#2
Izvestia
October 7, 2015
Putin, security agencies show biggest rise in trust - poll
Mariya Yelkina, Russians start trusting army more. Level of trust in all institutions of power increases in two years

A recent Levada Centre poll has showed that Russians trust three institutions the most - the president (80 per cent), the army (64 per cent) and the church (53 per cent). That said, trust in the army and the police has increased the most in the last year (by 11 per cent and 8 per cent respectively). Some 1,600 people from 134 centres of population in 46 regions of the country were questioned in the course of the study.

Russian citizens trust the head of state the most. Whereas in 2013, 55 per cent of those questioned said that the country's president "totally deserves trust", the figure was 79 per cent in 2014 and today reached 80 per cent.

The most significant increase in trust in the last two years is registered for the army. The country's armed forces were trusted by 43 per cent of those polled in 2013, by 53 per cent in 2014, and by as many as 64 per cent today.

One in two Russians trust the security agencies (50 per cent) and the government (45 per cent). The upper and lower chambers of parliament each merited 40 per cent trust.

Despite the fact that the church remains one of the three institutions that people trust the most, over the year the figure for trust in it has declined slightly (to 53 per cent) compared to 54 per cent in 2014. Furthermore, Russians have started to trust the government, the media and trade unions a little less since 2013.

Levada Centre sociologist Karina Pipiya noted that in the last two years there had been an increase in trust in all institutions of power, which has been affected by, among other things, the effect of the "Crimean campaign". That said, the most significant increase in trust has been for those institutions that were trusted the most previously too (the president and the army).

The sociologist attributes the appreciable increase in trust in security agencies to the fact that in recent years Russians' close attention has been focused on the foreign policy agenda.

"To begin with, Russians actively followed the Ukrainian crisis and now attention is centred on the conflict in Syria, in which connection the subject of the foreign policy challenges and national threats facing Russia - from 'fascists' and discrimination against Russians in eastern Ukraine to protecting Russians from Islamic radicalism - have started to be discussed more frequently," Karina Pipiya noted.

In her words, it is no surprise that against this backdrop something like 80 per cent of Russians are certain that the country has "enemies". This was mentioned most frequently by people living in villages and elderly people, for whom television is the main source of information.

"The increased sense of foreign policy threats and 'enemies' shapes the perception that the country needs protection, which is also the reason for a significant increase in trust in institutions that can provide this protection in the event of military action. At the same time, the trust in them does not testify that Russians are prepared for just any war involving our country. As regards the armed conflict in Ukraine and Syria, the majority of the population considered it important to provide diplomatic and humanitarian support, but were at the same time opposed to direct Russian military participation in them," the sociologist added.

She also noted that one of the characteristics of Russian society is a dual pattern of trust. On the one hand, we can see a high level of trust in institutions of power, but on the other, serious interpersonal mistrust can be observed. Something like 70 per cent note that it is necessary to display caution in relations with other people.

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 #3
Interfax
October 14, 2015
75% of Russians see Western countries as adversaries

Russian citizens negatively assess the U.S. role in the world and feel critical about the level of Russian-U.S. relations, Levada Center told Interfax on Oct. 14.

In the opinion of 71 percent of the respondents, the United States is generally playing a negative role in the contemporary world (50 percent in September 2013). Only 4 percent of Russians say the role of the United States is positive and 3 percent dub it neutral.

A fifth of the respondents (19 percent) argue that the United States "sometimes plays a positive role and sometimes this role is negative." Levada Center polled 1,600 respondents in 134 populated localities in 46 regions on October 2-5.

Forty-five percent of the respondents called the current relations between Russia and the United States tense, which was the highest indicator since 2001, the sociologists said.

Another 29 percent described Russian-American relations as hostile (39 percent in September 2014 and 12 percent in March 2014), and 18 percent said the relations were cool (11 percent in September 2014).

Positive opinions were expressed much less frequently: 4 percent said Russian-American relations were normal and calm (2 percent in September and 14 percent in March 2014), 1 percent called them good and neighborly (the same as a year ago), and less than 1 percent called the relations friendly.

Speaking of Russia-EU relations, 42 percent of Russians described them as tense, 32 percent as cool and 12 percent as hostile. Seven percent of the respondents said the relations were normal, and 2 percent called them friendly and good.

In the opinion of 75 percent of Russians, the largest Western countries (the United States, Germany, Japan, the UK and others) are "Russia's adversaries seeking to resolve their problems at its expense and using every opportunity to damage its interests."

At the same time, 17 percent of respondents believe that these are "Russian partners, which have common interests [such as the fight against crime and terrorism, ecological disasters, science, culture and the economy]."

According to 46 percent of Russians, Western democracy does not go well with Russia and has a destructive impact. Slightly more than a third (36 percent) believe that it "suits Russia but needs serious adjustment because of the peculiarities of our country." Ten percent argue that it is necessary for Russia's development.

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 #4
Irrussianality
https://irrussianality.wordpress.com
October 13, 2015
Russia and the East
By Paul Robinson
Paul Robinson is a professor in the Graduate School of Public and International Affairs at the University of Ottawa. Paul Robinson holds an MA in Russian and Eastern European Studies from the University of Toronto and a D. Phil. in Modern History from the University of Oxford. Prior to his graduate studies, he served as a regular officer in the British Army Intelligence Corps from 1989 to 1994, and as a reserve officer in the Canadian Forces from 1994 to 1996. He also worked as a media research executive in Moscow in 1995.

Russia's military campaign in Syria is front page news at the moment, so it is perhaps appropriate that this week my class 'Russia and the West' will be taking a break from the history of Russian-Western relations to take a look at Russia's interactions with the rest of the world. What such a look reveals is that the historical relationship between Russia and non-European/non-Christian peoples has been somewhat different than that between Western Europe (and later also North America) and most of the rest of the world.

While the Muslim world was more advanced than Western Europe, Europeans don't seem to have looked up to it as something to emulate. Rather it was for many centuries a civilization to be feared, and then once it ceased to be feared (roughly from the relief of the siege of Vienna in 1683 onwards) it became something to look down upon. As European power spread around the world in the era of colonialism, the West acquired a belief in its own superiority and others' inferiority, which to some extent persists to this day and is reflected in the foreign policy obsession with spreading Western liberal democratic norms around the world.

Russia, by contrast, rarely saw the East in quite such negative colours. Although the great philosopher Vladimir Solovyov pronounced his fears about the 'yellow peril' which he believed would destroy Russia, on the whole Russians worried more about dangers coming from the West. After all, most of the great invasions which have ravaged Russia have come from that direction. The one exception is the Mongols, but despite the myth of the 'Mongol yoke', contemporary accounts of Mongol rule depict it as actually rather mild. Furthermore, Russian rulers, far from despising Mongol administration as inferior, regarded it as a model of power and efficiency to be copied. It is notable that Alexander Nevskii in the mid-13th century chose to make peace with the Mongols, but to fight the Germans. The Mongols, after all, only wanted tribute; the Teutonic Knights sought to forcibly convert others to Catholicism. Given a choice between conquest from the east or conquest from the west, the east looked preferable.

As for Islam, it didn't threaten Russian Orthodoxy in the way that it was seen to threaten Roman Catholicism. There were relatively few contacts between the Muslim world and pre-Romanov Russia, but the few Russians who ventured into Islamic regions tended to be impressed by what they saw. An example was Afanasii Nikitin, whose account of his trip to Persia in the 1460s convinced many that he had converted to Islam. Once Russia expanded into Muslim territory following the conquest of Kazan in 1552, it showed little interest in converting Muslims to Orthodoxy. Numerous wars followed against the Ottoman Empire, but they were not obviously different in nature from those which Russia fought against European states. The Russo-Turkish War of 1877-8 was justified by a veneer of civilizational discourse about saving Christians from the barbaric Turks, but even in that case the Russians were concerned only with 'rescuing' Bulgarians, not with 'civilizing' the Ottomans.

As David Schimmelpenninck van der Oye has shown, Pre-revolutionary Russian 'Orientalism' differed from its Western counterpart in that for the most part Russians never fully endorsed European ideas of racial superiority. Academics such as Aleksandr Kazem-Bek, Jozef Kowalewski, and Vladimir Vasilev argued that Russian rule would benefit the relatively backward territories which Russia conquered in the nineteenth century in the Caucasus and Central Asia, but at the same time noted that the backwardness was a product of historical circumstances and not of any racial inferiority. Eastern peoples in their eyes were just as capable as Western ones. Europeans, meanwhile, were every bit as barbaric as Muslims and Asians, as shown in Vasilii Vereshchagin's 1868 pictures 'After Success' and 'After Failure', which suggest a degree of moral equivalency between Central Asian and European soldiers, each equally nonchalant about those killed in battle.

Having conquered a large amount of Muslim territory in Central Asia and the Caucasus in the 1860s and 1870s, the Russian Empire was ambivalent towards its Muslim subjects. On the one hand, the Empire viewed them with some suspicion, and didn't treat them exactly as equals. On the other hand, it wasn't interested in converting them to Orthodoxy and was willing to allow them exemptions from some of the demands made on other subjects, such as being conscripted into the army. Some officials regarded Muslims as a potential fifth column; others viewed them as being very loyal. During the First World War, for instance, the wife of the Viceroy of the Caucasus, Count Vorontsov-Dashkov, rejected a request that her charitable foundation provide support for Azeri refugees on the grounds that, 'I know no Tatar (i.e. Muslim) refugees. I know only Tatar traitors.' In contrast, Vorontsov-Dashkov's successor, Grand Duke Nikolai Nikolaevich, made a point of visiting the Sunni and Shia mosques in Tbilisi on the day of his arrival, later rejected plans to settle European refugees on Muslim land, and subsequently declared that, 'One cannot doubt the firm bonds between the Caucasus's Muslims and Russia.'

In the Soviet era Islam was, from a Marxist perspective, an oppressive ideology which required elimination. The Soviets therefore carried out a vigorous strategy of secularization. But they were equally hostile towards Christianity and all other religions. They did not single out Islam or portray it in a uniquely negative light. It is true that the top stratum of Soviet rulers came almost exclusively from the European parts of the USSR, and Soviet economic practices in Central Asia could in some respects be viewed as colonial in nature. In Soviet eyes, the relationship between Russians and Central Asians was something like that between a mother and her children - nurturing, but decidedly unequal. Nevertheless, from Khrushchev onwards, under the doctrine of korenizatsiia (which dictated that the national republics of the USSR should be governed by members of the nationality in question), the Communist Party did attempt to educate and promote local elites and allow for a degree of autonomy. The colonial model is not entirely appropriate.

In short, when one reviews the history of Russia's relationship with the East in general, and with Islam in particular, it isn't as negative as that of the West. There has been a little less hostility and fearfulness, a little less of a sense of superiority, and also a little more tolerance. This fits with the Slavophile view that I have described elsewhere, which contends that cultural diversity is desirable. It may help to explain why Russia, despite having conquered and to a degree exploited Muslim peoples in the past, today enjoys somewhat better (if far from perfect) relations with parts of the Muslim world than does the West.

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 #5
Moscow Times
October 14, 2015
Putin Says Russian Economy Stabilizing
By Peter Hobson

President Vladimir Putin on Tuesday strove to deliver a positive message on the economy, even as output continues to shrink.

"We have generally reached the peak of the crisis and overall our economy is gradually adapting to these new economic circumstances," Putin said during a speech at the VTB Capital "Russia Calling!" international investment forum in Moscow.

The Russian economy has been wrestling since last year with sharp falls in the price of oil, its main export, and Western sanctions over Ukraine.

Despite slumping output across large swathes of the economy, Putin said the situation was stabilizing and showered praise on government and Central Bank officials.

"Our management team in the economy has demonstrated a high degree of responsibility, consistency and the ability to achieve results," he said, adding that this was a sign of Russia's investment attractiveness.

He reiterated that Russia's economy would remain open, and there would be no capital controls.

Putin pointed to a capital inflow of $5.3 billion in the third quarter - Russia's first quarterly inflow for five years - as proof of the economy's strength. However, according to Central Bank data, more than $400 billion has flooded out of the economy since the last inflow in 2010, and officials expect another net capital outflow in the last quarter of this year.

Putin also used his speech at the forum to sound a soothing note on international issues, at a time when Moscow's support for Ukrainian separatists and intervention in the Syrian civil war have put many countries on edge.

He said Nord Stream II, a planned gas pipeline under the Baltic Sea to Germany, was not aimed at undermining the role of any country in transiting gas to Europe - a reference to Ukraine - and reiterated his commitment to imposing the Minsk peace deal for eastern Ukraine, according to the Reuters news agency.

Meanwhile, he said Russia was not looking to take control in Syria and called Turkey one of Russia's most important partners. Moscow and Ankara have taken opposite sides in the Syrian conflict, where Russian is using air strikes to support President Bashar Assad, and Turkey has protested Russian violations of its airspace.

Putin's bullish outlook on the economy echoed his speech at Russia's last major investment forum in St. Petersburg in May, when he announced, "We have stabilized the situation, absorbed the negative short-term fluctuations, and are now making our way forward confidently through this difficult patch."

But while the initial shock of sanctions and a falling oil price has passed, with Russia staving off a currency collapse or meltdown of the banking system late last year, many economic indicators have worsened in recent months.

The county's economic contraction accelerated from 2.2 percent year-on-year in the first quarter to 4.6 percent in the second, according to official data, with investment, consumer spending and industrial output falling sharply.

The price of oil - Russia's most important export and the source of about 40 percent of budget revenue - has decreased from around $65 per barrel in early summer to about $50.

The Central Bank expects the economy to shrink by 4 percent this year, and contract again in 2016.

 #6
Kremlin.ru
October 14, 2015
Russia Calling! Investment Forum. (transcript continued)

Vladimir Putin took part in the 7th Russia Calling! Investment Forum organised by VTB Capital.

The theme of the plenary session was "Building Long-term Cooperation and Developing Opportunities for Economic Growth." The discussion focused on ways of adapting the Russian economy to the changing macroeconomic conditions that open up new opportunities for strengthening the Eurasian Economic Union and creating strategic integrational projects within the framework of the Silk Route Economic Belt, as well as other issues of importance for the Russian and global economies.
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Chairman of the Executive Board of Fraport AG Stefan Schulte: As we are all here at this plenum I think we all believe in the future of Russia and we know that recovery will come as soon as possible.

If I take the aviation industry, yes, it is going through difficult times. You know all together the situation of Transaero. If we take St Petersburg, we know that Aeroflot is more focusing at the moment on Moscow. That is all fine. We would like to explore even more the potential of St Petersburg and invest even more, because we want to invest, and investment means jobs, and it means further potential for the GDP. I think a good proposal would be to open the sky somehow for more charter traffic for St Petersburg because St Petersburg is a great city with a lot of potential for tourists and if we could have some chance to discuss those issues it would be really great because we know there is a big appetite from a lot of European countries to go to St Petersburg to see this great city and to create more connectivity, and not just for tourism there but also to bring in business.

Vladimir Putin: I can only support everything our colleague has said, especially as he is speaking of my hometown of St Petersburg. The potential is great, and clearly, it has not yet been fully realised. We will do everything together with you to make this possible.

The airport did turn out very well, even wonderfully. If you remember, I even took part in the first steps of its construction: I laid a capsule there. It is a pleasure for me that the project has been completed with such brilliance. I am certain that it will be used to capacity and will operate efficiently.

Andrei Kostin: Thank you very much.

Colleagues, your questions are welcome. You can address them to any of the participants, though I believe most of them will be addressed to Mr Putin.

Question: The last 12 months have been very difficult for the Russian economy. Would you say the most difficult phase of reconfiguring the economy for lower oil prices and for less access to external financing has fully been completed? And if so, could we expect renewed growth next year, in 2016? And if not, when do you think the process will be completed and in that what do you see as the hardest tasks for the ministries of the Russian Government?

Vladimir Putin: We have already spoken about this. Next week I believe the 2016 budget is to be submitted to Parliament. Predictions are made on the basis of economic development forecasts formulated by the Economic Development Ministry and the Finance Ministry. Last year, as you may know, we had a certain slump, and it will continue this year. However, we believe that we will recover from this in the next few years.

I already said in my opening remarks that we have if not passed the peak, then reached it - I will be very careful with the wording here. Some colleagues believe we have passed the peak of the crisis and all our plans for the next few years have been made on the premise that we will not only overcome this, not only recover from this recession in certain sectors or the economy, but will also restore our overall positive dynamics. I have no doubt that this is the way it will be, and all our forecasts, which are very in-depth and professional, show this as well.

We will be doing this by using very realistic and very modest forecasts for prices of hydrocarbons, of energy resources - oil, gas - proceeding from $50 a barrel. This will allow us to concentrate greater resources on the main task facing us, which is now actually even easier to resolve than in conditions of high prices on traditional export commodities. The task is to achieve structural changes in our economy, and this is what all our actions will be based on.

Question: A question from Siemens. We have heard a lot about the crisis and about political difficulties. How do you see the prospects for the development of relations between Germany and Russia, prospects for German companies? We have just heard about the decision to build Nord Stream-2. What are the chances of taking part in a national project for high-speed transportation, for instance? How do you see the development of the economy for foreign, German companies?

Vladimir Putin: Germany as a country is one of our major trade and economic partners. This concerns not only trade turnover, but also the depth of penetration by German businesses into the Russian economy. German business comes to Russia, as we know, not only in areas of 'fast' money - German businesses come to machine engineering, to power generation on the territory of the Russian Federation, to agriculture, pharmaceuticals, to the key industries that we are giving special attention to and intend to do so in the future as well. This is the first thing I would like to note.

The second thing I would like to highlight is the balanced and I would say wise approach of German businesses to developing relations with Russia. German companies do not swing from one extreme to another depending on the political situation, but act very pragmatically, proceeding from their own interests and those of their partners. We value this highly.

As for specific projects, they were formulated quite some time ago, at least the ones you mentioned. Nord Stream-2 within the framework of the greater Nord Stream project was formulated several years ago, back in 2010, and was then implemented in stages, beginning with Nord Stream-1.

While we were implementing North Stream-1, our partners, the company's shareholders were working on their ideas to expand the project. Therefore, there is nothing new about this. It is directed at meeting the demand for energy resources primarily in Northern Europe, considering the drop in production in Great Britain and Norway and the simultaneously growing demand for energy resources in this part of Europe. It is absolutely not aimed at taking away anyone's transit opportunities. I would like you to leave behind all these political speculations.

As for Ukrainian transit and shipments to Southern Europe, we have separate plans, including those involving our German, Turkish and French partners - there are many possible participants in future projects. Nord Stream-2 has nothing to do with those transits and is not in anybody's way.

Regarding high-speed transportation routes - we would be happy to see you on such projects, on infrastructural projects. Your company took a very active and significant part in Russia's transport machine engineering and its development, and continues to do so. This is a mutually beneficial project and naturally we would be happy to carry on with this cooperation.

We know that our Chinese partners are also developing their transport machine engineering using German technologies. However, when implementing such large scale projects as high-speed railways, in this case from Moscow to Kazan and further, we have to proceed from economic parameters, from cost, primarily the cost of loans. This is a question to your Government rather than to ours. If access to European financing is limited for participants in such projects, it does not leave us much choice. In that case, our Chinese partners' proposal to take part in the financing may be decisive. This is one thing.

The other is the price, of course. If we agree on all of these things, we will be happy to see your company join the ranks of those who are implementing projects of this kind.

George Sebulela: Mr President, thank you very much for giving me the opportunity to ask this question. My name is George Sebulela, I am from South Africa, Chairman of Black Business Council and I serve on the South African Presidential Advisory Group. I want to also note the role that Russia has played in the transformation of South Africa during the political times, particularly for the ANC, which was really appreciated.

My question is around the BRICS countries. One is: Is China-Russia a strategic partnership, a strong and a stable one? We have seen a lot of the Chinese travelling to Africa for various opportunities, becoming much more active. And secondly, what do you see as the priorities in terms of economic cooperation with China, similarly with Africa?

Vladimir Putin: We are aware of the activity of Chinese business in Africa. There is nothing unusual here: Africa is a very rich continent, rich in mineral resources of different kinds. It is natural that such a rapidly developing economy as China needs a stable supply of mineral resources to its rapidly developing market. Therefore, I believe this is the reason behind China's activity in Africa generally and in the South African Republic in particular.

As for relations between Russia, China, the South African Republic, Brazil and India, they are acquiring a special nature and becoming more fundamental, because all of these countries, we are all working within the framework of trade that is growing in volume and the growing authority of the BRICS international organisation.

You speak about the prospects for the development of relations between Russia and China. China as a nation is our biggest trade and economic partner. I may get the numbers wrong, but it exceeded $83 billion last year - $83.5 billion, I think.

We have very big promising projects not only in energy, which is natural, considering the large volume of mineral resources in the east of the Russian Federation and the need to develop entire territories in China that are adjacent to Russia. There is nothing surprising in that we are supplying ever-growing volumes of oil and gas and starting the implementation of these major projects.

However, our cooperation is not limited to that. As you may know, we are doing a lot of construction in China in the sphere of nuclear power generation. This is an absolutely different type of energy, involving high technologies. We have built the Tianwan Nuclear Power Plant and we have an entire programme for future joint work in this area.

We have good prospects in infrastructure and transport. We are planning large projects in aviation, and there are other areas of mutual interest.

In this connection we find it very interesting to consider involving our partners in BRICS in joint work in all these areas; it seems very promising, specifically in nuclear energy. We are discussing one such project with the South African Republic.

However, this is not the only one - we have many different cooperation scenarios within the framework of the financial institutions we have created: the bank, the currency reserve pool - both are formed of $100 billion contributions. These are large resources that can, should and will be used for mutual development.

Question: Mr President, thank you for your time. I'm Steve Lantis, Portfolio Manager at Delaware Investments in the United States.

Russia adopted a fully floating ruble in a somewhat more dramatic fashion than many of us would have envisioned a year ago. But it has been clear that the steps you undertook have ensured that the economy is on a more stable path than we have seen in crises of 1998 and 2008. And as a member of the international investment community we applaud the fact that you undertook these steps without any restrictions on the free movement of capital. But I wanted to ask you at this time are there any circumstances that you can envision where the political leadership in Russia would make a change in that direction and put restrictions on the free movement of capital? Thank you.

Vladimir Putin: You recalled the crisis of 2008-2009. You have also mentioned the Central Bank's decision to introduce a floating national currency, the ruble. We did not do it in 2008-2009. Then we believed the economy was not ready for such steps, such tough measures. Then we really did use up huge reserves to maintain the ruble exchange rate and retained economic stability. However, we did not make the decision to limit the movement of capital, nor have we made it now, and we are not planning anything of the kind in the future.

I believe that the fact that we have demonstrated to all our partners and investors who have invested into the Russian economy that we would not do that is also a reason why we had a direct flow of investment in the third quarter of this year for the first time since the second quarter of 2010. I would like to repeat that we are not planning any limitations on the movement of capital.

As for the introduction of the floating ruble rate, this also has its drawbacks for some participants in economic activity: there are some drawbacks for Russian citizens, of course, for individuals, as this has influenced prices and, consequently, inflation. In other words, this has some negative consequences for the economy and our citizens. However, overall for the country and its economy, and therefore for the citizens of the Russian Federation in the final count, this step turned out to be the right one and a timely one.

To be continued.

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#7
Forbes.com
October 13, 2015
Investors Grill Russia: CalPERS, Foreign Investors Question Putin On Economy, Syria, Ukraine
By Kenneth Rapoza

Who says investors aren't worried about Russia's place in the world? Geopolitics is moving Russian markets at least as much as oil. If not in actual price movement, then certainly in terms of perception.  That perception has been negative since last March, when the Russian government annexed Crimea from Ukraine.  On Tuesday, foreign investors from the California public employee pension fund (CalPERS) to London's Prosperity Capital took advantage of the open-mic at the VTB Capital Russia Calling! conference to question Vladimir Putin on Syria, Ukraine and the resulting sanctions that have isolated Russia from the West and body-checked the Russian economy.

Investors want to know more about political strife, said a representative from London's Prosperity Capital, who then proceeded to ask about Syria and its impact on Russia's relations with Turkey.

"Turkey has a lot of concerns with respect to the Kurds and we are aware of those concerns and are talking with the government about this," Putin said, speaking through a translator. "Our military talks with their military and we also want political coordination with them on this matter too. Turkey is one of our biggest trading partners. A lot of our economies are intertwined. They've been a friend of Russia for a long time and we want to keep it that way," he said.

Russia's been bombing Syria for the past two weeks, attacking Islamic State forces as well as anti-Assad forces backed by the U.S. government. Over the weekend, Turkey blamed ISIS for a terrorist attack in the country's capital, Ankara. Some policy wonks say that Russia's involvement in Syria will send more refugees to Turkey, its southern neighbor. Moreover, the government of Recep Erdogan said that he was concerned about Russia's air bombing of anti-Assad groups, calling into question the Russia relationship.

Russia's energy firm, Gazprom, is loudly trying to make way with the Turkish government ahead of Nov. 1 elections in order to score a pipeline deal that will be another alternative out of Ukraine for Russian natural gas.

Ukraine was also on the mind of investors.

"These regions are under full economic blockade by Kyiv," Putin said of the Donbass region, home to majority ethnic Russian cities Donetsk and Luhansk.  "There are a lot of problems there and the majority of them are beyond our control. I think Europe sees this now. I think the U.S. is starting to see it. But it is not easy for them to say that Kyiv cannot pull this off," said Putin. The U.S. recently extended its sanctions for another six months. "It is just a lot easier to say that Russia is stirring things up in east Ukraine. We're working on the situation."

At times, Putin seemed a little bogged down by the onslaught of questions in English about the Syria, Ukraine and sanctions. At one point, he even took over from the moderator, VTB Capital's president Andrey Kostin, calling out people in the audience waving numbered markers like they were at an auction, bidding nothing but time and good fortune for a minute of Putin's attention.

CalPERS was most worried about revenue growth. The economy is expected to contract by nearly 4% this year, according to VTB Capital's Russia economist Alexander Isakov. Putin reiterated what his economic time is telling him, that the country is in the trough. If so, it's grinding along the bottom like a trawler digging for clams. Investors wonder when Russia's going to start hoisting anchor.

Putin told CalPERS that the Parliament was drafting a new budget for 2016. Oil prices, the bulwark of Russia's financial planning, are now targeted at $50. "All of our plans in this budget are about emerging from this crisis," he said, adding the usual bit about structural changes being needed to modernize the Russian economy.

Steven Landis, senior emerging markets portfolio manager at Deleware Investments, said he was still worried that the crisis could ultimately force Russia to shut its doors to capital flight. There are a number of ways to restrict capital flight, some less drastic than others. But Putin said none of these options were on the table.

"We have the new free floating rate of the ruble, but we did not do that in 2009 because we didn't think our country was ready to take such hard steps," he said. "We used a lot of reserves to hold up the ruble exchange rate and managed to maintain some economic stability. Back then we didn't use capital restrictions and we surely did not know even though I know you were all concerned about this. We are not going to do it. There are no restrictions on capital coming in and out of Russia."

Investors are hopeful for the relaxation of sanctions against Russian energy and financial firms. VTB Capital is one of the major Russian banks sanctioned by the U.S. and Europe.  But sanctions are not seen as the panacea to the problems that plague Russia's economy, from lackluster infrastructure to its over-dependence on commodities.

"I think sanctions give a marginal improvement to the physical economy," said Isakov, speaking after Putin left the building. "But what matters even more to investors is sentiment. Once sanctions because of Ukraine are lifted on Russia, it will improve investor sentiment here for sure."

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#8
Business New Europe
www.bne.eu
October 14, 2015
Putin looks back to West as China swing chokes
Jason Corcoran in Moscow

Russian President Vladimir Putin is abandoning his much-vaunted pivot to Asian sources of finance, judging by the prominence given to Anglo-American investors during his question & answer session at the VTB Capital conference in Moscow on October 13.

A year ago, Western investors were largely absent or mute as the Moscow forum was flooded with representatives from China and Asia peppering Putin and his government representatives with staged questions about co-investment projects.

Putin had hoped that Chinese banks would replace Wall Street as the country's key source of funding after financial sanctions were slapped on Russia for annexing Crimea and fomenting war in eastern Ukraine.

Turn the clocks forward to today and it transpires that Chinese banks have a negligible appetite for bailing out the Russian economy. At the q&a session, the planted questions for Putin came mostly from US, British and Scandinavian investors.

Indeed, hardened Russia watchers were in shock that VTB could lure representatives from conserative retirement funds in California and Delaware to Moscow, never mind get them to lob softball questions at Putin. Just two questions were posed by delegates from the BRICS rainbow of emerging markets, one from India and one from South Africa. Other questions came from Invesco Advisors, East Capital and Lloyds of London,

"Funding from China can't and isn't replacing what the West provided," said a Moscow-based hedge fund manager at the forum. "The Chinese are not interested and don't trust Russia so the Kremlin has decided in desperation to lure the Yanks and the Brits back into the game."

The heads of sanctioned state-controlled lenders VTB, Sberbank, and Gazprombank all went cap in hand on roadshows to Asia over the past year looking for financing. However, they found that Asian bankers were unwilling or unable to invest, partly out of fear of incurring the wrath of US regulators.

The banks have to rely on expensive short-term funding from the Central Bank and their deposit funding base but it's not sustainable over the long-term.

A new agreement brokered in Paris on October 2 to hold elections in eastern Ukraine, along with a ceasefire and a continuing withdrawal of weapons from the front lines, is boosting hopes Russian companies will be allowed out of the funding purgatory.

Blue-chips companies Norilsk Nickel and Gazprom both managed to sell the first Eurobonds by any Russian issuer in 11 months in October. Neither are sanctioned, but it's a good omen that the investor base, made up of mainly US and European funds, is now willing to take up Russia risk.

A VTB banker at the event said the lender is working closely with other Russian exporters who are waiting for bond yields to fall and that there could be three or four more Eurobond issues to come in the next few months.
Alexei Yakovitsky, global chief executive and chairman of VTB Capital, told CNBC the country's banking sector has struggled to access external source and is hoping for a swift end to sanctions.

"I think that whenever the lifting of sanctions happens it's going to be a major positive shock, a major positive outcome for the market and you'll see a significant improve across all fronts and obviously VTB Capital will be a big beneficiary of this," Yakovitsky said on the fringes of the forum.

A swift end to sanctions, especially the US prohibitions, is probably wishful thinking but Russian banks may see a loosening in their interpretation and a willingness of traditional Russia investors to dip their toes back in the water.
Russia's sovereign dollar bondshave returned 17% this year as a fragile ceasefire holds in Ukraine and as oil rebounded 26% from a six-year low. Russian stocks have also joined the party with the Market Vectors Russia ETF yielding 15% this year, the best performance among 776 U.S.-domiciled tracker funds.

 

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 #9
Bloomberg
October 14, 2015
$50 Oil for 15 Years Isn't What Scares Bank of Russia Governor
By Evgenia Pismennaya, Anna Andrianova, and Ryan Chilcote

Fifteen years of oil at $50 a barrel isn't the worst nightmare for Russian central bank Governor Elvira Nabiullina.

"What worries me more is the pace of reforms in the economy that could stimulate private investment," Nabiullina, 51, said in a Bloomberg Television interview on Tuesday. "What's very important is a whole set of conditions to make Russia more attractive to private investments. And what's worrisome is the pace of such changes."

It's a shot across the bow to President Vladimir Putin, who's faced growing pressure from inside and outside the government for new measures to pull the world's largest energy exporter out of its first recession in six years. While Russia has adjusted to the collapse in oil prices by allowing the ruble to lose almost half its value since January 2014 and letting consumer demand bear the brunt of the downturn, its economy remains hamstrung by corruption and inefficiencies.

Russia ranks alongside Nigeria and Kyrgyzstan at 136th, out of 174 countries, in Transparency International's 2014 ranking of perceived levels of corruption, down from 82nd in 2000, a year after Putin came to power. Its property rights rank 120th and the level of judicial independence 109th of 144 nations in the World Economic Forum's latest Global Competitiveness Report.

Investment Crash

While compounded by U.S. and European sanctions and turmoil on commodities markets, the slump in Russian investment predates the standoff over Ukraine. It's now reached 20 months, the longest stretch of declines since at least 1995, when Bloomberg started compiling the figures. September data set to be released next week will show capital spending fell 7.3 percent from a year earlier, according to the median of 13 estimates in a Bloomberg survey.

The central bank forecasts the economy won't return to annual growth until 2017, meaning Russia is on track for the longest recession in two decades. Gross domestic product will contract 3.9 percent to 4.4 percent this year and may shrink as much as 1 percent next year, according to a Bank of Russia forecast that projects oil staying at $50 in 2016-2018.

Putin's Backing

While Putin scolded the central bank last year for not reacting more quickly to the currency crisis, he's since rarely wavered in his support for Nabiullina, including her switch to a free-floating exchange rate last November. The policy shift was "correct and timely" despite "some negative consequences" for the economy and households, Putin said Tuesday at a conference organized by VTB Capital in Moscow.

The Bank of Russia said Wednesday that it won't "artificially restrain the ruble rate," responding to a report in the Financial Times that the government is discussing limits on how much the currency may strengthen against the dollar to ease the country's economic dependence on commodities.

What Russia needs is a growth model based on crude prices that "aren't very high," according to Nabiullina, a former economy minister in Putin's cabinet. The government, which relies on oil and gas for almost half of its revenue, is drafting next year's budget by assuming an average oil price of $50 a barrel.

"The main thing for us now is to learn to live under the conditions of relatively low prices for oil," Nabiullina said. "That's the reality for which we must be mentally ready. The financial sector is ready for the reality that forced an adjustment in the balance of payments. Now the economy is adjusting to this reality"

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#10
Russia Insider
www.russia-insider.com
October 14, 2015
Head of US Amcham Moscow: "Coming Year Will be Worse Than the Past Year"
Deep insight into what American big business think about Russia

Alexis Rodzianko has been the President of the American Chamber of Commerce since 2013.  Previously he held CEO positions in the Russia operations of various large global banks.  A profile of him in the Moscow Times can be seen here. [http://www.themoscowtimes.com/q-n-a/article/qa-horses-history-bind-amcham-chief-to-russia-video/494047.html] This is a translation from an interview given in Russian to Banki, a website dedicated to the Russian banking sector. [http://www.banki.ru/news/interview/?id=8356767]

The deterioration of the geopolitical situation around Russia has had a negative impact on the economy and the state of business.

The President of the American Chamber of Commerce in Russia Alex Rodzianko talks about how the investment climate in Russia has changed in this regard and how Russian and American businessmen look for ways to circumvent the sanctions.

Q- Alexei Olegovich, I would like to know your opinion how the attitude to our country has changed on the world economic scene in America and other countries during the time that you work in Russia?

A- The short answer  is the attitude changed together with the price of oil. Although, of course, it is an oversimplification. Twenty or more years ago, the price of oil was very low, and it was one of the factors that led to the collapse of the Soviet Union, the end of the communist regime. But this was just one of the factors, not the key, because the country's economy deteriorated for a long time before that. People saw and felt it.

Then 1991 came, I remember very well this time. Then I worked in New York, and just looked at the developing markets, especially those, where there were problems with the foreign debt and restructuring. Russia just fell into this category, as the country had to pay the old Soviet debts, then there was a restructuring, then the secondary restructuring ... I remember very well as that time I met with officials of the World Bank. Their opinion and the opinion of others in Washington was that Russia could fall into strange pieces. What would follow it - it was terrible even to think about it. Therefore, the attitude to Russia was as to a country that needs help in every way to prevent the further degradation to avoid chaos. And it was, as I understand it, almost the only main goal and concern. It was a constructive attitude, they tried to help as best they could. In general, the 1990s passed in this way. A lot was done to establish some basic institutions. In particular, the MICEX is the work of the US Federal Reserve with the Russian side.

Then there was an agreement on nuclear weapons, although it was partly a factor of self-preservation of the West that it was all concentrated in one place and there was no spread in any case. During these years, the oil price was also very low. However, the result of all the work still was the crisis of 1998, when the policy of the International Monetary Fund and the Russian Government actually couldn't be supported because money just didn't arrive. This was the first big devaluation, another default, the change of power.

Vladimir Putin came to power and brought his luck. The market went up, the price of oil rose. And of course, I must say, his administrative abilities, capabilities and political will were very important in that he stabilized the country. He collected it. But during the 2000s Russia was still supported by the rising price of oil, along with the further development of the institutions that were created in the 1990s. It was in the 1990s, when many large companies - members of the American Chamber of Commerce came to Russia. Their presence here objectively greatly helped to improve the quality of life, the creation of a competitive environment, in which Russian firms had to compete with the world level, and not to clear off, they say, with what they already had. Then there was an understanding: you have to sell something that people are willing to buy. From my perspective, this was a great achievement. But from that moment the relations with the United States became to deteriorate a little.

Q- In your opinion, what led to the deterioration of the relations between the two countries, between Russia and the West in general?

A- There are different opinions, and I'm not a political scientist. But I can say that the business relationships didn't become worse, on the contrary, they became better. Ask a businessman, what the most important thing for him and he will tell you: stability. This is exactly what Vladimir Putin brought to the Russian economy, the business environment: stable rules, clear rules, the opportunity to earn. All of these features came under Putin and continue to be now.

The political relations began to deteriorate when NATO became to move closer to Russia. The reason, as the mass media write, was the fact that Russia had stood on its own two feet, became more independent, and nobody expected this from it.

Q- That is, the States acted as parents with a grown-up favourite child, who they don't want to let go from the "nest"?

A- Russia with its thousand years of history can hardly be called a child. I would say that the wounded soldier recovering.

Q- Good. How did the history with the Crimea influence the attitude to Russia? How did it affect the relations of the Russian and American business? How did the whole idea of Russia as a country for investment change?

A- Russia raised the degree of tension with the history with the Crimea, thereby indirectly stoked a political solution on the adoption of the sanctions.

The sanctions are bad for business. All restrictions that are not aimed at making it easier for the business, are bad for the business and business understands this. But it understands that it has to be a law-abiding, and sometimes it's very hard, because the parties offer conflicting rules. The business tries to find a "quiet passage" between these terms, which is not so easy.

But if you listen to each of the parties, the United States says that it all started from the Crimea. Russia - that it all started in February 2014 from a coup in the Ukraine. Where is the truth? I don't know, probably somewhere in the middle. Is this needed? Business  doesn't need it!

Q- It is understood that it is not needed. What kind of statements, requests are often heard from businesses in connection with the sanctions and the deterioration of the political relations?

A- What kind? Looking for a way to solve them! The business can't act as a diplomat and is not going to, so more and more often the call to find a more cost-neutral way of resolving the issue is heard in the requests.

Businesses needs to be able to work as before. Everyone understands that the Russian economy is cyclical, it is strongly tied to the raw material income or lack of it, to commodity prices. Everyone understands that this is not a reason to leave the market, this is the reason to adjust the plans to the capabilities of the economy. The Russian economy is large, the market is big, there are a lot of natural resources, human potential is high, even though the "brain drain", of which everyone speaks. At the Sochi Investment Forum it was announced that almost a million Russians have two passports or residence permit in another country ...

Q- The Deputy Prime Minister, Olga Golodets talked about this.

A- Yes, a million Russians, and they are not the poorest Russians. This is a very important segment of the population. Why is this? Partly, because of the high tension. Partly, because people are different and set different goals in life. But the human potential is still huge, and it is replenished. In particular, that's why I don't feel that tomorrow or the day after there will be nothing. It is and it will be, it is a really great potential.

Q- So, business is aware that, in spite of all the negative and cyclical nature of the Russian economy, it can continue to invest money in Russia, that it can and should continue to work?

A- Yes, this is particularly well understood by companies that have been here for many years, from 10 to 20. There are American companies in Russia that operate from the time of the Soviet Union, and began even earlier. For example, last year I was on the 101st anniversary of Caterpillar presence on the Russian market - they came in 1913, worked under the royal power, then under the Soviet regime, and today they continue to work. Some companies take root in the 1990s, and there are many of these companies, they see and understand how to continue to work here.

But those that prepared to enter the Russian market in 2012-2013 take a break today. This delay is related to two factors. The first one is the political situation. There are some signals from Washington that it is better not to go to Russia, it is better not to invest. The second factor is, in fact, the slowdown in economic growth. And it is not clear how to get out of the recession. We shouldn't forget about the sanctions regime: it is not clear when and how it will be softened.

Q- Are there companies now that look at Russia, but also take a break?

A- Of course, there are.

Q- Of what industries, segments?

A- It's quite a broad list of segments. I want to note that now there is more and more talk about the localization program. It is a term that became very popular in recent years, but in fact, these efforts were started rather a long time ago - 10-15 years ago. For example, the auto industry: now Russia assembles more cars than at the peak of the Soviet Union. And these cars are assembled largely in partnership or with the participation of foreign companies, global players: Chevrolet Niva, Hyundai, Renault, Ford, BMW, Audi, Volkswagen, Toyota. All they assemble cars in Russia, and all have a plan for the localization of the business. This means that the percentage, the share of Russian suppliers of components and materials gradually grows.

There is a recent example: just less than a month ago there was a meeting with a company, producing polymers that are included in the paint for the automotive industry and for construction. This company bought a factory and decided to expand the production, to create a laboratory for the production of those products that are necessary on this market. This is one example, and there I can name a few of such examples.

Q- What industry, segment of the Russian economy is now the most interesting for foreign companies, particularly US ones?

A- The most interesting sector in Russia was, is and probably will be "oil and gas". Russia is the largest producer of crude oil in the world and owner of the largest unexplored potential new fields in the world. Therefore, large, global energy companies very successfully and actively cooperated and cooperate with Russian companies and the Russian Government. I think it will continue. Now they realize that their business is cyclical and that these low oil prices won't remain forever, but now it is a very good time to invest, to look at new fields, to buy them, to take a share in the same Russian companies for the partnership. All of this is now much cheaper and more interesting due to the fall of the ruble and reduction of the oil prices. But at the moment, they are held back by the politics, and in some cases a specific ban on investments (on the shelf, for example), and in some cases simply some political pressure.

Q-  Does this apply to all sectors of the Russian economy?

A- No, it doesn't affect all sectors. Directors of companies, members of the House, who are responsible for the business in Russia in their companies often say to me that it is very difficult to communicate with their superiors these days, with Boards in Europe, in the United States. They have to prove more, to explain, more questions to the leaders in the field appeared, more caution.

But there is no such thing that Russia is not interesting. Quite the contrary - too interesting, too many questions are asked.

Q- And the banking sector, in your opinion, at what point it is in the list of the most interesting industries in terms of direct and portfolio investments?

A- Let's start with the major US investment banks. All of them are members of our Chamber. All of them are now frozen in their main business in relation to Russia. That is the leading issuers on the Russian side are severely limited in the access to financial markets. Because of this, it is very difficult for investors of the second, third tier to enter the market. In fact, these sanctions are probably the most powerful in relation to their effect on the Russian economy. The limitation of the Russian players in the access to capital markets, from the point of view of the banks - members of the American Chamber of Commerce, taking into account the large size of their business in Russia, has led to the fact that mot of the business is simply idle.

If you look at banks in Russia, the banking system as a whole is, if you like, a magnet for investments. It was also promoted by the stripping the sector from unscrupulous players. However, it is unclear how the process of rehabilitation of the banking system is passed. I agree with the chairman of the Central Bank, who stated that the problem is controlled. But in fact, almost nobody invests in the banking sector of Russia now, when in general Russia is poorly invested, and even more players go from there. This suggests that caution is not only among foreign investors. And the banking and financial sector, as we know, are the reflection of the economic situation. Now it is not very clear and not very strong. Now there is a downturn, and all ask, whether we have reached the bottom, whether there will be a second floor.

Q- What do you think, have we reached the bottom?

A- We consider ourselves  a kind of the reflection of economic situation in Russia. Therefore I can say that we are afraid that next year will be more difficult than this one.

Q- Do you think our forecast of the Ministry of Economic Development on the growth of the Russian economy by 0.7% next year is too optimistic?

A- For a while, we don't particularly feel the prerequisites for the growth, but at the same time, the worst fears that the companies had at the end of last year, weren't realized. That is, people in respect of their worst performances, appeared in less severe conditions than they expected.

Q- What kind of the concerns did they have, with what were they connected with in the first place?

A- Fears that the market will collapse, that sales won't happen, possibilities to conduct the business will be less and less, that the conflict will develop further. There were fears about the decline of the oil prices to $20 per barrel, about the further weakening of the ruble. There were even talks is the ruble would weaken so much that the ruble to the dollar be 100 rubles. The reality turned out to be better than these worst-case scenarios.

Q- That is still our struggle of the past few years that he quality of the investment climate gave some fruit, even though the sanctions?

A- If you look at the ratings of Russia in terms of its competitiveness, the quality of the investment climate, they have grown in recent years. Mainly, the improved ratings, I think, were caused by the devaluation of the ruble. Russian products, the Russian workforce, the Russian potential, the production unit in Russia became cheaper. In this indicator, Russia now even competes with China and India.

On the other hand, it is worth paying attention to qualitative factors. There was a number of laws, aimed ostensibly at the security of the country, that is completely contrary to the interests of the business, including, for example, the law of undesirable organizations. The law is written broadly, there are no restrictions on the type of the organization, in the first place. Secondly, there is no process - the organization may be considered undesirable solely on the basis of a conclusion of an authorized official. And there is no one to complain to, and everybody is under attack. It is a question, hanging over the investment climate in Russia. How can we ensure the right of ownership, when at any moment you can be declared an undesirable organization? We understand that the law is not aimed everybody. But lawyers, who read the law, well aware that it can be used as they wish. This is one example. The second example: the Government's claims about the non-increase of the fiscal burden on the business that are contrary to the facts. It's a constant moving target, because, on the one hand, there were such assurances from top government officials that there wouldn't be any additional load. But at the same time, the Government needs money for the budget. It's not entirely clear how to reconcile these two things, so there are new ideas constantly appear, who and how to penalize, on who and how to impose taxes. All of this is contrary to the assurance that "in difficult times, we don't want to push  business too hard".

You can't leave without mentioning the law on personal data. Our opinion is that this law removes Russia from the possibility of  occupying a leading position in the most fast growing segment of the world economy - information technology. Because of that regulation jurisdiction, Russia becomes more difficult to do business. What effects will be on the investment climate, we will see in due course.

Q- You said that, according to the American Chamber of Commerce, next year will be worse than the present one. Could you specify, to give any predictions?

A- You know, for a while you can listen to various people on the topic of the oil price and to hear very different forecasts. Someone predicts that it may fall below the current level, someone says that it will inevitably rise much higher. What does this mean? This means that volatility will remain high. And the ruble and oil prices change correlated over the past year. In this regard, the question arises: whether the Russian competitiveness will disappear in the case of the increase in the price of oil as quickly as it came? Or there is some a kind of policy in relation to the ruble, which will preserve the competitiveness of the country? I recently asked this question on our Investment Conference (15th Investment Conference of the American Chamber of Commerce in Russia), but didn't get a direct answer. And during the Sochi Investment Forum, the Finance Minister, Anton Siluanov said that the excessive strengthening of the ruble in the first part of the 2000s was a mistake. This inevitably leads to an increase in costs, because the income still grows faster than expenses, and all imported things are cheap. So why to limit yourself? Some excess fat is formed, which it is very difficult to lose then. Here a very big question is for me, a question for the business: competitiveness is something that depends on the price of oil or is it something that is a part of the country's policy? I think time will tell what the answer is.

Q- In this regard, some experts talk more and more about the separation of the financial sector from the real economy. Do you agree with this position?

A- I, as a native of the financial sector,have  never separated the financial sector and the real sector, they are very much interrelated. Another question, and not  business to answer for it, but the state, is: what is the strategy for the development of the national economy? Whether we live in a big way, if today the oil price is high, and to live half-starving - if today the price drops? Or there are some tools for leveling the economic situation, for its diversification?

Yes, in recent years, they increasingly began to talk about the diversification. But the diversification of the economy is not enough, and the investment climate in the country is not good enough just  Russia's own capital would remain here. I think people are still afraid of their confiscation history.

Q- Next week the large forum "Russia is calling", organized by VTB Capital, will take place. This area is traditionally intended to send any message to potential and existing investors, to foster the business relationships. What do you think, what will be the role of this forum? What will the messages be? What do you expect from the leading state officials?

A- It is important that the forum is attended by President Vladimir Putin. In my opinion, his performance there is a highlight of the program. The head of state traditionally speaks about the investment attractiveness of the country, voices his thoughts on the subject. From year to year, it is very interesting to listen to him, because he gives an estimate, the message: if there is a complete stability, whether there are ideas of change in the country.

I saw today data of one of the polls: Russian citizens are most concerned, in descending order, the issues of wages, exchange rate and economic development. Only somewhere below are Russian international affairs. Therefore, I believe that the best response to the sanctions is to improve the investment climate in Russia. That is you need to do everything it would be more interesting and easier to invest here. You can meet the restrictions with limitations, but you can also do so that the economy will pass such improvements, such transformations, after which no money will be kept from being invested here. Many people in the Russian elite, incidentally, talk about it, including government officials. The site of the VTB Capital's forum is just a field for such discussions: how to respond to the sanctions, how to improve the investment climate.

Q- Over time, does this event become more recognized in the world economic community?

A- It has always been interesting for those who looks at Russia: for bankers, investors and businessmen, this is a very important event that sheds light on what is happening in Russia today, its future, the movement of economic policy. Therefore it is very important to be there and we hope to hear something good.
 

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 #11
Forbes.com
October 14, 2015
Russia's International Reserves Are Modestly Rebounding
By Mark Adomanis

During the early Putin years one of the most striking things about Russia was the huge growth in its international reserves. Given the increasingly shambolic state of Russian economic policymaking, the strict macroeconomic discipline of Putin's first two terms in office looks more and more remarkable in retrospect. This is particularly true regarding the conscious decision by the leadership to stock away a huge percentage of the windfall profits from an oil boom,

Back in 1999, Russia had just defaulted on its sovereign debt and it looked much like you would expect a post-crisis emerging market to look: it had barely enough reserves to "cover" its imports, and the central bank had virtually no ability to intervene in the foreign currency markets. In March of 1999, the country's total international reserves bottomed out at a mere $10.7 billion.

After that, though, Russia rapidly accumulated a large pile of money. This was especially true as oil prices spiked over the course of 2007 and 2008. From January 2007 through July 2008, Russia's international reserves increased by a whopping $293 billion, peaking at just south of $600 billion. The "ammunition" this afforded Russia's central bank was of enormous use during the crisis year of 2009, when Russia burnt through more than $200 billion in an attempt to stabilize the economy and prevent a "disorderly" devaluation of the ruble. Some of this money wasn't spent particularly wisely, trying to prevent the market from re-valuing a currency after a huge external shock is pretty much the definition of throwing good money after bad, but partially due to the Central Bank's aggressiveness Russia actually rebounded from the crisis more quickly than most European countries.

For several years after that nothing much happened. Russia's reserves rebounded modestly after 2009, but then stabilized at a level of around $500 billion, below their pre-crisis peak but still quite robust in comparative perspective.
Starting in the beginning of 2014, though, as the crisis in Ukraine (and the subsequent sanctions from the US and the EU) started to weigh on the economy and pressure steadily grew on the ruble Russia's monetary authorities began to draw more and more heavily on their previously accumulated reserves.

During the second half of 2014, as oil prices collapsed, this turned into a rout. From September through November, the Central Bank spent the better part of $40 billion trying to defend the ruble. This was obviously unsustainable, and largely explains why the Russian authorities decided to let the ruble freely float.

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 #12
Russia Beyond the Headlines
www.rbth.ru
October 13, 2015
Foreign media companies leaving Russia as new ownership law looms
With a new law limiting foreign ownership of media in Russia to 20 percent due to come into force on Jan. 1, 2016, many international companies are already leaving the market due to loss of revenue.
Maria Karnaukh, special to RBTH

With less than half a year left until controversial amendments to a law on mass media ownership that will limit foreign participation in Russian mass media to 20 percent goes into effect, many foreign publishers are already thinking of completely selling their businesses - it is simply no longer profitable.
The law will enter force on Jan. 1, 2016, and media companies are obligated to submit reports on their shareholders by Feb. 15, 2016.

In September it was announced that two large foreign media holdings, the German Axel Springer and the Swiss Edipress, are selling their Russian assets. President of Axel Springer International Ralph Buchi said that the demands of the new mass media law are "not acceptable" for the company.

Assets are also being sold in the world of television. STS Media, 37.9 percent of which belongs to the Swedish Modern Times Group, announced that it is selling 75 percent of its assets to UTH Russia for $200 million.
 
Why has the media business in Russia become unprofitable for foreigners?

According to IFC Markets analyst Dmitry Lukashov, foreigners are ready to leave the Russian media business not only because of the government ownership ban, but also for financial reasons.

He explained that foreign mass media is interested in profits in foreign currencies, while its revenues in Russia are generated in rubles. In 2014 the ruble fell by 72.2 percent to the dollar and 51.73 percent to the euro, which had a direct impact on revenues.

Moreover, in the field of advertising, foreign mass media is accustomed to working with western clients and producers of consumer goods. Due to the economic crisis in Russia, sales of foreign advertisement have fallen, thus reducing the advertising budget.

According to analyst from Otkrytie Kapital Alexander Vengranovich, in the first six months of 2015 the volume of advertising in print publications in Russia shrank by 33 percent (in 2014 there had been an 11-percent growth). Meanwhile, in television volumes fell by 21 percent in the first half of 2015 (in 2014 there had been a 2-percent growth).

"Foreign owners of Russian mass media are leaving the Russian market due to the unprofitability of participating with a 20-percent share, regardless of the publication," said Sergei Varlamov, partner at Delovoi Farvater.

Following the adoption of the law on mass media ownership, the quoted prices of media companies in Russia fell by an average of 60 percent.
 
Who's left?

However, there are some companies that are happy to remain on the Russian market. TV channels belonging to the Disney and Discovery family (Discovery, Animal Planet and Eurosport) will be managed by specially created Russian companies, while TV channels from the Fox family have changed their owner: The official Fox distributor in Russia will now be a Russian company,.

However, Alexander Vengranovich notes that restructuring assets and transferring 80 percent of the ownership to a Russian company (with 20 percent remaining for the foreign media company) does not necessarily mean that revenues will be distributed accordingly.

"Shareholder's agreements can be made that separately determine the distribution of revenues," he said.

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 #13
Russia's higher education is getting almost universal, but quality in question
By Lyudmila Alexandrova

MOSCOW, October 13. /TASS/. Higher education in Russia is getting almost universal, available to anyone who can afford to pay, but quality in many cases leaves much to be desired, analysts say. There are no end of commercial institutions of higher learning prepared to guarantee enrollment to any applicant, but in the end, though, many graduates are unable to find a job in line with one's training and education. In the meantime, employers care not so much about graduation honours as about what this or that university leaver is capable of as a professional.

Economists and lawyers account for 50% of the leavers of Russian universities who have failed to find a job during the first twelve months after graduation, the director of a department at Russia's Education and Science Ministry, Aleksandr Sobolev, has said. "True, they are not graduates of Russia's top universities. They received instruction at some smaller branches or at minor private institutions of higher learning. In engineering and pedagogics the employment rate is much higher, of course. "Those with certificates of high-tech engineers are employed 90%-100%," Sobolev said.

A number of measures is being taken to improve the quality of legal education and to restore its prestige, he went on to say. Lawyers will soon begin to be trained only at major, basic universities. Legal courses at minor, local branches will be curtailed.

According to the OECD, 54% of Russians aged 24 to 64 have higher education, which is the highest rate in the world. But half of the employees, according to opinion polls, believe that the skills and competence of their current employees falls short of expectations.

"Higher education in Russia is average by world standards, but it is not the worst of all," the director of Continuing Education Economics Center at the Russian presidential academy RANEPA, Tatyana Klyachko, told TASS. "We have not very many good economists or lawyers. The really good ones are hard to come by. And the bad ones are mass-produced because it's cheap."

Back in the Soviet years, Klyachko recalls, about 25% of those who had entered primary schools eventually applied for universities. The current rate is 75%. And as many as 85%-90% of secondary school leavers go to universities. "Clearly, it is hard to provide good instruction for such a large student audience. There are no curricular nor enough good teachers available," Klyachko said.

Getting higher education is a social norm these days, she remarks. "As many as 85%-90% of employers say they would like to hire people with higher education. At least, such employees are able to write and talk well enough. The surge in the number of those eager to get higher education has been observed ever since 1995. And after 2000 82% of families on the average wished their children to get higher education. In the families where parents have higher education the rate is still higher, 96%."

"Excessive bureaucracy is the worst problem facing higher education these days," the dean of the international business and business administration department at the RANEPA academy, Irina Kolesnikova, has told TASS. "We have to write no end of all sorts of documents and statistical accounts whatever steps we may take. Ever new forms of inspections are invented. We have no time for teaching. Everybody is complaining about that."

"There are too many economists and lawyers to go around, because at a certain point in the past management and law departments were opened at some universities having nothing to do with this field of knowledge at all," Kolesnikova said. "Fundamental overhaul and streamlining is now underway. The situation will surely get better."

Higher education is almost universal, says Kolesnikova. "Quite often this happens at the expense of quality, because some universities are open to all applicants, those who failed to qualify for decent universities. Commercial institutions of higher learning invite everybody. But their graduation certificates do not guarantee anything. They are needed only when a job seeker presents it to a potential employer. Then the potential employee begins to be judged by one's knowledge and merits."

The roots of higher education problems are to be looked for in school, she believes. The introduction of the Unified State Exam has downgraded the quality of school instruction.

"In fact, school students are being coached, and not taught to think, understand and make independent decisions. The first year in the university has to be spent on getting them out of that school system to help them develop analytical abilities and to expand their outlook."

In general, higher education in Russia is different from the western one stylistically, Kolesnikova believes. "Our teachers also perform the function of upbringing. We take care of our younger generation. In Europe and in the United States children stew in their own juice to a far greater extent, and that is reflected in the instruction process. Students there have to work on their own to a far greater extent. Nobody bothers to spend too much time on informal relations with students and on their concerns. Here, in Russia, talking to a young person's parents is normal when something is wrong. Abroad it is ruled out. Theirs is a different mentality. The difference is not in the amount of information, but in the attitude to life."

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 #14
Public Radio International (PRI)
www.pri.org
October 13, 2015
This woman demonstrated that even in Russia all politics is local
By Alina Simone

When you hear about politics in Russia, it's almost always about Vladimir Putin - whether it's bulldozing piles of cheese or approving airstrikes on Syria - commanding from on high. But at the regional level, things are very different. Here's a story about Russian politics writ small.

My friend, Sarah Lindemann, is an American who moved to Novosibirsk in Siberia in 1989. Late this summer, she started blogging about a local city council election in her district of Akademgorodok, which means "Academy Town." It's home to the state university and many famous scientific institutes - kind of a Madison, Wisconsin or a Cambridge, Massachusetts.

Anyway, Sarah decided to follow one particular candidate, Natalia Pinus, mother of three, successful businesswoman, head of the local community foundation. Out of six candidates, she was the only woman.

According to Sarah, that opened her up to criticism like "How can someone with three children have so much time?"

Out of 39 people on the Novosibirsk city council, only four were women. Even more unusual - Natalia Pinus was running as an independent.

"All the parties except for, you know, basically the closest to a Fascist party we have, approached her about representing them," Sarah says.

But Pinus ended up rejecting Putin's United Russia, the opposition parties - everyone. This meant no access to party money, while some of her opponents had plenty - like Nikita Galitarov, the son of a construction mogul.

"He plowed probably 20 million rubles [about $320,000] into his campaign. So you couldn't NOT know his name," Sarah says.

So instead of billboards, Pinus asked residents to hang her banners from their balconies. Her office was a local coffeeshop. Oh, and the other thing about Galitarov?

"He didn't live here, didn't work here, had absolutely no connection to the community," Sarah says.

At the sole debate, Galitarov showed up only to explain that he had a scheduling conflict and wouldn't be able to participate. The debate was streamed online and when the online votes were tallied, Natalia Pinus was declared the winner. She held open meetings throughout the district, and was the only candidate to develop a platform based on the feedback of actual residents.

Her grassroots campaign was running smoothly. But so was Galitarov's, in a way.

"All of a sudden, these teams of trucks and workers showed up all over town and started asphalting all the streets and sidewalks and then stamping them with 'For Roads, For Galitarov,' " Sarah says.

This was actually a popular gambit during the Soviet days. "Right before an election, some little piece of street would get asphalt so it brought hope. And people [would] think, Oh good, the guy really gets things done."

Thing is, Pinus was already known for getting things done. As head of the local community foundation, she got a duck pond constructed. "That may seem kind of preposterous but she did something that really benefitted the community," says Fiona Hill, a Russia expert at the Brookings Institution in Washington, DC, who followed the election on Sarah's blog.

"And it was the fact that [Natalia Pinus] did something that had direct benefit to her community that made her very effective and got her name recognition. Not because she ran some flash campaign."

The week before the September 13 election, when it was clear the two frontrunners were Pinus and Galitarov, things got ugly. A mock newspaper was distributed accusing Pinus of being part of the go-go 90s oligarch crowd that destroyed Russia's economy. An anti-Natalia barker appeared on the main street in Akademgorodok.

Even on election eve, it was still unclear how the vote would go. Remember, this is a city that stunned the nation by electing a Communist mayor over the United Russia candidate last April. So would Galitarov's modern version of Soviet-era politicking win the day?

"I don't know, maybe it was 2 in the morning and [Natalia's] phone rang. And she was talking and it was very serious," Sarah says. "Then she got off and she didn't say anything and so we were like, who was that?"

It was Galitarov, calling to congratulate Pinus for running an honest campaign - and for winning.

It was, by all accounts, a fair election, won by an outsider candidate without party backing on a shoestring budget. So what does it say about democracy in Russia?

"It depends on how we're defining democracy, but if we're talking about grassroots participation, in spite of everything, in spite of what things might look like at the top, or the fixations of people in Moscow or certain small circles in Moscow, people can still get things done."

If you can count on anything, count on Russian politics to confound you.

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 #15
Moscow Times
October 14, 2015
Russian Branch of Ecology NGO Bellona Closes Over 'Foreign Agent' Status

Bellona Murmansk, a Russian branch of the Norwegian environmental organization, has closed down but hopes to re-establish itself soon in a new legal form, the NGO said on its website this week.

"Bellona Murmansk will continue its work under a different kind of bureaucratic structure that will free it from the yoke of being branded a foreign agent," Bellona's executive director Nils Bohmer was cited as saying.

The Murmansk branch was declared a "foreign agent" in March 2015 by the regional Justice Ministry under a 2012 law that requires all NGOs to label themselves as "foreign agents" if they receive funding from abroad and engage in vaguely defined political activities.

During an unscheduled inspection, officials identified political activity within a Bellona Murmansk report on industrial pollution in Russia's northern Barents region, Russian media reported.

The "foreign agent" status was questioned soon afterward by Russia's Civic Chamber secretary Alexander Brechalov. In a June interview with the Kommersant newspaper, he said the chamber was looking into whether regional authorities were attempting to use the "foreign agent" label to influence Bellona Murmansk's activities.

Bellona was founded in Norway in 1986. Its office in Russia's northwest city of Murmansk opened in 1994, and soon after found itself at the center of an espionage scandal after it published a report on the radiation dangers presented by decaying Russian nuclear submarines.

One of the report's authors, retired submarine officer Alexander Nikitin, battled espionage and treason charges for several years before he was finally acquitted.

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 #16
Los Angeles Times
October 14, 2015
Activist organizations struggling to survive under Russian restrictions
By Carol J. Williams    
 
After decades of Soviet-era drilling, unregulated fisheries and haphazard construction, residents of Russia's Sakhalin Island have cheered the ecological protections secured by Sakhalin Environment Watch over the last 20 years.

One of the most effective civil society movements to emerge in the post-communist era, SEW led the ravaged island's campaign for protection of the pristine, 165,000-acre Vostochny Reserve, said to be the most productive salmon ecosystem on the planet.

The group fought successfully in court to have higher standards imposed on the powerful Gazprom monopoly for its fossil fuel exploration. It also took legal action to force an international consortium of oil giants behind the $12-billion Sakhalin I and II extraction projects to steer clear of sensitive marine life habitat and to scrap planned pipelines across gray whales' migration route.

But activist organizations now face government threats to their own survival for having accepted foreign grants and donations for their ecological causes. They have been ordered to register as "foreign agents" because of internationally supported conservation work recently condemned by the Justice Ministry as Western schemes to undermine the Russian government.

A $159,000 contribution from the Leonardo DiCaprio Foundation, $30,000 from the U.S.-based Wild Salmon Center and other gifts for the island's environmental campaigns are being returned as SEW attempts to sever ties with foreign partners that the Kremlin brands as Russia's foes.

More than 90 nongovernmental organizations in Russia have been listed as Western collaborators under a 2012 law requiring groups receiving funding from abroad and engaging in undefined political activity to register as "foreign agents." That label from the Stalinist era still prompts fear among Russians being told by President Vladimir Putin that foreign forces are bent on denigrating the country.

The nationalist-dominated parliament this year tightened the noose on the foreign partners of nongovernmental organizations by empowering justice officials as of last month to brand them "undesirables," forcing them out of the country.

The Open Society Foundations of philanthropist George Soros, the U.S. National Endowment for Democracy, the MacArthur Foundation and other civil society bulwarks have been forced to close their Russian operations after being accused of engaging in prohibited political behavior.

"On one hand this is very serious but on the other it is completely absurd - Kafkaesque!" said Alexander Cherkasov, executive director of Memorial Human Rights Center in Moscow.

Memorial was fined $5,000 for failing to register under the 2012 law and for civil rights activities by an international counterpart that is a separate NGO, Cherkasov said. Memorial International went to court on the human rights group's behalf, explaining that the cited infractions were their own, though defending them as rightful free expression. The appeals court nonetheless upheld the foreign agent label on Cherkasov's organization and doubled the fine to $10,000.

"I'm trying to deal with cases of people being 'disappeared' and victims of harassment and injustice, yet I have to spend all my time fighting these absurd accusations," Cherkasov said. "We survive. It's not like Stalin times; no one is being executed by firing squad. But that may be the only difference."

The crackdown has focused not only on the groups whose support for democracy and pluralism put them at odds with the Kremlin but against NGOs engaged in government-endorsed programs as well.

The Civic Assistance Committee provides relief for those displaced by disaster or armed conflicts, including the one in eastern Ukraine that has sent hundreds of thousands of refugees to Russia. The Russian NGO periodically receives contributions from the Office of the U.N. High Commissioner for Refugees.

The committee also receives money from the Russian government to care for displaced Russians, resulting, said chairwoman Svetlana Gannushkina, in the government punishing her agency for the same behavior that it helps finance.

"I think they want to control every benefit that goes out to any Russian, so that everyone is dependent on them," she said of the Kremlin. "But this is destroying civil society. We are seeing the disintegration of all institutions. There is no legal recourse and no arena where real political debate can be held."

The Sakhalin environmentalists' new status as suspected agents-provocateurs appears to be the result of the May legislation's definition of any attempt "to influence government authorities" as doing so at the direction of foreign paymasters.

A SEW post on Russian social media appealing for restraint in Arctic development drew the attention of the regional Justice Ministry in August. A surprise two-week inspection of SEW premises in Yuzhno-Sakhalinsk produced the report citing alleged political activities behind the foreign agent label.

The first of three alleged violations cited SEW's criticism of the Kremlin's ambitious plan to build new bases, ports, fuel depots and floating ice stations in the Arctic to secure the emerging Northern Sea Route.

As Arctic ice melts with the warming global climate, a previously frozen passage is now navigable about half the year. Russia has made control of the new shipping lanes a priority, seeking United Nations recognition of the undersea territory as its exclusive national zone and budgeting tens of billions of dollars for nuclear-powered ships to patrol and service the route.

Canada, Denmark, the United States and other countries bordering the Arctic Circle are also vying for a piece of the potentially lucrative shipping route.

SEW Director Dmitry Lisitsyn has vowed to fight the registration order in court.

"SEW has protected the environment of Sakhalin and its citizens' environmental rights for 20 years," he told journalists in a statement last month from his office seven time zones east of Moscow. "We have much to be proud of. We have never engaged in politics."

None of the 20 or so NGOs waging legal battles against their orders to register as foreign agents or disband after being immobilized with the "undesirable" label have prevailed in court.

If the Justice Ministry's decision isn't repealed, Lisitsyn said, his group will consider shutting down.

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 #17
Rossiyskaya Gazeta
October 12, 2015
Konstantin Kosachev, chairman of the Federation Council International Affairs Committee: Is the era of values and 'soft power' over? Konstantin Kosachev on what a multipolar world needs to strive for

The "brave new world" that many people dreamed of at the end of the Cold War never happened. Instead of harmony, cooperation, and dialogue there is growing violence and chaos, and many people are getting the feeling that the era of brute force has returned, when states and peoples are having literally to fight for a "place in the sun."

The American opposition accuses President Obama of lacking determination, and some Europeans feel that the emphasis on the attractiveness of the European project is resulting in migration problems and ineffectiveness in the sphere of "realpolitik." There are constant demands for "muscle flexing," otherwise the world agenda will allegedly be determined by those who do that without thinking.

I believe that this is as much of a delusion as counting exclusively on soft power methods would be a reverse delusion. To some extent it works: In some countries Europe's attractiveness prompts a desire to live "like them," while in others it prompts a desire to live "with them" - that is to say, mass migration. But in strategic terms this is not enough - this is precisely why, incidentally, the idea of "soft power" was subsequently upgraded to the concept of "smart power," which combines "soft" and "hard" elements in the requisite proportions.

But even in their most hard-line actions Western countries do not deviate for a second from the idea that everything is done in the name of values and against those who are allegedly posing a challenge specifically to values (but not interests, of course). And this would appear to be a very important factor for understanding the situation and the role of nonmaterial factors in it.

Because even when guns are roaring, the battle for people's minds does not cease. Furthermore, in the 21st century we have suddenly encountered an improbable re-ideologization of international relations. Concepts of "sole correct" doctrines and religions, talk about national exclusivity, ranking of nations, "export of revolution," and so forth - all of these constantly feature in politicians' speeches and analysis. And everybody needs lofty motives to justify even the most unseemly and vicious actions. Whereas in previous centuries it was sufficient to say "I'm coming to get you!" today the imperative is actions not in the selfish national interest but for the sake of the common good and in the name of attractive humanist ideas.

It is no coincidence that attempts have been made to present almost all the conflict situations of very recent times as value-driven - whether it be Kosovo, Georgia, Ukraine, Syria, and others. Because a clash of geopolitical or economic interests is one thing, whereas a conflict between "correct" and "incorrect" values is something completely different. It is in fact a conflict between deliberate good and deliberate evil.

Admittedly current events indeed have something to do with democracy. Because today it is obvious to many people that the unipolar system has turned out to be authoritarian - with a distinct centre and a disadvantaged periphery in terms of rights and resources. And essentially what is happening today on a worldwide scale is specifically a democratic revolution. A "colour" revolution, if you like. Whether it is exclusively peaceful depends for the most part on what forms of resistance the currently dominant West chooses. And the fact that the countries that are part of it are democratic in terms of their internal structure by no means guarantees that the eventual changes will be nonviolent.

But what is happening is less linked to values. Primarily because people share most of these values anyway. Things do not work out for everybody in practice, but there are few people, apart from deliberate marginals, who would verbally deny the importance of basic human rights and freedoms. But this in no way means that those who share values do not retain their own interests and resources, which need to be defended against outside encroachments.

There is a well-known contention that, allegedly, "democracies do not fight each other." This is considered to be justification for "promoting democracy," together with which, correspondingly, peace is also promoted. But in reality democracies do not fight each other not so much because they are democracies but because specific states have coinciding geopolitical interests, they do not lay claim to each other's resources or other assets, their citizens are equally prosperous, and their regimes do not demonize each other but, on the contrary, demonstrate a political will to join forces and forget historical differences. In simple terms, it is more beneficial for them to be together than at odds with each other. If, for example, the United States and Europe had better relations with Saudi Arabia than Russia even in the 90s, it does not mean that the Saudis are closer to Euro-American ideals of democracy (on the contrary, there are inevitable questions about ideals).

But the key thing in the context of values is that they provide a very convenient and universal justification for virtually any actions in the international arena, even mutually exclusive ones like support for separatism in some countries and territorial integrity in others. The only argument in favour of dual standards (behind which lies predictable support for "friends") is the fact that "friends" are always in favour of everything that is good, while foes are in favour of everything that is bad. Virtually in any debate with Westerners you will hit the wall of their feeling that they are a knowingly good and correct force.

For example: Why is Kosovo okay whereas Crimea is not?

Why is the European Union right whereas Eurasian integration means the restoration of the empire and deliberate evil?
Why can the United States sell weapons to other countries whereas when Russia sells them it is a threat to peace? Why is an American bombardment of a hospital an accident and a mistake, whereas any civilian casualties in the course of military operations by Russia or pro-Russian forces are deliberately intended and virtually genetic savagery? Why can the West support its "friends" in any internal conflict in third countries whereas Russia cannot? Why is any politician (party, movement) in the CIS who looks to Russia "funded by the Kremlin" and lacking in freedom or values, whereas one that looks to the West is free and sincere?

Why are some people (the Maydan) entitled to revolt whereas others (Donbass) are not?

Why are sanctions right but countersanctions outrageous?

Either you receive no answer to these questions, or you ultimately read in your interlocutor's arguments an unequivocal: "Because we are the good guys." Why? Because our citizens live a happy and affluent life. And this, they say, gives us the moral right to restructure the world and individual countries within it.

But this model - which involves both the right that a group of states has usurped to decide what is good and what is evil and also its own system for punishing the disobedient - precisely this model is being rapidly eroded today. And by no means through a Russian "revolt" against the System. The System itself - unjust, authoritarian, and in some respects even racist (because it divides peoples into those that are okay and those that are not) - no longer corresponds to the realities of the new world, which has actually led to a classic "those at the top can't, those at the bottom don't want to" situation. So, when the Russian president says from the rostrum at the United Nations that "the crux of the matter lies not in Russian ambitions... but in the fact that it is no longer possible to put up with the situation that is taking shape in the world" this is not a challenge but an objective assertion.

Which means that that the most important thing is to ensure a smooth transition from one world-order model to another. It is necessary to provide the most delicate and painless assistance in including the United States and the entire West in the emerging multi-polar world. As Jacques Sapir, director of studies at the French School for Advanced Studies in the Social Sciences, notes in particular," the United States' inability to comply with agreements with other countries as equals is getting in the way of world integration in the 21st century, which has been marked by a return to the idea of sovereign nations and essential cooperation between them." Of course it is difficult, but without this the majority of global and local problems simply cannot be resolved.

Those countries that are today setting the trend, so to speak, and have not simply latched onto world trends but are their promoters and ideological leaders, are starting to gain most in terms of attractiveness. And this, in my view, is an extremely significant source of the "soft power" enjoyed by present-day Russia. Which - having found itself subjected to the most powerful pressure from the "old" centre of power, slandered and demonized on all sides, and surrounded by military infrastructure and artificially cultivated Russophobic regimes - has not only not retreated on matters of principle in this situation but, on the contrary, is de facto dictating a new common world agenda which is increasingly attractive to the non-Western world.

At the same time, at every stage Russia has signalled its readiness to talk and seek agreement - of course in a format of equal rights and equal respect. It was specifically to this that V.V. Putin's speech to the UN General Assembly was devoted, not at all to "declaring war," as it might have seemed to some people. He invited the entire world to join in a dialogue, in a common cause, but did not try to lecture "unreasonable" forces from an "exclusive nation" position, as the American president had done before him - the difference of tone also emphasizes a difference of model, and people in the world noticed this.

It is indeed simpler for states with similar political systems to reach agreement with each other. But the new global model consists in ensuring an equal opportunity to reach agreement for all without exception, without dividing the world on the criteria of ideology-and value-based "soundness" or economic or democratic validity. Values and principles must be universal, not geopolitically determined: People in Crimea, the Dniester region, or South Ossetia have no fewer rights than people in Kosovo. The death of children in Donetsk is no less shocking than the death of Syrian refugees' children. Resisting a coup is no less legitimate than resisting a regime.

And Russia, which advocates equal and respected rights for all peoples - not as the antithesis of individual rights but as an integral part of them - is representing not only itself or a few world "revisionists" but the settled stance of an increasingly broad range of states and peoples who until recently had been artificially marginalized by the ideologues and practitioners of global multi-polarity.

As Hans-Dietrich Genscher, the patriarch of German diplomacy, wrote recently, "we live in an era of globalization and are more dependent than ever on cooperation among various countries. A policy of confrontation operating in accordance with the principle that 'right is might' is obsolete."

This is not a paradox, even against a backdrop of flying missiles and thundering guns: The era of the "rule of force" is indeed coming to an end because increasingly frequently force is finding itself confronted by a counterforce, which means that it is not the solution. And so it is better to try to seek agreement before force is used (of course with those with whom it is possible to reach agreement and for whom war is not a modus vivendi). Nobody in their right mind wants a war, there are no intrinsically "bad" and "evil" nations, and each one wants and has the right to live in peace, to determine its own path, to determine its own political system, and to be guided by its own conventions, faith, and tradition. To safeguard this right, rather than forcing everyone into a common "collective farm" of identical values and systems - this is the real task facing the world community and its leaders, among whom there will be specifically those who will offer the world optimal solutions, not those who appoint themselves by virtue of their military or economic supremacy.

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 #18
Brookings.edu
October 7, 2015
Why a new Cold War can be avoided
By Jeremy Shapiro and Samuel Charap
Jeremy Shapiro, Fellow, Project on International Order and Strategy and the Center on the United States and Europe, Foreign Policy Program, The Brookings Institution. Samuel Charap, Senior Fellow for Russia and Eurasia, International Institute for Strategic Studies (IISS)

All is not well in U.S.-Russia relations. Russia's annexation of Crimea and aggression in eastern Ukraine-and its new airstrikes in Syria-have brought the two to lows not seen since the Cold War. Presidents Obama and Putin sniping at each other from the rostrum of the U.N. General Assembly only accentuated that divide.

But does this incipient enmity mean that a new Cold War is inevitable? Andrej Krickovic and Yuval Weber, in a recent post on this blog, argued that avoiding a new Cold War requires a new security framework for Europe. But they don't think that such a framework can be achieved.

We share their skepticism. One would have to be either ignorant of political realities or hopelessly naïve to be optimistic about such prospects under current circumstances. But we are not prepared to surrender and accept what would be an incredibly costly new Cold War, or perhaps even worse. Military expenditures by the United States alone were around $18 trillion during the Cold War. The conflict destabilized nearly the whole world, presented a constant fear of catastrophic nuclear war, and at times even threatened American democracy. Recognizing just how bad such an outcome would be should focus minds and change political calculations.

Pessimism about the prospects for successful negotiation is common in international affairs. But it should not be an excuse for inaction. We have argued elsewhere that the Obama administration's "middle way" approach to Russia-by which it maintains cooperation on key global issues while keeping up pressure on Russia for its actions in Ukraine-is unsustainable in the long run. Eventually, the United States will have to choose between a new Cold War and a negotiated solution to the crisis with Russia.

We acknowledge that such a deal would involve difficult compromises. The key question is: Is the alternative to a negotiated settlement preferable to an attempt to achieve such a settlement, even if the attempt ends in failure? Given that we, Krickovic, and Weber all agree that the alternative is a new Cold War-an extraordinarily bad outcome-the negotiation option merits investing significant time and effort, even if the prospects of success are not great.

Overstating the obstacles

Reaching a negotiated settlement, while unlikely, is not impossible. The objections Krickovic and Weber raise-namely commitment problems and concessions that wouldn't fly in domestic politics-are all real but overstated.

Commitment problems exist in every international negotiation. In this case, it is clear that neither side would ever be fully convinced of the other's commitments. But for a negotiated settlement to work, the parties do not have to get over their mistrust. Neither the United States nor the USSR ever trusted each other, but they were certainly able to find mutually acceptable agreements. The key to international agreements is not trust; it is finding terms that all sides believe in their respective interests to follow.

Krickovic and Weber rightly call attention to the domestic politics on both sides. And indeed, if the terms of the deal turn out to be as the authors suggest they would (involving Russia reversing the annexation of Crimea and the United States agreeing to limit NATO expansion, among other possibilities), those costs might well be insurmountable. But the purpose of a negotiation is to find mutually acceptable terms; if talks succeed, the outcome will by definition not include terms that either "shake the [Russian] regime's legitimacy to its very foundations" or "give Russia a de facto veto over NATO's policies."

If at first you don't succeed

As a matter of future-focused analysis, the authors might be right: Russia and the United States might not be able to negotiate successfully. But from a policy perspective, their argument reads like an elaborate theoretical justification for inaction. Indeed, the logic of Krickovic and Weber's argument would have predicted that the Iran nuclear deal could not possibly have happened. But, surprising as it was, it did. The bottom line is that policymakers, let alone analysts, cannot know with certainty whether a negotiation will or will not succeed unless one is attempted. And in this case, there has been no such attempt.

In the end, it is not clear why the very real difficulties the authors cite, which are inherent in any complex negotiation, are so much harder in this case than any other. The key point is that it is fairly easy to conceive of an agreement that is in all parties' interest. As long as such a win-set exists, it is not impossible to imagine getting a deal. As long as the alternative is so costly, it makes sense to try.

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 #19
Brookings.edu
October 13, 2015
Avoiding a new Cold War. Really?
By Steven Pifer
Steven Pifer is director of the Brookings Arms Control and Non-Proliferation Initiative and a senior fellow with the Center for 21st Century Security and Intelligence and the Center on the United States and Europe in the Foreign Policy program at Brookings and a former ambassador to Ukraine

Writing on this blog-in "Why a new Cold War can be avoided"-Jeremy Shapiro and Samuel Charap pose a stark choice between a new Cold War and Washington negotiating with Moscow on a settlement for Ukraine. They make an interesting case. But they overstate the risk of a Cold War, appear ready to negotiate over the head of a smaller state, and do not define how much they would negotiate away.

Such an approach could well make things worse. Let's take these points in order.

Then and now

First, the Cold War was a scary time. The United States and NATO faced off against the Soviet Union and Warsaw Pact in a political, military, economic, and ideological confrontation. At several points, crises or mistakes (mechanical and human) could have ignited a horrific conflagration. With some luck, we got through it. But consider where we are today in contrast to the Cold War:

    -While relations between Washington and Moscow are frosty, they cooperate on strategic arms reductions, Iran, and Afghanistan in a way that would not have been conceivable in the 1960s, 1970s, or early 1980s.
    -The military face-off is very different. The United States and Russia have dramatically cut their nuclear arsenals. NATO now has the advantage in conventional forces-in part because all of the Soviet Union's Warsaw Pact "allies" have joined the alliance. And Russia struggles to man its armed forces at a number one-quarter of what the Soviet Union had.
    -Regarding economic competition, there is none. The combined economies of the United States and Europe come to more than 15 times the size of Russia's.
    -As for the ideological aspect, it's game over. The Soviet Union tried to offer the world communism as an antithesis to capitalism. Russia offers a corrupt authoritarian model that only appeals to aspiring corrupt authoritarians.

We should not fear negotiating with the Russians, but we also should not cite a Cold War strawman to frighten ourselves into a negotiation or unwise concessions.

Breaking rank

Second, perhaps I misunderstood their article, but Jeremy and Sam seem to argue for a U.S.-Russian negotiation over Ukraine's head. Elsewhere they have argued for a negotiation on a new European security order. Either way, Washington and Moscow cannot negotiate over the heads of Ukraine or other Europeans-those countries need to be subjects, not just objects, of the negotiation.

Otherwise, we risk an unhappy lot who could frustrate implementation of any arrangement. Yalta remains a part of Europe's historical memory: A large power negotiation over the fate of a smaller country (or countries) would leave many allies, particularly in the Baltics and Central Europe, nervous about American leadership.

How much compromise is too much?

Third, while acknowledging that a negotiated settlement-either on Ukraine or the broader European security order-is unlikely, Jeremy and Sam do not explain how far they would go to secure it. Russia broke the cardinal rule of the Helsinki Final Act by using force to change borders. It has grossly violated Ukraine's territorial integrity and seeks to erode its sovereignty and independence.

That poses a problem for the United States, which in 1994 joined with Britain and Russia in committing to respect Ukraine's sovereignty, territorial integrity, and independence in the Budapest Memorandum. That memorandum played a key role in persuading Kiev to give up what was then the world's third largest nuclear arsenal.

Ukraine will have to compromise to get a settlement, but how much? Fifteen months ago, President Petro Poroshenko was prepared to devolve some political authority to Donetsk and Luhansk, provide status for the Russian language, defer Crimea for later discussion, and put off the issue of Ukraine's relationship with NATO well into the future. Moscow did not engage. What more would Kiev have to give to secure Russia's withdrawal from the Donbas and a restoration of Ukrainian sovereignty over Donetsk and Luhansk?

Pushing Kiev too far on this would run a risk. What if the outcome of Jeremy and Sam's negotiation emboldened the Kremlin to try similar hybrid warfare tactics elsewhere-say, against Estonia or Latvia, NATO allies to whom the United States has given a security guarantee? That would raise the specter of something far worse than a Cold War-a hot one.

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 #20
Reuters
October 13, 2015
U.S. expects agreement with Russia soon on Syria air safety
By David Brunnstrom and Phil Stewart

The United States expects an agreement with Russia's military soon on air safety protocols in the skies above Syria, U.S. Defense Secretary Ash Carter said on Tuesday, as the former Cold War foes seek to avoid a clash during rival bombing campaigns.

Russia's entry into Syria's civil war has stoked concerns about an accidental mishap between U.S. and Russia jets. The Pentagon has already cited cases in which Russia aircraft came within miles of piloted U.S. fighters jets and drones.

The United States has said it will not alter its air operations against Islamic State in Syria or cooperate with Moscow, given Russia's support for Syrian President Bashar al-Assad.

But the Pentagon has agreed to work with Moscow on basic air safety procedures and said it would keep a channel of communications open.

"Our talks there are very professional, they're very constructive, and I expect them to lead in very short order to an agreement," Carter told a news briefing in Boston.

U.S. proposals, first outlined during a secure video conference between the U.S. and Russian militaries on Oct. 1, include maintaining a safe distance between U.S. and Russian aircraft and using common radio frequencies for distress calls.

Carter said a third round of talks between the U.S. and Russian militaries would be held on Wednesday. Russia's Interfax news agency, citing Russian military officials, said the talks would be held via video conference.

"Even as we continue to disagree on Syria policy, we should be able to at least agree on making sure our airmen are as safe as possible," Carter said.

Earlier on Tuesday, the U.S. military said two U.S. and two Russian aircraft "entered the same battle space" over Syria on Saturday, getting within miles of each other.

Saturday was also the last round of talks between the U.S. and Russian militaries.

U.S. Army Colonel Steve Warren, a Baghdad-based spokesman for the U.S.-led coalition campaign against Islamic State in Iraq and Syria, said the Russians have repeatedly broken air patrols and come close to American unmanned aerial vehicles or drone aircraft.

"We've seen instances where ... one of our UAVs will sort of come nearby and the Russian will break his pattern and come over and take a close look at the drone, or the UAV," Warren told a Pentagon news briefing, speaking via video-conference.

Warren said Russia has carried out about 80 strikes so far - a far lower count than Moscow has offered, possibly due to different methodologies for calculating strikes.

"I find these air strikes to be reckless and indiscriminate," Warren said, renewing the U.S. accusation that only a fraction of Russia's strikes target Islamic State or Islamic State-held territory.

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 #21
Washington declines proposed visit of Medvedev-led delegation to U.S., visit of its delegation to Moscow - Lavrov

MOSCOW. Oct 14 (Interfax) - The United States has rejected the Russian proposal to send a delegation led by Prime Minister Dmitry Medvedev to Washington and a U.S. delegation to Moscow in order to discuss interaction in the Syria situation, Russian Foreign Minister Sergei Lavrov has said.

"Actually, we received a formal reply today. It seems the public speech delivered by our president yesterday prompted the Americans to respond to our propositions. We were told they could not send a delegation to Moscow and could not receive a delegation in Washington either," Lavrov said at the State Duma's Government Hour on Wednesday.

The proposal to receive a U.S. delegation and to send a Russian delegation led by the prime minister to Washington afterwards was made in New York, on the sidelines of the UN General Assembly session attended by Russian President Vladimir Putin, the minister said.

The United States said in its reply that it only wanted to "agree on steps which would prevent incidents," Lavrov said. "It is a pity because it is important to our servicemen operating in the Syrian airspace and U.S. military pilots to understand who is doing what, who is performing what maneuver, so that accidents can be avoided," Lavrov said.

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 #22
Valdai Discussion Club
http://valdaiclub.com
October 14, 2015
THE RUSSIAN MILITARY CAMPAIGN IN SYRIA: THE BALANCE OF FORCES AND POSSIBLE RISKS
By Ruslan Pukhov
Ruslan Pukhov is Director of the Center for Analysis of Strategies and Technologies (CAST), Member of the Public Council under the Russian Defense Ministry.

The Russian military campaign in Syria is a political landmark comparable to Crimea's reunification with Russia or the conflict in Donbass.

The Ukrainian conflict demonstrated Russia's readiness to confront the West and to use military force to protect its interests. In Syria, Russia for the first time joined a military conflict to support an ally beyond the post-Soviet borders. Russia has demonstrated its ability for effective power projection in other regions and the enhanced combat standards of its air force and navy.

Russia joined the fighting in Syria for a complex array of reasons, only some of which have any relation to Syria. One of them is concern over the losses that Bashar al-Assad's army sustained in the summer of 2015. The Russian authorities believe that the defeat of the ruling Syrian government would result in the massacre of ethnic and religious minorities and a transition of control in the country to ISIS and other radical Sunni groups, which are almost indistinguishable from each other, according to Russia.

All of these groups are hostile to Russia, to one degree or another, and many of them include fighters from the former Soviet Union who are focused on continuing the jihad in Central Asia and the Caucasus. ISIS has become more active in Afghanistan, where it was joined by the Islamic Movement of Uzbekistan, which has demonstrated an ability to infiltrate Central Asian law enforcement agencies, as evidenced by the case of Gulmurod Khalimov, a senior Tajik police commander who defected to ISIS. The downfall of al-Assad and the victory of ISIS and other ideologically allied groups could undermine Russia's position in the Middle East and hence directly threaten its national security.

Russia's concerns were fuelled by the Western proposal for establishing a no-fly zone over Syria to support the opposition forces. The Libyan experience has shown that the establishment of no-fly zones for humanitarian concerns by the United States and its allies invariably develops into full-scale air fighting to directly support rebel forces. Judging by recent data, the Western countries nearly coordinated a decision to invade Syria when Russia launched an air force operation there.

The Russian military campaign in Syria, which it is waging in close coordination with Iran, has the following objectives:

-to remove the threat of intervention by the West and its allies. This goal has already been achieved by the deployment of Russian forces and the launch of Russian air raids;

-to stabilize and strengthen the government of Bashar al-Assad by liquidating the most dangerous opposition-controlled pockets in the rear of the Syrian army and by helping it take better defense positions;

-to put limited military pressure on ISIS in order to force it to concentrate its financial and personnel resources on defense, and hence scale down its activity in Central Asia;

-to the extent possible, to destroy the foreign ISIS recruits, primarily from the CIS countries, who represent one of the most capable combat ready terrorist groups that directly threaten Russia's security.

The achievement of these objectives would remove threats to the Syrian government for the near future, with the war drawn out for an indefinite period and with an unpredictable outcome. This is unacceptable to the supporters of the so-called moderate Islamic opposition, Turkey and Saudi Arabia, where internal instability has been growing against the backdrop of the Syrian war. Neither is this acceptable to the European Union, which has been swamped by refugees, nor the United States, which has to react to the concerns of its allies and partners.

This has created the environment for talks on an end to the military conflict, post-war development of Syria and joint action to rout ISIS. The talks will most likely take the form of discussions of federalization scenarios and the gradual removal of President Bashar al-Assad.

Russia and Iran have very strong negotiating positions, as they have the only effective military force capable of waging offensive operations against ISIS and al-Qaeda in Syria. In the event of success, Russia will achieve its main military goals, that is, to guarantee a post-war Syrian regime that would suit Russia and reduce the threat of Sunni radicals to Russia.

A secondary goal is to create more opportunities in relations with the United States. The resumption of top-level Russian-American contacts at the UN General Assembly and the launch of cooperation between the Russian and US armies and intelligence services are evidence that this goal can be achieved.

The Russian Defense Ministry has used new methods of working with the public during the Syrian campaign, such as broadcasting footage of Russian air strikes and missile launches, extended reports from Russian military bases and broad use of social media. However, this large-scale propaganda campaign should not eclipse the fact that Russia only has a limited air force group in Syria, which has not been very active so far. The Russian Aerospace Forces have 30 strike aircraft at its base in Latakia, including 12 Su-24M, 12 Su-25 and six Su-34 bombers, and four Su-30SM jets with air defense capability.

The Western coalition used mostly precision air munitions, while the Russian group also makes heavy use of gravity bombs. The US-led group has more effective reconnaissance, target acquisition and weapon guidance systems, including the broad use of suspension units that none of the Russian aircraft have, as well as 25 years of deployment and combat experience in the region and tried-and-tested air force interoperability and combat operation techniques.

As regards its effect on ISIS' military capability, Russia's advantages include access to al-Assad's considerable HUMINT sources. Some of its strikes are delivered specifically on groups of Central Asian or North Caucasus terrorists. The Russian military campaign is having a predominantly political and moral effect, but only a limited military effect, on ISIS. On the other hand, Russia's actions in Syria could greatly influence the Syrian Army's fight against other rebel groups, including the "moderate" opposition supported by the West and radical Islamist groups such as Jabhat al-Nusra.

Russia intervened in Syria at a time when the situation was stabilizing in favor of Bashar al-Assad. Indicatively, Russia did not intervene in July or early August 2015, when the Syrian Army was sustaining heavy losses, primarily from Islamic radicals. By September, al-Assad restored the frontline's integrity, while the Islamists' offensive fizzled out. Since then, the pro-Assad forces have accumulated reserves, including through the redeployment of Iranian units to Syria and large-scale Iranian and Russian arms deliveries. The Syrian Army predictably launched a large-scale offensive the other day. It's not the number of targets the Russian aircraft hit, but the success or failure of the Syrian offensive that will determine the overall success of Russia's Syrian strategy.

The main headache for the pro-Assad forces consists of the large Islamist pockets in the government-controlled territory, primarily in Homs and Rastan, which have tied up considerable Syrian Army forces. These opposition forces are part of the Army of Conquest (Jaish al-Fatah), a loose alliance of armed rebel groups that are fighting the forces of President al-Assad, and that are supported by the Sunni monarchies of the Persian Gulf and Turkey and also include Jabhat al-Nusra, the local branch of al-Qaeda.

Al-Assad's priority goal is to liquidate these pockets, which have apparently become the target of some of Russia's air strikes. If these combined strikes lead to the elimination of these anti-Assad pockets, the Syrian Army's next task will be to clean up the Aleppo area, stabilize the situation in southern Syria and, if possible, recapture Palmyra, which is a major communication hub, and drive ISIS into the desert. The achievement of these goals would greatly improve al-Assad's military and political standing, as good as assuring its survival.

At the same time, the "moderate" and Islamist opposition groups are building up their forces. The United States and its allies have been sending weapons to the "moderate" opposition, and the Russian intervention has only accelerated this process. Opposition forces of all stripes could launch a large-scale offensive in the key areas in December or January. Repelling this offensive will be a crucial task for the Syrian Army and the Russian aerospace group. The Russian group could be a major factor in postponing the offensive until January, which would suit the government forces. Active hostilities could stop during the period of sandstorms caused by a strong wind called khamsin, which lasts from February through April.

Under a best-case scenario for Damascus, Tehran and Moscow, conditions could develop by the spring of 2016 when talks on Syria's future will involve al-Assad's government, the "moderate" opposition and their sponsors and possibly even the moderate segment of the Islamist forces. The next issue on the agenda would be to join forces against ISIS.

The United States is planning to redouble its efforts against ISIS, including by launching an offensive by Kurds and the "moderate" opposition against the ISIS "capital," Raqqa, but the chances of success are slim. Washington's largest flaw is the absence of large, at least minimally effective and politically loyal pro-American forces on the ground. The systemic US failures at military development in other countries, including Afghanistan, point to the existence of major institutional problems.

In our opinion, the caliphate can be routed quickly and resolutely only through a large-scale military intervention by the US-led Western land forces. But this operation is made impossible by the internal political situation in the United States and the EU. The alternative is a long-term ground campaign against ISIS simultaneously on several fronts, including by the regular Iraqi army, various Iraqi militia groups, Iranian forces, al-Assad's army, Kurdish militias and possibly moderate Syrian Islamists. The main driving force of this motley group would be the Syrian Army, reinforced by Russian air support and Russian weapons, which would give Moscow and Tehran additional trump cards at talks.

In the next few months, when Russia's efforts will be directed against the Islamist groups of the Army of Conquest and the Islamist enclaves, its relations with Iran, on the one hand, and with Turkey, the Gulf monarchies and the United States on the other hand, will inevitably deteriorate. In light of this, the worst possible scenario for Russia would be an inability of al-Assad's forces to dramatically improve the situation even with Russian air support, which is quite likely. This could further increase tensions between Russia and the West, encourage the United States and its allies to attempts to introduce no-fly zones over Syria to protect the opposition and fan military tensions between Russia and NATO.

But an even worse scenario would be Moscow's desire to up the stakes or to bring about a radical change in the Syrian conflict by launching a ground operation. This would involve Russia in a hopeless and unwinnable war beyond its national borders, which can only increase tensions in its relations with the West, which would try to bleed out the Russian forces in Syria by providing large-sale support to the opposition and Islamist forces under the Afghan scenario. Judging by recent statements, the Russian authorities are fully aware of this danger and will preclude the use of the Russian army in hostilities in Syria.

When assessing the Russian military operation in Syria, we should compare the risks of action to the risks of inaction, both of which are very high. Inaction would most likely result in al-Assad's defeat, the large-scale slaughter of his supporters and the division of control in the country between ISIS and the Army of Conquest, which would ultimately fight each other. As a solid and better organized structure, ISIS would most likely win that future war. The United States would be unable to effectively influence the situation due to the lack of conditions for ground operations. As for the Gulf monarchies, the conflict in Yemen has shown that their military capability is very low, regardless of the amount of cutting-edge military equipment they buy. As a result, ISIS would further expand throughout the world, strengthening its potential for military operations in geographically remote regions.

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 #23
Moskovskiy Komsomolets
October 12, 2015
Russian expert comments on "premature" victory reports by Syrian troops
Igor Subbotin and Lina Panchenko, Will 'Russian wings' help Al-Asad: Peculiarities of Russian operation in Syria. Syrian army begins large-scale offensive

From the outset it was absolutely clear to everyone that it would not be possible to beat the terrorists by air strikes alone, without a ground operation. And now it has begun. The "green light" for Syrian government troops was secured by Russian aviation, the number of whose combat sorties has tripled in recent days. Moskovskiy Komsomolets tried to find out how substantial the Syrians' successes are, what problems Russian aviation could encounter in the air, and how and why Russian helicopters are operating in the region of our air base.

Ground operation

Syrian government troops have secured a number of victories over the Islamic State (IS, banned in Russia) grouping, liberating several population centres in the region of Latakia, Hama, and Idlib. The offensive, which was announced last week by official Damascus's military leadership, began after bombings by Russian aviation.

With the support of Syrian people's militia forces, the population centres of Kfar 'Ajuz and Kfar Dulbah (in the north of Al Ladhiqiyah province) were liberated; they are located 20 km from the Turkish border. This is reported by the Russian media, citing military sources. It is also reported that the Syrian government army has completely liberated the small Kyn [as transliterated] valley, which is 25 km from the city of Idlib.

According to reports by Libyan satellite TV channel Al-Manar, Syrian President Bashar al-Asad's troops have also taken control of the village of Atshan near Hama, where there were detachments of the radical Islamist grouping Al-Nusrah Front. However, Al-Jazeera writes that the moderate Syrian opposition may have been based at this population centre. Iran's Mehr agency reports that near Idlib, government troops also took the villages of Latmin [as transliterated], Markabekh [as transliterated], and Lakhayya [as transliterated].

A few days earlier, Syrian General Ali Abdallah Ayub had announced successes by the Syrian Army, linking them to the start of Russia's air operation. "The Syrian Arab Armed Forces have begun a large-scale offensive with the aim of eliminating terrorist groups and liberating regions and cities that have suffered from their crimes," the military leader stated. "After the Russian strikes from the air, which reduced the combat capability of Islamic State and other terrorist groups, the Syrian Armed Forces can now keep the military initiative."

However, not everyone views the developing situation with the Syrians' optimism. Thus, Russian military expert Viktor Murakhovskiy shows some scepticism about their premature victory dispatches. According to him, there are certain conditions in which successful operations can be expected from ground troops - specifically, entering the enemy zone within the first hour and a half after "air support."

"You may remember the Russian Army's operations in the 2008 [Georgian] conflict," the expert cites as an example. "But I do not think the Syrian Army, given its condition, is capable of carrying out everything as necessary. And whereas our own Army dealt with the task in literally 24 hours, here everything could drag on for weeks. It will most likely be a matter not of knocking out the terrorists but of squeezing them out."

Fighters

Meanwhile the end of the week was marked by a record number of sorties by Russian Air Force aircraft from the Khmeymim [as transliterated] air base. Thus, on 8 October for the first time the crews took off in combat aircraft more than 60 times. Previously the average daily number of sorties was no more than 25.

It is not surprising that the mass presence of Russian combat aircraft in the air provoked a certain reaction from the NATO coalition.

Thus, for instance, the British, according to some reports, were directed to arm their aircraft with air-to-air missiles, which had not previously been done because of the lack of a possible enemy in the air. That, in any case, is what the London Sunday newspaper Daily Star Sunday claims, citing its own sources in the United Kingdom's defence department.

"Naturally this decision cannot be called a friendly move. However, there is nothing unusual about it, after all, this is a zone of hostilities in which aircraft not belonging to the coalition have appeared. Fighters, at that, which are covering our bombers' operations. It is understandable that the pilots of other countries' aircraft should want to feel more protected. Although it is quite obvious that Russia is not going to take any aggressive actions against the coalition," Moskovskiy Komsomolets's military expert believes.

It must be said that the relevant directive actually stipulates that the British pilots may attack our aircraft in the event of a "threat to their lives." Obviously, if they follow this recommendation, no outrages should occur.

"A pilot can see the intentions of the pilot of another aircraft very clearly from his instruments - he can determine whether or not the other pilot has locked onto him as a target," the expert explains.

At the same time, the publication that made public the directive claims that "British Air Force pilots have been instructed to avoid contact with Russian fighter planes at all costs."

Moreover, there are some who consider this whole situation far-fetched in principle.

"All these things are media fakes," Igor Korotchenko, editor of the journal Natsionalnaya Oborona, believes. "Russian aircraft are not flying in Iraq's airspace."

Helicopters

Meanwhile another aspect of Russia's activities in the skies of the "hot" region is prompting both fears for our pilots' lives and all kinds of media insinuations. Thus, one Russian TV channel showed a video provided by the Syrian military in which helicopters are supposedly carrying out air strikes against Islamic State militants' positions. From the text around it saying that the Syrian Army liberated the city of Bakhsa [as transliterated] with Russian air support, some people drew hasty conclusions about our helicopters' participation in the ground operation.

The Defence Ministry replies unequivocally on the question of participation by Russian helicopters: "The helicopters are involved only in supporting the security and activities of the Russian air base."

Viktor Murakhovskiy told Moskovskiy Komsomolets precisely how:

"Helicopters are used at times when aircraft are planning to take off or when they are coming in to land. They barrage the surrounds of the air base in case militants should get into places where there is a danger of firing on our aircraft."

In reply to the question of whether there is a danger of our pilots being shot down by the very same militants against whom they are protecting Russian aircraft, all the experts said roughly the same thing. First, activity by portable antiaircraft missile systems has not been recorded in the zone where our air base is located. Second, the helicopters themselves are equipped with defence systems. That means chiefly heat traps.

"Well, of course nobody is safe against every chance occurrence," Viktor Murakhovskiy says, "whether in war or in peacetime."

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 #24
Washington Post
October 14, 2015
Al-Qaeda in Syria calls for revenge attacks on Russia
By Loveday Morris and Natasha Abbakumova

BAGHDAD - The head of al-Qaeda's offshoot in Syria has called on followers to carry out retaliatory attacks in Russia, raising the specter of blowback on Russian soil over Moscow's military intervention to aid Syria's embattled government.

Just hours after the call from Abu Mohammed al-Jolani, the leader of Jabhat al-Nusra, two mortar shells landed in the perimeter of the Russian Embassy in the Syrian capital, Damascus. No casualties were reported.

Meanwhile, Abu Mohammed al-Adnani, a spokesman for the Islamic State militant group, issued a statement criticizing the United States. He described President Obama as a "dumb mule" and an "idiot" who has extended the war "as we wanted" by not taking more robust action in Syria.

Russia has used cruise missiles and fighter jets to strike targets in Syria held by Islamic State militants and other factions battling Syrian President Bashar al-Assad, including Jabhat al-Nusra, also known as the al-Nusra Front.

President Vladimir Putin has argued that containing the extremists is a national security concern for Russia, with its restive North Caucasus region serving as a breeding ground for militants. But Russia also has strategic interests in supporting longtime ally Assad, including gaining footholds in the Middle East and the Mediterranean region.

"The new Russian invasion is the last arrow in the quiver of the enemies of the Muslims," Jolani said in an audio recording released late Monday. He urged those in the Caucasus region to "distract" Moscow from the conflict in Syria, calling for attacks on both civilian and military targets in Russia.

"If the Russian soldier kills from the masses of [Syria], kill from their masses," he said in the 21-minute speech. "And if they kill from our soldiers, kill from theirs. One for one."

Jolani set a bounty of 3 million euros ($3.4 million) for the killing of Assad and 2 million euros ($2.3 million) for the elimination of Hasan Nasrallah, the leader of the Lebanese militant group Hezbollah, which is backing the Syrian government on the battlefield.

In his audio recording released Tuesday, Adnani said the Islamic State has benefited from U.S. inaction.

"The idiot should have made haste and not wasted time by trying solutions," he said of Obama, according to a translation from the SITE Intelligence Group. He added that America would "come via land soon" and meet "your destruction and ruin and end."

Adnani also eulogized Fadhil Ahmad al-Hayali, the No. 2 Islamic State leader who was killed in an airstrike by a U.S.-led coalition in Iraq in August. The coalition has been attacking the Islamic State in Iraq and Syria for months.

"We consider that he did not die, for he has raised men and left behind heroes," Adnani said.

The United States and Russia have publicly traded barbs about the effectiveness of each other's air campaign since Moscow stepped up military action.

Russia has said that its airstrikes are directed against the Islamic State, but U.S. officials have contended that Moscow has largely targeted other groups, including U.S.-backed rebel forces.

Putin said Tuesday that Moscow has asked the United States to provide examples of targets that it considers legitimate but has received no response. Washington also did not respond to a request to provide information on sites that it did not wish to be targeted, he said.

"It seems to me that some of our partners are just messed up in the head," Putin said.

The Syrian army, backed by Russian airstrikes and supported by Hezbollah and Iranian fighters, has made progress against rebel groups in recent days. But Islamic State militants also appear to have benefited from Russian strikes against those groups, advancing on the outskirts of Aleppo, Syria's largest city.

Despite their gains, pro-government forces also have suffered losses; two Hezbollah figures and a top Iranian commander have been killed on the battlefield in recent days. The resistance put up by U.S.-backed rebels can be partly attributed to U.S.-supplied antitank weaponry.

The United Nations' special envoy to Syria, Staffan de Mistura, was in Moscow on Tuesday to urge Russia to help bring about a political resolution in Syria.

Russian Foreign Minister Sergei Lavrov said that Russia's military campaign was not hampering the political process and that a "swift launch" of steps toward a political resolution is consistent with Russia's goal of uniting "all healthy forces" to save Syria.

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#25
Russia Direct
www.russia-direct.org
October 13, 2015
Russia's military role in Syria: A byproduct of the Iran nuclear deal?
Tehran may have presented Moscow with a proposal it couldn't refuse to ignore: military involvement in Syria in exchange for a geopolitical partnership after the lifting of sanctions.
By Yury Barmin
Yury Barmin is a strategic risk consultant based in Moscow. He holds an MPhil Degree in International Relations from the University of Cambridge. His interests include Russian foreign policy and the politics of the Gulf. Follow him on Twitter at @yurybarmin.

Russia's military campaign in Syria that followed came as a surprise to most analysts since it marks a new milestone in the country's geopolitical ambitions. For the first time since the collapse of the Soviet Union, Moscow decided to get openly involved militarily outside of its so-called Near Abroad.

It appears, however, that Russian air strikes have been planned quite a while, for at least three months ever since Qassem Soleimani, one of Iran's most powerful generals who heads the Quds Force and is accountable directly to Ayatollah Khamenei, was reported to have come to Moscow in late July. According to media reports, Soleimani's meeting with Russian President Vladimir Putin was the first step that led to the large Russian military presence in Syria.

Yet, the Iranian general's visit to Moscow may reveal that Putin did not in fact want to prop up Syrian President Bashar Assad in Syria; instead, he was probably "cornered"into sending troops there. Soleimani's visit to Moscow was highly controversial, given that he is under an international travel ban. In addition, there are a number of Iranian officials whose visit would have been more logical since they have stronger ties with Moscow.

Treated with distrust internationally, Russia knowingly violated UN sanctions by going at such lengths to organize this controversial visit. It is likely that Tehran insisted that Soleimani, and none other, meet Putin personally and discuss Russian participation in the Syria campaign. Yet, what forced the Russian president to accept these risky terms from Iran?

According to the Syrian Ambassador to Russia, Riyadh Haddad, Moscow's involvement in Syria has been in the works since spring, which is the time when the Iran talks were in their concluding stage. Soleimani came to Moscow on July 24, ten days after the announcement of the Iranian nuclear agreement. Russian officials, who publicly lauded the agreement and the lifting of international sanctions against Tehran, were very much skeptical about the prospects of the deal for Moscow itself.

There was a prevailing position in Russia that once the sanctions against Tehran were lifted, the country would choose to get closer to the West, essentially abandoning its long-time partner Russia. In the months leading to the signing of the Iran deal, there had been rumors of Moscow and Tehran discussing an informal agreement that would provide guarantees to the Russians that there would not be any dramatic change in Iranian foreign policy that could hurt Moscow's interests.

Russia and Iran share a complicated history full of conflicts that are rooted in both countries'ambitions of being a regional power. Many in Moscow believe that, once the two powers are not tied together by a common opponent, Iran will inevitably start leaning to the West, potentially teaming up with the United States against Russia. The calculation in Moscow is that, if this in fact takes place, Russia may start losing its clout in the Middle East as well as globally.

Russia has clearly a lot to lose if Iran regains its political and economic role in Eurasia once there are no restricting measures in place. The Russian-Iranian marriage of convenience is likely to end once the two will start competing over European and Asian energy markets. Iran is ready to pour millions of additional barrels of oil into the market, likely exerting even greater downward pressure on the price of oil.

Russian companies that have signed numerous agreements with Iranian firms from aviation to agriculture over the past year are likely to be pushed aside by European and American companies with more sophisticated technology.

At the numerous meetings between Russian and Iranian officials, including on the sidelines of nuclear talks, earlier this year Tehran was clearly negotiating from the position of strength. Iranians likely realized the fear of losing a geopolitical partner that was creeping over Russian officials and made use of it.

According to some sources in Russia, Soleimani's visit to Moscow was the last one in a series of meetings where Tehran proposed a deal that Moscow could not risk rejecting. The Iranian leadership might have asked Moscow to join the campaign in Syria in exchange for the continuity of the Russia-Iran alliance in the event that sanctions are lifted.

Since it was Putin who needed guarantees from Iran at a dire time for the Russian economy, he simply couldn't say no to this proposal. While officials present Russia's air campaign in Syria as a careful calculation, it could be just a trade-off, which is necessary to secure the country's political and economic interests in the Middle East.

Tehran's influence over Moscow on the issue of whether to participate in the Syria campaign also explains why Iran was so quick to grant flyover rights to Russian Syria-bound cargo planes when European countries closed its air space for them.

The question remains, however, why it took Russia over two months to launch its air campaign in Syria. The answer likely has to do with the domestic political dynamic in the United States. Russia was keeping its presence in Syria low key while the Iran nuclear deal was under fire from the Republicans in the U.S. Senate.

Yet it was not until U.S. President Barack Obama wrapped up a veto-sustaining minority in the Senate that would allow him to go ahead with the nuclear agreement in early September that Iran "authorized"Russia to launch a full-scale deployment of forces to Syria.

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 #26
Moscow Times
October 14, 2015
Putin's Tactical Gambles Are Paying Off
By Georgy Bovt
Georgy Bovt is a political analyst.

Russia's military intervention in Syria has firmly supplanted Ukraine in news headlines and Kremlin propaganda. That seems to even be reflected in the way President Vladimir Putin conducted himself during the recent "Normandy Four" meeting in Paris. The Russian president behaved differently in Paris than he did in Minsk in February. It is possible he has grown "bored" with Ukraine: nothing new is happening there. Syria is his new priority.

By joining the war in Syria, Moscow used the same psychological trick it played repeatedly in Ukraine over the last year: it raised the stakes, forcing its international partners to wonder what the Kremlin schemers are up to and what their next stunt would be. There are more "chips" on the table now - both Ukrainian and Syrian.

The first crisis remains far from resolution and the second threatens to escalate. What's more, the second crisis involves far more players than the first, each of whom is pursuing their own interests.

However, Putin seems at ease with this type of situation: he has repeatedly proven himself a worthy tactician. He evinces cool confidence even as the ambitious and domineering Turkish President Recep Erdogan warns of worsening relations or as threats pour out from the capitals of Sunni monarchies led by Riyadh. What does that indicate - cold-blooded calculation or indifference born of despair over the fact that things could not get any worse anyway, so why not take a chance?

With Syria now at the fore, has the Kremlin surrendered Novorossia? That project did not pan out as planned back in the spring of 2014. Novorossia does not stretch from Odessa to Crimea, Ukraine did not break into pieces and, unexpectedly for many Russians, the "junta" in Kiev proved tenacious.

And almost overnight, the dramatic television news reports of Ukraine disappeared without Russian society even missing them. The Russian people are tired of the Bandera motif. And the ultra-patriots were wrong in their prediction that masses of Russians would express disappointment in the Kremlin if it abandoned Novorossia. They didn't.

At the same time, many of Moscow's goals in Ukraine, if not yet realized, remain achievable. In this sense, the Novorossia project partially succeeded. The price of that success is another question: it proved to be quite high. But now Moscow can use the Donbass as leverage against the authorities in Kiev for a long time to come. Europe has already mentally come to terms with Crimea's departure from Ukraine. And of course, that whole episode will be seen as a victory for the Kremlin, even if decades pass before Russian Crimea receives legal recognition.

Although no Western capital would openly admit it, Ukraine's accession to NATO has been postponed indefinitely. That can also be considered a partial success of the Novorossia project - that is, if NATO expansion is seen as a threat to Russia. And it confirms another principle of international politics taken from the field of psychology - namely, that the more outrageously a country behaves, the more influence it has. The West might not invite the world's weirdest leaders - such as North Korean leader Kim Jong Un - to summits, but it is also careful to avoid upsetting them unnecessarily.

Similarly, the West will wait a good long time before it crosses Russia again with the question of Ukraine's accession to NATO. That would only change if Russia's economy were to deteriorate so badly that the country required outside assistance. But that day is far off. The Russian people have great inertia, and even greater patience.

Russians have said they are willing to pay the price for Crimea and the Donbass. Well, they have paid, and are paying a high price for the conflict in Ukraine. The Russian economy continues to worsen not only due to the low price of oil, but as a result of Russia's growing international isolation and a paralysis of will on the part of leaders to do anything about it.

The Russian people are paying for the fact that leaders have almost wholly substituted their foreign agenda for attention to the domestic agenda. The Kremlin has suddenly become obsessed with its foreign policy agenda, even while telling citizens at home to "sit tight and wait for oil prices to rebound."

But then, nobody is exactly complaining, either. The joy of watching television broadcasts of glorious military victories mitigates the grief over the family's shrinking budget. And that is nothing new for Russians. In this country, the state is always more important than the individual.

One of those rare "fifth column" critics of the regime might point out that many soldiers are bound to come home in coffins. But only their immediate families will grieve: that is how it has always been. For now, polls indicate that more than two-thirds of the Russian people approve of the military intervention in Syria. After all, how many allies can Russia just "hand over to the West" - no matter who those allies might be?

In this sense, Moscow has not abandoned its Novorossia project, but consolidated its victories there and launched its own reset, creating the New Syria project. The goal is the same: Russia is fighting for its national pride, as Russia alone understands it. And that emotion is personified in a single man who, no matter what he does, remains the undisputed and uncontested authority for the majority of the population.

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 #27
Australian Strategic Policy Institute
www.aspistrategist.org.au
October 14, 2015
Russia's Syria intervention and the bipartisan insolvency of US strategy
By Michael Clarke
Michael Clarke is an associate professor at the National Security College, ANU.

On 6 October, Russian warships on the Caspian Sea fired 26 medium range cruise missiles at 11 targets in Syria. Washington has protested that these strikes have not only struck the forces of the self-declared 'caliphate' but also 'moderate' Syrian rebel groups. US Secretary of Defense Ash Carter has argued since that by entering the conflict on the side of the Assad regime Moscow is 'tethering' itself to 'a sinking ship of a losing strategy'.

While Carter's assessment of Russia's approach may well prove to be correct, it's clear that Washington's approach has already proven to be a losing one.

Central to this failure has been Washington's inability to construct a 'solvent' strategy whereby, to paraphrase Walter Lippmann, commitments accurately reflect US vital interests and don't exceed US capabilities to protect or prosecute those interests.

Since August 2011 the Obama administration has maintained that while only Assad's removal will resolve the crisis, the 'United States cannot and will not impose this transition upon Syria.' Rather, Washington has sought this indirectly through the imposition of sanctions and provision of support to anti-Assad forces.

The 'Assad must go' rhetoric and this indirect strategy has led the administration astray.

First, it has permitted a number of regional players such as Turkey, Saudi Arabia and the Persian Gulf monarchies to sponsor their own often jihadist proxies in Syria. Unsurprisingly, their actions have been guided by their own individual interests first and their strategic alignment with the US a distant second.

Second, the expansion of IS prompted the administration to give 'teeth' to its indirect strategy by prosecuting an ongoing air campaign to 'dismantle and degrade' it and developing a program to vet, train and equip 'moderate' Syrian rebels.

The former was designed to weaken IS offensive capabilities and allow local anti-IS forces to take the initiative. The problem in Syria (PDF) has been that 'the secular rebel groups vetted by the United States are divided, weak and unlikely...to augment US-led operations from the air.'

The latter initiative has been underwhelming. After admitting in July that it's US$500 million training program had yielded only 60 'moderate' rebels, the administration cancelled the program in early October to focus instead on identifying acceptable Syrian rebels 'already on the battlefield'.

The crucial problem bedevilling the Obama administration and the political class in Washington as a whole is that their core goal in the Syrian crisis-the removal of Assad-is not aligned with either US vital interests in the Middle East or the capabilities that the US is willing to deploy to achieve them.

Two central questions arise here.

First, does the continued existence of the undeniably odious regime in Damascus imperil vital US interests in the Middle East, let alone US national security? In answering this question, they would do well to recall that the current dilemmas Washington faces in Syria 'stem not from the mere existence of the Assad regime but instead from the war that emerged from confrontation between the regime and its opponents'. Additionally, the actions of the US and its allies have arguably helped to perpetuate it.

Or second, does the emergence of IS, a movement bent on the destruction of the territorial and political order of the contemporary Middle East, constitute the preeminent threat to US interests in the region? In September 2014 President Obama appeared to signal the administration's belief that it did in fact constitute such a threat.

Since then Washington has pursued a contradictory strategy. On the one hand it has argued that the Assad regime's continued existence is the 'magnet' that attracts foreign fighters to IS, while on the other it has declined to revise its position that Assad's removal is the precondition for a political resolution to the Syrian civil war.

As Paul Pillar has argued, this ignores the fact that 'the untoward effects of this war will be ameliorated only insofar as peace is established in Syria...It is the continuation of the war, much more than any particular outcome of the war or any particular political configuration of Syria, that is the source of most of the trouble that is worth worrying about'.

This failure is shared by Obama's Republican critics. Indeed, the alternatives offered by Republicans divorce further the relationship between commitment, interests, and capabilities that should underpin sound strategy.

Jeb Bush has argued that 'defeating ISIS requires defeating Assad, but we have to make sure that his regime is not replaced by something as bad or worse', while others are bedevilled by wilful obfuscation of the dynamics at play with respect to Syria and IS. In February Marco Rubio asserted that Obama hadn't implemented a military strategy to combat IS as he 'doesn't want to upset Iran'. That ignores the fact that Washington and Tehran's interests are aligned when it comes to combatting IS.

It's difficult to disagree with Michael Brendan Dougherty's assessment that the majority of the GOP primary contenders have argued for a  fairy-tale strategy on Syria that will somehow 'defeat everyone at once, at low cost, without ugly alliances, and to the benefit of unnamed good guys'.

Russia's intervention in the crisis has served to reveal the inability of the current administration and its Republican alternatives to bring US commitments into alignment with what are deemed to be its vital interests in the Middle East.

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 #28
Russia & India Report
http://in.rbth.com
October 13, 2015
Six unexpected outcomes of Russian airstrikes in Syria
Moscow is using its massive firepower to subdue terror and in the process dramatically alter the balance of power in the Middle East. But there are more gains it may not have foreseen.
By Rakesh Krishna Simha

With its devastating air strikes on ISIS and US-funded rebel groups, Russia is now at the centre of the Syrian chessboard. Besides the obvious gains that include securing Syrian President Bashar al-Assad's secular government and exposing American backing of terrorist groups, here are six strategic spinoffs from Moscow's military action.

Sukhoi showstoppers are the new must have toys

Following their spectacular performance over Syrian skies, Russia's Sukhoi warplanes are set to be the hottest commodity in the international arms market. With the MiG-29 providing top cover, the Sukhois - including the massive Su-34 fighter-bomber, the swing-wing Su-24 ground attack jet and the subsonic Su-25 tank buster - are doing a fantastic job. While the Su-24 is due for retirement, the Su-25 and Su-34 tandem could be the hottest new items on the wishlist of air forces around the world. The cruise missiles - probably the Klubs - that are thudding into terrorist hideouts are also likely to see an increase in popularity.

Intelligence bonanza for Russia

After a near collision with a Russian jet, the US Air Force ordered its fighter pilots to stay clear of areas where Russians are operating. The near miss gives you an idea of the cramped confines in which foreign aircraft have to fly. This proximity has allowed Russia to gather valuable intelligence on a variety of US and NATO aircraft, including the F-22, claimed to be the world's premier stealth fighter. Such opportunities are rare and the boffins in Russia's military intelligence must be having a lot of fun going through all that data.

ISIS can no longer steal Iraqi and Syrian oil

ISIS was selling Iraqi and Syrian crude oil on the black market for as low as $10 a barrel. The regular market price is around $47 a barrel. Exporting oil requires transporting it via pipelines to the coast. Clearly, ISIS was free to conduct the sale of illicit crude without the fear of NATO airstrikes. This alone is enough evidence that ISIS was enjoying some form of American and NATO protection. Although ISIS exports were just a trickle in the torrent of crude oil flooding the world, the markets responded positively to the Russian airstrikes by moving up. Even a small uptick in the price of oil translates into billions of dollars in revenue for Russia.

Russia has got Saudi Arabia over a barrel

Saudi Arabia is losing its shirt because of its relentless production of crude oil aimed at weakening Russia and Iran. The IMF says the Saudi budget is in tatters, and the outlook appears grave for the kingdom. Russia's comeback in the Middle East along with Iran and the Hezbollah - the Shiite militant group that gives nightmares to the Saudi sheiks - could be the incentive that OPEC's largest member needs to announce production cuts. Having lost face, the US is no longer in a position to ask the Saudis to hold the line.

Europe sees the light

It has taken only a few Russian missiles to bring Europe to its senses. Europeans are taking the view that Moscow's decisive action in neutralising ISIS seems like a good idea compared with US actions that created millions of refugees who are now flooding into Western Europe. Both Germany and France are thinking of rolling back economic sanctions against Russia. That's called cost-effective diplomacy.

The Caspian is a Russian lake

By launching cruise missiles from the Caspian Sea 2400 km away - instead of the Mediterranean where the Russia Navy has stationed a powerful armada - Russia is indicating that it has multiple options. The Caspian was considered a Russian lake for centuries, and Moscow is signalling that nothing has changed today. It is also a message to the US that the Russian military has access to Iranian and Iraqi airspace. Plus, it shows the range and lethality of its cruise missiles.

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 #29
Russia Direct
www.russia-direct.org
October 14, 2015
How Moscow 'invests' in frozen conflicts
For Russia involvement in ethno-political conflict is not kind of idee fixe. There are many interests and rationales behind it.
By Sergey Markedonov
Sergey Markedonov is an Associate Professor at Russian State University for the Humanities based in Moscow (Russia). From May 2010 to October 2013, he was a visiting fellow at the Center for Strategic and International Studies (Washington, DC, USA). In April-May 2015 he was a visiting fellow at the Center for Russia and Central Asia Studies, Institute of International Studies (IIS), Fudan University (Shanghai, China).

Russia's involvement in the military confrontation in Syria has fueled the debates about Moscow's role in resolving severe ethno-political and civil conflicts. The situation is made more acute by the fact that since the collapse of the Soviet Union right up until September 2015, Russia had only intervened in conflicts in the post-Soviet space, for example, in Tajikistan in 1992-1997, in the former Soviet republics of Transcaucasia in 1992-1994, and in the Dniester River in 1992.

In August 2008, by recognizing the idependence of the South Ossetia and Abkhazia from Georgia, for the first time, Moscow violated Article 5 of the Belavezha Accords, which fixed the borders of the post-Soviet republics as of the end of the Soviet Union.

The transfer of Crimea from one post-Soviet republic to another in March 2014 set a precedent. The West and Ukraine called it an annexation, while Russia described it as the reunification or Crimea's "return home."

In September 2015 Russia went beyond the geographic scope of the former Soviet Union in the fight against the Islamic State of Iraq and the Greater Syria (ISIS). The military operation calls for an assessment of Russia's previous experience and the risks involved.

Is Russia fueling the conflicts around disputed territories?

An article "Accumulating Disputed Territories" recently appeared in an influential Russian business newspaper Vedomosti, in which the authors make an attempt to assess the Kremlin's previous military experience and the risks. The opening lines alone are disheartening for the Kremlin:

"Russia is increasingly investing in conflicts that become frozen, and which then require new investments. It is not clear what the outcome of the Syrian operation will be, but Russia has already accumulated responsibility for no fewer than four disputed territories: Transnistria, Abkhazia, South Ossetia and the Donbas. This growing list of 'under-states' requires not only a large budget, but also competent management. Russia has problems with both."

Naturally, such an article cannot take into account all the conflicting details and nuances of the ethno-political conflicts involving Russia. So, it would be an oversimplification to file all cases of Russian interference under the same heading.

Let's start with the fact that Moscow has never had either a strategic objective or an obsession with collecting "disputed territories" and investing in conflicts. In fact, over the past two decades Russia's position in relation to these conflicts, as well as the issues of territorial integrity and self-determination, has repeatedly changed.

Before the conflict with Georgia, dubbed in media as "the five-day war," Moscow operated a blockade and sanctions against that selfsame Abkhazia (which were fully abolished only in spring 2008). The Georgian authorities once welcomed the presence of not only Russian armed forces (which withdrew completely by November 2007), but also border guards (before 1999).

In offering the Kozak memorandum on the basic principles of the state structure of a united state in Moldova (2003), Russia was prepared not only to recognize the territorial integrity of Moldova, but also to help guarantee it.

That would have made the latter a unitary, not federal country. But neither before nor since have the parties to the Transnistrian conflict been so close to solving the problem of integration into a single state. Alas, 12 years ago the chance slipped away. And not because of Russia's actions.

After the "five-day war" in South Ossetia, Russia prolonged the Grand Treaty with Ukraine to strengthen cooperation with Kiev, and the question of Crimea remained off the Kremlin's agenda until "Maidan-2."

Regrettably, the authors of the Vedomosti article cannot accept the simple fact that Russia's policy is not only a consequence of its actions. Moscow's political approach is seen as a unilateral movement. What Moscow wants, Moscow gets. But does that make Russia the demiurge of global reality? Are there not other factors that force it to move in a particular direction?

Russia is taking on more responsibility as it moves forward. Moscow has been forced to react both to mistakes in the "national construction" of new independent entities and the active foreign policy intervention of other players (U.S., EU, NATO).

Multi-dimensional nature of the post-Soviet conflicts  

It is not only Moscow's policy in respect of the conflicts in South Ossetia, Abkhazia and Transnistria that has changed. The approaches of Georgia and Moldova have also changed - rapidly at times. And the Ukraine that emerged after Maidan-2 was very different to the Ukrainian state that preceded it.

Therefore, we can (and should) debate the results of conflict resolution and/or involvement, but at the same time must not ignore the multi-dimensionality of the various post-Soviet case studies that are not simply the product of Soviet-style machinations from the Kremlin.

Regarding Russia's role, it would be unfair to ignore the positive outcomes of Moscow's interference. For instance, the May 1994 agreement on a permanent ceasefire in Nagorno-Karabakh, which was concluded largely thanks to the efforts of retired Extraordinary and Plenipotentiary Ambassador Vladimir Kazimirov, remains virtually the only such document, which maintains the fragile status quo in the region, that is both violated and disputed. Yet, so far, no one has proposed a better solution, which would encourage both sides to come up with genuine compromise.

Likewise, Moscow stopped the bloodshed in Transnistria in 1992 and in Tajikistan in 1997 by putting both parties at the negotiation table. In addition, Russia contributed to establishing peaceful negotiation process between Georgia and South Ossetia in 1992 and between Abkhazia and Georgia in 1994.

And had former Georgian President Mikheil Saakashvili not sought to "unfreeze" South Ossetian conflict in the spring of 2004, it is not ruled out that the current dynamic of the Russo-Georgian relations would be different.

Post-Soviet republics as under-states?

The authors of the Vedomosti article also use the word "under-state" to describe the post-Soviet de facto entities, which echoes of the views of many experts who see them as "black holes" "piratic enclaves."

However, most serious pudints (such as Laurence Broers, Donnacha O'Beacháin, Helge Blakkisrud, Pal Kolstø, Nina Caspersen, Thomas de Waal and John O'Loughlin) take a more careful view and avoid oversimplification of such complicated issue.

They began to consider these entities as the consequence of the complex processes of Soviet disintegration, national self-determination and the construction of new post-Soviet formations. Avoiding pejorative connotations, they also studied the political processes, electoral campaigns and structures of everyday life inside them.

Incidentally, these "under-states" (as some authors see them) were certainly not Moscow's obedient puppets all the time. Suffice it to recall the results of the 2004-2005 elections in Abkhazia, which were unpredictable for Moscow and seriously divided the Abkhazian society. Or take the campaign in South Ossetia in 2011, which also was full of intrigues, with the Kremlin having had little influence on the outcome of these elections.  

This is important to take into account, especially, in the context of the frozen conflicts:  After all, the blame for the conflicts between "under-states" and their "parent states" lies not only with them and Russia (which did not support them immediately), but also with the new post-Soviet states, which conducted a controversial policy as well.

After all, Abkhazia lost 4 percent of its pre-war population in clashes and battles with Georgian army, not the Russian one.

It should be also taken into account that reluctance to recognize "under-states" as independent does not mean refusal to work with thier population, as indicated by the West's policy toward these "under-states." For example, the visa restrictions for Abkhazian people imposed by the EU are indicative in this context. No wonder, the people of these unrecognized states choose Russia to establish closer ties. Such examples are plenty.

One worthy point the authors of the Vedomosti article do make is the need to improve the managerial skills of Russian diplomats and officials, and representatives of large corporations. But raising their level of competence doesn't means abandoning Russia's national interests or the necessity (if circumstances require) of intervening in conflicts in order to "freeze" them until the best compromise solution is found - not a settlement that seeks to minimize Russian involvement and edge Moscow out of the game.

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 #30
Politico.com
October 13, 2015
Rift in Obama administration over Putin
The president's reluctance to respond assertively is signaling U.S. weakness and indecision, some officials say.
By Michael Crowley

Vladimir Putin's intervention in Syria is creating new rifts inside an exhausted and in some cases demoralized Obama national security team, where officials pushing for bolder action see the president as stubbornly unwilling to assume new risk as he nears his final year in office.

Current and former Obama officials say the president's reluctance to respond more assertively against Putin is signaling U.S. weakness and indecision. "We're just so reactive," said one senior administration official. "There's just this tendency to wait" and see what steps other actors take.

Putin's direct military intervention - following years of indirect support for Syrian ruler Bashar Assad - has broken any momentum Obama had after sealing his nuclear deal with Iran. Secretary of State John Kerry had hoped to follow through on the agreement by working with Iran and Russia to win a political settlement in Syria, a goal that now seems fanciful. Adding to the frustration is the high-profile failure of the Pentagon plan to train and equip moderate Syrian rebels, which is being downsized.

"They're on their back feet right now," said a former senior Obama foreign policy hand.

Obama has recently approved the supply of ammunition to Kurdish and Arab fighters in northern Syria, and the Pentagon training program is being repurposed to arm trusted rebel commanders in the field. Midlevel officials throughout the administration have also been asked to "dust off old plans," as one put it, and brainstorm new potential approaches to Syria and Russia.

But expectations are low that those efforts will lead anywhere. Sources familiar with administration deliberations said that Obama's West Wing inner circle serves as a brick wall against dissenting views. The president's most senior advisers - including National Security Adviser Susan Rice and White House chief of staff Denis McDonough - reflect the president's wariness of escalated U.S. action related to Syria or Russia and, officials fear, fail to push Obama to question his own deeply rooted assumptions. "Susan and Denis channel him," says a former administration official who has witnessed the dynamic.

That dynamic is not new. But Putin's escalation has combined two of Obama's biggest foreign policy headaches - a newly aggressive Russia and Syria's civil war - into one throbbing migraine.

In senior meetings, some of Obama's top national security officials have pressed for a bolder response to Putin's muscle-flexing in Syria. They include Kerry, who has argued for establishing a no-fly zone in Syria, an option Obama recently suggested is "half-baked."

A former Cold War nuclear deterrence expert, Defense Secretary Ash Carter has fretted that the U.S. isn't standing up firmly to Putin's provocations. And CIA Director John Brennan has complained that Putin is bombing Syrian rebel fighters covertly backed by his agency with seeming impunity.

"The optics are that we're backing off," said a former Obama official who handled foreign policy issues. "It's not like we can't exert pressure on these guys, but we act like we're totally impotent."

Obama's refusal to take firmer action against Moscow has increasingly isolated several of his administration's Russia specialists, who almost uniformly take a harder line toward Putin than does the president himself. They include Victoria Nuland, assistant secretary of state for European and Eurasian Affairs; Celeste Wallander, the National Security Council's senior director for Russia and Eurasia; and Evelyn Farkas, deputy assistant secretary of defense for Russia, Ukraine and Eurasia. Farkas' recent announcement that she will exit the Obama administration this fall raised eyebrows among officials aware of her frustration that Obama hasn't responded more forcefully to Putin's annexation of Crimea and his support for pro-Russian separatists in the country's east. (Farkas has told friends that she is not resigning over policy disputes.)

Obama did face a public challenge in the form of an interview on CBS' "60 Minutes" that aired Sunday, in which the president grew visibly annoyed as interviewer Steve Kroft pressed him on the modest results of his campaign against the Islamic State and on whether Putin was successfully "challenging your leadership."

Standing his ground, Obama repeated his argument that it would be a mistake to overreact to Putin, who he says is acting out of weakness, and that the Syria morass defies the kind of "silver bullet" solution sought by his critics.

The critics increasingly include Democrats. White House officials are said to have reacted with irritation when Hillary Clinton proposed a Syria no-fly zone earlier this month, lending credibility to an idea mainly backed by Republicans. Kerry has also pushed for a no-fly zone in northern Syria along Turkey's border, which could provide a humanitarian haven for refugees - but would also create a de facto challenge to Russia's freedom in the skies.

This is not the first time Obama has dug in against national security officials urging bolder action, both in Syria and against Putin's Russia.

In late 2012, Clinton, then secretary of state, joined CIA Director David Petraeus and Defense Secretary Leon Panetta in presenting Obama with a plan to arm and train a moderate Syrian rebel force. Obama vetoed the idea. (He did approve a modest covert CIA training program in 2013 after the Syrian regime used chemical weapons, and last year he approved the $500 million Pentagon training program that is being downsized after a sputtering start.)

The pattern repeated earlier this year, when a consensus emerged among Obama's top national security advisers, including Kerry and then-Defense Secretary Chuck Hagel, that the U.S. should supply lethal military aid to Ukraine, including shoulder-fired Javelin anti-tank missiles. During his February confirmation hearing, Carter said that he, too, was "very much inclined" to provide heavier weapons to Ukraine. Again, Obama knocked down the idea, worrying that Putin would simply further escalate in response.

Some officials argued that Obama should keep the possibility of supplying of lethal weapons as a card to play against Putin in the event the Russian took newly provocative steps - which he now has in Syria.

But there are no signs Obama is seriously reconsidering the idea.

Obama's trash talk In a sign of the complexities the Obama team faces, few officials can be easily placed in a neat hawk or dove box. Kerry, for instance, has long favored a no-fly zone in Syria. But he frustrates the administration's Russia hawks, who prefer to isolate Putin, with his reliable belief in the benefits of continued dialogue with Moscow.

That reflects a view that pragmatic engagement with Moscow is the best way to accomplish U.S. aims. That theory may have received a little-noticed boost earlier this month. While critics point out that Putin began airstrikes two days after his sit-down with Obama at the United Nations, there was unexpected good news from Ukraine soon after, when Russian-backed rebels agreed to postpone disputed elections that threatened a fragile truce. The elections had been a key discussion point between Obama and Putin in New York. Even so, the Russia hawks believe that Putin and Kerry's Russian counterpart, Sergei Lavrov, generally string along and mislead the U.S.

On the flip side, many Pentagon officials want the U.S. to more actively counter Russian ambitions in Europe - while doubting the efficacy of proposals to take more action in Syria. Martin Dempsey, the recently retired chairman of the joint chiefs of staff, argued that the U.S. should consider sending lethal aid to Kiev. But Dempsey was a vociferous opponent of a Syria no-fly zone, which he called risky and said could cost $1 billion per month at a time of Pentagon budget cuts.

A new paper published by the Army War College concludes that the Russian intervention in Syria "is not necessarily a major setback for U.S. policy."

"I feel that we have a much more deeply held concern about what is going on in Ukraine than we do about pulling a rabbit out of a hat in Syria," said the paper's author, W. Andrew Terrill, a professor at the War College's Strategic Studies Institute and a retired Army lieutenant colonel. "The Lebanese civil war lasted 14 years and was very difficult to stop."

Other military officials believe the U.S. can stand up to Putin without getting entangled in Syria by contesting Russian aggression in other theaters, from the Arctic to Eastern Europe and the Baltics, where Russia has stepped up provocative overflights challenging foreign airspace. In a speech last week at the Atlantic Council, a Washington think tank, NATO's top naval commander proposed a stronger U.S. response to the recent deployment of six Russian Kilo-class attack submarines to the Black Sea.

The commander, U.S. Navy Adm. Mark Ferguson, called for a more active allied response, including identifying new bases where the U.S. Navy's P-8 Poseidon anti-submarine aircraft could operate, saying that "you do not get better sitting in port doing synthetic exercises."

It's unclear whether Obama is entertaining that idea. But even officials who grumble that Rice and McDonough discourage dissenting views - sometimes by invoking exaggerated, straw-man versions of recommendations - concede that there is plenty of discussion in national security meetings at the White House. Just little action.

As one of the former officials put it: "This is driven by one man, and one man only, and it is Barack Obama."

Bryan Bender contributed to this report.

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 #31
www.rt.com
October 13, 2015
How Newsweek gets Russia wrong
RT Editorial

This blog represents a range of opinions prepared by a team of authors working at RT. It contains commentary, views, feedback and responses to various events and news media items.

In the internet age, anti-Russia commentary very quickly circulates around the world. It lingers online, waiting to be cited by another op-ed writer, thus feeding the cycle of nonsense in the so-called 'analysis' of Russia in Western discourse.

One of the main sources for factually challenged diatribes is think tanks. In an era of miserly budgets, cash strapped news media find it hard to turn down freebies. So, when friendly policy institutes offer pieces for nothing, the reply is, invariably, "thank you very much." And one of the biggest culprits is Newsweek.

The once venerable New York magazine has endured calamitous difficulties since 2008. From a subscriber base of 3.1 million, it folded its print edition in late 2012. Last year it was relaunched. However, the new product is a pale imitation of the legendary publication that preceded it.

The old Newsweek wouldn't have published unchallenged, one-sided ravings by a Kiev-employed professor on alleged "Russian paranoia." Furthermore, it's unlikely the Atlantic Council would have found it as easy to plant such one-sided, erroneous nonsense in the magazine.

Moreover, the once-illustrious organ currently bearing Newsweek's moniker allowed the rabidly pro-NATO think tank to stir up tension in late September with an extraordinary op-ed from one Andreas Umland.

NATO - its own worst enemy

Headlined 'Putin's Paranoia Has Caused Russians to Suspect the West,' Umland's article hysterically portrays Russia as an aggressive, authoritarian nation ready to unleash its huge nuclear arsenal. He blames Russian media - domestic and foreign - branding it propaganda. The German academic also insists that NATO and the EU are innocent targets of the Russian press.

"The propaganda machine's constant repetition that NATO, the European Union and its allies are after Russia's lands and resources has convinced many Russians they must stick together to secure their nation's physical survival," Umland writes.

It's worth noting that the US is responsible for 70 percent of NATO spending. Thus, it can legitimately be argued that NATO is a tool of US foreign policy, dressed up as an alliance of equals. Also, the very ethos of NATO is currently confusing. Alliance bosses have long portrayed it as a force for the spread of democracy. However, long-standing member Turkey has been openly rolling back freedoms in recent years, with no apparent consequences.

In reality, nothing sullies NATO's name more than NATO's own behavior. Its assertive expansion eastwards, and illegal wars waged against sovereign states in the 1990's and 2000's have hardly improved its image. Thus, the notion that Russian media is a major reason for negative perceptions of NATO power in the West is patently absurd.

As it happens, the largest European protests against American military aggression took place on February 15, 2003, with three million marching in Rome alone. On the same day, 1.3 million rallied in Barcelona. Another million marched through the streets of London. It is implausible that RT influenced this movement, given that RT wasn't founded until 2005.

Aside from NATO, the EU is doing a fine job of destabilizing itself, without any help from Russian media interests. The union's third most powerful member, Britain, is threatening to leave, egged on by its own establishment newspapers, most notably the Daily Mail and Daily Telegraph.

Newsweek, with London-based editors, should know better.

Meanwhile, eurozone participants have also warned of exits, like Greece, or been encouraged to leave by the UK press, as was the case with Italy.

Meanwhile, applicants such as Poland and the Czech Republic have gone cold on the idea. Added to this, the summer 2015 refugee crisis has seen Hungary erect border fences and threaten to extend them to the intra-EU frontier with Romania. Even Germany re-instated immigration controls, thereby undermining the Schengen Agreement's promotion of free travel inside the zone. It's worth noting that the refugee emergency has been caused by NATO's military campaigns against Iraq, Libya and Syria, in an incredible example of blowback.

In light of all these deep-seated problems, to suggest, as Umland does, that Russian media plays a part in the EU's woes is outrageously dishonest.

Control freaks

The real reason that elitist American institutions like the Atlantic Council detest the likes of RT is because they cannot dictate to it. Popular media in the US, such as the New York Times, or the UK, for example the Sunday Times, is so beholden to NATO and government interests that Washington foreign policy bigwigs can't comprehend a critical news outlet gaining popularity.

Hence, when the New York Times publishes articles based on 'government sources,' that is considered 'news.' Yet, when RT carries legitimate stories that counter the established narrative that is termed 'propaganda.'

For example, if American and British troops, under the NATO banner, hold exercises in the Baltic States, Western media calls it 'training.' Britain's publically-owned BBC even embedded a reporter with participants "in defense of Europe." When Russia does the same, inside its own territory, Moscow's actions are labeled "aggressive." by the UK press.

Umland continues: "RT's pseudo-pacifist stance began to lose clout with the start of Russia's all-too-obvious 'hybrid war' against Ukraine. The downing of Malaysia Airlines Flight 17 by a Russian missile (unproven) over Ukrainian territory in 2014 has been particularly damaging. It dealt a lethal blow to the propaganda strategies of RT and other Russian outlets aimed at muddying the waters of Western public opinion on Russia's military escalation in the Donbass."

Not only was RT not "muddying the waters," it strived to inform the world about Ukraine long before Donbass erupted. RT crews were shot at by snipers in Kiev during the US-backed coup that removed President Yanukovich in early 2014.

Later, RT journalists exposed the hardships of civilians in Eastern Ukraine - something mostly ignored by Western media and Ukraine's domestic services. In fact, RT attempted to cover the other side in the civil war, but Kiev repeatedly banned our correspondents from its territory.

The new Kiev

Umland is not a journalist, but that hardly excuses him from ignoring facts in his opinion pieces. His Wikipedia entry (the link to his Atlantic Council biography is invalid) says he's a political scientist, historian and Russian language interpreter.

A product of East Germany, he teaches at Kiev's National University, Mohyla Academy. This institution, which is partially American-funded, served as the headquarters of the 2004 'Orange Revolution.'

As someone who works in Kiev, Umland is surrounded by militant Russophobia. His views certainly seem to align with the virulently anti-Russian post-coup elite in Ukraine. The kinds of people who run the show in Ukraine nowadays are deeply unpleasant. Take Anton Gerashchenko, an adviser to Ukrainian Interior Minister Arsen Avakov, who recently shared a message from a Facebook "friend" who wants to help ISIS militants take revenge against Russian forces in Syria "in accordance with Sharia law." The majority of Gerashchenko's Facebook friends supported the idea, calling it "brilliant" and "effective."

The new Ukrainian authorities banned 376 Russian films and TV series and outlawed TV channels in Russian. This despite the fact that 83 percent of Ukrainians responding to a 2008 Gallup poll preferred to use Russian instead of Ukrainian to take the survey.

Census results suggesting that Ukraine has more Ukrainian speakers than Russian are not borne out in reality. In 2005, even Kiev's Institute of Sociology of the National Academy of Sciences admitted that 58 percent of Ukrainians speak Russian at home. The real figure is probably much higher.

Umland concludes that there's nothing to discuss with the Russian authorities. Instead, he says, "we" have to address the Russian audience directly: "Neither better diplomacy with the Kremlin nor a boost in NATO's military capacity will overcome this threat. Instead of engaging in ever more diplomatic activism and spending more on weapons, the West's leaders and thinkers should ponder how and what to communicate to the Russian people living both inside and outside Russia. How can we reach them and make them believe that we are not their enemies? Where should we put our money and direct our energy to tackle not the symptoms but the root of our problem with Moscow? Finding practical answers and workable instruments to address these issues will make the Earth a safer place for all of us," he writes.

Essentially, Umland is wondering how Americans (because in NATO terms they are 'we') can reach out to Russians and tell them that the growing NATO presence on their doorstep is extremely good for them.

That's akin to tempting turkeys with positive news about Christmas.

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 #32
Los Angeles Times
October 14, 2015
A spot rich in Russia's soulful heritage becoming billionaires' playground
By Carol J. Williams    
 
The ocher leaves of the towering birch trees flutter in the warm breeze, shaking loose a confetti shower that blankets a forest promenade where Russian writers strolled for generations to drink in nature's inspiration.

The birch-shaded "alley" led east to the banks of the Setun River from Peredelkino's enclave of gingerbread wooden cottages where literary luminaries, including Boris Pasternak, plied their craft. To the south, the wanderers had an unfettered view across farmland and meadow to a 15th century church and convent near the railway station connecting the village to Moscow.

Nowadays, though, the tree-lined path to the river stops short at a walled compound of palatial villas built for billionaire bandits and business tycoons. The bucolic vista has been replaced with a 12-foot-high metal fence that separates the McMansions from the writers' colony along the canopied path. The newcomers' Audi and Mercedes sedans speed along the rutted surface, the siren blare of their SUV security escorts scattering the few remaining pedestrians like startled geese.

Three- and four-story palaces loom above the surrounding walls, their telescopes, rooftop terraces and Italianate balconies as discordant as if spaceships had landed in the vast field.

Poet Oleg Khlebnikov has lived in the old writers' retreat north of the birch alley for 20 years, penning his verse on an oil cloth-covered wooden table on the veranda of a dacha he leases from the Literary Fund, a cultural heritage bureaucracy that inherited the enclave after the demise of the Soviet Union. No longer state-funded, the landlord is on the verge of bankruptcy and forced to manage the properties with an eye on potential profit.

In spite of the invasion of "New Russians" and their garish mega-dachas, Khlebnikov prefers life here to the even noisier bustle of Moscow, a 20-minute train ride away.

"The air is better here. You see squirrels climbing trees, and dogs can live outside, as they should," observes the white-haired poet.

"It used to be a state farm in the Soviet era. Writers would steal beets and carrots for their dinners as they crossed through," Khlebnikov recalls of the fields now home to modern Russia's ostentatious elite.

The literary lights that made Peredelkino synonymous with Russia's soulful heritage of novels, poetry, screenplays and song would turn in their graves to see the village today, Khlebnikov laments.

When a neighboring property was rented to a criminal kingpin a few years ago, the prestige of living in the shadow of Pasternak's refuge spurred envy among the magnate's cronies, who sought to outbid him for the residence through the cash-strapped Literary Fund.

"It ended up in a shootout with three of them dead and the survivor in prison," Khlebnikov says with a disgusted shake of his head. "Some of these new neighbors have never read a single poem but they want to be able to say 'I live next door to Pasternak.'"

The 1958 Nobel laureate who wrote "Doctor Zhivago" lived out his high and low years here in a prow-front dacha that looks like a ship run aground in the birch forest. It was here that Pasternak, once celebrated as one of the nation's most important poets, wrote his masterpiece novel in the late 1940s, angering authorities with its portrayal of the Bolshevik Revolution's brutality and cultural destruction, and lived out his life in seclusion.

The brown dacha is now the Pasternak Museum, where the humble trappings of his last years have been reverently preserved, from the massive oak desk to the slender ground-floor bed where he died of lung cancer in 1960.

Museum curator Natalia Gromova despairs of the decline of the writers' colony and the pressure on the Literary Fund to lease historic homes to the highest bidder.

"Nowadays the public's knowledge of poets is very low," she says wistfully. "One only becomes famous if his verse is set to pop music."

The museum still gets about 8,000 visitors a year, but that income is no match for the millions that developers offer the Literary Fund to transform the village to suit the whims of the nouveau riche.

"New Times, New Prices!" a placard on the fence flanking the birch alley reads, hawking the Kalinka Real Estate Consulting Group's offer of custom-designed villas. And with the new residents have come a golf course, fitness centers and themed restaurants such as Mafia, across from the cemetery where the luminaries of Peredelkino's past are buried.

Modest dachas with white-framed windows once housed the likes of Alexander Solzhenitsyn, novelist and songwriter Bulat Akudzhava, Stalin biographer Alexander Fadeyev and children's poet and fabulist Kornei Chukovsky. Yevgeny Yevtushensko, a protest voice who emerged during the 1960s cultural "thaw," can still be seen prowling the grounds of the woodsy retreat.

In the colony's heyday, many of the cottages offered sweeping views of the field stretching nearly a mile between the birch alley and the 15th century Church of the Transfiguration. Today, the church and convent are no longer visible from the alley, blocked by the mansion complex and overshadowed by a recently constructed temple put up by one of the billionaires in memory of his mother.

Those like museum curator Gromova, devoted to shielding Peredelkino from the ravages of new money, deplore the new temple, with its thicket of gilded crosses and garishly tiled onion domes, as an embodiment of the tastelessness transforming the village.

The intrusions of modernity negate one of Pasternak's most famous lines, a verse said to have been inspired by the vista of knee-high golden grass beyond the birch trees.

"To live a life is not as easy as crossing a field," Pasternak's pensive Yuri Zhivago observes in a poem in the novel.

Today, crossing that field might be the more daunting journey.

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#33
Moscow Times
October 14, 2015
Infowar Continues as Russian, MH17 Investigations Reach Different Conclusions
By Matthew Bodner, Eva Hartog

The Dutch Safety Board and Russians arms manufacturer Almaz-Antey on Tuesday told a similar story about what caused the downing of flight MH17 in eastern Ukraine last year, but had a politically charged crucial difference of opinion on what type of warhead was used - and consequently, who was likely behind the tragedy.

Confirming theories that have circulated since the direct aftermath of the tragedy that killed 298 people on July 17 last year, the Dutch Safety Board (DSB) concluded the Malaysia Airlines plane had been downed by a surface-to-air Buk missile, but stopped short of saying who fired it or where exactly it was fired from.

Russia has said Ukrainian troops fighting separatist rebels in the area could have shot down the plane mistakenly, while Western reports have accused Russia of providing the rebels with a missile that they used to shoot down the airliner.

Standing in front of a partial reconstruction of the plane's front built out of recovered wreckage pieces, DSB chairman Tjibbe Joustra said Tuesday the plane had been broken apart by a 9N314M warhead carried on a 9M38-series missile that exploded outside the plane to the left of the cockpit. The 9N314M is easily identified based on the distinctive hourglass-shaped damage patterns found on its targets.

"This fits the kind of warhead installed in the Buk surface-to-air missile system," Joustra said. Both the Russian and Ukrainian military use the Buk missile, but Russia operates a newer system.

Hours before the Dutch investigation presented its findings, the Russian manufacturer of the Buk missile system, Almaz-Antey, held a morning press conference in Moscow to present its own version of events.

At first glance, Almaz-Antey's conclusions didn't substantially differ from the Dutch report in that the company also fingered a Buk missile as the likely culprit in MH17's destruction.

But the Russian arms manufacturer altered its version of events, which were first presented at a press conference in June. Instead of arguing that an out of production 9M38-M1 missile was responsible, Almaz-Antey on Tuesday revised its story to point to the even older 9M38 model.

"We have proved beyond doubt that the missile fired over Ukraine was a 9M38 from a Buk launched from the south near the village of Zaroshchenskoye," Almaz-Antey CEO Yan Novikov said at the press conference.

The evidence, Novikov said, is that the MH17 wreckage did not feature the distinctive hourglass-shaped shrapnel holes in the body of the Boeing 777 aircraft alluded to in the Dutch investigation report - despite the company pointing them out in June.

In order to prove its point, Almaz-Antey cut the forward section off of an old Soviet-built Ilyushin Il-86 passenger liner, and positioned an older Buk missile - provided by the Russian Defense Ministry - near the nose in the same position they believe the warhead detonated, and then documented the blast pattern.

Almaz-Antey noted that the blast pattern created by the missile, outfitted with the 9N314M warhead, created damage patterns the company did not see on MH17 and concluded that only an old 9M38 missile with an old warhead - which did not have the hourglass shrapnel - could have done the damage seen in the MH17 wreckage.

Almaz-Antey, Russia's largest defense company, is trying to use its argument to win a lawsuit against the European Union for placing sanctions on the company following the downing of the Boeing over Ukraine last year.

Nick de Larrinaga, the Europe editor at defense consultancy IHS' Jane's Defense Weekly magazine told The Moscow Times that the hourglass shape is significant because "its presence allows us to rule out other warhead types."

"Russia has previously argued that neither the 9M38 nor 9M38M1 remain in its military service. This is not borne out by the evidence," he said.

"Russia's claims relating to the [even older] 9M38 being responsible are inconsistent with the independent analysis of the crash by the Dutch Safety Board, by independent analysis conducted by IHS Jane's, and by its own analysis presented in June," de Larrinaga said.

Launch Site

The DSB did not say where the missile had been fired from, other than citing an area of 320 square kilometers in eastern Ukraine, adding that it did not have the mandate to conduct the further forensic research needed to determine the exact launch location.

Almaz-Antey focused much of its presentation on two experiments to recreate the missile's impact with the plane, and forensically establish which direction the missile was launched from.

The predominant theory in the West says that the Buk missile was fired from the rebel-held town of Snizhne in eastern Ukraine, but Almaz-Antey firmly rejects this scenario, pointing instead to the village of Zaroshchenskoye, which was further south of MH17's flight path.

This argument was based on the direction of the shrapnel patterns found in the MH17 wreckage, which were seen to enter from the left side of the cockpit and travel down the length of the plane, with some shrapnel hitting the left wing.

A surface-to-air missile does not direct its shrapnel forward, but rather off to the side. Therefore, in order to create the damage pattern seen on MH17, the missile would have approached the plane from the side, rather than dead on.

Since MH17 was traveling directly toward Snizhne, a missile launch from that location could not have created the damage seen on the Boeing's body, according to Almaz-Antey, but a missile fired from Zaroshchenskoye could have.

There is some debate over who controlled that town on July 17, the day MH17 was shot down. Almaz-Antey has hesitated to assign blame to either Kiev forces or the Russian backed rebels, but the Ukrainian Defense Ministry said in June this year that it had not been in control of the area at the time.

Novikov told reporters that the company was ready to share its findings with the Dutch-led investigation, but never received a request from the commission.

Russia Responds

In the run-up to Tuesday, Russian officials publicly distanced themselves from the DSB's findings.

Russian Foreign Minister Sergei Lavrov in August accused the Netherlands of concealing key findings from the investigation into the downing, the TASS news agency reported at the time.

Kremlin spokesman Dmitry Peskov said Monday that Moscow had "repeatedly expressed its disappointment over the lack of cooperation and involvement of Russian experts in the investigation," TASS news agency reported.

"A series of facts that have been put forward by the Russian side have been ignored for unknown reasons," he said.

Deputy Foreign Minister Sergei Ryabkov on Tuesday called the report "biased," state-run news agency RIA Novosti reported.

Russia in July also vetoed a UN Security Council proposal to set up an international tribunal to prosecute the perpetrators, with Lavrov arguing "it was introduced only to strengthen the image of Russia as a guilty party in this horrific crime," TASS reported.

Speaking to journalists after the release of the report, Dutch Prime Minister Mark Rutte said the findings had "confirmed some of our most shocking suspicions."

The Dutch leader also called for "self-control" in resisting the urge to point fingers.

When asked twice to comment on the report's implications for relations with Russia, Rutte refused, only urging Russia to "respect this report" and "lend its full cooperation to the criminal investigation."

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 #34
Interfax-Ukraine
October 13, 2015
MH17 shot down by Russian Buk missile launched from Snizhne area - Ukraine's investigation

An investigation carried out by the Ukrainian government has proven that Malaysia Airlines flight MH17 was shot down by a Russian-made missile launched by a Buk missile system from an area uncontrolled by Kyiv, Deputy Prime Minister, chairman of the government commission on coordination of the MH17 crash inquiry Hennadiy Zubko has said.

"At this reconstruction you can see from what site the missile was fired, this is a territory controlled by the pro-Russian militants; and which weapon it was, which was identified in the technical report as a Buk-1 Russian missile. From this video you can also see that this was a planned terrorist attack which occurred on territory uncontrolled by the Ukrainian authorities. The video also clearly shows that the missile was fired from the area of the town of Snizhne," he said at a briefing in Kyiv on Tuesday.

Zubko stressed that the missile was launched in front of the aircraft and that "the trajectory of its flight proves that it was aimed to hit the pilots, to make even an emergency landing impossible."

He said that the trajectory of the missile flight, which the Ukrainian working group established independently from the Dutch team, coincided with trajectory which was indicated in the technical report prepared by the Netherlands.

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 #35
Interfax
October 13, 2015
Ukraine rebels say they "did not have" Buk missile system at time of MH17 crash

Eduard Basuryn (Basurin), the deputy defence minister of the self-proclaimed Donetsk People's Republic, has once again said that the east Ukrainian insurgents did not have access to a Buk surface-to-air missile system at the time when Malaysian Airlines flight MH17 was shot down, privately-owned Russian news agency Interfax reported on 13 October.

Earlier in the day the results of a Dutch-led investigation into the incident were released, indicating that the aeroplane had been downed by a Russian-made 9M38 Buk missile fired from within east Ukraine.

However, according to Basuryn, the rebels did not have such a weapon at their disposal in July 2014 when the plane was hit.

"At that moment we did not have a Buk anti-air defence system," Basurin told Interfax.

He went on to blame Kiev for having not shut off the airspace over the area affected by the conflict to civilian aircraft.

"Ukraine did not close the airspace over Donbass to flights by civil aviation, although it should have done so. Passenger airliners should not have been flying there," Basurin said.

In June 2014 rebel representatives were quoted by RIA Novosti (part of state-owned international news agency Rossiya Segodnya) as claiming to have taken control of a Buk missile system. A DPR-affiliated Twitter account later posted a photograph of what it alleged to be the captured system. (http://bit.ly/1HIa6It)

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 #36
Sputnik
October 14, 2015
Russia Categorically Disagrees With Dutch MH17 Report - Aviation Agency

MOSCOW (Sputnik) - Moscow categorically disagrees with the Dutch Safety Board's report on last year's crash of Malaysia Airlines flight MH17 in East Ukraine, the deputy head of Rosaviatsiya, the national civil aviation regulator said Wednesday.

"We read the document, and I can state with full responsibility that the Russian commission categorically disagrees with the conclusions in this report, they are fundamentally wrong. The level of irrationality in the report exceeds all limits," Oleg Storchevoy told reporters.

Rosaviatsiya, the national civil aviation regulator said it supports the Dutch Safety Board's conclusion of Ukraine's responsibility for not closing the airspace above conflict-torn Donbas before last year's Malaysia Airlines flight MH17 crash.

"We support the conclusion in the final report that the Ukrainian side bears full responsibility for not closing the airspace amid military activities that could be potentially dangerous for civil aircraft," Rosaviatsia's deputy head Oleg Storchevoy told reporters.

The DSB, the official Dutch body tasked with investigating the July 17, 2014 crash of the Malaysian Boeing 777 over eastern Ukraine, released its final report on Tuesday wrapping up 15 months of inquiries into the detailed of the tragedy.

It was concluded in the reported that the plane seemed to have been struck by a ground-to-air missile, adding that at least 16 military airplanes and helicopters had been shot down in the eastern part of Ukraine several months prior to the MH17 crash.

Dutch investigators bashed Kiev for closing its eyes to apparent threats to civil aviation. It said in the report that Ukrainian authorities believed there was no "sufficient reason" to close the airspace over eastern Ukraine, which was proven to be wrong.

Ukrainian authorities failed to coordinate actions between the country's armed forces and air transportation services prior to the MH17 disaster in conflict-torn Donbas, the deputy head of Rosaviatsiya, the national civil aviation regulator said.

"Ukrainian authorities failed to ensure coordination between military authorities and the authority for air traffic services in order to ensure flight safety over the conflict zone," Oleg Storchevoy told reporters.

The Netherlands gave a single bow-shaped destructive element to Russia as proof that Malaysia Airlines flight MH17 was downed from the eastern Ukrainian town of Snizhne, the deputy head of Rosaviatsiya, the national civil aviation regulator said.

"Back during our first meeting in the Netherlands, a version - an unproved version, actually - was presented to the entire commission, that the aircraft was struck by a Buk-M1 type missile, and that the launch of this rocket was carried out from the town of Snizhne. The evidence presented to support this was a single bow-shaped destructive element that was allegedly found," Oleg Storchevoy told reporters.

"We were told that it was found in the cabin somewhere in the winding insulation," he added.

The authors of the Dutch MH17 report slanted documents on an already chosen version of events, Rosaviatsia's deputy head Oleg Storchevoy said.

"It seems that instead of a sequential analysis of objective data, the commission collected evidence for a pre-invented version," Oleg Storchevoy told reporters.

According to Storchevoy, destructive elements allegedly found on the MH17 crash site were used to push the investigation down a certain path.

"These destructive elements that were supposedly found were probably introduced to ensure the investigation moves in the right direction," he said, noting that real chemical compounds left by Buk missile explosions have nothing in common with the data presented in the Dutch report.

Straight after the plane crash, Washington and its Western allies accused militia forces in eastern Ukraine of shooting it down with a Russia-made missile system. Militia fighters denied the claim, saying that they did not possess weapons capable of bringing down an aircraft flying at 32,000 feet.

According to the Dutch Safety Board's report, the Malaysian aircraft crashed as a result of a 9N314M-model warhead carried on the 9M38-series of surface-to-air Buk missiles. It was fired from anywhere within a 320 square kilometer (123 square mile) area of eastern Ukraine, the report said, without specifying who was responsible for the launch.

Earlier the same day, Russian air defense systems producer Almaz-Antey presented its own probe into the tragedy, which found that the missile that downed the Malaysian plane could only have been a model of the 9M38-series of missiles that was removed from service in the Russian army in 2011. It also concluded that the missile was launched from the region of Zaroshchenske, which was under the control of Kiev-led forces at the time of the crash.

Russia has repeatedly expressed disappointment that Dutch investigators have not collaborated with Russian specialists.

Russia will use its right to initiate the renewal of the Malaysia Airlines flight MH17 crash investigation, the deputy head of Rosaviatsiya, the national civil aviation regulator said Wednesday.

"Russia will use the standard presented in annex 5.13 to the Convention on International Civil Aviation to initiate the resumption of the disaster investigation," Oleg Storchevoy told reporters, adding that Russia invites any other countries "not indifferent to finding the true cause of the tragedy" to assess Russian findings.

The version that Malaysia Airlines flight MH17 was shot down with a Russian-produced Buk surface-to-air missile system is not final, the deputy head of Rosaviatsiya said.

"You will not hear a final version anywhere that it was a Buk missile that caused the damage. We have been doing research and calculations based on those positions, because we were told in the beginning of the year that the aircraft was struck by a Buk missile. This is why we carried out this research," Oleg Storchevoy told reporters.

He underscored that Russia is not denying any version of events leading to the crash, nor has it pushed any of its own versions so that not to put pressure on the commission investigating the crash.

"We do not refute or deny any versions. We believe that there is a need to conduct further studies to determine what the aircraft was struck by," Storchevoy said.

Computations confirm that if it was, in fact, a Buk missile that downed Malaysia Airlines flight MH17, it could only have been launched from East Ukraine's Zaroshchenske settlement, the deputy head of Rosaviatsiya said.

"Computations were made on a possible flight path and the possible launch site. And if the aircraft was struck by a Buk-type missile, it could only have reached the aircraft if launched from the Zaroshchenske settlement," Oleg Storchevoy told reporters.

The Netherlands denied Russian experts access to the MH17 crash site, limiting the Russian team's participation in the investigation, the deputy head of Rosaviatsiya said.

"We did everything we could to visit the crash site, and such agreements were reached... But we could not leave for the crash site alone... without an official permission or approval from the chairman of the investigative commission," Oleg Storchevoy told reporters.

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 #37
Bloomberg
October 13, 2015
MH17 Crash Report Shows No Side Was Innocent
By Leonid Bershidsky

The Dutch report on the downing of Malaysia Airlines Flight 17 was not supposed to apportion blame. Yet the report released Tuesday by the Dutch Safety Board clearly shows that no side is innocent in eastern Ukraine's now-frozen conflict.

The July 17, 2014, plane crash killed 298 people, causing endless grief in several countries and catalyzing Russia's international isolation. It was after MH17 that Europe agreed to meaningful economic sanctions, including restrictions on the access of Russian state companies to European Union debt markets. Though Russia has vetoed a proposed United Nations-mandated tribunal, it is paying for the incident every day, and even without official findings, its guilt is assumed, despite the Kremlin's ham-handed attempts to deflect blame. The logic is clear: Pro-Russian rebels in eastern Ukraine were the only party to the conflict that needed to defend itself against a threat from the air, and they were -- and still are -- armed and aided by Moscow.

In that sense, the Dutch report changes little, showing -- without saying it in so many words -- that the Buk missile that destroyed the plane must have been launched from rebel-held territory. Yet it stresses a point that Russia has repeatedly made in its defense: Ukraine, a country responsible for safeguarding its airspace, failed in its duty by allowing passenger jets to fly over the conflict area. While there can be no moral equivalency between arming or protecting the perpetrators of that crime, and failing to close the skies, the uncomfortable truth laid bare by the report is that both sides in the conflict were glaringly incompetent.

After ascertaining that MH17 was brought down by a Buk, the Safety Board did a thorough job of pinpointing the location from which it was fired. It ordered three different simulations of the missile's trajectory, one independent, one from a Ukrainian research institute and one from Almaz-Antey, the Russian producer of Buk systems. The resulting spots fell within an area of 320 square kilometers:

The data match reports by journalists who traveled to the area and citizen journalists working with the Bellingcat blog. They indicate that the Buk launcher was loaded onto a truck from a rental company taken over by the separatists in Donetsk, driven to the small town of Snizhne, then offloaded and driven south of town on the day of the MH17 crash. Snizhne is located in the top left-hand corner of the broad area on the Safety Board's map. According to conflict maps published at the time, pretty much the entire area specified in the report was in rebel hands.

Almaz-Antey must have realized it had submitted data that didn't match the Russian propaganda line. On Tuesday, before the Dutch report was released, it gave a press conference to insist that, according to its simulation data, the missile was fired from the area of Zaroschenskoye, then held by the Ukrainian military. The village lies to the west of the area highlighted in the report. The Safety Board wisely ignored that attempt to rewrite the story.

If anyone needed proof that the Buk was launched from rebel territory, the Safety Board's data are unequivocal on that count. Determining who manned the Buk and what happened to it afterward lay outside the scope of the technical investigation, but the latest Bellingcat report uses social media data to show the launcher had been moved to Russia after shooting down MH17. Whether that indicates it had been supplied and manned by the Russian military or that Russia merely helped the rebels hide the hot weapon is not particularly important. The names of specific Russian or pro-Russian fighters who brought down the airliner would add little to the story of a terrible mistake, the kind that makes war indiscriminately, senselessly cruel. I find it hard to believe these people are still alive, anyway.

When a criminal investigation run by the affected countries presents its results sometime next year, it will probably also pin the catastrophe on the pro-Russian side: The evidence is by now overwhelming.

The Dutch report goes beyond the obvious, however, when discussing why MH17 was allowed to traverse the sky over the conflict zone. As many as 16 Ukrainian planes and helicopters had been shot down between April and July 17, 2014, and yet Ukraine let passenger traffic continue above a certain altitude. The Dutch investigation established that the Ukrainian authorities had figured the only threat to civilian aircraft in the area came from its own warplanes, not from the ground, so they banned civilian flights at altitudes below 26,000 feet. MH17 was 33,000 feet above ground when the Buk hit it. That, in the eyes of the Dutch investigators, was not a sufficient excuse. "Management of the airspace above a country is an exclusive right of the sovereign state," the report said. "From this exclusive right, the Dutch Safety Board also derives a large responsibility borne by the state concerned." It went on:

"It is plausible that decisions related to the airspace were primarily taken from the perspective of the military's interest, in which a potential risk to civil aviation was not the subject of any implicit consideration."

In other words, Ukrainian authorities were so preoccupied with their military operation against the rebels -- which was stepped up to include heavy airstrikes after Petro Poroshenko was elected president -- that they never really thought about any danger to passenger planes.

The governments of South Sudan, Syria, Iraq, Afghanistan, Yemen, Somalia and the Democratic Republic of Congo have also failed to close their airspace during recent civil wars, though Muammar Qaddafi's Libya did. These countries are hardly examples for aspiring European Union member Ukraine.

The Safety Board's conclusions provide support to lawyers such as Elmar Giemulla, who represents the families of German MH17 victims, in suing the Ukrainian government for damages. "It is not clear at this point what role Russia has played," he said in an interview a year ago, "but it is at least clear that Ukraine has failed in its responsibility to ensure the safety of its airspace."

Giemulla's lawsuits, filed in the European Court for Human Rights, are as fruitless as was the attempt to establish a tribunal to punish Russia. For such efforts to have a sobering effect on post-Soviet states mired in their ethnic and cultural conflicts, these states' leaders must truly understand the primacy of human lives, regardless of citizenship or political views. Until they do, neither Russia nor Ukraine will truly be part of the civilized world.

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 #38
The Guardian (UK)
October 14, 2015
Whoever shot down flight MH17, Russia's reputation is in tatters
We still don't know for sure who caused the Malaysia Airlines catastrophe in Ukraine, but it has been costly for both the Kremlin and the rebels
By Mary Dejevsky
Mary Dejevsky is a writer and broadcaster. She is a former foreign correspondent in Moscow, Paris and Washington, and a special correspondent in China and many parts of Europe. She is a member of the Valdai Group, invited since 2004 to meet Russian leaders each autumn, and a member of the Chatham House thinktank. She is a past honorary research fellow at the University of Buckingham and contributed the introductory essay to The Britannica Guide to Russia

If any one event defines the confusion and savagery of the Ukrainian conflict for much of the world, it is the downing of Malaysia Airlines flight MH17, on 17 July, 2014. There was the shock and the grief at the loss of 298 people on a commercial airliner that had nothing whatsoever to do with the war on the ground; there was the disorderly and at times sacrilegious treatment of the crash site; and there were the bitter recriminations about blame.

The Dutch investigation, which appears to have been impeccable in every way, has confirmed what the vast majority of people already thought they knew: that the plane was brought down over the war zone by a Russian-made Buk surface-to-air missile. The report also expressed criticism, both of the Ukrainian authorities and of commercial airline practice.

The Ukrainian authorities were condemned for keeping the airspace over eastern Ukraine open, despite evidence that planes had started to be shot down at much higher altitudes than before - in other words that there had been a change in the combatants' capability. Commercial airlines were also taken to task for not doing more to inform themselves about what hazards their planes might face from activity on the ground, with a hint, but no more than this, that commercial decisions might have trumped safety. Changes have been, or are being, introduced as a result of these observations.

The gaping hole in the Dutch report, of course, was any finding of culpability. And while this was no surprise - investigators have stressed time and again that the question of blame went beyond their mandate and would have to be dealt with by a separate criminal investigation - it leaves perhaps the biggest question unanswered. Who shot MH17 out of the sky?

Not that this remains a question for many people. If you ask anyone in pretty much any western street, they are entirely clear. The culprit is Russia's president, Vladimir Putin. The impression has been left - and western supporters of the Kiev government did nothing to discourage it - that Putin had just been sitting in the Kremlin calculating how he could make matters even worse, and MH17 was the answer.

Yet it is not that simple. A Russian-made Buk missile is not the same as a Russian Buk, and even if it came from Russia, the Buk was not necessarily supplied with the say-so of the Russian authorities. Even in the further event that the Russian defence ministry, or perhaps the Kremlin, had taken the decision to supply rebels in the east of Ukraine with such a weapon, the idea that it was supplied with the intention of bringing down a civilian airliner is patently absurd.

The legal and ethical questions here remind me of the dilemmas presented to aspiring Oxbridge candidates in the days when they set general entrance exams. The Ukrainians and Russians had close military relations for decades, before and after the collapse of the Soviet Union. Both have Buk missile systems; the particular Buk in question could already have been in Ukraine and acquired by the rebels, or it could - as a possibly discredited video suggests - have been transported across the border from Russia.

If Russia knowingly supplied weapons to the rebels that were more sophisticated than they could use, then it may be partially culpable - but did it? Another theory is that the missile batteries were actually manned by Russian troops. If so, were they volunteers (effectively mercenaries), or were they under orders from Moscow? This matters.

Whatever the truth - and we do not yet know the whole truth, despite widespread assumptions of Russian guilt - there has long been one certainty. The political and material consequences for Russia were enormous. The reputations of the Russian authorities and of Putin personally were left in tatters. Western sanctions were markedly strengthened in response to the disaster, and EU solidarity, which was starting to look shaky, was reinforced. The war in eastern Ukraine may well have been prolonged as a consequence.

With hindsight, it may turn out that the price paid by the rebels was even higher, in that this catastrophic mistake - for it was a mistake - ultimately cost them their lifeline from Moscow. The Kremlin could not make this immediately apparent for misplaced reasons of national pride. But Moscow's support - always in my view exaggerated - started to wane from last autumn.

As Putin has switched his attention to Syria, the east Ukrainian rebels have largely been cut adrift. The Minsk-2 ceasefire is holding; and a political settlement could be on the cards. The perverse longer-term result of MH17 could even be the survival of Ukraine (minus Crimea) as a unitary state.

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#39
Consortiumnews.com
October 13, 2015
MH-17: The Dog Still Not Barking
By Robert Parry
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s.

Exclusive: The dog not barking in the Dutch report on the shoot-down of Malaysia Airlines Flight 17 is the silence regarding U.S. intelligence information that supposedly had pinned down key details just days after the crash but has been kept secret, writes Robert Parry.

The Dutch Safety Board report concludes that an older model Buk missile apparently shot down Malaysia Airline Flight 17 on July 17, 2014, but doesn't say who possessed the missile and who fired it. Yet, what is perhaps most striking about the report is what's not there - nothing from the U.S. intelligence data on the tragedy.

The dog still not barking is the absence of evidence from U.S. spy satellites and other intelligence sources that Secretary of State John Kerry insisted just three days after the shoot-down pinpointed where the missile was fired, an obviously important point in determining who fired it.

On July 20, 2014, Kerry declared on NBC's "Meet the Press" that "we picked up the imagery of this launch. We know the trajectory. We know where it came from. We know the timing. And it was exactly at the time that this aircraft disappeared from the radar."

But such U.S. government information is not mentioned in the 279-page Dutch report, which focused on the failure to close off the eastern Ukrainian war zone to commercial flights and the cause of the crash rather than who fired on MH-17. A Dutch criminal investigation is still underway with the goal of determining who was responsible but without any sign of an imminent conclusion.

I was told by a U.S. intelligence source earlier this year that CIA analysts had met with Dutch investigators to describe what the classified U.S. evidence showed but apparently with the caveat that it must remain secret.

Last year, another source briefed by U.S. intelligence analysts told me they had concluded that a rogue element of the Ukrainian government - tied to one of the oligarchs - was responsible for the shoot-down, while absolving senior Ukrainian leaders including President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk. But I wasn't able to determine if this U.S. analysis was a consensus or a dissident opinion.

Last October, Der Spiegel reported that German intelligence, the BND, concluded that the Russian government was not the source of the missile battery - that it had been captured from a Ukrainian military base - but the BND blamed the ethnic Russian rebels for firing it. However, a European source told me that the BND's analysis was not as conclusive as Der Spiegel had described.

The Dutch report, released Tuesday, did little to clarify these conflicting accounts but did agree with an analysis by the Russian manufacturer of the Buk anti-aircraft missile systems that the shrapnel and pieces of the missile recovered from the MH-17 crash site came from the 9M38 series, representing an older, now discontinued Buk version.

The report said: "The damage observed on the wreckage in amount of damage, type of damage, boundary and impact angles of damage, number and density of hits, size of penetrations and bowtie fragments found in the wreckage, is consistent with the damage caused by the 9N314M warhead used in the 9M38 and 9M38M1 BUK surface-to-air missile."

Last June, Almaz-Antey, the Russian manufacturer which also provided declassified information about the Buk systems to the Dutch, said its analysis of the plane's wreckage revealed that MH-17 had been attacked by a "9M38M1 of the Buk M1 system." The company's Chief Executive Officer Yan Novikov said the missile was last produced in 1999.

Who Has This Missile?

The Russian government has insisted that it no longer uses the 9M38 version. According to the Russian news agency TASS, former deputy chief of the Russian army air defense Alexander Luzan said the suspect warhead was phased out of Russia's arsenal 15 years ago when Russia began using the 9M317 model.

"The 9M38, 9M38M, 9M38M1 missiles are former modifications of the Buk system missiles, but they all have the same warhead. They are not in service with the Russian Armed Forces, but Ukraine has them," Luzan said.

"Based on the modification and type of the used missile, as well as its location, this Buk belongs to the Armed Forces of Ukraine. By the way, Ukraine had three military districts - the Carpathian, Odessa and Kiev, and these three districts had more than five Buk anti-aircraft missile brigades of various modifications - Buk, Buk-M, Buk-M1, which means that there were more than 100 missile vehicles there."

But Luzan's account would not seem to rule out the possibility that some older Buk versions might have gone into storage in some Russian warehouse. It is common practice for intelligence services, including the CIA, to give older, surplus equipment to insurgents as a way to create more deniability if questions are ever raised about the source of the weapons.

For its part, the Ukrainian government claimed to have sold its stockpile of older Buks to Georgia, but Ukraine appears to still possess the 9M38 Buk system, based on photographs of Ukrainian weapons displays. Prior to the MH-17 crash, ethnic Russian rebels in eastern Ukraine were reported to have captured a Buk system after overrunning a government air base, but Ukrainian authorities said the system was not operational, as recounted in the Dutch report. The rebels also denied possessing a functioning Buk system.

As for the missile's firing location, the Dutch report said the launch spot could have been anywhere within a 320-square-kilometer area in eastern Ukraine, making it hard to determine whether the firing location was controlled by the rebels or government forces. Given the fluidity of the frontlines in July 2014 - and the fact that heavy fighting was occurring to the north - it might even have been possible for a mobile missile launcher to slip from one side to the other along the southern front.

The Dutch report did seek to discredit one alternative theory raised by Russian officials in the days after the shoot-down - that MH-17 could have been the victim of an air-to-air attack. The Dutch dismissed Russian radar data that suggested a possible Ukrainian fighter plane in the area, relying instead of Ukrainian data which the Dutch found more complete.

But the report ignored other evidence cited by the Russians, including electronic data of the Ukrainian government allegedly turning on the radar that is used by Buk systems for targeting aircraft. Russian Lt. Gen. Andrey Kartopolov called on the Ukrainian government to explain the movements of its Buk systems to sites in eastern Ukraine in mid-July 2014 and why Kiev's Kupol-M19S18 radars, which coordinate the flight of Buk missiles, showed increased activity leading up to the July 17 shoot-down.

The Dutch-led investigation was perhaps compromised by a central role given to the Ukrainian government which apparently had the power to veto what was included in the report. Yet, what may have spoken most loudly in the Dutch report was the silence about U.S. intelligence information. If - as Kerry claimed - the U.S. government knew almost immediately the site where the fateful missile was launched, why has that evidence been kept secret?

Given the importance of the conflict in eastern Ukraine to U.S. intelligence, it was a high-priority target in July 2014 with significant resources devoted to the area, including satellite surveillance, electronic eavesdropping and human assets. In his rush-to-judgment comments the weekend after the crash, Kerry admitted as much.

But the Obama administration has refused to make any of its intelligence information public. Only belatedly did CIA analysts brief the Dutch investigators, according to a U.S. government source, but that evidence apparently remained classified.

The second source told me that the reason for withholding the U.S. intelligence information was that it contradicted the initial declarations by Kerry and other U.S. officials pointing the finger of blame at the ethnic Russian rebels and indirectly at Russian President Vladimir Putin, who stood accused of giving a ragtag bunch of rebels a powerful weapon capable of shooting down commercial airliners.

Despite Russian denials, the worldwide revulsion over the shoot-down of MH-17, killing all 298 people onboard, gave powerful momentum to anti-Putin propaganda and convinced the European Union to consent to U.S. demands for tougher economic sanctions punishing Russia for its intervention in Ukraine. According to this source's account, an admission that a rogue Ukrainian group was responsible would take away a powerful P.R. club wielded against Russia.

Among the organizations that have implored President Barack Obama to release the U.S. intelligence data on MH-17 is the Veteran Intelligence Professionals for Sanity, a group of mostly retired U.S. intelligence analysts.

As early as July 29, 2014, just 12 days after the shoot-down amid escalating Cold War-style rhetoric, VIPS wrote, "As intelligence professionals we are embarrassed by the unprofessional use of partial intelligence information. ...As Americans, we find ourselves hoping that, if you indeed have more conclusive evidence, you will find a way to make it public without further delay. In charging Russia with being directly or indirectly responsible, Secretary of State John Kerry has been particularly definitive. Not so the evidence."

But the release of the Dutch report - without any of that data - indicates that the U.S. government continues to hide what evidence it has. That missing evidence remains the dog not barking, like the key fact that Sherlock Holmes used to unlock the mystery of the "Silver Blaze" when the sleuth noted that the failure of the dog to bark suggested who the guilty party really was.

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 #40
Kyiv Post
October 14, 2015
Oct. 25 local elections highlight battle under way to fill eastern Ukraine power vacuum
By Isobel Koshiw

The competition is on for the local elections in the remaining eastern power hubs of Dnipropetrovsk and Kharkiv, where the fall of ex-President Viktor Yanukovych, Russia's war and destabilization have created a political vacuum - and a fair share of scandal and power struggles.

"In eastern Ukraine, the elections are being held in a vacuum. Some political forces have left the scene, while others are appearing," Vadim Karasev, director at the Institute of Global Strategy, said at a press conference on Oct. 8.

The loudest new party posturing as an alternative to the parliamentary mainstream is United Ukrainian Patriots (UKROP). Despite only being founded in June, it already stands to gain 5.8 percent of votes in the east according to Kyiv International Institute of Sociology.

That's more than than the Bloc of President Petro Poroshenko, with 5 percent, but less than the Party of Regions successor party, the Opposition Bloc, which leads with 11 percent.

Two of the lesser-known parties seeking to establish themselves as contenders in the east are Our Land and Revival.

On the surface, they are represented by several former prominent members of the Party of Regions who were close allies of Yanukovych.

Our Land comprises Odesa member of parliament Anton Kisse, Kharkiv businessman Oleksandr Feldman and former first deputy head of the Kyiv City Administration Oleksandr Mazurchak.

Likewise, Revival was founded by Viktor Bondar, former head of the Dnipropetrovsk regional administration and ex-Minister of Transport; Vitaliy Khomutynnik, long standing Party of Regions MP from 2002 until 2014, and Volodymyr Pylypenko, a former MP who aligned with Party of Regions in parliament.

But speculation surrounding who stands behind these parties is rife.

A scandal erupted two weeks ago when Maxim Yefimov, a member of parliament with the Petro Poroshenko Bloc, was found to be leading Our Land's campaign in Kramatorsk and seeking to represent them in the City Council.

Our Land is a "Presidential Administration initiative," Karasev told the Kyiv Post. According to him, the reason why the party might appear to be a competitor of Petro Poroshenko Bloc in certain cities is because they wanted to make it look like a real party but now they are worried it might take too many votes from the PPB candidates.

Oleksandr Chernenko, a lawmaker from PPB, flatly denied the party was connected to the Administration. He told the Kyiv Post by phone on Oct. 9 that Our Land was a "serious competitor" of his bloc and in many cities its black PR had been quite damaging. Our Land was unavailable for comment at the time of publication.

Revival and UKROP, on the other hand, are widely thought to be political projects of billionaire and recently unseated Dnipropetrovsk governor, Igor Kolomoisky.

UKROP's founder and Kyiv mayoral candidate, Gennady Korban, told the Kyiv Post: "Ihor helps me with wise counsel and finances."

"Revival is the political partner of UKROP, they are being financed from the same pocket," Andriy Zolotarov, political expert and head of the center Third Sector, told news website Dnepr.Glavnoye.

However, Kirill Zakharov, a Revival candidate for the Dnipropetrovsk Regional Council, denied any link to Kolomoisky: "Experts can say want they want but the party is backed by businessmen such as Volodymyr Kutsin [director of Nikopol Ferroalloy Plant]".

How these parties are being tactically employed in different cities varies significantly and can be seen as a reflection of the ongoing power struggles and political bargaining in Ukraine's post-Yanukovych era.

In the Dnipropetrovsk mayoral election, billionaire oligarch Rinat Akhmetov and Poroshenko are going head-to-head against Kolomoisky.

According to Karasev, even if inadvertently, the current and old powers are working in unison in so far as they see a threat of the appearance of new political projects. Poroshenko's priority seems to be to prevent Kolomoisky's UKROP candidate, Borys Filatov, from winning.

Just weeks before the elections, former Party of Regions, now a parliament member with the pro-presidential bloc, and four-term Dnipropetrovsk mayor incumbent Ivan Kulichenko stood down from the race without any explanation. PPB brushed off what should have been a major loss to their campaign and announced that Maksim Kuriachiy, former head of Dnipropetrovsk's Batkivshchyna Party, would be its new mayoral candidate.

Political commentators say that PPB has purposely put forward a weak candidate in order to advance their supposed rival in the East, Opposition Bloc MP, former regional governor and vice Prime Minister, and Oleksandr Vilkul, against businessman Filatov.

The situation in Kharkiv, Ukraine's second largest city, is even more intriguing.

A poll conducted between 12-13 Sept. by Active Group, a research and communication center, indicates that the incumbent mayor, Gennady Kernes, running for the Revival party, will easily win a majority with 39.9 percent of the vote and well-known businessman Oleksandr Feldman from Our Land will come second place with 16 percent.

The competition in Kharkiv, according to Karasev, is not who will win, but who will control the City Council which at the moment does not belong to anyone. Our Land will therefore be a strong opposition for Kernes in the City Council.

According to an Active Group poll taken in Kharkiv on Sept. 24, overall PPB only received 4.7 percent of the vote. The party has the resources but is "not popular" and "can't influence the local elites", said Karasev.

The Opposition Bloc's City Council registration was rejected by the local Election Commission. Despite the party polling at just below Revival's 13.9 percent with 13.1 percent, the party's reaction has been surprisingly subdued.

Volodymyr Fesenko of the political research center Penta offered one possible explanation: "Kernes should win the election - but let's not forget that he is on trial. So they could neutralize him after the elections."

It remains to be seen who will succeed in filling the vacuum but what is clear is that further twists and scandals can be expected.

If it continues in this fashion, said Karasev, with all the other factors, the elections could be declared invalid and the same is true of Dnipropetrovsk.

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 #41
Newsweek.com
October 13, 2015
Luhansk Rebels Open to Discussions with Ukraine's President
By Damien Sharkov

Pro-Russian rebels in Ukraine's eastern Luhansk region say they are open to a meeting with Ukraine's President Petro Poroshenko during his upcoming visit to the area "if he has a substantial topic" to discuss.

Although Poroshenko regularly visits Ukraine's Donetsk and Luhansk regions, where pro-Russian armed groups continue to hold territories near the Russian border, his visits have been on the government-held side of the contact line. The Ukrainian president has previously refused direct dialogue with Luhansk and Donetsk rebels and a contact group has instead been set up, where Ukraine is represented by former President Leonid Kuchma.

Poroshenko is due to visit Luhansk region on Wednesday and Vyacheslav Deynevo, the representative of the rebel group known as Luhansk People's Republic, told Russian radio RSN that the rebels would be open to meeting with the president.

"The main thing is that [such a meeting] is not a futile exercise," Deynevo said. "If he has a substantial topic to discuss then, please. We certainly have plenty of them. Until Poroshenko is ready for dialogue, we are not interested in his visit."

A spokesperson for the President said he has not planned and does not plan to meet with the self-appointed rebel authorities. The spokesperson added that the President would only meet representatives elected through elections recognized by the OSCE, which the rebel elections last year were not.  

The Luhansk rebels are considered a criminal organization by Ukrainian law and discussions in the contact group between Ukrainian, rebel and Russian government representatives have not been smooth. In September, the leader of the Luhansk rebels, Igor Plotnitskiy, challenged Poroshenko to a duel to decide the outcome of the war.

Fighting has drastically subsided in recent weeks, with no violations of the ceasefire reported by either side for entire days - a rare occurrence prior to the summer. Both sides have begun to pull back heavy arms from the front lines in a bid to adhere to an end-of-year deadline to remove all major armaments, as agreed upon in the ceasefire deal brokered in Minsk, Belarus, in February.

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 #42
Gazeta.ru
October 7, 2015
Editorial: Suspended in war: Who will feed Donbass tomorrow

It seems that the war in Ukraine is coming to an end. Not only are both sides themselves withdrawing heavy weaponry, but they are also confirming that their opponent is doing the same. The people's republics have agreed to move elections from October and November to February 2016. Meanwhile the main loser in this apparently completely senseless war appears to be Donbass itself, which runs the risk of permanently turning into a semi-criminal economic black hole.

Despite the extreme scepticism of all parties regarding the Minsk process, objectively the situation in Ukraine is now closer to peace than it has been at any point in the last year and a half since the start of fighting in southeast Ukraine.

It has been a long time since there was such agreement in the opposing sides' public accounts of developments. More accurately, there has never yet been such a level of agreement since the moment the war began.

The postponement of elections was welcomed equally by Kiev and Moscow, although for different reasons. Ukraine is already treating this as its own foreign policy victory. [Ukrainian] President Petro Poroshenko wrote on his Facebook page that "the illegitimate elections, which threatened to restart the fighting and wreck the Minsk agreements, have been cancelled. This opens the way for Ukraine to return to Donbass with the help of elections that comply with Ukrainian law and are based on OSCE standards."

The Kremlin, which by all appearances had advised the rebels to do this (elections in DPR [Donetsk People's Republic] and LPR [Luhansk People's Republic] that do not comply with Ukrainian law would be a direct violation of the Minsk agreements), believes that Ukraine will fulfil its part of the Minsk agreements. It will amnesty participants in the war in Donbass and enshrine the special status of these areas directly in the constitution. Moreover, this will put on hold Ukraine's recovery of control over its part of the border with Russia - one of the most disagreeable points of the Minsk agreements for Moscow and the "rebels".

Nevertheless, saying that the war is finished and most importantly that the future of Donbass has become somewhat clearer, would for now be a major exaggeration.

The DPR and LPR authorities have announced the postponement of local elections to 2016, seeing this as a drastic concession on their part: They expect that the Ukrainian authorities will give Donbass special status and make the changes agreed with them to the constitution before the elections. The Ukrainian authorities say that there will not be any "special status", nor will there be a global or a "list-based" (for certain comrades) amnesty. This means that if elections are held in the people's republics in accordance with Ukrainian law, all the key DPR and LPR leaders cannot run in them.

The situation is now such that a major war is equally disadvantageous to both Moscow and Kiev. Kiev cannot conquer Donbass with a straightforward military operation. And Moscow now has another headache - Syria. But the catch is that the full implementation of the Minsk agreements is also equally disadvantageous to both them. This is why it is in each of their interests to blame the other for their [the Minsk agreements] possible collapse.

For Kiev victory in the war would be the complete abolition of DPR and LPR and regaining full control over the border. In theory Russia could, even without declaring it, "give back" the border, but even if it gets deeply bogged down in Syria (although the Kremlin hardly wants the Syrian operation to last for years) it will not agree to the real abolition of DPR and LPR.

But the status of Donbass is not even the main problem. Even on this issue there is formal agreement. Ukraine officially considers it to be its own, but simply ignores DPR and LPR, dreaming of making them into the ordinary regions of Donetsk and Luhansk regions at the first opportunity. Russia also considers Donbass to be Ukrainian. The trouble is something else: No one is answering or is even trying to answer the question of who will rebuild the destroyed Donbass and on what terms.

Kiev will hardly want to do that before it restores its government agencies there. Except that, most likely, in that case the rulers will be the very same oligarchs who controlled Donetsk and Luhansk regions under [former Ukrainian President Viktor] Yanukovych. Primarily Rinat Akhmetov's people in Donetsk and Oleksandr Yeferemov's people in Luhansk. And Ukraine does not see where it will get the money for Donbass from. It will have to ask for external help. And it will hardly come from Russia, which if it wanted to could easily drive Kiev into a default.

Russia itself might help Donbass on a long-term basis, but only if it keeps it as some sort of enclave, which is run by "pro-Russian" forces. Otherwise while the conflict is frozen, it will limit itself to humanitarian convoys and supplying a certain quantity of cash in roubles. Moreover, such help is seriously limited by problems in the Russian economy itself.

It will be much more expensive to support Donbass on a permanent basis than South Ossetia, Abkhazia, and the Dniester region put together.

Of course, it would be enough to keep it on starvation rations. There will not be any riots there - all the impassioned members of the population have been beaten down or fled long ago. But this would hardly be the "Russian world" the residents of the disputed territories imagined.

That said, the elections in DPR and LPR on 21 February 2016 under Ukrainian law are going to be no different to the ones that were postponed. So for now we only have a suspended war, a shaky ceasefire. The Minsk agreements must be fulfilled by the end of the year, and now simply "just like that", without any special additional document, this is being extended by another two months.

For now the sides are blatantly stalling for time. Ukraine hopes that in addition to the economic difficulties from the sanctions, Russia will get seriously tied up in Syria, and because of this will gradually "forget" about Donbass for good. Russia hopes that the West will get fed up of Ukraine, and Donbass will permanently remain a poor, broken, raw, but unyielding splinter of the "Russian world" in Ukraine's side.

In any case the fate of Donbass now will largely depend on developments in Syria, on the willingness of Russia and the West to meet each other halfway in the fight against ISIL. On whether Russia, perhaps tacitly, will swap sanctions for renouncing DPR and LPR, and recognition of Crimea. There is still scope for political horsetrading.

This, however, can never replace those who died (approximately 10,000 just according to the OSCE's data) and heal the wounds of those close to them, who will hardly be comforted by the arguments of Russian strategists: That the issue of Crimea has already completely disappeared from the Minsk talks, that Ukraine has been depleted, and that Poroshenko has big problems with the opposition, and so on. Especially as from 1 January 2016 the economic section of the Ukraine-EU Association Agreement, which is was what triggered the war in the first place, comes into force.

Literally days ago Russian Economic Development Minister Aleksey Ulyukayev announced that the chances of reaching an agreement with Ukraine on this issue are miniscule.

So the fight for the mythical "Novorossiya" has turned into a catastrophe for the real Donbass. And instead of being the industrial heartland of a large country, it may permanently turn into a semi-criminal economic hole through which it will be possible to transport any kind of illegal goods, and where people earn a living and survive as best they can, in any way possible.

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 #43
Interfax-Ukraine
October 12, 2015
Poroshenko: I don't trust Putin, his puppets, their promises, so Ukrainian army should be on constant alert

Ukraine's President Petro Poroshenko has said that the Armed Forces of Ukraine must be in a state of constant readiness due to the risk of renewed hostilities in Donbas.

"I absolutely do not trust [Russian President Vladimir] Putin, I absolutely do not trust his puppets, and I absolutely do not trust their promises. We need you to defend Ukraine, to defend it if someone decides to test our strength," the president said at a meeting with military commanders involved in the Anti-Terrorist Operation in Donbas in Kyiv on Monday, ahead of upcoming the Day of Defender of Ukraine.

In this regard, Poroshenko called on the Ukrainian military "to be prepared for the worst at every moment."

He also said that as a result of recent international negotiations Ukraine has managed to achieve a stable ceasefire.

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 #44
Reuters
October 14, 2015
Ukraine puts debt deal to bondholder vote

Oct 14 Ukraine's creditors will cast their votes on Wednesday on a restructuring deal critical to the country's bailout programme with most expected to agree to the terms except Russia, which holds bonds worth $3 billion.

Ukraine has agreed the debt exchange with a group of its largest creditors in order to plug a $15 billion funding gap under an International Monetary Fund-led $40 billion bailout program, but remaining creditors still need to approve the plan.

A Eurobond held entirely by Russia is included in the sovereign and sovereign-guaranteed bonds to be restructured, but the Kremlin has repeatedly said it will not participate in the process, arguing the debt was an official loan.

It stood its ground on Tuesday with President Vladimir Putin saying the IMF should lend Ukraine the $3 billion to pay off Russia.

The IMF has not yet decided whether it views Russia's bond, which matures on Dec. 20 as official sector debt.

The deal plays a key part in Ukraine's plan to shore up its war-torn economy, which was brought close to bankruptcy by years of corruption and economic mismanagement.

Ukraine's bonds do not have cross-default clauses, meaning holders of one bond cannot sink the entire restructuring deal if those holding other issues vote in favour of the swap.

The threat of other holdouts loomed in September, when holders of shorter-dated bonds argued that the terms of the debt swap were unfair. Last week the group said they would participate after Kiev sweetened the deal.

Under the proposed agreement, Ukraine plans to issue nine new bonds with maturity dates from 2019 to 2027, all paying a yield of 7.75 percent. Holders of two issues maturing in 2015 can exchange their holdings for 2019 bonds -- the shortest maturity available in the new series of issues.

The deal - which was hammered out between Kiev and a creditor committee consisting of Franklin Templeton, T. Rowe Price, BTG Pactual and TCW - is widely seen as an excellent one for investors.

Ukraine has rejected concerns that the deal's less-than-expected 20 percent principal write-off and repayment extensions are inadequate and could find Ukraine back at the negotiating table.

A 75 percent majority of holders in each bond must back the deal.

Bonds have risen around 20 cents since late August, boosted by the better-than-expected terms of the debt swap.

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 #45
www.rt.com
October 14, 2015
Putin teases IMF to repay Ukraine's $3bn Russian debt

The International Monetary Fund should give Kiev $3 billion to pay off its debt to Russia, suggested Russian President Vladimir Putin. Allowing Ukraine to skip the repayment due in December and default will undermine the IMF, according to Putin.

Moscow continues to insist that the debt Kiev owes is not private, but a state and official one. The current policy of the IMF only allows member states to miss payments to private investors. Ukraine's failure to fulfill its debt obligations to Russia means that there is a risk it won't get a $17.5 billion loan from the IMF.

"Why does the IMF not want to give another $3 billion to Ukraine so that it could pay off the debt? Why change the rules for a specific country, disturbing, in fact, the system itself and the rules of the IMF?" asked Putin at a meeting with the Cabinet.

Russian Finance Minister Anton Siluanov reported to the President that the IMF is preparing to change these rules so that Kiev could skip the payment to Moscow.

According to Siluanov, the IMF's decision is motivated by a general change in the rules of the organization's funding, stating that, "it is clear that this is done exclusively in order to freeze payments to Russia."

The Finance Ministry is preparing a "plan of action" in the event of Kiev's default, including taking Ukraine to court, Siluanov added.

In September, Ukraine began restructuring its debt. The Ukrainian government considers the debt to Russia as a private one which is subject to restructuring. Moscow has repeatedly said it has no interest in Kiev's restructuring plans and will demand full repayment of Ukraine's Eurobonds.

At the end of August, Ukraine clinched a restructuring deal with Western creditors to reduce the national debt burden by about $3.6 billion. Kiev agreed with a creditor committee led by Franklin Templeton (which owns about $7 billion of Ukrainian bonds) on a 20 percent write-down of some $18 billion worth of Eurobonds.

Repayment of the remaining amount will be transferred from 2015-2023 to 2019-2027.

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 #46
Counterpunch.org
October 13, 2015
The EU Has Lost the Plot in Ukraine
By Theodoros Papadopoulos
Theodoros Papadopoulos is a London-based researcher, specialized in the institutional evolution of Eastern Europe.

Aeschylus, the "father of tragedy," is credited with the invention of a plot device known as deus ex machina in the fifth or sixth century B.C. In a nutshell, when in the course of a play the situation seems utterly unsolvable, a thoroughly unexpected event occurs that resolves the situation and allows the plot to go forward. In Greek drama an actor was either dropped down from a crane or emerged upon stage via a trapdoor. The audience reaction was an immediate and emotional one, thankful that the gods chose to intervene in such a way. Whether by accident or design, the European Union's sanctioning of certain former Ukrainian officials has often resembled a sort of deus ex machina - it is the nearly magical key to solving the unsolvable problem, and it is intended to inspire a sense of moral awe and appreciation from among the hoi polloi that the gods have acted and done so appropriately. However, the EU are no dramatists. Their sanctions have turned the tragic situation unfolding in Ukraine into the modern equivalent of Moose Murders, and it's beyond time the farce of ham-handed sanctions be yanked from the world's stage.

The presumption of innocence has been the basis of Western law for almost two millennia, separating a legitimate court from a witch-hunt. However, in their zeal to find a scapegoat, the European Council has seen fit to shift the burden to the accused. Early last year it compiled a secret list of those former Ukrainian officials it deems responsible for the use of force in and during the Maidan. But it's obvious to even the most casual of observers that they have acted entirely too quickly. It took the Ukrainian Prosecutor General's word as fact and, after unilaterally determining a fair and open trial to be too time consuming, considered the listed individuals guilty of the atrocities charged and froze their assets accordingly. The unexpected list was compiled in secret and remained secret until Ukrainian activists obtained it and leaked it to the world. The Council did not advise the accused of the existence of the list, the evidence used to justify the inclusion on the list, or any other pertinent documents or evidence related to a person's place on the list. Nor does the council provide this information to the European Court of Justice, which, to its immense credit, has consistently fought against this system.

The Court already threw out one set of anti-terrorism sanctions against the Tamil Tigers as it was based apparently upon "imputations derived from the press and the Internet". Another set of sanctions against the Iranian central bank were thrown out because they were based on reasoning too vague to respond with anything other than a "general denial", as the arguments had nothing to do with the relevant case law. One of the individuals sanctioned by the EU at Kiev's behest, former Minister of Tax Oleksandr Klymenko, took to YouTube to express his frustration at the shortcomings of the sanctions regime. In a video ironically titled "Revolving doors" that borrows a page from M.C. Escher's absurdist drawings, the former minister castigates the hypocrisy of the EU, which denies the accused any legal remedies.

The Council is quickly losing credibility in this arena (assuming of course that they had any to begin with) due to their "shoot first, ask questions later" approach. This spring, Yanukovich's security chief was dropped from the list after the Ukrainian authorities (from whom the EC clearly takes its marching orders) failed to initiate formal legal proceedings against him and for failing to present any evidence to back up Kiev's claims. EU officials have stated that they intended to prevent the flight of stolen assets from the Ukraine by acting quickly. But, in the typically paternalistic fashion for which the EU has always shown to its eastern neighbors, due process is for friends and family only.

The entire debacle begs the question as to whether sanctions are even appropriate to begin with.  Sanctions have traditionally been used to change behavior of leaders and governments. However, the sanctions in question have been levied against people no longer in power. While sanctions can serve a secondary punitive function, the sanctions levied against officials in a past regime serve no such function. The EU has simply let itself be used as a tool of punishment against others, with no regard for pesky things like "facts" and has taken sides in what is essentially a war between competing clans of oligarchs vying for power in Ukraine. Powerful individuals associated with the Yanukovych regime dodged the sanctions bullet, as they cultivated a new system of patronage with the current Kiev leadership, while others saw their assets frozen for a year before being taken off the list. In short, after almost two years, not even a single penny has been recovered from the former Ukrainian elite and not a single official has been sent to jail for the defrauding the state.

Allowing Ukraine to pervert the sanctioning mechanisms of the EU (such as they are) simply undermined whatever credibility the EU may once have had on the world's stage. While the EU fiddles with its sanctioning process, Kiev burns, and the perpetrators either escape trial entirely, or, due to the failure of any credible due process, become martyrs to the ridiculous sanctioning process. Kiev's justice system should have investigated and punished those responsible for the Maidan atrocities, instead of involving the EU. The deus ex machina has lost its effectiveness, as we've all seen this imperialist play from the West far too many times. It would be comedic but for the stench of Ukraine's dead just offstage, and for the faces of the future victims of the EU's ineptitude waiting in the wings.

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 #47
www.rt.com
October 13, 2015
If you find yourself in a hole, stop digging: Ukraine bans Russian airlines
By Bryan MacDonald
Bryan MacDonald is a journalist. He began his career in journalism aged 15 in his home town of Carlow, Ireland, with the Nationalist & Leinster Times, while still a schoolboy. Later he studied journalism in Dublin and worked for the Weekender in Navan before joining the Irish Independent. Following a period in London, he joined Ireland On Sunday, later re-named the Irish Mail on Sunday. He was theater critic of the Daily Mail for a period and also worked in news, features and was a regular op-ed writer. He has also frequently appeared on RTE and Newstalk in Ireland as well as RT.

Petro Poroshenko's latest wheeze is to ban Russian airlines from Ukrainian airspace. While it may be a vote-winner amongst western Ukrainian nationalists, it will also severely damage Ukraine's economy.

Ukrainian oligarch Rinat Akhmetov owns the most expensive residence ever purchased in the UK. A 2,322sqm Knightsbridge home that he paid £136m ($209m) for in 2011. His fellow billionaire insider Petro Poroshenko is Ukraine's President. If Akhmetov had spent less time on his personal soccer club, Shakhtar Donetsk, and more time reading up on modern British history at the nearby Chelsea Library, he could have told his colleague about Healey's Law.

In America, it's called the first law of holes. In Britain, it's named after Denis Healey, the 1980's Labour politician, who popularised it. Either way, the adage is the same - "if you find yourself in a hole, stop digging." Instead of maintaining an untenable position, stop and change course. It almost always pays dividends in the long run.

Poroshenko is in a hole. The Maidan coup, which he passionately supported, has wreaked havoc on Ukraine. The economy has collapsed. Crimea has returned to Russia. A civil war has raged in the country's east. Public satisfaction with his government is creaking as wages atrophy to African levels. Amidst all this, he faces local elections on October 25th. Worryingly for the President, in opinion polls, his party bloc trails the Batkivshchyna party - a vehicle for another oligarch, Yulia Tymoshenko.

Just when Poroshenko probably thought things couldn't get much worse, remarkably, they did. Last week, the World Bank reported that Ukraine's GDP will fall by 12 per cent this year. This is even worse than the 7.5 per cent drop they'd forecast in April. Industrial activity has fallen by 20 per cent, year on year and retail sales have gone off a cliff, down 25 percent.

To compound Kiev's woes, its European and American sponsors appear jaded from its reluctance to reform. Even US Ambassador Geoff Pyatt, who helped to select Ukraine's government last year, has sounded warnings.

Facing such challenges, you'd expect Poroshenko to unveil a big idea or two. Something akin to Vladimir Putin's hugely popular move to defang Russia's post-Soviet oligarchs in the first years of this century. That move followed a similar economic collapse in Russia. Ukraine badly needs a similar policy and it would have mass appeal across the electorate. Another vote winner could be to clamp down on Ukraine's lawless borders where criminal gangs make fortunes from contraband. The re-direction of customs duties to the state would bolster public finances. Additionally, it would improve law and order.

However, instead of sensible initiatives like these, Poroshenko's cunning plan is to terminate all commercial air traffic with Russia from October 25. This happens to be election day. Back on September 16, Kiev had banned all bar one Russian airline - Utair, a west Siberian concern, established to support the oil and gas industry there. Kiev's excuse was that 27 out of the 29 companies involved had flown to the disputed Crimea province.

Russia responded a fortnight ago by closing its skies to Ukrainian carriers. For Russians this isn't very painful. Due to geographic advantages, Russians don't strictly need to use Ukrainian territory to access any foreign destinations. On the other hand for Kiev, the move appears suicidal. Firstly, 70 percent of passengers on Ukraine-Russia flights are Ukrainian nationals. Furthermore, Ukrainians use Russian airports - especially in Moscow - for connecting flights to global cities. Added to that, the only two direct connections between Kiev and east Asia (Ukrainian International to Beijing and Bangkok) rely heavily on use of Russian airspace, especially the former.

In other words, Ukraine is cutting itself off from the world. This comes at the precise moment when it desperately needs new foreign investment to rescue its moribund economy. With an attitude like this, it's better that sharp objects are kept away from Kiev's ruling elite. Who knows what damage they might do to themselves?

Poroshenko's madness doesn't only imperil transnational trade. It also has the potential to damage the lives of millions of his own people. In 2012, the World Bank reported that around $3.7 billion was returned to Ukraine in remittances from Russia. Meanwhile, Vladimir Putin said in 2013 that up to 5 million Ukrainians were working in Russia. That figure is probably much higher now, given the economic catastrophe Maidan wrought.

Constantin Gurdgiev, Economics Professor at Dublin University, Trinity College, insists that $3.7 billion is a very conservative estimate. "World Bank data is most likely underestimating the true extent of the remittances flows. Official figures understate true numbers of Ukrainian (and exclude dual) citizens working in Russia who have family connections back in Ukraine by a factor probably close to 30 percent. In 2013, Russian authorities estimated that of 11.3 million foreigners entering Russia, some 3 million did so to undertake illegal work," he wrote in his excellent True Economics blog.

Interestingly, household remittances from Russia are over 30 times greater than those from the EU to Ukraine. Just let that sink in for a moment. It highlights just how crazy Poroshenko's policy is. Not to mention that "Russian labour markets sustain Kiev by simultaneously reducing demand for social funding of the unemployed, and increasing household consumption and investment, with zero input costs." according to Gurdgiev.

Overall, remittances from Russia accounted for as much as 3.55% of the total value added in the Ukrainian economy in 2012. Again, that percentage is most likely far greater today. Either way, $3.7 billion (and the rest) is a humungous figure in a country where the state spends just $302 million annually on health care.

Attempting to stymie free movement with Russia is mind-boggling. Instead of halting the digging process, Poroshenko has hired a bigger drill to deepen the cavity. For his own good, and that of his country, the billionaire oligarch needs to stop dredging the trench.

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