#2
Russia Beyond the Headlines
www.rbth.ru
June 12, 2015
25 years of post-Soviet Russia: How far has the country come?
On June 12 Russia celebrates the 25th anniversary of the proclamation of the Declaration of Sovereignty of the Russian Soviet Federative Socialist Republic, the act that formed the basis for the construction of post-Soviet Russian statehood. Summing up this period, Russian experts say that in many respects post-Soviet Russia has fulfilled itself as a state, but express reservations about the viability of an authoritarian system.
Alexey Timofeychev, RBTH

The year 1990, when the Declaration of Sovereignty of the Russian Soviet Federative Socialist Republic was adopted, was a time in which the Soviet Union's rapidly progressing decline had become patently clear. The processes that were to lead to the country's disintegration in December 1991 were already at work. The USSR was disturbed by mass rallies whose participants demanded radical economic and political reforms.

The protesters insisted on the abolition of the Communist Party's monopoly of power and eventually succeeded, leading to the appearance of the post of president in the Soviet Union, which was taken by the party's general secretary, Mikhail Gorbachev.

The economic situation was rapidly deteriorating, with shortages of food and goods reaching colossal proportions. The Soviet Union began to receive humanitarian aid from abroad. Lithuania declared independence and secession from the Union, which led to an economic blockade of the republic by Moscow. The other Soviet republics declared their state sovereignty within the USSR. Russia adopted a similar declaration on June 12.

It spoke of the "determination to create a democratic state of law as part of the renewed Soviet Union." The declaration established the supremacy of the constitution and laws of the republic on the territory of the Russian Soviet Federative Socialist Republic and reaffirmed the right of free secession from the USSR. The document laid the foundations of the statehood of post-Soviet Russia.

'The final nail'

Assessing the path traversed by the Russian state by the results of the 25-year period, analysts tend to believe that in terms of its main features, post-Soviet Russian statehood has passed the test of time.

"The declaration itself is a very contradictory phenomenon. On one hand, it determined the collapse of the USSR and, on the other, retained the territory of the Russian Federation," political analyst Dmitry Andreyev told RBTH.

He believes that the declaration of Russia's sovereignty was "the final nail in the coffin of the Soviet Union." However, there could have no longer been any other scenario, and it was the "choice of the best of the worst options," since the opportunities to preserve the integrity of the Soviet Union had been already missed.

According to Boris Shmelyov, head of the Center for Political Studies of the Institute of Economics, "having initiated the collapse of the Soviet Union, the Russian people effectively abandoned part of itself," since "the Soviet Union was also greater historical Russia."
 
Unstable statehood

Although in the past 25 years Russia has managed to create institutions of governance and civil society, to establish an economic system, the Russian statehood still failed to acquire the necessary stability over the same period, the analyst points out.

According to Shmelyov, this is largely due to the fact that Russia has not yet managed to build an effective democratic political system.

"We have an authoritarian regime even if a soft one; a system of checks and balances has not formed; the parliament does not work - it's just a voting machine; there is no stable party system, a lot of corruption," he said in an interview with RBTH.

At the same time, according to the president of the National Strategy Institute, Mikhail Remizov, this system has its advantages in terms of consolidation of power and the ability to weather crises. Describing the role of the institution of strong presidential power in Russia as generally positive, the analyst called it the "cornerstone on which the national construction rests."
 
The foundations of presidential power

The tradition of strong presidential power in Russia today was laid by the first post-Soviet leader Boris Yeltsin (1991-2000), a man whose reign is widely seen as a time of genuine democratic experiment in Russia.

However, Boris Shmelyov considers Yeltsin as the founding father of what he calls "soft authoritarianism" in Russia, seeing evidence of this in the 1993 constitution - "adopted by the first Russian president" - according to which the Russian political landscape is dominated by the institution of the presidency, which overshadows all other bodies of government, while the parliament plays a secondary, subordinate role.

This model was inherited and subsequently further strengthenedby Russia's current president Vladimir Putin, a man who in his first two terms (2000-2008) was widely seen as having brought stability and economic prosperity to Russia, despite attracting harsh criticism from progressives both inside the country and abroad for restricting media freedom and failing to crack down on issues such as widespread corruption. Putin's decision to seek a third term has also been controversial, with large-scale protests taking place in Moscow December 2011 to May 2012.

The challenge of multi-ethnicity

However, speaking about the positive role played by the institution of strong presidential power in Russian conditions, political scientists stress at the same time the weakness of other state institutions, including the parliament. In addition, listing the vulnerabilities of modern Russian statehood, some observers point to the ethno-territorial principle of the federation - the presence of the ethnic republics in the Russian Federation.

Remizov points out that the course of Soviet nation-building is being continued in this respect - instead of creating a nation as a single political entity, the Russian Federation is building a multi-ethnic state. "If we talk about the plurality of nations within the country, it means that the country is made up of subjects entitled to self-determination, with the ensuing consequences," he notes.

'No sense of a young country'

In addition to the ethnic structure of the country, experts refer to another controversial feature connected to the Soviet past: the widely-held belief that the ideology of modern Russia is too focused on its nostalgic Soviet baggage.

According to Mikhail Vinogradov, president of the St. Petersburg Politics Foundation, the Russian Federation is shying away some what from its present statehood - which may be associated with nostalgia for the stability of the Soviet state system-and trying to strengthen it by claiming its succession from the USSR.

"This is a serious risk, because by tracing its history from [the founder of the ancient 9th-century Russian state] Rurik, the Russian Federation deprives itself of the feeling of a young country, the historical dynamics of a young country," the expert told RBTH.

"Meanwhile, those post-Soviet countries that consider themselves young are showing better [economic] dynamics," said Vinogradov. He pointed to the success of Kazakhstan and Azerbaijan, which have shown high economic growth rate over the last 15 years, while preserving social and political stability - though both, with their authoritarian models of governance and petrodollar-dependent economies, fall well behind the star of the post-Soviet world, little Estonia, which since gaining independence in 1991 has reinventeditself as a prosperous modern democracy based on one of the world's most hi-tech economies.

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 #3
Ever more Russians see Russia Day as real holiday, not just extra day off
By Lyudmila Alexandrova

MOSCOW, June 11. /TASS/. Russia Day, originally conceived as the nation's main official holiday to be marked on June 12, is perceived as a real occasion to celebrate by an ever greater share of Russians in the context of the overall surge of patriotism. Although the share of those who see the day as just an extra day off is still large. As for the general public's knowledge of the history behind this holiday, which heralded the forthcoming collapse of the Soviet Union and the emergence of new Russia, it leaves much to be desired. For the younger generation the events of 25 years ago are a tale as old as time, sociologists say.

On June 12, 1990 the First Congress of People's Deputies of the Russian Soviet Federative Socialist Republic (RSFSR) voted for a Declaration of the RSFSR State Sovereignty. The Soviet Union would stay in existence for another year. In 1990 Mikhail Gorbachev was still president of the USSR, and his chief political opponent, Boris Yeltsin, holding the post of the Russian parliament's speaker, was the one who initiated the Declaration's adoption.

June 12 has been a public holiday since 1992. A short while later the date was called Russian Federation State Sovereignty Declaration Day and then, Independence Day. However, the latter left the public at large wondering: "Who or what are we now independent from?" people were asking each other.

All that caused a great deal of confusion in people's minds. On the eve of the holiday several sociological centres have held opinion polls in order to find out Russians' attitude to July 12. The national public opinion studies centre VTSIOM has found out that only 4% of Russians know with certainty that Russia Day is marked on the day the sovereignty declaration was adopted.

However, the share of those who believe June 12 is a real holiday has been growing steadily. The public opinion fund FOM says there are 45% of such respondents, in contrast to 15% in 2005 and 29% a year ago. In the meantime, the percentage of those for whom it is just an extra day off has been down to 42% from 73% in 2005 and 60% a year ago.

FOM chief Aleksandr Oslon attributes this to the return of Crimea and Sevastopol to Russia's fold.

"Our society today is in a different condition. It is one of the symptoms, one of the manifestation of the changes that happened in March 2014. Crimea in March 2014 was the turning point," he said.

"From that moment on all events inside the country and abroad, the crisis in Ukraine included, have begun to be looked at from a different angle," Oslon said to explain the changes in the state of the public mind. "We have always considered ourselves as losers invariably falling behind." To a certain extent that feeling created a sort of inferiority complex, Oslon said, adding that March 2014 brought about a drastic change.

That the people by and large are curious about the holiday's origin is easy to explain, the head of the Comprehensive Social Studies Centre at the Russian Academy of Sciences' Sociology Institute, Vladimir Petukhov, told TASS.

"Firstly, since 1992 both the holiday's name and the political interpretation of events that brought it into being have changed several times. First, the date was perceived as a triumph of democracy, then the notion 'independence' was brought to the fore. For young people those are events are a tale as old as time. Many are ignorant of the country's latest history," he said.

Petukhov believes that this holiday has lost its historical connotation and identity. As a matter of fact it has become a holiday honoring Russian statehood regardless of its historical context.

"These days its popularity has been growing with the surge of patriotic sentiment and Russians' self-esteem. It has turned into a holiday of national pride."

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 #3a
Business New Europe
www.bne.eu
June 11, 2015
'Putin is not Auric Goldfinger.' Is sentiment towards Russia turning?
Is sentiment on the Ukraine-Russia conflict turning amongst Western politicians and journalists?
Ben Aris in Moscow

Is sentiment on the Ukraine-Russia conflict turning amongst Western politicians and journalists? A series of events in the past month suggests so, and in just the last week a string of articles attempted to inject a note of pragmatic realism into the debate, where shrill warmongering was the previously the norm.

The mood music changed dramatically in May when US Secretary of State John Kerry flew to Sochi to meet his counterpart Sergei Lavrov, his first trip to Russia since hostilities broke out in Ukraine more than a year ago. The two foreign ministers discussed a range of problems, mostly in the Middle East, whereas Ukraine did not top the agenda, according to reports. That was followed by a similar trip a day later by US top diplomat Victoria Nuland to Moscow, where her condemnation of Russia's actions in Ukraine was noticeably muted.

This milder tone has since been reflected in a series of opinion pieces in various high profile publications. New York University professor and bne IntelliNews columnist Mark Galeotti contributed two of his reliably level-headed takes on Russia in the last week. The first was an opinion piece in the Moscow Times calling for more Russophiles.

"Current dialogue between Russia and the West scarcely deserves the name. Too often, it is simply a contest of postures and a recitation of grievances," Galeotti wrote. "This is doing no one any good. For all kinds of reasons, the West needs more unsentimental Russophiles."

He then followed up with a piece in the June issue of bne magazine, arguing that Russia is not a dictatorship but has its own kind of political pluralism, except it is a very different and imperfect version of what we are used to in the West.

"Russia is not Mordor. Let me explain. We love to understand and explain by analogy. This can be a powerful tool, but it always carries with it the risk of caricature, oversimplification and downright misdirection," Galeotti wrote, concluding, "In other words, while obviously Russia is no representative democracy, and there are no meaningful constitutional constraints on [President Vladimir] Putin's authority, that does not mean that this is totalitarianism."

Until now, the debate has been ideological and vitriolic, but the aforementioned note of pragmatic realism is certainly creeping into the discussion. Despite vehement condemnation of Russian actions over the past 16 months, most of it justified, Putin has delivered on his earlier promise of prosperity for the Russian people, and, more recently, restored their sense of national pride, albeit at a cost paid in blood by Ukrainians.

The former KGB officer should have stepped down at the end of his second presidential term in 2008 and would have had a good chance of going down in history as the great statesman who transformed Russia. But he stayed on and will now probably be remembered by many abroad as a bloody-minded thug. But the vast majority of the Russian people continue to want him as leader - and it is their, not our, choice - so the West will just have to deal with that fact.

The shift in tone still hasn't stopped most Western media lambasting Russia. The escalation in fighting on the weekend of June 7 ahead of the G7 meeting in Berlin led to headlines like "Minsk II is dead: where do we go from here?" However, the OSCE reported the fighting had died down after the G7 summit was over and the Western leaders studiously ignored the obvious breach of the ceasefire terms. No one wants to go to war with Russia, as a poll by Pew showed this week.

Several well-respected commentators have begun to offer a more nuanced take on Putin and Russia's ambitions. One of these was from Bloomberg columnist Leonid Bershidsky, titled "Putin is No James Bond Villain." Bershidsky is no Putin apologist. A former editor of the liberal Russian daily Vedomosti, he recently emigrated from Russia for Berlin for political reasons, denouncing the country's Crimea snatch in a forthright column as he left, knowing it was probably a one-way swing of the door while Putin is in power.

"Putin is a rogue dictator and respects nobody's rights but his own. That doesn't, however, mean that he is intent on destroying the world with nuclear weapons unless it bends to his will, or on launching a Hitleresque blitzkrieg in Europe," Bershidsky wrote in his regular column for Bloomberg. "Adventures in the style of Auric Goldfinger, or Ernst Stavro Blofeld, would be too risky for the real life Putin."

Another theme gathering momentum is that sanctions on Russia don't work, won't make one iota's difference to its foreign policy, and have effectively killed the nascent opposition movement thanks to rising nationalism, while doing as much damage to Europe's economy as to Russia's.

Writing for Foreign Policy, Suzanne Nossel wrote a concise analysis of the issues in a piece entitled "It's Time to Kill the Feel-Good Myth of Sanctions" this week following an obviously tense debate between US President Barack Obama and German Chancellor Angela Merkel at the G7 summit regarding the sanctions. In the run-up to the meeting, both the German business lobby and press were especially vocal in calling for an end of the measures, whereas the US wants to maintain sanctions until Russia buckles and in effect abandons any interests in Ukraine.

"In the case of Russia, the United States and its European allies need to recognize that - at least as long as Putin is in power - Russian behavior won't be shaped by carrots and sticks," Nossel wrote. "Part of the shift will be rhetorical. Rather than promising to isolate Russia entirely, something the United States and its allies cannot achieve without the support of China, Brazil, India, and others, the administration could pledge to keep its distance."

bne IntelliNews has also argued that sanctions as a policy tool to change Russian policy have no effect, but as a negotiating chip they are obviously useful as the sanctions do cost Russia a lot of money and cause great inconvenience.

Why now?

Why are commentators drifting towards a more conciliatory tone now? Several factors are at play, but briefly they include the obvious rallying round Russia by the other BRICS nations. The attempt to isolate Russia has simply catalysed the intertwining of political and economic relations between the BRICS (Brazil, Russia, India, China and South Africa) that was symbolised by this year's guest list at Russia's WWII Victory Day celebrations on May 9. Heads of countries that account for more than half the world's population were on the podium with Putin, while Western leaders unanimously chose to stay away - except Merkel, who showed up in Moscow the next day, a conciliatory gesture in itself.

Another key factor is that Russia's economy, while wounded by the double whammy of sanctions and a collapse of the oil price in December, has proven to be a lot more resilient than anyone was expecting, underscoring the limited effectiveness of the sanctions regime. Some doomsayers were predicting a 10% economic contraction this year, whereas the damaged caused is looking milder and milder as each month passes.

The flip side of this coin is the worse-than-expected collapse of Ukraine's economy and the increasingly large amounts of money the country needs simply to function. Going into the Euromaidan protests at the start of 2014, economists estimated Ukraine needed about $15bn-$25bn to sort itself out. Post-civil war that bill is now $45bn, according to the International Monetary Fund (IMF), but probably closer to the $75bn estimated in a recent comment by bne Intellinews columnist Mark Adomanis - money no one wants to or can afford to lend to Ukraine.

Professor Anders Aslund was just in Kyiv for a week and did the rounds with almost everyone in government. A former advisor to the Yulia Tymoshenko administration, Aslund knows Ukraine from the inside. "My overall assessment is rather pessimistic. I had an eerie feeling of Moscow, May 1992. The whole thing is about to fall apart politically. The problems are just overwhelming. [Ukraine's President Petro] Poroshenko and [Prime Minister Arseny] Yatsenyuk are good but not fully focused on reforms, too preoccupied with vested interests. The whole law enforcement apparatus is awful. The economic reforms are impressive but not enough. The IMF program is severely underfunded," Aslund wrote in an email to his personal distribution list.

Finally, there is the obvious reluctance on the part of Western Europeans to start a war with Russia to rescue Ukraine, which isn't a member of the EU or Nato, nor ever likely to be. A recent poll by Pew found that less than half of Europeans would be willing to use force against Russia if it attacked a Nato member, and only 29% of Germans blame Russia for the violence in Ukraine. The lack of domestic political support for a military campaign against Russia means Western leaders would not be able to start a war even if they wanted to. In the world of diplomacy, you cannot make threats if you are not prepared to carry them out.

Where do we go from here? It's impossible to say as there are too many fluid factors in play. According to speculative reports coming out of Ukraine, the Kremlin didn't sanction the pro-Russian rebel attack at the weekend and refused to supply the rebels with support. Clearly Putin doesn't have full control over the rebels as is widely claimed in the West. At the same time, Poroshenko's government is under growing pressure, with some three-quarters of the people "dissatisfied" with his performance. It is also not clear if Kyiv will sanction elections in the autumn that were agreed in Minsk. In short, despite the improvement in sentiment, Ukraine remains an enormous mess. Too much blood has been spilt and what trust there was between East and West has been too badly damaged for there to be any quick and clean resolution to the conflict.

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 #4
Interfax
June 11, 2015
Medvedev calls on journalists to stay independent when making judgments

Russian Prime Minister Dmitry Medvedev believes the mass media should not become a propaganda weapon.

"It is obvious that the work of journalists is often very difficult. Journalism is not held in much regard on the media scene, propaganda is much more important. Objective and honest views often contradict ideologies," Medvedev said at the World Congress of Russian Press.

In this regard, the task of any journalist is to stay a journalist, state the truth and keep their judgments independent. "However, it is obvious that it is very difficult now, especially in a situation when virtually anyone can become a mass medium," Medvedev said.

Medvedev said the level of confidence in the mass media was previously connected to the state registration of the mass media. "And now, with the development of the Internet and the blogosphere, all these criteria got mixed and, of course, it's a totally new situation," he said.

 #5
Moscow Times
June 12, 2015
Medvedev Promises No Blacklist for Foreign Journalists Working in Russia
By Houssam Alissa

Prime Minister Dmitry Medvedev condemned foreign countries who blacklist Russian journalists Thursday and said Russia has no intention of setting up its own blacklist, RIA Novosti reported, despite a series of recent incidents in which Western journalists have been prevented from working in Russia.

Medvedev said the barring of foreign journalists was politically motivated and a "disgrace," speaking at the Global Congress for the Russian Press this week.

The former president did not mention any countries by name, but several Russian journalists have been barred entry to Ukraine during the last year. State-owned media outlets have complained of their correspondents being turned away at the border on various technicalities - such as inadequately stating the purpose of their visit or not having sufficient money - and sometimes being refused entry without any explanation at all.

Although Medvedev said that Russia should not resort to such tactics in response, there have been a number of cases in recent years in which foreign journalists have been banned from Russia.

Last July, Russian authorities arrested Ukrainian journalist Yevgeny Agarkov, claiming he lacked proper accreditation to work as a journalist. Agarkov, who was covering the trial of a captured Ukrainian pilot charged with involvement in the murder of two Russian journalists killed reporting in Ukraine, was subsequently deported and banned from entering Russia for five years.

David Satter, an American journalist who had been living in Moscow, was barred from returning to Russia in late 2013 when he attempted to renew his visa in Kiev. The Foreign Ministry claimed Satter had violated migration law.

Satter, a vocal critic of President Vladimir Putin, cast doubts on the grounds of his expulsion, saying they were nothing more than a "smokescreen" and "nonsense."

Luke Harding, at that time The Guardian's Moscow correspondent, was also denied entry to Russia without initial explanation in February 2011.

Harding alleged the expulsion was directly related to his critical writings on the Putin regime. Several days after he was refused entry, the Ministry of Foreign Affairs said Harding could extend his visa if he wanted to.

Russia has been widely condemned for its lack of press freedom and treatment of journalists. The U.S.-based NGO Freedom House ranked Russian media as "not free" this year for the 12th year running, citing "an increase in propagandistic content in the Russian news media and tighter restrictions on dissenting views in 2014."

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 #6
Government.ru
June 11, 2015
The 17th World Congress of Russian Press

Dmitry Medvedev attended the congress and presented Government awards to foreign Russian language media.

From Dmitry Medvedev's address:

A visit to Moscow is always a chance to see with your own eyes how Russia is doing in current conditions. Things are slightly different from the conditions of say, a year or 18 months ago. However, as you've probably seen, nothing much has changed: Moscow is still here, and the Government is still here. In short, we continue working.

Delegates from over 500 Russian-language media outlets and publishers from 63 countries have come to the 17th World Congress of Russian Press. According to different estimates, there are about 3,500 Russian-language publications in 80 countries. Many Russian-language media outlets operate very successfully in many large countries, in all of Germany's federal states and in every US state.

You are the guides leading millions of people towards a new life in a new country, bridging the language gap and helping them find their bearings amid confusing political and social realities. At the same time, a certain community usually develops around these Russian-language media. This helps people preserve their identity, language and culture, so they don't feel separated from Russia even though they live away from it.

There may be differences between us in Russia and outside it, but there is also something that keeps us united at a deeper level. This is our common cultural code and the powerful and metaphorical Russian language. This cultural code is the basis for a common system of notional coordinates of all Russian speakers in different countries. This system stands above political disputes and ideological struggles.

In this year of the 70th anniversary of Victory in the Great Patriotic War, we recall the solidarity and patriotism showed by the Russian communities around the world at the most difficult time of the Nazi invasion. Victory in the war is one of the indisputable symbols that unite different generations of Russians abroad and the Russian world as a whole. We must bring this truth to all those who are living in a normal, free world thanks to the heroism of the war-time generation. This is our shared responsibility, especially now that certain forces are trying to create an alternative history of World War II and the Great Patriotic War, to satisfy the demands of the current political environment.

Journalism is a difficult profession. The news media do not require "journalism"; what they want is propaganda. An objective and honest view often comes into conflict with ideological requirements, which is why journalists must remain journalists; they must tell the truth and provide independent opinions.

Our journalists and the staffs of foreign Russian-language publications have problems doing their jobs in many foreign countries. Many countries have black lists of journalists who are prohibited from practicing, whose freedom to travel is restricted and other rights are infringed upon. This is an outrage, but it's clear that these countries' governments have their own political goals, such as fighting the so-called Moscow's agents of influence.

I firmly believe that we must provide for a genuine freedom and independence of the media. It was for this purpose that the World Association of Russian Press was created. Over the past 16 years, you have consolidated the majority of Russian-language publications, radio stations, TV channels and new media outlets outside Russia. Annual congresses of the Russian-language media have become a good platform for exchanging professional experience and starting new projects.

The Russian authorities appreciate the role of the congress and the media it has rallied in consolidating the large Russian-language media community and strengthening the united Russian-language space and the Russian world as a whole.  Evidence of this is the 2013 Government decision on media awards. These awards are now given not only to the Russian media, but also to foreign Russian-language media outlets. I held the first awards ceremony this January. We will continue to do this.

We understand how important it is to support Russian-language media and to create conditions for their effective operation. We will continue to support them, despite certain difficulties, using budget and extra-budgetary sources.

One of the indirect methods of supporting Russian-language media is the Russian Language Federal Targeted Programme for 2016-2020, which the Government has approved. Our financial situation is not very comfortable now, yet we have approved and will implement this programme.

This year is the Year of Russian Literature in Russia. It is certainly a global heritage. I urge everyone to take part in its events.

It is notable that not all Russian-language publishers, editors and journalists come from Russia. This is a unique element of the Russian-language diaspora, which is open to people of any nationality, just as Russia is open to them.

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 #7
Russia Insider
www.russia-insider.com
June 12, 2015
Poverty Rate in Russia Jumps to 16%
The number of Russians living below the poverty line rose to 22.9 million, approximately 16 percent of the population.
By Mike Wheatley

The number of Russians with incomes below the "poverty line" increased by 3.1 million in the first quarter of 2015, compared to the same period of the previous year. In total, some 22.9 million Russians now have incomes "below the subsistence level", said the Federal State Statistics Service Rosstat on Thursday.

Percentage-wise, that means 15.9 percent of Russians are now living below the poverty line, compared to 13.8 percent in quarter one of 2014. Rosstat's information excludes data from the Crimea and Sevastopol, Interfax reported.

Rosstat said the main reason so many Russians are struggling to make ends meet is that the cost of living in the country has risen sharply in the last year. The agency puts the bare minimum income needed at 9,662 rubles per person, per month, compared to just 7,688 rubles per person, per month in 2014.

In Russia as whole, the average per capita income for the first quarter of 2015 amounted to 25,200 rubles per month, compared to 22,700 rubles per month one year ago.

However, Rosstat says that poverty in Russia is somewhat "seasonal" - noting that the poverty rate stood at 13.8 percent in Q1 of 2014, then 12.1 percent in Q2, 11.5 percent in Q3 and 9.1 percent in Q4. Overall in 2014, the poverty rate was 11.2 percent, compared to 10.8 percent in 2013.

More misery on the horizon?

The forecasts don't look good. According to the World Bank's baseline forecast, Russia's poverty rate will increase to 14.2 percent (20.3 million people) in 2015 as a whole.

"This will be the first substantial increase in poverty since 1998-1999. The poverty rate did not increase in 2008-2009 due to significant growth in disposable income," a World Bank official told Interfax.

Rosstat's report notes that because of limited budgetary resources in 2015-2016, financial support from the government for the poor may not be so forthcoming. It said that Indexation of public sector salaries will not be held in 2015, and that pensions and other benefits have decreased in real terms, since indexing based on the 2014 rate of inflation is much lower than projected pay rises in 2015.

"Currently, pensioners, public sector employees and state-owned enterprise employees account for a substantial part of the poorest part of the population. Other vulnerable groups include workers in the informal economy and families with children. As a result, in 2015-2016 there will be less opportunities to improve welfare," Rosstat said.

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#8
Russia Insider
www.russa-insider.com
June 11, 2015
How Floating the Ruble Rescued Russia
Letting the ruble float means that Russia is now running a smaller budget deficit during its recession than the UK and U.S. have during their recoveries
By Alexander Mercouris

One economic figure more than any other exposes the nonsense of the hysteria about the imminent collapse of the Russian economy we were hearing at the end of last year.

The government has just announced that the budget deficit as a percentage of GDP was 3.7% in the period January to May of this year.

This is the budget deficit Russia is suffering during recession. That Russia is in recession, there is no doubt (see Stop Sugarcoating Russia's Economic Situation, Russia Insider, 30th May 2015).

This budget deficit of 3.7% of GDP Russia is running while in recession compares with the budget deficit of 5.7% of GDP the UK is currently running two years into its economic "recovery".

In Britain the Conservatives have just won an election largely on the strength of their claim to have reduced the deficit.  

The British deficit has indeed fallen. In 2010 and 2011 - the deepest period of the recession - it was 11.4% and 10% of GDP, respectively.  Here are the figures.

What of the U.S.?  Its budget deficit is currently 2.7% of GDP - less than Russia's, but not dramatically so.

However this too comes several years after the start of a supposed economic "recovery".  During the peak of the U.S. recession the budget deficit was 12.10% of GDP in 2010, 10.7% of GDP in 2011 and 10.1% of GDP in 2012.  In 2014 - well into the "recovery" - it was 4.1%.  Here are the figures.

In other words, "collapsing" Russia is running a smaller deficit during its recession than the UK and the U.S. have had during their "recoveries".

The economist Paul Krugman argues that the deficits the UK and U.S. run don't matter because they borrow in their own currencies.

There is force to that point.  

However, in the case of Russia it would be more correct to say that the government doesn't borrow at all.  

The reason is that unlike the UK and U.S., Russia habitually either balances its budget or runs a surplus, and sets money aside in good times in its Reserve Fund (currently around $75 billion) to cover its deficit during recessions.

That doesn't of course mean that the government can go on funding its deficit like this indefinitely.  

This year the government will draw down around $50 billion from the Reserve Fund to cover the deficit. Finance minister Siluanov has warned that if the deficit remains at 3.7% into next year the Reserve Fund would be exhausted around the middle of 2016.

However even that would hardly be a crisis. The government's very low debt and the small size of the deficit mean the government would have little difficulty raising the funds or making the cuts needed to cover it, even if more Western sanctions were imposed.  

As it happens, with the economy showing increasing signs of recovery, that prospect looks unlikely.

The reason Russia's deficit is so small despite the recession is because the size of the government's oil receipts were to a great extent preserved by the devaluation of the ruble.

Though oil prices have fallen more than 40% since the summer of 2014, the ruble has fallen by a similar amount so that the same amount of oil produces roughly the same amount of rubles as it did this time last year. Since the Russian budget is in rubles this means that the deficit is much smaller than it would have been if the ruble had remained at the same level that it was this time last year.

The same is true of Russia's trade surplus. Despite the collapse in oil prices Russia continues to run a healthy trade surplus because the fall in the value of the ruble has made imports more expensive, pricing imports out of the Russian market.

Far from being a disaster, floating the ruble and letting it fall was an intelligent response to the oil price collapse that happened last year. It puts Russia in a much better position than it would have been in had it tried to defend the ruble at an economically unjustified level.  

Floating the ruble - and the steps needed to stabilise it when it hit bottom - has however hurt people, causing inflation to spike, leading to the recession Russia is presently suffering (see Russia's Recession: A Necessary Re-Balancing, Russia Insider, 5th June 2015).  However it has paved the way for the economy to recover, probably at the end of the year (see Russian Central Bank Forecasts End of Recession in Final Quarter, Russia Insider, 8th June 2015).

Far from "wrecking Russia's economy" Putin and the government last year did the right thing to rescue it from the consequences of the oil price decline, which in part explains why despite all the hardship they remain as popular as they are.

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#9
Business New Europe
www.bne.eu
June 11, 2015
Banned if they do, banned if they don't
Unable to change things in their own country, Russians are quietly leaving for good - but they will still check out Crimea.
Julia Reed in Moscow

Each week in Russia some obscure Duma deputy no one has ever heard of before proposes a new law. Usually, the proposal gets instant and almost unanimous approval of the legislative body and within days becomes law, signed by the head of state. Usually it's a law that bans something.

The first set of such laws shocked the local press and even gained coverage overseas because they appeared out of the blue, adopted without any public debate or scrutiny, and the Duma was even nicknamed "the mad printer". Then the speed of the law-making process accelerated and now it's hard to keep track of all the different bans that sweep across all aspects of Russian life.

While the ban on foreign adoption or the necessity for local NGOs who receive foreign funding to register as foreign agents sparked widespread controversy, little or no notice has been given to many of the subsequent ones. These laws are broad ranging, have major consequences and increasingly repressive, and so it is remarkable how little media or social discussion they receive.

Here are some most recent examples:

The naming of educational funds such as Soros Open Society, the Dynastiya fund or the Gorbachev fund as 'unfavourable organisations';

Putin's ban on the publication of information about soldiers who have died in the military during peace time, which will strip Russian soldiers and their families from any rights to restore their good names or families from receiving true information about their destiny;

A ban to disclose information in the press on cancer patients who commit suicide, which will make it difficult for the public to apply pressure on health authorities who administer pain-killer drugs to act quicker and more efficiently;

Prime Minister Dmitry Medvedev signing into law the right of prisoner officers to use batons on prisoners at their own discretion, and not just when they are at risk of actual harm (not that the earlier law protected prisoners like Sergei Magnitsky, a whistleblower murdered while in custody).

Heading the exits

Russians today avoid talking politics or social issues, resolving to watching football and Eurovision and going to their dachas to have barbeques, banyas and plant vegetables in their spare time.  Those whose education allows and money can afford leave the country. They do it silently. They claim it is not for good, but just to give their children a Western education, for health reasons or to spend just a little bit more time in their summerhouses in Bulgaria or France. To illustrate, consider some common anecdotes (surnames are withheld, as there is a possibility of a backlash in several of these cases.)

Those who have escape routes in the West also don't mind visiting Crimea. "It's very nice here, as if nothing ever happened. Planes are full. We had to fly business not because we wanted to be cool, but because there were no economy seats left (on the 10 flights a day to Yalta, a seaside resort in the Crimea). Shops are full of all the cheeses you can imagine. When we asked about sanctions, the sales lady said they have none," comments a Moscow lady on her Facebook page about her June family trip to there.

In addition to being a flat owner in Cannes, this lady has Latvian residency, which she applied for a few years ago, should she ever need to escape Russia urgently. The lady registered her small business in Latvia and now visits the country once a year to show her face to the authorities. She has no plans to ever live in Latvia, but it makes her feel safer to have it 'just in case' and for easy travel in Europe.

This lady, I will call her Lena, aged 42, is a typical example of an educated and Western-minded Russian entrepreneur who has a nose for where the wind is blowing. A distant relative of a well-known oppositional journalist, Lena took part in major Moscow opposition rallies and seems to want political and social reforms in Russia. But in her heart of hearts she doesn't feel she has any ability to make this happen and does not want her comfortable life affected. She does what is expedient at the time.

Irina, of similar age and background, married a British man, went to live in London for 10 years where the couple bought a house and had a daughter. The relationship failed and she met and re-married a Russian man in England. Back in Russia Irina has a sister, Veronica, who is married to a very well known member of the Russian government. He invited Irina and her new husband to come back to Russia and gave the husband support to get a lucrative job in business. Born in the UK and with a British passport, Irina's daughter from the first marriage came to Moscow hardly speaking a word of Russian. Now the family lives in Moscow, attends pro-Kremlin public functions and goes to Crimea on holiday, with occasional trips to England. The member of the government happens to be an ardent public critic of the West and Western values, but Irina does not seem to see any conflict. She enjoys living in the UK, but it's also convenient for the family to make the most of the power of their high-profile in-law back in Russia. So why not have the best of both worlds?

At the end of the 2000s, in her desire to do some good for the country, Svetlana tried to join the pro-Kremlin United Russia party, but appeared to be lacking commitment during her interview and was refused. She also tried to be an active member of the church, but this idea faded away. Then she took part in some opposition rallies because it felt new and exciting. But then her parents continued to vote for Vladimir Putin, so she began to see the positive side of stability too. Now she is considering marrying a foreign boyfriend and starting a new life in Sweden.  Shooting in all directions may be the best strategy to adopt in uncertain times.

Self-made Russians who succeeded in Russian businesses in the 2000s have maintained their homes in Russia, but are now largely making their way to the West by sending their children to British schools, establishing themselves on non-working visas in Monaco yet still going to Crimea, largely supporting the general trend of quiet conformism.

"Are you leaving?" is now a common greeting instead of hello. "My ex-wife is soon moving to Germany with her German boyfriend. It looks like they are going to take our two daughters with them. In a way I'm happy about it, because then I don't need to worry about my gene pool being protected," says Victor, 31, a psychologist. "I'm thinking about leaving myself and I'm doing a degree in Italy at the moment, but my English is still not good enough to practice psychotherapy in Italy. Otherwise, I would have already left."

It's not just the expats who do not extend their contracts and leave at the end of their tenure - and many of them have; it's those wannabes from obscure Soviet working-class families, whose fathers had life-long careers in the Soviet military, who as children were relocated every couple of years and were posted everywhere across the former Soviet Union, and who then made their first money in capital cities of Russia and became its middle class, who are now leaving the country.

They protest with their feet. They are leaving because they do not see opportunity and do not know where Russia is going. They don't even have strong beliefs about human rights.

People do what's easy and convenient. They do not want to get into trouble. They don't trust the government. They live their parallel lives, hoping the war or cancer never touches their homes. And even if they do, it's not Putin, government funds or charities they will cry to; they will resort to friends and family for help. Because Russians today, just like the Soviets in the past, do not trust anyone.

It may seem like the people in the examples above lack moral fibre. I am not sure if they do or don't, but they are very typical. The lives of ordinary Russians have little to do with the lives of other people in their country and society as a whole. There is no society as a whole, just different sets of individuals with their closed circles of friends. The people in these example and many more Russians hope that they will not be affected by the multiple bans that are steadily robbing society of its right to excerpt control on its government and provide individuals from their constitutional rights. Unable to change things in their own country, they'd rather leave for good - but will still check out Crimea.

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 #10
Moscow Times
June 12, 2015
Putin's Russia Is Not 'Back in the U.S.S.R.'
By Ivan Sukhov
Ivan Sukhov is a journalist who has covered conflicts in Russia and the CIS for the past 15 years.

A group of Russian scholars presented a report in Moscow in late May called "The values of perestroika in the context of modern Russia" that detailed the risks the country is currently facing. The authors argue that leaders must inevitably restart the reforms first begun by former Soviet leader Mikhail Gorbachev in 1985 - that is, unless they plan to continue pushing Russia toward the backward and unstable periphery of the modern world.

That allusion to perestroika immediately raises some uncomfortable questions. Is the current rise of authoritarianism and the breakdown of basic institutions the logical consequence of Gorbachev's reforms, or is it some strange evolutionary offshoot, a careless wrong turn down a historical blind alley?

Also, how likely is it that the current regime will recognize the need for reforms? Will a new "Gorbachev" emerge from President Vladimir Putin's "politburo," and if so, will he manage to overcome the inertia of his political milieu?

Or will the chance for change come only after the collapse of the current regime? If so, it will prove only illusory due to the almost inevitable political chaos that will result, the emergence of newly emboldened radicals of every stripe and the centrifugal forces that will tend to tear the system apart.

Many in Russia and elsewhere believe that the lyrics to the popular Beatles song "Back in the U.S.S.R." best describe the country's current trajectory. They are mistaken.

Today's Russia bears only a superficial resemblance to the Soviet Union, as anyone with memories of that era can readily testify.

The Soviet Union was characterized by cynicism and doublethink. Its history was marred by repression against its own citizens on a monstrous scale, and its political life bore absolutely no connection to Western notions of democracy, the separation of powers and human rights.

At the same time, the Soviet Union was conceived as a humanistic project. Its system - although burdened by the political monopoly of the Communists and the oversized military-industrial complex - was largely focused on developing what is now called "human capital."

Soviet leaders discussed the use of nuclear weapons exclusively as a means of retaliation, and only archival newspaper stories and newsreels of Stalin's terror reflected the level of vitriol that has become standard fare in Russian television over last year and a half or two.

As naive as it might sound, right up until it ended the Soviet Union remained part of an idealistic global effort to make the world a better place for everyone. The United States and China continue to promote their respective versions of that project, but without the Soviet Union the world has become significantly less stable, and there is far less hope now than there was in the late 1980s that mankind would ultimately achieve a bright and prosperous future.

Despite the rhetorical gymnastics of leaders who publicly wax nostalgic for the Soviet Union, modern Russia is far from considering itself part of a global humanistic project. A huge billboard that appeared in Moscow in May best conveys the political thinking of the current regime. It quotes Pyotr Stolypin, prime minister to Tsar Nicholas II: "They are in need of great upheavals, while we are in need of Great Russia."

The left side, where the word "upheavals" appears, shows photos of the Maidan protests in 2014, with agitated faces and upraised hands grasping firearms. On the right, next to the words "Great Russia," is a photo of the honor guard marching at the Tomb of the Unknown Soldier near the Kremlin.

"Great Russia" is depicted as a Kremlin regiment marching in blindingly high-polished boots before the Tomb of the Unknown Soldier. It is not new roads and factories, evidences of development or symbols of freedom and social justice. Thus, Russia has inherited only one thing from the Soviet Union - the love its leader holds for the pomp of military ceremony.

Modern Russia is not positioning itself as a welfare state: The government now sees it as a burden to feed millions of people directly dependent on the state. Modern Russia is ostensibly trying to invest in development, but its space program is crumbling with every failed rocket launch, and lawmakers are scaring away potential investors with ill-conceived laws.

Modern Russia is definitely not the free and prosperous country that dissidents dreamed it would become when the Soviet regime collapsed in 1991 - but, beyond a doubt, it is also not the Soviet Union. The contours of the social and political system now unfolding before our eyes are far harsher, the political taboos preventing society from degenerating into primitive obscurantism far fewer and the barriers separating the country from the rest of the world far higher.

Meanwhile, the honor guard embodying Great Russia continues marching at the Kremlin walls and the country's nuclear missiles - capable of destroying half the planet - stand ready.

Of course, Gorbachev's perestroika was part of the Soviet humanistic project, and today's Russia emerged not from perestroika, but from the rejection of it. However, that rejection came not from the Russian people, but out of the as-yet-forming political elite that was interested only in its own prosperity and not the common good - much less the welfare of all humanity.

Despite all the political changes of the 1990s, 2000s and 2010s, this consensus remains the same. That is not all bad, considering that it delineates the limits beyond which Russia's prosperity is threatened. For example, the country's economic well-being might even increase, notwithstanding the annexation of Crimea and Western visa bans against selected Russian officials.

But it will falter and ultimately collapse if Moscow opts to endlessly escalate tensions in Ukraine and expand the zone of military conflict there.

The post-Soviet consensus does not imply an excessively aggressive foreign policy, but it does rule out a return to the values of perestroika. Those who define the politics of modern Russia find it much more natural and comfortable to maintain the current course toward isolation and domestic witch hunts.

But in so doing, they risk overstepping the limits beyond which Russia's foreign policy would cease to be guided by logic and common sense.

At best, that could lead to Russia's complete international isolation. At worst, it could lead to a huge, albeit possibly brief, war.

Of course, perestroika is preferable to war, degradation and social and political collapse - but not for those who use those ills to maintain their iron grip over the country and its people.

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 #11
Russia Beyond the Headlines
www.rbth.ru
June 11, 2015
'We need to find a way out' of sanctions, says Putin on visit to Rome
Western sanctions are damaging the country and a solution needs to be found, Russian President Vladimir Putin said during a one-day visit to Italy. According to Russian observers, the main objective of the Russian leader's Italian trip, during which he met with senior Italian officials and Pope Francis, was to feel out options for lifting the sanctions.
Alexey Timofeychev, RBTH

Western sanctions are damaging Russia and a way out of the situation needs to be found, Russian President Vladimir Putin said during an official visit to Italy on June 10 in which he met with senior Italian officials and Pope Francis.

In a day packed with meetings, the Russian leader participated in the opening ceremony for Russia Day at the EXPO-2015 exhibition in Milan and held talks with Italian Prime Minister Matteo Renzi, as well as meeting with President Sergio Mattarella and the pontiff. In the evening, when he was already at the airport, Putin had a half-hour meeting with former Prime Minister Silvio Berlusconi, who is known to be friends with him.

The Russian president had last visited Milan in October 2014, where he had a one-on-one discussion with Ukrainian President Petro Poroshenko on the situation in Ukraine, where government forces remain in a standoff with Russian-backed rebels in the east of the country, and the issue was also high on the agenda during Putin's latest visit.
At a press conference after the talks, Putin and Renzi confirmed their continued approach to the Ukrainian crisis, underlining that the only way of solving the conflict was through implementing the peace agreement signed in Minsk on February 12.
 
'We need to find a way out'

The meeting with Renzi was not the first for Putin. They had met not so long ago - during the Italian prime minister's visit to Moscow in March. Renzi was the first Western politician to make an official visit to Russia after the start of the Ukrainian crisis, a move that drew criticism from Washington at the time, according to media reports.
In March, the two leaders said they intended to develop cooperation between Russia and Italy, despite the sanctions imposed against Russia.

Renzi and Putin also discussed the sanctions on this occasion, though according to Putin, the discussion was "not in terms of the abolition or simplification" of the economic measures, but based on how "these sanctions hinder the development of our relations."

The Russian leader mentioned that several Russian-Italian projects that had been frozen due to the sanctions and said that, despite the fact that sanctions were having a positive effect in regard to stimulating the development of import substitution in Russia, they were harmful in general. "We need to find a way out," he concluded.

According to Alexander Konovalov, the president of the Institute for Strategic Assessments, the main objective of Putin's visit was to try to find a way of altering the situation with the sanctions, in what European media saw as an effort to exploit disunity in the ranks of the EU.

"In my opinion, he is trying to break the sanctions regime by all means because it is greatly aggravating the situation in Russia," said Konovalov in an interview with RBTH.

Maxim Bratersky, a professor at the Higher School of Economics in Moscow, largely agrees with this assessment. He believes that Putin's visit to Italy was designed to help solve two problems - to balance the difficult dialogue with the European Union and promote economic projects that do not fall under the net of sanctions.

Moscow is also pursuing a strategy of supporting the voices within the EU that have a softer attitude toward the Russian Federation, Bratersky told RBTH.

According to Bratersky, it makes sense for Russia to continue with this approach, since it is bearing at least some fruit. According to the RIA Novosti news agency, after his meeting with Putin, former Italian Prime Minister Silvio Berlusconi said that ministers from his party Forza Italia will offer a draft resolution calling on the authorities to reject the sanctions policy against Russia.
 
'Teaching the Pope'

Konovalov believes that the meeting with the Pope was also extremely important for Putin. "The authority of the Pope is very high in the world. Francis is a very popular figure. It [the meeting with the pontiff] will be regarded as an achievement for him [Putin]," he said.

Konovalov believes that the meeting of Putin and the Pope was a "recognition of the need to talk to Russia, and to take account of its opinion and the opinion of its leader," which, the analyst stresses, is especially relevant against the backdrop of sanctions and attempts at the international isolation of Russia.

The meeting with Pope Francis lasted about an hour, twice as long as planned. According to the Russian president's press secretary, Dmitry Peskov, Putin and Francis discussed the situation in Ukraine, as well as the situation facing Christians in the Middle East.

According to Vatican officials, Francis made a call for all parties to follow the Minsk agreements and told Putin that "a sincere and great effort" was required if peace were to be restored in Ukraine. Francis asked the Russian president to assist in guaranteeing access to humanitarian aid groups in the region.

Speaking about the meeting, Peskov also commented on the statement of U.S. Ambassador to the Vatican, Kenneth Hackett. According to the British daily The Guardian, Hackett advised the Pope to raise the question of the territorial integrity of Ukraine at the meeting with Putin. Peskov saw this as an attempt to "teach the Pope," and called it "a new word in diplomatic practice," as well as "a blatant case of an attempt to suppress the sovereignty of other countries."

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 #12
www.rt.com
June 11, 2015
'Why Putin's meeting with the Pope ruffled the West'

Vladimir Putin and Pope Francis are popular figures who impact people's thoughts, and their meeting in the Vatican represented a reunification of Western and Eastern worlds, Ukrainian journalist Halyna Mokrushyna told RT's In the Now.

RT: Why did the US ambassador to the Holy See Kenneth Hackett call on the Vatican for a tougher stance on Russia ahead of Vladimir Putin's meeting with Pope Francis? What would the Pope's condemnation of Russia really change?

Halyna Mokrushyna: Because we should not forget that France and Italy, two members of the G7, are to a large extent, still Catholic countries, so the Pope's condemnation of so-called "Russian aggression" would add to this mainstream popular narrative that Russia is an aggressor in this war and it's important for the US to have the Catholic Church support it in that regard, in my opinion.

RT: What does it mean, in your opinion, if it doesn't get this support of the Washington position?

HM: I think the Pope's position is very moderate and temperate in this regard, because the church should stay out of this conflict. And that is the position also of the Ukrainian Orthodox Church of the so-called Moscow Patriarchate. I hope that Pope Francis will remain on this position because he is right: It is a civil war and the Church should not be involved in that conflict in a country like Ukraine where the religious cleavage is deep.

RT: The Pope always gets a lot of media attention, Putin gets a lot of media attention, and when you put two together it's an immediate storm. Why is there so much attention from mainstream media?

HM: Because, as you said, the Pope is a very popular figure and Putin is a very popular figure. As I said before, the Pope is a representative of a very powerful social institution, which is the Catholic Church, so whatever he does or says has a big impact on people's thoughts and Catholic parishioners across the world. Putin, of course, is the most popular leader, or one of the most according ... to Time, so it is quite understandable. Especially the Pope represents the Western world, and Putin represents the Eastern world.

RT: Putin met with Italy's Prime minister ahead of his visit to the Vatican where he was asked about Russia's relations with the G7. The Russian President said that Russia doesn't have any relations with the G7, and that it is not really an organization, but just a membership club. Why are we hearing this sort of rhetoric now?

HM: Because from what I've been following Russia really tried all the diplomatic means to solve this crisis. Russia used all platforms of international cooperation that are available out there and frankly it didn't work, so that's why we have this deep disappointment on Russia's behalf. The G7 is about one unified position in terms of the war in Ukraine... [There are] complaints, I guess, because it comes from the realization that this is a group of countries who represent the same mono-polar world, and they don't' want to hear an alternative opinion.

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 #13
AP
June 12, 2015
Russia steps up military modernization-but at what cost?
By Vladimir Isachenkov

NIZHNY TAGIL, Russia - It has a remote-controlled turret, it bristles with state-of-the-art defense systems and its computerized controls make driving it feel "like playing a video game." Russia's Armata tank, which its creator says can be turned into a fully robotic combat vehicle, is the crowning glory of a sweeping military modernization drive that is rumbling forward amid a perilous confrontation with the West over Ukraine.

But President Vladimir Putin's expensive arms build-up faces major hurdles as Russia's economy sinks under the weight of Western sanctions and falling oil prices. The 22-trillion ruble (about $400-billion) program, which envisages the acquisition of 2,300 new tanks, hundreds of aircraft and missiles and dozens of navy ships, was conceived back at the time when Russia's coffers were brimming with petrodollars.

Putin vowed that the military upgrade would go ahead as planned, and this year's military budget rose by 33 percent to about 3.3 trillion rubles (nearly $60 billion). Some observers predict that the Kremlin will inevitably have to scale down the plans amid a grinding recession.

In one of the first harbingers of the possible curtailment of new arms procurement, a deputy defense minister said earlier this year that the air force will likely reduce its order for the T-50, a costly state-of-the art fighter jet developed for two decades to counter the U.S. Raptor.

Another problem is also hampering the modernization drive: The sanctions include a ban on the sale of military technology to Russia. Nick de Larrinaga, Europe Editor for IHS Jane's Defence Weekly, predicted that Russia would find it hard to replace Western military know-how.

"They have been relying on Western sub-systems, electro-optical systems is a good example, but also computer chips and things like that, which Russia doesn't make," he said. "How Russia goes about trying to replace these systems is going to be a really big challenge."

The rupture of military ties with Ukraine dealt another heavy blow to Putin's re-armament effort. Ukrainian factories had exported a wide array of weapons and sub-systems to Russia, and officials acknowledged that it would take years and massive resources to launch production of their equivalent at home. Since Soviet times, Ukraine specialized in building helicopter engines, and Putin said that Russia was setting up a capacity to produce them at home.

It could be even more challenging to substitute another Ukrainian product, ship turbines. Its refusal to deliver them has derailed the commissioning of new Russian navy ships.

Last month, the Armata starred in the Victory Day parade on Red Square, becoming an emblem of the country's resurgent military power. Dmitry Rogozin, a deputy prime minister in charge of weapons modernization, likened Russia to a "big Armata" and claimed that the new tank is 15-20 years ahead of the current Western designs.

Speaking in a recent live TV talk show, Rogozin also used armor as a symbol to issue a bold threat to the West - showing how military hardware can also be a powerful weapon in the Kremlin's propaganda war.

"Tanks don't need visas!" Rogozin declared, in a reference to Western travel bans and economic sanctions against Russia. Amid the tensions with the West, Putin emphasized the need for the nation's defense industries to quickly shed their dependence on imported components.

The Armata's price hasn't been announced, but some observers speculated that the new tank could be as expensive as a fighter jet, too heavy a burden for the struggling economy. There are no reliable cost estimates of the tank.

The tank's chief designer, Andrei Terlikov, 52, shrugged off such claims, saying that the Armata's price will drop significantly once it enters full-scale production. "In the end, the price of those machines will be affordable," Terlikov told The Associated Press in his first interview with foreign media.

Speaking at his office at the mammoth UralVagonZavod factory in the Ural Mountains, one of the biggest industrial plants in the world, Terlikov described the Armata as a "decisive step toward more advanced unmanned machines, including those which could operate autonomously in combat."

He emphasized that the Armata uses only domestically produced parts. "From the very start, we have set the task to rely on our own resources," he said.

Viktor Murakhovsky, a retired Russian army colonel who is now the editor of the Arsenal Otechestva military magazine, said the Armata's advantages come at a price - but that eventually it may pay for itself.

"The Armata is significantly more expensive than the current models," he said. "But it far excels all Russian and foreign tanks on the cost-efficiency basis."

The Armata marks a radical departure from the traditional Soviet and Russian tank design philosophy. Unlike its predecessors, which had a compact build and low silhouette for nimble maneuvering, the Armata was designed to make crew protection the main focus.

"There is nothing more important today than crewmembers' lives," Terlikov said.

Terlikov's deputy, 35-year old Ilya Demchenko, said that the onboard computer system performs most of the technical functions, allowing the crew to focus on key tasks. "For the crew, it's like playing a video game, taking some final moves and making decisions," he said.

De Larrinaga agreed that the Armata represented a technological advance for Russia.

"The crew has a much better chance of surviving if the tank is destroyed," de Larrinaga said. "If you look at old Russian tank designs, they had a habit of blowing up quite spectacularly with pretty poor chances for crew survivability."

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 #14
Russia Direct
www.russia-direct.org
June 11, 2015
Russia's world without the West could be more hype than reality
Now that re-admittance to the G8 has become an unlikely prospect, Russian experts are debating possible strategies of how Russia can live without the West, including a greater focus on a technological alliance with the BRICS.
By Pavel Koshkin
Pavel Koshkin is Executive Editor of Russia Direct and a contributing writer to Russia Beyond The Headlines (RBTH). He also contributed to a number of Russian and foreign media outlets, including Russia Profile, Kommersant and the Moscow bureau of the BBC.

After the two-day G7 Summit in the Bavarian Alps spotlighted the growing confrontation between Russia and the West, Russian experts from the Council on Foreign and Defense Policy (CFDP) came together in Higher School of Economics (HSE)  to discuss Russia's future strategy of how to deal with economic and international challenges without the West.
The name of the roundtable that brought together the pundits is indicative of the scope of the challenge facing Russia: "Our World Without the West? How to Save Russia's Development Potential During a Time of Geopolitical Confrontation."

Today, the Ukrainian crisis has turned public discussion in Russia into a sort of a predictable and insipid talk show, an attempt to express oneself and politicize the debate, says Fyodor Lukyanov, the moderator of the roundtable and head of the CFDP.

That's the main reason why Russian experts find it necessary to come up with political and economic alternatives for Russia's development without the West. While some experts propose more extensive cooperation with the BRICS and, particularly, China, others pin their hopes on the expanded format of the Shanghai Cooperation Organization (SCO).

Could the BRICS be an alternative?

Increasing technological cooperation with the BRICS countries and the creation of a sort of multilateral technological alliance with them should be Russia's key strategy under the Western sanctions and confrontation with Europe and the U.S., according to some speakers.

Andrei Ionin, the chief expert at GLONASS, Russia's space-based satellite navigation system, argues that import substitution and the pivot to China - two strategies touted by the Kremlin - are hardly likely to be effective, because of Russia's technological drawbacks and China's controversial record. In short, China can't be seen as a reliable partner to make a technological leap forward.

"We do have national interests, but do not have technologies," said Ionin, pointing to Russia's minuscule share of the world's population (2 percent) and global GDP (3 percent) in comparison with the significant share possessed by the BRICS (40 and 30 percent, respectively).

According to him, this is one of the major requirements for technological prosperity. Developing technologies together and creating a non-political technological alliance, not directed against the West, should be the key component of the BRICS, which could help to resolve the problem of the brain drain.

In contrast, Andrei Klepach, the chief economist at Russia's state bank Vnesheconombank, warns against being overly optimistic about a BRICS technological alliance. He argues that even though Russia has technological potential, it won't be able to be technologically independent if it joins together with the BRICS.

He added that Russia's fundamental sciences and technologies are underfunded and brain drain is increasing.  However, "people are leaving [the country] because nobody offers interesting and challenging tasks," not only because of the lack of funding, Klepach clarified.

Likewise, Evgeny Kuznetsov, Deputy General Director of Russian Venture Company (RVC), calls for being more skeptical and realistic about the BRICS' technological potential.

So far, we are not subjects of this process [the world's technological transformation], but objects. BRICS is a tabula rasa," he said, pointing to a great deal of institutional problems in the BRICS countries. According to him, they do not understand how to create global technological markets, they can only reproduce the existing ones.

For Russia, existence without the West might be an elusive dream

Vitaly Kurennoy, a professor and head of the Higher School of Economics' School of Cultural Studies, argues that Russia should "stop concocting dreams and return to reality."
"Keeping up with America and outpacing them is a good goal, but we have to understand that we are on the periphery and will remain there," he said. "The country hasn't been shaken despite sanctions. This means that the integration level is low. People have learned to live in difficult conditions and today it is becoming relevant."

No sanctions will impact the country because Russia already lives in a different universe, with all the talk about space and new technologies foreign and inconsequential to most Russians, Kurennoy concluded.

Meanwhile, a number of experts and economists who participated in the roundtable warned against creating phantoms and an alternative reality without the West. They believe that overreliance on the BRICS and, particularly, China, is reckless in the long-term.

In search of political alliances, the Kremlin is forgetting about the fact the world is driven by economic goals. Following such logic, China is not turning its back on the West and, instead, it keeps attracting Western investment and doesn't isolate itself like Russia. In this regard, the West could be a greater priority to Beijing than the BRICS.
At the same time, Oleg Barabanov, a professor at Moscow State Institute of International Relations (MGIMO-University), says that Russia will have to adjust to the new reality without the West. According to him, it is inevitable. He argues that BRICS has a limited potential as an alternative to the West, because there might be a political or ideological split between the BRICS countries: the authoritarian ones (Russia and China) and the democratic ones (India).

Barabanov sees India as a Trojan horse in the BRICS, a country that could promote a democratic agenda among the other BRICS nations, and, thus, increase its geopolitical heft and potential amidst the Russia-West confrontation. That's why the expanded version of the SCO - if India, Pakistan and Iran join the organization - could be more geopolitically robust as a foundation for the idea of a united Eurasia.    
 
Russia needs to diversify its foreign policy orientations

Many Western experts question Russia's attempt to find its place in the world without collaborating with the West.

"Opening to the European market would have brought technology, healthy competition, and a market for high-value innovative products," said Jack Goldstone, Woodrow Wilson Center visiting scholar and professor at George Mason University, in an e-mail to Russia Direct. "Opening to China and Central Asia simply does not do that. While some technology can come in from China, it is not the same as the American and European market as a source of high-tech innovation."

According to Goldstone, Russia can get from China "another customer for its energy and primary resources," but this customer "will probably bargain harder than the West did. So a shift to the East is very unlikely to help Russia move its economy forward."

Richard Sakwa, professor of Russian and European Politics at the University of Kent, argues that, "It is both healthy and natural for Russia to seek to diversify its foreign policy orientations" at a time when the international system is becoming genuinely pluralistic. However, Sakwa warns Moscow against "putting all of its eggs into one basket."

"Engagement with the new governance structures and the rising states of the East while promoting equilateral Eurasian integration, should be seen as complementary to its engagement with Europe and the Atlantic community as a whole," he said. "Although the rhetoric of mutual contempt and abuse is currently at an extremely high level, it should be remembered that ultimately there are no irreconcilable contradictions with the Western powers. The EU and the U.S. are certainly not Russia's enemies, just as Russia is not their enemy."

"Thus engagement with the East should not be at the expense of keeping the door open for reconciliation with what used to be called the West," he added. "It may take years, but it is essential for Russia to maintain its traditional sense of balance in world affairs."

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 #15
Russia Direct
www.russia-direct.org
June 11, 2015
Russia needs a Plan B now that the G8 is history
There is still an outside chance that Russia could return to the G7. But until that happens, Russia is exploring other options, including an expanded role for the BRICS.
By Eugene Bai
Eugene Bai is an expert in USA, Latin America and international relations, a contributor to Politcom.ru, The New Times, World and Politics magazine.

As expected, the latest summit of the G7 in the Bavarian Alps did not produce any new conceptual decisions on whether to tighten the sanctions against Russia or adhere to the status quo. For that, at least, the Kremlin had cause to cheer.

"There were discernible nuances in the positions of the G7 members," stated Russian presidential press secretary Dmitry Peskov, adding that some countries even mentioned the need to promote dialogue with Russia.

And, although the G7 reaffirmed the "united sanctions front" against Russia and agreed to extend the punitive measures, the speeches in Bavaria carried clear undertones of something else: The EU is eagerly awaiting the moment when it can announce that the sanctions have done their job and Russian President Vladimir Putin has agreed to soften his position on Ukraine, stop leaning on Kiev, and withdraw his support for the separatists in Donetsk and Luhansk.

Washington's confirmation that it does not intend to send offensive weapons to Ukraine is crucial. White House Press Secretary Josh Ernest said at the summit that the United States does not intend to engage in the supply of offensive weapons to the Ukrainian army, as it would undermine a peaceful resolution of the conflict.

"Sanctions are not an end in themselves," stated Angela Merkel in an interview with German TV channel ZDF. "They will be lifted when the conditions under which they were introduced no longer exist and the issues are resolved."

President of the European Council Donald Tusk even expressed regret that the meeting of developed countries was taking place without Russia, but was philosophical, saying that the situation would change and the "seven" would become "eight" once again.

The toughest line came from Canadian Prime Minister Stephen Harper, who announced that he would no longer sit next to Putin.

Moscow can draw deep satisfaction from the fact that only the technical details of the sanctions were discussed; no political decision was taken.

"It's more like an instructive measure," says Business FM radio station analyst Dmitry Drize. "Moscow has been asked to behave properly. Ukraine, too, is being urged to comply with the Minsk agreements, according to statements by Obama and Merkel."

It is worth noting that pro-Kremlin media castigated the G7 gathering. A cartoon published by RIA Novosti even went viral.

National TV station Rossiya said that the organization should be renamed the G2, because only two countries, the United States and Germany, are in the driver's seat, while the rest are passengers. This view is widespread among pro-Kremlin, anti-U.S. political experts.

"The G7 will continue its pro-U.S. policy," asserts Sergei Modestov, doctor of political and philosophical sciences. "The Americans have always imposed their rules on Europe and will continue to do so, despite the fact that the G7 will become nothing more than a club of seven countries with no real impact on truly global issues."
Modestov believes that the G7 will be gradually supplanted by new international organizations and coalitions of other countries.

Russia looks for an alternative to the G7

Other Russian political analysts prefer to take a more balanced position, positing that the G7 will remain more of a think tank for prescribing financial, economic and political "medicine" for the world.

What will Russia's place be in all this?

"The 2015 summit was probably the last to debate the topic of Russia's participation or non-participation," says Fyodor Lukyanov, chairman of the Russian Council on Foreign and Defense Policy and editor-in-chief of Russia in Global Affairs magazine. The G8 will be consigned to history as a byword for the 15-year period when it was believed that Russia was becoming part of the extended West."

Where is Russia headed? According to Lukyanov, "a direct analogue of the G7, and a potential counterweight to it, is the BRICS. Whereas one gathers together the 'cream' of the Western world (plus Japan), the other represents the best of the non-Western world. Only the lack of shared values (something the G7 has) is believed to be hampering the consolidation of the BRICS.

But value-based alliances are a feature only of the Western community; for other countries it is more important in the new multipolar world to be able to overcome cultural and political differences and work together without being bound by common notions, believes Lukyanov.

One could take issue with this statement. Cultural and political differences may well be hampering BRICS consolidation. Just take a look at the thorny friendship between China and Russia, which fears being turned into a raw material appendage, not to mention the overt threat of the Middle Kingdom's territorial expansion northwards.

Relations between China and Brazil are also less than optimal. Latin America's largest country is experiencing a serious economic crisis and a sharp dip in government approval ratings following a string of high-profile corruption scandals.

One of the causes of the crisis is that Brazil's trade turnover with China has long been export-heavy, but weaker growth in China is now hitting Brazilian goods, primarily raw materials and minerals. The trade turnover between Russia and India is not too balanced either, and is made up largely of Russian military hardware and services. South Africa, meanwhile, is somewhat detached from the whole integration process. Thus, for all Moscow's gushing enthusiasm, the BRICS club is unlikely to turn into a center of gravity for Russia.

Another avenue to explore is the G20. But according to Lukyanov, Moscow is not overly keen on the forum. Whereas the G20 summit in St. Petersburg in 2013 was a turning point in resolving the issue of Syria's chemical weapons, Putin's participation in Brisbane was rather embarrassing, as the organizers went out of their way to make the Russian leader look isolated.

For Russia, the question of self-identification is no less acute now than it was at the beginning of the 1990s, when it stood on the threshold of the G7. Moscow is endeavoring to show the world something quite simple and distinctive, a "special" development vector. But without effective ideas, it can prove nothing to the West.

At times, whether in achieving a breakthrough, as in the case of Syria, or in showing goodwill, as in the creation of a collective front against Iran's nuclear program, Russia seems to pay more attention to the traditional values of the past, rather than look to the future.

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 #16
Brookings Institution
June 11, 2015
Putin's strategy has weakened Russia
By Brandon Valeriano and Ryan C. Maness
Brandon Valeriano isSenior Lecturer, University of Glasgow. Ryan C. Maness isVisiting Fellow of Security and Resilience Studies, Northeastern University

Is Russia really weak?

In response to our recent article at Foreign Affairs titled Paper Tiger Putin, Sergey Aleksashenko argued on this blog that everyone should stop calling Russia weak. His response misses our main point-worse still, it is critically flawed when it comes to policy advice. (Pavel Baev's response is a good one and we agree with many of his points, though we take a somewhat different approach here.)

We do not argue that Putin is weak as an individual. To the contrary, he is in a powerful position given his apparent popularity and the rise in nationalism in Russia. Rather, we argue-after examining Russia's total strategic position today, as we have done extensively in our book "Russia's Coercive Diplomacy" (Palgrave Macmillan, 2015)-that Russia's recent moves have actually put it in a worse strategic position. Using aggressive military coercion and cyber tactics, as well as flaunting energy power, have not made the state any more powerful, nor have they helped Russia achieve its strategic objectives.

Aleksashenko correctly observes that leaders in the region are worried, and rightly so. But a deeper consideration of Russia's foreign policy behavior does not prompt much concern about the sustainability of Eastern Europe-instead, the concern is rightly directed towards Russia.  Each of its maneuvers have made it worse off than before: Moves against Estonia and Georgia have only pushed them closer to Europe and Western defensive alignments, and every Baltic state is now seemingly prepared for potential conflict and requesting more and more support from NATO. This is clearly not what Russia intended. Even Serbia, a traditional Slavic ally, is now participating in alternative pipelines, degrading Russia's position in Europe even further.

We argue that Russia is weak after thoroughly considering outcomes, not by engaging in punditry and reacting merely to the latest news and provocations (which are sometimes imagined). We evaluate the country's total position and weigh the costs it faces against the outcomes of past actions. By this analysis, Russia does not appear strong. If anything, the Russians bogged themselves down into an expensive quagmire in Donbass that is unlikely to end anytime soon. The United States was in a similar situation after Iraq and is only now refocusing on its true strategic priorities.

Energy is still key

Alesashenko asserts that we get our policy prescriptions wrong. How can it be wrong to suggest that Europe invest in alternative energy (which was not really our point, in fact) and alternative energy supply routes?  Diversification is never a bad idea, and to depend so much on Russia for energy is clearly a weakness in Eastern Europe. As a recent piece at Monkey Cage demonstrates, Russia's aggressive actions often come during times when oil prices are high; reducing Russia's ability to leverage energy power can weaken the country in general.

Nor is it clear how investing in cyber defenses is a bad idea. Every country needs protection from cyber-attacks and intrusions, which have become common. Instead, all that Alesashenko offers by way of concrete recommendations is sustaining the sanctions already in place or being put in place.  

Shooting itself in the foot

Projecting strength in an attempt to encourage concessions is not a path we support, and history has consistently shown the shortcomings of such an approach. In our work, we suggest that overreacting to Russian aggressions would be dangerous-this is exactly the path Aleksashenko suggests by calling on the West to prove that Putin is weak. The reality is that each move Russia makes weakens it in general. Conquest is an idea of the past and rarely pays off. To overreact now is to play into Putin's hands and will only make his warnings to the Russian people come true, marshalling both domestic and elite opinion further behind his aggressive actions. To act provocatively is not in the American interest, but it is in the interest of Russia.

Given this, we recommend holding the line in Ukraine, finding alternative strategies for energy so Eastern Europe is not dependent on Russian sources, and resisting the urge to escalate the situation or "reset" the relationship for the third time in the last 20 years. There is also the option of extending sanctions to the SWIFT banking system, but this would lead to self-inflicted harm and not necessarily target the regime.

The situation is what it is, and the goal now should be to prevent a wider conflagration that would only drag in all of Europe. We advocate for a focus on the outcomes and think it's worth asking what Russia has gained from all its maneuverers-not making Russia wallow in its strategic weakness. All this will do is make Russia, currently a cornered power, lash out. The best response is one that recognizes the dangers of Russia's moves while not reacting too aggressively. The fact of the matter is: Russia only makes its situation more untenable with each successive foreign policy failure.

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 #17
Sputnik
June 12, 2015
Hope on the Horizon? Republican President May Mend Relations With Russia

The "Russian bear" shares more interests with the American "Republican Elephant", than anyone can imagine, writes the National Interest, adding that a new Republican president might be able to mend relations with Russia.

The Kremlin has more to talk about with American Republicans than Democrats, the National Interest noted.

According to the media source, the period of the most fruitful relations between Russia and the United States concurred with the rule of the first Republican President of the US, Abraham Lincoln, and Russian Emperor Alexander II.

"These leaders shared a contemporary challenge of abolishing slavery within their nations - with Alexander II ending serfdom in 1861 and Lincoln ending slavery in 1863.  Alexander also followed America's example by instituting trial by jury and authorizing local government.  At a time of upheaval in both nations, diplomatic relations were durable and effective," the media outlet noted.

Nowadays, shared economic interests may lead to a political resolution of Russo-American tensions. Remarkably, regardless of the much-talked-about sanctions policy, the US-Russian trade volume increased by almost 5.6 percent ($29.2 billion), according to the media outlet.

On the other hand, Moscow and Washington have certain common interests in the oil market. Since the United States has not yet lifted its ban on selling America's oil reserves abroad, US oil corporations are seeking new sources of crude oil in order to improve their business outcomes. And Russia has these rich oil reserves.

The economic sanctions still remain a stumbling block in the way of Russo-American cooperation in this field. Although Russia has huge oil reserves in the Arctic as well as shale oil within the Russian mainland, the country's companies do not have the technologies to kick off exploration and extraction of these natural reserves.

According to Derek Norberg, President of the Council of US-Russia Relations and Executive Director of the Russian American Pacific Partnership (RAPP), "a cooperative agreement over tapping Arctic oil reserves could thaw US-Russia relations."

"Such agreements do not alleviate the tensions over Crimea and Ukraine.  But they might provide progress as other diplomatic issues are resolved," the media outlet noted.

Furthermore, the Pew Research Center has recently exposed that the American Republican Party has received the public support for its firm stance against Islamic terrorism. And strikingly similar values are shared by the ruling United Russia party in Moscow.

"At the very least, it would appear that modern Russia has more to talk about with American Republicans than American Democrats," the media outlet concluded, claiming that the two great nations still have a chance to revive their partnership and dispel the clouds of prejudice and mutual mistrust gathering on the horizon.

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#18
The Diplomat
www.thediplomat.com
June 11, 2015
Kazakhstan-Russia Relations: With Liberals Like These...
A supposedly liberal Russian media figure comes out as irredentist.
By Casey Michel

Over the weekend, those following ethnic issues within Kazakhstan saw a new actor enter the fold. Alexei Venediktov, the nominally liberal head of the Moscow-based Echo Moskvy radio station, lobbed a few tweets that sent a buzz through the Kazakh Twitter-verse.

To be sure, Venediktov's - and Echo Moskvy's - liberal credentials have been called out at an increasing pace over the past few months, morphing what was once Russia's "best independent radio station" into something altogether different. Venediktov's Tweets over the weekend effectively flipped him from a neutral figure within Russian-Kazakh disputes into something approaching a nationalist stooge.

On Sunday, Venediktov pointed out to his half-million Twitter followers a bit about Kazakhstan's impending Kazakh-language switch from the Cyrillic to the Latin alphabet: "Kazakhstan switches to Latin in 2025. And Northern Kazakhstan?" At first blush, Venediktov looks to be simply highlighting the impending shift, planned since at least 2012. But it doesn't take much digging to find what he's going for.

Northern Kazakhstan has seen unprecedented attention following Russia's continued invasion in southern and eastern Ukraine, with parallels - ethno-linguistic Russian populations, minority rights, the Kremlin's squishy understanding of nationality and sovereignty - continuing between the two. A recent report from International Crisis Group found a key quote from a Kazakh analyst: "[If] previously Kazakhstan perceived Russia as a big brother that will come to help when needed, now that perception has changed. Kazakhstan is very skeptical." And rightly so. Russian President Vladimir Putin, just a few months ago, hinted darkly that Kazakhstan's statehood stood directly under the rule of Kazakhstani President Nursultan Nazarbayev; any shift in leadership, therefore, may necessitate a change in the wholesale structure of Kazakhstan's statehood.

Suffice it to say, the planned shift away from Cyrillic is yet another entry in the Kremlin's potential list of grievances surrounding Kazakhstan's ethnic Russian population (despite the fact that, since far fewer ethnic Russians speak Kazakh than the reverse, the Kazakh-language shift should have little discernible effect on Russian-language realities in the country.) This is the vein Venediktov seemed to tap over the weekend. As if his point wasn't clear enough, a few Tweets augmented his line of thought. When one follower pointed out that there was no mass separatist sentiment in Kazakhstan, Venediktov responded, "Nor was there in Crimea, nor in Donetsk..." When another respondent noted that Kazakhstan was a unitary state, Venediktov replied, "And Ukraine is a unitary state." As if his nationalist itch hadn't yet been sufficiently scratched, Venediktov soon Tweeted a photo showing a decimated, apocalyptic Washington, D.C, with his caption, "Washington someday."

Venediktov is by no means the first prominent Russian media personality to call for special treatment in northern Kazakhstan. A few months ago, the voices behind Sputnik i Pogrom declared northern Kazakhstan part of the "Russian nation-state." Venediktov hasn't gone so far as to call for the outright annexation of northern Kazakhstan, but his willingness to needlessly highlight apparent parallels between Ukraine and Kazakhstan is an inauspicious harbinger - and a sign of how quickly the discourse in Russia has shifted.

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 #19
Business New Europe
www.bne.eu
June 12, 2015
Georgians look east as western doors stay shut
By Michael Cecire
Michael Cecire is an associate scholar at the Foreign Policy Research Institute's Project on Democratic Transition
 
The occasion of Victory Day, the Soviet commemoration of victory over Nazi Germany, has always held certain propaganda value for Russia. But the ongoing war in Ukraine and the ensuing East-West standoff has imbued the event with an even sharper metaphorical significance. Victory Day has also coincided with a moment of great apprehension in nearby Georgia, where Russia-backed separatist regimes highlight the country's painful vulnerability, while Tbilisi's quest to join the EU and Nato looks as stillborn as ever.

Beyond the awkwardness of pro-Stalin rallies in the late Soviet dictator's hometown of Gori and Prime Minister Irakli Gharibashvili's uncomfortably bizarre tribute to Stalin, more worrying signs of creeping Russian influence is emerging in Georgia. The timing was coincidental, but there was something unhappily poetic about Victory Day coinciding with a new survey from the National Democratic Institute showing local support for joining the Russian-led Eurasian Economic Union (EEU) had jumped from 20% in 2014 to 31%.

Georgian and international analysts have largely met the news with either panic or dismissiveness. In the latter column, questions are routinely raised about the quality of the data or, more incisively, whether or not ordinary Georgians sufficiently understand the question being posed. Of course, this ignores the fact that growing pro-EEU sentiments are hardly a one-off statistical blip, but represent a trend going back at least several years. While regular Georgians may not fully understand the EEU's technical intricacies (in fairness, even few experts actually do) - such as the EEU's inherent incompatibility with Georgia's EU free trade and association deal - there is little question that the National Democratic Institute numbers reveal real and growing support for Eurasianism in Georgia.

The easy culprit for expanding Eurasianism is Russia - and its ongoing influence operation campaign in Georgia and throughout Central and Eastern Europe. Indeed, Russia is known to be financing an array of local pro-Kremlin political groups and non-governmental organizations while cementing its direct hold over the Georgian separatist regions of Abkhazia and South Ossetia. Meanwhile, the goalposts for Euro-Atlantic integration seem to be always just out of reach, despite - or perhaps because of - Georgia's habit of blowing past whichever concrete technical standards it is asked to meet as a precondition for further Western integration.

This growing sense that Georgia is destined to remain on the outside of the big Euro-Atlantic clubs for the foreseeable future, regardless of the merits, is stoking Georgian public scepticism, and even fatalism, about its Western path. Indeed, why align with the West for the sake of a few symbolic overtures, without EU or Nato membership in sight, and at the risk of goading Russia's powerful ire?

Awkward truths

Nino Burjanadze, an ex- speaker of parliament and one-time Westernizer, has skilfully rebranded as a pro-Russia agitator and re-emerged from the national political wilderness as the face of a growing accommodationist opposition movement that appears poised to enter parliament in numbers in 2016. Russian financing is likely a major part of her ongoing reinvention, but no less important has been her depressingly credible claim as a voice for hard truths on the subject of Euro-Atlantic integration. "We have been told in English, in French, in German, and I have said it in Georgian for a long time," Burjanadze recently said, referring to regular comments by Nato member state leaders that Georgia would not be receiving an invitation to join the Atlantic Alliance. "In which other language should we be told?"

Burjandze and her ilk, despicable as they may be, have found the soft underbelly of the Euro-Atlantic conditionality dance. The politicization of the Nato and EU expansion process - and the poverty of willingness to accept near-term Georgian accession - has made truth-tellers out of pro-Russia reactionaries and embarrasses pro-West democrats who only ask for clear, concrete pathways to membership. The West cannot decry Russian information operations in one breath while empowering their local agents with the next.

A second and equally pernicious local driver for growing Eurasianist support is the rather compelling local economic argument for the EEU. While the EEU has been widely denigrated in the West (not necessarily unfairly) for lacking purpose and vision, it nonetheless fills a very real niche in the Eurasian economic landscape. In Georgia, as in other post-Soviet and developing economies, the path to prosperity has been riddled with detours, setbacks and extended periods of serious economic pain. Adapting to the rigours of a globalized economy has been a tremendous challenge, requiring the retooling of entire industries and the concomitant displacement of vast segments of local labour markets - all for the sake of competitiveness.

But as Georgia's experience has shown, extensive and even painful reforms do not necessarily result in well-paying jobs and prosperity. Outside the Baltics, Georgia has been and remains a leader in anti-corruption, rule of law and business-friendly policies. It has experienced periods of strong, even dizzying, economic growth and its development and infrastructure has expanded exponentially since the mid-2000s. But even now, official unemployment is stuck in the double digits, and the true rate of unemployment is probably closer to more than twice that number.

Also worryingly, Georgia has yet to identify its international economic comparative advantage; under the previous United National Movement, efforts were focused on high-growth, service-oriented industries, which fuelled the rise of a small, white collar elite, but did little to bring sustained growth outside Tbilisi's central districts and a few handpicked, showcase regional cities. Under the current Georgian Dream coalition, that emphasis has swung back towards more labour-intensive industries like agriculture, but Georgia has yet to find its array of niche markets to drive broader growth. Whatever the fate of Georgia's industrial strategy, it will take time, effort and painstaking reforms before the winning formula is found.

More to the point, the much-anticipated Deep and Comprehensive Free Trade Area (DCFTA) that Georgia signed as part of its Association Agreement with the EU may be a long-term winner, but in the shorter term is just as likely to be an added burden to Georgian businesses, which will have to cope with new, byzantine standardization requirements and the rigours of understanding the lengthy process of obtaining EU-sanctioned export certificates. By contrast, the EEU looks like an attractive option, particularly in the near term.

Unlike the EU, the Georgian economy is more or less already primed for the EEU. We know this because one of Georgia's chief export drivers, its famous wines, has been enjoyed massive growth since Russia reopened its markets to Georgia goods in 2013. In the EEU, Georgia has large, relatively prosperous and eager markets already familiar with the Georgian "brand". With high protectionist barriers, Georgian goods would not have to compete with many big European or multinational competitors. And, likely attractive to certain elements, the EEU markets have a much higher tolerance for corruption, graft and monopolistic practices.

The EEU, of course, is also likely a vehicle of diminishing economic returns. If Georgia can overcome the short-term pain of adapting to the EU's higher standards and find its place in the globalized marketplace, its export opportunities will be more plentiful and lucrative, and the Georgian economic ceiling will be much higher. But long-term strategic thinking is a rare commodity even in mature democracies, and the political exigencies that EEU integration provides may prove too much for some politicians - and their constituents - to ignore, particularly as the drawbridge into fortress Europe stays shut. This is not merely a Georgia issue; this is a Eurasia and Eastern Europe issue. The EEU may never be a world-beating dynamo, but it doesn't have to be. As long as Euro-Atlantic doors are closed, it just has to exist to be "good enough".

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#20
The National Interest
June 9, 2015
Russia and America: Toward a New D�tente
It is totally unrealistic to think that the West can gain desired Russian restraint and cooperation without dealing with Moscow as a great power that possesses real and legitimate interests.
By Leslie H. Gelb
Leslie H. Gelb is president emeritus of the Council on Foreign Relations, a former columnist for the New York Times, and a former senior State and Defense Department official. He gives special thanks to John T. Nelson, his research associate, for his excellent research and expertise.

WITH THE Cold War's demise, the menacing Russia that long loomed over Europe seemed to vanish. The Russia of 1992 was just a fragment of its historic self in military punch and economic weight. Not even Russia's still-formidable nuclear arsenal deflected perceptions of decline. It was inevitable, then, that Western policy makers would feel that this shrunken Russia was more to be ignored than feared. They were wrong.

Now, memories of the bad old days are storming back, especially of Moscow's capacity to stir up trouble with its military power. While President Vladimir Putin's "covert" war in Ukraine continues to inflame tensions, he also torments his Baltic neighbors and threatens Europe with provocative military flights and nuclear rhetoric. Western alarms are heightened by Putin's seeming unpredictability and his apparently unlimited internal power. The West can't reckon how far he will take his muscle flexing-or how to stop him.

NATO has no strategy to counter mounting Russian pressures. Economic sanctions, the West's spear point, have seriously harmed the Russian economy, enough to squeeze from Putin some dubious cease-fire agreements on Ukraine, but not nearly enough to make him back down. Europeans are reluctant to expand sanctions for fear of prompting a Russian military response and for fear of further complicating their dependence on Russian oil and gas. On the military side, NATO has deployed mostly American fighter jets eastward and stepped up joint exercises and arms deliveries. Unsurprisingly, European NATO allies do the minimum militarily, and instead press ahead with a weak diplomatic hand. This diplomatic impotence is so pronounced that President Barack Obama has distanced himself from it, preferring to let the Germans take charge.

The reason for the West's limp hand is painfully evident to all: Russia's military superiority over NATO on its western borders. If NATO ups the military ante, Moscow can readily trump it. Moscow has significant advantages in conventional forces-backed by potent tactical nuclear weapons and a stated willingness to use them to sustain advantages or avoid defeat. The last thing NATO wants is to look weak or lose a confrontation.

NATO's military and civilian officials have worried about this situation for several years now-without receiving much productive guidance from their capitals. Predictably, a growing chorus in America (and not just the usual hawks) is championing sending weapons to Ukraine. Just as predictably, these advocates say nothing about what they would do if Moscow's response were to escalate.

Thus, NATO's options have narrowed: more arms aid to beleaguered friends, but no answers to Russian escalatory responses; more sanctions that hurt but don't humble Russia's economy; calls for a major NATO military buildup in Eastern Europe with no prospect of realization; and more diplomacy without leverage.

What, then, can the West do that has some chance of success? The only sensible path is to develop a diplomatic strategy with real leverage. This strategy would retain the sanctions regime and credible prospects for a greater NATO presence until its benefits materialize. It is now quite evident, however, that these punitive and defensive measures alone won't produce the requisite power over Russia, a conclusion shared by a number of former American ambassadors to Moscow, including Jack Matlock, Thomas Pickering and James Collins.

An effective diplomatic strategy has to be rooted in what matters most to Russian leaders-their historical sense of self and their passion to be treated as a great power. Moscow deserves no less, given the troubles it can cause and the problems it can help resolve. The West need not silence its complaints about the Kremlin's brutality, nor concede vital interests. It is totally unrealistic, however, to think that the West can gain desired Russian restraint and cooperation without dealing with Moscow as a great power that possesses real and legitimate interests, especially in its border areas.

The strategy proposed here should be thought of as D�tente Plus. It would pick up from the d�tente diplomacy of the past and go well beyond it. The old d�tente was about managing serious conflicts of interests and values with a mostly implacable foe. D�tente Plus would not treat Russia as an enemy, but as a combination of adversary and partner. D�tente Plus would exceed the arms-control focus of the past and address first-rank political matters in Europe and worldwide. It would recognize a wide range of common and overlapping interests, solving both Russian and American problems.

This cooperation has to be visible, filled with optics. Call it mountaintop diplomacy. The world would be watching as the two powers devised common solutions to common problems.

American and Western leverage would stem from the visibility and the results generated. Being seen at the mountaintop with the United States would go far toward satisfying Russia's yearning for status. To maintain this status, Kremlin leaders would understand their need to bend, but status is not enough. Moscow would have to benefit tangibly as well, mainly in improved economic prospects and assuaged political concerns.

With this leverage, Washington can do two things: first, tame Russian assertiveness and secure Russia's restraint on its western border; second, and often overlooked, step up joint action based on common interests on other critical fronts such as terrorism, Syria, Iran and nuclear proliferation. Today's pervasive atmosphere of hostility and mistrust obscures these promising possibilities. Given the dangers ahead and the poor alternatives for dealing with them, the D�tente Plus strategy deserves a trial.

JUST IMAGINE if the United States had lost the Cold War. For some comparative measure, think about the American trauma after losing the Vietnam War and after the inconclusive battles over many years in Afghanistan and Iraq. Yet most Americans won't give an inch when it comes to recognizing the far greater trauma for Russians after their utter defeat in the Cold War and NATO's almost immediate march eastward to their borders. Those profound shocks are central to fathoming recent Russian provocations and key to combating them. That's why it is essential to consider Russian history since the collapse of the Berlin Wall, not to justify Putin's course, but to comprehend it.

Across Eastern Europe, Communist dictatorships collapsed in short order and were swiftly replaced by democratically elected governments that looked west for their future. As Czech statesman Vaclav Havel remarked, "We have had literally no time even to be astonished." Germany reunified and became a leading member of the Western club virtually overnight. Mikhail Gorbachev exercised considerable restraint as the outer empire collapsed around him, but the experience could hardly have been more distressing for his nation. Soviet troops were compelled to withdraw haphazardly from Eastern Europe and surrender, without a shot fired, the very territories that millions of Soviet soldiers had died to secure and dominate just decades earlier.

Conservative critics in the Communist Party and in the military understood the perilous course upon which Gorbachev's reforms had set the Soviet Union, but remained divided on what to do about it. In August 1991, a faction of the conservatives attempted to oust the premier in a coup, but it was too little, too late. Soviet patriots like Chief of the General Staff Sergei F. Akhromeyev and Interior Minister Boris K. Pugo committed suicide rather than face the death of their country.

Within months of the coup, the Soviet Union collapsed, breaking into fifteen weak republics. As a rump state, Russia lost a quarter of its territory, half of its population and much of its wealth. Russians especially lamented the loss of territories like Ukraine that were integral to Russia's history and identity. The formerly colossal Soviet military was devastated as the post-Soviet republics began nationalizing the forces and materiel stationed within their borders. In 1991, the USSR had nearly four million men on active duty and could mobilize up to ten million. The system designed to win World War III was too weak to save itself.

Compounding Russia's sense of crisis, the peripheral republics of the Soviet Union erupted with terrible ethnic, nationalist and religious violence as the Communist edifice crumbled from the center. Intense fighting gripped Central Asia, the Caucasus and Moldova. Even the Baltic republics succumbed to violence in their struggle to secede from the USSR. While the Soviet Union lasted, its forces were sent in to try to restore order and stymie budding independence movements, often counterproductively.

Even after 1991, Russian troops remained engaged in battles along the country's southern frontier. Moscow's concern was that these nationalist, religious and ethnic convulsions could prove contagious. If unchecked, they would threaten a multiethnic and multiconfessional Russia. This fear proved well founded in Chechnya, where the Russian army was humiliated by guerrilla fighters between 1994 and 1996.

Given the chaos gripping Russia, it was hardly surprising that Western leaders began to write off Moscow's interests in ways unimaginable just a few years before. When Chancellor Helmut Kohl suggested to President George H. W. Bush in 1990 that Moscow should get something in return for its acquiescence to the reunification of Germany, the president responded, "To hell with that! We prevailed, they didn't. We can't let the Soviets clutch victory from the jaws of defeat." The Russians felt this disdain acutely, and their frustration mounted as the West pressed its advantages over the next two decades in what appeared to be an attempt to encircle Russia.

At the start of their administrations, both Bill Clinton and George W. Bush made more of an effort to include Russia in European diplomacy and economic development. Through the Partnership for Peace program and later the NATO -Russia Council (presently suspended), both presidents attempted to reduce Russia's suspicions of the new Atlantic order. Sensing Russia's wounded pride over its exclusion from the G-7 economic club, Clinton and Tony Blair arranged to include Russia as a full member in 1998, where it remained until its suspension last year.

In other important respects, however, Clinton and Bush were less sensitive to Russian interests. Over the course of the 1990s and early 2000s, NATO conferred membership upon much of Eastern Europe. In many cases, this was a sound strategy for the West, Russian resentment notwithstanding. The alliance, however, pushed its advantage provocatively far. It extended its protective wing up to Russia's borders in the Baltic states. Stating a view shared by many policy analysts, George F. Kennan predicted in February 1997 that the policy of NATO enlargement to Russia's border could be expected "to inflame the nationalistic, anti-Western and militaristic tendencies in Russian opinion; to have an adverse effect on the development of Russian democracy; to restore the atmosphere of the Cold War to East-West relations, and to impel Russian foreign policy in directions decidedly not to our liking."

Kennan's sound counsel was flouted and his prophecy fulfilled. George W. Bush, who had initially sought good relations with Putin, gave them up in favor of a prodemocracy, human-rights-first agenda. The Bush team administered the ultimate slap in the face, proposing to NATOize Ukraine and Georgia, where the "color revolutions" had installed governments friendly to the West. Here, Western Europe jumped in and said "no." Though the democratic uprisings in Tbilisi and Kiev were indigenous, Moscow inevitably suspected a secret American hand. Moscow also noted an irony. Even as it asserted its presence on Russia's borders, NATO was slowly but unmistakably allowing the military strength of the alliance to erode.

The new Obama team hinted at greater sensitivity to Russian feelings when it proclaimed the policy of "resetting" ties with Russia. At that time, Robert Legvold, a highly respected Russia expert, tried to push for a wide-ranging agenda that would engage Russia on a number of broad concerns. He was right about what was needed, but it didn't take long for the Obama White House to revert to a more Bush-like approach. For a while, Obama's relations with President Dmitri Medvedev seemed to be on the right track, and together the United States and Russia concluded deals on nuclear weapons and much-needed cooperation on Afghanistan. Obama also moved to bring Russia into the World Trade Organization, but soon undermined its own effort by endorsing the Magnitsky Act, which established a targeted-sanctions mechanism in response to Russian human-rights abuses. This measure was intended to undercut positive ties with Moscow, and it did. The openly anti-Russian activities of several Obama appointees further enraged the Kremlin.

For its part, Moscow has tried to make the post-Soviet states toe the line through a number of bilateral and multilateral mechanisms. Russia became the "impartial" mediator for lingering territorial disputes, played warring states like Armenia and Azerbaijan off against one another, and wielded its energy power, especially against Ukraine. Russia also made futile attempts to corral the post-Soviet states by proposing Moscow-led international institutions, including the Commonwealth of Independent States, the Eurasian Economic Community, the Collective Security Treaty Organization and, most recently, the Eurasian Economic Union. By and large, Russia lacked the attractiveness and the clout to make these efforts successful.

When some neighbors rejected Russia in favor of the West, Moscow chose force. In Georgia, Russia solidified control over the provinces of South Ossetia and Abkhazia. A democratic uprising in Ukraine triggered Russian support for revolts in Ukraine's eastern provinces and the annexation of Crimea.

At some point over the last quarter century, Washington might have realized that the Kremlin was not going to sit around and wait for the West to determine Russia's fate. Russia's leaders countered with what came naturally to them-military power-to ensure they would shape their own future.

THE STRATEGIC choices made by other modern major powers following profound losses had zero appeal to post-Cold War Russia. The British lost their empire after World War II, but figured out how to punch above their weight through a "special relationship" with the United States. France, after being humbled by the Nazis and losing its empire, settled for obvious second-tier status. Defeated Japan opted to forgo military power and yet still count by becoming a major economic power. To restore its great-power status, Russia went for military might.

True, some Russian leaders also wanted to take a hard look at an economically focused strategy. Vladimir Putin was once such a man. When he took office in 1999, he was considered something of a liberal reformer, and many in and outside Russia hoped he would succeed in growing and diversifying the economy. Culture, politics, and the practices of the old and new elite alike, however, made the task impossible. In the meantime, oil and gas revenues revived the moribund Russian economy, making it the eighth largest in the world, but still leaving it far behind the top nations. Furthermore, this spurt retarded impetus for reform and diversification. Kleptocracy set in as the state's guiding economic principle, while a good portion of the leftover energy proceeds went to defense.

Beginning in the 1990s, Russian leaders came to the consensus that military might was the key to accomplishing what mattered to them most: maintaining internal control, preventing the disintegration of Russia and one day reasserting Russia's global status. Slowly, haltingly and inefficiently, Moscow regenerated its military might, but not its greatness.

The outline for developing the desired military clout was fairly consistent and included four crucial elements: maintaining nuclear parity with the United States, streamlining Russia's fighting forces, maintaining and modernizing military hardware, and demonstrating superiority on its borders.

Maintaining nuclear parity with the United States was the first and last priority of the plan. It was also relatively easy because Moscow had the nuclear missiles and technology in hand. To compensate for weakened conventional capabilities, in 1993, Moscow revoked the Soviet Union's long-standing promise of no first use. During this time, however, Russian leaders continued to work with the West on mitigating the risk of nuclear accidents, on securing so-called loose nukes, and especially on consolidating the nuclear weapons that were spread around former Soviet republics into Russia's hands. Significantly, Moscow and Washington continued to coordinate closely to prevent nuclear proliferation.

Differences on nuclear matters between the two big nuclear powers have mounted in recent years. Putin does not share Obama's oft-expressed passion for a "nuclear-free world," and he did not hide his thinking in a 2012 statement: "We will not under any circumstances turn our back on the potential for strategic deterrence, and we will reinforce it. It was precisely this which allowed us to maintain state sovereignty during the most difficult period of the 1990s."

With this last line of defense in place, Russia undertook the more challenging task of recapturing its conventional military power. After the Soviet collapse, Russian forces were still potent, yet the kind of power they wielded was ill suited to the challenges they faced. It was difficult to mobilize Russian men for what appeared to be remote ethnic battles between foreign peoples, but the day-to-day manning levels of most units were insufficient for deployment. Russia needed to reform its fighting forces.

The Russians knew they needed smaller, fully manned, equipped and trained units maintained in a state of constant readiness. They wanted to build a usable army within the army. While Russia's fears of a scheming NATO and a dangerous China remained, Moscow's military planners saw no need to re-create a force of ten million men. The reforms were good enough to reestablish control of Chechnya in 2000.

The next major challenge for Russia's forces came in the 2008 campaign against Georgia. Though they won in five days, they felt that further reforms were still needed, and the Kremlin launched another series of even more sweeping changes, known as the "New Look."

The New Look's chief elements included a reduction of Russia's authorized strength to one million men, severe cuts in the officer corps, drastic consolidation of military units, centralization of the six existing military districts into four regional Joint Strategic Commands, and replacement of the regimental structure of the army with smaller, more versatile brigades. The program's chief aim was to develop an armed service that could function at or near full strength all the time by relying on professional "contract" soldiers rather than largely useless conscripts.

Conscription has been retained in Russia, though the term of service has been reduced to one year. Conscripts are deployed to most units, but these troops are considered practically worthless in combat. They are poorly trained and motivated, and useful mostly for logistics within Russia. Nevertheless, conscription is still seen as the best means of training future reservists should sudden mobilization be required.

More recently, Russia has given priority to improving its military hardware. Thus, it now has quality missile-defense systems, first-rate aircraft and substantial artillery. Putin has insisted upon massive investment in new high-tech equipment as a hallmark of his third term. The federal budget sent to the State Duma last September called for defense spending to increase from 3.4 percent of GDP in 2014 to 4.2 percent in 2015, with the bulk going to procurement.

The aim of this triumvirate of the nuclear backstop, more agile forces and more modern equipment is to enable Russia to assert military superiority on its western and southern borders, to establish a plausible defensive line in the east and to develop a capability to manage crises, particularly in the volatile Caucasus region.

HERE IS what these reforms have produced.

On the strategic nuclear level, Russia maintains effective parity with the United States. The two sides have roughly equivalent numbers of ICBM launchers, ballistic-missile submarines and nuclear-capable bombers. While Russian bombers are inferior to American aircraft, this does not affect overall strategic-weapons parity or Russia's capacity to absorb a first blow and retain retaliatory effectiveness.

Missile-defense systems are a sore point. To Moscow's consternation, Washington withdrew from the Anti-Ballistic Missile Treaty in 2002. The United States also sought to deploy missile-defense systems in Eastern Europe. While Moscow complains that these defenses hamper its retaliatory capability, in private they recognize that their offense can readily overcome this defense. Thus, it's hard to see how these deployments contribute to Western security; it's easy to see why they irritate Moscow.

The tactical-nuclear-weapons balance in Europe is overwhelmingly in Russia's favor. The United States maintains some two hundred gravity bombs on six bases in five NATO countries and is currently modernizing these to give them a limited standoff capability. Russia, on the other hand, has a tactical force of several thousand warheads, of which some two thousand are believed to be active and assigned to naval, ground and air nonstrategic delivery vehicles.

Recently, Washington alleged Russian violations of the Intermediate-Range Nuclear Forces Treaty of 1987. Under its terms, both countries forswore all land-based cruise and ballistic missiles with a range between five hundred and 5,500 kilometers. The West is unsure about the seriousness of recent Russian moves in this arena, but it is concerned by Russia's increasing reliance on nuclear posturing. Talk of first use is of special concern to NATO, particularly in light of the fifteen-year-old Russian doctrine regarding the use of a so-called deescalatory strike. This means nuclear strikes with the aim of restoring the status quo ante when Russia might otherwise lose. NATO is now struggling over whether to regard this as a bluff or a serious policy-and how to respond.

Insofar as Russia retains large armies for conventional war, these armies operate primarily in the Far East. Of the four regional Joint Strategic Commands into which the armed services are organized, only the Eastern Military District contains four army commands. In the event of a conventional invasion from China, two armies would serve as the first line of defense in the east with two more stationed farther west as a second defensive echelon. Air and naval standoff assets, including from the Pacific Fleet, would likely be used to delay hostile advances, while further reinforcements are drawn from the Central Military District.

Interestingly, for all of Russia's wariness of China, it continues to sell Beijing high-quality weapons. It would not sell China such good equipment-and at very good prices-were it not desperate for money. Most notably, Moscow licenses the production in China of its SU-27 fourth-generation fighter and has done so since the 1990s.

The People's Liberation Army currently numbers 1.6 million. At the first possible moment in an invasion, China would likely sever the Trans-Siberian and Baikal-Amur rail lines, thereby leaving Siberia isolated. The only strategic question for Russia in this scenario would be when to push the nuclear button.

Russia does not fear an invasion from its former Central Asian republics. The role of the Central Military District, based in Yekaterinburg, is to orchestrate Russian engagement in local conflicts within Central Asia, to manage Russia's bases in Tajikistan and Kyrgyzstan, and to supply reinforcements from its two armies either to the east or the west in the event of war. There's little to indicate that these forces are deployed to the central region for the purpose of reconquering lost Central Asian territories. Rather, their purpose is to forestall instability that might spill over into Russia and to remind everyone that Russia's forces in the region are mightier than China's.

Based in St. Petersburg, the Western Military District houses two army commands along with the Baltic Fleet, the Northern Fleet, numerous paratrooper brigades, Spetsnaz, air and air-defense units. Their role is to maintain clear military superiority along Russia's western and northwestern borders, and to play a large part in air defense.

Russia's air defenses are excellent. Their long-range surface-to-air missiles are among the best anywhere, particularly the S-300 and S-400 varieties. As mobile, truck-based units, they can secure air superiority over bordering regions, despite U.S. advantages in fighter aircraft. NATO reckons that Russian S-400s would have little difficulty taking down even American stealth aircraft within their 250-mile range. This likelihood greatly complicates any NATO strategy for establishing air superiority over the Baltic region. The United States is actively developing countermeasures to confuse or disable parts of Russian air defenses, but, all factors considered, any NATO effort to establish air superiority near Russian borders would be quite costly.

Russian fighter aircraft lack some of the power, precision and stealth of America's best fighters, but are comparable to the F-15 and are a match for the F-22, according to American analysts and generals. Moscow is developing a fifth-generation stealth fighter, but currently relies upon the SU-27 Flanker and its more modern cousin, the SU-35.

Without the trial of battle, defense systems can be notoriously difficult to compare. Nonetheless, experts must and do make comparisons. In addition to being lighter and stealthier than their Russian counterparts, American F-22 and F-35 fighters may be equipped with the AIM-120 AMRAAM (Advanced Medium-Range Air-to-Air Missile) family of missiles that allow pilots to "fire and forget." These missiles are thought to be superior to the Russian equivalent active-radar-homing missile, the R-77. Their potency, combined with the F-22's superior radar, suggests that American planes would have considerable advantages in a fight over neutral territory. Unfortunately for NATO, fights are most likely to take place near Russia's borders.

Other factors, ones that are even harder to measure, also influence airpower capabilities. American pilots receive more training hours each year and have more experience in coordinating combat operations with other branches of the military. Furthermore, Russia's drive to develop fifth-generation fighters and bombers has, to some degree, been undertaken at the expense of developing better logistical capabilities such as refueling and troop transport. There is also the possibility that Russia's new best-of-the-best equipment will prove less impressive in battle than on paper. India, a potential purchaser of the fifth-generation fighter, has complained repeatedly of unexplained technical malfunctions, charges reminiscent of those China has leveled after purchasing aircraft from the Russians.

The territorial remit of the Southern Military District, based in Rostov-on-Don, includes the unstable North Caucasus region, Russian bases in Abkhazia and South Ossetia, the base in Gyumri, Armenia, and now, most likely, Crimea. It is also responsible for operations in Ukraine. Even before that conflict erupted, the Southern district had the highest priority of all districts for new and modernized weapons and well-trained personnel. In addition to its two army commands, it oversees elite airborne troops, Spetsnaz and reconnaissance brigades, the Black Sea Fleet, the Caspian Flotilla and air units.

Southern forces can be quickly mobilized to respond to regional instability and, as was revealed in Ukraine, effectively deployed against Russia's far weaker neighbors. They can maintain credible superiority along the country's southwestern borders. Their takeover of Crimea was immediate, and relied heavily on elite formations.

Specialized Russian units performed so well in Crimea that Putin remarked after the annexation, "It was all coordinated so clearly, tightly . . . that I sometimes wondered: Was it really us?" Highly mobile and versatile, these units can be deployed in any of Russia's strategic theaters.

Of the roughly 771,000-strong Russian military, fewer than a hundred thousand fight in elite formations. Of these, the number on par with NATO's best is in the tens of thousands. Over the summer of 2014, Russia demonstrated the ability to draw as many as forty thousand troops to the Ukrainian border, including elite units. While this number was sufficient to menace Ukraine, it hardly represented a conventional threat to NATO forces in Eastern and Central Europe.

For the foreseeable future, the principal strategic danger for the United States and the West is on Russia's western borders. China can take care of itself to the east, and Central Asia doesn't worry about a Russian invasion, Putin's occasional glowering at Kazakhstan notwithstanding. Russian armed forces don't have the numbers, the allies or the logistical stamina needed to mount a credible threat to the former Warsaw Pact nations. It's Ukraine, Moldova, Belarus and the Baltic states where the West needs an effective strategy for deterrence and containment.

It strains credulity to think that Moscow would invade and reconquer these countries. There is no doubt that such actions would result in Russia's total isolation from the West, where Moscow understands full well its future lies. And NATO needs to reiterate such consequences in blunt language.

The genuine risks revolve around Moscow's capacity to pull off more "Ukraines." Once again, it could exploit the sizable Russian-speaking populations in its neighboring countries, and provide covert arms and covert soldiers to pressure the majority populations to make unreasonable concessions. Along with propaganda and other political techniques, these tactics are described collectively as "hybrid warfare." NATO has no effective military response to this scenario-and no broader strategy to do the job.

NOT LONG ago, the Obama team spoke of "resetting" U.S.-Russian relations, and indeed some significant agreements were reached with former president Medvedev. With the return of Putin, however, Russian policy took a more aggressive turn, in the face of which Obama withdrew from the reset in favor of policies that irritated the Kremlin without checking it. In any event, relations needed much more than resetting; they needed reconceptualizing.

At its root, the Cold War was a story of two goliaths, each attempting to impose its vision of the world and its values on the other. D�tente diplomacy in this era essentially strove to keep conflicts within bounds, particularly avoiding nuclear confrontation. The context for twenty-first-century D�tente Plus is quite different. There is nothing resembling the old worldwide political and ideological clash. A good case can be made now that these two powers have more shared interests than conflicting ones. Based on this reality, D�tente Plus has to make that cooperation possible. It has to create a concept and a procedure for fixing problems together that can't be managed separately.

For this new diplomatic partnership to be effective, both parties must enter into it with a realistic mind-set. That is the first step. The United States has to accept the fact that Russia is a great power and treat it that way. Washington has to be sensitive to Moscow's perspectives and interests, particularly on its borders. The Kremlin has to realize that to receive great-power treatment, it's got to behave far more responsibly and accept responsibility for joint solutions. Putin can't go on trying to dominate and intimidate his neighbors, just as the U.S. president can't be seen as seeking to pull these neighbors out of the Russian orbit.

Second, both sides have to recognize their very real complementary interests. That's perfectly obvious now when it comes to regional issues, fighting terrorism and nuclear proliferation. There's no denying that there are serious conflicts on Russia's western border or that Russia has clear military superiority there. Russia can cause real turmoil for Europe, which is why both parties have got to understand that the solution lies in diplomatic sensitivity and compromise, rather than fighting. It does not take a rocket scientist to see that the present mutual hostility imperils the interests of both sides.

How would D�tente Plus work in practice?

First, both sides have to commit to diplomacy at the highest levels. Particularly in the initial years, there would have to be annual presidential summits and semiannual meetings of foreign and defense ministers. Only top-level political leaders can make the decisions required of D�tente Plus.

Second, these joint ventures must be given high visibility. Optics are critical both to reestablish Russia's status as a great power, and for the United States to gain more restrained and cooperative Russian behavior in return. Kremlin leaders are surely realistic enough to see this trade-off and curb themselves. Until this mountaintop diplomacy begins to produce, Western nations are fully justified in sustaining sanctions and continuing to build a more credible military presence eastward.

Third, D�tente Plus has to progress on two fronts: maintaining the basic integrity and independence of countries on Russia's borders while being attentive to Russian interests there; and fashioning joint action on broader issues such as Middle East instability and terrorism.

Securing Russia's restraint on its western borders requires both political and economic dexterity. The cases of Georgia and Ukraine are a master class in what not to do. As the Maidan protests unfolded in Kiev, the White House should have been in regular top-level conversations with Moscow. Of course, no American president can turn his or her back on democratic movements anywhere. At the same time, it makes no sense to ignore the interests of nearby and historically vested great powers. But that's precisely what Washington did in Georgia and Ukraine. Their leaders reached out to the United States, which was fine. Yet they ignored history and geography and assumed U.S. security support that did not and could not materialize.

Georgian president Mikheil Saakashvili challenged Moscow repeatedly, in large part because private cautions from the George W. Bush administration were contradicted by public encouragements. Saakashvili brought out his meager armed forces, and Russia throttled them, taking over two disputed provinces on their mutual border. Georgia was humbled, and so was the United States. The only way to have avoided this was for Bush to have told the Georgians from the beginning not to count on U.S. intervention.

When a new pro-Western government came to power in Ukraine last year, one of its first acts was to limit the use of Russian as an official language. This and other anti-Russian noises were more than enough pretext for Putin to initiate the present crisis. If anything, the Obama team seemed to be egging Ukrainian nationalists and would-be democrats on, when it should have been encouraging restraint. The White House should have been warning Kiev to take away Moscow's excuses for intervention, like the ill treatment of Russian minorities.

Washington should have gone out of its way to urge caution and restraint in both Georgia and Ukraine. The United States had to clarify up front what it would and would not do. Most importantly, America should have encouraged these nationalists not to gratuitously poke at Russian sensibilities. And we must not forget Bush's effort to bring these two nations into NATO; Moscow certainly hadn't. Russia needs and deserves the requisite assurances about its historical sensibilities now and in the future if it, too, demonstrates real restraint.

To be sensitive to Russian interests and urge caution among its neighboring states is not to condemn them to living under Moscow's domination. Indeed, the truth is that recognizing Moscow's interests in the short run is the only way for the neighbor states to acquire more freedom and independence from Russia over time.

Meanwhile, the West should think of states like Ukraine and Georgia as buffer or bridge states and resist the urge to absorb them politically or economically. Georgian leaders are already cooling it, and their Ukrainian counterparts have to take a deep breath as well. That means granting more autonomy to eastern Ukraine, which harbors many ethnic Russians.

Dicier still is the security of the Baltic states. The challenge is unique because of NATO's Article 5 commitment to their defense. While the Balts deserve protection, all parties recognize the uncomfortable realities. Russia can prevail militarily, and NATO will never contemplate forward deploying forces sufficient to stop the Russians. Here, too, the burden has to fall on D�tente Plus diplomacy. The Balts hold tightly to their independence, but are trying not to aggravate Moscow. It doesn't take much to do so, which is all the more reason to develop the Russian-American diplomatic partnership inherent to D�tente Plus. Neither side should want to test Article 5.

The economic dimension of D�tente Plus is central to driving the whole relationship. It's got to account for Russian, Western and border states' interests. Alas, the European Union has demonstrated the wrong way to proceed in the last two years. It essentially proposed to incorporate the Ukrainian economy into Europe's and leave Russia behind. It pursued a Europe-win/Russia-lose approach rather than the win-win policy argued for here. Obviously Moscow couldn't accept this and turned the competition to its strength-stirring up Russian speakers in eastern Ukraine and sending in Russian arms and men.

The right way for the West to develop the economic dimension of D�tente Plus would be to include Russia in the earliest planning stages as well as in the implementation process. So far Obama has done almost the opposite. He has excluded Moscow from both European and Asian free-trade negotiations, only compounding Russia's doubts about its ability to compete in a rules-based trade regime. Given Russia's increasing economic woes, Western leverage will depend heavily on providing Russia with economic opportunities, which must be palpably beneficial to Moscow. In any event, a Russian role would not have to be concocted out of thin air: Russia is still a principal supplier of oil and gas to Europe, Ukraine included.

Over time, this all-inclusive approach to developing the region economically will redound mostly to the coffers of the West. European economies are far more attractive and promising than Russia's. Kremlin leaders know this full well, which is why it is essential that Moscow be part of the planning process and garner big and visible rewards. The economic move west has to be slow enough for Moscow to feel comfortable with the process and the timing. It goes without saying that Europe has to be involved fully in D�tente Plus, but mainly as a key player on the economic front. U.S.-Russian ties have to be central.

Dealing with China is more complicated. The very fact of D�tente Plus will unnerve Beijing. Nothing can be done about that; indeed, it might have a salubrious effect on China. Both Russia and the United States worry about Chinese economic and military muscling, and it wouldn't be bad for Beijing to consider Moscow and Washington as a counterweight. For the foreseeable future, Russia's and America's interests coincide more with one another's than with China's.

To be sure, all of these calculations about D�tente Plus have an abstract quality. No matter the potency of the arguments for cooperation, it will be very difficult for both sides to adopt a D�tente Plus strategy. Formidable segments of the policy communities on both sides will not reconcile themselves to such a relationship. The American right wing will never believe the Russians are negotiating in good faith, and vice versa.

Since the early twentieth century, no country has so consistently roiled Americans as has Russia. Apart from Tolstoy, Dostoyevsky and the Bolshoi Ballet, almost everything about Russia has inspired revulsion: czarist dictatorship and the secret police, horrid anti-Jewish pogroms, atheist totalitarianism, the Stalinist tyranny over Eastern Europe, and now military force against its weaker, peaceful neighbors by a Dracularized Vladimir Putin. Now, as ever, Americans seek to cure Russia with democracy and fail to understand that societies have their own special roots and must change from within. And most certainly, all these American attitudes and moves drive Russian leaders insane.

Though the benefits of D�tente Plus are so tangible, it's hard to imagine overcoming generations of mutual mistrust. It's harder still since realists in both capitals seem to be in short supply. But if there is any one move that can relieve the flood of crises worldwide, it is the reality of Washington and Moscow combining their powers. D�tente Plus could do this. Mounting Russian bad behavior in Ukraine and elsewhere does not preclude this approach. It makes it essential.

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 #21
Interfax-Ukraine
June 12, 2015
Russia is preparing to invade Ukraine - Turchynov
 
Secretary of the National Security and Defense Council of Ukraine Oleksandr Turchynov has said that Russia is preparing to invade Ukraine.

"The issues of conflict again returning to an active military phase is still on the table. Moreover, it's very relevant, especially in the coming days. According to our information, Russia is preparing for an invasion, for unleashing aggression. And that's why the task of our military, our defense complex is to prepare for that," Turchynov said in an interview on Channel 5, which was broadcast on Thursday.

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 #22
The Nation
June 11, 2015
Why Is Washington Still Pushing for War With Russia?
Despite today's vote in the House to bar US funding to a neo-Nazi Ukrainian militia, the 'war party' continues to rattle its sabers over Ukraine.
By James Carden
James Carden, a former State Department adviser, is a contributing editor at The American Conservative and a frequent contributor to The National Interest and Russia Direct.

On Wednesday the US House of Representatives passed an amendment to the Defense Appropriations Act which prohibits the US from providing arms, training, and other assistance to the neo-Nazi Ukrainian militia, the Azov Battalion. This development was a welcome respite from the relentless push by the war party, a bipartisan group of legislators, government officials and their allies in the media, which seek conflict with Russia over the crisis in Ukraine, to undermine Secretary of State John Kerry's diplomatic outreach to Russia in May.

Only a month ago, May 12, Kerry, after having met with Russian President Vladimir Putin for over four hours, stood with Russian Foreign Minister Sergei Lavrov at a press conference in Sochi where he expressed "President Obama's gratitude for Russia's willingness to engage in this discussion." Reacting to reports that Ukrainian President Poroshenko had pledged to retake rebel held territory by force, Kerry warned that the US "would strongly urge him to think twice not to engage in that kind of activity."

Lavrov's own impression of the Sochi meeting reflected, in retrospect, undue optimism, telling a reporter from the state-owned Russian news channel Rossiya 24 in late May that he believed Kerry's trip to Sochi likely meant "that there is an understanding in Washington that we need to build bridges and end this unfortunate period in our relations."

Given President Obama's statements following the completion of the latest G7 summit on Tuesday in Krun, Germany, it would seem that Washington is a long way off from such an "understanding." Trumpeting Russia's "isolation" from the G7, the President noted with evident satisfaction that thanks to the EU's sanctions regime "Russia is in deep recession" and the group stands ready to "impose additional, significant sanctions." Mr. Obama's rhetoric at the G7 had a positively Cold War tinge to it, asking of the Russian President: "Does he continue to wreck his country's economy and continue Russia's isolation in pursuit of a wrong-headed desire to re-create the glories of the Soviet empire?"

What accounts for the abrupt change in tone between Sochi and Krun? Much of the explanation lies in the fact that in the month leading up to the President's appearance at the G7, the war party, temporarily set back on its heel by Kerry's diplomacy at Sochi, rallied.

Three days after Kerry departed the Black Sea region, his Assistant for European and Eurasian Affairs, Victoria Nuland arrived for talks in Kiev. That same day State Department spokesman Jeff Rathke spun the meaning of Kerry's talks at Sochi, presenting them in a far different light than Kerry himself had, declaring that the Secretary "was clear with Russia-President Putin, Foreign Minister Lavrov-about Ukraine and about the consequences for failing to uphold the Minsk commitments." In this way Kerry's diplomatic outreach to the Russians was spun as a scolding of the Russians.

The Department's backpedaling from Sochi, along with Nuland's arrival in Kiev, was followed by a number of provocative actions on the part of the Ukrainian government beginning, on May 21, with the decision to blockade the pro-Russian enclave of Transnistria. This was followed by the appointment, on the 29th, of former Georgian President Mikhail Saakashvilli to the governorship of the Odessa oblast. Given Saakashvilli's close ties with the US-neoconservative lobby and his long simmering feud with Russian President Putin, his appointment is a near guarantee of more unrest in the deeply divided Black Sea province

Meanwhile, in the US, the hawks took aim at Kerry. Julianne Smith, a former top national security adviser to Vice President Joe Biden, complained to the New York Times that Kerry's trip to Sochi was "counterproductive" and that "it created this kind of cloud of controversy around what is the U.S. strategy, why did he go?"

Then, perhaps coincidentally-though, perhaps not-story after story began to appear touting yet another imminent Russian invasion of eastern Ukraine. On May 27, Reuters declared that Russia was massing "heavy firepower on border with Ukraine." (By one count Reuters has published, like clockwork, 13 headlines trumpeting a forthcoming Russian "invasion" in as many months). Bloomberg View went one further, when neoconservative stenographer Josh Rogin repeated unverified claims by Congressmen Mack Thornberry (R-TX) and Seth Moulton (D-MA) that Russia has dispatched "mobile crematoriums" into the territory of eastern Ukraine in order to hide evidence of Russian casualties.

Worse still, in the days since Obama's statement in Krun, the war party, led by the Washington Post editorial page, has doubled down on the pro-Kiev line. To mark this week's visit of Ukraine's Prime Minister Arseny Yatsenyuk and its American-born Finance Minister Valerie Jaresko to Washington, the Post published an op-ed demanding further American assistance by Yatsenyuk on June 9th, an editorial pleading for greater American involvement in the crisis on the 10th, and a report from its diplomatic correspondent regurgitating the claims of both later that day.

The Post, along with most of the Beltway media, continues to focus attention on the sins of Moscow while blithely ignoring those of Kiev, which, in continuing both its economic blockade of the Donbas and its refusal to negotiate with the leaders of the breakaway regions in Donetsk and Luhansk, is in violation of Minsk II accords.

The double standard extends to the Obama administration, which, on June 11, sent UN Ambassador Samantha Power to Kiev for talks with President Poroshenko. Poroshenko reportedly gushed to the visiting Power: "you cannot imagine how famous you are in Ukraine." For her part, Power took to Twitter to declare that the "US stands w/you as you fight on two fronts: countering Russian aggression and building an open, responsive govt."

The war party's motives in ginning up the anti-Russian hysteria in both Kiev and Washington are threefold: to undermine Kerry's diplomatic effort in Sochi; to bolster the EU's resolve in holding the line on sanctions; and, worst of all, to drive a stake through the heart of Minsk II.

All of this points to the very real danger of a renewed outbreak of hostilities in eastern Ukraine. Yet given the continuing efforts of the bipartisan war party, it is worth repeating that there is no military solution to the crisis in Ukraine. In order to stop the catastrophic humanitarian crisis that is continuing to unfold in the Donbas, Russia and the Western allies must take steps to fully implement the Minsk II accords.

The renewal of sanctions in Europe at the end of this month, combined with the continuing calls in the US to arm Kiev, will do little to bring about a peaceful denouement to the crisis.

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 #23
New York Times
June 12, 2015
Defying Obama, Many in Congress Press to Arm Ukraine
By JENNIFER STEINHAUER and DAVID M. HERSZENHORN

WASHINGTON - With the peace process stalled and violence escalating in Ukraine, a bipartisan coalition in Congress is defying President Obama and European allies by pressing the administration to provide weapons to the embattled nation.

The Senate has included provisions in its military policy bill to arm Ukraine with antiarmor systems, mortars, grenade launchers and ammunition to aid in its fight against Russian-backed separatists. It would also prevent the administration from spending more than one half of $300 million in aid for Ukraine unless 20 percent is earmarked for offensive weapons. The House has passed a similar measure.

So far, the Obama administration has refused to provide lethal aid, fearing that it would only escalate the bloodshed and give President Vladimir V. Putin of Russia a pretext for further incursions.

The push by lawmakers to arm Ukraine's beleaguered armed forces threatens to open a rift between the United States and key allies, especially Germany and France, at a time when the Obama administration has been working to demonstrate unified support for extending European economic sanctions against Russia that are scheduled to expire at the end of July.

Legislation to authorize lethal military aid for Ukraine has gone to the White House before, but Mr. Obama has not acted on it. And while this bill authorizes the weapons it cannot compel the administration to send them. The measure is largely meant to put renewed pressure on the White House.

Senator John McCain, Republican of Arizona and the chairman of the Senate Armed Services Committee, who has championed the effort to send arms to Ukraine for more than a year, dismissed the fears that it would worsen the conflict and unravel the international coalition.

Citing the attacks on Ukraine as "one of the most shameful and dishonorable acts I have seen in my life," Mr. McCain said in an interview that the response so far to Russia's aggression had been insufficient. "They are not asking for a single boot on the ground," he said on the Senate floor Thursday, adding, "I am a bit taken aback by the vociferous opposition" to weapons help.

Earlier this week, the Ukrainian prime minister, Anseniy P. Yatsenyuk, met with lawmakers in Washington to make the case for military and financial aid, and was met with sympathy.

"There has been a strong bipartisan well of support for quite some time for providing lethal support," said Representative Adam Schiff, Democrat of California. "We have offered Russia all kinds of exit ramps and they were clearly not interested in taking them."

But in the latest sign of the reluctance by the White House, Samantha Power, the United States ambassador to the United Nations, gave a speech on Thursday in Kiev, the Ukrainian capital, in which she excoriated Russia but did not mention sending offensive weapons as a possibility.

Instead, she focused on combating the Russian misinformation campaign, praising the Ukrainians for undertaking a government overhaul and warning only vaguely of a tougher stance by the United States.

In Kiev on Thursday, a Ukrainian military spokesman reported that three soldiers had been killed in attacks by Russian-backed separatists, and at least 13 were wounded in the latest fighting in Donetsk and Luhansk. Officials from the self-declared, pro-Russian separatist republics said that two of their soldiers had been killed and at least two more wounded in attacks by the Ukrainian military.

While the United States has been providing nonlethal assistance, and American military instructors have begun training Ukrainian troops in western Ukraine, President Petro O. Poroshenko has also made clear he would welcome more help in the form of weapons, as he seeks to build up his country's military to face down the threat from Russia.

"We have an effective form of cooperation, but not with lethal weapons, with the United States, Canada, U.K.," Mr. Poroshenko said in an interview in his office last week. "We are very satisfied with the current level of cooperation but we would be happy if the level of this cooperation would be increased."

The bipartisan pressure developing on Capitol Hill, however, comes at an awkward time. Mr. Putin in recent days has repeatedly blamed the Ukrainian government for continuing cease-fire violations, while calling on the United States and its European allies to pressure Kiev to fully put the peace accord in place.

That has set the stage for a pitched debate between lawmakers and the White House that could well undermine Mr. Obama's repeated assertion that the United States sees no military solution to the conflict in Ukraine.

"I have never seen a more aggressive and emotional debate than I have on this question," said Matthew Rojansky, the director of the Kennan Institute in Washington and expert on Russia and Ukraine. Mr. Rojansky said the debate is "reminiscent of that when the Soviet Union invaded Afghanistan."

Reflecting the view of many experts, Mr. Rojansky added, "There are valid arguments on both sides but you don't get to walk this back. Once we have done this we become a belligerent party in a proxy war with Russia, the only country on earth that can destroy the United States. That's why this is a big deal."

In his confirmation hearing in March, Ashton B. Carter, the secretary of defense, told senators that he would consider increased military assistance to Ukraine, including the sale of lethal arms, reflecting the views of some other senior administration officials.

If Congress moves forward with restrictions on the money allocated for Ukraine, a standoff with the White House could also conceivably block much-needed nonlethal aid.

Lawmakers who oppose sending weapons to Ukraine note that Washington could never send enough hardware for Ukraine to defeat Russian-backed forces militarily. And it is not clear that the Ukrainian military is sufficiently trained to make proper use of American weapons without substantial assistance by American military personnel, or that the weapons would not end up in enemy hands.

"If you're playing chess with Russia you have to think two moves ahead," said Senator Angus King, independent of Maine, who is among those lawmakers skeptical of providing arms. "I am afraid this could provoke a major East-West confrontation."

Julia Osmolovskaya, the managing partner of the Institute of Negotiation Skills, a mediation group in Kiev, said Ukrainians were divided over the potential benefits of receiving weapons from the United States and the inherent risk of stoking further violence, and also perplexed by Washington's mixed messages.

Jennifer Steinhauer reported from Washington, and David M. Herszenhorn from Kiev, Ukraine.

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 #24
Office of Congressman John Conyers, Jr.
http://conyers.house.gov
June 11, 2015
U.S. House Passes 3 Amendments By Rep. Conyers To Defense Spending Bill To Protect Civilians From Dangers Of Arming and Training Foreign Forces

WASHINGTON- Late yesterday evening, the U.S. House of Representatives considered H.R. 2685, the "Department of Defense Appropriations Act of 2015."  During consideration of the legislation, Congressman John Conyers, Jr. (D-Mich.) and Congressman Ted Yoho (R-Fla.) offered bipartisan amendments to block the training of the Ukrainian neo-Nazi paramilitary militia "Azov Battalion," and to prevent the transfer of shoulder-fired anti-aircraft missiles-otherwise known as Man-Portable Air-Defense Systems (MANPADS)-to Iraq or Ukraine.

"If there's one simple lesson we can take away from US involvement in conflicts overseas, it's this: Beware of unintended consequences.  As was made vividly clear with U.S. involvement in Afghanistan during the Soviet invasion decades ago, overzealous military assistance or the hyper-weaponization of conflicts can have destabilizing consequences and ultimately undercut our own national interests," said Rep. John Conyers.  "I am grateful that the House of Representatives unanimously passed my amendments last night to ensure that our military does not train members of the repulsive neo-Nazi Azov Battalion, along with my measures to keep the dangerous and easily trafficked MANPADs out of these unstable regions."

Ukraine's Azov Battalion is a 1,000-man volunteer militia of the Ukrainian National Guard that Foreign Policy Magazine has characterized as "openly neo-Nazi," and "fascist."  Ukraine's Interior Minister Arsen Avakov, who oversees Ukraine's armed militias, announced that Azov troops would be among the first units to be trained by the Pentagon in Operation Fearless Guardian, prompting significant international concern.

Since their initial use on a battlefield in 1978, MANPAD attacks have resulted in nearly 1,000 civilian deaths.

Added Conyers, "Both U.S. and Israeli officials have feared that these weapons could be used by terrorists to bring down commercial jets.  As the boundaries are increasingly blurred between insurgents fighting the Syrian government and those fighting the Iraqi government, providing additional arms could further destabilize the Middle East.  The same can be said for Ukraine, where an anti-aircraft missile allegedly downed Flight MH17 last September, killing 298 civilians. The possibility that MANPADS-or any weapon-could fall into the hands of radical groups in Iraq, Syria, or Ukraine, would unquestionably increase the already-devastating human toll in both of these volatile regions."

According to Reuters, The Azov battalion originated from a paramilitary national socialist group called "Patriot of Ukraine", which propagated slogans of white supremacy, racial purity, the need for authoritarian power and a centralized national economy. Azov's controversial founder, Andriy Biletsky, organized the neo-Nazi group the Social-National Assembly (SNA) in 2008.

"The Azov men use the neo-Nazi Wolfsangel (Wolf's Hook) symbol on their banner and members of the battalion are openly white supremacists, or anti-Semites," wrote The Telegraph.  Since Azov was enrolled as a regiment of Ukraine's National Guard in September and started receiving increased supplies of heavy arms, however, Biletsky has toned down his rhetoric, Reuters reported. According to the Washington Post, battalion members "could potentially strike pro-Russian targets on their own - or even turn on the [Ukrainian] government" if it pursues a diplomatic resolution to the conflict.

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 #25
www.opendemocracy.net
June 11, 2015
The struggle for progressive politics in Ukraine
The conflict over Kyiv's LGBT Pride march reveals the risks of conservative populism in Ukraine.
By Denys Gorbach
Denys Gorbach is a Ukrainian journalist and economic analyst writing on economy, energy, political and social issues. He is a member of the Autonomous Workers' Union.
 
On 6 June, Kyiv hosted an LGBT Pride event - the March of Equality. Roughly 300 people attended this march, which was devoted to defending human rights and equality. While hundreds of police officers protected them, the exact number of their 'opponents' - members of far-right organisations - is hard to define, but a few hundred seems reasonable.

There were also a few VIPs in attendance to support the march, including two Rada deputies, European diplomats and American politicians. Their presence was designed to lend the event legitimacy in the eyes of the Ukrainian government, as well as convince the latter to take all possible measures to preserve law and order. The principal slogan of the march was 'Human rights are always relevant'. After all, the organisers' main task lay in persuading Ukraine's coalition government that a successful LGBT Pride event in Kyiv would be a litmus test of just how 'European' Ukrainian society is, and would be closely observed by European eyes.

A litmus test

Ahead of 6 June, several public figures led a campaign in support of the march, and their media support eventually encouraged the Kyiv city authorities to let the march go ahead. The city had been planning to stop it with a court order, citing the risks to public safety (which, it seemed, could not be guaranteed by any other means).

To be fair, the risks were unknown. In the lead-up to the march, members of the radical right made it clear that they were not about to give up on their views: they were against the march, and were prepared to stop it at any cost.

And so Right Sector, the right-wing political and paramilitary group which shot to prominence during Maidan last year, made public statements to that effect, as did a string of other organisations (including Svoboda's youth wing C14), united in a coalition titled Zero Tolerance. The far right announced their intentions a few days prior to the event by picketing the Norwegian embassy, which was holding closed sessions on the issue. The police were even forced to put the diplomats under increased security.

This sense of risk was increased by the fact that Right Sector (which has its own volunteer battalion fighting in the conflict in the east of the country) and other far-right groups now have combat experience and access to weapons, which they could have potentially used against people involved in the march - or as they call them, 'degenerates'. Right up until the beginning of the event, the police leadership stated that it was not able to guarantee the safety of participants in the march, pushing for it to be cancelled.

Even populist figures on the liberal wing of Ukrainian politics came out against the March of Equality. Though Vitaliy Klichko had previously positioned himself as a liberal, in the run-up to Kyiv Pride, the boxer-turned-mayor of Kyiv publicly called for the march to be called off.

Klichko may have something of a liberal past (before entering the world of politics, Klichko was photographed together with his brother Volodymyr for a German gay magazine), but just like the attempt to hold a Pride march in 2014, Klichko announced that holding the march during wartime was far from sensible ('untimely' as he put it), essentially reproducing the rhetoric that the march's organisers were targeting.

The unambiguous position announced by various European representatives ultimately had the desired effect: on 5 June, President Petro Poroshenko declared that, as 'a Christian', he would not attend the march, but as the president of a European state he did not see any grounds for cancelling it. Participation in this kind of event is, after all, a constitutional right of every citizen.

Slow but steady

The next morning, activists began the event (complete with chants of 'Human rights above all else') in Obolon, a neighbourhood just north of the city centre. Marching along the riverside past a row of luxury cottages, the participants managed to travel no more than 500 metres before the organisers announced it was over.

By that time, the police had already suffered two casualties: one officer had injured his hand in a scuffle with a group of Neo-Nazis who had broken through the police cordon, and a smoke bomb filled with nails (intended for the march's participants) had seriously injured another officer. After the march was officially over, and 25-30 far-right activists had been arrested, those remaining started their 'safari', hunting activists who were trying to make their way home; according to reports, up to 20 people suffered injuries of varying degrees on their way home.

This is only the second LGBT march in Kyiv's history. The first took place in 2013 under even more depressing circumstances: up to 50 people took part, and they were accompanied by hundreds of police officers. The activists managed to march only a short distance before piling into buses and escaping - far-right and religious activists were on their way, having spent the morning patrolling the streets of central Kyiv.

Two years later, progress has definitely been made, but far from enough to start talking about the triumph of liberal values, which we might have expected after the victory of Maidan. After all, those events have come to be known officially as the Revolution of Dignity. Aside from the refusal to guarantee the security of 2014's march, the past year has witnessed a careful ignorance when it comes to LGBT issues - whether in terms of legislation, or last November's arson attack on the Zhovten cinema, which was showing a film from the Sunny Bunny LGBT film competition. Where does this conservatism come from?

Conspiracy theories run amok

The first thing you notice in contemporary Ukraine (and, indeed, Eastern Europe as a whole) is how LGBT people are consistently portrayed as the main antagonisers for people of conservative beliefs.

Today, this social group occupies the same position as Jewish communities in Western Europe a century ago - an invisible but ever-present minority, which provokes sharp hostility from 'ordinary' people. People of weak political beliefs state that they find it simply unpleasant to speak and even think about these people, demanding that issues of sexuality remain within the confines of one's own bedroom. For the far right, LGBT people are, similar to Jews, a group that is not only particularly repulsive, but also one which is secretly manipulating society and pushing it towards its hidden goal of 'homo-dictatorship'.

This state of affairs is somewhat different from Western European countries. Here, homophobia is widespread among the far right, but it is not considered a necessary attribute for membership: several figures, such as Pim Fortuyn in the early 2000s and Gert Wilders today, even contrive to use LGBT rights for their own devices.

Perhaps the difference lies in the diverging histories of liberal rights and freedoms in Eastern and Western Europe. Prior to 1991, the Bolsheviks (and the Soviets after them) actively affirmed ideas of multiculturalism and women's rights (in the framework laid out by first-wave feminism), even to the point of foisting them on society as part of their project of modernisation.

On certain issues, then, Soviet society far surpassed Europe. (For instance, one thinks of the fact that women did not have the right to vote in certain Swiss cantons right up until the 1970s.) But while the post-war wave of emancipation movements radically changed the face of Western societies, it bypassed countries of the 'Eastern bloc'. Neither second-wave feminism, nor LGBT rights were politicised in Soviet society right up to the moment of its collapse.

Indeed, during the 1970s, the Soviet Union's free-thinking intelligentsia, which could have initiated similar movements, underwent an ideological turn: it was under Leonid Brezhnev, after all, that the dissidents swung to the right, criticising Soviet society on right-wing liberal, and later conservative and traditionalist grounds, rather than leftist utopian ones which had been popular before that. In the national republics, these ideas fused with romantic nationalism, in which reverence for (constructed) national traditions dominated, leaving no place for otherwise modern trends.

Both the official and opposition narratives of this period were cut through with patriarchal and macho ideas typical of pre-1968 Europe. The field of history was dominated by idealised heroes (heterosexual men); their images made normative for the whole society.

After Ukraine became independent in 1991, key posts in the economy and government were occupied by the former nomenklatura, and the nationalist intelligentsia was left to watch over cultural politics of the newly-created state. For this group, socially progressive ideas such as gender equality, sex education and secular values were not deemed necessary. There was no demand on the part of Ukrainian society either. The Ukrainian state's only significant move in this area was to rescind the criminal prosecution of homsexuality in 1991.

Meanwhile, after the mass corruption and divisive language politics of Leonid Kuchma, the traditionalist agenda gained ground again during Viktor Yushchenko's presidency (2005-2010). Yushchenko attempted to push out the (post-) Soviet modernist element from Ukrainian national identity by strengthening its religious and nationalist components. Yet, given that certain sections of Ukrainian society failed (or refused) to accept ethnic nationalism, Yushchenko's politics were far from successful.

Here, Ukraine's (now infamous) heterogeneity helped to put the brakes on clericalisation: given that Ukraine has not one, but four branches of Christianity competing for influence and resources, no single group managed to become the 'state' church and impose its own particular conservative agenda (as seen in neighbouring Georgia, Moldova, and Russia).

Church politics

The clericalisation and imposition of outdated norms in Ukraine proceeded more smoothly under Viktor Yanukovych (2010-2014), who, though he rejected attempts to introduce a form of agrarian ethno-cultural identity, began to force through clericalisation together with a post-Soviet national identity based on culture and language.

In this sense, by betting on the Moscow Patriarchate of the Ukrainian Orthodox Church (subject to the Russian Patriarch Kirill), Yanukovych followed the Kremlin's agenda. Ukraine thus ended up imitating Russian practices: in 2010, for instance, Vadim Kolesnichenko, a member of the Party of Regions, introduced a draft law entitled 'Declaration of human dignity, freedom and rights', which was designed to promote the fundaments of Orthodox doctrine developed by the Russian Orthodox Church and rescind the norms developed in the 1948 Declaration of Human Rights.

Apparently, according to Kolesnichenko, the latter was 'formed largely on the basis of the Western liberal-protestant tradition, with its characteristic Anthropocentrism and extreme individualism'. In 2012, Kolesnichenko introduced a draft bill designed to ban 'homosexual propaganda aimed at children' - an exact copy of the infamous Russian law. Aside from this draft law, the Ukrainian parliament also hosted two other bills, which were exactly the same in spirit (one even passed the first reading).

Other initiatives of the Yanukovych era included a whole range of draft laws on the criminalisation of abortion, a proposal to unite church and state, the introduction of religious propaganda in schools, and the massive state celebration of the 1025 anniversary of the Christian conversion of Rus.

As always, though, LGBT rights remained one of the main targets for the conservatives in power. For instance, the law on preventing discrimination, which was a condition of introducing a visa-free regime with the European Union, was not passed, despite its clear necessity.

Back then, the Party of Regions and Yanukovych were the principal lobbyists for European integration in Ukraine. But the legislation designed to prevent anti-LGBT discrimination in hiring procedures was their downfall: many Regionnaires came out fiercely against this legislation, organising a rebellion inside the pro-government camp.

At the same time, Ukrainian nationalist and liberal organisations, who were opposed to the Yanukovych administration, opted for a selection of ideas which were basically no different when it came to society's progress. Take the most successful of the draft laws against 'homosexual propaganda' for instance: bill no. 8711 was introduced to parliament by deputies from all the largest parties - whether pro-government or opposition.

As the parliamentary opposition of the time saw it, the Yanukovych regime was bad because it didn't advance the right kind of 'spirituality' and nationalism. The opposition didn't have any objections to these concepts as such. Moreover, the nationalist Svoboda party, turned by Yanukovych into a convenient opponent, consistently criticised 'liberal extremism' - imposed on Ukraine by dark forces in European countries. To better understand the nationalists' logic, one only has to familiarise oneself with 'cultural marxism', a concept developed by the new American right (and later taken up by Anders Breivik).

Ukraine's feminist, leftist, LGBT and secular movements were faced by a broad front of conservative pro-government politicians, religious organisations and various far-right groups, often acting under the umbrella of Svoboda.

Political actors in Ukraine were thus actively involved in whipping up conservative fears, using them to score political points when possible. As a consequence, Ukrainian society's situation, towards the beginning of Maidan, was caught in a conflict between two forms of conservative nationalism.

Battle for hearts and minds

It was 'ordinary people' who formed the core of the mass protests of 2013-2014 - people who, prior to Maidan, did not possess any kind of clear political convictions.

Clearly, assertions to the effect that Maidan was simply a collection of Nazis and oligarchs are false. However, it is true that, during Maidan, the right did manage to establish a certain ideological hegemony in Ukraine. They managed to do this despite the fact that the initial demand of Maidan - signing the Association Agreement with the European Union - essentially contradicted the nationalists' political programmes.

While the far right did not conceal their hostility to the European Union (although neither did they popularise it), thanks in no small part to their overt radicalism they managed to gain the confidence of 'ordinary people'. These people only discovered the world of politics during Maidan, having previously been educated according to the everyday conservative values of 'common sense'.

At the same time, the LGBT groups at Maidan neither had the opportunity to make their presence felt publicly, and nor were they interested in doing so.

Having lost the confidence of the electorate with their lack of decisive strategy during Maidan, Svoboda lost their hegemony over the far-right movement to the upstart Right Sector. This new group emerged from Tryzub, a national conservative organisation with an ideology close to Italian fascism. With time, though, Right Sector split, giving birth to the Azov volunteer battalion based on another far-right group, the Neo-Nazi Social-Nationalist Assembly (campaigning for the world domination of whites).

Both of these organisations tried to secure and expand their influence in post-Maidan Ukrainian politics. At the same time, the patriotic liberal movement also began to crystallise on Maidan - a movement, which rejected radical nationalism and accepted so-called 'European values'. The conflict between these two camps can be witnessed in this footage, in which a member of the Azov battalion beats up a black member of the Aidar battalion for saying 'Ukraine is part of Europe' (Ukraina - tse Evropa) - one slogan of Maidan which the nationalists really didn't take to.

In their hostility to what is understood by 'European values' in Ukraine (progressive politics, feminism, LGBT rights, atheism and multiculturalism), the Ukrainian far right are, of course, rather similar to their main enemy - the Putin regime and its 'People's Republics' in Eastern Ukraine. The ideology of Anti-Maidan, the movement, which gave rise to the outburst of Donbas separatism, was initially cut through with ultra-right and anti-Semitic conspiracy theory, as well as admiration for the 'spiritual braces' of Orthodoxy - a favourite topic of the Russian president. These groups often use the term 'EuroSodom' to define what Anti-Maidan stands against - the same-sex marriages, legalisation of prostitution, drugs and euthanasia, mass atheism and sex education in schools.

Meanwhile, where circumstances allow, the far right tries to promote its agenda further in society. And for the most part, when it comes to their success, the far right has the liberal intelligentsia to thank - the opinion-makers of Maidan and post-Maidan Ukraine who still enjoy a significant amount of social capital and media resources.

Under Yanukovych, the liberal intelligenstia not only fell for Svoboda's radicalism (refusing to see the party's neo-fascist tendencies), but brought the party to parliament with the help of their public support and access to the press. In 2014, however, disappointed by Svoboda's showing during Maidan, these liberal groups made Right Sector and Azov their new idols. Understandably, Russian aggression only helped this process: nationalist surges are bound to happen in a time of war.

However, the conservative front's ranks have thinned of late: one of its constituent parts - conservative pro-Russian politicians - have completely vanished from the national political arena. The front's second partner - religious organisations - are now far less active in the public sphere than two years ago. Now only the pro-Ukrainian far right remains.

Indeed, several 'stars' of pro-Russian conservative politics have simply inverted their external political orientation. For example, take Roman Kukharchuk, the founder of Love Against Homosexuality (a coalition of protestant organisations), who used to make references to Orthodox dogmas in distinctly pro-Russian forms. Prior to Saturday's march, however, Kukharchuk expressed enthusiastic support for Azov and Right Sector, declaring that holding the march would be tantamount to betraying those members of the far right fighting at the front.

Romantic future

To a certain extent, the future of Ukraine rests on how the relationship between the country's liberals and the far right develops. The sooner most Ukrainian liberals realise that the nationalists' political goals are far closer to the 'Russian world' (the Russian state's ideology of an orthodox 'transnational community committed to Russian culture and language') than European integration and liberal-democratic values, the less chances we have of seeing a violent seizure of power by the far right.

Anton Shekhovtsov, who researches European nationalism, suggests that, over time, this conflict will become increasingly institutionalised, much like Russia's 19th century split between Slavophiles and Westernisers. In our case, the 'Ukrainophiles' from the nationalist and conservative wings will come to oppose the liberals and leftists who profess progressive values.

But the process of disillusion with Ukrainian nationalists is a slow one, especially when they can counter every scandal with reports of military courage on the Eastern front. This spring, there have been several instances whereby Right Sector has shown its darker side to the public - including gangster attacks on coffee vendors and the dispersal of a May Day demonstration by anarchists. Yet every time, the public outcry quickly dropped off, and people forgot about these incidents.

The attack on the March of Equality may well haunt Ukraine's liberal patriots for some time, though: the demonstration prompted serious discussion, and many supporters of the nationalists were outraged by the latter's actions. On social media, the organisers behind the attack were clearly dismayed by this reaction, and wrote about their actions in tones of justification.

Perhaps, then, this is the main effect of Kyiv Pride: it has driven a wedge - at least temporarily - between society and the nationalists trying to build a 'Russian world' in Ukraine. As the polarisation between liberals and conservatives continues to develop, we can expect to see the former take up the promotion of progressive initiatives, in particular, lobbying for LGBT rights, while LGBT activists themselves will see an opportunity to take to the streets.

The position of Western countries is important here, given that Ukraine's progressives tend to keep one eye on their reactions: European diplomats' support in the lead-up to Kyiv Pride should not be under-estimated.

But there are not only opportunities for LGBT and progressive movements here; there are dangers too. The supporters of progressive initiatives, human rights and the 'Europeanisation' of society in mainstream domestic politics come out for neo-liberal economic reforms, asserting that, in the words of their spiritual godmother, 'there is no alternative.'

This situation means that, over time, the ideas of freedom and equality might become fused in popular consciousness with the economic dislocation resulting from 'shock therapy', and subsequently rejected together with neo-liberal dogmas. Here are the all too familiar roots of right-wing populism as seen in Hungary, Poland, Russia and elsewhere - places where liberals advanced personal and social freedoms, but connected these freedoms to austerity policies and falling living standards. Liberals were quickly replaced by right-wing conservatives who offered bread in exchange for freedom.

In his recent state of the nation address on 4 June, President Poroshenko declared: 'Social democracy doesn't suit us right now, today it's the nuts and bolts of Thatcherism and Reagonomics we need.' But in the current unstable and uncertain situation, Ukraine's Reagan may well be replaced by an Orban or Putin.

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 #26
Sputnik
June 12, 2015
Former Maidan Activists Start Fighting Against Ukrainian Police - Reports

At night activists attack law enforcement officers and burn tires. They discuss plans and the results of their night attacks on social media, according to the Ukrainian newspaper Vesti.

Former maidan activists who dubbed themselves as "rebels" are creating in Ukraine a new underground movement to fight against the police, the Ukrainian newspaper Vesti reported citing activists' posts on social media.

At night "rebels" attack law enforcement officers and burn tires. They plan to continue such actions the entire summer.

Activists discuss plans and the results of their night attacks on social media, according to the newspaper.

"Here are the results of the night fighting. A police car was attacked with two Molotov cocktails on Vozdukhoflotsky Avenue. A foot patrolman was shot with fireworks near the Shulyavka subway station. We also burnt tires on the bridge near the Dorogozhichi station," Vesti cited a report by former Maidan activist Alexei from VKontakte social network.

"Within several weeks we will repeat our attacks. This time, they will be conducted across the whole city. If the revolution changed nothing, then we will stage our own revolt," Dmitry Sych, a radical activist, told Vesti.

According to the newspaper, the Kiev police said they will check the incidents and take measures to prevent any attacks.

The police also said that the incidents that "rebels" write about on social media may have not taken place actually. They may post provocative messages to destabilize the situation in the city, the police added.

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 #27
Zik.ua
June 12, 2015
Ukraine: 871 towns and villages to be renamed as part of de-Communization bid

The Ukrainian Institute of National Memory has come up with a list of cities, towns and villages whose names symbolize the Communist totalitarian regime, Apostrof reports June 12.

The communities of all 871 townships are to rename or return the old names to their places of location by Nov. 21, the law on the de-Communization of Ukraine says.

Under the law, the monuments to Communist era leaders must be pulled down as well as the names of streets, squares, buildings.

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 #28
Irrussianality
https://irrussianality.wordpress.com
June 10, 2015
ON THE BUS, OFF THE BUS
By Paul Robinson
Paul Robinson is a professor in the Graduate School of Public and International Affairs at the University of Ottawa, and the author of numerous books on Russia and Soviet history, including 'Grand Duke Nikolai Nikolaevich: Supreme Commander of the Russian Army'

Having climbed on board the bus of constitutional reform and proposed amendments that would make Donetsk and Lugansk 'inseparable parts of Ukraine', rebel leaders in Ukraine have now leapt off the bus and are backtracking from their own proposals with remarkable speed. Today, the head of the Donetsk People's Republic (DPR), Aleksandr Zakharchenko, told Life News, 'I do not envision the DPR being part of Ukraine.' 'For me personally, the DPR's future is as a free, independent state,' he said, adding that, 'the blood which our compatriots have shed cannot be forgotten. There can be no talk with Ukraine about any type of autonomy.'

This, of course, completely contradicts the suggestions for constitutional reform put forward by the DPR's representative to the so-called 'Contact Group', Denis Pushilin, which I analyzed in another post yesterday. How can we explain this contradiction? According to Pushilin today, the DPR has no intention of rejoining Ukraine, 'This would, of course, be for us a form of suicide ... nobody intends to go in this direction. But negotiations within the framework of international process is possible and is not excluded.' In other words, the DPR made its proposals not because it actually wants them to be accepted, or even because it expects Kiev to respond to them, but because 'international processes' (i.e. the Minsk agreement of February 2015) require that it propose something. In short, the DPR is going through the motions.

The question is why it bothers to do so. It cannot be because the Ukrainian government is forcing it to, or because the French and German governments (which were largely responsible for the Minsk agreement) are forcing it either. The only possible explanation is that the pressure to at least go through the motions is coming from Moscow. This would mean that the proposed constitutional reforms, which would see the provinces of Donetsk and Lugansk acquire 'special status' but remain within Ukraine, represent the wishes not of the rebels but of the Russian government.

The recent G7 meeting reiterated demands that Russia abide by the Minsk agreement, suggesting that it was not doing so and threatening additional sanctions if it did not change its behaviour. But if the above is correct, Moscow is actually trying hard to make the rebels conform with that agreement's requirements, while Kiev is failing to live up to its own obligations by refusing to negotiate the 'special status' for Donbass as mandated by Minsk.

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 #29
www.foreignpolicy.com
June 10, 2015
Ukrainian PM Blasts Separatists: 'We Will Never Talk to Terrorists'
BY JOHN HUDSON

Ukrainian Prime Minister Arseniy Yatsenyuk rejected criticisms from Russia on Wednesday that the embattled government in Kiev is failing to work toward reconciliation with separatist leaders in Donetsk and Luhansk.

Using particularly blunt language, the Ukrainian leader said Russia's calls for reconciliation are disingenuous and that pro-Moscow separatists were unfit for negotiations at this stage in the conflict. "My government will never talk to terrorists" until they are "behind bars or sitting in a prison cell," he told a small group of reporters in Washington on Wednesday. "Russia wants us to establish a direct contact with the terrorists. We will never talk to terrorists."

Yatsenyuk made the comments alongside Ukraine's Finance Minister Natalie Jaresko. The two officials have met with a number of U.S. officials this week, including Vice President Joe Biden and House Speaker John Boehner, in order to generate support for Ukraine's cash-strapped government.

Moscow's annexation of Crimea in March 2014 and the ensuing violence in the country's east badly set back Ukraine's already troubled economy. Plagued by high inflation, the country has cut off subsidies and frozen popular social programs. Yatsenyuk and Jaresko are hoping to secure the next payout of International Monetary Fund money, which is part of the West's $40 billion bailout program for the country.

The officials are also seeking additional military support, although they did not detail specific types of equipment.

Russian President Vladimir Putin's end game, Yatsenyuk charged, is to turn Ukraine into a "failed state," an outcome the Ukrainian leader said could be prevented with Western support.

Putin, on Wednesday, traveled to Vatican City to meet Pope Francis in a 50-minute meeting. The pontiff urged him to make a "sincere and great effort" to forge peace in Ukraine and appeared noticeably rigid during the meeting, according to reports.

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 #30
Poroshenko orders to complete fortifications on disengagement line in Donbas by mid-July

KIEV, June 11 /TASS/. Ukrainian President Petro Poroshenko said during his visit to Mariupol on Thursday that fortifications to be built on the disengagement line in Donbas should be ready by mid-July.

"All fortifications should be erected by mid-July," the Ukrainian newspaper Obozrevatel quoted Poroshenko as saying during the inspection of a fortified strongpoint in Mariupol.

According to the president, the construction of fortifications and military defenses will cost 1 billion hryvnias ($47.2 million).

"The total cost of construction of all military defenses amounts to 1 billion hryvnias /47.2 million US dollars/," Poroshenko's press service quoted him as saying.

Poroshenko told a news conference on June 5 that he was dissatisfied with the state of fortifications in the Kiev-government-controlled part of the Donetsk region, which is the area of responsibility of Alexander Kikhtenko (the head of the state administration of the Donetsk region). "He will be held accountable for it," the Ukrainian head of state said.

On March 9 this year, Poroshenko said that Ukraine was building a deep layered defense system in the country's East. The press center of the security operation's headquarters clarified that Ukraine was planning to create two defensive lines with a purpose to avert the enemy's penetration into the Ukrainian territory.

"The bulk of the works consists in the construction of about 1,500 kilometers of trenches and connecting trenches; more than 8,000 dug-in emplacements for military hardware and more than 4,000 trench shelters; and the creation of a 60-kilometer of non-explosive entanglements," the headquarters said.

Early in May, Ukraine's National Security Council adopted a package of measures to intensify the construction of fortifications in Ukraine's Donbas region with an aim to strengthen defense capabilities and the ability to defend state security, and develop a system of medical support for servicemen.

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 #31
Business New Europe
www.bne.eu
June 12, 2015
What will happen if Ukraine defaults?
Graham Stack in Berlin
June 12, 2015

With Ukraine edging closer to the world's first unilateral sovereign default since Argentina's in 2001, analysts are grappling with the question of how this might impact on the ex-Soviet republic as its strives for deeper integration with the EU and the West.

Ukrainian default on $23bn of sovereign debt to bondholders is now on the table,   Finance Minister Natalie Jaresko indicated to journalists during a visit to Washington on June 10. If bondholders failed to agree with Ukraine's terms, "I'd have to use other tools to reduce the pressure on the balance of payments. A moratorium [on payments to bondholders]," Jaresko said, adding, "I don't think we have that much time."

According to debt analyst Aleksander Paraschiy of Concorde Capital in Kyiv, Ukraine could "use the moratorium during the next 10 days". The first opportunity arises on June 17, when the country is due to pay a $39mn coupon on a $1.25bn Eurobond due in 2016, and then on June 20 when Ukraine has to pay $75mn on a $3.0bn Eurobond held by Russia.

What will happen if Ukraine does what was until recently unthinkable, and becomes the first country since Argentina in 2001 to declare a unilateral moratorium on payments?

Jaresko herself argues that Ukrainians have nothing to fear. In a long interview in Zerkalo Nedeli on June 6, the US-born minister seemed to be preparing the ground for a default. "To be honest, it [default] will not effect Ukrainians...The law we passed on the moratorium on payments will have one effect: forex will stay in the country, helping to reduce pressure on the balance of payments," Jaresko said. "We own no property abroad [that could be confiscated]."

In Argentina's footsteps

Some analysts fear that despite these assurances, a default will unleash mayhem on Ukraine's already comatose financial system.

"The truth is that a unilateral moratorium on foreign debt payments will undoubtedly have both immediate and long-term effects on all Ukraine's residents, companies and households alike," argues Oleksiy Andriychenko, an analyst at the Art Capital brokerage.

"Right after the default, the understanding that Ukraine's access to capital markets can be closed for a long period of time will lower expectations of Ukraine's economic growth among investors, local banks and companies and even lay people, who still remember the economic hardship at the end of 1990's after Russia's default," he explains. "Ukraine will sink into a period of low economic growth that can last for more than a decade, as evidenced by Argentina's case."

"The population will try save the remainders of its savings by taking them out of banks and buying foreign currency if possible. A true banking crisis might emerge unless the National Bank of Ukraine reacts quickly, allowing the banks to limit access to deposits. Ukrainians will be forced to cut consumption, some will lose jobs," Andriychenko continues.

"Since Ukraine will be shunned from foreign capital markets, financing the rising needs of state and local budgets will be done through hryvnia emission with direct consequences for inflation and real economic growth. Not only will the state be shunned from the capital markets, but also Ukrainian corporates, which will undoubtedly hurt their ability to invest, pay high salaries, and carry out any expansion plans," he says.

'Internal default'

Andriychenko's gloomy analysis echoes that of billionaire philanthropist George Soros, who warned in January in an international plea for financial help for Ukraine that, "a default would have disastrous consequences."

But Nick Piazza, CEO of SP Advisors, argues that since then, Ukraine has in fact already gone through an "internal default", in the form of steep devaluation in February only stemmed by the imposition of stringent capital controls.

"Default happened for most Ukrainians in February. Everyone is already used to it. Now some guys in New York will feel what the man on the street has for three to four months already," he says.

"Everyone that can is already dollarised. Banks aren't lending, there is no [foreign direct investment]. What else can happen? I'm not saying [it would be] nothing, but it won't be colossal. A bigger event for forex would be a bad harvest, or attack on Mariupol - that would launch hording again," Piazza adds.

Other analysts are closer to Jaresko's position. According to Aleksander Valchyshen, head of research at Investment Capital Ukraine, the brokerage founded and previously headed by current central bank head Valeriya Gontareva, Ukraine's tight capital controls have already "proved useful in having an impact on the local market by cooling down domestic demand for USD cash".

According to Valchyshen, Ukraine has in recent months received enough foreign funding to create an airbag against the shock of default. "All these [international fundraising] efforts since March 2015 are producing a net FX inflow, while previously there was a net outflow of FX," he says.

Valchyshen argues that whatever the outcome, default will be a better deal for Ukraine than ploughing on with unsustainable levels of debt. "Jaresko and the IMF's call to reduce debt nominal has its logic - to produce a sustainable public debt for an economy that very badly needs growth not burdened by debt of 100% of GDP," he says.

"Without that nominal reduction, Ukraine's economy risks entering an untested period when the public debt level is projected to be in the 95-105% range," he adds.

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 #32
Russia Insider
www.russia-insider.com
June 11, 2015
Western Creditors Are Outraged at Ukraine's Default Threat
Statement released by Ukraine's western creditors condemns Kiev for threatening default and for refusing to negotiate seriously
By Alexander Mercouris  

The women behind Ukraine finances: central bank chair Valeriya Hontareva (left) and finance minister Natalie Jaresko
Ukraine's Western creditors have responded angrily to Ukraine's threat to default.

According to the Financial Times they have issued a statement, which reads in part:

"Minister Jaresko has been in possession of a detailed IMF-compliant solution from the Bond Committee for over a month. We are deeply concerned about the stance the minister is taking, which is not in the interests of Ukraine. We are ready and willing to start talks at any time."

According to the Financial Times "a person close to the situation said investors rejected the idea that their proposal would deplete reserves and put the country in crisis, saying that to do so would neither be right nor make sense, as it would destroy their investment."

It appears that the situation is in total deadlock with the talks close to breaking down and both sides accusing the other of intransigence.

It is difficult to believe that Ukraine's Western creditors actually want the country to default, though as we have discussed before, it probably makes more sense for them to allow this than to agree to the demands Ukraine is making. If Ukraine were prepared to negotiate seriously by moderating its demands, it is likely that some sort of deal could be stitched together.

It seems the Western creditors are coming up against the same problem the Russians repeatedly encounter in their dealings with Kiev and which previously confounded Yanukovych - the Maidan movement does not negotiate but makes maximalist demands, in this case essentially for a debt write-off - that they are politically incapable of retreating from. Rather than retreat it is easier for them politically to let the whole house burn down.

Unlike Greece a settlement of Ukraine's debts ought not to be difficult. Ukraine is intrinsically a rich country.  It should certainly be able to pay its debts, which are not especially large, if the economy were well-managed and if a serious attempt were made to settle the political conflicts with Russia and with the people of the Donbass that are at the root of the present crisis.

The problem is that the government of Ukraine is wholly focused not on stabilising the economy but on "winning" its political conflicts with Russia and with those it calls "the separatists" in the Donbass. It assumes everyone else - be they Western governments or Western creditors - are simply there to help it do so.  

As for Ukraine's debts or its economy or the economic welfare of Ukraine's people, they can be sacrificed to achieve the overriding objective of a "victorious" monocultural unitary Ukraine.

It is this intransigent way of thinking that is pushing Ukraine towards default, just as it is what is behind the war in the Donbass.

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 #33
www.rt.com
June 12, 2015
Ukraine will 'default' if it misses $75mn Eurobond payment - Russia

Russia expects to receive a scheduled $75 million interest repayment on Ukraine's $3 billion Eurobond debt by June 22, Russia's Deputy Finance Minister Sergey Storchak said. However, he warns a failure to do so means Ukraine will default.

According to the terms of the $3 billion Ukrainian sovereign Eurobond issue, which was purchased by Russia at the end of 2013, the next coupon payment date is set for June 20, when Ukraine is supposed to pay off $75 million in interest.

"June 20 will be a Saturday, so the payment is expected to be received by Monday, June 22," Storchak said in an interview with the Rossiya 1 channel.

"Non-payment will mean a default," the finance ministry official added, saying such a scenario is not in Kiev's interests and he expects the payment to be made.

According to Storchak, Moscow and Kiev are not currently discussing a possible restructuring of the debt, the full repayment of which, is due by the end of the year.

"There have been no talks [about the debt restructuring]," Storchak said. He added that Kiev is obviously closely following every new statement on the matter from Russia, while Moscow is tracking Kiev's actions, discussions and dubious plans to introduce a moratorium on foreign debt repayment.

According to a source in the Kiev government, who spoke to the Ukrainian Apostrophe website, Kiev is not planning to make the June payment. The source also claimed the failure to pay Russia would not undermine Ukraine's plans to receive more funds from the International Monetary Fund.

In May, Ukrainian President Petro Poroshenko signed a bill that allows the government to set a moratorium on the repayment of certain foreign debt. The Eurobonds purchased by Russia are among those debts Ukraine claims to be "private" thus eligible for the planned freeze. Russia is planning to take Kiev to an international court should it miss the payment.

The total debt of Ukraine, according to the country's Prime Minister Arseny Yatsenyuk, is estimated to be at around $50 billion, of which $30 billion is external debt and $17 billion is internal debt.

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 #34
Sputnik
June 11, 2015
New Ukrainian Life: European Prices, Post-Soviet Salaries

With the Ukrainian economy in a tailspin, ordinary Ukrainians now face the unnerving reality of having to pay "new European prices" while getting their "old Ukrainian salaries," a German newspaper wrote.

"It is absolutely clear that the crisis in Ukraine is just beginning," S�ddeutsche Zeitung newspaper warned on Thursday.

According to IMF figures, the Ukrainian GDP plunged 7 percent in January 2014. The downfall continued through 2015 with the economic indices sagging by a hefty 17.6 percent between January and April. The forecast for the future is equally uninspiring, the paper added.

While the cost of homegrown produce has not changed much from last year, imported food is going through the roof forcing many to stop buying oranges, bananas and other foreign-grown treats.

"What we now have are European prices and old, Ukrainian, salaries," a struggling local vegetable vendor told the newspaper.

Bananas are not the only thing millions of Ukrainians  are no longer able to afford. With the hryvniya in a permanent nosedive ever since the so-called "Maidan revolution", all imports, including  first-necessity goods, clothing and household electronics are now a luxury few people can afford to buy.

There is a 100 percent spike in gas prices as well as public transport fare, S�ddeutsche Zeitung wrote.

Prime Minister Arseny Yatsenyuk blames the country's economic woes on the loss of territories in Donbass and the need to support the million-plus refugees fleeing war-torn eastern Ukraine.

Millions feel the pinch now that the traditional subsidies for natural gas, pre-school education and things like that are gone, and many people are no longer able to pay back their bank loans - an alarming situation, which the newspaper fears may only get worse as the country plunges ever deeper into chaos...

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 #35
Bloomberg
June 12, 2015
War-Weary Ukraine Shutters Cash-Starved Banks as Trust Falls
By Volodymyr Verbyany and Andras Gergely

When Vasyl Klos plunked $9,000 into a bank branch in his hometown of Lviv, Ukraine, in 2013, he assumed it was safe because it was German owned. He was wrong.
Bank Forum JSC had already been sold by Commerzbank AG to Ukrainian businessman Vadim Novinsky, a fact Klos only found out as he completed the deposit. He decided it was too late to back out, but within a year, Forum was declared insolvent and the cash was returned to him in hryvnia, whose later plunge cut the value of his original deposit by about half. The experience has left him poorer, but wiser.

"I'm not going to open any more deposit accounts until the economy stabilizes," said Klos, a 33-year-old field researcher. "And even then, I would only put money in a foreign-owned bank."

As if fighting a year-long war against pro-Russian separatists wasn't enough, Ukraine is also scrambling to shore up a banking system that's bleeding assets amid a tumbling economy, wavering talks with creditors about overdue debt and skyrocketing inflation, which the central bank estimates will end this year at between 45 percent and 50 percent. A run of liquidations has shaken consumers' confidence in the often mismanaged financial institutions they once trusted to protect their money.

Insolvency Wave

Since 2014, the central bank has declared a quarter of the former Soviet republic's 180 domestic banks insolvent, liquidated 37 of them as of the end of May and earmarked 36 billion hryvnia ($1.7 billion) for bailouts this year alone.

Cleaning up the troubled banks, left with insufficient supervision for years, has been a painful process as the country fights rebels in a conflict that's killed at least 6,400 and displaced 1 million citizens. Thousands of Ukrainians and some oligarchs, such as egg magnate Oleg Bakhmatyuk and chemical tycoon Dmitry Firtash, saw some of their assets vanish as banks were declared insolvent.

The cleanup is needed to "rebuild people's trust in banks," said Anastasia Tuyukova, an analyst at Dragon Capital investment company in Kiev. "This is a step they should have made in 2008-2009, but didn't."

The reorganization is also designed to cut reliance on the public purse at a time when the government is trying to restructure $23 billion in sovereign debt.

The affected banks, ranging from small players to the country's fourth-largest, Delta Bank, have suffered from their inability to drum up enough capital in the economy expected to contract 9 percent this year, according to the International Monetary Fund's forecast. Many of the smaller banks only served affiliated businesses and ran into troubles when debtors didn't repay loans.

Bank Bailouts

Ukraine follows other east European nations that have had to bail out their banks since the 2008 global financial crisis. Household lending in dollars and a sharp hryvnia depreciation in 2008 during years of political turmoil has caused the share of non-performing loans in Ukraine to soar.

Bad loans rose to 25.5 percent of the total of all loans from January to April alone, compared with 19 percent at the end of 2014, the central bank said on Thursday. The International Monetary Fund calculated the ratio of non-performing loans was at 32 percent as of Jan. 1.

Ukraine and Russia both sustained too many lenders for the size of their economies while still often failing to provide basic services to all, said Anastasia Nesvetailova, a professor at City University London.

Yevhen Hrebeniuk, a financial sector consultant at the World Bank's office in Kiev, also pointed to similar events in Turkey and Indonesia, which governments eventually overcame.

Bank Surfeit

"There was no particular good reason for Ukraine to have so many banks," Nesvetailova said by phone on Thursday. "A lot of them were either very corrupt or implicated in strange economic activities."

The crisis escalated last year when former President Viktor Yanukovych fled Kiev, Russia annexed Crimea in March and the separatist insurgency in Ukraine's easternmost regions pitted Russia against the U.S. and the European Union in their worst standoff since the Cold War. The conflict deepened the woes of an already fragile economy and banking sector, Nesvetailova said.

"There are villages or small towns where there is absolutely no cash," she said. "People dependent on pension transfers or basic banking systems don't get it fulfilled."

New Team

Premier Arseniy Yatsenyuk took power last year and picked Natalie Jaresko, an American-born investment banker, to head the Finance Ministry. The task of Jaresko and Valeriya Gontareva, who has chaired the central bank since June 2014, was clear: stabilize the economy and overhaul the banking system.

"Their back is against the wall now, they have don't have an option, they have to reform," Nashwa Saleh, a London-based analyst at Exotix Partners LLP, said in a phone interview on Thursday. "They also have the right technocrats in place to undertake the reforms."

Ukraine has so far compensated retail savers with about 50 billion hryvnia through the state guarantee fund, representing about 10 percent of the country's annual budget revenue, Gontareva told lawmakers in March. Retail deposits are covered up to 200,000 hryvnia per person.

Stress tests carried out last year showed a 66 billion-hryvnia capital need. Still, there's a "high chance" the government may not need to use all the funds it earmarked for bailouts this year, central bank Deputy Governor Oleksandr Pysaruk said in a May 22 interview in Kiev.

Delta Blues

The biggest case in the country so far was Delta Bank, the country's fourth-largest lender, which was declared insolvent in March after failing to repay a 4.2 billion-hryvnia loan. The government declined to nationalize the lender, saying its assets were of poor quality and it needed a 22 billion-hryvnia capital injection.

Banks owned by Yanukovych's associates also haven't been spared.

Nadra Bank, owned by billionaire Firtash, was declared insolvent in February as its owner was detained in Austria pending a U.S. extradition request. The request was rejected in April, allowing Firtash to leave the country.

The list of failed banks also includes VBR Bank, run by Yanukovych's son, Oleksandr.

Other wealthy Ukrainians such as Bakhmatyuk, whose empire includes the country's largest egg producer, had his majority shareholding in VAB Bank wiped out in insolvency proceedings. The bank was, along with others, taken over by the Deposit Guarantee Fund for administration and is now being liquidated.

Foreign Lenders

Foreign lenders with Ukrainian units that include Italy's UniCredit SpA, Raiffeisen Bank International AG in Austria and Hungary's OTP Bank Nyrt., have also had to inject fresh capital to keep up their presence in the country. Finding buyers for such units has proven a tougher option.

Authorities say the cleanup effort may be nearing its end more than a year after it started.

"Just a few troubled banks remain," Pysaruk said. "We are working thoroughly with their shareholders to solve their problems."

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 #36
Kyiv Post
June 11, 2015
Crime on rise as 'tolerance for violence has increased'
by Alyona Zhuk, Kyiv

Crime is up in Ukraine, even subtracting the 7 percent of the nation now under Russian occupation.

Nationally, 271,553 criminal offenses were registered by the Prosecutor General's Office in January-May, almost 1.7 percent more than the same period last year. Many crimes, of course, go unreported because the public doesn't trust the police.

Police witnessed considerable growth in armed robberies, with 70 percent of those crimes being committed with illegal weapons brought in from the war-torn east, according to Artem Shevchenko, spokesman for the Interior Ministry.

Sociologist Iryna Bekeshkina, head of the Democratic Initiatives Foundation, a Kyiv-based policy center, said that the increased violence is linked with the Russian-separatist war in Luhansk and Donetsk oblasts.

"The tolerance for violence has increased," she told the Kyiv Post. "People see violence on television every day. Every day people are killed, and this has already become a statistical fact. Dead people have become statistics."

At least 6,454 people have been killed and 16,146 wounded since mid-April 2014, when the Moscow-engineered invasion of the Donbas began.

However, Ukrainian defense lawyer Igor Fomin, who represented former Interior Minister Yuriy Lutsenko in his trial under Viktor Yanukovych's presidency, said statistics understate the extent of the problem.

He said that only about 10 percent of registered cases make it to courts. Police, meanwhile, sometimes fail to register criminal complaints because they are inundated and want to avoid the extra workload.

That's what almost happened to Ukrainian activist Valentyna Varava and her husband, who was beaten and robbed in Kyiv on April 19. Luckily, the only valuables he had with him were Hr 200, and an old monochrome cellphone, which his assailants left behind. According to Varava, the attackers broke her husband's skull. The couple reported the crime to the police, but the report didn't mention the husband's damaged skull.

"They wanted to classify the act as a simple robbery of Hr 200. But anyway, in the end, no one did anything," she said.

Other Kyiv victims, all of burglaries, with whom the Kyiv Post spoke said their cases haven't been investigated. "The police took a report, and we haven't seen them since," said Anna Panasiuk, whose apartment was robbed early this year.

A burglar who broke into the apartment of Olga Tkachenko last October was jailed for six years. But her husband, Dmytro Tkachenko, caught him, chased him through the apartment window and handed him over to the police.

Shevchenko, the Interior Ministry spokesman, said "we are doing everything possible to reduce crime. We register every report, and we respond to every report."

According to data provided by the prosecutor's office, there was a slight decrease in burglary this year over the same period in 2014.

More crimes happen in summer. Citizens should install metal doors and burglar alarms. To avoid becoming a victim of street violence, the Interior Ministry advises not walking alone late at night, to walk in lit areas, to avoid drinking excessively and to conceal money and valuables.

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 #37
Business New Europe
www.bne.eu
June 12, 2015
Blow to Ukraine hopes for agriculture as farmland sale moratorium seen extended
As Ukraine edges closer to default, analysts see fallout for the country from bad to mild.
Graham Stack in Berlin

One of Ukraine's key reforms in the path to transform itself from post-Soviet basket case to Europe's breadbasket is to create a market in farmland. But vested interests mean the reform could fall at the first fence.

The decade-old moratorium on farmland sales, which was first imposed in 2004 and last extended for three years at the end of 2012, will expire at the end of 2015. With agriculture regarded as a key sector for bringing Ukraine's economy back to health and as there exists no developed agricultural sector in the world without a flourishing market in farmland, getting rid of the moratorium is a no-brainer. However, experts worry the government is getting cold feet and parliament will extend it at the end of 2015.

"The moratorium will be extended with a high degree of probability... It's almost a consensus," says political commentator Volodymyr Fesenko of the think-tank Penta.

Nikolai Vernitsky, head of consultancy Pro-Agro Consult, agrees. "They will extend the moratorium, there is no doubt about this. When they discuss so much, it means they will extend. Almost all key figures in politics are for a renewal of the moratorium - including those who say 'first of all we need to create the right conditions'. This rhetoric has not changed for ten years, there is simply no political will in favour of opening the land market," Vernitsky says.

Officially at least, Minister of Agriculture Oleksiy Pavlenko informed bne IntelliNews that he is in favour of creating a land market - for all the right reasons - but not in favour of what he calls "political gambling". "At the end of the 90s we had 7mn owners of land shares - notional land parcels which appeared after the collapse of the collective farms. However, their owners have no way to dispose of their properties, except for renting or transferring them in inheritance," he explains. "Land reform is necessary, especially to make Ukrainians full owners of their land: to sell, to work the land, to rent out for a decent price, to unite with neighbours or to exchange it."

But the move from this mess of a system to something more market oriented is so fraught with difficulties that despite all the rhetoric of radical reform in the air in Kyiv, the ministry advocates a softly, softly approach. "For the time being, the population perceives such prospects with caution. The main reason for this is the lack of trust for the government," explains Pavlenko. "We are gradually preparing the population for opening of the land market, but we will not manage to fulfill any constructive decision without understanding of society."

Experts close to the agriculture ministry argue that at least two years is needed for constructing all the relevant legislation and a fully functioning land cadastre.

Vested interests

Critics of the "softly, softly" approach see in the procrastination the work of two powerful lobbies: the state bureaucracy that regulates farmland, which is "extremely corrupt and thus against the reform," according to a source in an international financial institution. The state itself remains direct owner of around 8mn ha of farmland.

Critics also see in the likely extension of the moratorium not so much concern for the villagers, but the influence of the so-called latifundia, or major land holdings, that dominate commercial agriculture and whose land banks can run to over 300,000 hectares.

Critics point to the influential political lobby of the companies with the largest land holdings. For example, Yury Kosyuk, owner of MHP, one of Ukraine's biggest agriculture businesses, worked as first deputy head of the presidential administration in 2014; while Vladislava Rutitska, formerly of the now-bankrupt grain producer Mriya Agro Holdings, is now deputy minister of agriculture. "The holdings along with most politicians are against [lifting the moratorium]," says Vernitsky, of Pro-Agro.

"Ukrainian agri-holdings are traditionally against introducing a land market," explains Erik Naiman, of brokerage Capital Times. "Why pay real, live and fairly large money to buy up land if it is possible to use almost for free?"

According to the agriculture ministry's figures, smallholders lease their land for as little $50-100 per hectare per year, with the lease sometimes even paid in kind.

Ukraine's big agribusiness lobby, Ukraine Agribusiness Club, is touting a survey published in May which found that a full 70% of farmers are against lifting the moratorium in 2016, with 56% against any lifting of the moratorium in the future. "It depends upon the cash position of the agriculture holding. Those deeply in debt or with scarce cash position would rather extend the moratorium. Some large holdings, having strong liquidity position, favour lifting the moratorium," explains Roman Topolyuk, agriculture expert at Concorde Capital.

Peter Thomson, deputy head of one of Ukraine's largest landholders, Ukrainian Agrarian Investments, tells bne IntelliNews that he was personally in favour of lifting the moratorium, but believes the moratorium will be extended anyway.

Other players such as banks, however, might be in favour of the lifting the moratorium, since it would enable them to lend more to agriculture, explains Stephen Pickup from Swedish-owned Agrokultura. "Currently you can't get bank loans on the back of agricultural land in Ukraine. Lifting the moratorium would create a whole new asset class," Pickup says.

Pickup, who has wide experience of operating in both Ukraine and Russia, where there has been a free farmland market since 2001, says that, "theoretically, it should make a big difference for Russian farming [compared to Ukrainian], but in practice this is not the case - we farm the leased land [in Ukraine] as we would the freehold land [in Russia]."

However, Pickup says speculative land bank expansion is a specifically Ukrainian phenomenon, where the low cost of acquiring control over leased land has seen agricultural holdings' landbanks spread out "like spilt beer over a table".

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 #38
Sputnik
June 10, 2015
Against a Brick Wall: US-Ukrainian Strategic Partnership Reaches Its Limits

The US-Ukrainian strategic partnership lacks both a strategy and a partnership, American experts underscore, stressing that the EU and the United States are playing for high geopolitical stakes in the region.

Washington should reconsider its approach toward Ukraine, insist Matthew Rojansky, an expert on US relations with the states of the former Soviet Union and director at the Kennan Institute, Thomas Graham, a managing director of Kissinger Associates, Inc. and Michael Kofman, a military expert and public policy scholar at the Kennan Institute.

"Washington and Kiev have reached the limits of what political rhetoric, summitry and symbolism can achieve. Both must now identify the vital national interests that can build and sustain a partnership between the two countries for the foreseeable future. If they don't, the two nations risk continuing a relationship that will disappoint and ultimately alienate Americans and Ukrainians alike," the three wrote in an article for Reuters.

According to the senior policy analysts, while the stakes in the region are high for Kiev, Brussels and Washington, the US-Ukraine strategic partnership deplorably lacks "both strategy and partnership."

Although Kiev has recently demonstrated that it has made a clean break with its Soviet and post-Soviet past, Ukraine's course toward a Western European alliance "is not yet open or irreversible," they underscored.

Meanwhile, the future of the country will be determined not only by "reform-minded" politicians and Ukraine's civil society but also by "longstanding, powerful oligarchic interests and pervasive corruption." The reforms proclaimed by the Ukrainian leadership have not yet proven effective, to the dissatisfaction of Ukrainians and Kiev's ruling coalition.

The experts highlighted that many Ukrainians openly express their doubts that "the current constellation of political leaders" can fulfill their promises.
But officially Washington is now deeply vested in the success of the new Kiev government, which formed after the 2014 elections; senior US officials have called their Ukrainian counterparts courageous and inspiring. "So Washington has little leverage on the Ukrainian leadership to follow through on specific policy reforms," the scholars stressed.

Given the circumstances, Ukrainian politicians, their oligarch backers and civil groups are now knocking on Washington's door, seeking support and political assistance.

So far, the US-Ukrainian relationship is beginning to resemble a relationship between a patron and its client-state. According to the experts, such a relationship is hardly what the Ukrainian and American people want. Alas, it is seemingly what both could end up with, the scholars emphasized.
Washington should work out a new framework for a bilateral strategic partnership with Kiev, bearing in mind the "same degree of caution" Ukrainians have toward their leading political figures.

The United States "must forget the tired formula of persuading Ukrainians to pick a pro-Western path as a vehicle for foiling Russian-led integration projects," the experts noted, adding that Washington must also "stop believing that it can be an active player in Ukrainian politics to achieve a desired change."

The scholars believe that a new approach could create a foundation for efficient bilateral cooperation between Washington and Ukraine "as a whole."

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 #39
Reuters
June 10, 2015
Are Ukraine and the U.S. allies or not?
By M. Rojansky, T.E. Graham and M. Kofman
Matthew Rojansky is the director of the Kennan Institute at the Woodrow Wilson International Center for Scholars. Thomas E. Graham is former senior director for Russia on the National Security Council staff, 2004-2007. Michael Kofman is a public policy scholar at the Kennan Institute at the Woodrow Wilson International Center for Scholars.

At this critical moment for the future of Ukrainian, European and U.S. interests in the region, the U.S.-Ukraine strategic partnership lacks both strategy and partnership.

This much is clear after meetings with Ukraine's political leaders, journalists, academics, civil-society activists and volunteers active in the conflict zone during our recent trip across the beleaguered nation. Ukraine's appeals for U.S. support have only grown louder and more desperate as renewed fighting flared around Donetsk in the past week.

Washington and Kiev have reached the limits of what political rhetoric, summitry and symbolism can achieve. Both must now identify the vital national interests that can build and sustain a partnership between the two countries for the foreseeable future. If they don't, the two nations risk continuing a relationship that will disappoint and ultimately alienate Americans and Ukrainians alike.

U.S. President Barack Obama meets with Ukraine President-elect Petro Poroshenko in Warsaw
President Barack Obama meets with Ukraine President-elect Petro Poroshenko in Warsaw, June 4, 2014. REUTERS/Kevin Lamarque

Ukraine has already transformed in crucial ways since the Maidan demonstrations in 2013-14. It is on a path leading away from its Soviet and post-Soviet legacies. Yet its course toward a Western European alliance is not yet open or irreversible.

Ukraine's future will be shaped by reform-minded political leaders and an awakened civil society. But also by longstanding, powerful oligarchic interests and pervasive corruption. Reforms have been sluggish, to the dissatisfaction of many, including the ruling political coalition.

Each attempted reform reveals the need to fix other components of governance, the political system or the economy. Positive effects are slow to be felt and public patience wanes.

Russia's annexation of Crimea and occupation of the Donbas have altered both Ukraine's delicate domestic regional power balances and the relative equilibrium among the country's most powerful oligarchs. Part of the country grows tired and angry from the grinding reality of war, while another part seems oblivious to it.

Many Ukrainians we spoke to repeatedly said they have little confidence that the current constellation of political leaders can deliver on promises they have made at home and abroad. Even many people in the government cautioned against framing U.S.-Ukraine relations in terms of support for one or several domestic political forces and their agenda. Doing so, they said, could draw Washington into a byzantine game, in which oligarchic power-brokers hold most of the cards, and in which the doors would stand wide open to these same Ukrainian actors seeking to play for influence in U.S. domestic politics - an unhealthy development by any measure.

For more than a quarter century, the United States has supported Ukraine based on shared values and interests. But official Washington is now deeply vested in the success of the new Kiev government formed after the 2014 elections; senior U.S. officials have called their Ukrainian counterparts "courageous" and "inspiring." So Washington has little leverage on the Ukrainian leadership to follow through on specific policy reforms.

Under these circumstances, politicians and parties, their oligarch backers and many new civic groups all seek U.S. support and close ties with Washington. It is beginning to resemble an emerging client-state relationship in search of reliable patronage. This is hardly the relationship the Ukrainian and American people want. But in the absence of a strategic vision and a framework for strategic partnership, it is likely what both could end up with.

To avoid this, much can be done. First, Washington should endorse Kiev's leading political figures and their agenda with the same degree of caution and circumspection as the Ukrainian people support them. Washington must stop believing that it can be an active player in Ukrainian politics to achieve a desired change.

Instead, the U.S. objective should be to work on the overarching problems that create instability and threaten Ukraine's future: the disastrous state of the economy and the conflict with Russia. Both are vexing and beyond the capability of the Ukrainian state - under any leadership - to solve by itself.

Next, Washington should work with Kiev to lay the framework for a bilateral strategic partnership. This should be based on a clear definition of mutual interests and values, and realistic expectations for the short, middle and long term.

Instead of a few favored partners or signature projects in Ukraine, Washington should look for spheres of cooperation that serve the interests of both nations. It must forget the tired formula of persuading Ukrainians to pick a pro-Western path as a vehicle for foiling Russian-led integration projects. A new approach can build a foundation for sustained bilateral engagement with Ukraine as a whole - well beyond the period after the fighting with Russia has ended. As it eventually will.

Finally, Washington must demonstrate strategic patience. Ukraine will likely progress more slowly and more fitfully than Americans would prefer. A strategic partnership based on clearly defined values and interests will help both sides navigate the potential misunderstandings and significant challenges that lie ahead.

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 #40
Consortiumnews.com
June 11, 2015
WPost Plays Ukraine's Lapdog
By Robert Parry
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s.

Exclusive: Ukraine's Prime Minister Yatsenyuk and Finance Minister Jaresko are on a U.S. trip to drum up weapons and money to crush the ethnic Russian resistance in the east - and they are finding a lapdog U.S. press that won't ask them tough questions, reports Robert Parry.

There once was a time when the U.S. news media investigated U.S. imperial adventures overseas, such as Washington-sponsored coups. Journalists also asked tough questions to officials implicated in corruption even if those queries were inconvenient to the desired propaganda themes. But those days are long gone, as the Washington Post demonstrated again this week.

On Wednesday, the Post's editorial board had a chance to press Ukraine's Prime Minister Arseniy Yatsenyuk about the U.S. government's role in the Feb. 22, 2014 coup that elevated him to his current post - after he was handpicked by U.S. Assistant Secretary of State for European Affairs Victoria Nuland, who declared "Yats is the guy" in a pre-coup intercepted phone call.

Wouldn't it have been interesting to ask Yatsenyuk about his pre-coup contacts with Nuland and U.S. Ambassador Geoffrey Pyatt and what their role was in fomenting the "regime change" that ousted elected President Viktor Yanukovych and hurtled Ukraine into a civil war? Sure, Yatsenyuk might have ducked the questions, but isn't that the role that journalists are supposed to play, at least ask? [See Consortiumnews.com's "What Neocons Want from Ukraine Crisis."]

Or why not question Yatsenyuk about the presence of neo-Nazis and other right-wing extremists who spearheaded the violent coup and then were deployed as the shock troops in Ukraine's "anti-terrorism operation" that has slaughtered thousands of ethnic Russians in eastern Ukraine? Wouldn't that question have spiced up the interview? [See Consortiumnews.com's "Wretched US Journalism on Ukraine."]

And, since Ukraine's Finance Minister Natalie Jaresko was at the editorial board meeting as well, wouldn't it have made sense to ask her about the propriety of her enriching herself while managing a $150 million U.S.-taxpayer-financed investment fund for Ukraine over the past decade? What kind of message does her prior work send to the people of Ukraine as they're asked to tighten their belts even more, with cuts to pensions, reduction of worker protections, and elimination of heating subsidies?

How would Jaresko justify her various schemes to increase her compensation beyond the $150,000 limit set by the U.S. Agency for International Development and her decision to take court action to gag her ex-husband when he tried to blow the whistle on some improprieties? Wouldn't such an exchange enlighten the Post's readers about the complexities of the crisis? [See Consortiumnews.com's "Ukraine Finance Minister's American 'Values.'"]

Yet, based on what the Post decided to report to its readers, the editorial board simply performed the stenographic task of taking down whatever Yatsenyuk and Jaresko wanted to say. There was no indication of any probing question or even the slightest skepticism toward their assertions.

On Thursday, the Post combined a news article on the visit with an editorial that repeated pretty much as flat fact what Yatsenyuk and Jaresko had said. So, after Yatsenyuk alleged that Russia had 10,000 troops on the ground inside Ukraine, the Post's editorial writers simply asserted the same number as a fact in its lead editorial, which stated: "Russia ... has deployed an estimated 10,000 troops to eastern Ukraine and, with its local proxies, attacks Ukrainian forces on a near-daily basis."

Though both assertions are in dispute - with many of the cease-fire violations resulting from Ukrainian government assaults around the rebel-controlled Donetsk Airport - the Post had no interest in showing any skepticism, arguably one of the consequences from the failure to impose any accountability for the Post's similarly biased writing prior to the Iraq War.

In 2002-03, editorial-page editor Fred Hiatt repeatedly declared as flat fact that Saddam Hussein possessed stockpiles of WMDs, thus supposedly justifying the U.S.-led invasion. After the invasion failed to locate these WMD stockpiles, Hiatt was asked about his editorials and responded:

"If you look at the editorials we write running up [to the war], we state as flat fact that he [Saddam Hussein] has weapons of mass destruction," Hiatt said. "If that's not true, it would have been better not to say it." [CJR, March/April 2004]

Yes, journalists generally aren't supposed to say something is a fact when it isn't - and when a news executive oversees such a catastrophic error, which contributed to the deaths of nearly 4,500 U.S. soldiers and hundreds of thousands of Iraqis, you might expect him to be fired.

Yet, Hiatt remains the Post's editorial-page editor today, continuing to push neoconservative propaganda themes, now including equally one-sided accounts of dangerous crises in Ukraine, Syria and elsewhere. [See Consortiumnews.com's "Why WPost's Hiatt Should Be Fired."]

On Ukraine - although the risks of neocon "tough-guy-ism" against nuclear-armed Russia could mean extermination of life on the planet - the Post refuses to present any kind of balanced reporting. Nor apparently will the Post even direct newsworthy questions to Ukrainian officials.

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#41
Russia Insider
www.russia-insider.com
June 11, 2015
Failed Policy and Historical Ignorance
The Western line on Crimea is so absurd that it actually requires mass historical ignorance to be believed  
By Jay Vogt
[Graphics here http://russia-insider.com/en/politics/crimea-work-progress/ri7794]

Ok, let's start with a quick recap of the Western narrative on Crimea. In its various forms - always most zealous where least informed - it generally goes something like this:

"Crimea is part of Ukraine, has always been part of Ukraine, and will always be part of Ukraine. The 2014 referendum - held at the barrels of Russian guns - is illegitimate, unconstitutional, and will never be recognized."

Two sentences - nice and neat, and easy to digest for the legions of brain-dead drones and dim-witted twits who constitute the majority of the Mainstream Media audience.

Now to your ordinary everyday Joe Six-Pack in the West, the idea that Crimea was stolen by evil Putin is perfectly understandable. Years-long, non-stop bombardment by MSM propaganda killed off any critical-thinking abilities he ever had a long time ago. However, when it comes to the reading audience here at RI - one that is considerably more intelligent discerning than its western counterpart - a bit more effort is required in explaining reality; and it doesn't require much more than a cursory glance at history to meet such a meager expectation.

The March 16, 2014 Crimean referendum for independence from Ukraine and subsequent union with the Russian Federation was the culmination of a struggle spanning almost a quarter of a century. That is recent history.

In order to arrive at a more complete understanding of this monumental event, we may be well-served to look back a little longer even - maybe back to around, oh, say, just under a hundred years ago.

The Bolshevik Revolution of 1917 was the catalyst of the Russian Civil War (1917-1921) - an event as savage and brutal as it is relatively unknown. Over the course of this bloody conflict, Crimea changed hands constantly, seeing no less than 10 different governments until it was finally consolidated as the Crimean Autonomous Socialist Soviet Republic on October 18, 1921.

Crimea at that time was a Tatar autonomy of the Russian Soviet Federative Socialist Republic (RSFSR) - a status it would enjoy until June 30, 1945, when it was stripped of its autonomous republic status and subsequently incorporated as an oblast (region) of the RSFSR in June 1946. This change in status was directly tied to Stalinist accusations of Tatar complicity with the Nazis during Germany's temporary occupation of Crimea in World War II (accusations that led to the dictator eventually and cruelly rounding up and deporting the entire native Tatar population to the Ural Mountains in 1944).

Fast forward to April 1954 when the Soviet Union transferred the Crimean region from the RSFSR to the Ukrainian Soviet. This was done partly in recognition of the 300th anniversary of Russia-Ukraine unity, but more due to the dismal economic environment and a belief that it could be more effectively run by an entity that shared closer economic and geographic links. It was a belief that would have made sense at the time, as a breakup of the Soviet Union would have seemed absurd in the mid-1950s.

Crimea's revamped 1954 status remained stable all the way up to the USSR's eventual dissolution in 1990, and this is where things start to get rather interesting in light of current events.

Ukraine declared its state sovereignty on July 16, 1990. Shortly thereafter in September of that same year, the Crimean Supreme Soviet petitioned the Supreme Soviet of the USSR and the RSFSR to rescind the 1945 decision that stripped Crimea's autonomous Soviet status and reinstate it as an autonomous republic, just as it was back in 1921.

The proposal was put to a referendum on January 20, 1991, drawing the participation of over 80% of the Crimean public, who collectively voted over 94% in support of the 'restoration of the Crimean ASSR as a subject of the USSR and as a party to the Union Treaty', i.e., just over 94% of Crimeans voted to secede from Ukraine a full 23 years before that secession was finally realized.

So in a 1991 referendum on Crimean autonomy and separation from Ukraine, over 80% of the population participated and 94% voted in favor. Fast forward to the 2014 referendum to secede from Ukraine and 83% of the population participated and over 96% voted in favor. Are we seeing some consistency here? Or is this just some strange coincidence?

When the attempted coup of August 1991 failed, Ukraine immediately declared its independence from the USSR, and in December of the same year, held a referendum on independence. Interestingly, of all the regions of Ukraine, support for Ukrainian independence from the Soviet Union was lowest in Crimea at around 54%, by far the lowest in any region of Ukraine.

The following year saw a flurry of political activity between Crimea, Moscow, and Kiev.

In January 1992, the Russian parliament and the Foreign Ministry both publicly condemned the 1954 transfer of Crimea to the Ukrainian SSR. A month later the Crimean parliament changed the territory's name from the Crimean ASSR to the Crimean Republic. Two months after that, then Russian Vice President Alexander Rutskoy traveled to Crimea where he called on the Republic to secede from Ukraine. Almost immediately afterwards, the Crimean parliament declared total independence from Ukraine and proclaimed that it would be put to a referendum in August of 1992.

Kiev reacted immediately, declaring Crimea's declaration to be unconstitutional and demanding that it be rescinded immediately. The Crimean parliament responded by suspending the referendum and called for a new power-sharing structure between Kiev and Simferopol. The very next day, the Russian parliament passed legislation declaring the 1954 transfer of Crimea to have been illegal and called for negotiations on the future of the Republic.

In June 1992, Kiev granted Crimea greater autonomy and special economic status on the condition that Crimea annul the proposed referendum for independence and alter its constitution to be consistent with that of Ukraine. The following month, the Russian parliament officially declared Sevastopol to be a Russian city; but this was quickly brushed aside by then President Yeltsin, who confirmed recognition of the then current borders between Russia and Ukraine. In August, Presidents Yeltsin and Kravchuk agreed that Sevastopol would be leased to Russia for the basing of the Black Sea Fleet. We will shortly return to this all-important point.

In March of 1994, Crimea held another referendum with just over 78% supporting greater autonomy from Kiev and over 82% supporting dual Ukrainian-Russian citizenship. In August, the Sevastopol City Council declared that it is a Russian city, subject to Russian legislation only. The declaration had the support of 36 of the 42 council members. Ukrainian authorities swiftly condemned the act as illegal.

By the beginning of 1997, Crimean Russians began to draw public attention to Ukrainian discrimination against the Russian language. Community leaders claimed that publications and television broadcasters whose content was primarily in Ukrainian were given preferential treatment by Ukrainian authorities. They were so concerned in fact, that an appeal was sent to the Russian government to start investigating linguistic discrimination not only in Crimea, but other areas of Ukraine with majority Russian-speaking populations. Two months later, riot police had to stand down over 1,000 protesters who tried to storm the parliament building at a protest in support of rejoining Russia.

In February of 1998 the Crimean parliament overwhelmingly voted to hold yet another referendum on returning to Russian jurisdiction and adopt Russian as the region's official language, but to no avail. That same year, the Ukrainian parliament changed the name of Crimea to the Autonomous Republic of Crimea and retained a right to veto any legislation passed by the Crimean parliament.

Crimea didn't see any significant activity in the first decade of this century, with two notable exceptions, which were inversely connected in a way that almost perfectly depicts the complexity of this exceptionally strategic territory.

On May 27, 2006, the U.S. naval ship 'Advantage' anchored near the Crimean port of Feodosia to bring 'technical aid' to Ukrainian soldiers at a nearby training range.

It didn't take long for locals to voice their displeasure with this unwanted arrival. Within two days, Feodosian residents began to picket the port, waving anti-NATO signs and blocking the 'technical aid' from reaching its destination.

When 200 Marines Corps reservists also arrived in the port city to take part in a military exercise called Sea Breeze 2006 scheduled for mid-July of that year, they were met with a similar measure of hostility. When they tried to make their way to the local training facility, their bus was surrounded by protesters who proceeded to rock it back and forth and tried to break its windows. The bus eventually made it to a local military base where the reservists remained holed up until their eventual departure from the peninsula when Sea Breeze 2006 was subsequently cancelled.

Fast forward to April 21, 2010 when Ukraine and Russia signed what was known as the Kharkiv Pact. Under the terms of the deal, Russia's lease on the naval base in Sevastopol would be extended from 2017 to 2042 with an option to extend for an additional five years. Ukraine was to receive a 30% discount in the price of Russian-supplied gas under the deal, which would be equal to an increase in the rent that Russia would pay for the base.

The deal led to a fierce debate in the Ukrainian parliament which eventually degenerated into a full-on physical brawl between egg-throwing and smoke bomb-tossing MPs.
 
To look at the voting results of the lease extension is to find further confirmation of the fundamental differences between the more ethnically-Russian east and south and the more ethnically-Ukrainian north and west:
 

Faction    Number of deputies    For    Against    Abstained    Did not vote    Absent
Party of Regions Faction    161    160    0    0    1    0
Yulia Tymoshenko Bloc    154    9    0    0    0    145
Our Ukraine-People's Self-Defense Bloc    72    7    0    0    0    65
Communist Party of Ukraine Faction    27    27    0    0    0    0
Lytvyn Bloc    20    20    0    0    0    0
No faction affiliated    16    13    0    0    1    2
All factions    450    236    0    0    2    212

Almost half of the parliament abstained from the extremely controversial vote; but it is quite clear from looking at the other half that did participate, that ranks had basically closed and parties representing the ethnic-Russian constituencies almost uniformly supported Russia's continued lease of the base, while those parties representing ethnic-Ukrainian constituencies were almost uniformly opposed.  

How much of a wonder then, can it possibly be to anyone that these two sides are still locked in a death grip over Crimea?

The simple-minded and fact-free Western narrative of today's Crimea, its non-existent history, its irrelevant population, and its ultimate annexation by evil Putin, is as offensive as it is pathetic.

If the West were to be honest with itself, it would show a little shame and start telling the truth. It would, if perfectly honest, most likely go with something like this:

"Crimea is one of the most important geo-strategic military locations in the world and we've been trying like hell to get a hold of it for the last 25 years, so we can get in there and nail down the Black Sea while kicking those god-damned Russkies out in the process. We were sure we had it when we overthrew Yanukovich last year, but damned if that little S.O.B. in the Kremlin didn't snatch it right out from under our feet. Well, hell, looks like the only things we can do now are cry, lie, and try to delegitimize the hell out of these people in our mainstream media while simultaneously doing everything we can to make their lives as economically difficult as humanly possible. Damn, we were close."

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 #42
Time.com
June 11, 2015
Bill Bradley: 5 Steps for Peace in Ukraine
By Former Sen. Bill Bradley

In Ukraine, lives continue to be lost, families are split, property is destroyed, the economy is decimated, ethnic divisions proliferate, and political unity remains non-existent. The human tragedy grows every day. The U.S., Europe, and Russia seem deadlocked, unable to understand the other's point of view.

Ukraine inflamed tensions recently by giving Ukrainian citizenship to Mikheil Saakashvili, the former President of Georgia, and then appointing him governor of the Odessa province. The chance for wider war lurks in the background with all that would mean for the Ukrainian people, Europe, and the U.S.-Russian relationship. As with many international events, the Ukrainian crisis has occurred in a broader historical context.

At the end of the Cold War, the prevailing view in Washington was that the U.S. was strong, and Russia was weak and did not count in a unipolar world. We disregarded Russia's opposition to NATO expansion, the Iraq War, and the U.S.-led military intervention in Serbia for the independence of Kosovo. We went back on our assurances to Russia that the air war on Libya was limited to saving civilian lives and did not include regime change. We withdrew from the ABM Treaty and even suggested that Ukraine and Georgia join NATO.

With each rejection, Russia's resentment grew. Confronted by the West's support for the pro-Europe protests in Independence Square in 2013 (Euromaidan) and the unlawful deposition of President Viktor Yanukovych in 2014, Russia's accumulated uneasiness over the West's intentions increased, and its military intervention in Eastern Ukraine soon began. The U.S. actions in Kosovo-carving out an independent state based on ethnicity from within a sovereign nation-provided the precedent for Russia to carve Crimea out of Ukraine.

Given all these events, many people declare that a new Cold War has arrived. I don't agree. It is not too late to repair our relationship with Russia, but real improvement starts with Ukraine-a country of historical strategic interest for Russia and no strategic interest for us.

In May, U.S. Secretary of State John Kerry and German Chancellor Angela Merkel both held meetings with Putin, signaling that diplomatic efforts may be beginning to break the current stalemate over the Ukraine crisis. Such efforts must recognize, in retrospect, that all parties are responsible for the current situation: Russia, in its military interventions; the U.S. and Europe, in attempting to bring Ukraine exclusively into the Western sphere, especially NATO; and Ukraine itself, in not taking advantage of opportunities over the last 20 years to improve its governance, reduce corruption, and create greater national unity.

Accepting this shared responsibility for the crisis in Ukraine, we can pursue an understanding that recognizes both the legitimacy of Russia's concerns about security threats on its border and the importance of self-determination by the Ukrainian people. Such a deal would have five features:

-Russian forces would withdraw from eastern Ukraine, and Russia would accept Ukraine's current borders in a binding treaty.
-Ukraine would agree never join NATO.
-Ukraine would be allowed membership in both the European Union and the Eurasian Economic Union.
-A new, internationally supervised referendum would be held in Crimea on whether to join Russia, remain part of Ukraine, or become independent, as Michael O'Hanlon of the Brookings Institution and others have suggested, thereby providing a victory to the West's core values by promoting authentically democratic self-determination, as opposed to the phony democracy practiced in the referendum held in Crimea last year.
-All economic sanctions on Russia would be lifted.

In short, as the West pursues renewed negotiations with Russia over the Ukraine crisis, these negotiations should not be expected to produce simply a series of Russian concessions. To this suggestion hard-liners in the West will inevitably characterize such thinking as "appeasement." But compromise is not the same thing as appeasement, especially considering that Putin appears more a tactical opportunist than a strategic warmonger. Providing Russia a sense of territorial security by promising not to expand NATO to Ukraine or Georgia will eliminate the major excuse for expansionist aggression that Putin offers to his people.

Moreover, no alternative proposals to solve the current crisis in Ukraine seem plausible. Economic sanctions and falling oil prices will not alone convert Kremlin behavior via popular pressure, as Putin's intransigence and high approval ratings among the Russian people indicate. With oil prices now rising, and the ruble partially recovering its value, counting on convulsive economic trouble in Russia would be quixotic.

Since Ukraine is not a member of NATO or vital to critical U.S. interests, Washington should not confront Russia militarily or lead a coalition to do so. And since shipping arms to Ukraine will only escalate the violence with no guarantee of Kiev's victory over Russia-backed Eastern Ukraine, the U.S. should avoid sending military aid into the region.

What can eliminate Russia's insecurity is a militarily neutral Ukraine-one that may prosper economically to its fullest potential by being a pawn of neither the West nor of Russia. Militarily neutral, Ukraine would be allowed to participate in both the European Union and the Eurasian Economic Union.

By demonstrating to Russia that the U.S. respects its territorial security, the U.S. could secure the trust of Russia's people and possibly revive our relationship with the Russian government. And with this crisis behind them, the U.S. and Russia could renew a productive partnership on many of the important problems confronting both of us, including Islamic terrorism, nuclear weapons in Iran, and the long-neglected nuclear arms control process. The U.S. and the current Russian government may not be best of friends, but at least we can avoid becoming enemies.

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 #43
United States Mission to the United Nations
June 11, 2015
Remarks at the October Palace in Kyiv, Ukraine
Samantha Power
U.S. Permanent Representative to the United Nations
Kyiv, Ukraine

AS DELIVERED

Dobry den. Thank you all so much for being here.

As Tamila said, I represent the United States at the United Nations. The United Nations Security Council, the body whose job it is to address threats to international peace and security, has met 33 times to discuss the crisis in Ukraine since February 2014, when Russia's little green men first started appearing in Crimea - many times more than it has met on any other crisis in the world during that period.

The focus on Ukraine in the Security Council is important, because it gives me the chance - on behalf of the United States - to lay out the mounting evidence of Russia's aggression, its obfuscation, and its outright lies. Or, as I told Russia's representative last week in an emergency Security Council meeting about the Russian-separatist attacks on Marinka, quoting Kyiv's native son, Mikhail Bulgakov, "The tongue can conceal the truth, but the eyes, never!" And America is clear-eyed when it comes to seeing the truth about Russia's destabilizing actions in your country.

The message of the United States throughout this Moscow-manufactured conflict - and the message you heard from President Obama and other world leaders at last week's meeting of the G7 - has never wavered: if Russia continues to disregard the sovereignty and territorial integrity of Ukraine; and if Russia continues to violate the rules upon which international peace and security rest - then the United States will continue to raise the costs on Russia. And we will continue to rally other countries to do the same, reminding them that their silence or inaction in the face of Russian aggression will not placate Moscow, it will only embolden it.

But there is something more important that is often lost in the international discussion about Russia's efforts to impose its will on Ukraine. And that is you - the people of Ukraine - and your right to determine the course of your own country's future.

Far too often, people tell the story of what is happening today in Ukraine without you in it. It is East versus West. The Eurasian Union versus the European Union. Russia versus the EU or Russia versus the United States. In this telling, at best, the Ukrainian people get to choose one of these sides. At worst, a side is chosen for you.

As every Ukrainian knows, this dynamic - leaving the Ukrainian people out of the story of Ukraine - is not unique to recent events. The same can be said for long stretches of your nation's history.

The irony of applying this way of thinking to the current crisis is that it goes against the very ethos of the Maidan, which was - and still is - about putting you, the Ukrainian people, back in the driver's seat of your country's future. It is about restoring your voice - a voice too often ignored by corrupt politicians, oligarchs, and foreign powers. Or, as one of the great rallying cries of the Maidan put it: Ukraina po-nad u-se! Ukraine above all else!

[Applause.]

So today I want to speak to your valiant struggle to reclaim that voice - why it brought people out to the Maidan in the first place; how it is being carried forward today, in spite of daunting obstacles; and what must be done to ensure that the effort succeeds in building the sovereign, democratic Ukraine that you want and deserve.

Let me begin with what we know brought people out to the Maidan in the first place.

We've all heard a good number of myths about this. One told by the Yanukovych government and its Russian backers at the time was that the Maidan protesters were pawns of the West, and did not speak for the "real" Ukraine. A more nefarious myth peddled by Moscow after Yanukovych's fall was that Euromaidan had been engineered by Western capitals in order to topple a democratically-elected government.

The facts tell a different story. As you remember well, then-President Yanukovych abandoned Kyiv of his own accord, only hours after signing an agreement with opposition leaders that would have led to early elections and democratic reforms. And it was only after Yanukovych fled the capital that 328 of the 447 members of the democratically-elected Rada voted to strip him of his powers - including 36 of the 38 members of his own party in parliament at the time. Yanukovych then vanished for several days, only to eventually reappear - little surprise - in Russia.

As is often the case, these myths reveal more about the myth makers than they do about the truth. Moscow's fable was designed to airbrush the Ukrainian people - and their genuine aspirations and demands - out of the Maidan, by claiming the movement was fueled by outsiders.

Yet, as you all know by living through it - and as was clear even to those of us watching your courageous stand from afar - the Maidan was made in Ukraine. A Ukraine of university students and veterans of the Afghan war. Of Ukrainian, Russian, and Tatar speakers. Of Christians, Muslims, and Jews.

This very building where we are gathered today, the October Palace, became a shelter for protesters. More than a thousand people slept here on any given night during the Euromaidan protest - in ornate rooms beneath classical paintings; on the floor of a ballet studio and even under a grand concert piano. And on the steps leading up to this building, people stockpiled hundreds of heads of cabbage and other vegetables donated by farmers, and babushki cooked them up in vats, feeding piping hot soup to the protesters.

What brought together such a diverse mix of Ukrainians - and what made them hold their ground through months of bitter cold and repeated attacks by the Berkut - was the Ukrainian people's frustration that their voices were once again being ignored by those in power; their sense that the basic compact at the core of the democratic model - that leaders are accountable to their citizens - had been broken.

The Ukrainian people had good reason to feel disempowered, which went much deeper than Yanukovych's decision on whether to enter into association with the European Union. The feeling was grounded in the deep, systemic corruption that permeated virtually every facet of Ukrainian life. At the time of the protests, Ukraine ranked 144th out of 175 countries on Transparency International's corruption index - the lowest of any European country. The pillaging by Yanukovych and his cronies had left this country tens of billions of dollars in debt. Ukraine's Prosecutor General's office later estimated that, between 2010 and 2014, Ukrainian officials stole a fifth of their country's output each year.

Graft, the lack of transparency and the concentration of power in the hands of a few oligarchs and power holders, were decades in the making. Under the Soviet Union, the institutions that provide an essential check on abuses of power in democracies, such as a robust free press and an impartial judiciary, simply did not exist.

So the Maidan was not just about reversing a cynical political decision or unseating a single kleptocratic government. Instead, it was about dismantling a generations-old system that kept producing rotten decisions, broken institutions, and corrupt leaders - and it was about replacing it with one that was accountable to the Ukrainian people.

Now, if the Maidan of 2013 and 2014 was about claiming your right to a genuinely democratic government, the task before you in 2015 and beyond is implementing the reforms needed to achieve Ukraine's transformation. It is about moving from demanding change to actually making change. This is my second point: you are still living in the revolution, and delivering on its promise will require all the resilience, smarts, and compassion you can muster.

Given the powerful interests that benefited from the corrupt system, achieving a full transformation was always going to be an uphill battle. And that was before Russian troops occupied Crimea, something the Kremlin denied at the time, but has since admitted; and it was before Russia began training, arming, bankrolling, and fighting alongside its separatist proxies in eastern Ukraine, something the Kremlin continues to deny. Suddenly, the Ukrainian people faced a battle on two fronts: combating corruption and overhauling broken institutions on the inside; while simultaneously defending against aggression and destabilization from the outside.

I don't have to tell you the immense strain that these battles have placed upon you. You feel it in the young men and women, including some of your family members and friends, who have volunteered or been drafted into the military - people who could be helping build up their nation, but instead are risking their lives to defend it against Russian aggression. Two Ukrainian soldiers were killed in the last day, and 13 more wounded. You feel it in the conflict's impact on your country's economy - as instability makes it harder for Ukrainian businesses to attract foreign investment, deepens inflation, and depresses families' wages. It is felt in the energy that elected leaders and civil society members are forced to dedicate to responding to the crises generated by the conflict - energy that could have been devoted to improving public services like education and health care. It is felt in the undercurrent of fear in cities like Kharkiv - where citizens have been the victims of multiple bomb attacks, the most lethal of which killed four people, including two teenage boys, at a rally celebrating the first anniversary of Euromaidan.

And the impact is felt most directly by the people living in the conflict zone. According to the UN, at least 6,350 people have been killed in the violence driven by Russia and the separatists - including 625 women and children - and an additional 1,460 people are missing; 15,775 people have been wounded. And an estimated 2 million people have been displaced by this conflict. And the real numbers of killed, missing, wounded, and displaced are likely higher, according to the UN, due to its limited access to areas controlled by the separatists.

Now, it seems the Russian government's cynical calculation in fueling this aggression was that a new Ukrainian government, and newly-empowered Ukrainian civil society, would be so consumed by the military threat to their nation, and so burdened by its destabilizing effects, that they would not be able to focus on carrying out the project of the Maidan. As the reforms stalled - Moscow's thinking went - you, the Ukrainian people, would grow disillusioned with the tremendous sacrifices you were being asked to make for so little progress. And eventually, you would give up and return another pawn of Moscow to power. Blackmail would work. You would trade your rightful sovereignty for greater calm. That was the bet.

But the Kremlin made a very serious miscalculation: it underestimated your resilience and your willingness to unite to help your fellow citizens. And it underestimated your tenacious determination to fix a broken system.

To understand what is meant by Ukrainian resilience, look at the workers at the Avdiivka coking plant - the largest in Europe. Avdiivka produces the fuel used to power steelmaking plants across Ukraine - plants that employ tens of thousands of Ukrainians. If its furnaces are shut off and cool down, they crack and break, wrecking the plant's costly machinery. The plant, as you all know, is near the line of contact, along which Russia and the separatists routinely violate the ceasefire agreed to at Minsk by launching attacks. Because the workers' journey to and from work is so dangerous, some 2,000 workers have taken to sleeping on the grounds of the plant.

Since the conflict began, the Avdiivka plant has been hit by more than 200 rocket and artillery strikes, which have killed at least five of its workers and wounded many more. In a single attack by combined Russian-separatist forces on May 24th, 70 projectiles hit the factory. But the workers managed to keep the plant running, suspending operations only briefly. Some workers manned their posts right through the mortar and rocket attacks. The plant's director told a reporter of the struggle to keep the plant running. He said,"You can't wait until tomorrow. You can't wait until they stop shooting. We wait a few minutes and then we act. To extinguish the fires, plug the gaps, replace power sources. And you keep going until you fix all the holes." That idea - that you cannot wait until they stop shooting to put out the fires and to plug the gaps - has defined the Ukrainian spirit throughout this conflict.

To understand what is meant by Ukrainian solidarity, look at the countless civil society groups that have sprung up to respond to the massive humanitarian crisis produced by Russian aggression.

Yesterday, I visited Vostok SOS - one of the groups assisting the displaced in Kyiv. The group started when a local businessman took in a few families who had been forced to flee the Donbass. Those few families quickly became a few dozen families, and then hundreds of families, whom Vostok SOS has helped obtain access to shelter and vital services like schooling, medical care, and jobs.

One mother told me how her husband and two-year-old child were killed when their home near Debaltseve was shelled during a Russian-separatist offensive in February. She and her five surviving children escaped in a van whose roof and doors had been blasted out by shelling, eventually arriving in Kyiv - in this van. While she and other families I met told heartbreaking accounts of loss, they also spoke of the humbling compassion shown to them by the people of your city. Of people who - seeing their fellow citizens in need - opened their homes, their classrooms, and their hearts - and welcomed them in, plugging the gaps.

The Kremlin also underestimated your resolve to see through the process you started on the Maidan - to build a system that answers to you, the Ukrainian people, rather than to the oligarchs or to Moscow. And it is your unflagging commitment to that process that has been the driving force behind the reforms that you are trying to achieve. A run through some of these efforts shows their genuine promise.

In October 2014, Ukraine held the freest and fairest Rada election in the country's history. This allowed the Ukrainian people to vote into office many new officials - including a number of journalists, human rights defenders, and transparency advocates who had played key roles in the Maidan movement - and who are now helping drive reform efforts from the inside while many of you exert pressure from the outside.

These new members of government - together with civil society - are pushing for greater transparency. This is the first year that every member of the Rada has publicly disclosed his or her income and assets. The anti-corruption committee became the first to live stream its meetings, allowing people to watch its investigations in real-time. The Ministry of Infrastructure and the Ministry of Ecology and Natural Resources have started publishing the contracts, tenders, and resource concessions that they award online - processes that in the past were completely opaque, making it easier to hatch corrupt deals. And the government has approved a Public Broadcasting Law that creates a single, unified national network - which is both publicly funded and independent - and whose supervisory board reserves a majority of its seats for representatives from civil society.

The government has also started to chip away at some of the oligarch's monopolies. Consider the energy sector. On April 9th, the government passed a law aimed at breaking up the massive state energy behemoth, Naftogaz, into separate firms and strengthening Ukraine's national energy regulator. That same month the prosecutor general's office brought lawsuits against key power companies which were given away at rock-bottom prices during the Yanukovych years.

A major reason these reforms have advanced is because of the continuing pressure placed on government by civil society, which has gone from claiming a place in the Maidan to demanding a seat at the policymaking table. The Reanimation Reform Package is one example; made up of more than a hundred advocates, policy experts, and journalists, the group not only keeps a monthly scorecard on whether the government is fulfilling its reform commitments, but also helps come up with concrete proposals for how those commitments can actually be met. Another example is stopfake.org - a website run by volunteer journalists, academics, and fact-checkers that uncovers false news and propaganda in the press - as it did last year when it revealed that a photograph on multiple Russian political sites claiming to show a morgue filled with bodies in Slovyansk was in fact taken five years earlier...in Mexico.

This pressure from civil society has also resulted in less tolerance for corruption. Look at the case of Oleksandr Yershov, who was appointed in April as temporary head of Ukraine's traffic police - a post he used to hold in Kharkiv. On May 19th, the media reported that Yershov owns an unreported three-story villa in Kyiv, as well as a fleet of cars valued at hundreds of thousands of dollars - all on an official income last year of around $1,500 a month. Yershov handed in his resignation within hours of the story breaking. He was the fourth high-ranking police official to resign in recent months due to dogged press reporting.

Now, of course, the reform process is in its early days. For every area of modest progress, there are many in which much more work is needed; and in which entrenched powers are succeeding in fending off change. Far too many of the reforms made on paper are not being carried out in practice. And no one can credibly claim that the colossal problems these reforms aim to fix - the monopolies of the oligarchs, the lack of transparency, the enduring corruption - have been adequately addressed. Public pressure may be forcing some crooked officials from office, but it hasn't yet resulted in them being effectively prosecuted. Investigations into serious crimes such as the violence in the Maidan and in Odesa have been sluggish, opaque, and marred by serious errors - suggesting not only a lack of competence, but also a lack of will to hold the perpetrators accountable.

This brings me to my third and final point, which is how crucial it is that you - the Ukrainian people - stay engaged in the reform process. Because slow as the pace of change may feel, powerful as your foes may feel, and profound as the hardships may be - building a system of new rules will never depend on what your government does, but rather what you make it do, and what you do yourselves.

I know this is easier said than done - especially when you are struggling to feed a family as wages drop and food prices shoot up, or when you are spending sleepless nights in a basement with no electricity because of relentless shelling. And I know that for most people, the daily struggle to live with dignity may feel very similar to the way it did in the past, or perhaps even worse. I can only imagine how disillusioning it must be to have to continue to confront the bureaucrat who asks for a bribe to do his job, or the agency that fails to deliver a basic service, or the politician who breaks yet another campaign promise.

Yet, hard as it is, remember what is at stake - not only for yourselves, but for generations of Ukrainians to come. Remember that the yearning to have a voice - which brought so many Ukrainians out to the Maidan, and resonated with so many millions more - the cry of Hid-nist! Hid-nist! Dignity! Dignity! - is just as powerful now as it was then. Remember that the alternative to forging ahead is accepting a system in which no one expects you to have a say in your country's future. And remember that big changes in institutions, behaviors, and societies always start with the smallest actions of individuals.

Let me give you an example. As many of you know, Kyiv is overhauling its police department. Few institutions have a more abysmal track record. In fact, I would bet that many of you here have had to pay a bribe at one time or another to a police officer in Kyiv. Nor is the problem limited to your city; a government study last year found that only 3 percent of Ukrainians trusted their police.

So the new authorities in Kyiv decided to start from scratch, and put out an appeal for new recruits. For 2,000 positions, more than 33,000 people applied. The competition was rigorous, including in-depth interviews, psychological and ethical exams, and other tests. In the time since, the chosen recruits have spent months training with international experts, including law enforcement officers from the United States. They will earn four times what police officers in Kyiv used to earn - not a lavish wage by any measure, but enough that they cannot claim that they are collecting bribes in order to provide for their families' basic needs.

In Kyiv's old police, there were almost no female officers. In contrast, a quarter of the new recruits are women, as is the director of the police reform effort. One recruit is a young woman named Anastasiya Marchenko. When asked recently by a reporter how she thought women officers would be treated, she said, "In the beginning it will be difficult... Maybe they'll laugh. Maybe they won't take us seriously. But I think it will depend on how we handle ourselves." Asked why she applied, Anastasiya said, "I wanted to do my own small part for these reforms. I wanted to try to change something. It's ordinary people who change things in society."

That is what one of the great moral visionaries in my country's history, U.S. Supreme Court Justice Louis Brandeis, meant when he said, "The most important political office is that of the private citizen." It is private citizens like Anastasiya, who is here with us today, on whom the success of the project that began in the Maidan depends. Citizens like you.

And as you assume that most important political office - the office of citizen - you must continue to demand a government that lives up to your country's noblest principles; to ensure that your leaders and fellow citizens listen to what American President Abraham Lincoln once called the better angels of our nature.

That means that Ukraine is stronger when it listens to those calling on its military to respect international law while defending its people from attacks by combined Russian-separatist forces - even as its enemies ignore those same standards. It means that Ukraine should zealously protect freedom of the press, including for its most outspoken and biased critics - indeed, especially for its most outspoken and biased critics - even as the so-called separatists expel journalists from the territory they control, and even as Russia shutters Tatar media outlets in occupied Crimea. It means that politicians and police across the country should recognize how crucial it is that people be able to march to demand respect for LGBT rights and the rights of other vulnerable groups without fear of being attacked. And it means that the Ukrainian government should do everything in its power to get humanitarian aid to the civilians trapped along the line of contact and those struggling to survive in separatist-controlled areas, as well as to ensure the swift freedom of movement across the line for humanitarian actors.

It is this idea - that the people can use their voice to hold their leaders accountable - that is so threatening to leaders like President Putin, and the autocratic governments they lead. And it is the reason Moscow is working so desperately to sabotage your efforts at reform. Just look at the contrast.

In Ukraine, civil society is the driving force behind the reform agenda. Its leaders are being elected to seats in the Rada and leading key ministries, and playing a central role in crafting public policy. In Russia, the government is doing everything it can - from passing repressive legislation to launching violent attacks - to muzzle civil society. Just a few weeks ago, on May 23rd, the Russian government signed a decree targeting what it called undesirable organizations, which lets the government ban the activities of any NGO seen as undermining "state security," "national defense," or the "constitutional order." Vague and sweeping, this draconian legislation builds on a 2012 law that requires Russian NGOs receiving foreign funding to register as what it calls foreign agents, demonizing these groups among the public. According to an independent watchdog group, Russia has pursued lawsuits against at least nine organizations branded as foreign agents, including some of the country's leading human rights organizations. One group identified as a foreign agent, and targeted for repression under the new law, is Dynasty, an organization that promotes scientific research and education, and supports promising young Russian physicists, biologists, and mathematicians.

It is bitterly ironic that the Russian government - which views international support for NGOs that promote human rights as an unacceptable threat to its security - it is ironic that that same government has no qualms bankrolling, training, and arming separatist movements in multiple neighboring countries, and sending its soldiers across Russia's borders to fight alongside those same fighters. You tell me: which of these is the true foreign agent: Russian NGOs in Russia or Russian soldiers in Ukraine?

In Ukraine, the people and the government have pressed relentlessly for the release of Nadiya Savchenko, the Ukrainian pilot who was captured in June 2014 by separatists on Ukrainian soil, and then smuggled against her will to Russia, where she's been held ever since. In that time, Nadiya has endured relentless interrogations, and even been subjected to solitary confinement for staging a hunger strike. Just yesterday, her detention was extended yet again by Russian courts, until September 30th. Meanwhile, Nadiya's 78-year-old mother, Maria, has traveled the world making the case for Russia to release her. I had the opportunity to meet Maria in New York a few months ago - and as a mother myself - I cannot imagine the pain she must feel. But Maria has not given up - and neither has Nadiya. Maria is here with us today. And today, Maria, we repeat to you that the United States will continue to press tirelessly for Nadiya's release, as well as the release of all Ukrainians who are being held illegally by the so-called separatists and by Russia.

[Applause.]

Now, while you would be hard-pressed to find a person in Ukraine who has not heard about Nadiya's case, the overwhelming majority of Russians have little idea that their soldiers are fighting in eastern Ukraine, where the Russian government continues to deny its involvement.

Compare Ukraine's efforts to secure Nadiya's release with the Russian government's response to the two special operations Russian soldiers captured by the Ukrainian military in Schastya last month. While the Russian soldiers have admitted that they were on a reconnaissance mission when they were caught, Russian officials deny the men are members of the military.

Not content with denying their military service in life, Russia is also denying the families of soldiers killed in combat in Ukraine the respect, closure, and social services that they deserve for their loved ones' sacrifice. Just last week, Russia passed a decree classifying deaths of Russian soldiers in special operations in peacetime a state secret.

And in those homes where the "Cargo 200," as it is called, has arrived - this is the Russian government's euphemism for the remains of soldiers killed while fighting in its covert conflict - in those homes, silence is the rule as families fear that they will lose jobs, benefits, and find themselves charged with treason by the very government their sons and daughters died serving.

In all of these efforts to hide the truth, the Russian government denies its citizens the knowledge of, and a say in, a conflict in another sovereign country that their government has been fueling. That is knowledge that the Russian people deserve to have. Especially given that in a poll last year, two-thirds of Russians opposed sending troops into Ukraine.

In these contrasts, one begins to see why the aspirations of Ukraine's reform movement pose such an existential threat to the Russian model. The choice could not be clearer.

A system where leaders serve the people, versus a system where leaders think the people serve them. A system that trusts and empowers the people, versus a system that fears and represses them. A system of rights, versus a system of favors. A system that builds up independent institutions and checks on power, versus a system that knocks them down.

Let me conclude.

The Ukrainian people are one-of-a-kind, but the situation you find yourselves in is not. People around the world find themselves facing similarly daunting obstacles: corrupt politicians, rotten institutions, powerful oligarchs, and even aggressive neighboring countries intent on meddling in their sovereign affairs. And these people are watching you. They learned from your stand on the Maidan. And they are learning from the struggle that you are waging right now - to build a democracy from the grassroots up.

And all of the autocrats, kleptocrats, oligarchs, and bullying foreign powers out there - they are watching, too. And they are so rooting for you to fail.

But know this: you are not alone. The United States has been with the Ukrainian people since the first brave protesters went out on the Maidan, and since the first little green men showed up in Crimea and the Donbass. We have never left your side. And we are not going to leave your side now - when your hardship is great, your obstacles many, and your path to change long. Because America believes that your struggle has resonance far beyond your sovereign borders. And because we believe that there is no greater cause than the cause of human dignity - no greater call, in fact, than the call of Hid-nist! Hid-nist! Hid-nist!

And if the pressure starts to feel overwhelming, consider this: everyone who has bet against you up until this point has been proven wrong. People who thought you would abandon the Maidan if you were threatened and arrested, or cede your ground when you were beaten by mobs and shot at by snipers. People who thought your spirit could be broken by the occupation of Crimea, or who believed that you would not be willing to fight to defend your territory against foreign attackers. People who thought that the severe hardship inflicted by sustained aggression would wear you down. But no, you have definitely not been broken.

That tenacity - that willingness to fight for your voice, whether against internal oppressors or outside, would-be occupiers - is one of the proudest parts of Ukraine's national heritage. It is in your DNA.

It is the legacy of the Ukrainian farmers, shopkeepers, and school principals who risked their lives by violating the central government's orders to hand over their stocks of grain during the Holodomor, choosing to share it instead with hungry neighbors. And it is the legacy of the great Ukrainian dissident poet, Vasyl Stus. His poems were banned by the authorities, his books were methodically tracked down and destroyed, and he spent 23 of his 47 short years in prisons and labor camps - before ultimately dying while on hunger strike in a political prisoner camp in the Urals. Yet throughout his life, Stus refused to be silent, continuing to write and continuing to speak out against the injustices he saw around him, no matter the consequences. And his words are immortal. Here is part of a poem he wrote:

You may still be bleeding from pain

you are still torn to pieces

yet you are strong and defiant

you are standing tall for freedom.

Ukraine, you may still be bleeding from pain. An aggressive neighbor may be trying to tear your nation to pieces. Yet you - from committed volunteers like Anastasiya Marchenko to brave fighters like Nadiya Savchenko; from the humanitarian volunteers in Vostok SOS, to factory workers in the Avdiivka plant - you are strong and defiant. You, Ukraine, are standing tall for your freedom. And if you stand tall together - no kleptocrat, no oligarch, and no foreign power can stop you.

Thank you.

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