#2
Turmoil lessons warn of devastating effect of society split for Russia - Putin

SOCHI, September 1. /TASS/. Russia's history has shown that splits are perilous for the country, and only the nation's unity and public consent can lead it to success, Russian President Vladimir Putin said on Tuesday, addressing students of the Sirius education centre for gifted children.

"Yes, the national history had also tragic pages. The lessons of turmoils, revolutions, the civil war warn of the perilous effect of any splits to Russia," he said. According to the president, these lessons of history show that "only the people's unity and public consent can lead the state to success, ensure its independence and help it repel any powerful and perfidious enemy." "When the native land needed defence, the entire nation was rising. Where the people took their gigantic spiritual power, self-sacrifice readiness? It's all from a sincere, heartfelt love for their country," Putin said. He said that these feelings of patriotism "are passed in the country from generation to generation."

Strong positions of domestic science ensure breakthroughs in many industries

Russian President Vladimir Putin attributes the latest breakthroughs in many industries to strong positions of the domestic fundamental science.

"Breakthroughs in many industries are owed largely to the strong positions of our fundamental science," Putin said at the Sirius centre. "Teams of mathematicians and physicists generated new ideas and made the most complicated computations. At first sight some things seemed very far-fetched and having nothing to do with real life and of little practical value. However, later they brought about revolutionary technological changes and breakthroughs."

He recalled that the success of the nuclear missile project came as a result of achievements by Mstislav Keldysh, Igor Kurchatov and Sergey Korolyov.

"Their remarkable research and ideas were eventually connected with the solution of practical tasks. They had the power to foresee, to identify the most important things, and to feel new opportunities, sometimes at the junction of different sciences," Putin said.

As an example Putin mentioned Korolyov's achievements in rocket engineering and Zhores Alfyorov's achievements in the modern mobile communication technologies and communications.

Importance of "clear moral criteria" in technological progress

Russian President Vladimir Putin believes it is important to adhere to "clear moral criteria" in technological progress.

"Only a society that has clear moral benchmarks and a firm spiritual position and groundwork is capable of harmonious technological progress. Only this type of society can ensure the achievements of science benefit humanity, and not harm it," Putin said.

Putin said the adults needed the younger generation's support and trust very often, including situations when the issues facing the nation were at stake today.

"We need your support and your trust. It is very important to understand each other, in particular, when it comes to matters concerning the country's present day and the future. It is easier to handle many difficulties and problems together, including the situations of moral choice, which has to be made now and then," Putin said.

Although "life has changed cardinally," the true values are forever, he remarked.

"These values are honesty, patriotism, science, love, kindness, courage, dignity, compassion, responsibility and the sense of duty. I am certain that all this is important to you," Putin told.

Russian President called on the rising generation to believe in themselves and assured them of constant care and support.

Speaking to children at the Sirius educational centre, the president noted that any victory is accompanied by "lots of doubts, mistakes and failure."

"It is only natural. But it is vital not to step back, not to lose heart and never give up," Putin underscored. "A key factor of success is the faith in oneself, in one's forces."

"Each of you should find yourself, your place in life. Only in this case you will be able to be a cohesive and solidary team, the best one in the world. I am confident it will be that way," he said. He stressed that the younger generation would always be able to rely on their parents, teachers, tutors and the motherland. "We will be by your side, we will help you, admire your successes, we will work for you and with you - all for the sake of Russia. I believe in you, in success of each of you. You can, you ought and you will be winners!," Putin stressed.

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 #3
www.rt.com
September 1, 2015
Russia-China relations at 'historic peak' despite 'illegitimate Western restrictions' - Putin

With all the differences between Russia and China, the countries face common development targets, such as changing the structure of the economy to favor high-technology sectors, Vladimir Putin said in an interview to Chinese and Russian media.

The Russian president spoke to TASS and Xinhua agencies as he prepared for a visit to China that kicks off on September 2.

A key point in Putin's Chinese visit is taking part in the celebration of the 70th anniversary of the end of World War II.

"Our two countries were allies in the fight against Nazism and Japanese militarism and bore the brunt of the aggression, and they not only withstood this battle, but won it, liberating enslaved peoples and bringing peace to the planet," Putin said.

He paid special notice to attempts to falsify the history of World War II.

"Efforts by certain countries to glorify and exonerate war criminals and their henchmen are an outrageous flouting of the Nuremberg and Tokyo trials," he said, stressing that Russia and China maintain similar views on such causes.

It is a common goal for the two countries to prevent the revival and spread of Nazism and militarism, Putin said.

The president noted that the international situation is "growing increasingly unpredictable."

"The creation of a new polycentric model is accompanied by growing regional and global instability," Putin said, adding that the main reason for that is the "deficit of attempts to reach compromise," with the "persistent desire" of certain states to "retain their dominance in global affairs at any cost," actually "denouncing the principle of sovereign equality" of all states laid down in the UN Charter.

In this regard Russian-Chinese relations are developing rapidly and have probably "reached a peak in their entire history," said Putin, mentioning "deep respect" and "consideration for each other's key interests" among the key factors of this sincere friendship.

Moscow and Beijing work together in all international organizations, be it G20, BRICS or SCO, Putin stressed.

"Expansion of the Russian-Chinese partnership meets the interests and strategic goals of our two countries," he said, specifically pointing to the Joint Declaration on cooperation in coordinating development of the Eurasian Economic Union and the Silk Road Economic Belt.

With trade turnover already reaching about $88.4 billion, China is Russia's key economic partner and the "illegitimate restrictions imposed by certain Western countries against Russia" have no negative impact on Russian-Chinese economic cooperation, Putin insists.

"Our countries are consistently moving towards the creation of a strategic energy alliance," he said. Russia-China deals in gas supply and nuclear power generation make energy the key to closer cooperation between the two countries.

Russia and China also have stable contacts in developing high-speed railway transport, aerospace and space rocket industries.

"Both Moscow and Beijing are set to intensify our financial partnership, including mutual settlements in national currencies," Putin said.

Putin, who has visited China 13 times since he first was elected president in 2000, acknowledged that he was lucky to watch China 'on the move' over a number of years, as the country has been "growing more economically powerful, achieving new targets in building a modern infrastructure and in social development."

"The development road China has covered over these years is a path of successful economic reform and wise social policy. This experience is of great value for us," said Putin, adding that Russia and China have very similar industrial priorities and are sharing common development targets.

"There is a lot we can achieve on this basis. And I am sure we will."

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 #4
The National Interest
September 1, 2015
Why Waiting for Russia to Collapse Is a Terrible Ukraine Policy
It seems dangerous to base policy towards Russia on assumptions of a forthcoming economic disaster.
By Nikolas K. Gvosdev
Nikolas Gvosdev is a contributing editor at The National Interest and co-author of Russian Foreign Policy: Vectors, Sectors and Interests (CQ Press, 2013). The views expressed here are his own.

Two months ago, a number of senior U.S. national-security officials insisted that the Russian Federation has reemerged as the premier existential threat to American interests. Today, as energy prices continue to tumble and China's economy falters, a new narrative has emerged: the pending collapse of Russia itself, or at least the prospects that the government of Vladimir Putin is entering into its last days. The continuous oscillation in views-Russia as a powerful threat, Russia as an imploding basket case-does not permit a cool, rational assessment of Russia's actual strengths and weaknesses.

Let's first start with the economic indicators. Russia's economy is contracting, its currency is losing value vis-à-vis the dollar and the euro, and its industrial output is showing signs of decline. Because of the conflict in Ukraine, Western sanctions remain in place against Russia. The second round of collapsing energy prices further decreases the revenues available to the Kremlin-although the devaluation of the currency has helped to partially compensate for this since energy exports are priced in and generally paid for in dollars and euros. And Putin's lifeline against Western sanctions-more than $100 billion in deals, credits and loans with China-has been compromised by China's own economic woes. Inflation is eating away at the savings and purchasing power of Russian citizens. Between devaluation, Western sanctions and Russian countersanctions, imports have become either more expensive or have disappeared altogether, while domestic substitutes have not generated sufficient replacements.

These basic facts are not in dispute by most people ranging from Kremlin ministers to vociferous Putin opponents. What these developments may portend, however, is open to interpretation.

In one narrative, the declining economy will galvanize widespread public opposition to the Putin government, as hundreds of thousands of Russians are set to fall below the poverty line. Declining commodity prices make it much more difficult for the Kremlin to be able to distribute financial support to a number of the economically strapped regions of Russia, depriving the government of one of its more effective tools for managing local unrest. The cratering economy will also negatively impact the fortunes and livelihoods of the Russian elite, particularly as sanctions cut into their ability to maintain access to Western sources of goods and services. The Kremlin will come under tremendous pressure to reverse its foreign-policy choices-starting with supporting separatists in Ukraine and aiding the regime of Bashar al-Assad in Syria-in order to shore up its economic base. Spending on military rejuvenation will have to end. Moreover, some have even begun to speculate about a combination of mass public protests and elite maneuverings coalescing in Putin's very removal as president.

The seductiveness of such a narrative to Western governments is apparent. For the last year, American and European leaders have solemnly warned about the dangers posed by Putin to Euro-Atlantic security, yet the rhetoric has still not been completely matched by decisive action. There have been some rotations of forces and equipment to the eastern frontiers of the NATO alliance, but no permanent pivot back to Europe, and in fact, the United States continues to withdraw personnel. Many European governments have still not increased defense spending while some continue to cut such expenditures. Ukraine has received only a fraction of the aid it needs and almost none of the military assistance it has requested to push back the separatists. A narrative that a collapsing Russian economy, however, is going to deliver Moscow's complete reversal on Ukraine and may even lead to regime change in the Kremlin itself-and in a matter of months-takes Western governments off the hook. The West need not "do" anything more, but simply wait for the Russian collapse, in a repeat of what happened to the Soviet Union thirty years ago.

It seems quite dangerous, however, to base policy towards Russia on assumptions of a forthcoming economic disaster. The Russian economy is slated to enter a period of extreme austerity, but even with the declines, there is nothing that resembles the catastrophe of the 1990s, with GDP being nearly halved. Declines are still predicted in the single digits-indicating future hardships, not outright collapse. It is also not clear that popular unhappiness will translate into sustained anti-government unrest. Here, the failure of the West to develop a rapid, comprehensive Ukrainian rescue package plays a critical role. Russians are well aware of the tremendous economic hardships Ukraine is facing in the post-Maidan period and that Ukraine has not been given any significant help to put it on a path to prosperity, which may temper enthusiasm for any sort of revolutionary activity. Russian media has also consistently covered the prolonged economic crisis in Greece and other EU member-states, sending a very strong signal that not only would there be no real reward for Russia if Putin were to be removed, but that Russia could face even worse economic conditions than the current austerity they must undergo. Given the conservative and risk-averse nature of Russian political culture, grumbling and protests about current conditions may not in fact translate into sustained action for political change.

Nor does it appear that Putin is prepared to let an economic crisis go to waste. Indeed, the silver lining is that he, like President Xi Jinping in China, can use economic failure as a way to push for members of the elite to hand in their resignations and enhance his own authority. As we have seen with the removal of a close Putin ally and partner, Vladimir Yakunin, from his position as head of Russian Railways, poor economic performance may indeed give Putin the ability to begin implementing a plan of systematic replacement of cadres to bring in younger talent. At the same time, Yakunin's expected appointment to the Federation Council suggests the provision of "golden parachutes" where those who are prepared to cooperate in their removal are given guarantees of retaining some status (as well as immunity), which could help to mitigate possible opposition.

Yes, the economic crisis does affect Putin's ambitious military spending plans-with further postponements now all but guaranteed. Yet this should not cause any premature rejoicing. Putin has sufficient wherewithal in place to continue his activities and to maintain what Michael Kofman has termed "the power to annoy." And even if Russia moves into terminal decline, it will still be able to cause a good deal of damage, if it chooses, for the foreseeable future.

The "Russia problem" is not going to take care of itself. There are serious strategies put on the table for both engagement and confrontation with Moscow-but both require time, resources and commitment. The search for a low-cost, consequence-free approach to Russia-which has been on display ever since the Ukraine crisis flared last year-does not find its answer in gambling on a Russian economic collapse.

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 #5
The Unz Review
www.unz.com
August 31, 2015
One Day in a BS-Life
By Anatoly Karlin
[Graphics and links here http://www.unz.com/akarlin/one-day-in-a-bs-life/]

For those who missed this affair, the aptly urled Russian website bs-life.ru (Business Life) published a secret Kremlin directive to compensate the relatives of 2,000 Russian military KIA and 3,200 WIA .

Alarm bells should have rung from the start.

Start with the website. The design runs on a free, mass-use Joomla magazine template. I daresay most functional one-author blogs look nicer. WHOIS lists no contacts, the owner being identified as a "private person." Until it became "famous" in the past few days, it did not register in Alexa's top 100,000 global websites (for comparison, Unz.com is 53,764 on the list, and Russia Insider, launched less than a year ago, is at 27,585). That a site built in one day for $10 sometime in 2011 would be the one to acquire a leak of such seminal importance seems unlikely to say the least.

The figures also don't pass the face validity test. Both UAF and NAF casualties are estimated around 2,500 to date, though they are likely substantial underestimates. Even so this would imply that the actual Russian Army accounted for a substantal portion, perhaps the majority, of the Novorossiyan military deaths. Considering its massive preponderance in training and equipment over Ukraine such ratios would be implausible even if it was doing the regular fighting. In actuality, the only time that we can be reasonably sure it got involved was in the Ilovaysk battle, in which the Ukrainian forces suffered a crushing defeat. The 2:3 ratio of killed to wounded is also utterly implausible for any modern army. That's the kind of ratios you had in pre-antibiotics wars. In WW2, the ratio was 1:3. In modern wars, it's at least 1:5.

These are some basic investigative and logical questions that any journalist writing about this should have been asking.

In their defense, though, Novy Region, the Ukrainian news site that first republished the story, is engaged in a propaganda war against Russia, as is 90%+ of the Ukrainian media. That is understandable.

And in their defense, neither Paul Goble nor Paul Roderick Gregory, the two Anglosphere pundits who did most to "break" this story in the West, can be considered legitimate journalists. Both are glorified bloggers, much like myself.

Goble's primary schtick consists in recycling stories from marginal anti-Kremlin commentators and "laundering" them for mass citation in the Western MSM. This is a role for which he is eminently qualified by his long years of service in the CIA, RFERL, the State Department, and various democracy promoting NGOs (quadruple-sic!). As I wrote in an expose on him five years ago: "If one fine day some random Tatar blogger on LiveJournal decides to restore the Qasim Khanate, we'll certainly hear about it on his blog... and guess what, we do!" His piece "uncovering" Russia's military casualties for Euromaidan Press, his latest gig, is just his latest and unusually successful laundry day.

I don't really know much about Gregory, apart from him being an economist who loves the 1%, blogs for Forbes, and really, really dislikes Putin and Russia (including up to and beyond the point of conspiracy theories). I suspect he got the story from Paul Goble since his post was published 11 hours after Goble's and it is unlikely that they were both monitoring Novy Region, let alone BS-Life.

The real question is how come a whole range of Western media outlets reprinted these claims more or less unquestioningly, including: NBC, The Times, The Independent, IB Times.

Incidentally, The Independent is (was?) considered to be a pro-Russian paper, on account of it being owned by a Russian oligarch (as if Russian oligarchs ever cared about anything beyond their wallets). It's coverage was singularly incompetent (see bolded), not a surprise perhaps considering the author also writes for VICE and BuzzFeed. And for some reason the Indy expects people to pay for its wisdom.

Whilst Russia continues to deny that its troops are fighting in the ongoing Ukrainian conflict, a respected news site in Russia seemingly inadvertently published secret figures that detail deaths and causalities of forces on the ground.

In fairness, some journalists were properly skeptical of this from the start, such as Leonid Bershidsky, who is likely the best (i.e. least ideological, most fact based) anti-Putin journalist writing at a high profile venue today.

A couple days later, this rumor was taken apart by RT, by revealing the elementary fact that there was no such publication as Business Life. Then the whole affair was comprehensively debunked by Ruslan Leviev (in Russian and translation), a liberal Russian journalist who has actively hunted for traces of Russian military involvement in Donbass. He uncovered that the site was a simple phone number phishing website whose owner went so far as to use stolen identities to keep the scam going.

And some Western journalists such as the AFP's Dmitry Zaks were very, very sad to see the truth come out.

I said they needn't worry too much. As is all too typical in this conflict, it is the sensationalist, headlines-generating news items that make the biggest impact. Reddit is probably the single biggest political discussion forum in the West, where upvotes are directly linked to visibility.

Let's do a quick quantification using the number of upvotes at /r/WorldNews as a proxy:

BS    +    Reality    +
Paul Goble    1129    RT    2
Forbes    374    Ruslan Leviev    0
NBC    219
Independent    28
TOTAL    1750    TOTAL    2

What can one say?

Well, first... Kremlin bots! Olgino trolls! Where the hell are you?!?

Second - the rather mundane observation the vast majority of people who only read the articles on /r/WorldNews - without delving into the comments, which at least in this case strip away the BS quite effectively - would come away reinforced in their impression that Russia is directly involved militarily in Ukraine on a large scale, is getting its ass kicked, and that popular opinion will turn against Putin sooner or later at which point the usual color revolution textbook would be pulled out. This is not an isolated case. It's just the banal reality of information war. The people who "ordered" this story and then laundered it into the MSM don't care that it was quickly exposed and that it thus has a short shelf life. It still dominated the Ukraine headlines for a couple of days, so it's mission accomplished so far as they're concerned. Only a tiny percentage will maintain interest long enough to see it debunked. So far as the rest are concerned the only effect is to reinforce the dominant narrative and the audience for that is primarily Western.

This is all rather obvious, of course, but even - especially - obvious truths still have to be repeated every so often.

 #6
Moscow Won't Succeed in Using Ukrainian Radicals to Destabilize Kyiv, Portnikov Says
Paul Goble

taunton, September 1 - Having failed to find the number of backers for the Russian world in Ukraine it expected, Moscow in the opinion of many in Kyiv is seeking to use Ukrainian radicals in the pursuit of its goal of destabilizing Kyiv to the point that Ukraine will fall back into Russia's orbit, according to Vitaly Portnikov.

But that calculation is based on a fundamental misperception of Ukraine and Ukrainian politics after the Maidan, the Ukrainian commentator says, a misreading that ascribes far too much importance to the radicals who helped make the earlier revolution but have been eclipsed by the more rational leaders who have succeeded them.

Commenting on the violent confrontation yesterday in front of the Verkhovna Rada, the Ukrainian commentator points out, "informed observers in Kyiv are speaking about the beginning of a Russian operation called 'Golden Fall,'" one that will pursue the same goals as "the Russian spring" but with different cadres (grani.ru/opinion/portnikov/m.243973.html).

"In the Lubyanka, they have come to understand that there are too few people in Ukraine ready to be backers of this Putin project." Those who say they are for it are hardly willing to fight for it let alone di. Instead, and "according to the old Russian tradition, they lie on their stoves and wait for others to save them."

Consequently, in the view of many, Moscow is quite reasonably from its point of view now placing its bets "on the Ukrainian world," some of whose radical members can be counted on to "rise against 'the criminal junta' and make it easier for Vladimir Vladimirovich to gain the return of insubordinate Ukraine," Portnikov argues.

"Social risings, meetings against the authorities, excesses which claim lives, all this will be 'the golden fall' of the Russian return to Ukraine. All this" if it works "would allow the Chekists and also their comrades in the Russian Presidential Administration" to claim victory over Ukraine.

However, Portnikov says, "this isn't 'the Golden Fall'" Moscow hopes for or that some Ukrainians fear. Instead, it is "evidence of the most profound lack of understanding by Ukrainian politicians of the psychology of people whom they lead" as well as an equally profound lack of understanding in Moscow of where Ukraine now is.

Oleg Tyagnibok, the leader of Svoboda, did not play the role after the Maidan that some of his followers expected.  He didn't prevent the Russian occupation of Crimea, and "therefore after the Maidan the process of the disappearance of Svoboda from Ukrainian politics began." His people didn't get into the Verkhovna Rada, and he is losing positions in western Ukraine.

In order to try to save the situation, Tyagnibok has been trying "to reestablish a miracle- party out of the ruins," and for him, "the voting on changes in the Constitution is a real gift," because it allows him to strike a role and present himself on the political stage as someone standing up against "the treason of the authorities."

"But Tyaginbok isn't taking one thing into consideration," Portnikov continues. In his rush to see treason under every bush, "he believes those who say that changes in the Constitution will bury Ukraine," and thus, "he doesn't understand why the National Guard is defending the traitors who must be blown up so they will not be able to vote."

Like some other Ukrainian politicians, the commentator says, the Svoboda leader has been playing at politics over the last two years despite the fact that he is not in a theater as he appears to imagine but in the real world where people die and where "'the Golden Fall' could turn out to be just as horrific as 'the Russian spring.'"

"It is necessary to stop playing," but he and some others "will not stop. They simply are not able to do otherwise."  Not surprisingly, Moscow will do what it can to encourage them and exploit their actions for its own purpose. But hopefully, Portnikov concludes, the Ukrainian people will see through all this and not vote for those who are merely acting a part.

In another comment on yesterday's events, this one for Espreso.tv, Portnikov says that "what we are observing in Ukraine unfortunately is nothing new." Instead, it is a feature of developments "after all successful risings" because "their more radical participants are never satisfied with the result" (ru.espreso.tv/article/2015/08/31/gosudarstvo_bunta).

Such radicals "always suspect the more moderate part of society of betraying national interests. They are never in a position to realistically evaluate the potential of their own country and its role in the system of international relations ... [and] they are always ready to kill their own" in pursuit of their radical goals.

He cites the examples of Ireland after it gained independence and of Israel, and he points out that "radical politicians always have it easier than do their supporters. For the politician radicalism is a career. For their supporters, it is a faith. And each dead supporter becomes for the radical politician simply another step toward power."

What is "most important," Portnikov says, "is that the ambitions and populism of some and the naïve faith of others not lead to irreparable losses - death, war, and the destruction of the state." Given what Ukraine is up against and its willingness to exploit anything it can for its purposes, those are real dangers: those who hear the calls of the radicals should remember that.

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 #7
http://gordonhahn.com
August 31, 2015
Ukraine's Neo-Fascist 'Tea Party' Throws Grenades, Shoots at Police, Attempts Storm of Rada
By Gordon M. Hahn

As I have noted numerous times, both the West and Russia deserve blame for the making of the Ukrainian crisis and civil war. But revolutions - no matter who instigates or encourages them - are messy things; once begun no one knows where they might end, especially when neo-fascists or other radical types play a prominent role.

Thus, the passage in a first of three readings and votes of a likely meaningless 'decentralization' amendment along with more important ones to the Ukrainian constitution today ended as politics often do in Maidan Ukraine since the Western-approved illegal power seizure in February 2014. The neo-fascists of the deceptively named Svoboda (Freedom) Party, led by their anti-Semitic and Russophobe chairman Oleh Tyahnibok, attempted to storm the hall of Ukraine's parliament, the Supreme Rada. Svoboda. The news from Kiev is even worse, since the more 'moderate' Self-Help party has defended Svoboda's action.

The clash erupted between police and the Svoboda members as the latter demonstrated and then attempted to storm the Rada. Video and photos show Svoboda leader Tyahnibok and his deputy Yurii Sirotyuk acting aggressively towards riot police (see photo above) and then Sirotyuk beating a path to the building using a rubber truncheon on police (http://vesti-ukr.com/strana/112928-tolpu-radikalov-pod-radoj-prokachivali-tjagnibok-i-sirotjuk).

Those paying attention to the Ukrainian crisis - a small group albeit - might recall US Deputy Secretary of State warmly greeting Tyahnibok and U.S. Senator John McCain appearing on stage with him on ther Maidan in the run-up to the illegal Maidan seizure of power.

At any rate, Tyahnibok's 'freedom' fighters then tossed a grenade and shot firearms at police and shots soon rang out. The grenade explosion caused one policeman to lose part of his foot, and fifteen police were reported wounded and injured as a result of the battle (http://vesti-ukr.com/kiev/112907-iz-za-vzryva-granaty-siloviku-otorvalo-nogu# and http://vesti-ukr.com/kiev/112907-iz-za-vzryva-granaty-siloviku-otorvalo-nogu#). In evening MVD chief Arsenii Avakov reported there were 125 wounded "siloviki", including one in a coma (www.pravda.com.ua/rus/news/2015/08/31/7079685/), and held Tyahnibok responsible. However, as with the history of impunity for Dmitro Yarosh's Right Sector neo-fascist violence, Tyahnibok remains free.  The video of the grenade explosion can be viewed here: http://www.youtube.com/watch?v=0ifHrs2Wxto. Svoboda was 'demonstrating' against the Rada's passage of a series of constitutional amendments that ostensibly gives the Donbass regions Donetsk and Luhansk power-sharing with, or autonomy from the central government in Kiev.

This neo-fascist attack comes in the wake of a year and a half of neo-fascist violence led by other groups such as the notorious and increasingly powerful Right Sector, the Radical Party (with a significant parliamentary group), Social-National Assembly, Revansh, Black Committee, etc documented on this site in numerous articles and posts.

Right Sector apparently played a separate game on this day, setting up a road block on a Kiev street leading to parliament in a failed attempt to prevent deputies from getting to the Rada to vote (http://gordonhahn.com/2015/06/20/dealing-with-ukraines-neo-fascists-or-not/). Since the violence, Right Sector and its leader have come out in full support for Tyahnibok and Svoboda (http://pravyysektor.info/news/news/695/dmitro-arosh-pro-krajnoschi-pid-chas-vulichnoyi-sutichki-bilya-vr.html).

Perhaps even more disturbing is the carefully implied support expressed by the more 'moderate' Ukrainian nationalist party, Self-Help, headed by mayor of Lviv (Lvov) Andriy Sadoviy, which I, it seems correctly, included recently among the ultra-nationalist parties in the Rada. In response to the violence, Self-Help's Rada faction leader Oleg Berezyuk attempted to cover up for Tyahnibok and Svoboda using democratic rhetoric and the by now old saw in Maidan Ukraine that Putin was behind the 'provocation': "The majority of people who came to the Supreme Rada are those who are concerned for the country, since the Constitution is the property of the people and not of politicians, the parliament or the president. But among the people were also provocateurs. On whose order they worked is a rhetorical question. But it is the responsibility of law enforcement bodies to warn of such events. The SBU and MVD should have warned about this already on the eve (of the event), exposing the provocateurs." "The tragic events at the Supreme Rada is the result of the crisis of executive power and criminal negligence of the law enforcement bodies." Self-Help then called for the resignation of the SBU's and MVD's leadership (http://vesti-ukr.com/strana/112940-avakov-tjagnibok-otvetit-za-bojnju-pod-radoj). Not a word of criticism of Svoboda's actions came from the Self-Help leadership.

The explanation for the Self-Help critique's focus on the executive branch, law enforcement, an implied Russian-organized provocation ("On whose order they worked is a rhetorical question"), is that it agrees with Ukraine's ultra-nationalist and neo-fascist parties that repeatedly issue the very same criticisms. Moreover, Self-Help opposed the constitutional amendments, in particular that on decentralization, and promptly ejected five members from its group of Rada deputies who voted for them along with the majority (http://vesti-ukr.com/strana/112920-gopko-vygnali-iz-samopomichi).

The constitutional amendments that ostensibly give the Donbass regions Donetsk and Luhansk power-sharing with, or autonomy from the central government in Kiev in fact do nothing of the kind. One of them alone simply allows for said. For decentralization to be actually implemented, the Rada must pass a special law. The only amendment among those approved today that is related to the 'decentralization' merely states that the Donbass regions will be given a share of power on the basis of a special law. If that law is never passed, Donetsk and Luhansk will not have autonomy of any sort.

Moreover, any autonomy will be extremely limited, given that the constitutional amendments also included clauses establishing the office of an appointed prefect in place of governors. The new prefects will be appointed and strictly subordinated to Ukraine's president - an executive vertical of power of the kind Putin has tried to build in Russia at the expense of federalism. Similarly, as Putin once had the power to do, the amendments give the Ukrainian president the power to disband regional legislative assemblies under certain circumstances. The fact is, however, that Ukrainian President Petr Poroshenko has held out the possibility of significant markups to the draft amendments after the first reading. The demonstrations scuttle any hope that the marked up amendments will be changed in the direction of further decentralization/autonomy and not less. Indeed, in a nationwide television address in the evening Poroshenko seemed to give in to the neo-fascists' pressure, noting that the final decision on decentralization would depend on the situation in Donbass (www.pravda.com.ua/rus/news/2015/08/31/7079679/).

The amendments are crucial if there is any hope at all of bridging the gap between Kiev and the Donbass rebels. One of the central clauses of the Minsk 2 agreement signed on 12 February 2015 required the Maidan regime to amend the constitution to provide for a decentralization of power in the Donbass. The Donbass rebel regimes (DNR and LNR) are so suspicious of Kiev's willingness to actually carry out a decentralization of power and provide the Donbass with some degree of autonomy has prompted them to schedule their own elections in the region rather than allow Kiev-organized elections to proceed this autumn as planned for the rest of the country. On the other hand, Kiev might be additionally reluctant to decentralize given that should Donbass receive special powers at the local level, other regions may demand the same. Transcarpathian areas with their large Hungarian populations might seek autonomy. In addition, many of Ukraine's regions have their own unique characteristics and often an independent self-identity that might prompt many non-ethnic areas to  pursue such autonomy. Those with large minority, including ethnic Russian minority populations, might be expected to lead the way. Unstable Odessa would be a prime candidate, among others.

Regardless of the complications, failure to bridge the gap between Kiev and Donbass on the decentralization issue is likely to leave the Minsk 2 ceasefire agreement a dead letter and make renewal of heavy fighting in Donbass almost inevitable at some point. This is part of the calculus in the ultra-nationalist and neo-fascist parties in opposing the amendments. They constitute the core of Kiev's war party intent on taking back Donbass by force.

Conclusion

According to ultra-nationalist Ukrainian-American writer Alexander Motyl, Svoboda is Ukraine's 'Tea Party'. This means that the U.S. capitol should be expecting a crowd of thousands of Tea Party members attempting to storm it throwing grenades and shooting firearms. In reality, Svoboda and Ukraine's other neo-fascist parties have nothing in common with the constitutionalist, free market, and often libertarian Tea Party here in the U.S. Contrary to the propaganda, Tea Party demonstrations are always peaceful and dominated by rational discussion about ways to restore American values, equality before the law, limited government, and the U.S. constitution. Svoboda and like-minded Ukrainian parties and groups do nothing of the kind. Svoboda used force today and did so in league with Right Sector - including the infamous sniper shootings of 20 February 2014 - to overthrow the legally-elected, if deeply flawed government of Viktor Yanukovich.

The deep and disturbing irony is that most Americans and indeed most Tea Party members supported the neo-fascist-led revolt and will continue to support the Maidan regime in Kiev, including eventually the supply of U.S. weapons. They ignore the fact that the Maidan regime came to power by way of an illegal and violent seizure of power. They ignore the regime's creation of parastatal volunteer battalions filled with neo-fascist elements in order to put down a still non-violent and negotiable Donbass revolt. They ignore the war crimes committed by these groups in Donbass, and the pogroms and other violent attacks by neo-fascists committed elsewhere in Ukraine, such as in Odessa on 2 May 2014 or more recently in Mukachevo on 11 July 2015. As a direct result of such illegalities and unconstitutional actions - apparently supported in Washington and Brussels - thousands have been killed, and neo-fascists continue to sew chaos across Ukraine and in the heart of ancient Kiev.

But American conservatives - and I count myself among them- listen very attentively to Motyl on Svoboda's supposedly benign conservatism, to Rush Limbaugh's claim that 'there are no fascists in Ukraine,' and Glenn Beck's claims that Putin is orchestrating neo-fascism in Ukraine and across Europe.

What travails America's degraded democracy and post-Cold War hubris have wrought.

~~~~~~~~~~~~~~~~~~~

Gordon M. Hahn is an Analyst and Advisory Board Member of the Geostrategic Forecasting Corporation, Chicago, Illinois; Senior Researcher, Center for Terrorism and Intelligence Studies (CETIS), Akribis Group, San Jose, California Analyst/Consultant, Russia Other Points of View - Russia Media Watch; and Senior Researcher and Adjunct Professor, MonTREP, Monterey, California. Dr Hahn is author of three well-received books, Russia's Revolution From Above (Transaction, 2002), Russia's Islamic Threat (Yale University Press, 2007), which was named an outstanding title of 2007 by Choice magazine, and The 'Caucasus Emirate' Mujahedin: Global Jihadism in Russia's North Caucasus and Beyond (McFarland Publishers, 2014). He also has authored hundreds of articles in scholarly journals and other publications on Russian, Eurasian and international politics and wrote, edited and published the Islam, Islamism, and Politics in Eurasia Report at CSIS from 2010-2013. Dr. Hahn has been a Senior Associate at the Center for Strategic and International Studies (2011-2013) and a Visiting Scholar at both the Hoover Institution and the Kennan Institute.

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 #8
Reuters
September 1, 2015
Big guns in east Ukraine fall silent, two more die from wounds in Kiev protests

A fragile truce between Ukrainian government forces and pro-Russian separatists appeared to be holding on Tuesday as both sides made a renewed effort to silence their guns and make the much-abused ceasefire work.

Sporadic shelling and shooting, which each side has blamed on the other, had ensured a steadily mounting death toll despite the ceasefire called as part of a peace plan worked out in Minsk, Belarus, in February.

Government and separatist representatives agreed last week to strive to end all violations from Tuesday.

A Kiev military spokesman said first signs were that parties to the Minsk deal were adhering to the call for a more effective truce to mark the start of a new school year.

"As of 12 p.m. there were no reports of violations by the illegal armed groups. Now the situation is calm," the spokesman, Oleksander Motuzyanyk, said.

No soldiers had been killed or wounded over the past 24 hours, he said.

However, two more guardsman have died from wounds sustained in violent protests outside Ukraine's parliament, the national guard said.

The Minsk agreement, brokered by the leaders of Ukraine, Russia, Germany and France, is regarded as the bedrock of international efforts to end the conflict in Ukraine's eastern regions. More than 6,500 people have been killed since a separatist rebellion erupted there in April 2014.

But violent nationalist-led protests outside parliament on Monday and political opposition inside to reforms indicate that President Petro Poroshenko may struggle to win broad support for the Minsk deal.

Several explosive devices, including smoke bombs and one grenade, were thrown from the crowd at the parliament during a rowdy debate on constitutional amendments that would give greater self-governance to rebel-held areas in the east.

One guardsman was reported on Monday as having been killed in the unrest and nearly 90 wounded.

Police detained 18 people, including a person who had thrown a grenade. Police say he is the member of nationalist Svoboda political party.

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 #9
Moscow aware of Ukraine massing heavy weaponry on dividing line in Donbas

MOSCOW. Sept 1 (Interfax) - The Kyiv military have been massing weapons with a caliber of over 100 millimeters along the dividing line in Donbas, Moscow says.

"The Russian side at the Joint Center for Control and Coordination (JCCC) has informed the OSCE SMM (Organization for Security and Co-operation in Europe Special Monitoring Mission) staff about Kyiv massing weapons with a caliber over 100 millimeters on the dividing line between the sides," a source in the Russian Foreign Ministry Department for Information and Press told Interfax on Tuesday.

He cited specific facts: "In Chasiv Yar, (Ukraine) deployed 60 self-propelled artillery launchers, tanks, IFVs (infantry fighting vehicles), APCs (armored personnel carriers) and up to 4,000 personnel. In Mykolaivka, about five Buk-M1 surface-to-air missile systems have been deployed. In Starohnativka, (Ukraine) deployed units of the 72nd Separate Motorized Infantry Brigade, armed with 120-millimeter mortar launchers and 152-millimeter artillery. In Verkhniotoretske, D-3 howitzer artillery weapons and Grad rocket launchers were seen, as was the movement of a military convoy from the village of Zhellane towards Novosiolivka (six APCs, five IFVs and five petrol tankers)."

"In Hranitne, near an industrial dairy farm, (Ukraine) deployed two D-30 howitzer artillery weapons, five tanks, two APCs, five IFVs, one refueller and up to 250 personnel; furthermore, up to 90 marines and up to 120 paratroopers arrived, as did a mechanized platoon in BTR-80 personnel carriers," the source said.

In addition, on the southeastern edge of Novohryhorivka, firing positions have been set up for artillery systems and up to 30 self-propelled artillery systems and tanks have arrived near the village of Vershina.

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 #10
Christian Science Monitor
August 31, 2015
Amid violence in Kiev, Ukraine tries to find a 'decentralized' peace
Ukraine's parliament took a first step toward granting powers to rebel regions. But deadly clashes in the capital show the depth of resistance to such changes.
By Fred Weir, Correspondent

MOSCOW - In what was the worst violence to hit Kiev since last year's Maidan Revolution, fighting between right-wing protesters and police left at least one officer dead and around 100 injured, four critically, outside Ukraine's parliament Monday.

But the more lasting confrontation may prove to be inside the parliament.

Even as protesters, some armed with grenades and firearms, attempted to break in to the building, legislators passed a set of constitutional reforms that would grant "special status" to rebel republics in eastern Ukraine. The bill's passage marked a first step in Kiev's compliance with the Minsk-II agreement, sponsored by both the European Union and Moscow.

Recommended: How much do you know about Ukraine? Take our quiz!
But protesters, led by the right-wing Svoboda and Radical parties, say the package of "decentralization" reforms, which still require another vote at the end of the year for final passage, are a surrender to the Russia-backed rebels in Ukraine's east. The reforms' supporters counter that they are necessary to move ahead on Minsk's tenuous road map for peace and reintegration.

The basic reform, in the works for more than a year, aims to address many of the causes of last year's revolution by streamlining Ukraine's over-centralized government to delegate appropriate powers to regions and local communities. Polls show this plan, based on Poland's model of governance, enjoys widespread support around the country.

But opponents of the bill, which passed its first reading Monday with support from 265 lawmakers, are incensed by provisions that would grant temporary autonomy to the rebel republics of Donetsk and Luhansk. Many fear that step will eventually harden into permanent independence. The bill will need a constitutional majority of 300 votes to pass in its second and final reading slated for December.

"The storm in society is mostly over the issue of special status for [the rebel zones]. This bill is like a candy that's fine - except for a couple of noxious chemicals that it's laced with," says Sergei Gaiday, an independent political expert in Kiev, and opponent of the bill.

"The president claims there's not really any special status, but in fact there is. If they're going to change the Constitution to do this, why not grant special status to all Ukrainian regions? Why is Donbass so special? The question many people are asking is: Does this mean we have lost the war?"

Decentralization vs. federalization

Under the Minsk agreement, Ukraine is required to pass a set of constitutional changes that grant greater autonomy to its regions, allow the rebel republics to hold separate elections on the territory they control, end the year-old economic blockade of the rebel territories, and begin talks aimed at reintegration. The rebels, while retaining special powers that include the right to form their own militia and appoint administrators, would return to Ukrainian rule and hand back the Russian-Ukrainian border to Kiev's control.

But there is a fundamental disagreement over the nature of a "decentralized" Ukraine. In Kiev, the reform is viewed as handing down only those powers that concern local government, while retaining military, foreign policy, and overall economic control.

Moscow has argued that Ukraine needs a "federalized" system that allows regions to go their own way on issues like language and cross-border economic associations - which would effectively give them a veto over major initiatives like joining NATO or the EU. Rebel leaders in Donetsk and Luhansk have offered  their own version of constitutional change that differs sharply from Kiev's.

Olexander Chernenko, a Rada deputy with President Poroshenko's bloc, says he voted for the decentralization bill Monday because he regards it as Ukraine's most basic reform, and stalling could be disastrous.

"If we didn't pass it today, it would be postponed" beyond the year-end deadline for meeting the Minsk requirements, he says. "Some political forces are using this for their own purposes in advance of [October regional] elections."

Ukraine, divided

But others warn that, while decentralization may be needed, the political and economic situation in the country is too unstable to carry it out effectively.

"It's a very risky path," says Vladimir Panchenko, an expert with the International Center of Political Studies in Kiev. "People fear that separatists in the east will be legitimized, and that they might get elected into local legislatures and councils. There's a lot of scope for provocations and escalation of tensions."

The most comprehensive poll on Ukrainian public opinion, conducted by the International Republican Institute in July, found majority support in all regions of the country for the idea of transferring more rights from central to local authorities. On the other hand, it also found that solid majorities support the idea of Ukraine remaining a "unitary" state, which would seem to rule out the Russia-sponsored idea of "federalization."

Critics say Monday's unrest in Kiev may be just a foretaste of troubles to come, as Ukrainian society continues to split over how to deal with the rebellious east.

"People see Poroshenko increasing his [executive] powers," says Mr. Gaiday. "Increasingly, authorities make decisions in a non-transparent way, through backstage maneuvers that ignore people's interests. There was no social discussion about [today's decentralization bill], and the process was not open. It's a very dangerous precedent."

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 #11
RIA Novosti
August 31, 2015
Ukraine draft law a potential "interim" step to constitutional reform - Pushylin

Moscow, 31 August: Denis Pushilin [Ukrainian: Denys Pushylin], plenipotentiary representative of the self-proclaimed Donetsk People's Republic [DPR/DNR], considers the first reading of draft constitutional amendments passed by the Supreme Council to be Ukraine's internal affair which has little to do with the Minsk Agreement but which could be an interim step towards constitutional reform harmonized with the Donbas region.

"There is a clear road map to be followed without revising its individual clauses. There is an absolutely clear statement that constitutional reform should be carried out in agreement with the Donetsk and Luhansk republics," he told RIA Novosti.

Pushilin recalled that the DPR's and LPR's ["Luhansk People's Republic"] representatives had repeatedly forwarded their version of constitutional amendments, which they were ready to agree to, to Kiev and the OSCE. "But given that this has not been done, what happened in the Supreme Council is their internal affair, which has little to do with the package of measures [agreed previously]," Pushilin added.

At the same time, Pushilin said that the draft passed by the Supreme Council could be an "intermediate step for Ukraine". "The next step should be to accept what we've offered, what we are ready to agree to," he said.

If, however, Kiev decides to leave the draft passed in its first reading "as it is, then this is a road to nowhere", the DPR envoy stressed. In his words, it is "very sad" that Ukraine is backed in this by the US which "in this way is only exacerbating the conflict rather than solving it". The results of the vote will be considered at a meeting of a subgroup of the contact group on the settlement in Ukraine in Minsk on Tuesday [1 September], Pushilin also noted.

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 #12
Business New Europe
www.bne.eu
August 31, 2015
KYIV BLOG: Damned if he does and damned if he doesn't
Ben Aris in Moscow

A grenade thrown by nationalists at police outside Ukraine's parliament may only be the beginning of troubles for Ukrainian President Petro Poroshenko, who is facing a stark choice between enraging violent nationalists or condemning his country to further military destabilisation by Russia.

The grenade was thrown at police from out of a crowd of protestors outside Ukraine's parliament building on August 31, killing at least one policeman and injuring around 90 other policemen and bystanders, including journalists. The crowd had gathered to protest against the controversial law on decentralization of political power in the country, handing more control to local governments that is part of the Minsk II agreement that is supposed to bring the fighting in eastern Ukraine to an end. According to initial reports, the man who threw the grenade has already been arrested.

The incident highlights the painful political process Ukraine is going through. On the one hand President Poroshenko desperately needs to bring peace to the east before serious the task of reform and restructuring can begin. The country has been torn apart by split loyalties; with those in the western part of the country leaning towards Europe, while those who live in the east want to maintain a closer relationship with Moscow.

The vote on decentralization epitomizes the political Hobson's choice faced by President Poroshenko. Some form of devolving power to the regions was an integral part of the Minsk agreement signed at the end of last year. However many see any concession to the Kremlin as betrayal. For others, a token decentralization will be insufficient.

Poroshenko is damned if he concedes to a meaningful decentralization, as he will be punished at the polls by western Ukrainians. But he's also dammed if he doesn't put into place a meaningful decentralization, as the peace accord will fail and Russia will continue to destabilize the eastern part of the country.

As bne IntelliNews reported, Poroshenko and the other liberals leading the government have already been punished in opinion polls, seeing their popularity shrink to single digits in some cases. After little more than a year in office, Poroshenko and Prime Minister Arseniy Yatsenyuk's confidence ratings are sitting at less than 50%, according to a poll by the Kyiv Institute of Sociology.

The People's Front party founded by Yatsenyuk and allies has effectively thrown in the towel, announcing that it will not even participate in local elections on October 25 that are also part of the Minsk II peace agreement. The move follows a catastrophic drop in the party's ratings to under 3%.

The Ukrainian Democratic Alliance for Reform (UDAR) party led and founded by former world boxing champion and Kyiv mayor Vitali Klitschko has also decided to merge completely with the Petro Poroshenko Bloc going into the local elections.

The liberal leaders of Ukraine are facing a political crisis. Despite the promise of a better future in the long term if Ukraine turns towards Europe, in the short term it is an extremely painful process. The embattled population is bearing the brunt of the economic collapse. In the meantime standards of living are plummeting, Ukraine's Misery and Despair Indices have soared, and the harsh winter is coming. Rather than leading Ukraine to a prosperous future in the arms of the EU in the long term, from street level the liberal leadership seems to be leading itself to a electoral defeat in the much shorter term in crucial regional elections slated for October 25.

Opposition firebrand Yulia Tymoshenko has been waiting quietly in the wings, casually sniping at the Poroshenko government, and increasingly is finding her mark; Tymoshenko and Poroshenko are now running neck and neck in the popularity polls.

The liberal leaders are circling their wagons and will in effect turn the upcoming local elections into a referendum on which direction Ukraine will go. The goal has become political survival in an effort to buy time for the swing to the EU to pay some dividends.

"Klitschko's decision to merge with the president's party, and thereby gain its administrative backing for the October mayoral vote, virtually ensures that he will remain as Kyiv mayor until 2020. That will give him five years to prove whether he's a presidential contender, or launch a new political party in case Poroshenko's Solidarity project derails. On the other hand, if Poroshenko's presidential term is successful, Klitschko can aim for re-election. It's a win-win situation for the boxing great," said Zenon Zawada, an analyst with Concorde Capital in Kyiv.

"As for Yatsenyuk, he's also demonstrated himself to be a slippery, versatile political creature. Rather than fulfilling his prophecy of becoming a kamikaze and crashing in the local elections (with his party's poll ratings lower than 5%), he is preserving himself as a player in the pro-Western establishment by aligning himself with the president in this election," Zawada added.

The passage of the decentralization bill on August 31 is only one of several painful concessions Ukraine will have to make to meet the terms of the Minsk II agreement. The Rada passed the bill in the first reading. These amendments were proposed by President Petro Poroshenko but only supported by 265 lawmakers, but it needs a super-majority of over 300 votes in the next of a total of three readings to make changes to the Constitution.

In the meantime there is already fighting on the streets of Kyiv again as the two sides square off to make their voices heard. Analysts haven't started speculating that another Euromaidan is on the cards, but political tensions are high and Ukraine is facing another difficult winter.

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 www.rt.com
August 31, 2015
'Victoria Nuland may be passing out virtual cookies outside Kiev'

The same forces that are pushing radicals in key hot spots in and around Europe - the US in the first place - also have a part in the protests going on in Kiev. They are not innocent, they just don't appear in the picture in front of the TV cameras, says political analyst Aleksandar Pavic.

In Kiev, Ukraine's capital, crowds of protesters came to oppose amendments to the constitution that would provide for decentralization of the country. As a result dozens were injured and one security officer was killed after a grenade was thrown outside the parliament.

RT: Do you think we could expect further escalation in Kiev?

Aleksandar Pavic: Ukraine is basically becoming a failed state, it already is. This is a state that has been practically permanently destabilized ever since the Maidan in February 2014. You've actually had the radical agenda that's become institutionalized, meaning that any voices that are calling for any sort of compromise - let's say with Russia - are being marginalized, being demonized and have just been pushed out of the political spectrum. As a result, radicals are feeding each other and what we have today is practically the revolution coming back to devour some of its children.

The most radical elements were practically the key actors in Maidan and they pretty much set the tone in Ukraine nowadays. So that's the internal part of the story. But I think externally we also have to think about who gains from this, not just the internal actors. This is a key moment meaning this is something that's supposed to advance the Minsk agreement agenda. And who would benefit from that being, let's say, sabotaged? I think maybe it's the country that's not part of the Minsk process and I'm clearly talking about the US. And I wouldn't be surprised. Victoria Nuland isn't down there passing cookies today, but she may be passing virtual cookies from somewhere else. This is part of a general agenda just keeping Ukraine a kind of unstable place, a failed state on the border of Russia.

RT: How real is the threat posed by far-right groups that have been opposing the government?

AP: It still is because you have the Right Sector, it's the same actor pretty much who was the key, the most radical actor of Maidan almost a year and a half ago and they've become a major factor in Ukraine. They are the ones who are forcing the agenda. Whoever tries to do anything moderate, whoever tries to pursue any sort of compromise, you have the so-called radicals, Right Sector, etc. who are there to halt the process. The same forces that are just pushing radicals in key hot spots in and around Europe - I'm again talking about the US in the first place - they also have a part in this. They are not innocent; they just don't appear in the picture in front of the TV cameras.

RT: President Poroshenko's approval ratings are plummeting. What in the eyes of the Ukrainian people is going wrong?

AP: Poroshenko first of all is not being viewed, for one, as a genuine leader. It's clear that without Western support he wouldn't even be where he is. The other thing is a total catastrophe that's taking place in Ukraine today; its economy is practically dead. Corruption is probably greater than it ever was even during the corruption that preceded Maidan. It's clear that Ukraine has become ruled by oligarchs and of course Maidan was being organized in the name of so-called democracy. What is the average Ukrainian supposed to be satisfied about? There are no good results that have come from this past year and a half regarding the life of the average person: You've seen prices go up, social instability, uncertainty as far as employment is concerned. No prospects of recovery anytime soon. Why should they be happy with Poroshenko?

West committed to Ukrainian govt 'obviously going down'

Alexander Mercouris, International Affairs Editor at Russia Insider, suggests that it was predictable that protests would take place in Ukraine as radical groups there are not happy with the peace plan, with the way Kiev is implementing it, with the economic situation and political issues with the government

RT: Are you surprised that the decentralization amendments triggered such a violent response?

Alexander Mercouris: No, I'm not surprised at all. If you have been looking at the situation in Ukraine for some time, there has been increasing protests against the government by various right-wing groups - Right Sector is the most famous. Going back several weeks they are not happy with this whole peace plan, they are not happy even with the limited way the Ukrainian government is implementing it, they are not happy with the economic situation and they've got their own political issues with the government. So it was entirely predictable that they would protest today and given the kind of people they are it was entirely predictable these protests would be violent.

RT: How far are these protesters prepared to go?

AM: I think the protesters themselves are prepared to go very far indeed. I think some of them would probably want to see the government changed. The question is do they have the strength to achieve that and I think the answer is no.

RT: If there is a standoff here between these protesters and the government, Poroshenko in particular, who is going to come out on top here and how long this process is going to take?

AM: The danger is that neither is going to come out on top. I think what we are seeing in Ukraine is a stalemate situation. The government was talking some time ago about suppressing these people and it's never got around to doing it, and it doesn't seem to have the strength to do it. And these people in turn don't seem to have the strength to overthrow the government. So we have a perpetual standoff with two sides, each antagonistic.

RT: What kind of reaction to this violence should we expect from Kiev's allies in Europe? Are we going to see some condemnation?

AM: No, I don't think there is going to be any at all. In fact, I think the media and Western governments are going to try to ignore this incident, however violent it is. Privately they will be very concerned, because of course if the situation escalates, or if whatever steps have been taken in Kiev towards decentralization proposals are derailed, then they will be left with a very difficult situation having committed themselves to a process and to a government that is obviously going down. But until that point is reached they will try and pretend it isn't happening.

RT: An explosion has gone off near the parliament building. Who might have weapons able to cause that? These are not protesters, aren't they?

AM: No, they are not protesters. The Right Sector and various other right-wing groups are better understood as armed right-wing militias. They've been involved in a military operation in the country's east and some of them have had various military weapons that they have been supplied by the Ukrainian government and by various Ukrainian businessmen and politicians. So they are very heavily armed and very dangerous.

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 #14
Bloomberg
August 31, 2015
The Radical Menace to Ukraine
By Leonid Bershidsky

A police officer was killed during a protest in Kiev on Monday. It was the first such fatality since Ukraine's "Revolution of Dignity" last year. Radical nationalists, some with weapons, gathered to protest a constitutional amendment proposed by President Petro Poroshenko that would make it possible to reintegrate separatist areas into Ukraine on special terms favorable to Russia.

Although a majority in the Ukrainian parliament voted to support the measures, the street clashes show how difficult it will be to sell the changes to an impoverished, volatile country filled with weapons. President Vladimir Putin appears to be looking for a way out of the mess in eastern Ukraine, but even after more than a year of war, many Ukrainians are unwilling to end the fighting in a way that would be acceptable to Russia.

According to a Facebook post by Interior Minister Arsen Avakov, 122 people were wounded, some seriously, as protesters threw "explosive devices" --  hand grenades, according to other sources -- at soldiers guarding the parliament building. Avakov said one police officer  was killed.

Avakov blamed Svoboda, an ultranationalist party, for the violence, as did some other eyewitnesses. Svoboda, however, said  it was "a planned provocation against Ukrainian patriots," also blaming the authorities for "provoking Ukrainians to protest." About 30 people have been arrested. Their political affiliations probably will be made public soon. The authorities may look for a Russian connection, but they will probably only find radical Ukrainian nationalists who desire to fight the war against Russia and its proxies in eastern Ukraine to the bitter end.

In parliament, Yuri Shukhevich, a legislator with the populist Radical Party, called the proposed constitutional changes a "betrayal of Ukrainian national interests" because they give too much autonomy to the separatist areas:

They get their own police, their own courts, prosecutors, taxes, they have the right to special relationships with neighboring Russian regions. So what next, will they be allowed to open their own embassies tomorrow?

None of those powers are mentioned in Poroshenko's amendments, which only call for separatist areas to be governed according to a special law. A similar law was passed last March that granted rather broad autonomy to the eastern Ukrainian territories around Donetsk and Luhansk. It was suspended, however, after the February cease-fire broke down. Yuri Shukhevich, son of Roman Shukhevich, a high-profile Nazi collaborator and a hero to the Ukrainian right, is worried that once the constitutional amendment is passed, the law will be reinstated to appease Putin.

He and other nationalists have some good reasons to believe that will happen. The U.S. and Europe have put pressure on Poroshenko to push through the constitutional changes. Assistant Secretary of State Victoria Nuland visited Kiev in July to try to persuade Ukrainian lawmakers to back the measures. She even met with a few recalcitrant parliamentarians. She failed: Five of the six attendees of the meeting voted against Poroshenko's proposals. The pressure didn't subside, however: the vote may have been the subject of discussion in Berlin between Chancellor Angela Merkel, President Francois Hollande of France and Poroshenko on Aug. 24.

"Europe is selling us out and giving us up as it did Czechoslovakia in 1939," Shukhevich said Monday. "This is a humiliation of the national dignity of the Ukrainian nation."

Merkel, Hollande and U.S. officials don't see things that way.  They are busy trying to provide Putin with an honorable way to back down and aren't particularly concerned about giving the rebels a few more powers as long as the secessionist regions reintegrate Ukraine. It is far from certain that this approach will work: the separatists have disparaged Poroshenko's proposal as insufficient and discussed holding elections in October under their own rules, not Ukrainian ones. If they do, reintegration will fail, the half-frozen conflict will drag on and Russia may face new Western more Western sanctions.

So far, Putin appears willing to play along with Merkel and Hollande. On Aug. 29, he spoke with them by phone, agreeing to a "total cease-fire" starting Sept. 1. The day after the call, fighting in eastern Ukraine dropped off sharply after weeks of heating up. On Monday, the Ukrainian Defense Ministry reported only a few random shots fired here and there.

Given Russia's precarious economic situation because of low oil prices, Putin may be more inclined to compromise. He would get to keep Crimea, after all. Poroshenko probably understands this well enough, without the prodding from Berlin, Paris and Washington. But he doesn't yet have the 300 votes needed for the final approval of the constitutional changes, scheduled for December. On Monday, preliminary approval was given by 265 votes, with three parties that are members of the ruling coalition voting against it.

With local elections in the fall, populist radicalism is a major danger to Poroshenko and Prime Minister Arseniy Yatsenyuk, especially because they have failed to fulfill promises to revive the economy and their attempts to break the hold of oligarchs have been indecisive. The popularity of Yatsenyuk's party has sunk almost to zero, and he's joining forces with Poroshenko to avoid electoral defeat. The president remains relatively popular, but accusations that he is appeasing Putin may hurt his party's performance.

Normalization is still a long way off for Ukraine. The bloody clashes Monday are evidence that violence is much more likely to erupt. The majority of Ukrainians may want an end to fighting, but a relatively small, angry and well-armed contingent does not. That may be just how Putin wants it.

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 #15
www.rt.com
September 1, 2015
'Right wing practicing violence in Ukraine no mystery to anyone'

The latest outbreak of violence in Kiev may probably give more impetus to a real and serious investigation into the extremely violent events on Maidan Square in February 2014, says Roger Annis, editor from the New Cold War.org news website.

RT: The US said Kiev can use force to uphold the rule of law, but that's not what it was saying during Maidan, which they say was "largely peaceful". Would you agree with that assessment of Maidan?

Roger Annis: No not at all. In fact there is a growing body of evidence that researchers into the events on Maidan Square are showing that there was extreme violence practiced by the right-wing forces that were striving to overthrow the elected president at that time, and specifically the use of sniper fire on February 20. Now there is considerable evidence, including in the official investigation ongoing in the Ukraine itself, that the sniper fire that was blamed on the police of the government that was overthrown in fact came from the right-wing side. So that the right wing practices violence is no mystery to anyone, but perhaps these latest events in Kiev will give more impetus to a real and serious investigation into the extremely violent events on Maidan Square on February 20 and the days and weeks leading up to that.

RT: Back in January last year the US State Department even considered sanctions against the previous Yanukovich government for using force on Maidan square. Why was the attitude to Yanukovich so different when he tried to get his country in order?

RA: Precisely, and in fact let's take that a little bit further. When we look at the so called violence that was carried out on Maidan Square for those months before the overthrow of the elected president, violence coming from the government... I'm not going to sit here and defend all the actions of the Yanukovich government, but they are grossly exaggerated. And at the same time the violence coming from the right-wing side striving to overthrow the government has been - as we are seeing by the reaction today from the State Department - has been mysteriously downgraded in a complete whitewash and cover-up, as I said the growing body of evidence about the sniper fire. So what we saw on Maidan Square was the unraveling of a conspiracy. And that requires a lot of evidence to be hushed up and silenced and it requires a massive media propaganda effort to convince the world that something rather opposite to what was taking place on Maidan Square, that a violent right wing uprising against an elected president was taking place. The US can't sell that to the world, they can't say "we supported a violent right wing protest against an elected president." They have that ... fictional narrative of the actual events. And you know we're seeing today the very forces that were out there on Maidan Square 18 months ago, we see them in action again. And now this government is really reaping the whirlwind of the conspiracy that it was a part of it months ago.

RT: Can these protests involving radicals escalate? And do you think Washington will back Poroshenko's government till the very end?

RA: I'm not sure how much further this can go. The extreme right in Ukraine is in no position to overthrow this government in Kiev. This could not be solved internationally, not in the slightest. And so I think the right wing is making its points, we may see more of these violent protests, but they are in no position to overthrow the government. Now the government on the other hand [has got to use peaceful means] because it has obligations under the Minsk II ceasefire agreement which it is failing to carry out, including this proposed decentralization law, which is for the most part is an evasion by the Kiev government of its responsibilities and obligations under Minsk II.

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 #16
Levada.ru
August 31, 2015
More than two thirds of Russians believe Ukraine conflict could escalate - poll

More than two thirds of Russians (70 per cent) have predicted a "sharp escalation of the military conflict" in eastern Ukraine in the next few month, with only 21 per cent saying that such a scenario is unlikely or practically ruled out, a poll conducted by independent polling organization Levada Centre has shown.[1]

The poll also showed that 50 per cent of the respondents believed that Russia should provide "military-technical support (advice, weapons)" to the self-proclaimed Donetsk and Luhansk people's republics (DPR and LPR), while only 20 per cent favoured "direct military support (deployment of troops)".

Eastern Ukraine

According to the opinion poll published on the pollster's website on 31 August, 16 per cent of Russians believe that a "sharp escalation of the military conflict in Donbass" is "practically unavoidable" and 54 per cent believing that it is "quite possible". Nineteen per cent of those polled believe that is "not very likely" and 2 per cent that it is "practically ruled out". Ten per cent of those polled found it difficult to give a definite answer.

Asked whether "Russia is currently engaged in military activities against Ukraine", 4 per cent of the respondents said "definitely yes", 16 per cent "more yes, than no", while 40 per cent said that "more no, than yes" and 30 per cent "definitely not". Ten per cent found it difficult to answer the question. According to a similar poll conducted in March 2015, 4 per cent answered "definitely yes", 13 per cent "more yes, than no", 36 per cent "more no, than yes", 35 per cent "definitely not", with 11 per cent finding it difficult to answer the question.

Asked whether Russia should provide assistance to the DPR and the LPR, the largest number of the respondents supported provision of "political and diplomatic support" - 88 per cent, with only 8 per cent opposing it and 4 per cent finding it difficult to answer the question. Eighty-four per cent supported provision of "humanitarian aid", with 13 per cent opposing it and 4 per cent finding it difficult to answer the question. Sixty-seven per cent supported "help in receiving refugees", 25 per cent opposed it and 9 per cent found it difficult to say. Sixty-five per cent supported "economic aid", 25 per cent opposed it and 9 per cent found it difficult to say. Fifty per cent spoke in favour of "military-technical support (advice, weapons)", with 38 per cent opposing this type of support and 12 per cent finding it difficult to say. The least favourite type of aid was "direct military support (deployment of troops)". Only 20 per cent spoke in favour of it (8 "certainly yes" and 12 per cent "more yes than no"), with 72 per cent opposing it and 9 per cent finding it difficult to say.

Crimea

Asked about support for Crimea's joining Russia, 50 per cent of the respondents said that they "definitely" supported it, 33 per cent that they "rather supported" it, 10 per cent that they "rather did not support" it, and 2 per cent said "definitely not", 5 per cent found it difficult to say. According to a similar poll conducted in March 2015, these figures were: 55 per cent, 33 per cent, 6 per cent, 2 per cent and 4 per cent, respectively.

To a question as to whether Crimea's joining Russia has been more beneficial or harmful for the country, 59 per cent said that it has brought "more benefit", 23 per cent "more harm" and 18 per cent found it difficult to say. In March 2015, these figures were 70 per cent, 18 per cent and 12 per cent, respectively.

The latest poll was carried out on 21-24 August among 1,600 people in 134 places in 46 Russian regions.

[1] http://www.levada.ru/31-08-2015/vospriyatie-sobytii-na-vostoke-ukrainy-i-sanktsii

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 #17
Russia Direct
www.russia-direct.org
September 1, 2015
Why Germany and France are taking on new roles in the Ukraine crisis
Top leaders in France and Germany are making it clear that they are still determined to stick to the Minsk Agreements regardless of the fragile nature of these agreements and escalation in Donbas
By Alexey Fenenko
Alexey Fenenko is an associate professor at the Faculty of World Politics of the Moscow State University. Previously, he was a leading researcher at the Institute of International Security Studies of the Russian Academy of Sciences (2004-2013), a project coordinator at the Academic Educational Forum on International Relations and a co-editor for ˝International Trends˝ magazine (2004-2011). He has a Doctorate in History (2003).

On August 29, telephone negotiations were held between Russian President Vladimir Putin and his French and German counterparts François Hollande and Angela Merkel. The leaders discussed issues concerning the conflict in Donbas and the fate of the Normandy Format.

At the earlier Berlin meeting between Ukrainian President Petro Poroshenko and Hollande and Merkel, suggestions were made to alter the Normandy Format. However, the leaders of Russia, France, and Germany confirmed their intention to preserve and maintain the Normandy Format.

The telephone negotiations between Putin, Merkel and Hollande can be seen as a response to the meeting in Berlin on August 24, a meeting that involved the French president, the German chancellor and the Ukrainian president.

This Berlin meeting was notable for at least two reasons.

Firstly, on the eve of the meeting, the Ukrainian military stepped up attacks on Donetsk and Gorlovka. This gave rise to numerous articles suggesting that Angela Merkel and François Hollande tried to dissuade Petro Poroshenko from starting a new military campaign.

Secondly, the meeting in Berlin took place without the participation of the president of Russia. All last year, the Normandy Four has acted as the main platform for regulating the conflict in Donbas. Now, it looks like the "Berlin Trio" is being added or at least a "three plus one" format.

The main intrigue of the summit was, perhaps, the Berlin Trio's surprisingly soft position for the negotiations. Moscow has not made any loud statements about any threat of the Normandy Format collapsing and has made no threats concerning the consequences of such a step.

On the contrary, Russia has officially welcomed the Berlin meeting. It seems that the Kremlin is not against Germany and France taking over the role of mediator in resolving the Ukrainian conflict, at least, not at this stage. The question is whether the German diplomats cope with the objectivity assigned to the role of being chief mediator.

New negotiating format

Having said that German diplomats are to play the role of intermediary, there needs to be some elaboration of what this means. There were different nuances in Merkel's and Hollande's speeches. The German chancellor announced that the series of agreements comprising the Minsk 2 Agreements must remain as the basis for regulating the Ukrainian conflict. The French president observed that it was important to retain a window for dialogue with Russia.

Between French and German diplomacy, it appears, there is a new division of roles: Berlin has stepped up as a guarantor for the Minsk accords while Paris is attempting to take on the role of negotiator with Russia.

There are objective reasons for such a specialization of roles. In Ukraine, the prestige of German diplomacy remains high, given that Germany supported the Eastern Partnership program to the very end and was an initiator of anti-Russian sanctions in the EU.

In Russia, on the contrary, over the past year anti-German sentiment has grown. The policy of sanctions implemented by Angela Merkel's cabinet was interpreted in Moscow as a betrayal by a traditional partner. (And in the Russian mentality, a traitor is worse than an enemy).

Paris, on the other hand, after Hollande's visit to Moscow on December 6, 2014, has demonstrated preparedness to compromise with Russia. This feeling has strengthened since the recent visit of French parliamentarians to Crimea.

Furthermore, Merkel's cabinet has confirmed its status as a key European partner for the U.S. Specialist circles still discuss the possibility of bringing Washington into the Normandy Format. In practice, this option has long ago lost any meaning. American diplomacy has effectively delegated part of its authority to Germany, which is implementing American initiatives.

In the last year, Berlin has managed to save Ukraine from defeat, "freeze" the conflict in the middle of Donbas and provide financial support for the government of Arseny Yatsenyuk. Merkel's cabinet has also maintained EU unity on the issue of extending anti-Russian sanctions. All of these tasks fit the strategic direction of U.S. President Barack Obama's administration.

Berlin, incidentally, has instruments for influencing Poroshenko's administration. Breaking the Minsk 2 agreement is somewhat harder for Kiev than Minsk 1: after all, Germany is Kiev's guarantor. A new military campaign in Donbas will be a clear failure in German diplomacy. For this reason, the Ukrainian government aims to use provocations so that a failure of the Minsk 2 accord looks like the militias are to blame. Otherwise, a change in Berlin's relations could cause financial and political difficulties for Poroshenko's administration.

Berlin's success

The updated negotiating format helps Germany to partly redeem itself for the negative results of 2010, when Britain took on a larger role. Then, after the dissolution of the Western European Union, France and Britain signed the Lancaster House Agreements on a privileged military and political partnership.

Talk began in the European Union about the formation of a Franco-British tandem, which has been successfully tested during the Libyan war and the Syrian crisis. The British and French bloc has dramatically weakened Germany's resources, effectively isolating Berlin from solving key problems in the EU's military policy.

The Normandy Format has enabled Merkel's cabinet to partially change the situation. Paris is again cooperating with Berlin, and not with London. British diplomacy was extremely active during the Crimean crisis in spring 2014, essentially isolating it from resolving key European problems. Britain's return to European politics, which looked like a fait accompli in 2011-12, stopped. Germany consolidated EU unity in regards to the Ukrainian conflict and in this way took away Britain's traditional role as a key U.S. partner in Europe.

The renewal of their traditional partnership with France will make it easier for Germany to implement its own interests in the European Union. Since the end of 2011, the cabinet of British Prime Minister David Cameron has taken up a position against the German directorship of the EU, but without the support of France, it will be much harder for Britain to torpedo German initiatives.

Eastern European countries that have traditionally closely cooperated with British diplomacy have also oriented themselves on Berlin. Not Britain, but Germany has taken on the role as leader of a common European front to work with the United States. This is increasing the isolation of the British rebellion in the European Union.

Berlin's difficulties

However, the role of the "key mediator" comes with great risks for German diplomacy. It is essentially becoming hostage to Kiev's preparedness to abide by the Minsk 2 Accord. The renewal of military operations will mean that Germany's efforts as peacemaker have failed. Kiev is more likely to listen to Washington's recommendations than Berlin's. Moscow is more likely to cooperate with the Élysée Palace than with Merkel's cabinet. The initiative to regulate the conflict might be transferred to French diplomats. (Which automatically strengthens the position of all opponents of Germany's EU policies).

Another problem is the growing conflict with Russia. The Americans are supporting Merkel just so long as she continues to increase conflict with Russia. Anglo-Saxon countries traditionally fear a rapprochement between Russia and Germany. The Eastern Partnership program and the subsequent conflict in Ukraine have led to a break in the model of the special relationship that developed between Moscow and Berlin in the mid-1990s. Further expansion of the tensions could turn Germany into a key anti-Russian country within the EU, which will lead Moscow to seek an alternative to German politics.

It's not just politics. The partnership with Russia has allowed Germany to become a leading energy power in the EU, removing Britain from that role.

Disagreements over the transit of Russian gas through Ukraine enhance the conflict between Germany and Gazprom. This reduces the EU's and Russia's energy resources. But at the same time, it reduces Germany's resources and soon Moscow will start looking for alternatives to the Ukrainian route.

The Berlin Format creates a difficult challenge for Merkel's government: develop a compromise which is acceptable to all parties, or at the very least, an option to freeze the conflict in the Donbas. A failure on this front will mean that Germany has failed in its mission. In that case, Berlin will face the unpleasant alternative of either distancing itself from the Poroshenko's government or conclusively becoming the leader of anti-Russian policy in the EU. Both options are disagreeable to Berlin.

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 #18
Valdai Discussion Club
http://valdaiclub.com
August 31, 2015
What Awaits Donbass in Foreseeable Future?
By Yevgeny Kopatko
Yevgeny Kopatko is sociologist and Research&Branding Group cofounder.

This is a central question. Especially for people living in Donbass. I believe that the key word is "uncertainty". The Minsk Protocol is balancing on the edge of a breach. The socio-economic situation persists to deteriorate. The blockade of Donbass does not reestablish credibility of the Ukrainian government on the uncontrolled territories.

1.5 million people have become internal migrants. According to the Russian Federal Migration Service, over 2.5 million Ukrainian citizens are stationed in Russia. The country displays active migration sentiments. Our surveys say that over 30% of citizens are ready to leave the country. Ever since the Second World War, the territory of Ukraine has probably never seen such intensive movement of people beyond the country and within it.

The unfolding confrontational scenario will have tragic ramifications not only for Ukraine alone, but also for its neighbours in the East and West.

The key characteristics of the situation in Ukraine as a whole and in Donbass in particular are drastic deindustrialization of the country and the rising unemployment rate. It will eventually exacerbate the economic underdevelopment of the country. For reference: the pre-war Donetsk Region and the Luhansk Region had been generating over 15% of Ukraine's GDP. Most mines, metallurgic and engineering enterprises were situated on the territory of these regions.

Economic ties with Russia remain cut off. Compensation of the losses or reorientation towards the European or other markets seems impossible. The future of Donbass will largely depend on the chances for restoration of economic ties with Russia.

What awaits Ukraine and Donbass in the foreseeable future? I believe that we will see an aggravation of the socio-economic situation on both sides of the war-torn country.

Sociologists note that practically all Ukrainian citizens have experienced the impact of the economic crisis one way or another. The extent of social pessimism is extremely high. Over 50% of the citizens believe that the situation will go downhill in the near future. The Ukrainian government loses credibility in the eyes of the society.

The problem of Ukraine's future - as a unitary or a federal state - remains on the agenda as well.

How can the situation in the east of Ukraine develop? The warring parties are mustering their military potential. The intensity of shelling is not easing. The "information war" is gaining momentum.

In my opinion, the society is being prepared for high-scale military operations. The military expenditures have shot up considerably. The political space is dominated by forces advocating the war. In light of the aggravating economic situation, we can see militarization of social conscience. Any dissent is repressed in the information space. The country has practically no real opposition. According to social surveys, protection of the human rights and freedom of speech in the country worsened.

Modern Ukraine is an object of a geopolitical fight between Russia and the US in the post-Soviet space. For the US, pursuing the policy in Ukraine means further efforts to contain Russia. Europe, where Germany and France play the pivotal role, is a subject of the political process too, but it is more vulnerable to potential exacerbation of the situation in the southeast of Ukraine.
 
Such developments are exceptionally detrimental for Russia as well. Not only the ruling elites are deeply mired in the conflict. The Ukrainian and the Russian people are engaged in it also. Should a peaceful solution to the conflict be found, the consequences would echo for a long time. The causes of the civil conflict in Ukraine are deeply rooted in the country itself. But the external factor has had a serious impact on the developments in Ukraine. The warring parties are especially sensitive to the potential influence of the US and Russia. Arrangements made under mediation of these two states would smooth out the tensions in the country.

A direct dialogue between officials of the Ukrainian government and the governments of Donetsk and Luhansk has slim chances. A dialogue today can only be conducted with assistance of Russian, German and French representatives. But the conflict tends to aggravate, ruling out direct negotiations. The Ulster conflict experience suggests that it was initially very hard for the parties to imagine ever sitting at the negotiation table. It took 30 years to settle the conflict. Nevertheless, the repercussions are still tangible.

Overcoming the conflict takes more than political will alone, it also requires enormous resources to rebuild Donbass and Ukraine as a whole. The funds are nowhere to be seen. It is crucial for global players, primarily Russia and the US, to assess the risks and opportunities around the conflict in the east of Ukraine.

The key risks, in my opinion, are degradation of the economy and social life. The risks and their repercussions are the hardest to calculate. But it has to be done.

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 #19
Washington Post
September 1, 2015
Three and a half reasons why Russia might be planning to withdraw from Ukraine (or some of it, anyway)
By Samuel Ramani
Samuel Ramani is an MPhil Student in Russian and East European Studies at St. Antony's College, University of Oxford, specializing in post-1991 Russian foreign policy.

On Aug. 9, 2015, a senior Russian general declared that if the Ukrainian military crosses Russia's red line and attempts to recapture the Donbas region of eastern Ukraine, Russia would respond with overwhelming force. This statement reaffirms the Kremlin's official line that Russia needs to hold onto territory it has virtually annexed in Donbas to ensure the viability of its puppet republics, Donetsk and Luhansk.

But is it true?

Here's another theory. It could be that President Vladimir Putin regards the takeover of Donbas territories as temporary, and is evaluating this occupation with a strict cost-benefit analysis. Right now, he has concluded that small military victories in the Donbas generate more than enough political capital in Russia to offset the Russian public's disdain for the hardships of sanctions-induced austerity.

Should that assessment change, Putin is very likely to tactically withdraw from Donbas on his own terms. Putin will not regard this withdrawal as a defeat, as Russia will retain a military force in Crimea that could be used to destabilize Ukraine if it tries to join NATO.

Three factors suggest that Putin's commitment to retaining control over the territories is weaker than his regime's rhetoric indicates:

1. Russia's military presence in and occupation of Donbas territory is much less popular among Russian-speaking Ukrainians than Putin initially predicted in 2014.

2. The Ukrainian government has more power than it has used in the conflict thus far, and it could use this influence to force Putin to back down sooner than expected in Donbas.

3. There is compelling evidence that Putin's long-term goal is to create a "frozen conflict" in Donbas, a scenario in which active fighting is suspended but ethnic tensions remain and can reignite at any time.

In addition, withdrawal from territories in Donbas would relieve Russia of the costs of occupation.

Let's examine these factors in turn.

1. The Donbas Russian speakers don't like the occupation

Russia would have a difficult time controlling the Donbas in the long-term because its imperialism is unpopular there. Putin did not expect mass resistance from Russian speakers in eastern Ukraine, but that's what he has gotten. Prominent Ukrainian analysts such as International Democracy Institute Director Sergiy Taran argue that Putin extended his military campaign from Crimea to Donbas because he thought Russian speakers would greet him as a liberator.

By contrast, Western analysts knew that Russian incursions into Donbas would be unpopular, given trends documented in public opinion polls. Oxford political scientists Paul Chaisty and Stephen Whitefield argued in 2014 that as few as 4 to 6 percent of people in Donetsk and Luhansk supported outright separatism. A May 2014 opinion poll showed that only 19 percent of Kharkiv's citizens supported the Russian occupation.

The same poll showed that in Odessa, a Russian-majority city, Putin registered only 14 percent support. Former Georgian president Mikhail Saakashvili, a staunch enemy of the Kremlin, is now a highly popular governor in Odessa. That opposition is why Putin's military foray into eastern Ukraine shocked most observers.

2. Whether Russia's military operations can keep the Donbas territories is beyond Putin's control

Few analysts seem to recognize the Ukrainian government's important role and latent power in shaping events. The leverage that the Ukrainian government has in abeyance could cause Putin to opt for withdrawal rather than risk a potentially disastrous military escalation.

Consider the fact that Russian forces swiftly occupied some regions of eastern Ukraine but did not emerge victorious in others. For example, Russian forces were able to easily take over parts of Donetsk and Luhansk, but failed to triumph in other cities with large ethnic Russian populations, like Dnipropetrovsk and Kharkiv. Russia's early successes were attributable in part to poor coordination between the Ukrainian government and regional oligarchs who profoundly impact military operations on the ground.

Lucan Way, a University of Toronto professor and expert in post-Soviet regimes, agreed with this theory, in a recent interview with me. He believes that Russia's initial successes were partially attributable to miscommunications between the Ukrainian government and eastern Ukrainian oligarch Rinat Akhmetov.

Way argued that if the Ukrainian government had been more willing to make a deal with Akhmetov, Russian aggression could have been thwarted earlier. If the Ukrainian government can learn from this experience and coordinate more closely with regional oligarchs, it will be able to confront Russian aggression from a position of greater strength.

There are other ways the Ukrainian government can still influence events. For instance, the Ukrainian state could strengthen itself economically through tighter relationships with the European Union and China. Should this work, Ukraine's decreased dependency on trade with Russia, and increased capital for arms production, would greatly increase its military power relative to pro-Russian separatists in the Donbas.

Ukraine could also deter further Russian aggression by increasing the costs of Russian military involvement. If the Ukrainian government can coordinate with its oligarchs to escalate counterterrorism efforts against pro-Russian separatist militias, and procure lethal arms or technical support from its Western allies, more Russian soldiers would perish in Donbas. That would make a tactical withdrawal a more cost-effective, politically justifiable strategy for Putin.

3. Putin wants a frozen conflict. It costs less and threatens more.  

Since the Soviet Union dissolved, Russia has had one especially common pattern in its military interventions in the Commonwealth of Independent States, the region directly around its southern seas: frozen conflict, which would work well in Ukraine.

To see how this approach works, let's look at what happened in Transnistria, a small strip of land on the Moldova-Ukraine border.

In accordance with the cease-fire agreement ending the 1992 war between Moldova and Transnistria, Russia stationed 2,000 troops in Transnistria. These troops prevented the autonomous region from rejoining either Moldova or Russia. Moldova denounced this Russian military presence as a violation of international law because it infringes on Moldovan sovereignty. Russia has resisted international pressure to withdraw its military force because its presence deters Moldova from applying for NATO membership.

Frozen conflicts are typically created as a result of settlements in countries beset with deep-seated ethnic tensions. Before 2014, Ukraine's ethnic tensions were not high enough to threaten civil war. In fact, substantial evidence suggests that Russia manufactured ethnic tensions before its military intervention to prepare for a frozen conflict in eastern Ukraine.

Oxford University Professor Roy Allison in his 2013 book "Russia, the West and Military Intervention" describes how the Kremlin alarmed the Ukrainian government by distributing Russian passports to Crimean citizens during the 2008 war between Russia and Georgia. Then Putin was able to use the pretext of protecting Russian civilians to justify moving Russian forces into Crimea and Donbas. The passports prove that Russia had long planned to set up a frozen conflict here as well.

While the methods used in Russia's interventions in Moldova and Ukraine differ, Russia will likely emulate the Moldovan frozen conflict strategy in Ukraine, due to deep ethnic tensions in both states and Russia's common objective of keeping both countries in its sphere of influence. Russia will therefore keep troops on the Ukraine border should it tactically withdraw from the Donbas territories. The implicit threat would be the same as in Moldova: enter NATO and risk war. The threat would be backed by Russia's permanent hold on the Black Sea naval base of Sevastopol.

Meanwhile, if Russia were to end its occupation and create a frozen conflict, it could save some rubles. Consider that it will eventually need to subsidize pensions in eastern Ukraine, which by late 2014 were $2.6 billion in arrears. Indirect imperialism would be much more cost-effective.

Some analysts of Russian conduct are succumbing to new Cold War hysteria when they assume that Donbas is being incorporated into a new Russian empire. That view is contradicted by realities on the ground and by Russia's past conduct after military interventions. Russia's real objective is to influence Ukraine's foreign policy. It can do that best without further territorial expansion.

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 #20
TASS
Housing capital repair fee angers Russians, opposition takes advantage of protests
By Lyudmila ALEXANDROVA

MOSCOW, August 31. A mandatory fee for apartment blocks' capital repairs imposed this year in Russia has further strained households' budgets amid the crisis and caused certain social tension - a situation, which opposition forces are trying to exploit ahead of the parliamentary elections.
All understand that it is necessary to pay for repairs but the reform was implemented far from thoughtfully and, as it often happens, the population was poorly informed, experts say.

A fee for the future capital repairs of apartment blocks will be imposed on citizens in all the Russian regions, except Crimea, in 2015.

The new housing fee's monthly rate differs considerably, from 18 rubles ($0.27) per square meter in Khanty-Mansiysk in West Siberia to 2 rubles ($0.03) in the Murmansk Region in northwest Russia. According to data of Russia's State Statistics Service Rosstat, housing services in Moscow have soared by 40% due to capital repair costs. Citizens' mass non-payments for housing services can be seen already now. In some Russian regions, less than 20% of residents pay for future capital repairs. Even before this fee was imposed, 12% of Russians were "chronic debtors" in housing and utility services payments.

A mini-rally against the capital repairs charge was held in Moscow on Sunday. In the opinion of the rally's organizers, mass non-payments are the sole method to make the authorities cancel the unpopular fee. The rally's speakers emphasized that the stated goal of apartment blocks' capital repairs over the period of 30 years was too vague while the fee payment system was not transparent. The protesters believe that mass non-payments coupled with protests are the basic recipe of the struggle against the capital repair fee collection.

So far, only 100 persons came to the rally but it has to be borne in mind that the living standards in Moscow are noticeably higher than in many other regions. Earlier, the protests with the demand to cancel the new housing charge were held in Tyumen, Nizhny Novgorod, Birobidzhan and some other cities.

Over a million of Russian citizens have signed a petition to the government with a demand to stop the collection of capital repair charges. The petition was initiated by the opposition faction of the A Just Russia party in the Russian parliament. The party considers the collection of capital repair charges to be illegal. It argues that the state has not fulfilled its obligations and has not transferred the housing stock to owners in a proper condition.

Other opposition parties have also spoken for a change in the endorsed system of collecting capital repair charges. The Communists of Russia party has said it is going to initiate a referendum on the cancellation of the fee. The Communist Party of the Russian Federation (KPRF) is also seeking a reduction in the capital repair charge.
No one disputes the need of capital repairs. But legally-minded citizens are confused over contradictions with existing laws. It also turns out that the government has not yet even formulated transparency and controllability requirements for the administrators of collected fees. The issues of allowances for lone pensioners who won't be able to see the results of future repairs have not been resolved either.

"The problem of capital repair fees is becoming an important political theme, which the opposition parties are exploiting. It will most likely be impossible to achieve the full cancelation of this fee. However, the opposition may gain additional support by seeking this," Nezavisimaya Gazeta daily quoted First Vice-President of the Center for Political Technologies Alexei Makarkin as saying.

The current situation is the result of a whole number of mistakes committed by the authorities since the New Housing Code was adopted, expert of the Higher School of Governance at the Russian Presidential Academy of the National Economy and Public Administration (RANEPA) Igor Kokin told TASS.

The idea sealed in the Housing Code that owners maintain apartment blocks on their own has not received unambiguous financial support from the state. "Owners have been left with their housing one to one," the expert said.

"The system should have been thoroughly devised and a consensus should have been reached in society that the owner assumes responsibility for some share while the state guarantees its responsibility for some share as well," he added.

"The state has failed to say a simple thing so far: whether it will help owners with capital repairs. But this should have been done in the first place."

People need to receive explanations and people need to be informed, RANEPA Professor Alexander Shcherbakov told TASS.

"Money is collected now but it is promised that the service will be rendered afterwards. Moreover, this is done without providing any details. This issue has not been thoroughly elaborated. The population has been ill-informed. For example, how is the pay determined? Why does this fee in Moscow differ from the charge in other regions? There is a feeling that the authorities are offering people to buy a pig in a poke," the expert said.

In the expert's opinion, the authorities in Moscow and other regions are already "making conclusions but inadequate so far."

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 #21
Subject: RE: 2015-#171-Johnson's Russia List/Demography
Date: Tue, 1 Sep 2015
From: Josh Wilson <jwilson@sras.org>

In response to 29. Moscow Times: Why Is Russia's Growth in Life Expectancy Slowing? From 2015-#171-Johnson's Russia List. Response originally posted here: https://www.facebook.com/SRASFB

The main thing to point out is that these aren't really "objective numbers." The period of comparison between Russia's performance on life expectancy and everyone else's is 1990-2013. However, the article gives no indication (save perhaps for the small, passing mention of the "demographic pit" of the 1990s) that the year chosen to begin comparison was the year that the collapse of the USSR began. This led, of course, the complete collapse of the economy, government, and borders that the Russian people had lived with for decades before. As should be obvious, this led to economic hardship as well as related population declines and increased mortality.

If one moves the period of comparison to 2000-2013, after Russia's  economy stated to recover, one can see that Russian life expectancy grew from about 65 to 71 years, a growth of more than nine percent (World Bank data) or more than twice the growth experienced by the US (76 to 79 - or an increase of about 4 percent). My point here is that you can make numbers dance just about anyway you want - the real significance is only visible if you understand the context. Russia's extreme growth post 2000 was largely fueled by the fact that it started from such a low position. Things like governmental and economic collapses and recoveries (which were not experienced by most western countries in the period of comparison) are kind of important context.

So, far from being "mysterious," as the article claims, we can see that life expectancy actually largely follows the Russian economy. There was stagnation from 1960 until about the time of the fall of the USSR (in both the economy and life expectancy). When the USSR collapsed, so did life expectancy. When the Russian economy recovered, so did life expectancy. We don't have to reach for extreme explanations like people stealing cable from rail tracks and causing accidents to explain these things. Generally, people tend to live longer when they live better under a better economy.

The current economic slowdown is likely to have an effect on the growth of Russian life expectancy. Current changes (mostly in de-funding) to the Russian healthcare system may well have an impact as well. The situation for Russia is not phenomenally rosy, but Russia is also likely not going to die any time soon.

Demographically, the "demographic pit" of the 1990s is going have a negative effect on population numbers. But this doesn't mean an infinite spiral of decay as the article seems to imply (any more than a post-war baby boom implies an infinite spiral of growth). That's just not how populations work - and decreased births actually has no repercussions on life expectancy, of course.

In summary, if you ignore elephants in the room like societal collapse that obviously affect your analytical comparison, it's pretty hard to take your comparison seriously.

Josh Wilson
Assistant Director
The School of Russian and Asian Studies
Editor in Chief
Vestnik, The Journal of Russian and Asian Studies
SRAS.org

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 #22
Interfax
September 1, 2015
88 NGOs registered as 'foreign agents' in 2 years, 7 of them did it voluntarily - Justice Ministry

Less than 10 percent of non-governmental organizations (NGOs) recognized as 'foreign agents' submitted by themselves an application regarding their status during the two years that the respective law has been in force, according to Dmitry Yermak, the acting director of the NGO department at the Russian Ministry of Justice.

"Altogether, 88 organizations have been included in the register of NGOs performing the functions of a foreign agent during these two years, seven of which were registered due to statements submitted by the organizations themselves," Yermak said in an interview to Rossiyskaya Gazeta newspaper on Aug.31

In the second half of this year a total of nine applications were received by the Ministry of Justice, mostly with the request for a removal from the register and several of them are being reviewed now, he added.

"Out of the remaining organizations, 59 were registered as foreign agents in accordance with results of NGO monitoring pursued by the Ministry of Justice, while 22 other organizations were included in the register upon a request by prosecutor's offices," Yermak said.

He stressed that the registration of an organization as a foreign agent would not make it an unwelcome one.

"Such registration lets us establish and publicly disclose the fact that these organizations carry out political activities, while being financed by foreign sources," Yermak said.

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 #23
Moscow Times/Vedomosti
September 1, 2015
Will Russia Block Facebook?
By Nikolai Epple
Nikolai Epple is a columnist at Vedomosti. This comment originally appeared in Vedomosti.

Roskomnadzor, Russia's communications watchdog, finds itself in a very strange situation for the second time. First, the agency attempted unsuccessfully to block Wikipedia from working in Russia, and now Facebook has rejected its demand to transfer the personal data of its Russian users onto Russian territory, putting Moscow regulators in a very awkward position.

If they wish to enforce their ill-conceived law - drafted for the sole purpose of extending the government's control over civil society by closely monitoring popular social networks - Russian officials must now shut down Facebook's operations in this country. However, Facebook has essentially called their bluff: The officials never wanted to shut down the social network and it is difficult to predict what will happen now.

The law "on personal data" that requires foreign Internet companies to transfer the data of Russian citizens onto Russian territory will go into effect on Sept. 1. According to Pavel Savitsky of the law firm Borenius, the main problem is the loose wording of the legislation.

More than a year after Duma deputies passed the relevant amendments to the law, Roskomnadzor has refused to clearly specify the requirements it places on Internet services, and officials - themselves confused by the rules - have disoriented the business community.

Does the law require Internet companies to keep only their databases on Russian territory, or also the software that constantly exchanges information with foreign servers? Does the requirement that firms "process" their data on Russian territory mean that they must store the data itself, along with other forms of manipulating it, on Russian soil?

If companies do agree to keep their data on Russian territory, are they obliged to share it with government agencies, and if so, by which method? Does the law apply only to Russian companies, to foreign companies with branch offices in Russia or also to foreign companies with no affiliates in Russia? The Communications and Press Ministry has issued only informal guidelines for firms to go on.

The law gives only a very vague definition of what is actually meant by personal data.

The words "any information relating directly or indirectly to an identified or identifiable individual" allows for extremely broad interpretation, and such information often does not refer to a particular person - as in the case of frequently occurring or fictitious names. Facebook refused to comply with the law on the logical grounds that its users' accounts do not represent personal data, and this forces Roskomnadzor to articulate what it means by the term "personal data."

The least likely scenario is that Roskomnadzor will issue a clearly worded explanation of its demands, on the basis of which market participants will comply with the law and Facebook will preserve its reputation as a company concerned with the safekeeping of its users' personal data, and that does not want to go to unnecessary expense by transferring its servers.

In all likelihood, Roskomnadzor will wait for clear political orders. According to Savitsky, rather than protecting personal data, the new law seeks to control that data by prohibiting its transference abroad. In fact, the user agreement that each person "signs" when opening an account on Facebook and other such services already meets the law's requirement for data protection through a formal agreement between those transferring and those receiving data.

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 #24
Wall Street Journal
September 1, 2015
Russia Puts Off Data Showdown With Technology Firms
Facebook, Google and Twitter get more time to comply with law requiring Russian data centers
By SAM SCHECHNER and  OLGA RAZUMOVSKAYA

Russia is postponing a showdown with a handful of technology titans, including Facebook Inc., over installing data centers on Russian soil, handing an interim victory to companies that have resisted a divisive new rule.

Ahead of a law that goes into effect Tuesday requiring companies to store and process data about Russian users within the country's borders, Russian regulators have told companies such as Facebook, Google Inc. and Twitter Inc. that they don't plan to check until at least January whether the companies are in compliance, executives and Russian officials said.

The three companies have so far either told officials they won't have new data centers on Russian soil in the immediate future or haven't made clear whether they plan to comply, some of the executives said. Russian officials provided a reprieve when they said these companies weren't on the list of those the Russian communications regulator Roskomnadzor was planning to check before 2016.

"We understand that in transnational companies where offices are spread globally, it takes a while to make a decision," said Vadim Ampelonsky, spokesman for the regulator, adding that checking on companies like Google would take resources the regulator doesn't have. "There's only that much we can physically do."

Russia's regulatory stance eases immediate pressure on big U.S. technology firms involved in social media and messaging to implement rules that Russia says are meant to ensure privacy for Russians, but critics say could be a back door to government surveillance.

While it is unclear whether Russian regulators will later move to enforce the new law against the U.S. firms, their initial reluctance to do so illustrates how difficult it can be for governments to exercise control over U.S. technology superpowers when it comes to the sensitive issue of where they locate their data and who has access to it.

Last year, for instance, companies successfully resisted an attempt in Brazil to implement such a measure, arguing it would cost them hundreds of millions of dollars to build new data centers and upset the structure of the Internet.

Facebook, Google and Twitter have at times bent to censorship requests from countries including Turkey to remain online, arguing they must respect the rule of law in countries where they operate. But the companies have been far less willing to compromise on the location of their data centers, of which they typically operate only a handful globally. They say doing so would cost hundreds of millions of dollars.

"We're not thumbing our nose at the law. But saying you respect local law doesn't mean you always implement it fully if it wouldn't work with how you deliver your service," a technology executive said.

To be sure, the Russian regulator says it intends to enforce the law against small and medium-size domestic and foreign companies with offices in Russia, and reserved the right to conduct spot checks on any firm if necessary. Some foreign companies have said they would comply with the law, including Samsung Electronics Co., Uber Technologies Inc. and eBay Inc., potentially giving it momentum.

The regulator says it hasn't recently been in touch with Apple Inc. about the new law. And one U.S. technology executive said the companies that had said they were complying operate in hardware-manufacturing and e-commerce sectors, which often have accounting and other data already located within countries like Russia-in contrast to firms like Facebook or Twitter.

In addition, many Russians use home-grown services like market-leading social network VKontakte, which already have servers in Russia. That gives regulators more leeway to allow foreign providers to slide, some observers say. "It would be a lousy PR hit for Russia to try to take on Facebook, especially when they already have access to the personal data of online discussions," said Ethan Zuckerman, director of the Center for Civic Media at Massachusetts Institute of Technology.

Russia is a dilemma for technology companies. With a large population but relatively low penetration of Western firms, the country represents one of Silicon Valley's biggest growth opportunities. But with a government that has passed new rules giving it the ability to crack down on online speech, Russia also highlights the compromises companies must consider in that expansion, putting principles and profits in conflict.

A law that obliged bloggers to register with the government caused consternation last year, and Facebook, Twitter and Google were briefly locked in conflict with the government over their refusal to block pages promoting a rally for opposition figure Alexei Navalny.

Russia's push for a so-called data localization law has been among the most worrying for technology executives. The executives argue the new law, passed last year as a privacy initiative, could serve as a pretext for Russian authorities to demand deeper access to user data and could give governments more power to control how the Internet behaves in their territory.

"It's not how our network is built," the U.S. tech executive said of the Russian law. "And it would set a bad precedent."

Google has been trying to run a fine line between resisting the rules without calling attention to itself in a way that could lead regulators to crack down, or endangering local staff, said people familiar with the matter. While the company said last year it would shutter its engineering operation in Russia, it maintains sales and marketing staff in the country.

Russian state-controlled telecommunications company OAO Rostelecom's officials said earlier this year that Google had started to move some data into Russia in preparation for the law, but the Russian regulator's spokesman now says it isn't clear whether Google will comply with the law.

Facebook, which has no office in Russia, told Russian regulators last week that it won't be ready to comply before Sept. 1, and added that it has very few data centers and therefore wouldn't commit to putting one in Russia, according to a person knowledge with the meeting. The company told Russian officials that it would be willing to discuss its privacy practices with them to address any concerns.

As recently as July, Russia had indicated that Twitter-which has no office in Russia-likely wouldn't be subject to the law because it didn't collect enough personal data. Now the Russian regulator says the company may in fact be subject to the law but that it still doesn't plan an inspection. A person familiar with the matter said Twitter isn't currently planning to locate a data center in Russia.

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 #25
Russia Direct
www.russia-direct.org
September 1, 2015
Why it's too early to worry about $40 oil
Tumbling oil prices could recover as soon as 2016, especially if OPEC decides to change its stance on oil production and global energy demand continues to pick up speed.
By Dmitry Dokuchaev
Dmitry Dokuchaev is a Russian journalist and a columnist, who deals with economic issues. He has extensive experience in different Russian media, including Izvestia, Moscow News, The New Times, The Echo of Planet.

For oil exporting countries, of which Russia is one, the prospects remain dismal. Hopes for a budget windfall and economic revival from a rise in the price of "black gold" are receding fast. Whereas in spring the price stabilized at just above $60 per barrel and seemed on the way up, by the end of summer oil, was trading at below $45 and poised to slip even further.

The cause is well known and has been for some time: the glut of oil in the world market. According to the International Energy Agency (IEA), daily production outstrips consumption to the tune of 3 million barrels. Every day around 100 million barrels are produced - the highest level this century. And that is despite the fact that in the first quarter of this year supply exceeded demand by just 0.5 million barrels per day.

International oil companies, both private and public, are loath to cut production. On the contrary, they are increasing it so as to somehow compensate their losses from falling prices this past year. On top of that, newly "liberated" Iranian oil has yet to hit the market, which could add another million barrels a day.

As a result, most experts are warning of a price of $40 per barrel or lower. The other day, for instance, Kazakh President Nursultan Nazarbayev predicted $30 a barrel, and Russian Economic Development Minister Alexei Ulyukayev, who is always careful in his pronouncements, admits the possibility of a range between $30-40.

But the market is not so straightforward. And scenarios do exist that could change the direction of the downward spiral.

The first such scenario, as highlighted by the IEA, is linked to increased global demand for oil. This growth, says the agency, has already begun, and could one day outstrip supply, making "Texas tea" a scarce commodity once more. Daily demand for oil this year will rise by 1.6 million barrels (expected to reach 95.24 million barrels in the fourth quarter), or 200 barrels higher than earlier forecasts. Growth rates are at their highest in five years, not least due to the very fact that oil has become cheaper and thus more affordable.

The IEA asserts that the process of restoring the balance in the global market is underway, and given the right circumstances, demand will again match supply in about a year's time.

Of course, the dynamics of demand could still be negatively impacted by the situation in China's financial markets. In recent days, the Chinese authorities have taken unprecedented steps to weaken the yuan in order to avert a stock market collapse and prevent the country from sliding into a full-blown economic crisis.

The devaluation of the yuan will increase the dollar price for China of commodities such as oil, which could hurt demand for oil in China, the second largest consumer of petroleum in the world, after the United States. A possible slowdown in the Chinese economy will mean less demand for the black stuff, which, of course, could cause the price to drop again.

But things could play out differently. After all, the devaluation of the yuan, as many financial market experts posit, could unleash a new "currency war" - when central banks around the world experiment with lowering their own currency to breathe life into the national economy. The weaker the currency, the more competitive the goods produced at home. If a race to the bottom ensues in the foreign exchange market, stock market players will turn their gaze on the oil market, which could push up the price of a barrel.

And let's not forget that the Organization of Petroleum Exporting Countries (OPEC), which so far has preferred not to intervene in the "priceonomics" of the situation, could soon revise its intransigent philosophy. The fact is that falling oil prices are drilling a deep hole in the balance sheet of Saudi Arabia, the leader of OPEC and the global oil market.

The Saudi budget, which is 90 percent dependent on oil exports, has factored in an average price of $100 per barrel. And since the actual price of oil has turned out to be rather lower, the kingdom is facing a budget deficit of up to 20 percent of GDP, or $140 billion. Such a shortfall could force the Saudis to abandon their policy of non-interference and adopt measures to stabilize and slowly bring up the oil price, including through OPEC.

Moreover, the policy of low oil prices seems to have hit U.S. oil shale companies, too. At any rate, the leading producers of oil shale in the United States posted losses of hundreds of millions of dollars in the first half of 2015. Earlier this year, Raiffeisenbank analysts suggested that oil shale projects in the United States need a price of $55-65 per barrel to stay viable. That level is on the horizon, and companies are signaling imminent losses. If the U.S. shale business does indeed go bust, it will inevitably reduce global oil supply and push the sinking barrel upwards.

In the meantime, according to ten investment banks recently polled by The Wall Street Journal, the price of oil will hit $70 per barrel by the end of next year. True, this is short of the $100 estimates given in June last year, but a fair bit higher than the $40 forecasts elsewhere. It may yet turn out that rumors of oil's demise have been greatly exaggerated.

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 #26
Russia Beyond the Headlines
www.rbth.ru
September 1, 2015
Foreign investors may get access to major deposits in Russia
If a foreign company in Russia repeats the recent success of Italian energy company in Egypt and discovers a strategic deposit on Russian territory, it will be able to develop that deposit. Experts expect the relevant amendments to the Russian legislation to attract investment in exploration.
Anna Kuchma, RBTH

On Aug. 30 Italy's leading oil and gas company Eni discovered a gigantic gas field off the coast of Egypt, the potential of which is valued at 850 billion cubic meters. In several months Eni is to receive a license granting it exclusive rights to develop the new field, which is capable of providing Egypt with gas for several decades.

Companies operating in Russia may soon be able to benefit from similar developing rights, if legislation currently being prepared becomes law.

In late July the Vedomosti business daily reported that a draft law had been drawn up by the Russian Ministry of Natural Resources, according to which foreign companies would be able to develop so-called strategic deposits in Russia if they discover them themselves.

Under the draft law, foreign companies would be able to apply to the Russian government for permissions for exploration and development of natural resources, including oil and gas. If permission were granted, it would remain valid for three years.

If during that time, the holder of the license discovers a deposit of federal significance, it would be granted the right to develop that deposit without the need to seek any further approval from the government.
 
The need for foreign expertise

Deposits of federal significance include oilfields with recoverable reserves of 70 million tons and more; gas fields with reserves of 50 billion cubic meters and more; gold deposits starting from 50 tons and copper deposits, from 500,000 tons.

"As far as oil and gas are concerned, there are a lot of large but difficult deposits left, whose development requires expensive technologies, for example deposits in the Arctic," said Sergei Pikin, head of the Energy Development Foundation.

In order to develop those gas and oilfields, Russia needs to attract foreign companies, which have the relevant experience and technologies - but this is currently obstructed by Western sanctions that restrict the export of hi-tech equipment to Russia in the oil and gas sector.

Earlier, in 2008, Russia adopted amendments to the law "On Mineral Resources" which considerably restricted foreign companies' access to deposits of federal significance. According to Mikhail Krutikhin, a partner with the RusEnergy consulting company, this has hindered foreign investment.

At the moment, he explained, a foreign company that has discovered a large deposit is not banned from developing it, however, the government can strip it of this right, after reimbursing it the costs. The new mechanism is intended to remove this risk.

"Users of mineral resources get the incentive to invest considerable funds in completing exploration and evaluation work, with firm guarantees in place," the authors of the bill explained.
 
Gold mining sector to benefit?

Experts predict that in future there may be an upsurge in interest toward the gold mining sector too.

"One of the main problems of the Russian mining industry is that there has been practically no exploration in recent years. And one of the reasons is that there were no guarantees of obtaining the right to develop a discovered deposit," said Ayrat Khalikov, an expert with Gazprombank's center of economic forecasts. With the adoption of the new law, he adds, a change in this trend can be expected.

The first foreign companies entered the Russian gold mining sector in the 1990s to develop primary gold deposits. In the mid-1990s, there were already up to 80 foreign companies, mainly from the U.S., Canada and Australia, conducting exploration and development of precious metal deposits in Russia.

In 2002, foreign companies began to show interest in the Russian gold mining sector again, including Canada's Kinross Gold and the Russian-British Peter Hambro Mining (which was later renamed Petropavlovsk).

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 #27
www.rt.com
August 31, 2015
Weak ruble reviving Russian exports

The devaluing ruble is not a complete disaster for Russia. A cheaper currency makes for cheaper exports increasing demand for local products abroad, while labor and operating costs are getting cheaper as well.

The average monthly nominal wage in Russia fell in dollar terms to slightly more than $500 in July, according to the official statistics agency Rosstat. Labor in the country became cheaper than in Romania and China, countries known for low wages.

Automobiles

For auto manufacturers, Russia is becoming a more profitable assembly site than any other in Europe, including Romania and Turkey, a representative of AvtoVAZ Sergei Ilyinsky told Vedomosti daily. Labor costs per vehicle are about $250 in Russia, compared to $340 in Romania and $450 in Turkey.

Meat

By June, the weak ruble enabled wholesale prices of Russian pork to catch up with China. Russian pork was offered at $3 per kilo, compared to $3.10 in China. A year earlier, Russian pork cost $4.60 per kilo.

Russia's Economic Development Minister Aleksey Ulyukaev says the government is doing its part in helping local meat producers enter Asian markets.

"China is the world's largest importer of pork. We have to go to this market. We have to go to the Korean market; we should go to the Vietnamese market, and so on. We will help the producers to do it," Ulyukaev said last week.

Other food

According to the Far Eastern Department of the Russian Federal Customs Service, exports of dairy products, honey and eggs, in the first half of the year increased 14-fold up to 3,550 tons, and chocolate 34 times to 1,048 tons.

Cosmetics and household products

Foreign cosmetics and household product manufacturers are profiting from the weaker ruble. It is cheaper for companies like L'Oreal, Oriflame and Unilever to produce in Russia and sell abroad.

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 #28
www.rt.com
September 1, 2015
Putin says dump dollar

Russian President Vladimir Putin has drafted a bill that aims to eliminate the US dollar and the euro from trade between CIS countries.
This means the creation of a single financial market between Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and other countries of the former Soviet Union.

"This would help expand the use of national currencies in foreign trade payments and financial services and thus create preconditions for greater liquidity of domestic currency markets", said a statement from Kremlin.

The bill would also help to facilitate trade in the region and help to achieve macro-economic stability.

Within the framework of the Eurasian Economic Union (EEU) the countries have also discussed the possibility of switching to national currencies. According to the agreement between Russia, Belarus, Armenia and Kazakhstan, an obligatory transition to settlements in the national currencies (Russian ruble, Belarusian ruble, dram and tenge respectively) must occur in 2025-2030.

Today, some 50 percent of turnover in the EEU is in dollars and euro, which increases the dependence of the union on countries issuing those currencies.

Outside the CIS and EEU, Russia and China have been trying to curtail the dollar's dominance as well.

In August, China's central bank put the Russian ruble into circulation in Suifenhe City, Heilongjiang Province, launching a pilot two-currency (ruble and yuan) program. The ruble was introduced in place of the US dollar.

In 2014, the Russian Central Bank and the People's Bank of China signed a three-year currency swap agreement, worth 150 billion yuan (around $23.5 billion), thus boosting financial cooperation between the two countries.

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 #29
Moscow Times
September 1, 2015
U.S. Is Immoral and Racist, Russians Say in Poll
By Ivan Nechepurenko

Russians believe the United States is an immoral and unequal country where people are not warm to each other or are openly racist, a survey by the state-owned Public Opinion Research Center (VTsIOM) reported on Monday.

Analysts interviewed by The Moscow Times said the majority of Russians genuinely see the U.S. as an enemy, an attitude that cannot be completely explained by the influence of state-run media.

"On the one hand, people repeat what they are told by the television - either because they genuinely believe it, or because they want to be part of the majority," said Ivan Kurilla, a professor at the European University in St. Petersburg.

"On the other, there is a demand in the society to construct an enemy that would explain the worsening living conditions and also boost peoples' self-esteem," Kurilla said in written comments.

The respondents were asked to name things that characterize the U.S. for them: 15 percent said "It is a country of moral decay and widespread crime," another 15 percent said "It is a country where there is no warmth in people's relations," and 12 percent said "It is a country with a high standard of living."

 A further 11 percent said it is a country "with a wide gap between the rich and poor," and 9 percent said that racial discrimination is a feature that defines the U.S. for them.

The poll was conducted in July among 1,600 respondents with the margin of error not exceeding 3.5 percent.

In 1990, the results of the same poll were radically different. Russians saw the U.S. primarily as a country with a high standard of living, where success depended on people's own efforts, and as a country with highly developed science and technology.

In a confirmation of changing attitudes, foreign-produced cars with labels saying "Obama is a schmuck" glued on them have become visible on the streets of Moscow and other Russian cities in the past year.

"In the 1970s-80s people distrusted the Soviet system and they liked the U.S. as the main alternative to it, but in the 1990s people faced the reality that the U.S. is a self-interested state with its own faults," said VTsIOM's general director Valery Fyodorov.

"Already by the end of the 1990s, following the NATO bombing of Yugoslavia, there was a sense of disillusionment about the U.S.," Fyodorov said in a phone interview.

In 1990, the U.S. was seen as an ideal state system that was to be emulated. Everything American was widely regarded as superior to Russian and many Russians dreamt of leaving for the U.S. permanently.

With time, these views have shifted dramatically. Russians have become broadly negative toward the U.S. following the 1998 financial default, then after the 1999 bombing of Yugoslavia, in the aftermath of the 2003 invasion of Iraq and after the 2008 five-day war with Georgia.

Russians' overall attitude toward the U.S. has been broadly negative for 1 1/2 years now, according to polls conducted by the independent Levada Center.

During both the Georgia and Ukraine crises, Russians saw the U.S. as manipulating local governments or opposition in these countries in order to diminish Russia's influence in the area. The difference is that the Ukraine crisis has been raging for almost two years now.

According to Alexei Grazhdankin, Levada Center's deputy director, given that the current downward trend in peoples' attitude toward the U.S. has been steady for so long, Russians have also adopted a negative image of the internal situation in the U.S.

"Most Russians want to feel part of a greater whole, so if they see that their country is currently in confrontation with another one, they will unify behind a common cause," said Grazhdankin.

"This gives them a sense of mission in life," he said in a phone interview.

In January, 81 percent of Russians were negative toward the U.S. Since then, this figure has dropped to 70 percent in July, but is still higher than at any point during any other crisis between Russia and the U.S.

The polls were conducted among 1,600 people with the margin of error not exceeding 3.4 percent.

According to Fyodorov, these attitudes are not derived from television's coverage of the U.S. Russians do not just repeat what the state-run media tells them, he said.

"In Soviet times, propaganda couldn't convince people that everything is bad in the U.S., and it cannot do it now" Fyodorov said in a phone interview.

"Today, propaganda simply coincides with the public mood," he said.

Vladislav Inozemtsev, director of the Moscow-based Center for Post-Industrial Studies, disagreed. He believes that state propaganda is still the primary reason for negative attitudes toward the U.S.

"Apart from propaganda, it reflects people's wishful thinking - instinctively, Russians want to portray the U.S. as weak and pitiful," Inozemtsev said.

"We are not at a real war with the U.S., so people want to feel superior to it at least in symbolic terms," he said.

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 #30
www.rt.com
August 31, 2015
Majority of Russians say US administration 'extremely hostile toward us' - poll

The perception of the United States in Russia has drastically deteriorated and 59 percent of respondents in a recent poll said they think that the current Washington administration is extremely hostile toward Russia and its people.

On Monday, the Russian state-owned public opinion research center VTSIOM released the results of the poll on Russians' attitude to the United States and things that are most often associated with this country. The poll was conducted in late July.

According to the statement, most Russians experience predominantly negative feelings when they think about the United States. Fifty-nine percent of respondents agreed that the current US administration was extremely hostile toward Russia, and another 31 percent described the attitude of the US authorities as "unfriendly."

When asked about their own attitude toward the United States, 9 percent of respondents said it was negative, 6 percent said they would describe it as dislike, disgust or hatred, and 4 percent said they perceived the United States as an aggressor. Another 4 percent said that in their opinion the US was Russia's "No. 1 enemy," 2 percent noted the provocative nature of Washington's policies and 2 percent said that the United States was constantly seeking world dominance.

The positive associations mentioned in the same poll were much more scarce and weak. Two percent of respondents said they considered the US to be a great superpower, 1 percent said that it was a strong country and another 1 percent agreed that it was a home to the free.

Ten percent of the Russian public said that they strongly associated the United States with its current president, Barack Obama.

The authors of the research noted a major shift in perception of the United States among the majority of the Russian public. "Twenty-five years ago, 13 percent of Russians described America as a free society, 15 percent as a technically advanced nation, and 20 percent said it was one that awarded personal effort with success. Now the share for figures for these answers fell to 5, 7 and 7 percent, respectively," the research reads.

The Russian public currently concentrates on America's drawbacks. Nine percent say that the US still has racial discrimination (1 percent in 1990) and 11 percent note the huge gap between the rich and the poor in the US (5 percent in 1990).

In February, the number of Russians with a negative attitude toward the US and the EU hit an all-time high, with 81 percent of respondents claiming this, compared to 44 percent just one year before. The number of those who perceived current relations between the two nations as hostile rose from 4 percent to 42 percent in the same year.

In the same poll, 40 percent of citizens said they wanted Russian authorities to improve relations with Western nations, but 36 percent said that Russia must further distance itself from the West.

In mid-July, the public attitude to the US in Russia improved slightly, but still remained very negative. Seventy percent of Russians said they had negative sentiments about the United States and only 19 percent of respondents said they had a positive attitude toward the US.

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 #31
Sputnik
September 1, 2015
US-Russia Standoff: 'Moscow Feels Betrayed by Washington'

It is always tempting to try to pinpoint the exact event which might have triggered the recent cold spell in the relations between the United States and Russia but the standoff is a result of a complicated decades-long history and corrupt interests, Irish journalist Bryan MacDonald maintains.

It all started with a sense of promises unfulfilled.

"Russia feels betrayed. ... It feels that the supposed détente between Gorbachev and Reagan and the 90s supposed friendship between Yeltsin's administration and that of Bill Clinton was probably going to lead to an alliance between Russia and America," the political analyst told Sputnik.

The partnership never really took shape but major changes were underway. For instance, Russian mainstream opinion drastically transformed in the 90s. Russians no longer perceived the United States and Western Europe as an adversary but the narrative in the West did not follow suit, the journalist asserted.

"Unfortunately, Russia is still seen as an enemy by many countries and many parts of the military and political establishment particularly in the United States and Great Britain," MacDonald noted.

The anti-Russian sentiment is also artificially fueled in the West. The Irish journalist named it another major reason for the current standoff.

This "particular ethos" has emerged in several post-Soviet states, including the Baltic nations and Georgia and to varying degrees in Poland and Romania. Slovakia, the Czech Republic and Hungary have remained immune to the anti-Russian virus.

"Politicians have found it very useful to take anti-Russian position and to use hysteria and genuine fear of [Russia] to their advantage. In many cases they use it to cover corruption, economic incompetence and hopelessness in the domestic market," MacDonald stated.

As it turned out, Ireland had the same experience decades ago.

During its first 50 years of independence, Ireland was largely a failed state. The party managed to stay in power by "generating hysteria of the British threat, which was pretty much non-existent at that stage. I can see right now a carbon copy of this in the Baltic states, Poland, Ukraine," the journalist observed.

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 #32
Interfax-Ukraine
September 1, 2015
Russia defined as aggressor, Ukraine's enemy in draft military doctrine - Yatseniuk
 
The Cabinet of Ministers in its draft military doctrine of Ukraine has defined Russia as an enemy and an aggressor state, Ukrainian Prime Minister Arseniy Yatseniuk has said.

"The draft military doctrine for the first time in the history of Ukraine's independence has defined an opponent and aggressor, which is Russia," he said at a briefing in Odesa on Tuesday.

Yatseniuk said that the draft military doctrine of Ukraine had been sent to the National Security and Defense Council for consideration, after which it is subject to the approval of the Ukrainian president.

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 #33
The Vineyard of the Saker
http://thesaker.is
August 31, 2015
The Saker interviews Peter Koenig
Western Sanctions on Russia - Russia-China Cooperation and a Tectonic Shift of World Economics - World Power

Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, RT, Sputnik News, TeleSur, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion - An Economic Thriller about War, Environmental Destruction and Corporate Greed - fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! - Essays from the Resistance

The Saker: How is Russia coping with sanctions so far and what are the prospects for the future?

Peter Koenig: Let's begin with what are 'sanctions'? - Sanctions are (economic) punishments by the self-proclaimed empire in Washington and its European minions on any country that does not follow the dictate of the empire. Actually, it's worse. The European spineless puppets participate despite their own losses, lest they may be sanctioned themselves by the empire. In some cases, they are so submissive, like in the case of punishing Russia, they advance sanctions, against their own (economic and political) interests, just to please the transatlantic hegemon which is far away from the battleground - always stays far away from where the action is, so that others may get bombed and hurt.

Case in point: WWI and WWII - played out in and destroyed Europe, even though the impulses for the two ferocious world wars came from the US. The current 'crisis' around Ukraine is also entirely fabricated and instigated by Washington to the point of provoking another world war, maybe willy-nilly the last one of our civilization. Washington does not miss a beat for denigrating Russian President Putin, to enter the ever more transparently horrendous power game for Ukraine, where Obama's men with the help of the European vassals organized a coup, displacing a democratically elected president - Victor Yanukovych - and put a criminal, murderous Nazi Government in place.

The idea is against all previous accords, making Ukraine a NATO country and as a side line usurping the Ukraine's riches in agricultural land. Ukraine was for hundreds of years considered Europe's bread basket, especially for the Soviet Union and later for Russia. Ukraine has also natural resources, notably minerals and natural gas. With an estimated 1.2 trillion cubic meters (m3) Ukraine has Europe's 3rd largest shale gas reserves. Shale gas is accessed by the highly controversial and socio-environmentally unfriendly extraction process called 'fracking'.

The US economy which depends largely on the war industry needs constantly new wars and conflicts. More than 50% of its GDP depends on the military and related industries and services. Obama brags being currently involved in 7 wars around the globe, notwithstanding the almost countless conflicts around the globe, instigated, funded and carried out by proxies on behalf of the empire. But Mr. Putin has not fallen into trap. In fact, thanks to Vladimir Putin's stellar strategic thinking and diplomacy, the world - especially Europe - has so far been spared a WWIII - the 'would-be' third war within 100 years.

To make sure the world at large believes that Russia is the culprit in the atrocious and deadly Ukraine conflict, sanctions have to be levied against Russia; Mr. Putin has to be slandered, insulted, vilified. The naked emperor's word still has an impact in the western neoliberal hemisphere, whether politicians believe it or not - they do as if, the same way as people admire the new clothes of the naked emperor. Sanctions should punish the Russian people, evoke an internal rebellion and lead to 'regime change'. The contrary has happened. Mr. Putin with 85% enjoys one of the highest approval ratings of any democratically elected head of state.

The second question is - why can one nation alone, the US of A, impose sanctions? - Because the US had after WWII, when they called for the Bretton Woods Conference to establish the World Bank and the International Monetary Fund (IMF) already one fix idea - to dominate the world through the weapon of finance. What wasn't obvious then, has since become crystal clear. The self-declared victor of WWII dictated the rules.

With the US holding the largest gold reserves at the time, the ingenious idea was to establish a gold standard which would peg the US dollar against a gold price of US$ 35 / ounce and all other western currencies were pegged to the dollar. The IMF was created to watch over the western gold-based monetary system.

Nixon abandoned the gold standard in 1971 because (i) too many dollars were in circulation for the US to keep up with gold reserves, and (ii) the US debt left by the Vietnam War was to be covered by the sale of gold at market price which already then was about ten times higher than the fixed $ 35 rate. Yes, at that time even a Nixon Administration had some ethics, namely paying its debt.

But the real and hidden reason was brilliant. By leaving the gold standard, the dollar became de facto the world's fiat currency of reference and main reserve money, basically replacing gold. Large international contracts were established in dollars, therefore increasing the demand for dollars. In addition, through a special deal negotiated between the Bush family, friends of the Saudi King, and the House of Saud, later formalized by Kissinger with the Saudi Government, Saudi Arabia as head of OPEC, was to assure that the dollar would remain the only currency in which hydrocarbons were to be traded in the future. In return, the US would assure militarily the Saudis security. Since everybody needed oil, everybody needed dollars. The demand for more dollars in circulation.

In comes the BIS - Bank for International Settlements, created in 1930 and originally set up to facilitate Germany's reparation payments imposed by the Treaty of Versailles. Today, the BIS, largely privately owned by the Rothschild group and other western banking families, is considered the central bank of central banks, controlling almost all international monetary transactions - most of which have to transit through a US based Wall Street bank. Hence was created a fraudulent fiat monetary system thanks to which Washington plays up to this day cowboy with the rest of the world. But this is changing rapidly.

The short of the long story explains why the US has (had) so much financial power over the rest of the world, including Russia; why Washington may seize and block foreign assets around the world at will, why it can coerce and 'sanction' other countries into behaving according to their, the US agenda.

This supremacy is gradually faltering and fading ever faster. Sanctions will become more threats than actual actions. The BRICS (Brazil, Russia, India, China and South Africa), as well as the SCO (Shanghai Cooperation Organization) countries are carrying out general trade in their own currencies. Russia and China are already trading hydrocarbons in their own currencies and others will soon follow.

The Cost of sanctions to Russia is a controversial subject. According to CNN, the sanctions cost Russia 'more than US$ 100 billion'. At the same time, Newsweek admits that Russia could easily replace trade with EU by increasing trade with Asia and Latin America, thereby rapidly reduce the cost of 'sanctions'. Newsweek also says that the cost of the US dictated sanctions on Europe to impose on Russia cost the EU at least € 100 billion. Indian NDTV reports losses to Europe at € 21 billion; at the same time they report 2013 EU exports to Russia as €119 billion. 'Sanctions' started in 2014.

The true story on the ground is increasing misery especially for Europe's southern countries, like Spain, Greece, Italy; common people suffering manly from losses of agricultural exports and declining tourism. But also job losses throughout the EU, for example in Germany alone, lost and threatened jobs due to the sanctions on Russia (reduced trade) are estimated at more than 300,000. The chain of consequences is endless, but mostly hurting Europe - and especially not the trans-Atlantic Big Master and hegemon. Putin actually said that these sanctions are godsent, as it allows Russia to develop agriculture and industry to eventually become self-sufficient, meaning independent from western trade.

The question of oil prices and oil price manipulation is also a controversial story. Oil prices have dropped by about 50% within the last 12 months, to currently around US$ 50 / barrel. This price drop has certainly caused damage to everybody selling hydrocarbons. The benefit must be political, somewhere. Common wisdom would have it that Saudi Arabia in cohorts with the US is overproducing petrol to hurt the 'enemy', i.e. Russia, Iran and Venezuela.

However, an interesting new theory is emerging, namely that Saudi Arabia is increasingly realizing the decline of the west and is seeking a closer alliance with Russia and China - which are sure client for her hydrocarbons. Recent meetings between the Russian and Saudi Foreign Ministers, Sergei Lavrov and Adel al-Jubeir, most notably the latter's visit to Moscow earlier in August would indicate a Russian - Saudi rapprochement that is about more than just energy.

Some media outlets claim the Saudis see the sinking western ship and are seeking new alliances in anew orbit. The new Russia-China (BRICS, SCO) might welcome them against some political concessions. It might just be possible that in agreement with Russia and despite the temporary damage to Russia, the Saudis keep pressing the oil price down which may hurt the US shale or fracking industry more than Russia. According to the International Energy Agency the average breakeven for oil is around $60 / barrel - which makes many shale oil production sites no longer profitable, especially in Texas and North Dakota. These industries grew in the last ten years and are heavily indebted, thus bankruptcies abound. In Texas alone some 60,000 shale oil / fracking laborers are out of work. - You may call this 'reverse sanctions'.

In addition, when gas prices dropped drastically earlier this year, many western shareholders of Russian gas companies panicked and sold off their shares at fire-sale prices - only for the Government of Russia to buy them back- at a net profit of $20 billion within a couple of days, as Spiegel-on-line reported earlier this year.

As we know, diplomacy between Lavrov and Kerry has not advanced an inch regarding Syria. To the contrary - ISIS, sponsored by the US, the Saudis and other Gulf States, but also the EU and NATO, is infringing ever more of Syrian territory, killing more civilians and causing a flood of refugees that are blocked from entering the EU - co-responsible for the massive Middle East destruction and misery.

The Saker: What is the complementary nature of the Russian and Chinese economies and what is the collaborative potential of these two economies?

Peter Koenig: What the different high level Russia-Saudi meetings might also have on their agenda, other than energy deals and weapon sales - is the Saudis taking an active role in helping demilitarizing the Middle East, particularly stopping sponsoring and arming ISIS and other anti-Syria terror groups - and seeking normalizing relations with Iran, both countries being close allies of Russia and China.

Russia and China have already a close association in mutual financial assistance with large currency swaps between the two central banks. They are also closely linked in trading, for which especially the recent huge gas deals testify. Russia has signed with China last year two enormous gas deals amounting to close to US$ 800 billion equivalent. The trade will take place in their respective local currencies not in US-dollars.

This and other hydrocarbon deals in currencies other than the US dollar will drastically reduce demand for the dollar and weaken even more the dollars credibility as a reserve currency. In 2000, international reserves were to more than 70% held in US dollar denominated securities. This figure has dropped in 2010 to 60% and is today rapidly approaching 50%. When the rate falls below the 50% mark, a flight out of the dollar may be expected.

Russia Inside and RT reported that Russia will issue in 2016 a new international payment card, the MIR card (MIR meaning peace around the world), in association with the Japanese JCB Credit Card system. When the new MIR card takes hold in the west, demand for the dollar and its credibility as a reserve currency will further drop. A collapse of the western fiat monetary system, the weapon of usurpation and destruction in so many countries around the globe, may be imminent.

Why did the Chinese currency 'devalue' and the Chinese stock exchange all but collapse? - Western media report as key responsibility a faltering Chinese economy. Look again: the Yuan was over-valued at the insistence of the US which made the Chinese central bank keep the Yuan fluctuating within a 2% 'snake' to the dollar, a request tolerated due to the enormous dollar reserves China holds, some US$ 1.6 trillion. Now the Bank of China has decided to let the Yuan 'float' to its natural value which will give it additional strength in the world market. This will make it more attractive as a world reserve currency - which is precisely what China is aiming for, namely that the Yuan will be admitted in the IMF's SDR basket (Special Drawing Rights) which as of today consists of only four currencies- the US dollar, the British Pound, the Euro and the Japanese Yen. Adding the Yuan, would make the Yuan de facto an internationally accepted reserve currency, taking further weight away from the dollar.

As to the stock exchange - amazing is that western bankers propagandize a decline of the Chinese economy which by their own account (Bloomberg) is still growing at 7%, which is just what China wants. Knowing the impact the Shanghai stock exchange fluctuations have on the world markets, would not Chinese bankers be able, as their western counterparts often do, to 'massage' the Chinese bourse downwards, an indirect 'sanction' to the west - costing western investors and banks hundreds of billions of dollars, but changing hardly anything of China's internal economy.

China's leader, Xi Jinping, joined the Russian victory celebration over Nazi Germany on 9 May 2015 with Chinese honor guards parading alongside Russian troops. Similarly, Putin and Russian troops will join Xi in Beijing on 3 September to celebrate the 70th Anniversary of the Japanese capitulation, the end of WWII. This sends a clear message of a solid Russia-China defense alliance to the west. The recent expansion of the SCO in September 2014 in Tajikistan - admitting India, Pakistan, Iran to the economic and strategic military coalition further enhances the emergence of a new power in the east.

These observations of change may signal that a tectonic power shift, not only in the Middle East, but around the world may be not far away. It happens gradually, not overnight - allowing unaligned countries to prepare for the new era - an era of sovereign countries living in peace and social justice.

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 #34
Longreads
http://blog.longreads.com
August 31, 2015
Back in the USSR: A Reading List
[Links here http://blog.longreads.com/2015/08/31/back-in-the-ussr-reading-list/]

Svetlana Boym, an eminent Leningrad-born literary scholar, died earlier this month in Boston. She was a versatile and eloquent critic, novelist, and photographer, but is perhaps best known for her work on nostalgia, a cultural and psychological phenomenon that she described as "a strategy of survival, a way of making sense of the impossibility of homecoming."

Boym left the USSR in the early 1980s. Since then, her country of birth has formally disintegrated, but has also become one of the most fetishized nostalgic objects of our post-Cold War imagination, a political entity that continues to cast spectral shadows in unexpected places - in Russia, in the former Communist Bloc, and in the West.

Writing about post-Soviet Kaliningrad/Königsberg, Boym described the city, and by extension contemporary Russia as a whole, as a "theme park of lost illusions." The stories in this reading list - from a haunting travelogue through an abandoned Soviet mining town in the Arctic to Boym's account of Moscow's 850th anniversary celebrations in 1997 - take us on a ride through the park's gaudily uncanny landscapes.

1. "The Most Soviet Park in Russia." (Charles Shaw, The Appendix, March 2014)

Shaw guides us through the sprawling kitsch and grandiose architecture of Moscow's VDNKh park, a World Fair-style amalgamation of pavilions and exhibition spaces. In the post-Soviet era VDNKh has morphed into a mishmash of commercial outlets and tourist attractions (including "two competing live shark habitats, one of which is housed in the former pavilion to Friendship of the Peoples"), and this essay channels the surreal ambiance of the space it describes.

2. "Nostalgia for Russia's Soviet History." (Anya von Bremzen, Travel + Leisure, September 2013)

After writing Mastering the Art of Soviet Cooking, a memoir of Soviet food cultures, Anya von Bremzen returns to her native Moscow with her mom. Between sumptuous meals, the two explore the strange vogue for Soviet design, fashion, and food among younger Muscovites who never lived through - or can't remember - the struggle and hardship that went hand-in-hand with (now-retro) objects like Red October Chocolate or avoska mesh bags.

3. "The Cold Rim of the World." (Colin Dickey, Longreads, March 2015)

Pyramiden, an abandoned Soviet outpost in the far reaches of the Arctic archipelago of Svalbard, has turned from utopia to dystopia in the short span of 15 years. Once a seemingly prosperous mining town, now in ruins and overtaken by gulls, Dickey sees in Pyramiden not just the collapse of an ideology, but a vision of a post-human landscape, "where human history has once again joined the deep geologic time of the earth itself."

4. "Into the Cosmos" (Chloe Aridjis, Granta, August 2012)

"Looking back on his early years, writer Zinovy Zinik describes how the mere knowledge of Sputnik 1 orbiting the sky instilled a sense of triumphant flight (and, later in life, of tragic landing) - it was much easier to become a cosmonaut than to obtain an exit visa to travel abroad, and therefore all Soviet adolescent boys wanted to fly."

In her essay, Aridjis explores the parallels between Soviet cosmonauts and circus performers, and how both captured a distinct Cold War-era fascination with the vertical.
5. "My Midwestern Soviet Childhood." (Liesl Schillinger, Virgina Quarterly Review, January 2015)


From recitations of Pushkin over dinner (in Russian!) to poppyseed birthday cakes, Schillinger evokes her unconventional upbringing by two Slavophile professor parents. Bemoaning the sad fate of the study of Russian in the US, she sees a silver lining in the renewed tensions between Moscow and the West: perhaps Russia's greater political relevance will also resuscitate interest in Russian culture, as it did back in the days of the USSR?

6. "Nostalgia, Moscow Style." (Svetlana Boym, Harvard Design Magazine, Winter/Spring 2001)

"For the celebration of Moscow's 850th anniversary, in 1997, Mayor Yuri Luzhkov ordered the clouds over the Russian capital to be dispersed."

Taking a cue from the extravagant festivities that marked a mostly fabricated anniversary, Boym explores the persistence - and fragility - of Soviet-inflected narratives of grandeur in post-Communist Moscow, from the sprinkling of massive historical monuments all over the city to the construction of Europe's largest underground shopping mall beneath Manezh Square.

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