Chirac lauds 'great years for Russia' under Putin (AFP, 5/30/08)

On his first trip abroad as prime minister, Vladimir Putin met Friday with former French president Jacques Chirac who praised his time in the Kremlin as "great years for Russia."

Putin met Chirac at his Paris hotel just two weeks before the former French leader is due in Moscow to receive Russia's highest honour, in recognition of his efforts to consolidate Franco-Russian relations.

Ties between France and Russia are "expanding very well," Putin said as he greeted Chirac.

"I thank you for the solid foundation you created for this," said the Russian leader, who stepped down as president on May 7 and handed over to his protege Dmitry Medvedev.

Chirac expressed his "very deep friendship" toward Putin, adding: "My esteem comes from the remarkable manner in which you governed affairs in Russia."

"These 10 years have been, unquestionably, great years for Russia," said Chirac. Putin served eight years as president and two years as prime minister under Boris Yeltsin.

His comments were seen as placating criticism that Putin had rolled back democracy in Russia by stifling the opposition and shutting down independent media during his presidency.

Chirac added there could be no "balance in the world without a strong Russia".

During his 12 years in office, Chirac defended what he termed as the need for a multi-polar world -- a stance applauded by Putin and widely seen as diplomatic code for opposing US hegemony.

In a sign of the Russian leader's continuing clout since stepping down as head of state, Putin also met with French President Nicolas Sarkozy.

"Fears about the human rights situation in Russia are exaggerated," Putin told reporters after a working dinner at the Elysee palace with Sarkozy, and accused Moscow's critics of using the issue as "an instrument of pressure".

"Energy security in Europe depends on calm relations with Russia," Putin said, referring to concern in western Europe that Russia might try to exploit its gas and oil supplies to western Europe for political purposes.

In a noticeable shift in tone from Chirac, Sarkozy had criticised Russia's "brutal" use of energy to pressure its neighbours and Europe during his first foreign policy speech after taking office, but he has since adopted a more conciliatory approach.

France was chosen as Putin's first major foreign destination because it will take over the presidency of the European Union in July -- a development Putin said should "enable us to advance" talks on a strategic partnership.

The Russian leader on Friday also dropped by the Paris home of writer Maurice Druon, 90, whose works are well-known in Russia.

The two men have met at least twice before, with Putin inviting him to his Moscow area dacha in 2003 and Druon reciprocating a month later with a visit to his Bordeaux area home.

"You look younger, mister president!" Druon told Putin on Friday. "Maybe it's the Paris effect," responded Putin.

The prime minister also toured a Cossack museum in a Paris suburb as part of his drive to renew ties with Russian emigrants, including the families who fled communist rule after the 1917 Bolshevik revolution.

Indulging in a glass of champagne, Putin announced a 100,000 euro (155,000 dollar) donation to the museum in Courbevoie and thanked curators for preserving the "traditions, culture and religion" of Czarist Russia.

Putin gave Russia 'great years' - Chirac (Russia Today, 5/30/08)

It was an ex-presidential love-in in Paris as the former leaders of Russia and France exchanged compliments and courtesies. Prime Minister Vladimir Putin met Jacques Chirac as part of his working visit to France. Putin bestowed Russia's State Award on the former president for his outstanding achievements in humanitarian activities. [CW: In 2006 Chirac awarded Putin the Grand Cross of the Legion d’Honneur, the highest honor that France can bestow on a foreigner]

The meeting came after Putin held talks with the incumbent French President Nicolas Sarkozy, which, according to the Russian PM, was "sharp but constructive".

Speaking of the Putin’s years in charge, Jacques Chirac said the eight years of his presidency "were great years for Russia", characterised by successful economic development and increased living standards.

"Under your leadership the quality of life in Russia greatly increased and Russia strengthened its position in Europe and in the international arena. The last ten years have been great for Russia," Chirac said.

The former French president also said that without a stable Russia there cannot be a stable Europe. "I am thankful to you for that as a European, as a citizen of the world," Chirac said, adding that he has long been Putin's friend.

"Russia's President Medvedev has signed a decree saying that this year Mr. Chirac is granted the State Award of Russia. It’s a significant symbol of his contribution to Russia-France relations in recent years. I’m pleased to thank Mr. Chirac again for this. My congratulations! This is a very special ceremony in Russia. We'll all be glad to welcome Mr. Chirac in Moscow on the 12th of June," Putin responded.

Vladimir Putin also met Maurice Druon, a renowned French writer and member of the Academie Francaise, who turned 90 this April. Putin included a meeting with Druon in the agenda of his working visit to Paris in order to pass on greetings from Russia, where the French writer is widely read.

I've seen quite a few articles lately talking about a chill in Russia-China relations. This is an interesting theory, but one that I disagree with.

Of course the relationship isn't perfect and, heck, it might not be as healthy as officials from the two countries let on, but I'm hesitant to begin describing it as chilled. But what do I know !!!

Anyway, just for reference, and in case anyone's interested, here are links to a few of the articles I'm talking about.

Sinophobia, by Richard Lourie

What China Wants from the Russians, by Bill Powell

The Russia-China Lovefest, by Robert Amsterdam

Sinophobia, by Richard Lourie (The Moscow Times, 5/12/08)

Russia is the only European country that borders China. That border is quite long (4,400 kilometers) and has a long and contentious history. The first treaty China ever concluded with the West, the Treaty of Nerchinsk in 1689, began establishing borders with Russia, a process that was only finally completed by President Vladimir Putin and Chinese President Hu Jintao in 2004.

But fear and grievance remain. Many Chinese believe that by force or the threat of force Russia imposed "unequal treaties" on China and unjustly seized 1.5 million square kilometers of land. [CW: Some who bring this up are really just after regime change in Beijing; others are fringe nationalists comparable to Zhirinovsky. Whatever they are, they aren't many in numbers - not by a long shot]

Mao Zedong espoused that view in 1964, and five years later, Soviet and Chinese troops engaged in armed border clashes. "The Politburo was terrified that the Chinese might make a large-scale intrusion into Soviet territory that China claimed. A nightmarish vision of invasion by millions of Chinese made the Soviet leaders almost frantic," wrote Arkady Shevchenko, the highest-ranking Soviet diplomat ever to defect.

But it wasn't only the Politburo that envisioned war with China. Soviet dissident Andrei Amalrik predicted war with China as the probable cause of his country's demise in "Will the Soviet Union Survive Until 1984?" He was wrong about the cause but only seven years off on the date.

The old Soviet quip "All quiet on the Finnish-Chinese border" continues to reflect Russian anxiety. Speaking off the record, highly placed Russian government figures told me that they expect the next war to be a "resource war" and that China would be the enemy. It's a pity that U.S.-Russian relations have sunk so low, they say, when the two sides should be forging an alliance to counter the mounting Chinese threat. [CW: Ironically, Russia might just be forging an alliance with China to counter another mounting threat that has already waged a "resource war"]

As in Soviet times, anti-Chinese sentiment runs deep and creates odd bedfellows. Democrats and jingoists, unable to agree on anything else, agree on China. Leaders of the pro-Western Union of Right Forces, including Yegor Gaidar, often speak of "Chinese expansionism" and the country's "population threat."

Geography abhors a vacuum every bit as much as nature. The Russian Far East, which is two-thirds the size of the continental United States, has only 7 million people. On the other side of the Russian border, in the three northeastern Chinese provinces, there are 100 million people in an area one-eighth the size of the Far East.

A "creeping occupation" has already begun, and by some estimates the Chinese could be the dominant ethnic group in the Far East by 2020. Putin himself has said, "I don't want to dramatize the situation, but if we do not make every real effort, even the indigenous Russian population will soon speak mostly Japanese, Chinese and Korean."

Though Putin's Asia policy has been balanced based on the recognition that Russia is both a European and an Asian country, Putin himself has come under fierce attack lately in a white paper by Boris Nemtsov, co-founder of Union of Right Forces. Nemtsov accuses Putin of a "capitulatory" policy toward the Chinese, whom he has armed to the teeth and to whom he has made "major territorial concessions" (some islands across from the city of Khabarovsk). Nemtsov has even called Putin a "Chinese agent of influence." [CW: The Epoch Times basically argues the opposite, making Jiang Zemin an "agent of influence" for Russia. What do Nemtsov and The Epoch Times have in common? Neither of them have any popular support in the country they're trying to win-over and are resorting to pure propaganda] He also notes that Chinese politicians often speak of Chinese territory "unfairly seized" by tsarist Russia and that Chinese schoolbooks have maps with Russia's eastern territories in the same color as China.

Perhaps it's because the only successful invasion of Russia came from the east -- the Mongols in 1230 -- but it's rare to hear any reasoned discourse on the subject of China. [CW: Doesn't make sense because the most horrific invasions have all come from Russia's west, including a notable one a few generations back. I mean, you can't compare the Nazi invasion to the Mongol invasion and if Lourie thinks that the latter one resonates more with Russians today, he ought go out more] Still, it does exist. Speaking of the glaring disparity between Russia's manufactured exports to China (1.4 percent) and China's to Russia (30 percent), Andrei Ostrovsky, deputy director of the Institute of the Russian Far East, put it quite plainly: "Instead of developing our own production, Russia prefers to 'be afraid of the Chinese.'" Sounds about right.

Richard Lourie is the author of "A Hatred For Tulips" and "Sakharov: A Biography."

What China Wants from the Russians, by Bill Powell (TIME, 5/27/08)

Russia's newly inaugurated President, Dmitri Medvedev, just completed his first state visit over the weekend. His choice of locale was not a surprise: Beijing. During the visit, there were predictable headlines in the press about Medvedev and President Hu Jintao denouncing U.S. plans for missile shields in both Europe and east Asia. The U.S. says they are to help its allies defend against possible attacks from Iran and North Korea. Moscow and Beijing don't really believe that, but the fact is, that train has left the station. Both countries, on their own, will have to decide how to respond should missile defenses go up.

But the day-after wire service stories miss the larger point about the Hu-Medvedev meeting. What was most important is what didn't happen. If the outside world had access to China's intelligence service — the Guojia Anquan Bu or National Security Ministry — this is how an after-the-fact debriefing on the Medvedev visit might have gone from one of Beijing's official Russia specialists (an expert who, for the sake of literary license, was educated in the U.S.) addressing the Central Committee and the State Security Council:

"Yet another bad date. The young Russian President — he's only 42, and actually looks much younger in person — sounds a lot like the old one, which shouldn't be surprising, since Mr. Medvedev is a place holder for Mr. Putin, now the Prime Minister.

"First things first: China's interests when it comes to Russia don't have anything to do with American plans for missile defense. [CW: I disagree] We can certainly afford to build a few more nuclear weapons if we genuinely feel threatened by missile defense, but our attitude should be wait and see: our U.S. assets say the likely new President, Mr. Obama, will shelve plans for missile defense because he wants everyone to like America. We'll wait and see.

"No, we need to build trust with the Russians on bilateral security matters — relations between them and us, one on one. And while we've settled some border disputes over the past couple of years, and we continue to buy their weaponry, there is one thing that would demonstrate to everyone looking that our relations had truly entered a new era, where trust finally supplants suspicion. They need to sell us oil and gas — lots and lots of it — at a reasonable price.

"As the Americans like to say, 'This ain't rocket science.' The Russians have oil and gas — tons of it — and we need it. We need it now. We'll need it tomorrow. And we'll still need it decades from now. But we still can't get a deal done with Moscow. Not on oil and gas. We've talked and talked and talked — and issued to the international press a string of optimistic sounding half-truths for the last four years — but we still don't have much to show for it. [CW: That's not true. All the statistics I've seen indicate that oil and gas exports from Russia to China are on the rise. When the landmark ESPO pipeline is completed next year, expect more of the same. However, if you've read my blog before you'd know that I am against Russia increasing its energy exports. So, I would hope that any increased exports to China go hand-in-hand with decreased exports to Europe]

"Oh sure, they agreed to sell us $1 billion worth of uranium. Unlike some people who prattle on endlessly about global warming but don't do anything about it, we're expanding our nuclear generation capacity massively: That's the New 'China syndrome,' folks.

"But more than anything we need hydrocarbons — oil for the 25,000 new cars that we add to our streets every day in China, because they're not Priuses. And we need natural gas for our power plants. For years we've talked about various proposals, but we still can't agree on price. The Russians want us to pay for natural gas what the rich Europeans pay. [CW: A plethora of respected analysts agree that when it comes to oil and gas, the suppliers hold all the cards. But Russia's not unreasonable - it's just after market prices and market prices it shall get. China can afford to pay and will do so happily. Just wait and see how fast this is resolved when ESPO's ready to flow] Sorry, we can't do it, not when we're supposed to subsidize the construction of the pipeline in the first place [CW: This is a total lie! Transneft, Russia's state-run pipeline operator, is paying for the ESPO pipeline to China. A few years ago, Russia rejected Chinese and Japanese offers to help pay for the pipeline, wanting to retain full ownership for itself], plus pay bribes to everyone in Moscow. An international energy consultant, a Chinese-American fellow by the name of Edward Chow, once said the Russian-Chinese energy relationship isn't a marriage, 'it's a series of bad dates.'

"He isn't far from the truth. That's why, by the way, we sent the Russians a signal just a month before this weekend's summit: we signed a $60 billion long-term liquefied natural gas deal with Qatar. We wanted to show the Russians we had options, that they couldn't dictate prices to us. And so we did. [CW: The markets dictate prices. Russia, China, and Qatar all know this. And, if anything, the suppliers have the upper hand. Not to mention the real life bogeyman named "Gas OPEC." Powell's shooting duds] The fact is, we trust sources of supply in the Middle East more than we do the Russians. After all, we haven't fought a war against anyone in that part of the world like we did against the Soviet Union in 1969 (and that one almost got out of hand). [CW: If history meant so much, why is Russia supplying so many hydrocarbons to Germany? And does the United States really trust Venezuela so much to make it a primary supplier for oil?] Things are much better now, of course. But the Russians are right there, across our border, and instead of seeing our vast population and rapid economic growth as a golden economic opportunity, their military and security ministries still look at us and feel nervous. [CW: Unrelated, but I think this is more true: "Instead of seeing Russia's vast population and rapid economic growth as a golden economic opportunity, Kaczynski, Topolanek, Schwarzenberg, Ilves, and Ansip still look at Russia and feel nervous"] It is an anxiety Nikita Khrushchev wrote about ages ago and it hasn't changed.. The Russians see the vast relative emptiness of their own land mass — and the riches that lie beneath it — and think we might to be tempted to take some of it someday. [CW: Russia's more concerned about the unwarranted expansion of NATO and regards China as a strategic and reliable ally, feelings that China honestly shares]

"They're nuts to think that, but what are you going to do? For now, we'll buy our energy elsewhere. After all, the Americans still patrol the Persian Gulf, guaranteeing that all the oil and gas we buy from there (including Iran's!) will get to China without incident.

"For now anyway, that arrangement's OK. Because the fact is, despite all the bluster about missile defense this past weekend, if it comes down to a question of who we trust less — the Americans or the Russians — well, that's no contest. Do svedanya, Mr. Medvedev." [CW: Lol, is this guy for real?]

A late-night / early-morning observation right before I go to bed:

On Tuesday, John McCain made an impassioned call for Russian-American cooperation in the global security sphere, his second consecutive speech signaling he is for a "strategic cooperation" with Russia, instead of restarting the Cold War.

One day earlier, Barack Obama took a slight against Russia by inadvertently trying to steal away the liberation of Auschwitz.

Words are just words, sure, but this reaffirms my personal belief that McCain would be the best American president for Russia. I've listed my reasons here. I think all of them are valid.

What's the REAL Significance of Obama's Nazi Gaffe?, by Glenn Sacks (GlennSacks.com, 5/28/08)

The latest stupid, petty controversy in the presidential primaries/election is people being "outraged"--and the Republicans demanding an explanation--for Senator Obama confusing Auschwitz with Buchenwald in a recent speech. According to the Associated Press' Obama mistaken on name of Nazi death camp (5/28/08):

"The Barack Obama campaign said Tuesday the candidate mistakenly referred to the wrong Nazi death camp when relating the story of a great uncle who helped liberate the camps in World War II.

"The Democratic presidential candidate said the story is accurate except that the camp was Buchenwald, not Auschwitz...

"Obama's mistaken mention of the camp on Monday quickly generated Internet chatter, ranging from puzzlement to outrage. The Republican Party demanded an explanation.

"'It was Soviet troops that liberated Auschwitz, so unless his uncle was serving in the Red Army, there's no way Obama's statement yesterday can be true,' said Alex Conant, a spokesman for the Republican National Committee."

So Obama--who must be so tired from the endless, endless, endless campaigning that he can probably barely see straight--confused the names of two concentration camps. Big deal--most Americans couldn't even name two concentration camps.

But the real significance of the gaffe is this--"'It was Soviet troops that liberated Auschwitz, so unless his uncle was serving in the Red Army, there's no way Obama's statement yesterday can be true,' said Alex Conant, a spokesman for the Republican National Committee."

An ironic comment, to say the least. American conservatives have spent the last 60 years pretending it was the US and Britain who defeated Nazi Germany, when the vast majority of Nazi Germany's casualties occurred on the eastern front, against the USSR. When celebrating the 40th anniversary of D-Day in 1984, then-president Ronald Reagan read General Eisenhower's announcement for the day and deliberately omitted Eisenhower's reference to America's Soviet allies.

The first president to properly acknowledge the Soviet role--the leading Soviet role--was Clinton, not because he was more honest but because the Cold War was over so we could stop the stupid charade. It was that generation of Russians--28 million of whom died in World War II, and millions of whom also died at the hands of their own dictatorship--who saved humanity.

The picture above is of the Soviet Army liberating Auschwitz. The video below has footage of the Soviet Army capturing and liberating Auschwitz--it's in German (I think) but it is still worth watching.

Thanks to Valerie, a reader, for sending the story.

[CW: It sounds petty discussing it and I even feel a bit ackward. But, suffice to say, I agree that the Soviet's role in defeating fascism and liberating Europe was terribly revised in the West during the Cold War and to this day. People like Pat Buchanan have pointed this out in the past. Click on the link above to see the picture and video that the article references]


From Your next president is not a smart man, by Rachel Lucas (Rachel Lucas, 5/27/08):

Oy. I wonder how the Russians feel about that, seeing as how they’re the ones who liberated Auschwitz, not the Americans. Maybe Obama identifies so deeply with the Red Army that he has conflated things in his wee little brain.

Here’s a thought exercise: imagine Dubya making blatant factual errors like these two quotes. Imagine the headlines about how he was disrespecting the memories of fallen servicepeople and how he was such a pompous moron to ignore and belittle the overwhelmingly massive contributions of the Russians in WWII, who frankly had more to do with defeating the Nazis than America did (in my relatively knowledgeable opinion). Oh god. The accusations of dumbness and chimp-like brain power would be coming at you like a tsunami.

Russia suspects foreign involvement in Georgian provocation (RIA Novosti, 5/28/08)

Russian Foreign Minister Sergei Lavrov said on Wednesday that third parties could be behind Georgia's provocative actions against Russia.

Relations between Russia and Georgia have been consistently strained since President Mikheil Saakashvili came to power in Georgia four years ago, with both sides being involved in numerous disputes, most recently over Russia's moves to develop closer ties with Georgia's two breakaway regions, Abkhazia and South Ossetia.

"I do not understand what they [the Georgian authorities] want; unless they are being used [by someone else] to constantly provoke Russia," Lavrov said at a ministerial meeting of the five states bordering the Arctic Ocean, held in Ilulissat, western Greenland.

"I doubt they would come up with these provocative actions on their own," he added.

Bilateral relations saw a new low this week when the Georgian Foreign Ministry demanded that Russia give an official apology and pay compensation following the alleged shooting down of an unmanned reconnaissance drone by a Russian aircraft in April.

A UN report published on Monday, based on video footage and radar records, confirmed Georgia's earlier claims that on April 20 the Russian Air Force shot down a Georgian drone over the Georgian breakaway region of Abkhazia. Russia's Defense Ministry has dismissed the report.

Georgia called the downing an act of aggression, an assessment shared by some Western countries.

Moscow has accused Tbilisi of violating a ceasefire agreement by sending spy planes into the conflict zone, where it has maintained peacekeeping troops since bloody conflicts ended in the early 1990s.

Tbilisi is also demanding the withdrawal of additional peacekeepers deployed by Russia in Abkhazia and the annulment of former-president Vladimir Putin's decree issued on April 16 urging closer ties with Abkhazia and South Ossetia.

Abkhazia and South Ossetia have been a source of tensions between the former Soviet allies, with Tbilisi accusing Moscow of backing separatism on its sovereign territory.

Lavrov also said the current Georgian leadership would most likely withdraw from its earlier agreements to set up a joint counter-terrorism center with Russia and not to allow the deployment of foreign bases on its territory.

Georgia earlier announced its withdrawal from a 1995 CIS unified air defense agreement signed by a number of former Soviet republics, including Russia.


"We can’t negotiate with this Georgian Government": Russian FM (Russia Today, 5/28/08)

Foreign Minister Sergey Lavrov says Russia can’t negotiate with the current regime in Tbilisi. In a strongly worded statement, Lavrov said Georgia is only trying to provoke Russia. He also said Moscow believes a foreign backer is guiding Georgia's actions.

The minister was highly critical of Georgia’s stance over its commitment not to have foreign military bases on its soil. He also pointed to Tbilisi’s obligations over an initiative to set up a joint Russian-Georgian anti-terror centre.

According to Lavrov, Georgia is breaking the terms of the agreements, whereas Russia is only too willing to stick to the deal. Lavrov said that, among other things, Russia has withdrawn its troops from Georgia.

On February 25th, I raised my 2008 GDP growth estimate for Russia from 8% to an astronomical 9.5%. I did this after first showing how GDP growth estimates for Russia rose at least 10 separate times over the past five months and, well, I wanted to be ahead of the curve.

Mind you, at 8% I was already well ahead of the generally accepted projection [of 7%], and 9.5% was and still is simply a provocative figure.

But, after today's news, I'm pleased to see that 9.5% has entered the ballpark.

Today, Russia's deputy economic development and trade minister said that Russia's economy grew by an 8.3% annualized level in the January to April period, with 8.4% registered for April alone.

These are blowout figures, even without taking into account how horrendous the worldwide economic environment has been.

Russia's economy is growing at levels of magnitude greater than its G8 counterparts and leaving other former communist economies in the dust.


Vladimir Putin predicted recently that Russia could overtake the United Kingdom and become the world's sixth largest economy, as measured by purchasing power parity, sometime this year. Even though the British press made a fuss about it, this prediction is basically a no-brainer and it's more of an inevitable event than a prediction. The only question is whether it'll be during the second or third quarter.

Nevertheless, I have a prediction to make and it's a bit more provocative (no offense to Putin). I predict that Russia will overtake Germany for fifth place by the end of 2010 - and I still stand by my assertion that Russia's economic growth will accelerate at much lower oil prices. High oil prices are, in my opinion, even a slight hindrance for Russia right now.

Cynical Russian Russophobe Grigory Pasko is living in a fantasy world.

Here are excerpts from two recent articles of his to prove my point. Both are scathing attacks on Russia that I don't even see the need to comment upon. I mean, anyone who reads these would see how crazy and out-of-touch with reality this guy is.

To the readers, enjoy the laugh. There are more doozies like these on Robert Amsterdam's blog. For example, Pasko recently complained about stamp prices going up in Russia, gas prices going up in Russia, electricity prices going up in Russia, food prices going up in Russia, transportation costs going up in Russia, and traffic tickets being handed out in Russia.

These things are only happening in Russia, of course, and it doesn't matter, for example, that Russians are paying some of the lowest utility and housing bills on the planet, costs which are gradually being aligned to market levels. Having the world's second lowest income tax rates also doesn't matter since this is just an illusion to mask everything else.

Sooner or later, expect Pasko to blame the Kremlin for low temperatures during the winter months (and high temperatures during the summer months), the long distances between Russian cities, and why a movie ticket costs more today, in Russia, than it cost in 1952. And on that point, Pasko's ready to blame the Kremlin for the transition, just in Russia, from black-and-white television to color (color is deplorable according to Pasko).

To Grigory Pasko, wake-up man.


From "Heroes of a Mediocre Time," by Grigory Pasko (Robert Amsterdam, 5/27/08):

The Putinite-Medvedevite time chooses for itself as heroes people not from the world of scholars, thinkers, writers, inventors, instructors, but from the world of sport and pop-business. The latest hurrah of patriotic hysteria broke out in connection with the victory in the Eurovision competition of a second-rate Russian singer, Dima Bilan. Medvedev immediately congratulated the singer. They immediately bestowed upon him the title of People’s Artist of Russia. One of the streets of the town of Ust-Dzhegut in Karachayevo-Cherkessia, where the singer is from by birth, was immediately renamed after him.

Indeed, if there are no real achievements in the economy, science, production, the resolution of the social problems of the people, then even such achievements as the victory of a mediocre singer in a mediocre contest will be tossed into the propaganda machine.

The times are like that now – mediocre. Like the leaders of the country.


From "The Narcissitic Power," by Grigory Pasko (Robert Amsterdram, 5/7/08):

I had also had the opportunity to be in Washington during the time of the second inauguration of G. Bush, Jr. The center of the capital was blocked off, but not for long. And the traffic didn’t stop in the entire city.

A great many such examples from the practice of the actions of the organizers of particularly important events with the participation of the leaders of countries can be cited. And only Russia (well, okay, maybe North Korea as well) differs here from the rest of the world...

Besides the blocking off of streets (and in Moscow, automobile traffic is ridiculously hard as it is, even without this) for the time of the inauguration and parade, it has been decided to disperse the clouds over Moscow. This is done with the help of special aviation, which seeds chemical reagents in the clouds. During the course of 24 hours, the sun will shine over Moscow, while someplace in Vladimir Oblast, the skies will let loose a deluge of poisonous precipitation in the form of rain containing these same chemical reagents.

Who has calculated the losses that are incurred from the blocking off of the roads? Nobody. Because this concerns the ordinary people, and not narcissistic presidents. Who has calculated the losses that are incurred from the chemical reagents? Nobody. Because they did not fall on “Rublevka” [Rublevskoye chaussé, where all the big-shots live—Trans.] and the residences of narcissistic presidents.

According to the testimony of one of the Moscow newspapers, to prepare for the military parade and to clean up the city and bring it back to normal afterwards – including replacing the asphalt after all the heavy military hardware has torn up the streets while being driven through Moscow – will require one billion three hundred million rubles (this is approximately 35 mln. euros). For this money in Moscow you could build 25 standard-issue pre-school day care centers with swimming pools. Or 10 highway interchanges. Or garages for 130 thousand automobiles. The capital of Russia suffers from a catastrophic shortage of day care centers, highway interchanges, and garages. But the ambitions of two small men have turned out to be worth more than the needs of ordinary Russians.

Russia: giant of a new economic world order, by Heather Connon (The Observer, 5/25/08)

Two decades ago, Russians would always have a string bag known as an avoska - a just-in-case bag - tucked in their pocket 'just in case' they spotted some oranges or other consumer staple for sale in the normally empty shops and market stalls. These days, Muscovites are as likely as Manchester United and Chelsea fans to be sporting carrier bags from GUM, the 242m-long shopping mall that runs along the eastern side of Red Square and is crammed with labels from Hugo Boss to Russian specialist shops.

Russia is booming: there are more '6 series' BMWs in Moscow than in any other city in the world and there is barely a Lada to be seen among the Mercedes, Audis and Range Rovers that clog its congested streets; within the next year or two, Russia will overtake Germany to become the world's biggest car market.

It is not just cars. Ordinary Russians are snapping up everything from baby-food to designer bags as they splash out with their newfound wealth; average earnings have been growing by around 20 per cent a year and consumption has been following close behind. At around $8,500 (£4,300) a year, average earnings are still low by Western standards but they are stratospheric compared with a decade ago, when the average was less than $1,100 and a greater proportion of the population had to get by on less than $1 a day than in India.

Disposable income is also higher than that suggests, given that tax is at a flat rate of 13 per cent and, with every Russian having been given their own flat or house free as the Soviet era ended, mortgages and consumer debts are rare. It is not hard to work out the reason for the transformation: gold, both black and yellow. Russia vies with Saudi Arabia to be the largest oil producer in the world: it has the second-largest oil reserves in the world, [CW: Officially, Russia's oil reserves are like seventh or eighth. Unofficially, some analysts have put it as high as second] the largest gas reserves and the fourth-largest gold reserves. Just over a decade ago, oil was trading at around $10 a barrel; last week it passed through $135 for the first time. Over the same period, the price of gold more than trebled, to over $900 an ounce.

No wonder Vladimir Putin was described as the lucky President: his elevation to that role in 1990 coincided with the commodity boom and his skill in riding it means that, after two terms as President, he has just been elected Prime Minister and can still claim unprecedented popularity ratings.

He deserves plaudits for managing the economy's growth. He arrived two years after Russia stunned international investors by defaulting on its debts, triggering a collapse in the rouble and a crisis in emerging markets across the world. Growth has since averaged a healthy 7 per cent a year and some commentators say it is the world's most successful economy. [CW: Island of stability] Putin has also husbanded the resource wealth wisely: the stabilisation fund, designed to conserve the oil and gas windfall and to prevent it distorting the rest of the economy, reached almost $160bn by the end of 2007, while Russia has also built up the world's third-largest foreign exchange reserves.

Oil is undoubtedly crucial. It accounts for two-thirds of exports, a quarter of GDP and half of Russia's stock market. But the challenge facing Putin and Dmitry Medvedev, his handpicked, and some fear henpecked, successor as president, is to demonstrate that the country is more than simply a resources play and that they have effected a more lasting transformation of the economy. [CW: True. Anyone who's been following Russia closely would know that this transformation is well on its way. In fact, non-oil and gas related sectors led Russia's economic growth over the past couple of years]

Russia's growth strategy will be familiar to anyone who has studied the spectacular growth in China and India: enriching and empowering its 140 million consumers while investing to improve its decrepit infrastructure.

There is still plenty of scope for boosting consumer demand: Yaroslav Lissovolik, chief economist at Deutsche Bank in Russia, says: 'Moscow is Russia's showcase. Outside Moscow, there is a very different picture.' Tyumen Oblast, heartland of the Siberian oil barons, is the next-wealthiest area but is just half as rich as the capital, while the poorest areas could have as little as 4 per cent of Moscow's wealth per capita. But the cities outside Moscow are now growing far more rapidly and Medvedev aims to increase the proportion of the middle classes from the current 20 per cent to half. [CW: Last weekend, a New York Times article explained how Siberia is red-hot for retailers. All of the luxury brands that want to expand in Russia are specifically looking for space outside of Moscow, in places not you nor I have ever heard of. They recognize the tremendous spread of wealth throughout the country]

The housing market illustrates just one area of opportunity: while everyone owns their home, the stock is decrepit. Two-thirds of the housing stock is more than 30 years old - many of the five-storey apartment blocks erected during the Khrushchev era during the 1960s and designed to last just 20 years are only now being demolished - and almost 40 per cent of Russians have no running water or sewage systems in their homes.

Putin is promising between 70 and 80 million square feet of new housing by 2010, 10 million of that state housing, so that the number of Russians who can afford to buy a new house should rise to a third, from the current 5 per cent. That should fuel a dramatic increase in mortgages; the number has been doubling annually and, on Putin's targets, should grow to a million within two years. Consumer credit, too, has been surging as Russians are losing their suspicion that banks are where you risk losing your money and realise they could instead offer a way for them to buy cars or upgrade their houses.

'The wealth effect is trickling down,' says Robin Geffen, managing director of emerging market specialist Neptune Investment Management. He points to the recent rapid growth of Aeroflot, the state airline, which has increased its domestic air traffic - where it has a stranglehold - by 18 per cent. 'It has a young and dynamic management which has responsibility for revitalising what was a pretty antiquated company.'

He can see plenty of opportunities among companies like this, which are being built up by a new class of entrepreneur and are prospering from the growing consumer wealth.

Infrastructure spending is also being stepped up - and it is much needed. Roland Nash, managing director and head of research at Russian investment specialists Renaissance Capital, says that only one in 10 requests for access to the power grid is approved, while the number of airports has plunged from 1,300 in the Soviet era to 300. Road and rail services are poor, with virtually no connections from the north to the south - a key route for trade with China.

The biggest challenge is to manage this spending without fuelling the already rapidly rising inflation. With food accounting for around 40 per cent of the average Russian basket compared with between 10 and 20 per cent for developed countries, the impact of soaring food prices is much more severe and inflation, having been falling, is creeping up towards 15 per cent again.

'They do need to get inflation under control,' says Elena Shaftan, manager of Jupiter's New Europe fund. 'In Russia, it is being driven by the same forces as everywhere else - food - but the government has not helped with the massive spending before the election [in December].' She adds that the inflation-fighting Prime Minister remains in his job. [CW: Unlike the United States and much of Europe, Russia has had budget surpluses for many years running. And instead of borrowing from China and the OPEC nations, Russia has accumulated the world's third-largest foreign exchange and gold reserves, as this article just noted above. Therefore, it is completely unjustified to criticize the Kremlin for beefing-up spending, especially since it was much needed - for infrastructure, for social programs, for education, and for defense. I have no idea who Elena Shaftan is but she is totally off-base for criticizing the behavior of the Russian government in this regard]

She is also relatively sanguine about the other key concern for Russian investors: the role of the state. Few dispute the fact that, during the 1990s, the Russian oligarchs were given state assets too cheaply and much of the current focus is on ensuring that does not happen again.

Last week, BP's Moscow offices were raided again and both it and Shell have experienced problems with their oil joint ventures there. But, says Shaftan, the key factor is that the regime is both 'stable and predictable'. While not everyone may agree with the way Putin operates or the role of state-controlled resource companies, Shaftan says everyone should know the state of play. 'If you listen and abide by the rules, you are fine.'

Well, another Russian victory in Medvedev's inaugural month as president.

This time, Russia's Dima Bilan won the Eurovision song contest, which I guess is pretty popular in Europe.

I think the key fact here is that voting for Eurovision is done by viewers over the phone, meaning that popularity plays a part in it.

At first, I was surprised at all of the countries awarding Russia the highest amount of votes (these are Israel, Estonia, Latvia, Lithuania, Ukraine, Belarus, and Armenia) because some of these nations are supposedly on hostile terms with Moscow. But, the more you think about it, there are many ethnic Russians all throughout the FSU. And, second of all, the hostile policies of the Baltic nations, for example, do not represent the will of their people. Instead, they represent their leader's extremist views, which are also cited in the Western press (i.e. stuff that Edward Lucas writes) and a few Baltic nationalists on message boards. From what I understand, including conversations I've had with Latvian-Americans and Lithuanian-Americans, most Balts really do like Russia and would like to dissociate themselves from the extreme nationalists that do their best to sour relations with their neighbor to the east. I am confidant that the voice of the majority will be heard in the end.

Finland, Hungary, Romania, Moldova, and Serbia gave Russia the second-highest possible number of votes, while Cyprus, Malta, Azerbaijan, and Montenegro the third-highest number.

Russia's victory was a complete landslide. Ukraine finished a distant second and Greece third.

Germany, Poland, and the United Kingdom tied for last place.

Five of the top six finishers this year, as well as four of the last five winners are countries where Eastern Orthodoxy is the dominant religion, which is an oddity.

Speech at Reception marking the 63rd Anniversary of Victory in the Great Patriotic War, by Dmitry Medvedev (President of Russia, 5/9/08)

Dear veterans of the Great Patriotic War, colleagues, friends,

May 9 is a special holiday for our people. No other celebration, I think, has come at such a cost or represents such a triumph. But though achieved through suffering, this celebration is also the most joyous and uniting holiday, a day that brings the different generations together under the banner of our historic Victory.

The dramatic events of those years will remain forever in our memories, in the pages of our country’s history and in the chronicles of our families. For six decades now we have been honouring and remembering the feats of our forebears who found themselves face to face with the horrors of war.

They paid a tremendous price for our Motherland’s freedom and independence. But those terrible years gave birth on the frontlines and in the rear to genuine examples of patriotism, noble spirit, self-sacrifice, and tempered the national character that has helped us more than once in our history to fight the enemy with courage, to fight despite the bitterness of losses, to fight to win.

Our people fulfilled their historic mission with true glory. Not only did they liberate their own country but they saved the world from Nazism, brought freedom to the countries of Europe and decided the outcome of the entire Second World War.

Today, we know very well that the lessons of 1945 have no expiry date. They, like the colossal human losses of the war years, teach us that confrontation and violence lead to disaster. It is whole peoples, the elderly, women, children, who pay for the bloody mistakes of politicians. These mistakes place a heavy burden on the shoulders of new generations. For long decades afterwards entire countries and continents struggle to overcome the terrible consequences of such tragedies.

The Victory of May 9 represents the triumph of our people’s unyielding spirit. There is nothing by which we can measure the weight of the hardships our people had to bear then. The feat of the wartime generation is the absolute measure for us today, the standard for our ideals of freedom, justice and goodness. These ideals have always helped us resist aggression and violence, and today must unite the international community in order to prevent the emergence of new and terrible threats.

Dear veterans of the Great Patriotic War, you are the worthy guardians of the historical truth of that war, and you have borne your personal testimony of this truth throughout the years of your lives. The fate of each one of you means much to us indeed, and your battle-tempered spirit and great sense of responsibility for the Motherland has never allowed you to stand aside from its greatest cares and undertakings.

I wish you health and prosperity, dear veterans. I wish you long and dignified years of life and I propose a toast to this Great Victory, a toast to the liberating soldiers, a toast to a strong and prosperous Russia!

Speech at the Military Parade marking the 63rd Anniversary of Victory in the Great Patriotic War, by Dmitry Medvedev (President of Russia, 5/9/08)

Citizens of Russia, veterans of the Great Patriotic War!

Comrade soldiers and sailors, sergeants and senior warrant officers! Comrade Officers, Generals and Admirals!

I congratulate you on this Day of Great Victory, this celebration that has always been the most sacred and truly national of our holidays and has become an everlasting symbol of our national unity.

I give my greetings to all veterans of the Great Patriotic War. You refused to let our country be brought to its knees and gave your descendents lessons in true patriotism. It is thanks to you that May 9 will forever be the date of our people’s liberation, the date marking the start of a new period in world history.

Our fathers and grandfathers endured inhuman suffering but defended our Motherland’s sovereignty and independence and infused us all with great belief – belief in the triumph of truth and life, in our national strength, our independence and freedom – and ushered in an era of peaceful achievements and victories for many generations to come.

Today we are celebrating the sixty-third anniversary of that victorious May. But the difficult years of the Great Patriotic War will never be forgotten. As time passes, we only develop an even deeper understanding of their momentous importance for the world and its destiny, and we become even more aware of how dramatic a fate fell upon the shoulders of the wartime generation.

People of all different nationalities fought side by side during those terrible years. Today, millions of people are celebrating Victory Day not only in our country but throughout the CIS and in countries further abroad. This occasion is celebrated by all who honour the feat of the peoples who destroyed fascism. The more the events of that terrible war grow distant, the more valuable our eternal brotherhood and solidarity become, and the greater our shared responsibility for what is happening on our planet.

The history of world wars sends us the warning that armed conflicts do not simply start of their own accord. The flames of conflict are lit by those who put their own irresponsible ambitions above the interests of whole countries and continents, above the interests of millions of people. We must therefore remember the lessons of that war and do everything we can, every day, to ensure that such tragedies are never repeated.

We must take extremely seriously any attempts to incite racial or religious hatred, spread the ideology of terrorism and extremism, interfere with the affairs of other countries, and all the more so, attempt to revise borders.

We cannot let the rules of international law go ignored. These laws are the fruit of the entire international community’s labour and without them we cannot build a secure life and a just world order.

Dear citizens of Russia, dear friends!

We are marking this May 9 holiday with a military parade, a parade in which the inheritors of Victory will march as one. They, the sons and grandsons of the soldiers who fought in the Great Patriotic War, honour today the heroes of Victory, those who took part in tank and air battles, those who went into the attack and fought the fascists at sea, and who understand very well that the real purpose of weapons and military hardware is to provide reliable defence for the Motherland.

Our Armed Forces are growing stronger, like Russia itself. Their strength today continues the glorious history of Russia’s military, carrying on the victorious traditions and high morale of our army.

No matter how many years pass, we will never forget the defence of Moscow and Leningrad, Stalingrad and the Battle of Kursk, the battle to liberate Europe, and we will always remember too the contribution of those who worked tirelessly in the hospitals and the factories. We will treasure this memory. Our hearts, conscience and duty call on us to do so.

Dear veterans, it is from you that we learn to live and be victorious in the name of our Fatherland, to work so that our accomplishments might be worthy of your great achievements, to work to make our country strong, prosperous and happy.

Glory to the victorious soldiers! Glory to the great liberating army!

Happy holiday – happy Victory Day!

Russian senator says Russia, Israel should fight Holocaust denial (RIA Novosti, 5/14/08)

Sergei Mironov, the speaker of the upper house of Russia's parliament, proposed on Wednesday that Russia and Israel join forces to fight against Holocaust denial theories and attempts to glorify Nazism.

Federation Council Speaker Mironov is representing Russia at celebrations in Jerusalem to mark the 60th anniversary of the founding of the State of Israel. The Israeli capital is also hosting a three-day international forum to mark the event.

"I believe it would be useful for Russian and Israeli envoys to the UN to promote jointly at regional and international parliamentary and political forums efforts to fight manifestations of extremism and attempts to rewrite history and glorify Nazism," Mironov said.

He also proposed establishing in Jerusalem an international center for cooperation among representatives of different faiths.

The current forum in Jerusalem features over a dozen of heads of state and government, including U.S. President George Bush, Ukrainian President Viktor Yushchenko and Georgian leader Mikheil Saakashvili, as well as a number of Nobel Prize winners, ex-U.S. Secretary of State Henry Kissinger. Former British PM Tony Blair and Mikhail Gorbachev are also attending.

The 3,000 participants in the forum are discussing a range of foreign policy issues, the future of the global economy, medicine, and a host of other matters.

Rabbi Lazar holds Russia's relations between state and religious organizations as an example for other countries (Interfax, 5/20/08)

Russia's Chief Rabbi Berel Lazar believes that Russian experience of interaction between the state and religious associations may set an example for other countries.

"No country of the world enjoys such situation as Russia does. Russia doesn't have such acute problems as Europe. This country is unique because the state is interested in peaceful relations between different communities of the believers and is ready to participate in settling any conflict situation," the rabbi said in the World Economic Forum in Sharm al-Sheikh, Interfax-Religion reports.

According to Lazar, analogues of the Council for interaction with religious associations under Russian president "are very few", though "many questions of religious life" are settled there.

The rabbi believes that "dialogue between the state and religious leaders solves many questions and participants in the process realize that the state is interested in settling difficulties in an amicable way."

Lazar also noted that "Russian society realizes that we all are people of various nationalities and beliefs, but we live in one country and we have an idea of shared Motherland for all country's citizens and patriotism."

[CW: The Jewish Telegraphic Agency (JTA) also reported on this]

The Russia-China Lovefest, by Robert Amsterdam (Robert Amsterdam, 5/22/08)

The press is really running away with the symbolic importance of Dmitry Medvedev's first trip to Asia rather than Europe. "Medvedev trip east sends signal to west," goes the headline from the FT. The AP reports that the China visit "is a sign of how the two resurgent giants have buried Cold War rivalries and built a 'strategic partnership' intended to serve as a counterweight to U.S. dominance." A piece from RFE/RL has a similar analysis, quoting Masha Lipman, who says that this is Russia's way of saying "we're not in a rush to go West to begin Medvedev's presidency as a foreign-policy maker."

These conclusions are all fine and well, but also problematic. Aren't these the same journalists and experts who have told us over and over again that Medvedev has no power or influence, and that this is still Vladimir Putin's game? Therefore wouldn't it be more important to watch which country he visits first? Or perhaps we are beginning to see evidence that the new president does actually matter - a view I've been holding for a while. [CW: The new president matters, but the cover story right now is to depict him as a puppet and Putin as a puppeteer. Newspapers and anti-Russian analysts are supposed to run with the story]

Nevertheless, it's another red herring. What may look like a Russia-China lovefest is just a ploy to make the European concubine jealous. [CW: I doubt it] We have seen in the past that the highly public entreaties between Beijing and Moscow and all that SCO business are largely for show, [CW: I've followed Russia intensely for the past five years and I've come to an entirely different conclusion. I think that anyone who chooses to underestimate the level of Russian-Chinese cooperation will be proven astonishingly wrong, historically] with little substance (look at the lack of progress on the ESPO), [CW: More than 1,000 kilometers of ESPO have already been laid. Putin vowed that it'll be filled. By this time next year, Russia will have a major alternative market for its oil], land relations between the two countries continue to be characterized by deep distrust. It takes more than just some mutual fears of color revolutions to build a genuine alternative alliance to substitute for relations with the countries of Western Europe, who have shown themselves more willing to pay higher prices for gas, and much easier to divide and play off against each other. [CW: Well, it's a free market and Russia's more than entitled to diversify its customers and enhance its position. I mean, what if Western Europe becomes self-sufficient one day? Or what if its economy crashes? Who would Russia sell oil to then? Even if there's still sufficient demand from Europe, wouldn't having China as an alternative market be prudent? Surely, it will decrease the possibility that Europe, as Russia's primary customer, tries to blackmail Moscow over oil and gas sales. Folks, this is a guy who's advocating, passionately, for Europe to end its reliance on Russian oil and gas; so of course he'd be against Russia preempting Europe by diversifying its customers first. He can't stand it and can't believe it, but it's happening]

Germany is largely perceived to be the primary target of this gesture - with Medvedev making a visit in one month - Russia's "clear" second priority (by the way, shouldn't Frank-Walter Steinmeier be taking some flak for this?). If I were in the Merkel government, I would worry less about Gazprom suddenly diverting all the supply to China, and would rather focus on Russia's efforts in Kazakhstan to keep supply away from the Nabucco. [CW: I don't get it. Were Medvedev to visit Germany first and China second, would this be seen as a snub to China? lol. For sure, the author's grasping at geostrategic straws while drunkst]

Fuelling Brown's desperation, by Dilip Hiro (The Guardian, 5/20/08)

The prime minister's attack on Opec was unwarranted and short sighted: it's a sign of how poorly he grasps the forthcoming oil crisis

When in trouble at home, lash out at foreigners. It is a formula that politicians in power find effective in reversing their declining approval ratings.

So, with the Labour party's support sinking to a record low of 27% in the latest Guardian/ICM poll, Gordon Brown found a useful target in the Organisation of Petroleum Exporting Countries (Opec). He blamed it for the record high prices of petrol and diesel.

Describing it as "a scandal that 40% of oil is controlled by Opec," he called for the European Union and G8, the group of highly industrialised countries, to break down its control.

Such declarations show woeful ignorance of basic facts. The ultimate source of Opec's power lies not with its production of two-fifths of the global total but with its possession of three-quarters of the world oil reserves.

So it is hard to see how the European Union or G8 can take away what mother nature has bestowed upon Opec's 13 members.

It is true that in nominal terms the price of petroleum has risen eightfold in eight years. But allowing for inflation, it was only four months ago that the price of oil exceeded its previous record of nearly $102 in April 1980, soon after the interruption of oil supplies from Iran following its Islamic revolution.

Brown countered the argument that the recent rise of oil prices was related mainly to speculation by saying that the speculators took their cue from Opec's refusal to raise output.

But speculators do not rely on signals from one source. The recent collapse in the financial sector of the United States with its consequent negative impact on the equity market on Wall Street has led those with cash on hand to channel their finds into such commodities as oil and gold.

Another important factor that has caused a hike in petroleum prices is the weakness of the American dollar - the currency in which oil is traded.

Brown wishes to see a balance between demand and supply. But he forgets that the only Opec country with a spare capacity is Saudi Arabia. [CW: Arguable, imo] All other Opec members are already extracting as much petroleum as they can.

During President George Bush's visit to Riyadh last week, Saudi oil minister Ali al Naimi announced that the kingdom raised its production from 9.2 million barrels per day (bpd) to 9.5 million starting on May 10.

But the overarching point that Brown and other western leaders ought to register is that global demand will keep on rising at an unprecedented pace. Why? Because the economies of China and India will continue to grow by 8% to 11% a year, and oil is a very important part of the energy they need to fuel their economic expansion. Remember too that these two mega-nations account for 40% of the human race. [CW: But how many of them can trace their lineage to Charlemagne?]

Their potential for increased use of petroleum can be judged by a mere glance at the following figures. The annual oil consumption in barrels per capita is: America, 65; Britain, 30; Russia, 16; China, 4; and India, 2.

At present there are eight cars for 1,000 Indians whereas there are 778 vehicles for every 1,000 Americans. Imagine, then the rise in demand for oil when the figure for India rises tenfold - to a mere 80 cars for every 1,000 Indians. [CW: Sigh. Bush recently blamed the increase on food prices on India and China "eating too much"]

With the Tatas ready to roll out a small car for $2,500/£1,300 this autumn, the above scenario is not too far in the future.

So instead of demonising Opec, western leaders like Brown should exhort their citizens to reduce oil consumption, which, for example, the Japanese have done over the past decade or so.

Brown calls for end to the power of Opec, by Patrick Wintour (The Guardian, 5/20/08)

Gordon Brown yesterday signalled a new determination to defend Britain's hard-pressed consumers and motorists when he denounced the oil cartel Opec as a scandal and called for the EU and the G8 to break down its control, saying it was holding back the development of the world economy.

It is the first time the prime minister has spoken in such stark terms about the causes of the tenfold rise in oil prices, and it follows a conscious decision to speak up on behalf of voters' sense of fairness.

Number 10 rejected the view that the huge oil price rise was due to speculation, saying that on the contrary the speculation was a function of signals by Opec, and the lack of balance between supply and demand.

Such is the concern at No 10 that some officials are proposing that Brown travel to Saudi Arabia for direct talks, probably when he goes to Israel for its 60th anniversary. No 10 stressed no decision had been taken.

At Google's third Zeitgeist conference yesterday, Brown said: "It is, as people will recognise, a scandal that 40% of the oil is controlled by Opec, that their decisions can restrict the supply of oil to the rest of the world, and that at a time when oil is desperately needed, and supply needs to expand, that Opec can withhold supply from the market."

The Organisation of Petroleum Exporting Countries has kept targets unchanged at its last three meetings, on December 5 2007, February 1 and March 5. It is not due to meet again until September.

George Bush met the Saudi royal family on Saturday; they said they would up production by 3.3% to 9.45m barrels a day in June, a rise that led to little change in the price yesterday and was dismissed by the US president as not enough. Opec states insist the rise in price is due to speculation and the dollar's weakness, not under-supply.

Brown argued: "Until we have a proper dialogue between consumers and producers that bring supply and demand into a better position in oil, we will continue to have problems. Yes, there may be elements of speculation, and yes there may be elements where people have unfairly restricted supply as an individual member of Opec; but we have also got to deal with the supply and demand question. That will demand in the long term other sources of fuel, that will demand in the medium term greater energy efficiency and the use of existing fuel ...

"It also demands, I think, first of all that it should be at the centre of the agenda at the next European council meeting, it should be at the centre of the agenda of the G8. A realistic dialogue between consumers and producers has got to happen, and that would be the start of breaking down the control that has existed by a cartel."

Brown's tough remarks in a Q&A session did not spell out how he would like Opec reformed, but the most practical way of breaking up its control is for developed countries to increase energy efficiency and shift to nuclear or to renewables.

Saudi oil minister Ali al-Naimi told reporters in Riyadh at the weekend that supply and demand were in balance and his country was investing to increase production. "So how much more does Saudi Arabia need to do to satisfy the people who are questioning our oil practices or our oil policy?" he asked.

Forget about the Coen Brothers.

The Telegraph's Adrian Blomfield is the true genius of our time.

I'm saying this because I've heard that many geniuses throughout history have gone insane.

Blomfield's going through his insanity stage now and it's a doozy.


I mean, I read his article "Vladimir Putin 'fills palace with Russia's public art'" and, well, the article speaks for itself. It's a total work of genius (insanity).

In his masterpiece, Blomfield mentions most of the popular conspiracy theories against Vladimir Putin and Russia, missing only the apartment block bombings and the Alexander Litvinenko poisoning.

So without further adieu, here it is. A true work of art and expression of genius (insanity); a deserving recipient of all genius (insanity) awards of 2008, no doubt.

(for effect, all conspiracy theories and groundless accusations made-up by Blomfield and his alter ego are in red. Things which are true, more or less, are in black)


"Vladimir Putin 'fills palace with Russia's public art,'" by Adrian Blomfield (The Telegraph, 5/19/08)

It should have been a significant moment in Russia’s cultural history. Yet when one of the most important private collections of Russian art was formally presented to the state this week, it was unclear who would benefit most - the Russian people or the new Russian prime minister, Vladimir Putin.

Last September, the oligarch Alisher Usmanov, owner of a 24 percent stake in Arsenal football club, bought 400 pieces of art owned by the late cellist Mstislav Rostropovich in a deal brokered by Sotheby’s in London.

Few doubted that the mining magnate was not acting at the behest of the Kremlin. The main question was where the art, which included paintings by Ilya Repin and Boris Grigoryev, would be displayed.

The most obvious candidates seemed to be the Tretyakov gallery in Moscow or the Hermitage in St Petersburg.

Instead the collection, for which Mr Usmanov reportedly paid at least £25 million, was hung in the Konstantin Palace, better known to locals as “Putin’s Palace on the Sea”.

The Konstantin, set in landscaped gardens overlooking the Gulf of Finland near Mr Putin’s home city of St Petersburg, is one of the prime minister’s proudest achievements.

Its foundation stone laid in 1715 by Peter the Great, who planned to turn it into a Russian Versailles, the palace was destroyed in Soviet times [CW: By the Nazis] but rebuilt on Mr Putin’s orders in 2000 at a cost of over £60 million.

Since then, Mr Putin has loved to show off the building to visiting guests from Rupert Murdoch to George W Bush and Tony Blair.

Theoretically, the palace belongs to the state but some critics believe that Mr Putin has in effect turned it into his private St Petersburg residence.

As a result some artists are unhappy that the Rostropovich collection will be so inaccessible to the public -- just 15 visitors are allowed into the palace grounds on a carefully chaperoned trip at any one time.

"The Kremlin claims it has preserved these treasures for Russia and yet they are basically being used to decorate Putin’s walls," one artist, who declined to be identified said.

Given that Mr Putin stepped down as president last week, he has little discernable right to use the palace any more and certainly less than his handpicked successor Dmitry Medvedev, widely seen as the new prime minister’s puppet.

Yet Mr Putin clearly has a fondness for the Konstantin and would be loath to let it go. He has held birthday parties there in the past and a Russian tabloid recently claimed that he was planning to marry a young gymnast at the palace next month. Mr Putin has denied the allegations.

Kremlin officials indicated that Mr Medvedev would not stand in the prime minister’s way if he wanted to turn the palace into an unofficial residence.

"I am sure that if Vladimir Vladimirovich requests Dmitry Anatolyevich to allow him to use the Konstantin Palace for a meeting or even to stay there, Dmitry Anatolevich will certainly agree," said Kremlin spokeswoman Valeriya Fedorina.

If the Konstantin does become an unofficial grace and favour home for, it could become the jewel in an allegedly rapidly expanding real estate empire.

According to reports, Mr Putin in the last year has bough a chateau on the Saint Tropez peninsula, an armoured chalet in Switzerland and a villa in the most exclusive enclave of Sardinia, close to the holiday home of his friend Silvio Berlusconi.

The oligarch Roman Abramovich has also given Mr Putin a £30 million 180-ft yacht, according to press reports.

Last year, Mr Putin dismissed allegations that he was worth £20 billion as "detritus excavated from someone’s nostril." According to his official declaration of wealth, Mr Putin owns a small flat, a modestly sized plot outside Moscow and two old cars. He also has savings of pounds 70,000.

A Monday afternoon observation from work on a slow work day.

Let's say that there were still a KGB and they had the influence to choose who the next American President would be, John McCain or Barack Obama.

A lot of people would automatically say that the KGB would choose Obama because McCain has said a lot of bad things about Russia. It's all been widely reported in the press and I don't need to go into details since I'm at work and I don't have my database of Russian articles handy, like I do at home.

That said, I'm not completely convinced that Obama would be the KGB's choice in the end of the day.

Here are a few reasons why:

- I think a McCain presidency would bring stability and continuity to Russian-American relations. Not just continuity from the last eight years, but continuity from Nixon and Reagan. All in all, I believe that Russia, and the Soviet Union before her, appreciated the stability that Republican administrations brought with them. Unfortunately, I think that Democratic presidents have been idealists, which could be a good thing, except if you’re completely misinformed about reality

- Despite what he has said, I'm pretty sure that McCain would be no different than Republicans before him. Actually, after reading McCain's warm congratulatoly statement on the inauguration of Medvedev, I'm completely convinced that this will be the case

- While its Russia policy would be stable and practical, a McCain presidency would continue Bush/Cheney's "cowboy diplomacy" vs. the rest of the world. Trade embargoes, diplomatic wars, and military campaigns against mostly Middle Eastern nations could all happen. Therefore, America's prestige in the world will continue to plummet. Our economy and moral authority will both stutter. NATO could split as our perceived never-ending imperialism estranges Old Europe to the breaking point

- This will create a wider opening for emerging regions (read: Russia, Brazil, India, and China) to lower the gap with the United States and perhaps replace it as the perennial economic, social, cultural, and military powerhouse

- On the other hand, an Obama presidency might rejuvenate America's standing in the world. The KGB, for example, might fret that Obama will forge better relations with the same developing regions that Russia's also trying to covet. Competition's good, sure, but if it has the power to rig the election, the KGB might opt for a McCain presidency, which, in effect, would give Russia a carte blanche to form strategic bilateral alliances with most of Asia, Africa, and Latin America at the expense of the United States

- Henry Kissinger. He's on McCain's team and has recently hinted that he will have a voice in foreign policy. He's totally a guy that Russia loves dealing with

I totally respect Barack Obama. His honesty and straightforwardness against McCain’s and Clinton’s populist gas tax scheme still gives me chills.

So, I’ll vote for him and pray that he wins (actually, I'm not going to vote for him since I live in New York and he's already assured of winning here - we have a presidential election system that's not completely democratic and some votes have more value than others, but it's our system like Russia's is theirs).

However, it's not up to me and if the KGB gets to choose, I doubt they’ll pick Barack.

A Monday morning observation from work.

When oil started breaching the $40 and $50 barriers a few years ago, a lot of the pundits declared that a "terror premium" was responsible for much of the increase.

We were told not to fret about supply, for goodness sake, because it was not about availability, or the lack thereof. Rather, it was because a "terror premium" was being priced in and "futures traders" were taking advantage of it.

This morning, on the 8:00 AM segment of CNBC, here on the East Coast, pundits were talking about the price of oil, but I didn't here any of them mention "terror premium" or "futures traders."

Some mentioned the need from increased supplies from Saudi Arabia; some about drilling for oil off our continental shelf and in ANWR. They acknowledged that it is, and has always been, a supply problem.

Given their historical fallacies, I don't know how to judge their credibility, even now. I mean, they were wrong then and they could be wrong again. That could just be the consistency in all this - how wrong the pundits have been.

Suffice to say, the energy question is huge and the public deserves to know the truth about what’s going on.

And, on a related subject, it’s like a breadth of fresh air to hear Barack Obama reject a ludicrous and completely populist scheme proposed by both John McCain and Hillary Clinton, which is the "gas tax holiday idea." Obama has proved, once again, that he is totally unlike the lying scum-of-the-earth who are ruling, and ruining, this country.

Breaking news from Quebec. Russia has just defeated Canada, in overtime, in the final of the World Ice Hockey Championship. I guess this is a big event, especially since it is against Canada, the homeland of ice hockey.

Analysts could compare this victory over Canada with Russia's shocking win over England in soccer last year. That win helped eliminate a humiliated English squad from the European Championship, with Russia taking their place. Like Canada in hockey, England is considered the birthplace of soccer and the country that sport is most associated with.

Athletic successes have become more and more commonplace in Russia of late. Just scanning news reports from the past couple of weeks yielded the following stories:

- 5/4/08: In Madrid, CSKA Moscow defeated Maccabi Tel Aviv to capture the Euroleague title

- 5/8/08: Russia completely dominates the World Open Water Swimming Championship in Seville

- 5/10/08: Russia retained the team title at the men's European Gymnastics Championships in Lausanne

- 5/14/08: St. Petersburg's Zenit soccer team won the UEFA soccer championship in Manchester ("... and not only that, but watched British fans run riot in the aftermath," according to one commentator)


What to make of all of these sporting successes?

Well, after Zenit's victory, an official of the Russian Orthodox Church put it all in perspective:

I'd like to share the joy of Russian sport fans and stress that it's not only a matter of scoring goals, rather, it is a matter of Russia's recovering its vital strength, optimism, energy and a hope for the better future and a decent independent place in the world, and this tendency as well manifests itself through the success in sport.

Moreover, this will rile-up those against Russian patriotism and nationalism, which I believe is a good thing for the world, essential for peace and stability. Pathetic Russophobe Andreas Umland, for example, probably can't stand Russia's victories. Kim Zigfeld's probably binging on junk food.

Russia on the rise? (Brattleboro Reformer, 5/14/08)

For the first time since the collapse of the Soviet Union, tanks and missiles rolled through Moscow's Red Square on Friday for Russia's annual Victory Day parade.

For Russians, Victory Day commemorates the defeat of Nazi Germany and the enormous sacrifices that the people of the Soviet Union made to achieve that victory.

More than 25 million Russians [CW: To be fair, Soviets] died during the war, so the Victory Day parades carried a special weight. During the Soviet era, it meant showing off the military might that beat the Nazis as a reminder to the rest of the world that the Russians weren't pushovers. [CW: All the serious people in the world know this already, but okay]

But didn't the Russians, who once controlled about half of Europe and much of central Asia, lose the Cold War? Didn't the Berlin Wall and the Iron Curtain come down and leave the United States as the world's lone superpower? [CW: Like Stephen F. Cohen recently wrote, Soviet and American leaders ended the Cold War "with no winners and no losers"]

It did. But while our leaders congratulated themselves on victory in the miraculous year of 1989, the seeds were being sown for the United States to follow the Soviets into ex-superpower status.

Why? Because as the United States reveled in being No. 1, it also became too accustomed to cheap and abundant oil. It never prepared for the day when oil would no longer be cheap and abundant. [CW: These are two separate issues, in my opinion. The price of oil has risen because it is priced in dollars, a totally washed-up currency who's long-term value is about zero. As far as our dependence on imported energy goes, that's a complete strategic failure tantamount to high treason - in a way]

Now, our nation imports 65 percent of its oil and most of it comes from countries that don't particularly like us. [CW: That's a misstatement because Canada heads that list] And Russia, which was driven [CW: Like Eddie Murphy in Trading Places]

Once the weak link in the Group of Eight, the world's eight largest industrial economies, Russia now has the G-8's fastest growing economy. [CW: By a long shot. It's totally kicking butt] It is the world's largest producer of natural gas and second only to Saudi Arabia in oil production. It is the only member of the G-8 that isn't dependent on other nations for its energy. [CW: Canada too, and the United Kingdom and France in some ways; but Russia's in a category all its own when it comes to long-term energy security and independence. FYI take a look at Russia's strong performance in a "sustainability of fiscal and ecological development" study done last year by economists at Allianz Insurance and Dresdner Bank]

When George W. Bush became president in 2001 and oil prices were below $30 a barrel, his administration could get away with pushing a weakened Russia around and ripping up arms control agreements. The United States and Russia were no longer on equal footing in their relationship. [CW: This arrogance didn't begin in 2001, it began immediately once the Cold War ended. I mean, let's not spin this politically to try to lay blame on the Republican Party for declaring victory and absurdly thinking it's winner-take-all]

The Bush administration thought that with Russia broke and impotent, it could get access to its gas and oil reserves. [CW: Same with the Clinton administration, to the tee] Russian leader Vladimir Putin had other plans. Instead of allowing American oil companies free rein to exploit his country's resources, Putin put most of Russia's most valuable reserves in the hands of Gazprom, the state-controlled energy company. [CW: Fifty-one percent owned by Russia, but also traded on the Moscow and London exchanges, with a large chunk owned by Germany's E.ON, for example. For consistency, Gazprom's mostly in natural gas. Rosneft, 80% owned by Russia, is the big state oil company]

Now that oil is around $125 a barrel, the United States and Western Europe are at Russia's mercy. And the Russians know this. [CW: Well, Russia's ready to cooperate. If you choose to become a partner, treat it with well-deserved respect, and pledge mutually-beneficial cooperation (not colonization), you'll be pleasantly surprised at opportunities that open up. However, some western officials still feel entitled to Russia's oil and think Siberia is too vast and wealthy a region to belong to Russia alone. That kind of thinking will get you nowhere. Tough]

In an interview last week with The Daily Telegraph, England's leading conservative newspaper, former Soviet leader Mikhail Gorbachev accused the United States of mounting a military build-up to contain a resurgent Russia. [CW: Check that out here]

"Russia does not have enemies and Putin is not going to start a war against the United States or any other country for that matter," Gorbachev said. "Yet we see the United States approving a military budget and the defense secretary pledging to strengthen conventional forces because of the possibility of a war with China or Russia. I sometimes have a feeling the United States is going to wage war against the whole world."

While Russia has quadrupled its defense spending in the past few years, Gorbachev -- who still consults with Putin and the new Russian president Dmitry Medvedev -- need not worry. The United States is currently busy in Iraq and Afghanistan and is still mulling an attack on Iran. It doesn't have the time or resources to pick a fight with Russia, too.

The United States can rattle Russia's cage by trying to expand NATO into the former Soviet republics and by making plans to build an anti-missile shield. But in the end, the power lies not with the country with the weapons to destroy -- the United States -- but with the countries that have the brains and the money to build for the future. These are also the countries that have the resources our nation needs to survive.

Unimaginable sums of money are now going to other nations to sustain our oil habit and our weapons addiction. With every day that this continues, our claims to superpower status become more and more hollow.

Reflections of a U.S. Ambassador, by William J. Burns (The Moscow Times, 5/13/08)

Last month in Sochi, during U.S. President George W. Bush's visit to meet then-President Vladimir Putin and Dmitry Medvedev, I was reminded of how much the complicated U.S.-Russian relationship still matters to both of our countries and to the rest of the world. The U.S.-Russia Strategic Framework Declaration, which our two presidents issued, is not exactly light reading. It does not attempt to paper over some very real differences between us, but it does highlight very clearly how much we both have to gain by working together to prevent the spread of nuclear weapons. The document addresses the issues of how to protect and reduce our own remaining arsenals, develop civil nuclear cooperation, fight terrorism and help settle regional conflicts. And it also reminds us that our economic ties are growing fast, in ways that could shape our relationship far more significantly in the years ahead than at any moment in its first two centuries.

Russia has achieved a level of success that was unimaginable when I last served in Moscow in the mid-1990s. You can all paint the picture as well as I can. In bright colors, we see a trillion-dollar economy, now the ninth-largest in the world and perhaps the fifth-largest by 2020, [CW: Seventh largest in PPP terms and on the verge of overtaking Britain for sixth place; Russia can easily make the top four in less than 5 years] with huge hard-currency reserves, a rising middle class, fewer people struggling beneath the poverty line and growing appetites around the world for all of the country's vast raw materials. With 14 million Russians traveling outside the country last year, 40 million Internet users and 3 million bloggers, a whole generation has grown accustomed to its connections to the rest of the world and is aware of all its possibilities. [CW: Well said]

But any honest portrait has darker shades too. Russia's economic achievements are too dependent on hydrocarbons, and tomorrow may not be so kind in terms of high oil prices. [CW: People have been saying this since 2002 when the price of oil was barely $30. Fact is, Russia's economic growth for the last few years has been led by sectors outside oil and gas. The average price of oil during Putin's presidency was less than $45 a barrel] Corruption and bureaucratism are serious impediments to sensible economic choices and deeply depressing for the hopes of small and medium-size entrepreneurs. Rule of law is a nice slogan, but it is unevenly applied, to put it politely. Institutions are fragile and infrastructure is crumbling. [CW: These are problems that all countries in the world are facing, while Russia is one of the few that's taking measures to combat them. Therefore, I can't understand this lecturing when the bridge that I take to work every morning, one of the most famous bridges in the world, is past its expected lifespan and was labeled as dangerous following the Minnesota bridge collapse last year] Education and health care systems, [CW: While Russia's health care system needs to be repaired, America's needs to be completely overhauled. Ask the tens of millions of uninsured. Ask the two million Americans who go bankrupt every year because of medical bills. Ask the doctors who can't afford to retain their practices due to increased malpractice premiums] so critical to realizing the promise of the country's talented people, desperately need to be rebuilt. [CW: By many measures, the Russian population remains one of the world's best educated. For example, Russian colleges took five of the top twelve places at the prestigious International Collegiate Programming Contest sponsored by IBM, where Princeton and Oxford did not even place] Overcentralized decision-making may be the way to regain control over the commanding heights of the economy, but it is a weak model for the challenges just ahead, for innovation and diversification beyond oil and gas. And overcentralized power may be popular today for repairing some of the inequities and vulnerabilities of the past, but it is a weak long-term model for protecting the hard-won property rights and personal freedoms achieved by Russians over the last couple of decades.

Russia has surely come a very long way economically in a very short time, through a period of hardship and uncertainty and lost pride that is hard for foreigners to understand. I do not doubt the capacity of this society to succeed in its next phase or to take advantage of the moment of economic opportunity before it. [CW: Good]

Medvedev's progressive statements at the Krasnoyarsk Economic Forum in February and elsewhere offer an encouraging sense of purpose. Russia certainly has the resources today to invest aggressively in its physical, human and institutional infrastructure. [CW: It does and it is] Innovation and growth in the technology sector are always possible with well-educated and skilled people as there are in Russia. [CW: Innovation and growth in the technology sector are not just possible, they are a reality. Ask Intel] The passage of the strategic-sectors law -- and, most important, its consistent implementation -- can help make the rules of the road for foreign and domestic investors more transparent and more predictable. [CW: I agree] While questions are emerging about drops in the country's oil production and future shortfalls in natural gas output, there is still plenty of time for Russia to invest sensibly in infrastructure and attract foreign partners. [CW: Partners is the correct term. Regarding the fall in oil productions, it's something that should be welcomed, at least I welcomed it]

Corruption can be combated, piracy of intellectual property can be reduced and bureaucratic red tape can be cut. Rule of law can become more than just a slogan, especially given the interest of a new generation of property owners in protecting what they have obtained. But all these tasks will require a real sense of urgency over the next few years and a constant battle against complacency. As one of my favorite American philosophers, Will Rogers, once said, "Even if you're on the right track, you'll get run over if you just sit there."

The United States is not a disinterested observer of Russia's economic course. U.S. investment in Russia has increased by about 50 percent each year during my tenure as ambassador, and Russian investment in the United States is increasing just as quickly. For all the concern expressed about U.S. foreign investment regulations, the truth is that no Russian investment in the United States has ever been rejected. [CW: Worth commending] Severstal is now the third-largest steelmaker in the United States. International Paper and Pepsi-Cola have recently made billion-dollar acquisitions in Russia. Two-way trade has grown by an average of nearly 40 percent per year in the last few years. More than 100,000 Russian jobs can be traced directly to U.S. businesses or investments.

In addition to jobs, U.S. businesses have made real contributions to the modernization of business practices and corporate governance in Russia, which is what the country needs to compete in global markets. Boeing's overall business with Russia will total tens of billions of dollars in the coming years, and the Russian Regional Jet project is an excellent example of technological partnership. Despite all of that, bilateral trade and investment numbers are still far below their potential, and much more is possible in the years ahead. [CW: Let's hope]

That will be particularly true as Russia completes its integration into global economic institutions. Membership in the World Trade Organization should be achieved this year, and Bush reaffirmed at the Sochi summit on April 6 his commitment to doing everything possible to help meet that goal before he leaves office. [CW: Russia's in a good negotiating position and will not succumb to blackmail and ultimatums as it continues its WTO talks with various countries. In a way, the WTO could soon need Russian more than Russia needs it, especially if the new Russian leadership initiates programs to re-shape the world's financial system] We have also begun negotiations of a bilateral investment treaty. Moreover, the U.S.-Russia Economic Dialogue, which was agreed upon by Bush and Putin in Sochi, marked its inaugural session in Washington on April 28, and U.S. Secretary of Commerce Carlos Gutierrez is planning a visit to the St. Petersburg International Economic Forum in June to explore ways of restarting business-to-business dialogue. And as a new U.S. administration organizes itself after the November presidential election, it will see an economic relationship with Russia with increasing significance for both our overall ties and Russia's future direction.

I lived in Russia for a total of five years. It was hard to leave. For all the frustrations, for all the ups and downs in relations, for all the missed opportunities and misunderstandings, for all the disagreements that still afflict us, for all the uncertainties about the future, I will always view Russia and Russians with real fascination, affection and respect. [CW: Nice] As ambassador, I was able to take more than 40 trips around the country, from Kaliningrad in the west to Chukotka, 11 time zones to the east, and only 50 kilometers across the Bering Strait from Alaska. I saw what's possible in this vast society, and the formidable problems that remain. I left with a fair amount of humility about the ability of any outsider to fully understand, let alone influence, the course of events in Russia. But I left also with an abiding sense of the importance of building and maintaining strong relations between our two countries.

William J. Burns served as the U.S. ambassador to Russia from 2005 to 2008.

After a meeting yesterday with a visiting American delegation, Abkhazia's foreign minister, Sergey Shamba, said something interesting; he said that Russia's "tough position and actions" had already brought results as Georgia had toned down its rhetoric. "We see that Georgia’s rhetoric became more peaceful," Shamba was quoted as saying by Apsnipress.

I think that Shamba is correct.

Here's a short timeline of some significant events in the Russian-Georgian conflict. There's plenty of stuff left out, sure, but just to get an idea.


1/31/06: Acknowledging the hysterical antagonism of the Georgian side, Vladimir Putin says at a press conference that while Russian specialists worked "day and night" in freezing temperatures to repair a ruptured gas pipeline, Georgian government officials "only spit at us"

4/23/06: Commenting on Russia's decision to ban Georgian wine imports, Georgia's defense minister states that "even if you export – excuse me for this expression – feces to Russia it can be sold there"

10/16/06: Georgia's defense minister says that "Russia would lose if the quarrel between the two countries escalates into a shooting war"

Throughout 2006-07: Every so often, Georgia makes-up random allegations of fictitious Russian offensives, including helicopter gunship and rocket attacks and air space violations. There were so many accusations and the evidence was so laughable that even notorious Russophobe Edward Lucas was forced to admit last month that "Georgia has something of a reputation for crying wolf about Russian intentions"

9/20/07: Georgian government troops murdered in cold blood, and in a very horrifying manner, two innocent people in Abkhazia. After Georgia disputes the Abkhaz version of events, the United Nations investigates and agrees with Abkhazia. A humiliating blow to Georgia

11/14/07: Russia completes its withdrawal of troops from Georgia earlier than agreed to, despite facing administrative obstacles from the Georgian side, such as the random seizure of military hardware and arrest of military officers responsible for the move. For years, Georgia called for the withdrawal of Russian troops, so it's totally mind boggling why they tried to sabotage it

11/26/07: Sergey Lavrov finally calls Georgia out:

The Georgian authorities pursue "anti-Russian policy" in order to distract attention from internal problems, Sergey Lavrov, Russia’s foreign minister said. "What the Georgian leadership is doing cannot be described as friendly. I would not even call their actions neutral or restrained. This is a clear anti-Russian line. Georgia's leadership needs this line to justify its failures in both domestic and foreign policy," Lavrov said in an interview with the Russian weekly magazine Itogi (Results), published on November 26. Any time Russia shows its readiness for improving ties with Georgia, Lavrov said, authorities in Tbilisi were staging new provocations

2008: Georgia takes relatively restrained position following Russia's decisions to forge closer relations with the unrecognized Abkhaz government


The rhetoric's still there, sure. But if you've been following this region closely you'd know that Georgia's behavior, of late, has totally tamed itself out.

So, I agree with Shamba: A weak Russian policy vis-a-vis Georgia produced a never-ending stream of instigations and verbal abuse, while a strong-armed Russian policy has yielded some results.

Russia's not going to make strong-arming its primary foreign policy option because, with some states (a vast majority actually), it's not needed for cooperation.

But others choose to behave like children and, with them, strong-arming is a viable policy choice that has a proven track record.

If anyone thinks this is unfair, tough. You reap what you sow.

Unrelentless European Union pressure forced Lithuania to drop its veto on talks with Russia on a new strategic partnership !

This is a tremendous failure for the Russophobes in the European Union, hawkish countries like Lithuania, Estonia, and Poland, which tried to use their position within the Union to blackmail and threaten Russia, often in regards to bilateral issues that Brussels has no official responsibility.

This nettled and vexed a majority of the member states, notably France, Germany, Italy, who want to have pragmatic relations with Russia. In no uncertain terms, many expressed their feeling that Lithuania and Poland were trying to hijack the Union.


If any of you have forgotten, this is the second high-profile failure by a minority group of states, within the European Union, to try to blackmail Russia.

In 2006, Poland tried to. Holding its ground, Russia never yielded an inch for more than a year, which saw political changes in Poland where the anti-Russian Polish PM was stunningly voted out-of-office, partly due to his extreme foreign policy that alienated many ordinary Poles on the street.

The new PM in Warsaw expressed some consoling sentiments and the two sides, Russia and Poland, eventually reached an agreement where Russia got exactly what it wanted (intense inspections of Polish slaughterhouses by Russian veterinary specialists in exchange for a resumption of Polish meat imports).

Report: Slovenia Ties Georgia Visit to Lithuania's EU-Russia Veto (Deutsche Welle, 5/10/08)

EU president Slovenia warned Saturday, May 10, it could skip a five-nation foreign ministers' mission to Georgia that aims to cool tensions with Russia, unless Lithuania drops its veto on separate EU-Russia talks.

Citing a Lithuanian foreign ministry source, the Baltic News Service (BNS) said Slovenia, which holds the rotating presidency of the 27-nation EU, had used a new bargaining tactic to try to get Vilnius, a staunch ally of Georgia, to approve the launch of negotiations on a new EU-Russia partnership pact. [CW: This is totally unexpected. It signals that the biased anti-Russian Baltic and Eastern European countries will soon have a hard choice to make it. Suffice to say, they overplayed their hand and disenfranchised the rest of Europe mightily]

"How such a trade can be offered?" asked the ministry source, who BNS said had spoken on condition of anonymity.

"It is difficult to understand whether Slovenia, which presides over the EU, is expressing the attitude of the EU towards Georgia, or whether it is just an inapt proposal by Slovenia in an attempt to force Lithuania to withdraw its justified demands in the discussions on the mandate for the EU talks with Russia on the strategic partnership," the source said. [CW: I'm not that familiar with Slovenia to know which countries it consults with. But, from what I understand, Germany and Portugal are officially advising it as this is Slovenia's first go around with the Presidency. France, which takes over on July 1st, might also be influential, as might Slovenia's neighbor Italy. All four of these countries are big supporters of Russia and favor practical business-like relations with Moscow, rather than instigating, vilifying, and isolating it, like some Russophobic Baltic and Eastern European nations would prefer]

EU Presidency refuses to comment on report

Lithuanian foreign ministry spokeswoman Violeta Gaizauskaite would not comment on Slovenia's alleged ultimatum, but said Vilnius would not change tack.

"The plans for the mission to Georgia have not changed. Lithuania's Foreign Minister Petras Vaitiekunas is due to go to Georgia on Monday and he hopes the four other ministers will join him," Gaizauskaite told reporters. [CW: Without Slovenia it will be completely pointless. If Slovenia does show-up, Georgia can expect to hear a few embarrassing lectures]

"The Lithuanian position has not changed (on the EU-Russia talks). We will discuss all these issues Sunday in Vilnius," she added.

Last month, Vilnius unilaterally blocked attempts to kick off EU-Russia talks, demanding that a number of sensitive issues, including energy security and relations with Georgia, be included in the EU negotiating mandate.

Lithuania, which joined the EU in 2004, 13 years after breaking free from the crumbling communist bloc, is a strong supporter of fellow ex-Soviet republic Georgia.

Escalating tensions with Russia

Tensions have been mounting over the Georgian separatist region of Abkhazia, where Russia -- seen as backing the separatists -- has military forces.

They reached new heights Thursday as Georgian President Mikheil Saakashvili warned of a risk of war with Russia.

Foreign ministers from five EU member state -- Slovenia, Sweden, Poland, Lithuania and Latvia -- are expected to travel to Tbilisi to try to mediate between Georgia and Russia.

The ministers are scheduled to assemble in Vilnius on Sunday and leave for Georgia on Monday.

The EU is hoping talks with Russia on the pact -- which is meant to keep relations between the EU and Moscow on an even keel -- can be launched at an EU-Russia summit in Siberia on June 26-27.

The mandate for EU talks with Russia is to be discussed at the next EU foreign ministers' meeting on May 26, where the pressure on Lithuania to give way is likely to be high.

All of the EU's 27 members must approve the start of negotiations with non-member states.

Shell pulls out of Iran gas deal (Reuters, 5/10/08)

Oil major Royal Dutch Shell has pulled out of a planned gas project in Iran, after coming under pressure not to participate from U.S. lawmakers who were concerned about Iran's nuclear programme.

A spokeswoman said on Saturday that the world's second-largest non government-controlled oil company by market capitalisation was pulling out of Phase 13 of the giant South Pars gas field but may yet join later stages of the field's development.

Shell, Spain's Repsol and the National Iranian Oil Company (NIOC) signed a Memorandum of Understanding in January 2002 to develop Phase 13 in a project to be known as Persian LNG.

At the time, Shell said deliveries of liquefied natural gas -- gas cooled to liquid under pressure for transportation in special tankers -- could begin in 2007. [CW: A total hallucination, in retrospect]

However, United Nations sanctions on Iran related to its nuclear programme, which it claims is for power generation but which the U.S. and European states believe is aimed at developing weapons, and criticisms of the deal from U.S. politicians and investors, slowed progress.

Meanwhile Iran grew impatient and threatened Shell with eviction from the project if it did not commit formally.

The spokeswoman for the Anglo-Dutch company said:

"We have agreed the principal of substitution of alternative later phases for the PLNG project so that INOC can proceed with the immediate development of Phase 13."

She would not give a reason for the decision. Repsol was not available for comment.

Iran will now need to find new partners for the project. Media reports have suggested Russia's Gazprom, Indian Oil Corp and Chinese companies could join, as they are expected to be less susceptible to U.S. political pressure, but the companies have limited experience of LNG.

[CW: This says a lot. Condoleezza Rice and Matthew Bryza like to claim that Europe is being blackmailed or held hostage by Gazprom, alleging that the company is an instrument of the Russian government and a tool to try to exert political influence throughout the continent. They use this to argue for alternative supply routes, circumventing Russian territory. lol at their never-ending hypocrisy]

[CW: On a related note, Switzerland and Iran agreed in March on a $42 billion deal that envisages Iran supplying 5.5 bcm of gas annually from 2011. The United States slammed the deal, but kudos to Switzerland for completely brushing off the criticism. I can't say that I'm a passionate supporter of Iran or anything, but it's always great when proud sovereign nations, like Switzerland, don't let outside actors and bullies influence their internal affairs and foreign policy]

Analysis: Putin stays true to himself, by Martin Sieff (United Press International, 5/8/08)

Vladimir Putin's first actions as prime minister of Russia were typical of the man, emphasizing the qualities with which he has transformed his nation's standing over the past eight years as its president.

Putin wasted no time in proclaiming that the modernization of Russia's dilapidated conventional ground forces and of its still world-class strategic nuclear forces would push ahead as the nation's No. 1 priority.

He also proclaimed his determination to assure public housing for veterans of World War II -- known in Russia as the Great Patriotic War -- and he voted to increase the wages of armed forces servicemen.

It would be a mistake to doubt the sincerity or seriousness of these pledges on Putin's part. He has been focusing on the same issues ever since his surprise appointment as prime minister of Russia by President Boris Yeltsin in September 2000. [CW: A few years ago, Putin pardoned all W.W. II veterans serving time in prison so that they can spend the rest of their time with their families]

Even then, here at UPI Analysis, we were the first to point out that Putin from the very beginning moved fast and effectively to pay Russia's struggling teachers, nurses, coal miners, doctors and other public service workers the endless months of back pay that Yeltsin and his prime ministers had held back from them during their own chaotic and shameful stewardship of Russia's public affairs. [CW: And when Putin was Prime Minister, back in 1999, oil around $10 a barrel. Goes to show you how corrupt, immoral, and shameful the 90s oligarchs were; not only were they after stealing everything, they also wanted everyone else to fall into poverty and lose all hope. Imagine an America where all the wealth is distributed to the President's inner-circle for pennies on the dollar. In turn, these companies cheat methodically on their taxes, usually through off-shore arrangements. And federal employees go without pay for months or even years. That's what happened in the most simple sense. A war against the people]

From the very beginning, Putin was determined to re-establish the credibility of the Russian state and to fulfill its financial and social obligations to the people who were dependent on it.

Putin also made clear from the very beginning his determination to "restore the vertical" -- to re-establish the national unity and coherence of the Russian state. This was not merely a preference for autocratic government over democratic government: Essentially it marked a conclusion Putin and his policymakers had reached that the corrupt, nightmarish chaos that had wracked the Russian state in the years under the ever drunken and often incoherent Yeltsin after the collapse of communism resulted in millions of lives cut short through appallingly deteriorating living conditions.

Those years of hardship and instability were a modern "time of troubles" for Russia, renewing the broad national consensus that had endured for so many centuries that the dominant land power of the Eurasian plain over the past half a millennium had to remain united and strong to ensure the very physical survival of the Russian people.

Finally, we also noted all those years ago in UPI Analysis -- when Putin was still prime minister and before Yeltsin had appointed him as the nation's next president -- that in a few short weeks Putin had already established himself as the first really good administrator to run Russia since Soviet Prime Minister Alexei Kosygin, who died in 1980.

Indeed, during the entire past century -- the most bloody, tragic and catastrophic in Russia's long history -- the nation has ever only had three national leaders who can truly have been said to have administered it with skill, competence and true success, without squandering millions of lives on one disastrous war or half-baked communist policy or another: Those three leaders were Pyotr Stolypin, who was the last effective prime minister under Czar Nicholas II before World War I, Kosygin from 1964 to his death in 1980, and now Putin.

Putin can therefore be expected to take the technical duties of being prime minister under the 1996 Yeltsin Constitution as a duck takes to water. His own handpicked successor as president, Dmitry Medvedev, who was sworn in Wednesday, can be under no illusion that he has any power base except Putin's favor. [CW: It's a team effort]

Assessing Truth and Accuracy in Russian Reporting Internationally

--> volume two

From: The West Can Respond More Effectively to Russia's Assault on Georgia: Part III, by Vladimir Socor (Eurasia Daily Monitory, 5/9/08)

He wrote: In the April 20 incident, a Russian MIG-29 was filmed destroying the Georgian UAV and was then tracked flying into Russian air space (see EDM, April 21). In that incident, Russia initially denied the facts strenuously, then changed its story and attributed the shooting to "Abkhaz air defenses." Abkhaz political and military authorities then took up that tack for the other purported incidents in that series.

The truth: In reality, Abkhazia claimed that its air defenses shot down the Georgian spy plane on Saturday. The next day, the Georgian Ministry of Defense vehemently denied that any its spy planes were lost. On Monday, Georgia changed its story and humiliatingly admitted that its spy plane was in fact shot down.

Some people try to rewrite history. The totally pathetic Vladimir Socor, though, is trying to rewrite the present, completely underestimating the intelligence of everyone else. Either that or he's gone nuts.

Kissinger Offers Expertise on Russia in Kent, by Kathryn Boughton (Litchfield Country Times, 5/8/08)

The United States should make every effort to ensure civil relations with Russia. That is the conclusion of Dr. Henry Kissinger, the former Secretary of State under President Richard Nixon and a Nobel Peace Prize winner, who spoke last Saturday in Kent. [CW: Kissinger's also advising McCain; just saying]

The talk, part of a three-part series on Russia sponsored by the Kent Memorial Library, filled St. Andrew's Episcopal Church parish house with an audience of approximately 200.

Dr. Kissinger, who negotiated with the Russians through six years of Cold War tensions, has over the decades gone mano a mano with such political heavyweights as Podgorny, Brezhnev, Andropov, Chernenko, Kuznetsov, Gro¬myko and Gorbachev.

Today, he continues to act as an emissary for his country, and as recently as January, he and former Russian Prime Minister Primakov co-chaired a discussion of important issues on the U.S.-Russian agenda for President George W. Bush in the Cabinet Room of the White House.

Last July, Dr. Kissinger attended a private discussion on the future of the Russian-U.S. relationship in former President Vladimir Putin's residence, together with former Secretary of State George Schultz, former Treasury Secretary Robert Rubin and former Senator Sam Nunn, among others.

Dr. Kissinger said that he has encouraged the former Russian Federation president, who is now prime minister, to enter into a dialogue about where the relationship between the two world powers will be in five years.

Dr. Kissinger began by giving his audience a brief history of Russia. "There are many similarities between Russia and the United States," he said. "Both are huge countries that extend across vast territories." Russia spans 11 time zones, with 80 percent of its population east of the Urals. There are only 30 million inhabitants of Siberia, but 1.5 billion people living in the East.

Russia has never been as secure as the United States, with its buffer of two oceans, he said. Russia has the European Union, "caught between a past it is giving up and a future it has not yet reached," on one side, a "disintegrating" Middle East to its south and China and major emerging countries to its East, he noted.

Because Peter the Great decided where the capital city would be, population centers were decided by tsarist decree, "not by the voluntary movements of people looking for freedom," as in the United States. But, no matter how despotic a tsar might have been, he was seen by his subjects as being benign, Dr. Kissinger said.

He said that Americans are proud of having built a country, while Russians are proud of having built an empire. [CW: I really don't see many differences between Russia's expansion east and America's expansion west] "Their history has been one of expansion," he explained, adding that what has happened to Russia in the past 20 years in the disintegration of that empire has been a "psychological blow."

The Russian people are fiercely patriotic, he reported, often preserving their motherland at their own peril. "When Charles XII of Sweden invaded Russia [in 1708] he had the best Army in Europe. When he got into Russia he found people were burning their own food [in advance of the Army]. Since then, every invader has encountered the same patriotism. Their standard of living has always been considerably below that of the rest of Europe, but the Russians have always thought they could make up for that with great endurance and patriotism." [CW: Nicely stated, but Russia's plan, now, is to combine this legendary patriotism with high standards of living. Goldman Sachs and others are predicting that Russia's economy will expand at phenomenal levels over the next few decades. Wages, in dollar terms, rose 200 percent since 2000 and are expected to continue rising at fierce levels. Moreover, the transformation of Russia's economy from natural resources to high value-added goods and services is a priority and a lot of progress has been made. Trillions have been allocated to infrastructure, housing, and transportation]

Added to this deeply entrenched cultural disposition are the political inclinations of both the United States and Russia. "There is no tradition of democracy in Russia," he said. "No Russian leader has ever retired voluntarily. Putin is the only one who has every voluntarily given up office, which is a huge difference." He said the totalitarian regime of Stalin "was unique even in Russia." "If people started applauding Stalin, they didn't know how to stop," he said to a wave of laughter from the audience. "No one wanted to be the first one to stop so sometimes people would clap for an hour."

Gorbachev deserves enormous credit for trying to reform the Communist system, according to Dr. Kissinger, who said that his efforts were thwarted by rampant corruption. "The only free market was bribery and corruption," he observed.

"Here in the United States, we have never had to conduct foreign policy over a long time," he observed. "It was always something where we could resolve the problem diplomatically or militarily and be finished with it. As late as the 1990s, when Clinton put forces into the Balkans, he said it was a one-year project. No one who knew the Balkans could believe it would only be one year.

"Our national problem is that we are now involved in foreign policy that needs time and patience and understanding," he continued. "We are trying to spread democracy all over the world and judging our success by whether countries become democratic. I'm of the view that we can't involve ourselves in the domestic policies of every country. We shouldn't judge Russia by whether it is a democracy, but by its possibilities.

"We should not conduct a domestic crusade in a country the magnitude of Russia," Dr. Kissinger went on to say, "but rather follow a policy that will bring about cooperation." President Richard Nixon and a Nobel Peace Prize winner, who spoke last Saturday in Kent. [CW: By his choice of words, maybe Kissinger's foretelling that any attempt to subjugate Russia will result in untold failure, as it has throughout history] "America wants everything to be democratic," he said in response to a question. "The issue is not that we prefer democracies; the question is how much pressure we put on other countries. If we attempt to intervene in the domestic policies of every country, we will be extremely controversial. [CW: For sure] If we look at the history of the world, we would have to say monarchies are more frequent. I don't advocate them-I'm only saying there are only so many things the U.S. can do." [CW: Perhaps the only thing the U.S. can do is to try set and example. However, from the mid-60s, and especially since the end of the Cold War, the U.S. has been setting a bad example - at home and abroad. Case in point, going against international law and recognizing Kosovo. In no uncertain terms, the U.S. endorsed the partition of a sovereign nation against its will. According to some, we've become intoxicated with power and infested with the hubris syndrome]

The stakes for cooperative relations between the two countries are high. "Eighty percent of the nuclear weapons in the world are [held] between the United States and Russia," he said. [CW: More like 90 percent, I'm pretty sure] "Any attempt to limit or control them depends importantly on having Russia and the United States agree. Russia is essential to the solution of the nuclear problem and the Iranian problem." [CW: I'm confused now. I thought BMD was the solution ???]

He said that he believes Russia is not "supporting anyone actively hostile to us" in Iran. "They would like to see us there until they see what nuclear weapons are there and then they probably will support us," he surmised. "Right now they are not fully supporting us but are not actively opposing us either. Their views are fairly parallel to ours."

Dr. Kissinger said that a return to the Cold War between America and Russia "is not likely now." [CW: How about a new Cold War ?] He said the Russian population is declining [CW: Kissinger should recall what he said about Russian patriotism; ergo, to make a long story short, Russian births at a two decade high and rising strongly] and that it faces religious and ethnic fragmentation, with one-quarter of its people being Muslims. [CW: Russia's a shining example of a multiethnic and multi-religious society, where "people of different ethnic and religious backgrounds have lived and worked side by side for centuries," to quote Putin] "The death age is 57, about the level of Bangladesh," he observed, "and the government faces the tremendous task of reconstituting its infrastructure. [CW: Just wait and see] My point is not that a Cold War is impossible - if Russia should expand into Europe, we would have a problem - but don't feel we will have that problem in the near future. We both must make an effort. We live in a different world, with problems that need to be solved globally." [CW: Lol, look at who really is trying to expand into Europe; bases in Bulgaria and Romania and BMD facilities in Poland and the Czech Republic. The real imperialistic villain in today's world is crystal clear]

He said he first met Putin when he was deputy mayor of St. Petersburg. "I don't speak Russian," he recounted, "and Putin speaks German, so we met. He made so little impression on me that I forgot him. Within three years he was prime minister and then president." Dr. Kissinger said he believes that Mr. Putin was underestimated by the people who promoted him.

He said the West's perception of the Russian leader has been shaped by media people living in Russia who are not friendly to him. [CW: If anyone hasn't noticed, Russia doesn't care anymore. For a while, sure, it tried to appease the media but the media has overplayed its hand, exposed its bias and anti-Russian agenda. Russia's strong enough now and doesn't care what the western press says] "He's often described as a dictator and that's possible," he conceded. "Russia will now have a new president - will he be a strong figure like Putin or a figurehead? Putin will be prime minister, which is a position appointed by the president - what role will Putin and play and how? I don't know, but it is possible five years from now people will look back and say it was a period of transition."

Part of that transition may be Russia's reemergence as a world power. [CW: Kissinger must be laughing-out-loud if he reads any the Russophobic articles that still try to deny Russia's resurgence] The country is again growing, although at a slower rate that China and India. "It doesn't have the structure to develop," Dr. Kissinger said. [CW: Russia has a very education population and its scientific and technological potential is really unrivaled. The world's largest country. All the natural resources to keep it running. A great balance sheet with more than $500 billion and reserves and no significant debt. Strategically located between Europe and Asia. However, Russia does not have a lot of low-cost labor (nor does it want to have much of it anyway). So, besides that, what does China and India have that Russia doesn't? Seriously] Still, in the nine years since Vladimir Putin became first prime minister, the poverty level has dropped from about 33 percent to 17 percent. Russia has risen over the same period from the world's 22nd largest economy to its ninth. [CW: Seventh, according to the CIA's World Factbook]

Dr. Kissinger noted the escalating demand for energy in the world and said that if the trend continues "tension will be inevitable." Is it possible to create some system so there will be a cooperative environment?" he asked. "We have to make it clear that military threats will be dealt with, but I think that is a less likely outcome. We need to work with the Russians on control of nuclear materials-that is one of the fundamental challenges. I think nuclear weapons will be reduced, but no matter how much we reduce them, one missile can still kill one million people."

"I can say as someone who conducted the Cold War for six years that for the next decade our principal goal must be a cooperative world order," concluded Dr. Kissinger, who played host just a week earlier to President Bush for a political fund-raiser, an event that drew protestors from across Connecticut to Kent. [CW: A cooperative world order is something Russia can live with and it has plainly said so. It's up to the U.S. to decide if it's with Russia on this, or against it]

The fund-raiser aided State Sen. David Cappiello (R-Danbury), who is running against first-term U.S. Rep. Chris Murphy, (D-Cheshire).

Here's an interesting interview of Mikhail Gorbachev, done in Paris by Adrian Blomfield and Mike Smith of the Telegraph:


Gorbachev: US could start new Cold War, by Adrian Blomfield and Mike Smith (Telegraph, 5/7/08)

Mikhail Gorbachev has accused the United States of mounting an imperialist conspiracy against Russia that could push the world into a new Cold War.

With Dmitry Medvedev due to be inaugurated today as Russian president, the Soviet Union's last leader said that the White House's claims of peaceful intentions towards its former superpower rival could no longer be trusted.

Delivering one of his most scathing attacks on the US, Mr Gorbachev told The Daily Telegraph that a US military build-up was under way to contain a resurgent Russia.

From Nato's expansion plans in the former Soviet Union to Washington's proposals for a bigger defence budget and a missile shield in central Europe, the US was deliberately quashing hopes for permanent peace with Russia, Mr Gorbachev said.

"We had 10 years after the Cold War to build a new world order and yet we squandered them," he said.

"The United States cannot tolerate anyone acting independently. [CW: Someone should start a blog chronicling all the times an American government official criticizes a foreign official expressing his or her opinion or condemns a foreign country's domestic policy; stuff that's none of our business and we have no moral authority preaching about. It happens a lot]

"Every US president has to have a war." [CW: I can only remember up to Reagan, but he just might be right ?]

The 1990 Nobel Peace Prize winner's denunciation of the US mirrors the most belligerently anti-Western speeches of Vladimir Putin – who is said to consult Mr Gorbachev on foreign policy matters. [CW: I read somewhere that they meet like once or twice a year. Is that considered consulting?]

Mr Putin may be switching jobs to become prime minister, but many expect him to remain the most powerful figure in Russian politics.

Mr Gorbachev hinted that the former KGB spy could still direct Russia's foreign policy, leaving President Medvedev – seen by some as more liberal than his mentor – to concentrate on internal matters. [CW: I doubt it]

Yet if Washington blames Mr Putin's self-aggrandising rhetoric for the worst crisis in East-West relations since the Cold War, for Mr Gorbachev the blame lies entirely with the administration of President George W Bush. [CW: On who started it, Stephen F. Cohen and Patrick J. Buchanan agree with... Gorbachev]

"The problem is not with Russia," he said, speaking at a friend's château outside Paris. [CW: I want to be at a château outside Paris just about now. Sigh]

"Russia does not have enemies and Putin is not going to start a war against the United States or any other country for that matter.

"Yet we see the United States approving a military budget and the defence secretary pledging to strengthen conventional forces because of the possibility of a war with China or Russia.

"I sometimes have a feeling that the United States is going to wage war against the entire world." [CW: Some American officials are so cocky, arrogant, and delusional that they think they'll do better than Napoleon or Hitler. I highly doubt that this will happen though. I mean, mutually-assured destruction and stuff]

Last year, Robert Gates, the US defence secretary, told a congressional committee that America needed to boost military spending to counter myriad threats including the "uncertain paths of China and Russia".

Those comments caused uproar in Russia, with pro-Kremlin newspapers claiming they heralded the start of a new Cold War.

Tensions have already been heightened by a US proposal to build a missile defence shield in Poland and the Czech Republic to counter a nuclear strike by Iran.

Mr Gorbachev, however, claimed the plans were an aggressive act against Russia.

"Erecting elements of missile defence is taking the arms race to the next level," he said. "It is a very dangerous step."

Relations have further deteriorated after Nato promised eventual membership to Georgia and Ukraine, a move interpreted by Mr Gorbachev as an attempt to extend America's sphere of influence into Russia's backyard.

"The Americans promised that Nato wouldn't move beyond the boundaries of Germany after the Cold War but now half of central and eastern Europe are members, so what happened to their promises? It shows they cannot be trusted."

For a man hailed as one of the heroes of the 20th century, Mr Gorbachev, now 77, often sounded like the ageing hardliners he struggled against in the Kremlin during the 1980s.

He railed against a "military-industrial complex" that he insisted was the "real government" of the US and, quoting a Russian documentary on state television, suggested that Margaret Thatcher had supplied weapons to Chechen terrorists.

Still, while Mr Gorbachev may be delighted by the rebirth of what many see as Russian imperialism, many wonder whether he approves of the way in which Mr Putin has eroded freedom of expression to such an extent that some claim glasnost is dead.

"I do not think that glasnost is dead in Russia," he said.

"There is a phenomenon in the West to criticise Putin's domestic record. But in Russia he has mass support. His popularity ratings are 70 to 80 percent.

"Is this not democracy?"

[CW: Adrian Blomfield is a first-class Russophobe. I mean, he tries to incorporate an anti-Russian slant into everything he writes. So it just ought be said that he has a knack for taking the anti-Russian slant and, without a full transcript of the interview available, we can't fairly assess this interview; at least I can't]

[CW: Finally, just FYI, here is a collection of key Gorbachev comments and remarks, accumulated over the last year or so: on American hegemony and the CFE treaty, 7/15/07; on American hegemony, 7/27/07; on American hegemony, Russian-American cooperation, and terrorism, 10/4/07; on American hegemony, 10/9/07; on American hegemony and the European Union, 11/27/07; on BMD, 11/28/07; on Putin, 12/1/07; regarding Gorbachev and Putin, 12/1/07; on American hegemony, BMD, and Putin, 12/5/07; on American hegemony, Kosovo, and BMD, 12/14/07]

Lower oil production is the real story, by Loren Steffy (Houston Chronicle, 5/1/08)

Eleven billion dollars is not enough.

That, at first blush, seemed to explain how Exxon Mobil Corp. could earn that much money in three months and still see its stock fall 4 percent.

Wall Street expected more, and so did Exxon Mobil investors. At a time of record oil prices, America's biggest oil company reported an earnings increase that was the smallest among its peers.

The profit is what captures everyone's attention, but there's a bigger concern hidden amid the numbers of Exxon Mobil's earnings.

The company's worldwide oil production fell 10 percent, to just under 2.5 million barrels a day.

Some of the decline came from Exxon Mobil's dispute over the seizure of assets by the Venezuelan government, but even excluding those assets, the company's production declined. Overall production, including natural gas, fell 3 percent.

While Exxon Mobil boosted production from fields in West Africa and the North Sea, the gains weren't enough to offset declines from aging oil fields, the company said.

The company blamed the decline in part on its contracts with oil-producing countries, which allow those countries to claim a larger share of oil volumes as prices rise. In other words, the higher prices go, the less oil Exxon Mobil gets. [CW: I wrote about this phenomena months ago]

As those countries benefit from higher prices, living standards rise and, as I mentioned last week, their own demand for oil increases. That, in turn, means less oil for companies such as Exxon Mobil over the long term. [CW: And food prices are high due to 350 million Indians joining the ranks of the middle-class. Sheesh. We get it. The west tried to hold the rest of the world down for its own selfish reasons. Finally, the rest of the world has risen and is socking the west a few good ones in the form of higher food and energy prices. In some ways, I'm serious]

The problem isn't unique to Exxon Mobil.

Other major oil companies also offered a stark production picture. BP's was unchanged from a year earlier. Shell reported a gain only because it boosted natural gas production, which offset lower oil output. ConocoPhillips reported an increase but attributed it to its 20 percent stake in Russia's Lukoil. [CW: lol]

With national oil companies now holding most of the world's reserves, companies like Exxon Mobil are left with few places to look for new production. [CW: War for oil]

The public, though, has little concern for Exxon Mobil's travails. We only care about what we see from our side of the pump, and that means the price and the profits of the company whose name is atop the sign.

Exxon Mobil has reported earnings between $9 billion and $11 billion in almost every quarter since late 2005, and every time it does, the public outcry grows.

...

As I've said before, oil companies don't welcome the numbers we're now seeing at the pump. Not only do they cut into refining margins — another reason Exxon Mobil's profit didn't grow as much as expected — they make us start buying Priuses in spite of their bean-pod appearance.

So the public and politicians decry Exxon Mobil's profit while the market frets over a mere 17 percent increase. Both miss the more disturbing numbers, the ones that portend greater problems, not just for the oil companies but for all of us who use their products.

It's not a question of whether $11 billion is too much or not enough. It's a question of whether 2.5 million barrels is.

According to some people, rising wages in Russia are a bad thing !

Here's a collection of quotes from recent articles that prescribed to this whacked-up philosophy.

Bloomberg article: OAO Rosneft, Russia's largest oil company, has felt the sting of inflation mostly through rising equipment, infrastructure and wage costs, said Peter O'Brien, chief financial officer of the Moscow-based company. Salaries for welders in western Siberia have risen 200 percent in dollar terms since 2000, he said. Inflation "hurts," O'Brien said. "If it persists, natural resource producers here will struggle to be competitive globally."

A second Bloomberg article: After a decade of average annual economic growth of 7 percent that pushed up wages and the currency, making Russia less competitive.

BONOBO LAND blog: Russia, which is the world's biggest energy exporter, is struggling in what now appears to be a vain attempt to reduce the inflation rate to 10 percent this year as food and energy prices and rising wages and living standards take what appear to be a relentless toll.

Russia Economy Watch blog: Russia now has a very serious wage push inflation problem. This structural problem may make it near impossible for Russia to continue to grow rapidly without opening up a growing trade deficit (due to the loss of competitivenes) and this goods trade deficit in the Russian case would clearly risk the possibility of serious macroeconomic instability.


So, let me get this straight.

Russophobes brag that Russian wages are low, encouraging (in vain) the masses to rise up against the establishment, which they label as corrupt. They conveniently leave out the fact that Russian income taxes, housing, and utility costs are also lower than the west's, resulting in increased disposable income and creating a neverending list of premier international retailors desperate to set-up shop all throughout Russia to take advantage of this.

Meanwhile, as Russian wages rise, indicating far-reaching economic prosperity, another set of Russophobes begins to write that wage inflation will ruin Russia. Companies will lose their competitive advantage and will look to invest elsewhere, lol.


I have a few things to say about all this:

- I agree with what Medvedev said to the Financial Times. That inflation, and particularly wage inflation, is a countereffect of becoming a world economic power. No one, I hope, expected Russia to become a factory to the world. The idea is for Russia to become an economic leader, specializing in high-valued added goods and services, utilizing its unrivaled scientific potential and technological expertise. The real plan is that and it's not about becoming a manufacturing point, competing on cheap labor. If anyone thought otherwise, you thought wrong.

- Therefore, rising wages are a complete and utter given. No matter the arguments against it, Russia should be and is clearly striving for higher wages - at each and every level. If an auto plant will go to Vietnam instead, fine; Russia's not about to compromise its well-drawn out game plan for low-paying go-nowhere jobs.

- Higher wages, coupled with one of the world's most favorable tax environments and subsidized housing and utility allowances will make Russia an even more attractive market for retailers, travel brokers, and financial institutions. If not already, Russians will become the world's most coveted consumers of luxury goods and services.

- Finally, and most importantly, what's up with the west being so bitter and upset that people in emerging markets are becoming prosperous and middle-class?

The AP reports: Indian politicians have lambasted President Bush for saying the South Asian country's increasing prosperity is partly to blame for the rising price of food around the world.

The defense minister called Bush's comments a "cruel joke" and the Hindu nationalist opposition, the right-wing Bharatiya Janata Party, threatened Monday to force a parliamentary debate on the matter.

Bush, in comments that praised the growing prosperity of countries like India, said Friday that "when you start getting wealth, you start demanding better nutrition and better food.

"And so demand is high, and that causes the price to go up," Bush said.


Bush didn't come up with this theory, his neo-con advisers did. Russophobes who try to argue against rising Russian wages also subscribe to the same school of thought as the neo-cons.

I can't understand this sense of bitterness over the increased prosperity of the average Russian, average Chinese, and average Indian, of which Sreeram Chaulia writes a good piece on for the Asia Times.

But I ask what, really, did the west want and expect of them? Were Russia, China, and India not supposed to be stable, prosperous, and middle-class? Were Russians, Chinese, and Indians not supposed to be consumers of the world's foods, drivers of the world's cars, and passengers on the world's planes? Were all those seats reserved for bankrupt Americans, for example?

So I ask that - what did the west want and expect of them? And I also ask what it is so scared of? And, also, for how long has it been trying to keep the rest of the world down because, evidently, that's what it tried to do? It has failed miserably and now it's sorrowing in a sest pool of its own failure. Goodnight .

Assessing Truth and Accuracy in Russian Reporting Internationally

--> volume one

From: The President and the Prisoner, by Eckart von Klaeden (International Herald Tribune, 5/2/08)

He wrote: After his arrest, Yukos was broken up and absorbed by the state energy company Gazprom through a questionable auction for far less than its real value.

The truth: I don't know if von Klaeden is a victim of the anti-Gazprom propaganda machine or if he knew the truth and lied on purpose but, in reality, Gazprom did not win any of the Yukos assets that came up for sale. It participated in the highly-transparent auctions, like BP also did, sure, but it did not win any of the assets. Nada.

The rest of von Klaeden's article isn't any more accurate and as it really cozies up to Mikhail Khodorkovsky, a pure criminal in any sense of the word. Von Klaeden's fine mix of passion and ignorance signifies some sort of hidden agenda, surely involving transfers of large sums of money and allocations of many barrels of oil. In fact, it even sounds like the entire piece was penned by Khodorkovsky's international defense team or the "management in exile" of hapless Yukos.

And, just for reference, here's who won what at the Yukos auctions:

Asset / winner (country) / purchase price

1. Yuganskneftegas / Baikal Finance Group (Russia) / $9.4 billion
2. 9.44% of Rosneft / Rosneft (Russia) / $7.51 billion
3. 20% of Gazprom Neft and Siberian energy assets / Eni and Enel (Italy) / $5.8 billion
4. Tomskneft / Rosneft (Russia) / $6.8 billion
5. Headquarters and other non-operating assets / Prana (Russia) / $3.88 billion
6. Yukos Finance / Promnefstroi (United States) / $308 million

In a veiled reference to a seventy-one year-old Senator from Arizona, Dmitry Medvedev said last February, before he became President-elect, that Russia is willing to work with any future American president who isn't stuck in the past and doesn't have "semi-senile views." In agreement that the elderly Senator has an irrational temperament are former Senator Rick Santorum and former GOP Presidential candidate Mitt Romney.

Recently, Matt Stearns and Warren P. Strobel of The Hartford Courant and Fareed Zakaria of Newsweek expanded on the idea of McCain's accused senility, particularly when it comes to Russia policy.

McCain's G-8 Swipe At Russia, by Matt Stearns and Warren P. Strobel

Mccain Vs. Mccain, by Fareed Zakaria

McCain's G-8 Swipe At Russia, by Matt Stearns and Warren P. Strobel (The Hartford Courant, 5/4/08):

Threat To Expel It Called 'Dumb'

John McCain dropped a little-noticed bombshell into his March foreign-policy address: Boot Russia from the G-8, the elite club of leading industrial democracies whose leaders try to coordinate economic policies.

One major problem: He couldn't do it, even if he is the next U.S. president, because the other G-7 nations wouldn't let him.

But the fact that he's proposing to try, risking a return to Cold War tensions with the world's second-largest nuclear power after 20 years of prickly partnership, raises questions about McCain's judgment. It also indicates that many of his top foreign-policy advisers are of the same neo-conservative school that promoted the war in Iraq, argues for a tougher stance toward Iran and is skeptical of negotiating with North Korea over its nuclear program.

The Group of Eight, or G-8, as it's popularly known, makes decisions by consensus, so no single nation can kick out another. Most experts say the six other countries — Great Britain, France, Italy, Germany, Japan and Canada — would never agree to toss Russia, given their close economic ties to their neighbor. A senior U.S. official who deals with Russia policy said that even Moscow would have to approve of its own ouster, given how the G-8 works.

"It's not even a theoretical discussion. It's an impossible discussion," said the senior official, who requested anonymity because he wasn't authorized to speak publicly. "It's just a dumb thing."

Aside from that, many wonder whether McCain's suggestion would be wise policy. They fear that if McCain were elected and followed through on an attempt to toss Russia from the group, it could anger and isolate Russia, which has been increasingly assertive on the world stage, autocratic within its borders and is the second-largest producer of the hydrocarbons that feed the world's energy needs.

"In Europe, there's very little support ... for a policy like that," said Stephen Larrabee, an expert on Europe and Russia at the RAND think tank. "It's too late in the game to try and oust Russia."

The proposal also seemed at odds with the theme of McCain's speech, which promised a less unilateral approach to world affairs than the Bush White House has pursued. That could reflect tension between two Republican foreign-policy camps vying for influence in McCain's campaign: the pragmatic realists and the hard-line neo-conservatives — with the neo-cons ascendant for now in Russia policy.

Randy Scheunemann, the foreign policy director for McCain's campaign, acknowledged that "there would be very vigorous discussion" within the G-8 of a proposal to exclude Russia. But, he said, Russia was "on a different political and economic trajectory" when it joined the group a decade ago, and he said it's unlikely that the same invitation would be extended today.

Scheunemann vigorously disputed that the proposal is a product of McCain's neo-con advisers. McCain's position on the issue dates to 2003, he said.

Mccain Vs. Mccain, by Fareed Zakaria (Newsweek, 4/26/08):

He seems to think he can magically unite the two main strands in the foreign-policy establishment. He can't.

Amid the din of the dueling democrats, people seem to have forgotten about that other guy in the presidential race—you know, John McCain. McCain is said to be benefiting from this politically because his rivals are tearing each other apart. In fact, few people are paying much attention to what the Republican nominee is saying, or subjecting it to any serious scrutiny.

On March 26, McCain gave a speech on foreign policy in Los Angeles that was billed as his most comprehensive statement on the subject. It contained within it the most radical idea put forward by a major candidate for the presidency in 25 years. Yet almost no one noticed.

In his speech McCain proposed that the United States expel Russia from the G8, the group of advanced industrial countries. Moscow was included in this body in the 1990s to recognize and reward it for peacefully ending the cold war on Western terms, dismantling the Soviet empire and withdrawing from large chunks of the old Russian Empire as well. McCain also proposed that the United States should expand the G8 by taking in India and Brazil—but pointedly excluded China from the councils of power.

We have spent months debating Barack Obama's suggestion that he might, under some circumstances, meet with Iranians and Venezuelans. It is a sign of what is wrong with the foreign-policy debate that this idea is treated as a revolution in U.S. policy while McCain's proposal has barely registered. What McCain has announced is momentous—that the United States should adopt a policy of active exclusion and hostility toward two major global powers. It would reverse a decades-old bipartisan American policy of integrating these two countries into the global order, a policy that began under Richard Nixon (with Beijing) and continued under Ronald Reagan (with Moscow). It is a policy that would alienate many countries in Europe and Asia who would see it as an attempt by Washington to begin a new cold war.

I write this with sadness because I greatly admire John McCain, a man of intelligence, honor and enormous personal and political courage. I also agree with much of what else he said in that speech in Los Angeles. But in recent years, McCain has turned into a foreign-policy schizophrenic, alternating between neoconservative posturing and realist common sense. His speech reads like it was written by two very different people, each one given an allotment of a few paragraphs on every topic.

The neoconservative vision within the speech is essentially an affirmation of ideology. Not only does it declare war on Russia and China, it places the United States in active opposition to all nondemocracies. It proposes a League of Democracies, which would presumably play the role that the United Nations now does, except that all nondemocracies would be cast outside the pale. The approach lacks any strategic framework. What would be the gain from so alienating two great powers? How would the League of Democracies fight terrorism while excluding countries like Jordan, Morocco, Egypt and Singapore? What would be the gain to the average American to lessen our influence with Saudi Arabia, the central banker of oil, in a world in which we are still crucially dependent on that energy source?

The single most important security problem that the United States faces is securing loose nuclear materials. A terrorist group can pose an existential threat to the global order only by getting hold of such material. We also have an interest in stopping proliferation, particularly by rogue regimes like Iran and North Korea. To achieve both of these core objectives—which would make American safe and the world more secure—we need Russian cooperation. How fulsome is that likely to be if we gratuitously initiate hostilities with Moscow? Dissing dictators might make for a stirring speech, but ordinary Americans will have to live with the complications after the applause dies down.

To reorder the G8 without China would be particularly bizarre. The G8 was created to help coordinate problems of the emerging global economy. Every day these problems multiply—involving trade, pollution, currencies—and are in greater need of coordination. To have a body that attempts to do this but excludes the world's second largest economy is to condemn it to failure and irrelevance. International groups are not cheerleading bodies but exist to help solve pressing global crises. Excluding countries won't make the problems go away.

McCain appears to think that he can magically unite the two main strands in the Republican foreign-policy establishment. But he can't. This is not about personalities but about two philosophically divergent views of international affairs. Put together, they will produce infighting and incoherence. We have seen this movie before. We have watched an American president unable to choose between his ideologically driven vice president and his pragmatic secretary of State—and the result was the catastrophe of George W. Bush's first term. Twenty-five years earlier, we watched another president who believed that he could encompass the entire spectrum of foreign policy. He, too, gave speeches that were drafted by advisers with divergent world views: in that case, Cyrus Vance and Zbigniew Brzezinski. It led to the paralyzing internal battles of the Carter years. Does John McCain want to try this experiment one more time?

I just went on Da Russophile's blog and I see that he's planning to make 10 "Russophile predictions".

That's all well and good, but I am the competitive type so I must make my 10 Russophile predictions first !

This is on the fly, it's past midnight, and I'm tired, but here goes:

10. Russia's population begins growing again by 2014-2015 (this is pretty much a given, IMO)

9. Russia's economy, now number 7 in PPP terms but still well behind the leaders, continues to expand phenomenally. The United States, China, and Russia (and maybe India) have comparable economies by 2020. The European Union is ahead of all of them, but no individual European economy is even close

8. Russia becomes the first country to reach the moon in the Twenty First Century. Off to Mars

7. A lot of Eastern European / Caucasus / Central Asian states that showed signs of Russophobia begin to turn a corner as more practical governments get elected. Annoyed American officials will begin to question if these countries were ever on their team in the first place

6. The U.S. defaults on its external debt. Dollar hegemony ends. American way-of-life adjusts, but no humanitarian catastrophe or anything. After a few quarters, it's back on its feet again, albeit more humble and inward-looking

5. Peak oil is a reality and for a while the world frets until a Russian-led international team announces a major alt. energy breakthrough that gives the world a new lifeline

4. Peace in the Middle East. Signed, sealed, and delivered... in Moscow

3. In 2100, Putin is named Time's most influential person of the century

2. A new Russian strategic defense system, based not on missiles but on lasers. Hundreds of thousands of lasers, outflowing from land to space, making penetration of ICBMs impossible when activated. "Fortress Russia"

1. Russia becomes an ideal place to live for many. The quality of life of Scandinavia (but on a much wider scale), along with a unique and rich cultural heritage and history

So I see that the Foreign Ministers of the BRIC states will meet in Yekaterinburg on May 14th.

I note below my BRIC wish list, two general agreements that I would want to see come out of the meeting. They are really out there, sure, but if not this time maybe one day:

1) Totally revise the post-World War II economic arrangement, including the World Bank, International Monetary Fund, World Trade Organization, and U.S. dollar hegemony. Now, I'm not going to pretend that I'm an expert on these organizations, but the simple fact that the President of the World Bank must be an American and the IMF President a European goes to show how much a relic of an unequal past these institutions are. Moreover, the arrangement allowed the game to be rigged. From the onset, some nations had a significant paper advantage, not because of merit, but because of a predisposed perception of superiority. A more just economic world order is needed and totally turning around, or even abandoning, the post-World War II economic arrangement is a necessity.

2) Pledge support to the Developing World. First of all for moral reasons. Second of all to stick it the colonial powers of Western Europe and their prodigal son, the United States, which have exploited these countries for decades, if not centuries, stealing first their gold and now their oil and gas. This has led to out-of-control leftism in Latin America and brought about the possibility of calamitous class warfare throughout developing Africa, Asia, and the Middle East. Stable and prosperous BRIC must help the Developing World shake off the shackles of colonial rule unconditionally. I strongly believe that BRIC is ready to outbid Western firms for any and all investment projects throughout the world. Investments from BRIC nations bring along a different flavor, one of partnership, cooperation, and mutually-beneficial terms. This, of course, contrasts with environmental disregard, slave wages, corruption, exploitation, and arrogance associated, historically, with western multinationals.


Just for reference, here is Vladimir Putin's speech at the St. Petersburg International Economic Forum, which touched on some similar subjects and inspired me at least.

Speech at the XI St. Petersburg International Economic Forum, by Vladimir Putin (President of Russia, 6/10/07):

Good afternoon colleagues, ladies and gentlemen. It is my pleasure to welcome you here to the St Petersburg Economic Forum. It is a great honour for us to play host on this occasion to heads of state and government and top managers from the world’s biggest corporations. As one of the participants and organisers of today’s event put it, those present here today represent, figuratively speaking, ‘more than half the world’s GDP’. I would like to note too that traditionally, the economic and political leaders attending this international forum discuss not only economic issues but also take the opportunity to discuss and formulate positions on vital strategic issues and questions of truly global significance.

The world is changing literally before our very eyes. Countries that seemed hopelessly backward only yesterday are becoming the world’s fastest growing economies today. Fifty years ago, the G7 countries accounted for 60 percent of the world’s GDP, but today this situation has been reversed and 60 percent of the world’s GDP is now produced outside the G7 countries. The developing countries are more and more active in establishing niches for themselves not just in the trade of goods but also of services. New players, including in the high-technology and science-intensive sectors, are bringing greater competition to the market. At the same time, the development imbalances in the global economy and the growing gap between rich and poor countries are having an ever more tangible impact. This is an issue we have discussed on past occasions and one that we just discussed at the G8 summit in Heiligendamm.

It is my conviction that just saying the usual words about fair distribution of resources and investment is not enough. If we want to achieve sustainable development we need to create a new architecture of international economic relations based on trust and mutually beneficial integration. We cannot ignore the importance of healthy competition, but at the same time, we need to move towards forming common and interdependent interests and ties.

We believe that this is the direction in which relations within the Commonwealth of Independent States should develop. The CIS countries are becoming increasingly integrated in global processes and are becoming influential participants in international economic relations. Issues of mutual trust are now coming to the forefront in international economic relations.

In an open economy, most countries depend on international trade and on how stable and sustainable are their exports and imports. Economic partners can feel a sense of security only when they have reliable and predictable relations and when buyers and sellers guarantee fulfilment of their respective commitments. I stress that Russia will work actively to help form an infrastructure of trust in the global and regional economy. In this respect I would like to say a few words about the trends on energy markets.

The energy sector today is witnessing the emergence not only of major new consumers such as China and India, but also of new producers in the Eurasian region, significant players such as Kazakhstan, Turkmenistan, Azerbaijan and Uzbekistan. These countries have become independent suppliers of fossil fuels to the world market. At the same time, the policy pursued by traditional consumers is far from unambiguous. We understand their desire to ensure energy independence and to diversify energy sources, but the policies they follow have a direct impact on the interests of supplier countries. As one of the guarantors of energy security in the world, Russia cannot turn a blind eye to these problems, and this is why we support the idea of a strategic dialogue between energy consumers, suppliers, and transit countries. I am sure that all sides would benefit from such a dialogue. The new steps we are taking aim to ensure energy security for the entire Eurasian continent. This is true also of the projects which we are planning and which we are carrying out together our neighbours and partners in this sector – Turkmenistan, Kazakhstan and Uzbekistan.

Above all, of course, we are talking about the production and supply of fossil fuels – oil and gas. This encompasses the construction of the Northwest Gas Pipeline and Burgas-Alexandropoulis oil pipeline. Given increasing energy demand in the Asia-Pacific region, Russia is also increasing supplies in this direction too.

We will also carry out projects in the transport, telecommunications and logistics sectors. These are projects that will link the countries of Europe and Asia. We plan to modernise existing transport corridors and create new international transport corridors joining Europe to Central Asia and the Far East. We have also announced plans to build a second section of the Volga-Don Canal and give the Caspian Sea countries access to the world’s oceans. I know that my friend and colleague President Nursultan Nazarbayev has his own vision in this area and I am sure that he will speak about it today.

Countries’ investment policy forms another aspect of the interwoven nature of mutual interests. We see how the doctrine of investment freedom is giving way to completely different approaches in the developed countries. Foreign investment, it turns out, is not always seen as beneficial, and sometimes sectors such as infrastructure, telecommunications and energy close their doors to foreign participation.

Russia, on the contrary, seeks to give foreign investors the most favourable conditions possible. We are constantly improving our system of property rights protection, including intellectual property rights. Our economy is open to foreign investment, including in infrastructure and in the electricity sector. Russia’s electricity generation companies have begun offering their shares to the public this year. Foreign investors are carrying out major projects in industry, construction, retail and the banking sector in Russia.

Direct foreign investment in the Russian economy showed a 2.5-fold increase compared with last year. Total accumulated foreign investment in Russia now exceeds $150 billion. As I have said on many occasions now, aside from all our other difficulties, we also faced the problem of capital flight from the Russian Federation.

Last year, for the first time, we had a net capital inflow of $41 billion, and this figure has already passed the $60-billion mark for the first four months of this year and continues to rise. Incidentally, the investment process has finally become a ‘two-way street’ for Russia.

As I said, total accumulated foreign investment in Russia now comes to around $150 billion, but, according to data from international economic organisations, Russian investment abroad has now reached a figure of $138 billion, and our own data puts it at not less than $140 billion. We want to continue to expand Russian investment abroad and we are interested in exchanging assets with international partners under mutually beneficial conditions. This is the road Russian companies are now taking. We have positive experience of such partnerships with our colleagues from Germany and other European countries. Our projects with Italian companies are the latest example in this area.

It is my conviction that Russia could become home to financial centres and the decision-making centres of new global corporations. We passed a law this year completely freeing from taxation dividends received from strategic investment inside the country and abroad. I hope that both Russian and foreign investors will make use of this exemption we are offering. We hope to see just as favourable, understanding and liberal an attitude from our partners. In cases where problems do arise, the balance between national interests and the need for foreign investment should be found exclusively by working together in a spirit of constructive dialogue.

The new architecture of economic relations implies a principally new approach to the work of international organisations. It has become increasingly apparent of late that the existing organisations are not always up to the measure in regulating global international relations and the global market. Organisations originally designed with only a small number of active players in mind sometimes look archaic, undemocratic and unwieldy in today’s conditions. They are far from taking into consideration the balance of force that has emerged in the world today. This means that the old decision-making methods do not always work. The World Trade Organisation and the Doha round of trade negotiations, which are proceeding with great difficulty, to put it mildly, provide a clear example in this respect.

Today, the protectionism the WTO was set up to combat is often implemented by the developed economies that founded the organisation. It is in these economies that we see the greatest concentration of state support for business. It is not coincidence that a parallel system of regional alliances and agreements is taking shape, essentially giving the global market a new structure. And the trade liberalisation process is now taking place more and more through these new agreements. It is worth thinking about creating regional Eurasian free trade institutions in order to encourage trade and investment. These institutions could of course draw on and use the positive experience of the World Trade Organisation.

The international financial organisations are also in need of serious restructuring and modernisation. They were established at a time when the world looked very different and are having difficulty adapting to the new situation of stable economic growth in the majority of developing countries and growing markets. An international financial system based around just one or two currencies and a limited number of financial centres no longer reflects the global economy’s strategic demands. Fluctuations in these currencies’ exchange rates have a negative impact on the financial reserves of entire countries and on the development of different economic sectors around the entire world.

There can be only one answer to this challenge and that is the emergence of several reserve currencies and several financial centres. This is why we need to start work today to create the conditions for diversifying the world financial system’s assets.

Russia will continue carrying out its policy aimed at making its national currency, the rouble, and its financial market and banking system more attractive. The issue of settling payments for goods exports from Russia in roubles will also be a question we will need to look at, but this of course should apply to cases when it would be in both the suppliers’ and the buyers’ advantage.

Ladies and Gentlemen,

History has convincingly shown on enough occasions that the situation in Russia in many ways determines the situation in the surrounding countries in the Eurasian region. This is a subject we have discussed many times with our colleagues from the Commonwealth of Independent States. Russia’s temporary weakening inevitably led to instability in the region as a whole. Our country lived through a series of dramatic upheavals in the twentieth century, but at the same time it also built up serious potential. Our scientific, education and industrial experience are not just contributing now to development in Russia itself but are also giving a development boost to new states and strengthening new players in the global economy. We are very pleased to see this and are ready to do everything possible to encourage this process. At the forum last year, the concept of what were called ‘idea-countries’ was put forward. Russia is just such a country, a country that seeks to build a fair and just society based above all on moral values, a country that analyses thoroughly the strategic processes in the world and is committed to strengthening trust between peoples and states.

It is our firm conviction that the engine of development in the new millennium is people, their culture, education and abilities. We support the free exchange of ideas, technology and innovation. I repeat that the doors in Russia are open for carrying out the most ambitious joint projects. We hope that through partnership and working together we can make the Eurasian continent truly an area of peace, trust and cooperation.

Sometimes after work I enjoy hitting a cocktail lounge or hotel bar for a drink with a few friends. Hotel bars I've gone to lately include the W on Lexington and 49th, the W in Times Square, and the W by Union Square Park. Besides the W, which is obviously my favorite brand, I've also gone to the Grand Central Hyatt and other posh, but less internationally well-known hotels like 60 Thompson, Rivington, and Mercer.

But this post is not about my social life nor is it about lodging and leisure options in New York City !!!

I'm just saying that, you know, I've been hearing a lot of Russian at these swanky hotels. Sure, due to the collapse of the dollar, a lot of foreign tourists have converged on the United States, but Russian-speakers are tops according to my unofficial survey. There are many of them and they spend a lot.

I've also noticed a surge in Russian-speaking hotel operators, waiters and waitresses, etc. to accommodate to their key clientele. Just sayin'.

Some tidbits on Russian tourism:


- In 2007, 9.37 million Russians traveled abroad for tourism. In 2006, the figure was 7.7 million. And to show how far Russia's economic resurgence has come, in 1995 just 2.6 million Russians traveled abroad

- Of course, the 9 million aren't all oligarchs and oil and metals tycoons. A tad of them also represent the thriving Russian middle class, something Russophobes are still trying to deny

- Top tourist destinations include the Mediterranean nations and southeast Asia

- Menus in Turkey are being translated into Russian to cater to Russian tourists, who "complain less" and "spend more lavishly," according to one hotel owner

- The Swiss are learning to say "spasibo" instead of "thank you"

- "Russian tourists spend more per day than any other nationality," according to VisitScotland's international marketing executive

- "Most Russians travel with their families and stay for an average of seven to 10 days. And they really spend! What more can you ask?" said a tourism official from the Philippines

- The number of Russian visitors to Israel could exceed 250,000 people annually in the next three years. In March, Russia and Israel signed a deal on mutual visa-free travel

A lot of people are beginning to agree that arrogant American policy based on illusions of hegemony, diktat, and imperialism have possibly helped restart the Cold War.

I've posted below a recent Los Angeles Times commentary by Stephen F. Cohen coming to this conclusion, as well as a very concise article by Patrick J. Buchanan that probably inspired many to reason that the Cold War restarted for this reason.

A chilly peace, by Stephen F. Cohen

Who Restarted the Cold War?, by Patrick J. Buchanan

A chilly peace, by Stephen F. Cohen (Los Angeles Times, 4/30/08):

U.S. presidential candidates must address our strained relations with Russia.

None of the American presidential candidates has seriously addressed, or even seems fully aware of, what should be our greatest foreign policy concern: Russia's singular capacity to endanger or enhance our national security. Overshadowed for now by the U.S. disaster in Iraq, Moscow's importance will continue long after that war ends.

Despite its diminished status following the breakup of the Soviet Union in 1991, Russia alone possesses weapons that can destroy the United States, a military complex nearly America's equal in exporting arms, vast quantities of questionably secured nuclear materials sought by terrorists and the planet's largest oil and natural gas reserves. It also remains the world's largest country in territory, pivotally situated in the West and the East, at the crossroads of colliding civilizations, with strategic capabilities from Europe to the Middle East to North Korea, China, India, Afghanistan and even Latin America. All things considered, our national security may depend more on Russia than Russia's does on us.

And yet, U.S.-Russian relations are worse today than they have been in 20 years. The relationship includes almost as many serious points of conflicts as it did during the Cold War -- among them, Kosovo, Iran, Venezuela, the former Soviet republics of Ukraine and Georgia, NATO expansion, missile defense, access to oil and the Kremlin's internal politics -- and less actual cooperation, particularly in essential matters involving nuclear weapons. Indeed, a growing number of observers on both sides think the relationship is verging on a new cold war, including another arms race.

Even a chilly war, or the current cold peace, could be more dangerous than its predecessor, for three reasons. First, its front line will not be in Berlin or the Third World but on Russia's borders, where U.S. and NATO military power is increasingly ensconced. Second, lethal dangers inherent in Moscow's impaired controls over its vast stockpiles of materials of mass destruction and thousands of missiles on hair-trigger alert, a legacy of the state's disintegration in the 1990s, exceed such threats in the past. And third, also unlike before, there is no effective opposition to hawkish policies in Washington or Moscow, only influential proponents and cheerleaders.

How did it come to this? Less than 20 years ago, the Soviet and American leaders, Mikhail S. Gorbachev and George H.W. Bush -- completing a process begun by Gorbachev and President Reagan -- ended the Cold War, "with no winners and no losers" (as even Condoleezza Rice once agreed), and began a new era of "genuine cooperation." Now, the U.S. policy elite and media contend that Russian President Vladimir V. Putin's anti-democratic domestic policies and "neo-imperialism" destroyed that historic opportunity.

You don't have to be a Putin apologist to understand that it is not an adequate explanation. During the last eight years, Putin's foreign policies have been largely a reaction to Washington's winner-take-all approach to Moscow since the early 1990s, which resulted from a revised U.S. view of how the Cold War ended. In that new, triumphalist narrative, the U.S. won the 40-year conflict and post-Soviet Russia was a defeated nation analogous to post-World War II Germany and Japan -- a nation without full sovereignty at home or autonomous national interests abroad.

The policy implications of that bipartisan triumphalism, which persists today, have been clear, certainly to Moscow. It meant the U.S. had the right to oversee Russia's post-communist political and economic development, as it tried to do directly in the 1990s, while demanding that Moscow yield to U.S. international interests. It meant Washington could break strategic promises to Russia, as when the Clinton administration began NATO's eastward expansion, and disregard extraordinary Kremlin overtures, as when the George W. Bush administration unilaterally withdrew from the Anti-Ballistic Missile Treaty and moved NATO's border even closer to Russia despite Putin's crucial assistance to the U.S. war effort in Afghanistan after 9/11. It even meant the U.S. was entitled to Russia's traditional sphere of security and its energy supplies.

Such U.S. behavior was bound to produce a Russian backlash. It came under Putin, but it would have been the reaction of any strong Kremlin leader. Those U.S. policies -- now widely viewed in Moscow as an "encirclement" designed to keep Russia weak and to control its resources -- have helped revive an assertive Russian nationalism, destroy the once-strong pro-American lobby and inspire widespread charges that concessions to Washington are "appeasement," even "capitulationism." The Kremlin may have overreacted, but the cause and effect threatening a new cold war are clear.

Because the first steps in this direction were taken in Washington, so must be initiatives to reverse it. Three are urgent: a U.S. diplomacy that treats Russia as a sovereign great power with commensurate national interests; an end to NATO expansion before it reaches Ukraine, risking something worse than cold war; and a full resumption of negotiations to sharply reduce and fully secure all nuclear stockpiles and to prevent an impending arms race, which requires ending or agreeing on missile defense in Europe. Discussions with members of Moscow's policy elite suggest that there may still be time for such initiatives to elicit Kremlin responses that would enhance rather than further endanger our national security.

American presidential candidates are supposed to discuss such vital issues, but Sens. John McCain, Hillary Rodham Clinton and Barack Obama have not done so. Asserting varying degrees of toughness, each has promised to be less "soft" on the Kremlin than President Bush has allegedly been and to continue the encirclement of Russia and the hectoring "democracy promotion" policy, which have only undermined U.S. security and Russian democracy since the 1990s.

To be fair, no influential actors in American politics, including the media, have asked more of the candidates. They should do so now before another chance is lost, in Washington and in Moscow.

Stephen F. Cohen is a professor of Russian studies at New York University and a professor emeritus of politics at Princeton University. A version of this article will appear in the May 19 Nation magazine.

Who Restarted the Cold War?, by Patrick J. Buchanan (Creators Syndicate, Inc., 10/19/07):

"Putin's Hostile Course," the lead editorial in the Washington Times of Oct. 18, began thus:

"Russian President Vladimir Putin's invitation to Iranian President Mahmoud Ahmadinejad to visit Moscow is just the latest sign that, more than 16 years after the collapse of Soviet communism, Moscow is gravitating toward Cold War behavior. The old Soviet obsession – fighting American imperialism – remains undiluted. ...

"(A)t virtually every turn, Mr. Putin and the Russian leadership appear to be doing their best in ways large and small to marginalize and embarrass the United States and undercut U.S. foreign policy interests."

The Times pointed to Putin's snub of Robert Gates and Condi Rice by having them cool their heels for 40 minutes before a meeting. Then came a press briefing where Putin implied Russia may renounce the Reagan-Gorbachev INF treaty, which removed all U.S. and Soviet medium-range missiles from Europe, and threatened to pull out of the Conventional Forces in Europe Treaty, whereby Russia moved its tanks and troops far from the borders of Eastern Europe.

On and on the Times indictment went. Russia was blocking new sanctions on Iran. Russia was selling anti-aircraft missiles to Iran. Russia was selling weapons to Syria that found their way to Hezbollah and Hamas. Russia and Iran were talking up an OPEC-style natural gas cartel. All this, said the Times, calls to mind "Soviet-era behavior."

Missing from the prosecution's case, however, was the motive. Why has Putin's Russia turned hostile? Why is Putin mending fences with China, Iran and Syria? Why is Putin sending Bear bombers to the edge of American airspace? Why has Russia turned against America? For Putin's approval rating is three times that of George Bush. Who restarted the Cold War?

To answer that question, let us go back those 16 years.

What happened in 1991 and 1992?

Well, Russia let the Berlin Wall be torn down and its satellite states be voted or thrown out of power across Eastern Europe. Russia agreed to pull the Red Army all the way back inside its border. Russia agreed to let the Soviet Union dissolve into 15 nations. The Communist Party agreed to share power and let itself be voted out. Russia embraced freedom and American-style capitalism, and invited Americans in to show them how it was done.

Russia did not use its veto in the Security Council to block the U.S. war to drive Saddam Hussein, an ally, out of Kuwait. When 9-11 struck, Putin gave his blessing to U.S. troops using former republics as bases for the U.S. invasion.

What was Moscow's reward for its pro-America policy?

The United States began moving NATO into Eastern Europe and then into former Soviet republics. Six ex-Warsaw Pact nations are now NATO allies, as are three ex-republics of the Soviet Union. NATO expansionists have not given up on bringing Ukraine, united to Russia for centuries, or Georgia, Stalin's birthplace, into NATO.

In 1999, the United States bombed Serbia, which has long looked to Mother Russia for protection, for 78 days, though the Serbs' sole crime was to fight to hold their cradle province of Kosovo, as President Lincoln fought to hold onto the American South. Now America is supporting the severing of Kosovo from Serbia and creation of a new Islamic state in the Balkans, over Moscow's protest.

While Moscow removed its military bases from Cuba and all over the Third World, we have sought permanent military bases in Russia's backyard of Central Asia.

We dissolved the Nixon-Brezhnev ABM treaty and announced we would put a missile defense system in Poland and the Czech Republic.

Under presidents Clinton and Bush, the United States financed a pipeline for Caspian Sea oil to transit Azerbaijan and Georgia to the Black Sea and Turkey, cutting Russia out of the action.

With the end of the Cold War, the KGB was abolished and the Comintern disappeared. But the National Endowment for Democracy, Freedom House and other Cold War agencies, funded with tens of millions in tax-exempt and tax dollars, engineered the ouster of pro-Russian regimes in Serbia, Ukraine and Georgia, and sought the ouster of the regime in Minsk.

At the Cold War's end, the United States was given one of the great opportunities of history: to embrace Russia, largest nation on earth, as partner, friend, ally. Our mutual interests meshed almost perfectly. There was no ideological, territorial, historic or economic quarrel between us, once communist ideology was interred.

We blew it.

We moved NATO onto Russia's front porch, ignored her valid interests and concerns, and, with our "indispensable-nation" arrogance, treated her as a defeated power, as France treated Weimar Germany after Versailles.

Who restarted the Cold War? Bush and the braying hegemonists he brought with him to power. Great empires and tiny minds go ill together.

This week, Time Magazine included its Person of the Year of 2007 on its list of the world's 100 Most Influential People of 2008.

This is not a surprise, of course, but it just goes to show you how fantastic Putin has been when in the Talkback section of the Time 100 report - where readers comment on the list - Putin seems to be a resounding favorite, heralded as the most deserving by so many.

Here are just some of the Talkback comments

- Brendan from Royersford, PA: i would have to say i choose Vladimir Putin. he is a very strong man itellectually and shows many leadership qualities that some of us admire. he is my top choice because all others seem like a joke

- Yuri from Washington, DC:: Vladimir Putin, for turning around an entire country

Moreover, Joel Stein of Time wrote a fun essay entitled "For God's Sake, Rank the TIME 100," where he tried to devise a methodology to rank the 100. According to Joel's formula, which includes such vital statistics as Google hits and TMZ non-appearances, Putin ranks first, edging out Bush !

Time Magazine rankings are debatable, sure, but as far as influence goes I agree that Putin is tops. It's really a no-brainer.


Madeleine Albright, for Time:

I have friends who predict that Vladimir Putin will find his new position as Russian prime minister a comedown after eight years as President. I doubt it. Putin is more likely to define his job than be defined by it. After our first meetings, in 1999 and 2000, I described him in my journal as "shrewd, confident, hard-working, patriotic, and ingratiating." In the years since, he has become more confident and — to Westerners — decidedly less ingratiating.

Some believe Putin's KGB background explains everything, but his allegiance to the KGB is in turn explained by his intense nationalism — which accounts for his popularity in Russia. Timing matters in history, and Putin has had the benefit of high oil prices and the contrast with his predecessor, Boris Yeltsin. [CW: The average price of oil in the past eight years is just a tad over $40; oil has been under $70 for 90% of Putin's reign] His vision of Russia is that of a great power in the old-fashioned European sense. Such powers have spheres of influence and subjugate lesser powers. [CW: I wonder if Albright would consider Russian bombers buzzing Alaska an attempt by Russia to influence and subjugate a lesser power lol; Putin always looks to do what's best for Russia and it doesn't matter if it's against someone larger or smaller, he's won't be intimidated] At home, they celebrate national traditions and prize collective glory, not individual freedom. [CW: Many pundits agree: Russians have never been this prosperous, this optimistic, or this free... and every thing's looking up; but, sure, give it your own spin]

Tolstoy described the 19th century count Mikhail Speransky as a "rigorous-minded man of immense intelligence, who through his energy...had come to power and used it solely for the good of Russia." What one found disconcerting, though, "was Speransky's cold, mirror-like gaze, which let no one penetrate to his soul [and] a too great contempt for people." It is possible to love the idea of a nation without caring too much for its citizens.[CW: Tell that to the people running the United States]

It is unlikely that Putin, 55, will wear out his welcome at home anytime soon, as he has nearly done with many democracies abroad. [CW: Judging from Putin's popularity on the Internet, in hip cafes in Williamsburg, and among the press-corp of the last NATO summit, I would disagree; the only people irritated by him are ones who conspired for the destruction of Russia and have become bitter that Putin spoiled their plans] In the meantime, he will remain an irritant to nato, a source of division within Europe and yet another reason for the West to reduce its reliance on fossil fuels. [CW: I agree completely. Putin will remain an irritant to nato, a relic of the Cold War. He will divide Europe between those who choose to cooperate and those choose to blackmail, between those who are living in the present and those who are living in the past, and between those who can speak for themselves and those who like being Washington's puppets. And Putin will force the West to reduce its reliance on fossil fuels because Russia, I believe, will stop selling oil and gas to a lot of its customers who are completely ungrateful. A self-fulfilling prophecy, if you will]