RESPECT AND INFLUENCE. Two centuries ago John Jay wrote: “If they [foreign powers] see that our national government is efficient and well administered, our trade prudently regulated, our militia properly organized and disciplined, our resources and finances discreetly managed, our credit re-established, our people free, contented, and united, they will be much more disposed to cultivate our friendship than provoke our resentment.” True then and true now. A Medvedev interview touches on many of these points: Just as our foreign policy has a direct impact on living standards here at home, so does our success at home have a direct impact on how others perceive us.” He knows Russia has some distance to go: “So long as others see Russia as a country with an unacceptably high level of corruption we will be treated accordingly.” If you want to know what the Russians think about things, read what they say; not what other people want you to think they said.

CORRUPTION. Medvedev has called on people “not to be afraid to use [the new anti corruption laws]”. In the interview cited above, he admits that so far his efforts have had “very modest results”.

MAIL. Law enforcement agencies are now empowered to inspect private mail. With a court order. Which, in the realities of Russia, is a flimsy safeguard.

NGOs. Medvedev has approved a simplification of the registration rules for Russian NGOs.

POLITKOVSKAYA. It is announced that a new murder trial is to begin 5 Aug. I think that the prosecutors got it right (and the editors of Novaya Gazeta seem to agree) but the last trial was completely bungled. As so many prosecutions have been: the best lawyers are working somewhere else; mob hits are notoriously difficult to prove thanks to cutouts, intimidated witnesses and the expendable triggermen; the police are incompetent and corrupt (one policeman acted as the spotter for the murderers it is said). Very few prosecutions do the job in modern Russia.

RELIGION. In a meeting with leaders of Russia’s four “traditional” religions (Orthodoxy, Islam, Judaism and Buddhism), Medvedev expressed support for voluntary religious instruction in schools and chaplains in the Armed Forces. It will be interesting to see how the kommentariat spins this one.

CHECHNYA. An effort is underway to bring back into the fold the last remaining independence fighters so as to gain their cooperation against the jihadists. Talks with Akhmed Zakayev in particular.

BASES. A Russian admiral says the Black Sea Fleet should have at least two main bases: one in Sevastopol and Novorossiysk. I think it should have as many bases as it wants. But they should all be in Russia.

GEORGIA. Just before Biden’s visit Saakashvili promised reforms: the opposition is scornful. What are his promises worth anyway? A few hours before Georgian forces opened fire on Tskhinvali last year, he saidI have been proposing and I am proposing Russia act as a guarantor of South Ossetian autonomy within Georgia”. The opposition has suspended its regular Tbilisi street protests but promises to keep working to get rid of Saakashvili. Not a failure: Biden seems to have taken to heart Burjanadze’s appeal to support Georgia not Saakashvili. In the Wall Street Journal interview (which has been spun, in my opinion, as far more hostile to Russia than it really was) Biden was asked about Saakashvili’s reform promises: “I’m not concerned, but I’m not taking any chances. The opposition believes the only reason he said it was because I was coming. The opposition said to me the only reason he did some of the stuff he did in terms of backing off the demonstrations was because I told him…” Saakashvili wanted weapons; he has been refused. The Daily Telegraph reports that the EU report on the war has been delayed. This leads me to suppose that it will not support Saakashvili’s various stories. Pretending that the fact that Georgian forces opened fire on Tskhinvali at midnight doesn’t matter is absurd: does anyone seriously think that Russia would have “invaded” anyway if Saakashvili had actually meant what he said? Extracting what he can from Biden’s visit, Saakashvili says “Putin’s plan to completely occupy and to destroy Georgia: has now been foiled”. Perhaps this will put an end to all the op-eds predicting that Moscow is about to do what it could have done last year but didn’t.

BIDEN IN UKRAINE. He appears to understand that the gas problem is not just Moscow: he is reported to have observed that allowing local consumers pay fractional rates for gas means that Naftohaz is always short of money to pay Gazprom.

© Patrick Armstrong Analysis, Ottawa, Canada (see


JUST WHAT RUSSIA NEEDS. Another liberal/social democrat opposition party. But it has been announced that Gorbachev’s Independent Democratic Party of Russia will hold its founding congress in early September. I would estimate that 10 to 15% to the electorate would be sympathetic to something like this (although the “pedestal parties” long since stole the economic platforms) but for some reason Russian liberals absolutely refuse to cooperate with each other and there doesn’t appear to be much sign that they ever will. Each is prepared to unite – but only under his leadership.

KARABAKH. At a side meeting of the G8, Russia, France and the USA announced they would submit a revised set of proposals to resolve the Karabakh problem to Yerevan and Baku. Like South Ossetia, Abkhazia, Chechnya and Transdnestr, this particular attempt to revise Stalin’s cartography started up in the dying days of the USSR in an. After quite serious fighting over several years, the Karabakhians secured their independence and occupied a swath of Azerbaijan territory linking themselves to Armenia. Like the other issues (except Chechnya for some reason) the “international community” generally ignores the secessionists, regarding them as the finger puppets of recognised states. External attempts to mediate the issue have foundered on the assumption that it’s only a Baku-Yerevan issue. But that is folly: the Karabakhians won their independence and they will not allow it to be traded away by somebody else. Any solution must return a substantial amount of territory to Baku and assure Stepanakert that it will not be governed from Baku and offer veterans of the fighting enough to satisfy them. Not an easy thing to achieve. Over the years, however, the rough form of a settlement has emerged: Karabakh remains nominally in Azerbaijan but in reality controls its own destiny; some access to Armenia is secured, the other land is returned to full Azerbaijan control. Naturally, there would have to be some strong peacekeeping force in place (and who would volunteer for that?). Nonetheless it is encouraging that Washington-Moscow and Paris are getting involved: the combination may be able to deliver. The preliminary meeting of the Armenian and Azerbaijanian presidents will be held in Moscow this weekend.

BLACK SEA FLEET. The Black Sea Fleet in the Soviet days was based in Crimea. When the USSR broke up, the Russia portion of the fleet negotiated a lease to stay there. The current lease expires in 2017. On Tuesday Medvedev visited Novorossiysk and announced that construction of a new base was underway and should be complete by 2020. What appeared to be a strong intimation that the fleet would finally leave Ukraine was immediately muddied when the Chief of the General Staff announced that Moscow hoped to extend the lease. Moscow should bite the bullet, finish the base and move the fleet to it as soon as possible. Perhaps Medvedev will issue a clarification.

AIRCRAFT LOSSES IN SOUTH OSSETIA. Moscow Defense Brief says that Russia actually lost 6 aircraft in the fighting (Moscow admits to 4), three of them to Russian fire because the lack of cooperation between Army and Air force “led them to conduct completely separate campaigns”. The General Staff has denied the report.

ANOTHER MURDER. Natalya Estemirova was kidnapped in Chechnya yesterday and her body was found in Ingushetia. The Interior Minister Rashid Nurgaliyev has pledged action. While it is possible that the murder will be quickly solved, it is more likely that it won’t and the usual rumours will replace fact.

GEORGIA. The opposition has announced that it will spread protests throughout Georgia. Meanwhile Burjanadze was in France presenting evidence of government repression. Saakashvili continues to tighten control with a new law on protest rallies and a stronger grip on the news media. He assured the Georgian people that the new presidential palace a-building cost a “trifle”.

BEREZOVSKIY. It is reported that Ukrainian investigators interviewed Berezovskiy about the alleged poisoning of President Yushchenko in 2004. If true, that’s a new and curious twist to this long unsolved mystery.

NABUCCO. The gas pipeline moved a step forward with Turkey, Austria, Hungary, Bulgaria and Romania signing an intergovernmental agreement on the line (Caspian to Europe via Turkey). Naturally, in the zero-sum thinking that infests the subject of pipelines, some hailed it as a way to cut Russia out. But, for what it’s worth the Turkish PM invited Russia and Iran to join the project.

© Patrick Armstrong Analysis, Ottawa, Canada (see


RUSSIA-US SUMMIT. To my mind, Obama said a number of things that deserve being said, particularly: “America wants a strong, peaceful, and prosperous Russia… we also recognize the future benefit that will come from a strong and vibrant Russia.” For too long, the prevailing impression has been that Washington would prefer a weak, turbulent and poverty-stricken Russia. He also intimated that the end of the Cold War was not simply a result of US action. On the two burning concerns for Moscow, he showed openness. He hinted at the possibility of Russian involvement in missile defence and, on NATO expansion, rather than the usual wooden language, listed the things Ukraine and Georgia must do to qualify for membership (one of them, “a majority of its people must choose to”, effectively rules out Ukraine); he also stated: “NATO should be seeking collaboration with Russia, not confrontation”. The only jarring note, probably understandably, I saw was “I reiterated my firm belief that Georgia’s sovereignty and territorial integrity must be respected”. If only it were that simple: but Tbilisi ought not to have done things in the late 1980s and 1990s that persuaded Ossetians and Abkhazians they had no future in an independent Georgia. The two roughed out a nuclear weapons agreement and US transit through Russia to Afghanistan was extended. Overall, the “reset” seems to be off to a good start. But we’ve been here before: Clinton-Yeltsin and Bush-Putin also started well. Things happen and each government has long-entrenched interests that work against these beginnings.

RUSSIA INC. The Central Bank says net capital inflow was US$7.2 billion in the second quarter (first net inflow since second quarter 2008). But net outflow in the first quarter was US$34.8 billion. Meanwhile, Russia’s total foreign debt is down US$8.4 billion to US$475.1 billion in the first half of the year. In this number the government’s debt is down US$1.8 billion to US$27.7 billion. International reserves are US$409.1 billion.

OIL AND GAS. Russia’s energy exports have suffered with the world-wide economic difficulties. We are told that the average price of Russian oil was $US105.31 per barrel in the first half of last year but only $50.82 per barrel in the first half of this year. Natural gas exports to Western countries are about half over the same periods. As for Russia’s immediate neighbours, Ukraine has bought about a third of the gas that it contracted to buy but Gazprom’s CEO says that it will be forgiven the penalties the contract requires. It has paid in full for June’s deliveries but there is concern that it’s having problems doing so (gas has to be bought to fill storage tanks so as to prepare for winter’s higher demands). The EU may lend Ukraine the money. (Parenthetically, the EU seems to now understand that the gas delivery problem is more than just Russia’s “energy weapon” as conventional wisdom had it the first time around). Putin stated that Russia will continue to sell gas to Belarus at reduced prices (Ukraine is not paying the full European rate either).

KHODORKOVSKIY. Like some others, I thought it possible that Medvedev might pardon him. He has just issued his first (I think) statement on the subject: “Concerning the possibility of a pardon for someone, Khodorkovsky or anyone else, the procedure has to be carried out in accordance with our country’s rules. In other words, a person must appeal to the President, plead guilty to having committed a crime and seek the appropriate resolution. So at this point there is nothing to discuss”.

GOVERNORS. A recent Levada poll finds majority of Russians supporting direct election for governors. Russia has run through a number of variations: from direct appointment in Yeltsin’s time, to direct elections, to nominations by the President with agreement by the legislatures. There may be more changes to come.

CAUCASIAN RUMOURS OF WARS. Another two weeks of violence in the North Caucasus. But it’s not one-sided: for example, a police convoy was ambushed in Chechnya on the 4th but the authorities ran the attackers to ground quickly with some success. Last week security forces killed an “emir” and, it is claimed, prevented an assassination attempt on Kadyrov. While there are resemblances to the situation before the first Chechen war of 1994, there are very important differences. Then the central and local governments were helpless and ineffective; today the authorities are altogether stronger and better organised. They have much more support from the populations as well: all the suffering, and the terrible result of the death or glory rhetoric so common then, has inoculated many against such romanticism. (I’ve heard that the movie Braveheart was a huge hit all over the Caucasus at the time – after a short struggle the heroic little guys win their freedom: see.)

© Patrick Armstrong Analysis, Ottawa, Canada (see