moscow either.

He doesn't have any money. So he spends his time on the street and stays with other separatists. "If I need money, my friends here in Donetsk will help me," he said confidently.

Just a few blocks away, the former Ozhad Bank is open for older people to pick up their pensions.

A woman sits waiting on a small bench in front of the bank. She introduces herself as Svetlana, 69, but doesn't want to talk about the mechanisms for collecting her pension from the separatist side.

"Yes, we're receiving it, which is good. If you convert it into hryvnias, it's a little bit more than what we used to receive. Some of us haven't received a pension in over 10 months!"

The authorities in Donetsk are trying to keep the economy functioning. Some factories are still working.

The Donetsk Metallurgical Plant operates, but operating at only 10 percent capacity, a guard said.

The gap in incomes becomes more apparent all the time in Donetsk. A burgeoning shadow economy may be alleviating some of the inequality, rendering official statistics meaningless and making street life one of the best indicators of the state of residents.

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 #27
Expert: Ukraine not to become EU member in foreseeable future if ever

KIEV, May 25 /TASS/. Last week's Eastern Partnership summit in Riga made it clear that the European Union was not going to grant EU membership to Ukraine in the foreseeable future. Ukraine may not become an EU member at all, Kost Bondarenko, director of the Ukrainian Policy Foundation, told a news conference on Monday.

"After the summit Ukraine realized that it would not become an EU member in the foreseeable future and may not join the EU at all," Bondarenko said adding that the European Commission President Jean Claude Juncker had said that Ukraine was still not ready for the European Union.

Ruslan Bortnik, director of the Ukrainian Institute of Policy Analysis and Management, said that the EU expansion policy had reached its limit. The European Union made it clear that further European integration of the Eastern Partnership states would not go farther than association agreements.

Another Ukrainian expert on international policy, Oleg Voloshin, said that the Ukrainian leadership had made a mistake by focusing entirely on European integration. "The European integration is the right direction of development for Ukraine but they should not have constrained it to any timeframe and adjusted the country's internal policy to this goal," Voloshin, the former chief of the Ukrainian Foreign Ministry information department, said.

Kost Bondarenko agreed with Voloshin noting that European integration had been turned into a new religion in Ukraine and into a theme that could not be subject to criticism.

European Commission President Jean Claude Juncker said at the EU summit in Riga last week that the EU should get convinced that each of the Eastern Partnership countries had a European perspective. "As for now, neither we nor them are ready for it," Juncker stressed.

The Eastern Partnership summit took place in Riga, the capital of Latvia, on May 21-22. It was attended by the leaders of 28 EU countries, six Eastern Partnership states and the leaders of the Brussels-based EU institutions. The summit's final document does not contain any promises to cancel visas for Ukraine and Georgia and says nothing about their possible membership of the European Union. It does not say anything about sanctions against Russia. At the same time, the Riga summit confirmed that a free trade zone with Ukraine would start functioning on January 1, 2016.

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 #28
http://gordonhahn.com
May 25, 2015
Ukrainians Disapprove of President and Government, Survey Results
By Gordon M. Hahn

On the one-year anniversary of Petro Poroshenko's election as the Maidan regime's president, it has become clear that the Maidan revolution has brought to power a government and perhaps a regime of which the majority of Ukrainians disapprove, according to a recent survey carried out by Ukraine's TNS agency. Poroshenko won the 25 may 2014 presidential election with 54.7 percent of the vote.

According to the poll, 51 percent of Ukrainians disapprove of President Poroshenko's performance, while only 17 percent approve. Regarding the government of Arseniy Yatsenyuk, 68 percent disapprove, while a mere 8 percent approve. Regarding the efforts to stabilize the situation in the country undertaken by the authorities overall, 31 per regard their efforts as "absolutely unsatisfactory," 28 percent see them as "for the most part" unsatisfactory, 37 percent - consider them "incomplete and untimely," and only 1 percent of Ukrainians see the regime's efforts as "completely fulfilling their obligations" ( http://vesti-ukr.com/strana/101024-ukraincy-vruchili-jacenjuku-i-poroshenko-chernuju-metku).

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#29
Zik (Kyiv)
http://zik.ua
May 25, 2015
Poroshenko's one-year track record not bad - political analyst

Pres Petro Poroshenko is responsible for security and international sector. Some tangible work has been done here during his first year in office, says analyst Serhy Taran in a commentary to ZIK May 25.

It was the hardest year in Ukraine's history as Ukraine was at war with Russia and amid an economic crisis, he said.

 "A year back, Ukraine had no army and Donbas was defended by patriotic volunteers. Today, there is an army. Although it is below NATO standards but it is able to oppose one of the most power armies in the world, Russian.

Besides, Ukraine has a wide support in the world and international sanctions against Russia. All this means that in the area of security and diplomacy Pres Poroshenko has done much.

The economy is Premier Yatseniuk's turf, and we would like to see more headway here, the expert said.

This year, the government has done much to neutralize the impact of tycoons on running the economy and country.

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 #30
Analysts: Poroshenko's 12 months at the helm was time of empty promises
By Tamara Zamyatin

MOSCOW, May 26. /TASS/. Over the first twelve months Ukrainian President Petro Poroshenko has been in office the country has plunged into a civil war, the economy has collapsed, extreme nationalism has gained the upper hand as the official ideology and the state has in fact been placed under external administration, polled experts have told TASS.

"Poroshenko's number one election pledge pronounced a year ago was to bring peace to the southeast of Ukraine. In the meantime, combat operations in Donbas have continued up to this day. According to the United Nations, more than 6,200 people there have lost their lives to the hostilities. The war plays into Poroshenko's hands, because it is an excellent excuse for all of Ukraine's misfortunes," the deputy director of the CIS Studies Institute, Vladimir Zharikhin, has told TASS.

"The Ukrainian president promised his fellow citizens to restore the economy. In reality, the disruption of cooperation with Russia has sent all basic industries - aircraft-building, space technologies manufacturing and engineering into ruin. Over just one year Ukraine's state debt has soared to 75 billion dollars. The national currency has been devalued by a factor of three and the European Bank for Reconstruction and Development predicts the GDP will shrink by 7.5% by the end of this year," Zharikhin warns.

He believes that the expectations of European choice supporters have fallen through with a crash.

"Over the first year Poroshenko has been in office the conditions for cancelling the visa regimen have merely deteriorated. At the recent Eastern Partnership summit in Riga the Ukrainian president was told in very clear terms that Europe would by no means be happy to see an influx of impoverished and angry migrants. The economic section of Ukraine's treaty of association with the European Union does not work. Transition to European standards in the economy has not started yet," Zharikhin said.

"Poroshenko has been really successful only in one respect - the ability to retain power by maneuvering between centers of influence in the United States and the European Union. Before, he criticized his ousted predecessor, Viktor Yanukovich, of catering to Russia's interests. These days Poroshenko himself is in the service of the United States' interests. Ukraine's independence has been lost. In fact, the country has been placed under external administration," Zharikhin said.

The chief of the international development directorate at the Institute of Modern Development (INSOR), Sergey Kulik, points to the collapse of the Ukrainian economy and the country's actual default none of the Western economists had foreseen just a year ago.

"The agreement on Ukraine's association with the European Union rested upon two pillars: preservation of trading and economic relations between Kiev and Moscow in the capacity of a safety net for the period of the Ukrainian economy's modernization and heavy direct investments into manufacturing. Instead, Kiev upset the trade balance with Russia, while foreign investments into Ukrainian economy have plummeted. According to the Vienna Institute for International Economic Studies, even if the war in eastern Ukraine is over an economic recovery will begin no earlier than 2017," Kulik told TASS.

"The West is very angry about Kiev's attitude to struggle with corruption, which Poroshenko a year ago proclaimed as a cornerstone of his policy. The struggle has not begun in earnest yet, and no institutions or instruments have been created yet. This explains why investors are in no mood of bringing their money to Ukraine," Kulik explained.

And the director of the Institute of Political Studies, Sergey Markov, says Ukraine under Poroshenko has made ultra-nationalism its official state ideology.
"The Ukrainian parliament's adoption of a special law declaring the Ukrainian Insurgent Army, which collaborated with the Nazis during World War II, as heroes has had a stunning effect on many. Ukraine does not investigate war crimes in the zone of what Kiev keeps calling 'anti-terrorist operation', or the circumstances of the death of half a hundred people in the fire inside the Trade Unions Building in Odessa last May," said Markov, a member of the Civic Chamber.

"While professing commitment to the rule of law, Poroshenko has maintained an economic blockade of Donbas for a whole year now. And in a recent resolution the Ukrainian parliament canceled the operation of the European Convention on Human Rights for the people of the self-proclaimed Donetsk and Lugansk people's republics. In just one year Ukraine has transformed itself from a democracy into a police state," Markov said.

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 #31
Forbes.com
May 25, 2015
Yats To Washington: Please Buy Ukraine
By Kenneth Rapoza

Ukraine Prime Minister Arseniy "Yats" Yatsenyuk is lobbying Washington to convince American firms to buy up Ukraine in the country's planned flea market of state controlled enterprises.

"The Prime Minister of Ukraine has urged U.S. partners to actively use the investment opportunities offered by the privatization campaign in Ukraine, particularly in the energy sector," a statement posted on Ukraine's governmental website said on Monday.

Yats met with U.S. Senator Dick Durbin recently to discuss the current state of economic reforms following an additional $1 billion pledge in official U.S. aid to the fledgling nation.

Ukraine seems to be constantly embattled. The recent Euromaiden revolution took the country out of Russia's sphere of influence and into Europe and the U.S. "loving arms." However, the nation is not united on Kyiv's newfound love for the west. And despite calls for Ukraine to be more pro-actively engaged with a capitalist Europe than with a mostly state controlled Russian economy, it is unclear just how attractive the country looks to Americans right now. The hub of Ukraine's industrial east is largely controlled by separatist groups backed, in part, by the Russian military. Although Russia denies official support (they say its volunteer support), the AP has reported extensively on how local pro-Russia separatist groups receive off-the-reservation military aid from "Uncle Putin".

Yats, meanwhile, is teaming with president Petro Poroshenko in leading a nation of disbelievers. Their poll numbers are in the gutter. And so if Yats thinks that selling a state asset for a dime to foreigners is going to go off without protest, then it is clear that Ukraine is not disinterested in being controlled by foreign entities after all, so long as those foreign entities do not speak Russian.

In March, the Ukrainian government approved a list of companies subject to privatization, putting up for sale predominantly energy-related firms. Natural gas giant Naftogaz was not one of them. Earlier this year, the Cabinet of Ministers approved the sale of 164 businesses slated for the auction block this year. The fund estimates the face value of these shares at 3 billion hyrvnia ($150 million) for companies that have an existing market value of 15 billion hyrvnia. Yats said that the 164 number given to him by his cabinet was too low. He wanted to increase the number to 1,200. In other words, it's a fire sale.

Besides the $2 billion from the U.S., Ukraine is getting most of its money from the European Union and International Monetary Fund. Around $40 billion is heading their way over a four year period some in the press have likened to the Marshall Plan, which helped rebuild Europe after World War II.

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 #32
Analyst: Ukrainian government loses support from abroad as foreign experts leave cabinet

KIEV, May 26. /TASS/. Recent resignations of foreign experts from the Ukrainian government might signal the loss of support from abroad of the country's cabinet of ministers, led by Prime Minister Arseniy Yatsenyuk, a Ukrainian political analyst said on Tuesday.

Ruslan Bortnik, the director of the Ukrainian Institute of Policy Analysis and Management, said "the withdrawals may be a signal for the government of Yatsenyuk that he is losing the support of foreign partners."

"We all realize that the majority of foreigners were representing to some extent western interests," Bortnik said adding that "there is currently an atmosphere of grand changes in the government of Ukraine."

The political expert said that one the sound resignations recently was the walkout of German national Sasha Borovik, who was seen as the most possible candidate for the post of the country's deputy minister of economy.

"Sasha Borovik's withdrawal on the day of [US Department of State spokesperson] Victoria Nuland's visit [to Kiev on May 18] may be a bad sign, the so-called presentation of a 'black spot'," Bortnik said.

Commenting on the situation with the resignations in general, Bortnik said that "foreigners, just like Maidan ministers, where trapped in the atmosphere of corruption and oligarchy, where they failed to implement their ideals."

"They felt like ceremonial bystanders or celebrities for hire, behind whose backs the government continued doing what they thought to be effective and necessary according to old rules and habits," he said. "In other words, the corruption continued and there were no reformations."

The political analyst said there would be "further outflow of foreign specialists from the Ukrainian government and it may give the start for the reformation of the cabinet of ministers."

Natalie Jaresko, who came from the United States and is currently holding the post of the country's minister of finance, is the only one among the foreigners holding a stable position at the moment, Bortnik said.

"Health Minister Alexander Kvitashvili is in a very unstable position," Bortnik said. "In one of the recent interviews [Sasha] Borovik hinted that Economy Minister Aivaras Abromavicius was not feeling comfortable as well.".

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 #33
Moscow unveils note sent to Kiev due to detention of Russians in Donbas

MOSCOW, May 26. /TASS/. Russia's Foreign Ministry posted on its Facebook page on Tuesday the note of the country's embassy in Kiev demanding access of a consular official to two Russians detained in Ukraine.

The ministry said Moscow hopes that Kiev will stop manipulating the public opinion and in the near future will allow access to Yevgeny Yerofeyev and Alexander Alexandrov, who were captured in mid-May near Donetsk, in eastern Ukraine.

"Since the first day of the detention of Russian citizens Alexandrov and Yerofeyev on Ukraine's territory, the Russian diplomats both in Kiev and in Moscow have been taking active steps for the Russian consul to meet with them," the statement reads.

"There has been no result yet. The Ukrainian side is not only allowing access to the detained persons, but is also politicizing this issue, using mass media to that end," the ministry said.

The note of the Russian embassy in Ukraine, dated May 19, 2015, was handed over directly to Andrey Sibiga, the director of the department of consular services of Ukraine's Foreign Ministry.

In the document, the Russian side in line with Article 13 of the Consular Convention between Russia and Ukraine asks Kiev to detail the place of their detention. The ministry stressed that the publication is a forced measure in order to repel accusations of Moscow's inaction.

"The publication of the diplomatic correspondence is a forced measure. But it will allow understanding the authenticity of the publications that have emerged of late," it says.

Kiev earlier claimed that Moscow had not sent any requests on allowing the access of a consular official to Yerofeyev. Ukraine's Security Service advisor Markiyan Lubkovskiy said that as of May 22 there have been no Moscow's requests on the possible meeting.

Russian citizens face at least 15 years in prison in Ukraine

Yevgeny Yerofeyev and Alexander Alexandrov were arrested by court in Kiev last Thursday.

The two Russian citizens are facing a prison term of at least 15 years, spokesman for the Security Service of Ukraine Vitaly Naida said shortly before. He noted that they were suspected of carrying out "terrorist attacks" under Article 258 of Ukraine's Criminal Code. "They may be sentenced to at least 15 years in prison," he said.

Last Monday, the Russian Defense Ministry made a statement expressing hope for "the release of the former service members detained by Ukraine's Security Service." "At the time of their detention on May 17, Russian nationals Alexander Alexandrov and Yevgeny Yerofeyev captured by Ukraine's Security Service in the Luhansk region were not on active service in the Russian Armed Forces," Defence Ministry spokesman Major-General Igor Konashenkov said.

"We checked the Ukrainian side's information. These guys used to serve in a unit of the Russian Armed Forces and underwent military training. Moreover, I can confirm that the leadership of the Association of Veterans of Special Operations Forces had asked us to contact Ukraine's General Staff through official channels to put an end to tortures of their wounded comrades by Security Service officers aimed at securing expected confessions," Konashenkov said.

"We reckon on the prudence of the Ukrainian leadership and the speedy release of Alexander Alexandrov and Yevgeny Yerofeyev," he added.

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 #34
Moscow Times
May 26, 2015
Death of Novorossia: Why Kremlin Abandoned Ukraine Separatist Project
By Ivan Nechepurenko

Standing in front of a small Moscow church last September, President Vladimir Putin told journalists that he had lit candles inside for people who had been injured or given up their lives defending Novorossia.

The historical term, meaning "New Russia," was first used by the president last April and was subsequently picked up by insurgents in Ukraine's east to define their effort to spread their anti-Kiev rebellion across the country's southeast - the same large region north of the Black Sea that became known as Novorossia after Russia conquered it during 18th-century wars with Turkey, and that became part of Ukraine after the 1917 Bolshevik revolution.

Russian conservative ideologists and Putin himself used the term to justify their claim that it was the Kremlin's duty to protect the interests of ethnic Russians there.

In June, amid the pro-Russian rebellion in Ukraine's east, Novorossia was proclaimed by rebels as a separate entity with its own parliament, flag and news agency. Novorossia was supposed to unite the self-proclaimed Donetsk and Luhansk people's republics into a confederation and also absorb other regions of Ukraine in the future.

But last week, Alexander Kofman, foreign minister of the self-proclaimed Donetsk People's Republic, announced that the Novorossia project had been put on hold.

"The Novorossia project is frozen until a new political elite emerges in all these regions that will be able to head the movement. We don't have the right to impose our opinion on [the Ukrainian cities of] Kharkiv, Zaporizhia and Odessa," Kofman told the Vechernyaya Makeyevka newspaper published in the Donetsk region.

His words echoed those of Novorossia parliament head Oleg Tsaryov, a former deputy of Ukraine's official parliament in Kiev. Last month, Tsaryov told the Kiev-based Vesti Reporter magazine that Novorossia's activities had been frozen because they did not fit into the Minsk cease-fire agreements signed in February by Putin, Ukraine's President Petro Poroshenko and the leaders of France and Germany. The official website of Novorossia's parliament is now offline.

Change of Tune

During recent weeks, as though in a preplanned chain of events, Russian officials have become remarkably active in stating that the Russian government wants the self-proclaimed republics to remain part of Ukraine.

"At all levels, including the presidential one and in other formats, we say that we want [these republics] to become part of Ukraine," Foreign Minister Sergei Lavrov told government newspaper Rossiiskaya Gazeta last week.

"They have unveiled their own constitution project in which they talk about their status as envisaged by the Minsk agreements: The republics will become part of Ukraine, followed by constitutional reform that will solidify this status into a permanent one," he said.

A month earlier, Putin had something very different to say about the same subject. "I believe that - provided that the Minsk agreements are implemented - it is possible to find some elements for restoring a sort of common political field with Ukraine. However, in the long run, of course, ultimately the final say about how and with whom to live and on what terms should belong to the people who live in those territories," he said during his most recent call-in show on April 16.

Leaders of the Donetsk People's Republic were already proposing their own amendments to the Ukrainian constitution back in February, suggesting that they intended to remain part of Ukraine.

Instrument of Leverage

Analysts interviewed by The Moscow Times said the change of rhetoric demonstrated that Russia had been using the prospect of the further expansion of the self-proclaimed entities into Ukraine's southeast as leverage during negotiations with the West and Ukraine on how to resolve the crisis.

At the same time, Andrei Piontkovsky, an opposition-minded Moscow-based political analyst, said that Kremlin policymakers have realized that they had reached levels of tension with the West that they cannot afford.

"In order to maintain the level of tension, the Kremlin would have had to escalate the crisis further, which would have meant more victims among Russian soldiers and more sanctions," said Piontkovsky, a senior researcher at the Institute of Systems Analysis of the Russian Academy of Sciences.

Crimea Deal?

Andrei Kolesnikov, a senior associate at the Carnegie Moscow Center think tank, noted that the end of the Novorossia project was announced shortly after U.S. Secretary of State John Kerry met with Putin in Sochi for the first time since the Ukraine crisis unfolded at the end of 2013. Assistant Secretary of State Victoria Nuland followed hot on his heels with visits to Kiev and Moscow.

In an article published on the Carnegie Center's website last week, Kolesnikov said that it was possible that during those negotiations, U.S. neutrality or silence with regard to Russia's annexation of Crimea was offered in exchange for Russian support for the reintegration of Ukraine's rebellious regions.

Piontkovsky agreed.

"Putin has offered the Americans a draw: They close their eyes to the Crimea issue, while Russia freezes the conflict in Ukraine's east. This is a lucrative option for the West, but Ukraine cannot like it," Piontkovsky said.

In the same interview with Rossiiskaya Gazeta last week, Lavrov made a point of mentioning that the question of Crimea had not been brought up by Kerry during his meeting with Putin.

"Draw your own conclusions," Lavrov said at the time.

According to Fyodor Lukyanov, chairman of the Council on Foreign and Defense Policy, a think tank with close links to the Foreign Ministry, pro-Russian insurgents in Ukraine's east have realized that Moscow will not support their independence or make them part of Russia.

"Despite their declarations, they understand that they want to stay within a unified Ukraine. The Kiev authorities will reject them [the rebels' reintegration terms], but in that situation they can portray themselves as proponents of peace," Lukyanov told The Moscow Times in a phone interview.

As a result, analysts say, Russia and the West have reached a situation in which the crisis has been defused - at least for a while - with neither side losing face.

What remains unclear, however, is how the Ukrainian government will react if Russia and the U.S. really have reached a deal behind its back.

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 #35
Washington Post
May 25, 2015
What people in southeast Ukraine really think of Novorossiya
By Gerard Toal and John O'Loughlin
Gerard Toal (Gearóid Ó Tuathail) is Director of the Government & International Affairs program at Virginia Tech's National Capital Region campus in Old Town, Alexandria, Virginia. John O'Loughlin is College Professor of Distinction and Professor of Geography at the University of Colorado, Boulder.
[Figures here http://www.washingtonpost.com/blogs/monkey-cage/wp/2015/05/25/what-people-in-southeast-ukraine-really-think-of-novorossiya/]

Novorossiya is frozen. Last week Oleg Tsarev, leader of the 'parliament' that ostensibly united the eastern Ukraine separatist entities, the Donetsk Peoples Republic (DPR) and the Luhansk Peoples Republic (LPR), announced the project was now on hold. The reason Tsarev gave was that Novorossiya was incompatible with the Minsk II Accords, the principles agreed by the 'Normandy Four' - French President Francois Hollande, German Chancellor Angela Merkel, Ukrainian President Petro Poroshenko and Russian President Vladimir Putin - in February to end the crisis in eastern Ukraine. His statement and similar ones by others may signal that rebel leaders have been encouraged to consolidate around territory they now control rather than launching a new offensive to grab more. Time will tell. What it does reveal is belated recognition on the part of separatists and perhaps the Kremlin that Novorossiya as a geopolitical project to break Ukraine has fallen well short of its objective.

Tracing the origins of Novorossiya as a contemporary geopolitical re-imagining of Ukraine takes one to the murky world of relations between Kremlin forces and a spectrum of Russian nationalists. In a recent article, Marlene Laruelle outlined the three colors of Russian nationalism behind Novorossiya: a red Novorossiya preoccupied with reasserting Russia as a neo-Soviet great power, a white Novorossiya concerned with reviving and extending reactionary Orthodox ideals, and a brown Novorossiya driven by Russian ultra-nationalist fantasies and practices. What these power connected networks produced was an opportunistic geopolitical gambit on the heels of the Crimean annexation in March 2014 to detach southeast Ukraine from Kiev's control.

The envisioned territory stretched from Odesa to Donetsk to Kharkiv, uniting eight southeast oblasts into a singular space. Pro-Russian nationalists in these areas launched a series of anti-Maidan protests as occasions for the seizure of local public buildings and proclamation of counter-coup regimes to the perceived EuroMaidan coup in Kiev. These moves, however, garnered uneven public support and manifestly failed in the two strategic locations of Odesa and Kharkiv. Only in the oblasts of Donetsk and Luhansk did they take hold, and not everywhere there. From the outset, therefore, there was a manifest gap between the aspirational greater Novorossiya and the lesser Novorossiya formed around the DPR and LPR. Putin famously amplified the project in his annual Direct Line television extravaganza in the pivotal month of April 2014 when he reminded everyone that the Novorossiya oblasts "were not part of Ukraine back then" in the tsarist days.

Behind Putin's remarks were three operating assumptions: that modern southeast Ukraine and historic Novorossiya were equivalent spaces, that this was home to a distinct interest group ("ethnic Russians and Russian speakers"), and that this group was uniformly threatened by Maidan events in Kiev. Putin does not endorse separatism, instead stating that the "key issue is providing guarantees to these people." Putin's three assumptions about this region and "these people," however, proved to be incorrect. Our research reveals what people in most of southeast Ukraine really think of Novorossiya.

Our comparative project funded by the U.S. National Science Foundation examines post-Maidan attitudes in Ukraine, as well as in Crimea now annexed to Russia, and in the Russian-supported de facto states of Abkhazia, South Ossetia and Transnistria.  In December 2014, we organized simultaneous public opinion surveys in these regions and surveyed in 6 of the 8 oblasts of southeast Ukraine (hereafter SE6). We judged it impossible to do reliable survey work in war afflicted Donetsk and Luhansk, instead contracting with the Kiev International Institute of Sociology (KIIS) to administer a randomized face-to-face survey to 2003 persons in Odesa, Mykolaiv, Kherson, Zaporizhia, Dnipropetrovsk and Kharkiv. We asked a series of questions about Novorossiya.

The first was whether respondents thought Novorossiya was a myth or historic fact. Implicitly this is a question that sought to get at whether they viewed the newly hyped imaginary as legitimate or not. Over half (52 percent) of the SE6 sample deem it a myth but 24 percent considered it a 'historic fact' with a further 22 percent giving a 'hard to say' response.  (Much higher ratios, about three-quarters, in Crimea and in the Russian-backed de facto republics view it as a historic fact). To determine whether seeing Novorossiya as "historic fact' might be an endorsement of separatism, we asked directly if the concept could be the basis for separatism of the sub-sample of 970 in the SE6 who saw it in these terms or who gave a 'hard to say' answer to the myth-or-fact question.  Only 14 percent of this sub-sample agreed with this possibility but importantly 38 percent choose 'hard to say' indicating that the question was likely a sensitive one for them. Endorsing or considering the basis for separatism, we should appreciate, is profoundly politically incorrect in most contexts where a legitimate government remains in firm control.

We then posed a question to respondents about the use of the Novorossiya moniker giving them two declarative choices as well as the usual 'hard to say' and refuse options: (i) "it is Russian political technology to break up Ukraine" or (ii) "it is the manifestation of the fight of the population of southeast Ukraine for independence." Only 18 percent in SE6 were willing to choose this latter option (for the graph comparison to Crimea see our earlier post here). Barely over half the population (51 percent) in SE6 viewed Novorossiya as Russian political technology, in effect a geopolitical scam manufactured by Russian power circles. This split opinion is hardly a resounding affirmation of the worldview of Kiev and many Western observers, suggesting the term and its genealogy resonated with some even if they did not say so explicitly.

Since Putin presumed that ethnicity and language was a major cleavage in southeast Ukraine, we examined this belief by sorting our 2003 respondents into four self-declared ethnicity and language categories: Ukrainians speaking only Ukrainian at home (22.6 percent), Ukrainians speaking Russian at home (40.7 percent), Ukrainians speaking both languages (17.4 percent) and those who self-declared as ethnic Russians (11 percent).

Figure 1 reveals how these groups answered the latter Novorossiya question.  Little difference is seen within the Ukrainian population regardless of their home language with over half ascribing the term's appearance to the manipulations of Russian political technologists. However, the ethnic Russian minority (highest in Kharkiv and Odesa) shows a split with only a small minority attributing it to Russian propaganda. The high 'don't know' answer (38 percent) is typical of responses to sensitive questions by minority populations in conflict zones as we have observed elsewhere in our surveys of the former Soviet peoples.

Finally, Figure 2 disaggregates the results by geographic region. What is significant here is the degree to which Odesa and Kharkiv stand out as divided oblasts and cities. Making the not unreasonable assumption that many of those refusing or answering 'don't know' are avoiding revealing politically incorrect sentiments, these results demonstrate that SE Ukraine 6 is not uniform in its rejection of the Novorossiya project. It does have some support, potentially significant in Odesa and Kharkiv where there have been violent destabilizing events in recent months.

While Putin may have been glib in his assumptions about the region, we would be equally glib if we concluded that all in the region have definitely rejected separatism, or that it does not hold attractions for some. Some oblasts in southeast Ukraine are deeply divided, and we should acknowledge that. Indeed, we can identify four distinct zones in contested Ukraine today: annexed Crimea, rebel held Donbas, the divided oblasts of Kharkiv and Odesa, and the rest which are fairly solidly pro-Ukraine. A profound economic and legitimacy crisis is still unfolding in Ukraine and likely to place even greater stress on its institutions and people. Majority sentiment in Crimea is deeply alienated from Ukraine, and supportive of its annexation by Russia irrespective of legality.

Greater Novorossiya may be dead but a lesser Novorossiya lives on in the form of the Russian dependencies DPR and LPR. These appear to be fashioning themselves as de facto states, though they are very distinct from the other post-Soviet de facto states we have studied in depth. While some speculate about a deal 'giving up' Novorossiya for acknowledgement of Crimea's annexation, the grim reality is that there is no easy territorial fix to the multiple crises afflicting Ukraine. They were a long time in the making and they will take a long time to resolve.

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 #36
Russia Insider
www.russia-insider.com
May 25, 2015
Here We Go Again: Ukraine Asks For a Russia Gas Discount
Ukraine's request confirms its lack of money and suggests it has given up on its court case against Russia. Russia however may not be willing to grant another discount if Ukraine defaults.
By Alexander Mercouris

Latest reports confirm Ukraine has asked Russia to extend the discount it granted Ukraine last year for the gas Russia supplies Ukraine.

That Ukraine should make such a request proves several things.

First, it shows what everyone knows: Ukraine is desperately short of money.  

It struggled to get through the winter even with the gas discount from Russia.  In the event, it just about made it, helped by an unusually warm winter, and the collapse of production by Ukrainian industry, which will have caused energy consumption to fall.

Nonetheless many power cuts took place, in part because Ukraine ran out of coal as Ukraine's key coal producing regions now lie inside the Donetsk and Lugansk People's Republics with which Ukraine is in a state of war.  

Attempts to import coal from places like South Africa were a fiasco, and Ukraine was forced to turn to Russia again for help, this time for coal. Though the fact is being hidden from the Ukrainian and Western publics, it was coal and electricity from Russia - supplied without prepayment - that enabled Ukraine to pull through the winter.

Since then Ukraine's payments for Russian gas have come in dribs and drabs, in small amounts, right on the eve of delivery, emphasising the extent to which Ukraine now lives from hand to mouth.

The second point about Ukraine's request for an extension of the gas discount is that it suggests Ukraine has given up hope of winning its case in the Stockholm Tribunal either this year or perhaps at all.

Whether the Russians will be willing to extend the gas discount is another matter. The offer of the discount last year came amidst the negotiations that led to the Minsk Protocol in September. It was also made in the context of Ukraine's negotiations with the IMF to stabilise its economy.

As of now, Ukraine is not carrying out the commitments it made under the peace deal that was agreed in Minsk in February. The IMF plan announced last year has failed. Ukraine has just passed a law that prepares the ground for default.

If Ukraine does indeed default - or defaults selectively on the debts it owes Russia - then it is difficult to see Russia granting a discount for the gas it supplies Ukraine, given that a discount is in a sense a form of credit.

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 #37
Sputnik
May 26, 2015
From Nowhere to Nowhere: Ukraine Can't Fight Three Economic Crises at Once

Ukraine is facing economic collapse, which the current Ukrainian President Petro Poroshenko is unable to stop. He must fight three crises at once, which have dramatic consequences for the country and cause frustration among its residents, Spiegel wrote.

Ukraine has to cope with three economic crises at once, with the current government being unable to face such a challenge and improve the domestic situation, the German magazine wrote.

According to the magazine, there are three major problems:

First, there are direct consequences of the war, which has brought production in eastern Ukraine to a standstill.

Second, there was the termination of economic relations with its most important trading partner, Russia.

And third, the government is struggling against a severe structural crisis in the Ukrainian economy, smoldering for years.

The poor economic situation has dramatic consequences for the population and the government. Petro Poroshenko, who made a fortune with his confectionery production, is not able to prevent the crash of his country's economy, the magazine wrote.

According to the latest data, economic output in Ukraine plummeted by 17.6 percent in the first quarter 2015. The last proper economic growth was registered in 2011.

The situation is especially hard for Ukrainian residents. They are suffering an unprecedented increase of gas and heating costs as well as severe hryvnia devaluation.

Though currency devaluation may sometimes have positive impact, namely, making exports cheaper and the country more attractive for investors, in Ukraine it is definitely not the case.

Investments from abroad decreased due to military conflict and the unstable domestic situation, while  exports dramatically fell as trade relations with Russia were broken and industrial production, especially in the eastern regions, has been severely affected by the war, Spiegel wrote.

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 #38
Moscow Times
May 25, 2015
U.S. Social Networks, Blogs Allowed Back Into Crimea

The United States on Friday announced that U.S. companies can still give users in Crimea access to a range of free online communications services, despite an earlier U.S. ban on providing any services to the region after it was annexed by Russia last year.

The decision will allow U.S. Internet companies such as Apple and Google - who previously announced that they were cutting off service to Crimea - to continue services to the region without violating U.S. sanctions.

Russia seized the region from Ukraine in March last year, to which the United States in December responded by barring U.S.-registered companies from investing in Crimea or providing services to companies there.

The free online services now exempt from the ban include "instant messaging, chat and e-mail, social networking, sharing of photos and movies, web browsing and blogging," a document posted online by the U.S. Department of the Treasury said.

Ensuring that Crimeans are able to communicate with the outside world via the Internet is "in the United States' national security and foreign policy interests," the U.S. Department of Commerce said in a rule published online.

"Persons in the Crimea region of Ukraine may use such Internet-based communication to describe their situation directly and counter any false messages being propagated by those currently exercising control over the Crimea region of Ukraine," the agency said.

Since the region joined Russia, the new Crimean authorities have been accused in the West of suppressing media freedom. A television station for the Crimean Tatar population was forced to shut down last month after it was repeatedly denied a broadcasting license, raising a chorus of objections internationally.

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 #39
Russia Insider
www.russia-insider.com
May 26, 2015
US Scholar Scolds Obama for Letting Neocons Run Wild in Ukraine
David Bromwich, a top scholar from Yale, argues that neocons are hellbent on reversing any peaceful progress on conflict resolution.
Moreover they are constantly appeased by Obama who is a weak president who wants above all to avoid confrontation and responsibility
By RI Staff

In an essay for Harper's Magazine, "What Went Wrong," [http://harpers.org/archive/2015/06/what-went-wrong/]David Bromwich summarizes the lost chances of Obama presidency to generate real change in the US domestic and foreign policy, and make a clear break from the policies of the Bush-Cheney Administration.

Bromwich, one of top professors from Yale University, criticizes Obama for choosing "the path of least resistance" and not making enough sacrifices for his views and pre-election promises.

In a page on the US role in the Ukraine conflict, the author elucidates what we have been saying all along here at Russia Insider.

Referring to the aftermath of the coup in Kiev, Bromwich writes:

"The later stages of the enterprise called for the defamation of Vladimir Putin, which went into high gear with the 2014 Sochi Olympics and has not yet abated.

"When Nuland appeared in Kiev to hand out cookies to the anti-Russian protesters, it was as if a Russian operative had arrived to cheer a mass of anti-American protesters in Baja California."

We have witnessed 18 months of relentless, unwarranted Russia bashing by the corporate media, and Western diplomats. Bromwich is one of the rare scholars willing to admit at least that.

Bromwich goes on to say that neo-cons took a hold of Obama's foreign policy-letting Obama off the hook for the Ukraine chaos - and that he, choosing the path of least resistance, did not object as it absolved him of the responsibility for the outcome.

"Through the many months of assisted usurpation, no word of reprimand ever issued from President Obama.

"An intercepted phone call in which Nuland and Geoffrey Pyatt, the ambassador to Ukraine, could be heard picking the leaders of the government they aimed to install after the coup aroused no scandal in the American press.

"But what could Obama have been thinking? Was he remotely aware of the implications of the crisis-a crisis that plunged Ukraine into a civil war and splintered U.S. diplomacy with Russia in a way that nothing in Obama's history could lead one to think he wished for?

"His subsequent statements on the matter have all been delivered in a sedative nudge-language that speaks of measures to change the behaviour of a greedy rival power.

"As in Libya, the evasion of responsibility has been hard to explain. It almost looks as if a cell of the State Department assumed the management of Ukraine policy and the president was helpless to alter their design."

There is a big question mark whether he was in fact "helpless" to affect US foreign policy. How can that be? Doesn't the corporate media tells us that US president is the most powerful person on Earth?

The author's explanation for Obama's frequent change of mind is the power of the State Department over the White House:

"There is a sense-commonly felt but rarely reflected upon by the American public- in which at critical moments a figure like John Brennan or Victoria Nuland may matter more than the president himself.

"There could be no surer confirmation of that fact than the frequent inconsequence of the president's words, or, to put it another way, the embarrassing frequency with which his words are contradicted by subsequent events."

Bromwich adds:

"Edward Snowden, in an interview published in The Nation in November 2014, seems to have identified the pattern. 'The Obama Administration," he said, 'almost appears as though it is afraid of the intelligence community. They're afraid of death by a thousand cuts...leaks and things like that.'

"John Brennan gave substance to this surmise when he told Charlie Rose recently that the new president, in 2009, 'did not have a good deal of experience' in national security, but now 'he has gone to school and understands the complexities.'"

"This is not the tone of a public servant talking about his superior. It is the tone of a schoolmaster describing an obedient pupil."

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 #40
Kyiv Post
May 26, 2015
America should teach Ukraine to wage a clandestine war
by Alexei Bayer

Editor's Note: This is the last in three op-eds about America's 2016 presidential election campaign and the implications for Ukraine.

Russian President Vladimir Putin and his propagandists keep asserting that, in Ukraine, Russia is confronting the United States and that, because of Putin's steadfast defense of Russian independence, the Great Satan is licking its wounds.

Execrable Russian political scientist Sergei Markov has propounded a lovely theory, which has that the rest of the world secretly rooting for Putin to win, because if he does, America's plans for world domination will come a cropper.

It makes for amusing reading, especially since very few people in the United States are even aware that such world historical battle has been joined. In fact, a quick scan of news headlines in US media reveals that Ukraine is, if not on the back burner, at least far from the forefront of the American political agenda.

It is likely to remain there during the next year and a half, while the presidential campaign continues. Other issues that will dominate the political debate - such as ISIS, Iran and the Trans-Pacific Partnership - and in any case, given the deep ideological split in Washington, it is domestic policy that will preoccupy voters.

After the election, Washington will probably continue to neglect Ukraine. If the Republicans win back the White House, they will have their hands full dismantling Barack Obama's legacy in the area of health care, immigration and gay marriage. This won't be easy since each of these policies has already developed a sizeable constituency. If a Democrat prevails - whether it's going to be Hillary Clinton or someone else - the dysfunctional gridlock in Washington will continue and may even worsen.

Staying off America's political agenda would be a good thing for Ukraine. The worst thing would be for the new Cold War to flare up and for Ukraine to become a battleground in a proxy war between Moscow and Washington.

While analysts forever draw historical parallels with the previous confrontations between the two nuclear superpowers - from Korea and Vietnam to Afghanistan and Serbia - none of them are in any way relevant to the current situation. The Soviet Union was a self-sufficient autarky, and its far-flung empire was seen by the Kremlin as a bona fide alternative to the American-led economic system centered on the West. Moreover, communist leaders still believed in the fiction that they and their ideology are the way of the global political future. The communist world was weaker economically than the West, but not by an insurmountable margin. Finally, the Warsaw Pact had a formidable conventional military force; the Soviets could have easily overrun NATO defenses in Europe, forcing the United States to rely on its nuclear deterrence.

Now Russia has become the Sick Man of Eurasia. Its military is vastly inferior to the United States in every way, and it has become deindustrialized and utterly dependent on imports. Its economy, once thought to be the world's second largest, is now placed somewhere below Portugal's. In an era when technology and innovations dominate, it simply can't compete. Its nuclear warheads is the only thing that distinguish it from Sierra Leone.

Russia is angry, frustrated and peeved by its own irrelevance on the global scene. This is what makes it different from the old Soviet Union and what makes it extremely dangerous - to the world at large and, especially, to Ukraine. If the confrontation escalates, Washington could plunge the Russian economy into a severe depression, destroying its banking system and stopping the inflow of petrodollars. It never had this capacity in the early post-World War II decades.

Of course, there is a chance that a collapsing economy would trigger a palace coup in the Kremlin or mass protests in Russian cities, but a more likely scenario entails Putin raising the military ante in Ukraine. If the United States then starts arming Ukraine in turn, there is no telling how the conflict will develop. The only certainty is that Ukraine and its people are not going to come out a winner.

At present, Putin is not planning an escalation. On the contrary, he's ready for a tactical retreat, an uncertain truce in Eastern Ukraine for a period of up to a year. But he's sure not to give up on the idea of breaking up and subjugating Ukraine, and he will go on trying to strangle Ukraine economically and destabilize it politically with the help of terrorists and pro-Moscow agents. The process has already started.

The only way Ukraine won't become a battleground for a superpower confrontation is if it is politically strong and can set its own agenda, rather than depend on someone else's goodwill. Kyiv needs a respite as well, to implement economic reforms, rebuild its military and start creating institutions that are required to join the European Union. In the meantime, it will need from the United States what the United States seems willing to provide in any case: benign neglect. It needs Washington to be a guarantor of the last resort of Ukrainian sovereignty and to keep the level of sanctions on Vladimir Putin that would cripple his economy without totally devastating it.

Joint military exercises and training of Ukrainian soldiers by American instructors have a psychological effect, but Ukraine's conflict with Russia has never been an ordinary conventional war. This is why it has no military solution. It has been called a hybrid war and it is, in the final analysis, a KGB-style conflict. It has been waged by stealth, with "volunteers" and "vacationers" arriving in Ukraine without uniforms or identity papers. There have been lies and denials of the obvious from the highest level of the Russian government. It is a war of saboteurs and terrorists, as well as of saturation-level propaganda.

Where Ukraine really needs U.S. help is in the area of domestic security. In other words, it needs to fight the kind of war Russia has started - especially now, since the hot conflict in its eastern part has become stationary and the war is entering a clandestine phase.

In the years since the Sept. 11, 2001 terrorist attacks, America created a formidable security apparatus, especially in the area of intelligence and surveillance. Ukraine could benefit from close cooperation with the U.S. anti-terrorist establishment, from exchanging information and acquiring technological know-how and training. This can be done under any administration and it will be the one truly effective military help from Washington to Kyiv.

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 #41
Newsweek.com
May 25, 2015
Will Putin Gamble All On A Broader Ukraine Invasion?
BY DENIS CORBOY, WILLIAM COURTNEY, AND KENNETH YALOWITZ
Denis Corboy is a visiting senior research fellow at King's College London and was European Union ambassador to Armenia and Georgia. William Courtney is an adjunct senior fellow at the nonprofit, nonpartisan RAND Corporation and a former U.S. ambassador to Georgia and Kazakhstan (@courtneywmh). Kenneth Yalowitz, a Wilson Center Global Fellow, was U.S. ambassador to Belarus and Georgia.

Westerners strain to predict Moscow's next moves in Ukraine, and elsewhere.

President Vladimir Putin may think that Russia can weather Western reactions if he decides to move beyond the occupied part of eastern Ukraine, perhaps seeking to forge a land bridge between Russia and Crimea.

But will he consider economic and political constraints, akin to those that hastened the fall of the USSR after its intervention in Afghanistan?

A Kremlin decision to widen its assault in Ukraine might not be irrational. But would it be imprudent? This question is more complex.

NATO Commander General Philip Breedlove warns that Russian forces have "reset and repositioned," and may be preparing a fresh offensive in Ukraine. Were this to happen, the amount of force required would make it hard for the Kremlin to keep alleging that Russian military units were not fighting or soldiers were not dying in Ukraine.

Kiev's recent capture of two Russian soldiers underscores this dilemma, as does the release of slain opposition leader Boris Nemtsov's report detailing Russian military involvement in Ukraine.

The Kremlin would expect that expanded military thrusts would lead the West to ratchet up economic sanctions. But in light of current European opposition, Moscow may doubt that the West would begin arming Ukraine.

In any event, the Kremlin may think that Russia would succeed before any Western arming could be militarily decisive. Moscow would not expect NATO forces to intervene. Finally, the Kremlin may calculate that new territory seized would become permanent treasure, whereas over time Western sanctions and other measures of displeasure would ebb.

One issue is whether a wider attack would worsen Russia's economy. Sanctions, lower energy prices and state interference already weaken it. Although the extent of GDP decline thus far is modest, consumption is down by a tenth and investment may have fallen much more.

The Kremlin is touting import substitution, a discredited economic strategy. Small and medium-sized enterprises are often sources of innovation and supply chain efficiency, but they comprise a quarter or less of Russia's economy. This is a much lower share than in developed countries. Rampant corruption raises the costs of goods and services. Finally, for many years Crimea and occupied eastern Ukraine will be financial drains on Moscow.

Another consideration is whether new military action would strengthen the Kremlin's hold on power. Although the annexation of Crimea elevated Putin's public support, cracks in the edifice are appearing. Putin is unable to control a dispute between the Federal Security Service, which he once headed, and his strongman in Chechnya.

Ramzan Kadyrov has ordered the shooting of federal officials who enter the region without his permission. Extreme nationalists, some of whom Putin has empowered, resent his failure to seize all of Czarist-era "New Russia," now southern and eastern Ukraine. In the 2000s, when energy prices were high, Putin gained much of his popularity. Now that living standards are starting to fall, disaffection may grow. Labor strikes by unpaid workers are now breaking out.

A third issue is whether a renewed assault would help Russia gain international respect. The invasion of Ukraine and intimidating military exercises in the Baltic region are causing NATO not to cower, but to move forces closer to Russia's borders and perhaps spend more on defense.

Isolation from the West and its capital markets, and lower global energy prices, undermine Russia's bargaining position with China. Commercial ties are increasing, but Russia is now more a price taker and junior partner.

It is uncertain whether Russia's military, with its heavy reliance on one-year conscripts, could secure and hold new territorial gains in Ukraine against a possible insurgency.

If it is contemplating further action in Ukraine, the Kremlin faces a tough choice. The decision could have an enduring impact on Russia's fortunes.

The late Georgian President Eduard Shevardnadze told us of his outrage that a few senior members of the Soviet Politburo decided to launch a full-scale invasion of Afghanistan in 1979. The Soviet economy was on a downward course and the war further sapped it. The conflict led to the deaths of large numbers of soldiers. Then as now the authorities tried to hide them. A decade after the invasion Soviet forces withdrew in defeat, and two years later the USSR collapsed.

The incursion in Ukraine is modest compared with that of Afghanistan, and the number of Russian deaths is far smaller. Yet once again a limited number of Kremlin leaders, without benefit of public debate, may make a fateful decision about using force against a neighbor. The leaders should bear in mind the lesson of Afghanistan and exercise caution.

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 #42
Ukrainian Conflict is between 'Heirs of Kievan Rus' and 'Heirs of Golden Horde,' Piontkovsky Says
Paul Goble

Staunton, May 25 - "The Ukrainian-Russian conflict is to a significant degree a conflict between the heirs of Kievan Rus [Ukraine] and the heirs of the Golden Horde" [Moscow], according to Andrey Piontkovsky, and one of its key results will be "an intensification of the swallowing of Russia by China."

In the course of a wide-ranging interview yesterday with Artem Dekhtyarenko of Ukraine's Apostrophe news agency, the Russian commentator argues that it is a mistake to see what is taking place in Moscow as "a strengthening of the ties of Russia and China" (apostrophe.com.ua/article/politics/2015-05-24/putin-davno-provalil-proekt-novorossiya---politolog-piontkovskiy/1749).

Instead, he argues, it is part of a long ongoing process that has accelerated in the course of the Ukrainian crisis of "the swallowing of Russia by China." At the recent Victory Day parade in Moscow, something "symbolic" happened that had never occurred "in the thousand year history of Russia:" three units of the Chinese military took part.

"For the Chinese who devote enormous importance to symbols," Piontkovsky says, "this was as it were a parade of their victory" because it represented "a foretaste of their complete victory over Russia."

A year ago, the Chinese clearly signaled that this is how they view things: Beijing's prime minister told a gathering in St. Petersburg that "you have big territories, and we have many Chinese workers. Let's unite these resources for the strengthening of our common economic potential."

The Chinese had never permitted themselves to express such notions so boldly, the Russian analyst continues; but it is clear that they now have "complete confidence that having cut itself off from Western civilization, Putin's Russia will become an easy catch" for Beijing.

That is all the more so, Piontkovsky continues, because there are influential people in Russia itself who "welcome this process" because they "consider the Golden Horde to have been the golden age of Russian history." Thus, "the swallowing of Russia by China is a return to its deepest historical roots."

Those who think in this way have a certain measure of truth on their side, the Russian commentator concludes, and that in turn means that the current conflict between Ukraine and Russia is "to a significant degree" a conflict between the two states these two countries emerged from, Kievan Rus in the case of Ukraine and the Golden Horde in the case of Russia.

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 #43
Transitions Online
www.tol.org
May 25, 2015
Russia's Expansionist Disease
How the 'Crimea virus' is eating away at the country's foreign and domestic ambitions.
by Andreas Umland
Andreas Umland is a senior research fellow at the Institute for Euro-Atlantic Cooperation in Kyiv and general editor of the book series Soviet and Post-Soviet Politics and Society, published by ibidem Press, Stuttgart and Hannover

In the understanding of too many Western journalists, diplomats, and politicians, the "Ukraine crisis" may have dire consequences for Ukrainians, Crimean Tatars, anti-imperialist Russians, and other Eastern Europeans. It is also admitted as an obvious embarrassment for the EU and NATO. Yet some seem to assume that Ukraine's "crisis" will have few significant repercussions beyond Eastern Europe. At most, it is considered yet another territorial European issue difficult to solve. It is hoped, however, that it can be "frozen," within some peculiarly post-Soviet failed-state equilibrium, resembling those already in place in Moldova and the southern Caucasus.
 
Some ramifications of Russia's annexation of Crimea and covert intervention in the Donets Basin, however, go beyond Eastern Europe and are creating major deadlocks in northern Eurasia, threatening the foundations of Europe's or even the world's security system. Above all, they are triggering internal aftershocks in humanity's largest country, permanent UN Security Council member, and second nuclear power, Russia - with global political implications.
 
END OF THE RUSSIAN ECONOMIC MIRACLE
 
Russia has entered a path of protracted decline. The World Bank's recent forecast of a 3.8 percent decline in Russia's GDP this year might still be too optimistic, as it does not account for the potential cumulative effects of increasing international tensions and the economy's structural defects. While the growing aggravation and unpredictability of Russia's economic calamity is a result not just of the "Ukraine crisis," Russia's military intervention in Ukraine and its effects on other spheres of Russia's foreign and domestic affairs have been a catalyst. They are magnifying the salience of earlier unresolved problems in areas including state administration, regional development, industrial structure, immigration and emigration, demography, technological innovation, business management, public health, as well as higher education.
 
A sober evaluation of Moscow's economic, political, diplomatic, and cultural challenges and failures makes for a pessimistic view of the country's near future. The tireless bluffing of the Russian leadership and its "information warriors" should not distract from the fact that a prolonged Russian social crisis may count as a best-case scenario and that the current recession may turn into a depression. Even a chaotic dissolution of the Russian Federation, in case of domestic political strife, is no longer an unrealistic worst-case scenario.
 
Reasons for such pessimism are not hard to find, whatever the Kremlin's hype to the contrary.
 
Above all, over the last 15 years of favorable world economic conditions, Russia has not managed to tackle its peculiarly post-Soviet version of "Dutch disease." It will presumably also not be able to do so under current difficult circumstances and will be stuck with its dysfunctional economic structure for years. During the past period of high energy prices and close economic cooperation with the EU, Russia had the chance to establish the rule of law, create a functioning bureaucracy, and diversify its economy. In 1999-2013, the enormous income generated by energy exports, relative socio-political stability, and Western readiness to engage with Russia's leadership, companies, and regions (in spite of abuses in Chechnya and its sponsorship of the breakaway Transdniester region in Moldova as well as Abkhazia and South Ossetia in Georgia) gave the Kremlin a window of opportunity to modernize the country. In 2008, Berlin even closed its eyes to Russia's abrogation of its EU-brokered peace treaty with Georgia and started an official Modernization Partnership with Moscow that served as a template for Russian agreements with other EU countries. Yet the Russian economy became not less, but more, dependent on raw material exports during the last two decades. State corruption did not fall, but skyrocketed under Putin's alleged "dictatorship of law," a main slogan of his first presidency.
 
This fundamental defect was worrisome, but of only limited political consequence, as long as world-market energy prices were rising and the West was ready to invest heavily in and trade with Russia. The Kremlin had enough cash to distribute to its many servants and - to a lesser degree - among pensioners, students, and other dependent citizens. That situation drastically changed in 2014, in the wake of new OPEC export policies. The oil price may never return to its previous peaks - with far-reaching consequences for Russia's economy and political system. Lowering tensions between Iran and the West, technological advances in the extraction, transportation, and use of fossil energy, as well as the rise of non-fossil sources will continue to cut the market share and to limit the profitability of Russia's intense energy trade.
 
THE DETERIORATING IMAGE OF PUTIN'S RULE
 
The deep structural defects of the Russian economy are being compounded not only by rapidly shrinking export revenues for Russia's energy companies and state budget but also by a steep drop in worldwide confidence in the sanity of the Russian leadership, the capacity of the Russian Rechtsstaat, the prospects of the Russian market, and the potential of the Russian economy itself. Especially in the European Union, Russia's most important trading partner and foreign investor, the mood is darkening by the month. To be sure, there was already growing mistrust of Russia before 2014, due to Vladimir Putin's increasingly manifest authoritarianism, the Russian economy's dive during the 2008-2010 world recession, and the Kremlin's ever more dubious conduct of foreign affairs. Russia's lasting occupation of Abkhazia and South Ossetia, or calculated support of Syria's Bashar al-Assad were among dozens of earlier points of disagreements with the West. Until the "Ukraine crisis," the problematic issues in Russian-Western relations were, however, mitigated by the influence of pro-Russian political factions and business interests in the West. They were also partly discounted by the assumed improvement in the West's relations with Russia that would come from Russia's allegedly ongoing modernization.
 
Today neither the previously influential partners of, nor the formerly optimistic outlook on, Russia plays much role in the formation of Western opinions and policies toward Moscow. In view of the Kremlin's shocking actions in Ukraine, the historical meaning and political interpretation of the entire period of Putin's rule since 1999 is changing. Most Putinversteher ("Putin-understanders") in Germany are now, at best, ignored or, at worst, laughed at, if not despised, for their misrepresentation of Russia's recent history and leadership during the last year. To be sure, Russia still has considerable sympathy in politically or economically underperforming countries such as Greece, Hungary, or Cyprus. The Kremlin is also flirting with radicals on the European right and left and still commands some sympathy from various political pensioners in Germany. Yet Moscow's very old and completely new favorites in the West only underline, in the eyes of the mainstream European public, how desperate, unattractive, and cynical the current Russian leadership is.
 
That disenchantment is a healthy development. The West has today a more realistic picture of the nature of Russian politics under Putin than it had before 2013. The Kremlin, in turn, may claim that the "Ukraine crisis" has made clear who is a friend and who is a foe of the Russian nation. Behind this clarification, however, looms the worrisome paradox that Russia's major trading partner and foreign investor, and formerly strategic ally, the EU, has become its main political critic and geopolitical competitor in Eastern Europe (as the U.S. turns its attention to the Pacific region). While the union's member countries too will suffer from the economic effects of this curious contradiction, Russian industry and society will be hit far harder than the EU's as a result of the growing disillusionment and distrust of Russia among Western businesspeople, politicians, diplomats, journalists, and experts.
 
Thus, the current tensions between Russia and the West will have repercussions that cannot be easily overcome, even if a new détente materializes soon. The Russian leadership is lying when it says it does not need the West, that current Western sanctions do not seriously affect Russia, that the Kremlin has other options, and so forth. The role that EU clients, companies, universities, research institutes, and joint projects in many fields played in Russia's relatively impressive resurgence until 2008 was significant. As the world-economic conditions for energy exporters worsen and the West fundamentally changes its attitude to Russia, the Russian economy will be left in limbo. Russia's elite clans will clash ever more openly for a share of a rapidly shrinking pie.
 
Russian society is entering a state of permanent crisis. The full range of international ramifications of this destabilization are difficult to foresee. They constitute risks, above all, for Ukraine and other Western-leaning post-Soviet republics, yet will also affect countries beyond this area, from Central Asia and Western Europe to North America. Not only the EU, but all neighbors, partners, and competitors of Russia will have to pay more attention to, and may be affected more deeply by, Russia's increasingly chaotic domestic and foreign affairs than hitherto. At least, in Northern Eurasia, crisis-ridden Russia will for years remain a headache for decision-makers in its neighborhood.
 
NO 'COMMON EUROPEAN HOME'
 
Some nurture the illusion that the West could prevent or at least soften Russia's ongoing fall. They believe that the West would be able to re-incorporate Russia swiftly into its system of concentric integration circles, given a friendly signal from the Kremlin or a leadership change in Moscow. While such calculations provide some hope, they may have already become unrealistic. As long as Crimea remains annexed, an instant reset of Russian-Western relations will remain difficult, if not impossible.
 
Only somewhat more than one year ago, Russia seemed to be slowly but steadily integrating with the West, and thereby gradually implementing Mikhail Gorbachev's once pronounced vision of a "common European home." Under Boris Yeltsin's presidency, Russia entered the Council of Europe and the G8. The CSCE transformed into the OSCE. Russia signed a Foundation Act with NATO and concluded a cooperation agreement with the EU. Under Putin's first two presidencies and Dmitry Medvedev's pseudo presidency, the Kremlin's course changed, to be sure, in substance. Yet the Kremlin's official pro-European line continued and briefly became Medvedev's semi-official doctrine. Under Putin, Russia entered a joint Council with NATO. Moscow identified four Common Spaces of cooperation with the European Union. It announced Strategic and Modernization Partnerships with the EU and its member states and started negotiations for a so-called New Agreement. The Russian Federation recently became a member of the World Trade Organization. The next steps could have been Russia's entry into the OECD and, later, the signing of an enhanced Russia-EU cooperation or even association treaty.
 
That story, until recently particularly popular in Germany, is now over and will probably not resume soon. In 2014, Russia was excluded from the G8 and stripped from its voting rights by the Council of Europe's Parliamentary Assembly. The negotiations about Russian membership in the OECD and New Agreement with the EU are suspended. The Strategic and Modernization Partnerships with the EU exist only on paper. The Foundation Act and NATO-Russia Council are dead and may never be resurrected. Russia's expansion into Moldova, Georgia, and Ukraine, and especially its formal annexation of Crimea, have shattered the foundations of the 1975 Helsinki Accords and the 1990 Paris Charter of the CSCE. During the past months, Russia has been undermining the reputation of the OSCE by its covert boycotting of the organization's monitoring mission in eastern Ukraine and selective implementation of the Minsk accords. Moscow is also subverting a core function of the UN by using its Security Council veto power to defend territorial gains. This is done, moreover, at the expense of a founding member of the UN (the Ukrainian Soviet Republic had, unlike the Russian Federal Soviet Republic, its own seat in the UN, in 1945-1991).
 
Russia thus has not only violated numerous treaties, especially with Ukraine. It has also devalued important networks and organizations it had been integrating or cooperating with for years, if not decades. While most of these international institutional links are formally still in place, it is unlikely that Russia will become a fully functioning part of them anytime soon. A good-case scenario would be that the Donbas conflict becomes "frozen" and that the so-called Luhansk and Donetsk "republics" develop into more or less peaceful Russian protectorates resembling Transdniester, Abkhazia, and South Ossetia - something the West could, perhaps, live with. However, the issue of Crimea's annexation will remain open and may persist as a matter of contention for decades. While Western states and international organizations have been willing to put up with Russia's territorial diversions in Moldova and Georgia, they cannot accept an official territorial seizure by military force.
 
MORE PROBLEMS TO COME
 
The idea of a common security and trade area "from Vladivostok to Lisbon" (not to mention Vancouver) will remain an illusion as long as Crimea is annexed to Russia. Given the Kremlin's determined incorporation of Crimea's public administration, juridical institutions, local economy, educational system, and cultural life into Russia's sociopolitical system, the Crimean issue may have already passed the point of no return. At the same time, information leaks, investigate journalism, eyewitness testimonies, and scholarly research are documenting ever more clearly the aggressiveness and illegality of Russia's behavior toward Ukraine since February 2014, if not before. As more people in the West and elsewhere become aware of Crimea's Soviet and pre-Soviet past, the dubiousness of the Russian Federation's historical claims to the faraway exclave will become better understood across the world (Crimea never belonged to the current Russian state as such but, since 1783, to the Czarist and later Soviet empires of which Ukraine was also a part. Moscow would, in view of its rationale for Crimea's annexation, also be entitled to capture much of the territory of mainland Ukraine and other post-Soviet states.)
 
In addition, the horrendous past and difficult present of the peninsula's indigenous people, the Crimean Tatars, is becoming an increasingly well-known and salient issue in international debates about the "Ukraine crisis." This too will have unpredictable diplomatic as well as political consequences and could complicate, for instance, Russian-Turkish relations. The Turks are ethnically close to Crimea's Tatars, and Turkey hosts a large and politically influential Crimean Tatar immigrant community. The case of Turkey's interest in Crimea, and the country's growing importance for the Kremlin in connection with a new Black Sea gas pipeline project, is an illustration of how the "Crimea virus" will infect many of Russia's foreign affairs. Moreover, there are various logistical and infrastructure-related complications as well as high costs of the remote peninsula's inclusion into the Russian economy. The "Crimea virus" may soon start to also weaken the Putin system from within. Crimea is a not only thorny but also in some regards poisonous issue to Russia's international relations and domestic life.
 
Given the magnitude of international and domestic problems that Russia will encounter during the next years, one can only hope for sanity in Moscow. Sooner rather than later, Russia's elite needs to soberly reassess the events of 2014, their repercussions for Russia's future, and the feasibility of alternatives to Russia's integration into Europe. Once the mood in Moscow changes in principle, Ukraine, the West, and Russia may have a chance to get out of the current deadlock.

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