A PERFECT ECOMOMIC STORM LOOMS FOR KREMLIN
There's been a lot of bad economic news in Russia of late. The ruble is plunging, inflation is rising, and growth has slowed to a trickle. Everything that needs to be up is down and everything that needs to be down is up.
But the one figure that should really be causing sleepless nights in the Kremlin is the price of oil -- which is hovering around $90 a barrel. Sure it's an oversimplification, but it's also generally true that the fortunes of any Russian regime tend to fluctuate with the oil price. When energy prices were high in the 1970s, the Soviet Union was aggressive and expansionist. When they tanked in the 1980s, the regime retrenched -- and stagnated.
Just as a thought experiment, imagine what the 1990s would have been like with $100-a-barrel oil. Would Boris Yeltsin have looked so inept? (Ok, he probably would have looked inept, but not so inept.) And would Vladimir Putin have nearly the same amount of swagger if oil was around $20-a-barrel like it was in the 1990s?
Now we know all this, of course. But nevertheless, a couple tweets by Anders Oslund caught my attention this morning:
The first tweet links to a Reuters piece by Edward Mcallister and Timothy Gardner that is well worth reading. Here's the first few grafs:
(Reuters) - As oil production swells, demand falters and prices slide, the global oil market appears on the verge of a pivotal shift from an era of scarcity to one of abundance.
Oil prices have fallen as much as 20 percent since June, despite a host of rising supply risks, leading more investors and traders to consider whether 2015 is the year in which the U.S. shale oil boom finally tips the world into surplus.
While the plunge has rekindled speculation that the Organization of the Petroleum Exporting Countries (OPEC) may need to cut output for the first time in six years when it meets next month, some analysts are looking much further ahead.
They say a long-anticipated fundamental shift in the market may now be under way, ending a four-year stretch when $100-plus prices were the norm, and opening a new era in which OPEC restraint once again becomes paramount.
Read the whole piece here.
Even before the Ukraine crisis, even before Western sanctions, even before the ruble crashed, Russia appeared to be headed for leaner economic times. With falling oil prices, the situation could become dire.
OIL PRICE TRENDS
MORNING NEWS ROUNDUP, OCTOBER 7
Good morning. Here are some items from RFE/RL's News Desk:
POROSHENKO SAYS NO PEACE IN DONBAS WITHOUT CONTROL OVER BORDER
Ukrainian President Petro Poroshenko said in a meeting with a top U.S. official on October 6 that there cannot be peace in Ukraine's eastern Donbas region until government control is re-established over the border with Russia.
Poroshenko, during a meeting with visiting U.S. Assistant Secretary of State Victoria Nuland, stressed the need for Ukrainian border guards to be allowed to return to all areas along the Russian border.
"Without restoring Ukrainian control over the border it is impossible to achieve a peaceful settlement," Poroshenko told Nuland.
Poroshenko also warned that areas in eastern Ukraine controlled by pro-Russian separatists faced a humanitarian disaster this winter if nothing can be done to change the current situation.
Gas, electricity, and food supplies must be resumed, Poroshenko said.
Meanwhile, N ATO's new Secretary-General Jens Stoltenberg said the alliance is very concerned about numerous breaches of a month-old cease-fire between Ukraine and pro-Russian separatists.
Stoltenberg, speaking in Warsaw on his first foreign trip, said it is important for Russia to use its influence to make sure the separatists adhere to the cease-fire.
Russian President Vladimir Putin's Security Council on October 6 also called the cease-fire in Ukraine very fragile, particularly in the area of Donetsk airport.
Stoltenberg called NATO's "task number one" reinforcing the security of its members and "supporting an independent, democratic, and western-oriented Ukraine."
And he vowed to maintain "a continuous presence and activity in the eastern part of our alliance," potentially calling into question its 1997 promise to Russia that it would not permanently station significant combat forces in the east.
Meanwhile, artillery fire resumed in the eastern Ukrainian city of Donetsk late on October 6, raising more doubts about the ceasefire.
Donetsk, eastern Ukraine's largest city, has been under the separatists' control, with the exception of the Donetsk International Airport, which remains in the hands of the Ukrainian army.
The separatists have been mounting repeated attacks against the airport, but their attempts have been so far unsuccessful.
Pro-Russian authorities in Donetsk said that two civilians were killed and five injured in shelling earlier in the day.
Ukraine's National Security Council spokesman, Andriy Lysenko, said October 6 that one soldier was killed and 13 were injured in fighting in the past 24 hours.
(Based on reporting by UNIAN and Interfax)
MOGHERINI SAYS FAVORS A 'BALANCED APPROACH' TOWARD RUSSIA
Federica Mogherini, the European Union Commissioner-designate for foreign policy has said that the EU needs to handle Russia with a mixture of firmness and tact.
Mogherini, speaking during her three-hour confirmation hearing at the European Parliament, said, "I would say that we need a mix of assertiveness and diplomacy. The balance would also depend on the reaction of the [Russian] bear."
Some eastern European EU states had sharply criticized Mogherini's nomination in August, saying her record as Italian foreign minister and a center-left politician showed she was too soft on Moscow over its role in the Ukraine crisis.
Mogherini said that while relations with Russia are strained at the moment, Russia remains "a strategic country in the world" and the EU needs to consider its ties with Russia "in the next five years."
She added, "it is going to be crucial that we are going to engage with Russia for our own security."
Mogherini also said that the EU needs to pay greater attention to its eastern neighbors.
Mogherini said the EU should offer "full support to Ukraine in terms of security, institutional reform, political process" and economic and energy challenges.
She underlined the importance of "a full implementation" of a cease-fire deal between Ukraine and pro-Russia separatists concluded in Minsk last month.
The Commissioner-designate also said she believed EU sanctions against Russia have been effective from the economic point of view.
She said, "I think that the Russian economy is starting to suffer quite a lot. So if the question is, have the choices we have made so far been effective on the Russian economy? [the answer is] Yes."
Mogherini said the EU needed to support other eastern neighbors such as Moldova and Georgia and work more closely with Armenia, Azerbaijan, and Belarus.
RUSSIA CLAIMS TO HAVE FOILED TERRORIST ATTACKS
Russia's National Antiterrorism Committee (NAK) said a security operation in the North Caucasus republic of Daghestan resulted in one militant being killed and large amount of explosive material being seized.
NAK said security forces conducted an operation in the Kyzylyurt district of Daghestan on October 6 and killed Alidibir Asudinov, described as a bomb maker for a local militant group.
A search of a home belonging to the militant group turned up some 170 kilograms of explosive material and a vehicle that was being rigged with enough explosive material to cause a powerful blast.
NAK said the group planned to carry out a series of terrorist attacks in Daghestan.
The operation was conducted one day after a bomber in nearby Chechnya killed five policemen outside a concert hall in the Chechen capital Grozny.
(Based on reporting by TASS and Interfax)
EVENING NEWS ROUNDUP, OCTOBER 6
A few items from RFE/RL's News Desk
RUSSIA BANS NIGHTTIME DEMONSTRATIONS
Russian President Vladimir Putin has signed an amended law that bans nighttime demonstrations and meetings.
The amended law on meetings, rallies, demonstrations, processions and pickets was posted on Russia's official legal portal on October 6.
The new amendments make it illegal to conduct a public event before 7:00 and specifies that such events must end before 22:00 local time.
There are exceptions for events marking historical dates or cultural events.
The State Duma, the lower house of parliament, passed the bill on September 19 and the Federation Council passed it on October 1.
(Based on reporting by Interfax and UNIAN)
NATO CONCERNED ABOUT UKRAINE CEASEFIRE VIOLATIONS
NATO Secretary-General Jens Stoltenberg says the alliance is very concerned about numerous cease-fire breaches in Ukraine.
In Warsaw on his first foreign trip, the new NATO chief said it is important for Russia to use its influence to make sure the separatists adhere to the cease-fire.
Russian President Vladimir Putin's Security Council on October 6 also called the cease-fire in Ukraine very fragile, particularly in the area of Donetsk airport.
Stoltenberg called NATO's "task number one" reinforcing the security of its members and "supporting an independent, democratic, and west-oriented Ukraine."
And he vowed to maintain "a continuous presence and activity in the eastern part of our alliance," potentially calling into question its 1997 promise to Russia that it would not permanently station significant combat forces in the east.
(Based on reporting by Reuters and TASS)
MISSING CRIMEAN TATAR MAN FOUND DEAD, SISTER SAYS
A Crimean Tatar man who went missing late last month on the annexed peninsula has been found dead, his sister said.
Edem Asanov's sister, Feride, told RFE/RL on October 6 that Asanov's body was in a morgue in the Crimean city of Yevpatoria and that he would be buried on October 7 in the town of Saky.
Asanov's sister provided no further details.
Asanov, 25, is one of many Crimean Tatars who have been reported missing in Crimea in recent months.
Community members say pressure on Tatars is part of what they call a campaign of harassment and intimidation against the Turkic-speaking Muslim minority group, most of whose members opposed Russia's annexation of the Black Sea peninsula from Ukraine in March.
Crimean authorities have made no official comment about Asanov since he went missing on September 29.
Asanov disappeared the day when hundreds of Crimean Tatars protested in the town of Bilohirsk against the disappearances of two other Tatars, 20-year-old Dzhevdet Islamov and 17-year-old Islam Dzhepparov, who were reportedly forced into a vehicle by unknown individuals in military uniform and taken away on September 27.
The protests prompted Crimea's Moscow-backed acting leader, Sergei Aksyonov, to meet Dzhepparov's father Abdureshit, a well-known activist, on September 29 and promise him to search for his son and the other young Tatar man.
The disappearances began in March when activist Reshat Ametov was pushed into a car while picketing local government building in protest at the takeover of the peninsula by Russian troops.
Two weeks later, his body was found with traces of torture.
On October 1, talking at the Parliamentary Assembly of the Council of Europe (PACE) in Strasbourg, the veteran leader of the Crimean Tatar community, Mustafa Dzhemilev, said that at least 18 Tatars had disappeared after the peninsula was annexed by Russia in March.
The Council of Europe’s commissioner for human rights, Nils Muiznieks, said at the PACE session that security for Crimean Tatars "has been shattered by a series of raids by armed, masked security personnel in religious institutions, schools, Tatar-owned businesses, private homes," and the community’s assembly, the Mejlis.
Crimean Tatars are native to the Black Sea peninsula but were deported by Stalin to Central Asia in 1944. They started returning back to Crimea in late 1980s and make now more than 12.5 percent of Crimea's population of 2.5 million.
PUTIN TO SPEND BIRTHDAY IN SIBERIAN SOLITUDE
Russian President Vladimir Putin plans to take his birthday off from work and will spend the day in the Siberian taiga.
Putin's spokesman Dmitry Peskov told journalists on October 6 that the Russian president "is taking tomorrow (October 7) off from work."
Peskov said Putin would depart later in the day for a place in Siberia that was "some 300 to 400 kilometers from the closest inhabited place."
Peskov did not specify where in Siberia Putin planned to spend his 62nd birthday but Peskov said part of the reason for the choice was a scheduled meetings with officials in Siberia on October 8.
Putin usually works on his birthday and Peskov offered no explanation for Putin's decision to "rest" on this birthday.
(Based on reports by TASS and Interfax)
AS PUTIN'S BIRTHDAY APPROACHES, WE SEE MORE AND MORE 'MANLY' PIX
MORE ON CAMPAIGN AGAINST CRIMEAN TATARS
SURKOV'S FAMILY ALBUM
Tatler has pix of Vladislav Surkov's family. They sure do like plaid. I think I have a Burberry overdose!
PUTIN TO SPEND BIRTHDAY IN SIBERIAN TAIGA - WILL NO DOUBT DO SOMETHING 'MANLY'
MORE ON MISSING CRIMEAN TATAR EDEM ASANOV, WHO HAS BEEN FOUND DEAD
And you can read report by RFE/RL's Robert Coalson on the campaign of harassment and intimidation against Crimean Tatars here.
AFTERNOON NEWS ROUNDUP, OCTOBER 6
A few items from RFE/RL's News Desk
RUSSIAN RUBLE HITS RECORD LOW
The U.S. dollar has risen above 40 Russian rubles for the first time ever.
The ruble's worth fell below 40 to the dollar in early trading in Moscow on October 6, RIA Novosti and TASS reported.
The Russian currency has fallen steadily in the last three months amid tightening U.S. and European Union sanctions against Moscow over its role in the conflict in Ukraine.
A dollar bought about 34 rubles in early July, and the official exchange rate on October 4 was just under 39.70 rubles to the dollar.
The ruble rate has been closely watched by since the 1991 Soviet collapse and is seen by many Russians as a sign of the economy's strength or weakness.
News that the ruble's worth fell below 40 to the dollar was greeted with comments by Kremlin foes such as Alexei Navalny, who noted that a round number would make calculations simple.
(Based on reporting by RIA Novosti, TASS, and Reuters)
NAVALNY ASSOCIATE SEEKS ASYLUM IN GREAT BRITIAN
A close associate of top Kremlin critic Aleksei Navalny has applied for political asylum in Britain.
Vladimir Ashurkov, the executive director of Navalny's anti-corruption fund, announced his decision on Twitter on October 6.
The former banker helped Navalny expose corruption among the elite and fund his campaign for Moscow mayor last year.
His announcement came after the "Izvestia" daily published what it said was his asylum application.
Ashurkov wrote in the alleged application that "a fabricated criminal case" had been launched against him and that he faced "detention, inhuman conditions, torture, and unfair judicial procedure" if he returned to Russia.
In June, the Investigative Committee issued an arrest warrant for Ashurkov and charged two other allies of Navalny with fraud linked to the financing of his Moscow mayoral bid.
(Based on reporting by AFP, "Izvestia," and Interfax)
NATO CHIEF SEEKS 'CONSTRUCTIVE' TIES WITH RUSSIA
NATO's new chief says the alliance wants "constructive" relations with Russia despite moves to bolster the defense of member states in eastern Europe.
Jens Stoltenberg, who is on his first trip abroad since becoming NATO Secretary General last week, spoke in an interview published in the daily "Gazeta Wyborcza" on October 6.
"There is no contradiction between a strong NATO and building constructive relations with Russia," he said.
Stoltenberg pledged NATO would respect its international commitments, including a post-Cold War deal with Moscow limiting deployments in the former Communist bloc.
In comments broadcast on October 5, Stoltenberg told the Polish state broadcaster TVP Info that NATO could deploy its forces "wherever" it wanted, potentially calling into question its 1997 promise to Russia that it would not permanently station significant combat forces in the east.
Relations between NATO and Moscow are badly strained by the Ukraine crisis.
(Based on reporting by Reuters and dpa)
RUSSIA TO DEPLOY WEATHER SATELLITE GROUP TO ARCTIC
Russia plans to deploy satellites to monitor the Arctic, a region President Vladimir Putin has set out as a priority because of its strategic location and natural resource riches.
The Federal Space Agency, Roskosmos, said on October 6 that "two Arktika-M satellites will be placed in a highly elliptical near-Earth orbit" soon to monitor the weather and environment in the region.
Officials have said a new military command will be formed in the Arctic region by the end of 2014 and two motor-rifle brigades will start serving within the Russian army group there in 2015-2016.
Russia is looking to the Arctic as a source of oil and gas, but Western sanctions against companies such as state giant Rosneft have thrown up a hurdle to its drilling plans.
(Based on reporting by Interfax and TASS)
RUSSIAN MILITARY HOLDS 'ANTI-TERROR' DRILLS IN TAJIKISTAN
Russian forces based in Tajikistan are holding military drills near the Central Asian nation's capital, Dushanbe.
A spokesman for Russia's Central Military District, Yaroslav Roshchupkin, says the maneuvers started on the Lyaur training ground on October 6.
He said more than 1,000 servicemen and 300 pieces of military hardware from Russia's 201st military base, which is located in Tajikistan, are practicing to ward off possible attacks by "international terrorists."
Tajikistan shares a long border with Afghanistan, and Russian officials have voiced concern that the militant threat to Central Asia and Russia may increase after most Western troops leave by the end of this year.
The 201st base is Russia's largest non-naval military facility outside the country, with some 6,000 servicemen stationed near the cities of Dushanbe, Qurghonteppa and Kulob.
(Based on reporting by TASS and ca-news.org)