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Security Watch: January 14, 2003


14 January 2003, Volume 4, Number 2
FOREIGN POLICY
RUSSIAN WARSHIPS HEAD TO THE GULF. Moscow will send the Pacific Fleet cruisers "Marshal Shaposhnikov" and "Admiral Panteleev" to the Persian Gulf in order "to protect Russian national interests in the event of an escalation of the military conflict between the United States and Iraq," Interfax and gazeta.ru reported on 13 January, quoting an unidentified source in the Pacific Fleet command in Vladivostok. According to the source, the cruisers will set sail in February and will be charged with monitoring the situation rather than participating in any conflict. The Russian Navy does not exclude the possibility that it will send additional ships to the region, gazeta.ru reported. The website also pointed out that the "Marshal Shaposhnikov" carried out a similar mission during Operation Desert Storm in 1991. President Vladimir Putin visited the cruiser in Vladivostok in August and mentioned that the ship would be sent on far-off missions in the future.

DEFENSE MINISTER URGES DIPLOMACY REGARDING NORTH KOREA. Speaking to journalists in Moscow on 6 January, Sergei Ivanov iterated Moscow's belief that the present crisis over North Korea's nuclear program should be resolved by "quiet diplomacy" without the intervention of the United Nations (see "RFE/RL Security and Terrorism Watch," 7 January 2003), ITAR-TASS and other Russian news agencies reported. "The existence of a nuclear program does not mean that Pyongyang has nuclear weapons on hand," Ivanov said. "To resolve this problem, one should use an approach that will guarantee the nuclear-free status of the Korean Peninsula and international control over Pyongyang's nuclear projects." He added that North Korea needs security guarantees in order to prevent an unpredictable situation from developing in the region. Russia is ready to join with South Korea, Japan, and China to help mediate, Ivanov said.

MOSCOW, TOKYO EXPRESS CONCERN ABOUT NORTH KOREA... Japanese Prime Minister Junichiro Koizumi told "Izvestiya" and ITAR-TASS on 10 January that Japan will demand that North Korea rescind its decision to withdraw from the nuclear nonproliferation treaty. He added that he will discuss this issue with President Putin during their summit beginning the same day and that he understands Russia can play an important role in resolving the conflict because of Moscow's good relations with Pyongyang. Foreign Ministry spokesman Aleksandr Yakovenko also expressed concern about Pyongyang's renunciation of international controls over its nuclear program.

...AND MINISTER PROPOSES RUSSIAN SOLUTION. Atomic Energy Minister Aleksandr Rumyantsev said that Russia can resolve the conflict over North Korea and return that country to "the framework of the nuclear nonproliferation treaty," ITAR-TASS and other Russian news agencies reported on 10 January. To do so, he implied, the United States should allow Moscow to undertake an energetic aid program to North Korea. An unidentified Russian expert told ITAR-TASS that in order to withdraw from the nonproliferation treaty, North Korea must complete several technical procedures, including notifying the other signatories of the treaty and the United Nations Security Council. He estimated that will take about three months.

MOSCOW, TOKYO SEEK CLOSER RELATIONS... Speaking in advance of the 9 January arrival in Moscow of Japanese Prime Minister Koizumi, Deputy Foreign Minister Aleksandr Losyukov said on 8 January that the two countries have already agreed to a document outlining "the development of a creative partnership," ITAR-TASS reported. The document touches upon all aspects of bilateral relations, including political cooperation, trade and economic ties, cultural exchanges, and cooperation in law enforcement and defense. It also contains a chapter devoted to the problem of negotiating a peace treaty between the two countries, which have remained formally at war since World War II. The signing of a treaty has been blocked by a dispute over the Kurile Islands, which the Soviet Union occupied in the closing days of the war. Losyukov said that many factors are pushing Japan and Russia closer together and that the time is ripe for a businesslike discussion of a peace treaty without excessive emotional rhetoric. Speaking to reporters in Tokyo, Koizumi said on 8 January that "Japan has said in the past that a close relationship would be difficult if the islands were not returned, which was extremely unrealistic," Reuters reported. "Now both sides are taking steps that are quieter but more productive," Koizumi said. During Koizumi's visit, it was expected that the Kurile issue would be set aside and talks would focus on North Korea and the fight against international terrorism, Reuters reported.

...AS RUSSIAN-JAPANESE SUMMIT OPENS. President Putin met in the Kremlin on 10 January with Prime Minister Koizumi and said the summit should give new impetus to bilateral relations and help improve the international situation, Russian news agencies reported. Koizumi said he favors the quick signing of a Russian-Japanese peace treaty "after the resolution of the territorial problem." In an interview published in "Izvestiya" on 10 January, Koizumi expressed the hope that a solution to the Kurile dispute will emerge through the general expansion of bilateral relations. State-run RTR television commented that the summit will focus on less contentious areas such as economic relations, because "one can argue for years, but profits can come now." In particular, Moscow hopes to attract Japanese investment into the Far East energy sector and to increase many times over the amount of Russian oil exports to Japan. "Rossiiskaya gazeta" wrote on 10 January that Moscow and Tokyo continue to see the Kurile problem differently. Japan is pushing the "Hong Kong option," under which Russia will govern the islands until a specified date and then transfer them to Japan. Moscow backs the so-called Falklands variant, under which the islands will come under permanent joint control.

RUSSIA, FRANCE PREPARE FOR PARIS SUMMIT. Deputy Foreign Minister Aleksei Meshkov said that Russia and France have reached a higher level of cooperation in the international political arena, moving from mere coordination to joint action, as demonstrated by their positions on Iraq, ITAR-TASS reported on 8 January. He especially noted the formation last year of a Franco-Russian security council. Meshkov also said that French Foreign Minister Dominique de Villepin was expected to stop in Moscow on 8 January on his way to Beijing to discuss with Foreign Minister Igor Ivanov preparations for President Putin's trip to France on 10 February. He said the ministers will discuss Russia's relations with the G-8 countries since France has taken over the chairmanship of that organization this year.

NATIONAL SECURITY
EMERGENCY MINISTRY ISSUES 2002 REPORT. Russia was plagued by natural and technological disasters in 2002, with fires causing the most damage and casualties, polit.ru reported on 30 December, citing the annual report of the Emergency Situations Ministry. The ministry reported that there were nearly 230,000 fires registered in 2002, in which 16,312 people died and which caused 52 billion rubles ($1.7 billion) in damages. The ministry also coped with 1,070 other emergencies, including floods, earthquakes, and airplane crashes. In these, 1,900 people were killed, 320,000 were injured, and 76,000 were rescued. The report noted the continued increase in the number of technological emergencies caused by the country's aging infrastructure.

MILITARY
FORMER DEFENSE MINISTER CRITICIZES GENERAL. Former Defense Minister Igor Rodionov expressed his disapproval of the behavior of Colonel General Gennadii Troshev, who was dismissed last month from his post as commander of the North Caucasus Military District for publicly discussing his refusal to accept a transfer to command the Siberian Federal District, "Nezavisimoe voennoe obozrenie," No. 52, reported (see "RFE/RL Newsline," 19 December 2002). "If I were [Troshev], I would rather resign than make a public show, and President Putin would be right to demote him," Rodionov said. He also expressed doubt that Troshev will be able to imitate former Chechen war General Lev Rokhlin, who started a political career after retiring from the military. "It is not desirable to have people such as Troshev in politics since he is an unreliable person," Rodionov said. Rodionov also criticized Defense Minister Sergei Ivanov, saying that he is not doing a good job and the Defense Ministry is not the proper place for him. Finally, he criticized Chief of Staff General Anatolii Kvashnin, saying that he is sitting back and watching the destruction of Russia's defense capabilities.

GENERAL SAYS RELEASING CASUALTY FIGURES IS 'INHUMANE'... First Deputy Chief of the General Staff Colonel General Yurii Baluevskii said in a 9 January interview in "Moskovskii komsomolets" that he opposes publication of information about losses sustained by federal forces fighting in Chechnya. Baluevskii revealed that, like his predecessor Colonel General Valerii Manilov, he is the key person overseeing military operations in Chechnya. Baluevskii ended Manilov's practice of releasing data on federal casualties in the fighting each week. "I believe that such a practice is inhumane. During every engagement, people are dying," he said. "We are obligated to name everyone and to honor them after peace is achieved. But the question 'how many died' is not one to be asked during times of tragedy."

...AND COMMENTS ON INTERNATIONAL ISSUES. In the same interview, Colonel General Baluevskii said that as the person responsible for the Defense Ministry's foreign contacts, he has told his U.S. counterparts that a military operation against Iraqi President Saddam Hussein is not the optimal solution of the Iraq problem. He added, however, that he does not doubt the capability of the United States to defeat Iraq decisively. Baluevskii also said Russia's military cooperation with China is not intended as a counterweight to NATO, but is an effort to support President Putin's balanced political line.

POLITICAL ECONOMY
LUKOIL SEEKS STAKE IN BALKANS' LARGEST OIL COMPANY. Russian oil giant LUKoil is the leading contender in a tender to privatize Greek oil major Hellenic Petroleum, which is the largest oil company in the Balkans, gazeta.ru reported on 9 January. According to the report, LUKoil is prepared to pay $454 million for a 23.17 percent stake in the company. The Greek government has referred to LUKoil as "the exclusive contender" for the stake, the report added. Even after the sale, the Greek government will retain 58.2 percent of the company and control of its management. However, the minority stake would give LUKoil access to Hellenic Petroleum's infrastructure of more than 1,500 retail gasoline outlets throughout the Balkans and open up new opportunities for expansion in the region, gazeta.ru commented.

RUSSIA TO INCREASE OIL, GAS PRODUCTION... Energy Minister Igor Yusufov said on 12 January that Russia will follow the lead of OPEC countries, which announced they will increase oil production by 1.5 million barrels beginning 1 February, nns.ru reported on 13 January. Yusufov said it is Russia's policy to compensate for any oil shortages that might develop on world markets and to keep oil prices stable. The ministry released its annual report, which said that Russia produced 2.274 billion barrels (379 million tons) of oil in 2002 and will produce 2.340 billion barrels (390 million tons) in 2003, "Kommersant-Daily" reported on 13 January. Natural-gas production will be increased from 594 billion cubic meters in 2002 to 604 billion this year, the report states. In order to increase competition and reduce prices, the ministry has proposed the creation this year of an energy stock exchange, the daily noted.

...AS RUSSIAN OILMEN COMPLAIN THEY CAN'T BOOST EXPORTS. The heads of several Russian oil majors on 10 January sent a letter to Prime Minister Mikhail Kasyanov asking him to look into policies enforced by the state-run oil-transport monopoly Transneft that they claim are preventing private oil companies from increasing exports, strana.ru reported on 13 January. The oilmen complain that Transneft is ignoring their interests and barring the export of oil through the Latvian port of Ventspils in order to increase support for the government's Baltic Pipeline System and the newly built oil terminal in the Leningrad Oblast port of Primorsk. Transneft Vice President Sergei Grigoriev charged that "the oil companies want to increase exports by any means and do not care about the interests of the country," according to strana.ru.

PRIME MINISTER SAYS PIPELINES WILL REMAIN UNDER STATE CONTROL... Addressing a conference in Murmansk on 10 January, Prime Minister Kasyanov said the government will not tolerate the construction of private pipelines in Russia, "Vedomosti" reported on 13 January. "You must understand that according to Russian law, [such projects] would not be private initiatives," Kasyanov was quoted as saying. At present, all major oil pipelines are controlled by the state-run monopoly Transneft, and all natural-gas pipelines are run by Gazprom. The government has adopted a policy of trying to attract investment into the pipeline infrastructure by offering discounted transport tariffs, the daily wrote. Kasyanov's statement seems to have cast doubt on ambitious plans by Russian and foreign investors to build pipeline projects worth tens of billions of dollars, pravda.ru wrote on 13 January, including a plan by LUKoil, Yukos, TNK, and Sibneft to construct a $4.5 billion oil pipeline from western Siberia to Murmansk. Also seemingly affected is a project announced by Yukos and the Chinese state petrochemical concern CNPC to build a $1.7 billion pipeline from the Siberian city of Angarsk to China's Datsin capable of transporting 20 million to 30 million tons a year (see "RFE/RL Newsline," 18 November 2002).

...AS RUSSIA TO CHOOSE BETWEEN JAPANESE AND CHINESE OIL-TRANSIT ROUTES. An agreement reached during the recent visit of Japanese Prime Minister Koizumi to Moscow has spurred competition between Japan and China over the proposed Far East transport route for Russian oil exports, pravda.ru reported on 13 January. According to the website, President Putin told a recent Security Council meeting that routing oil exports through China could jeopardize Russian national interests and that routing them through the port of Nakhodka could help Russia improve oil supplies to that region. These considerations seem to have been bolstered by Koizumi's offer to funnel $5 billion in Japanese investments into a pipeline in order to reduce Japan's dependence on Middle Eastern oil. Such a project could also enable Russia to export to the west coast of the United States. Deputy Foreign Minister Aleksandr Losyukov has said that Moscow is currently reviewing both plans, neftegaz.ru reported on 13 January. Losyukov admitted that the Chinese option is more advanced, but said the Angarsk-Nakhodka project could increase competition for Russian oil. He said that a decision will be made quickly.

PRIME MINISTER FORESEES DEVELOPMENT IN FAR NORTH. Speaking at an interbranch governmental meeting aboard the "Yamal" nuclear icebreaker in Murmansk, Prime Minister Kasyanov noted that Murmansk is the only year-round port in the Russian Far North and, therefore, it must be the central point of the Russian Arctic transportation system, strana.ru reported on 10 January. Kasyanov also said exploration of the Arctic shelf will sharply increase the flow of goods through the northern sea route and this will create the need for more nuclear icebreakers.

CRIME AND PUNISHMENT
U.A.E. COURT SENTENCES RUSSIAN FOR SELLING FAKE DOLLARS. An unidentified Russian citizen was sentenced to three years in prison by a court in Dubai for attempting to sell $1 million in counterfeit U.S. currency, RIA-Novosti reported on 7 January. The man was arrested last year while trying to sell the counterfeit bills for $338,000.

TRENDS AND IDEAS
MINISTER DECLARES VICTORY OVER SEPARATISM. Vladimir Zorin, the government minister responsible for nationalities policy, has said that during the last two years Russia has overcome its greatest threat, "separatism in the legal sphere," "Parlamentskaya gazeta" reported on 5 January. During that period, Russia has succeeded in restoring the priority of federal laws over regional ones and has brought the constitutions of the federation subjects into compliance with the federal constitution. Zorin also said that he is encouraged by the results of the national census conducted in October, which seem to indicate that Russia is emerging from the post-Soviet demographic crisis. According to the census, the mortality rate in many Russian regions has declined and the birth rate has increased. In 1992-95, more than 70 percent of the additions to the population was accounted for by migration, while in 2000, migration accounted for just 8 percent of population increase, with the rest attributable to rising birth rates. Zorin reported that the country's population of 145.1 million people comprises 120 million Russians, 5.5 million Tatars, 4.3 million Ukrainians, 1.8 million Chuvash, 1.3 million Bashkirs, 1.2 million Belarusians, and 1.2 million Mordovins. Chechens are the eighth-largest ethnic group, followed by Germans, Udmurts, and Mari, although Zorin did not specify the sizes of these groups.

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