RUSSIAN FEDERATION WEEKLY SITREP 16 October 2008

FINANCIAL CRISIS. According to Standard & Poor’s, Russia’s stock exchange has fallen 53% this year to 3 Oct (and there have been more declines since). This is the worst of the “emerging markets” that it watches. On Monday Medvedev signed a package of laws designed to stabilise Russia’s financial market. We shall see.

MILITARY REFORM. The Defence Minister has announced that Armed Forces strength will be down to one million by 2012 (original date had been 2016) and officers reduced from today’s 355,000 (!) to 150,000.

LAW CASES. The Director of the Investigative Committee of the Prosecutor General’s Office has filled us in on some on-going investigations. Its finding is that Magomed Yevloyev was accidentally killed and the police officer responsible has been charged with “reckless manslaughter”. Meanwhile the Litvinenko investigation has come to a halt because of lack of cooperation: specifically the British have not provided the autopsy report and the Germans have given no details on the alleged traces of polonium found in Hamburg. A cynic would suggest that the whole Berezovskiy-created story is collapsing. The Politkovskaya murder case will go to trial. Her former editor is satisfied with the investigation but has reiterated that because neither the person who ordered the murder nor the actual killer has been arrested (they are believed to be in a European country) the case can hardly be considered to be “closed”.

TECHNOLOGY. As a reminder that Russia is not a country of string and wood, two ICBMs were successfully launched (one from a submarine) on the 12th and two days later a Russian spacecraft docked with the ISS.

JUST WHAT WE NEED. A group of opposition leaders are talking about creating a new movement perhaps to be called “Solidarity”. Most of the people in the group are leaders of personal groupuscules, fractions of other parties or the now-dissolved SPS. Just what Russia needs: more opposition groups arguing with each other and (dare I say it?) living off foreign NGOs (one of them, Lev Ponomaryov, has recently been quoted as saying that Russian human rights organisations live on foreign grants).

NORTH CAUCASUS. The Director of the FSB gave some figures on “bandit” activity in the North Caucasus. He said 170 fighters had been “neutralised”, more than 350 arrested and 15 turned themselves in. About 200 arms caches were found. The situation seems to be growing slowly worse.

GAS WARS. While Ukrainian PM Tymoshenko and Putin signed an agreement that gas prices will go to world levels over the next 3 years, Putin has called for the end of cheap gas for Russian consumers as well.

NEW SECURITY PLAN. Medvedev is calling for a new European security treaty: “It needs to follow three ‘don’t-do-it’ principles – do not ensure one’s own security at the expense of other’s security, do not allow measures that would weaken the unity of the common security space, and, thirdly, do not allow military unions to develop at the expense of the security of other signatories to the treaty”. This reminds me of an idea from the early Gorbachev years: you will never be truly secure if your measures make the other feel less secure.

STRANGER THAN YOU CAN IMAGINE. There is a proposal to remove the statue of Stalin in Gori to the Stalin Museum and re-name it the Museum of the Russian Occupation of Georgia. Stalin becomes a Russian!

GEORGIA ETC. Russian forces left the buffer zones slightly ahead of schedule. As usual, there were attempts to re-write the deal with complaints that they remain in areas in South Ossetia (Akhalgori) and Abkhazia (Kodori). But these areas have been clearly within the borders of Abkhazia and South Ossetia since the Soviet days. I speculate that Paris says these things to placate Washington while the actual agreement goes ahead. Meanwhile there have been several car bombs in South Ossetia (one on the 3rd killed 11). Tbilisi claims they are Moscow’s doing, but no rational observer could believe that. German Chancellor Merkel has evidently vetoed Ukraine’s and Georgia’s accession to a NATO MAP anytime soon. An Israeli official has flatly denied that Israel ever sold offensive weapons to Georgia and, in doing so, revealed “There is a covert agreement with Russia that it would not sell offensive armaments to Iran and Syria either”.

UKRAINE. The political crisis continues as President Yushchenko dissolves parliament and courts that disagree with him: more of a Lemon Revolution, I say. Meanwhile the question of arms supplies to Georgia is percolating in the background with a Ukrainian parliament member saying Kiev supplied ammunition, disguised as humanitarian aid, while the war was on. A Ukrainian government commission denies this.

© Patrick Armstrong Analysis, Ottawa, Canada