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Russia Report: January 30, 2007


A Belarusian Pawn On The Global Chessboard

By Victor Yasmann
January 23, 2007 (RFE/RL) -- While policymakers in the EU fret about Russia's reliability as an energy supplier, their counterparts in Russia interpret the conflict with Minsk differently. Economic Development and Trade Minister German Gref and Finance Minister Aleksei Kudrin argue that the rise of oil and gas tariffs for Belarus has more of an economic than political meaning.


They point out that Russia’s forthcoming entry to the World Trade Organization (WTO) requires the Kremlin to raise domestic prices to world market levels by 2011. This is impossible to do without first raising energy-export prices, which is precisely what Russia has been doing -- increasing gas and oil prices for its CIS neighbors.

However, another group of domestic analysts, many of them nationalist, interpret rising energy-export prices -- at least for a customer such as Belarus -- differently. They accuse "Western agents" within the government of Prime Minister Mikhail Fradkov of undermining the Russia-Belarus Union state agreement signed in 1997. One such critic, Mikhail Remezov, president of the Moscow-based National Strategy Institute, wrote on km.ru on 12 January that "the energy conflict makes the building of a Russia-Belarus Union state both impossible and meaningless."

An Alternative Future

One of the most provocative analyses of the Russian-Belarusian relationship has been put forth by Sergei Pereslegin, a specialist on alternative-future analysis who heads the St. Petersburg-based research center Modeling the Future. Pereslegin, who is reputed to have earned Putin's attention and respect, argues that the Kremlin has in fact revised its entire strategy toward Belarus.

Kremlin policymakers may eventually decide that political gains will offset the economic costs of absorbing Belarus.

Much of Pereslegin's argument can be found in his book "A Do-It-Yourself Guide To Playing On The World Chessboard," published in 2006. The book was intended as a Russian response to Zbigniew Brzezinski's "The Grand Chessboard" of 1997.


Lukashenka isn't looking at Russia from a position of strength (ITAR-TASS)

According to Pereslegin, the Kremlin has refused to fully incorporate Belarus into the Russian Federation -- not because this is not its ultimate goal. Rather, the Kremlin is merely biding its time. Kremlin policymakers believe that Belarusian President Alyaksandr Lukashenka's policies are bringing the country to a political and economic dead end. Russia only has to wait for "the fruit to ripen and fall into its hands."

Belarus is completely economically and politically dependent on Russia, according to Pereslegin. The Belarusian economy cannot exist independently of Russia's raw materials, which provide energy for Belarus's own industrial production. And Russia provides the only market for these finished products.

Moreover, cheap Russian oil helps Lukashenka's internationally isolated regime maintain its political stability. Belarus imports and refines annually about 17 million tons of Russian oil, but consumes only 4 million tons. The rest Minsk sells to the West at market prices. The revenues from these sales underwrite Belarus's generous social-welfare programs. In this way, not only Belarus's economic but also its social order depends on Russia.

Pereslegin also notes that Lukashenka's regime has no "national project" like that of neighboring Ukraine, which has been building its own independent state for more than a decade.

Belarus's leadership, on the other hand, has relied on tactics without a strategy or a strategic objective, such as an independent state. Lukashenka has backed himself into a tight corner: He has no other option than to push for the quickest union with Russia conditional on the preservation of his own status as president of an "independent Belarus."


"For the Kremlin it is clear that Belarus eventually cannot avoid joining Russia and the only agenda to discuss is the details of the integration," Pereslegin writes. Pereslegin suggests the Kremlin has in mind only one scenario: full reintegration through the incorporation of all six of Belarus's administrative areas plus Minsk as new oblasts of the Russian Federation.

Kremlin policymakers believe that Lukashenka's policies are bringing the country to a political and economic dead end.

Under this arrangement, Belarus would not even have the same status as the republics of Tatarstan or Bashkortostan. According to Pereslegin, Putin bluntly made this offer to Lukashenka in 2004, who angrily rejected it. "One can understand [Lukashenka's] position, since it would not only mean the inglorious end of the 'Republic of Belarus' but harshly upend the position of the Belarusian elite, including that of Lukashenka himself, " Pereslegin comments.

But Putin is remaining firm, unmoved by Lukashenka's growing discomfort. According to Pereslegin, Putin knows Belarus has no choice. In fact, Russia will win more concessions the longer it delays the "acquisition" of Belarus. The more time that passes, the more "profitable" the Union Treaty will be for Russia, whose businesses will be able to come in and replace the owners of Belarusian assets.

Biding Its Time

At the present time, Russia would pay too high a price to absorb the unreformed, paternalistic economy of Belarus, according to Pereslegin. The Russian economy is more open and market oriented than the Belarusian economy, which responds to the decrees of Lukashenka rather than market forces.

Another problem is that the 10 million-strong Belarusian population has an average annual income lower than that of Russia. Well educated and technically proficient Belarusian workers earn lower wages than their Russian counterparts. They are now employed mostly in the machine-building sector, whose products are exported to eager Russian industrial enterprises.


Belarusian exports depend heavily on the Russian market (RFE/RL)

Full integration could trigger a massive influx of migrants from Belarus to Russia, which could trigger both social tension and a reduction of Belarusian industrial exports to Russia because of labor shortages.

However, Kremlin policymakers may eventually decide that political gains will offset the economic costs of absorbing Belarus. The Putin government could score a big political success by retaking "lost Russian lands." What's more, Russia-Belarus integration could "create momentum for further integration and political pressure on Ukraine and Baltic states," Pereslegin suggests.

Pereslegin notes that timing is the critical issue. The conditions have to be right. First and foremost, the resources of the United States and European Union must not be allied against the project. Second, Russia would need to quickly generate additional economic growth from the absorption of Belarus to offset the costs of the incorporation of new territories. These criteria relate not only to Belarus but also to any further efforts to reintegrate former Soviet states.

These conditions, in Pereslegin's view, do not yet exist, but they are achievable in the medium-term. In the meantime, it will be expedient for Russia to delay formation of the union state, leaving Lukashenka dangling as if over a precipice.




Ill Will Won't Dog Merkel, Putin Ties

By Victor Yasmann
January 22, 2007 (RFE/RL) -- Heading into their first bilateral meeting of 2007, Russian President Vladimir Putin and German Chancellor Angela Merkel had weighty items on the agenda: energy security, the Middle East, Iran, and Kosovo.


In the end, however, the meeting passed smoothly and was virtually problem-free. No major accords or breakthroughs were made, but for journalists on the scene, the story was more about mood than content.


Business Vs. Pleasure


Merkel in the past has been critical of the "special relations" evident between Putin and her predecessor, Gerhard Schroeder. As chancellor, she pledged never to mix the personal and the political when it came to Russia and its president. Her recent angry rhetoric following this month's cutoff in Russian oil supplies led many to believe the January 21 summit would be brusque and businesslike.


Events, however, evidently conspired to soften her resolve. The meeting, originally scheduled for Moscow, was moved to Bocharov Ruchei, Putin's personal summer residence in Sochi. The warm temperatures and clear skies immediately made the summit more informal and cozy. Merkel and Putin both looked relaxed, exchanging jokes, and speaking in a mixture of German and Russian.


Speaking The Language


The two leaders, of course, are unusually well-suited to communicate. Putin speaks fluent German, and Merkel speaks good Russian as well. As a student in communist East Germany, the chancellor once won a contest for superior knowledge of the Russian language, and was awarded with a two-week tour of the Soviet Union.


Merkel had ample opportunity to demonstrate her Russian skills during the Sochi summit -- often with Putin's encouragement. Asked by a Russian journalist how she liked the Black Sea setting, Merkel was instructed by Putin -- using the informal "ty" form -- to answer in Russian. The chancellor dutifully obliged.


Later, when Koni, Putin's black Labrador, made her domineering entrance, Merkel nervously, or perhaps wishfully, commented in Russian, "Now the dog is going to eat the journalists." Finally, drinking tea together with Putin at a small garden table, Merkel jokingly raised her cup in a vodka-like toast and wished Russian president good health in his native language.


Warm, Or Weird?


The Gazprom-controlled "Izvestia" newspaper enthusiastically endorsed the cordial, if not expressly amicable, atmosphere of the Sochi meeting, saying relations between Putin and Merkel are beginning to be reminiscent of Putin's warm relations with Schroeder.



Koni makes her entrance (epa)

Not everyone was as awestruck, however. Kremlin critic and journalist Yulia Latynina, writing for "Yezhednevny zhurnal," said the "friendly meeting in Sochi between Vladimir Putin, Angela Merkel, and Labrador Koni" left her bewildered.


Following Germany's refusal last autumn to join in exploitation projects on Russia's Shtokman gas field, and Russia's eviction of foreign majority control of the Sakhalin-2 project -- not to mention the recent Minsk-Moscow dispute and subsequent oil cutoff -- the mood was impossible to comprehend, Latynina wrote.


Latynina went on to speculate that the friendly atmosphere was standard for Putin, who often disarms his counterparts with an unexpected dose of charm. Former Italian Prime Minister Silvio Berlusconi, French President Jacques Chirac, and Schroeder -- not to mention U.S. President George W. Bush -- have all been "recruited" by Putin's KGB-bred powers of persuasion, Latynina writes.


Putin, in fact, has boasted in the past that his KGB background has made him a "specialist of interpersonal relations." But Latynina is probably exaggerating both Putin's talents and the Western leaders' naivete.


The Thick Of Things


If Merkel is interested in enjoying good communication with Putin, it is less likely due to his personal allure and more Germany's current role at the center of the European political scene.


Germany currently heads both the European Union and the Group of Eight (G8) club of major industrialized nations. It also remains the one great European power with relatively stable political leadership. It's an opportunity that Berlin hopes to use to consolidate its dominant position within the European alliance and to harmonize different factions within the body. For example, Germany has backed Poland during its standoff with Russia over a meat import ban and the building of the Nord Stream pipeline, which circumvents Poland.


The tactic apparently worked. Putin in Sochi proposed extending a branch of the Nord Stream project to Poland. He also suggested setting up a gas reservoir in Germany to make the country a new distribution center for Russian gas. Merkel said she has no objections.


Finally, Germany -- as Russia's biggest trade partner in Europe -- is interested in developing bilateral trade relations. This is key not only for energy supplies, but because contracts from Russia can boost employment in economically depressed regions of Germany, particularly in the east.


Allies Dwindling


Russia, too, stands to gain from a close partnership with Germany -- especially because it is unclear who will be the next leader of France, which assumes the EU chairmanship in the second half of 2007.


Until recently, Chirac's France was the only major European power to compete with Germany for Russia's heart. But with people looking ahead to presidential elections in May, that equation, for the time being, is unclear.


At least one French presidential hopeful, Interior Minister Nicolas Sarkozy, has already sparked Russian irritation. Asked by a journalist whether he liked the U.S. model of democracy, Sarkozy answered rhetorically, "And what should I like, the Russian model?"


With Putin ally Berlusconi gone and Chirac and British Prime Minister Tony Blair soon to follow, Merkel, for now, is the only seasoned European leader left for Putin to do business with. Perhaps the next time they meet, Koni will have to stay outside.




Speculation Still Rife About Litvinenko Case

By Claire Bigg

Scotland Yard investigators have been following a number of trails (ITAR-TASS)

January 24, 2007 (RFE/RL) -- Two months have passed since former Russian security officer Aleksandr Litvinenko died of radioactive poisoning in a London hospital.


But the mystery shrouding his death is thicker than ever.

With investigators tight-lipped on their findings, speculation is intense on what has grown into the most dramatic espionage case since the Cold War era.

Divergent Documentaries

On January 22, Britain's BBC television broadcast two documentary films on the former Russian security officer and fierce Kremlin critic.

MORE: Coverage in Russian from RFE/RL's Russian Service.

Andrei Nekrasov, a Russian filmmaker and friend of Litivinenko, is the author of one of these films, titled "My Friend Sasha: A Very Russian Murder."

He tells RFE/RL's Russian Service that the case is generating huge public interest in Britain.

"I know there is very strong pressure from British society on the government and the police to comment on this issue, and television, too, is pressured," Nekrasov said. "For example, I asked the BBC to give me at least six weeks for editing. This is normal. I was given three weeks for everything, for the reason that society needs some kind of answer -- if not the name of the perpetrators, then an honest and open discussion."

So far, Litivinenko's November 23, 2006, death has raised more questions than answers.

The second documentary film shown by the BBC, "How To Poison A Spy," puts forward a different theory. It suggests a first attempt to poison Litvinenko with polonium-210, a rare radioactive substance, took place more than two weeks before he received the fatal dose.

According to the film, the radioactive traces found at a London sushi restaurant where Litvinenko met Italian contact Mario Scaramella on November 1 -- the day the Russian fell violently ill -- were found in a different place from where they were sitting.

The filmmakers say the traces were probably at the seats where Litvinenko had met two former Russian security officers turned businessmen -- Andrei Lugovoi and Dmitry Kovtun -- on October 16.

The two Russians met Litvinenko again on November 1, at London's Millenium Hotel. Radioactive contamination was found at the hotel and eight staff members have tested positive for small doses of polonium.

This theory has already been put forward by a different source -- Russian Prosecutor-General Yury Chaika. Chaika has alleged Lugovoi and Kovtun themselves were poisoned on October 16.

Skeptics Abound

But many observers reject the version put forward by the film.

Oleg Gordiyevsky is the highest-ranking Russian intelligence officer ever to defect. He now lives in London and was a friend of Litivinenko's.

In an interview with RFE/RL's Russian Service, he says that what the BBC describes as a first poisoning attempt was in fact a dress rehearsal for Litvinenko's murder staged by Russia's Federal Security Service (FSB).

"If he had been given some kind of poison [on October 16], he would have died before November 16," Gordiyevsky said. "This was a general rehearsal. Everyone involved in operations -- secret services, military officers -- perform general repetitions of their operations. This day was a rehearsal. They had poison with them, because all warfare substances are meant to be at hand. They arrived, they made up nonsense, but they didn't decide themselves to use the ampule."



Lugovoi (center) and Kovtun (right) (epa)

Gordiyevsky told Britain's "The Times" newspaper last week that a fourth man present at the November 1, 2006, meeting with Lugovoi and Kovtun was responsible for lacing Litvinenko's tea with polonium.

The man was reportedly introduced to Litvinenko as Vladislav and was traveling on a forged EU passport.

"The Times" reports that British police suspect the man of being the killer and says his image was recorded by security cameras at London's Heathrow airport. The newspaper has described the suspect as having Central Asian features.

British investigators from Scotland Yard have declined to comment on these allegations.

Suspicions Deepened

Another London-based ex-KGB agent, Boris Volodarsky, also dismissed the version put forward by the BBC's film as "absurd."

Volodarsky worked as a consultant for the film.

"In my opinion, it's full of mistakes. It's confused. They showed the Kremlin's stance as allegedly being that [exiled tycoon and Litvinenko acquaintance Boris] Berezovsky stands behind this, which is totally absurd," Volodarsky said. "They said the attempt to poison [Litvinenko] took place on October 16. So they indirectly confirmed Russia's version that the attempt to poison him was possibly made on October 16, which is absolutely not true and goes against the investigation's findings and common sense."

Like Gordiyevsky, Volodarsky squarely pins the blame for Litvinenko's poisoning on the FSB.

The accusations echo Litvinenko's deathbed statement blaming Russian President Vladimir Putin -- who formerly headed the FSB -- for his murder.

New footage released on January 22 is likely to deepen suspicions against the FSB.

The BBC and the British broadcaster ITV News aired a previously unseen interview by an Italian investigator in February 2006 in which Litvinenko says he was being persecuted by the FSB.

In the footage, Litvinenko accuses Russian secret services of threatening to kill his 6-year-old son and says a bomb was thrown through his window.

Litvinenko says he wanted the recording to remain secret as he feared for his life.




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