Russia's Gas War is Political

The dispute is entirely political. Russia is loosing more money by not sending gas than they were trying to squeeze out of Ukraine. Russian gas storages are full, so they will soon have to start burning their gas because they have nowhere to put it. The purpose of this gas war with Ukraine is the same as the purpose of the hot war with Georgia - to prevent the European integration of either nation and keep it within the Russian sphere of influence.

Russian back-stabbing and blame game

As this Romanian member of Yahoo Ukraine list has pointed out and Romanian media has publicized, the Gazprom subsidiary in Moldova was stealing gas coming in from Ukraine that was intended for delivery further downstream, to Romania and Bulgaria. And then Gazprom accused Ukraine of stealing Russian gas!

This has a Russian signature all over it. Just like the attempts by the Russian security services to hire Ukrainians to fight against Russians in Georgia, which, if it were successful, it could then use to accuse Ukraine of fighting Russia in Georgia. What other purpose any of this could have other than to make Ukraine look bad and to try to drive a wedge between Ukraine and the EU and set up both European and Russian citizens Ukraine...

>In the Romanian mass media that matters, Ukraine is no longer portrayed as a "gas thief". This is partly because of what has happened in Russia, and partly due to the disclosures related to the diversion of the gas from the pipelines for Romania and Bulgaria by the Moldovan subsidiary of Gazprom and by the Moldovan authorities. One senses that Voronin's attempt to back-stab Ukraine economically through this (to divert gas, and create the impression that Ukraine is doing it), and the buying of electrical power from a Transnistrian gas company instead of from Ukraine (Ukraine is exporting 1/3 of her spare electric power to Moldova) is more than the Ukrainian Orange authorities are willing to accept. With Moldova having gas reserves for 24 hours, one senses that the Communists' popularity will be broken. They will come off looking bad. The issue nevertheless needs to be posed: didn't, by propping up Voronin, helping him get re-elected in 2005 with the help of a part of the opposition, Yushchenko and a part of the Orange Kyiv feed the Tasmanian devil called the Moldovan Communists, which is now biting Ukraine's leg? The reason why they did it do not matter, but the fact that it was done has turned against Ukraine like a boomerang. I repeatedly warned about what the Moldovan Communists were up to, and I wasn't alone. Yet Orange Kyiv has learned everything "the hard way", as it always seems to do, not like the good student, but like the student who crams before the exam.

All the best,

Ionas

Russian KGB and Ukraine

The Russian people are not an enemy of Ukraine. I personally have more Russian friends than Ukrainian friends. But unfortunately the Russian government is an enemy of an independent Ukraine.

The trouble is with the fact that the Russian government is run by the KGB (FSB), which has two main goals:

1. Increase their power as much as possible.

2. Make as much money as possible. (Much of which ends up on the personal accounts of the leaders.)

The infamous false Hitler dolls story, by the way, was cooked up by the KGB, and spread all over Russia and the world. You have to be dreaming not to see that they are working on subverting Ukraine's population with propaganda, and sullying Ukraine's image in the world as much as possible. The same thing goes for the current condemnation of Ukraine for selling weapons to Georgia, as if it was something illegal or immoral. Ukraine sells much more weapons to Russia than to anyone else, so Georgians actually have much more reason to complain!

Why would the KGB interests want to invade Ukraine? Two reasons: increase their power and make as much money as possible. There is only one absolutely sure way to gain and maintain wealth in Russia - rise through the KGB and then the world is your oyster. Everyone else can loose both power and wealth by making the wrong move (or by simply being alive) - and very quickly too.

There is a liberal opposition in Russia, with highly intelligent politicians like Valeriya Novodvorskaya, who are absolutely pro-democratic and anti-imperialistic, highly sympathetic to Ukraine (and support Ukraine's NATO and EU strivings) and wish that Russia would emulate Ukraine's democratic reforms and that the friendship between the two nations would be based on shared democratic, European values. (By the way, Grigoriy Yavlinskiy, who was born and raised in Lviv, and has headed Russia's Yabloko Party for decades, is also part of that opposition.)

Some resources on Novodvorskaya:

Голова партії "Демократичний союз"
Валерія Новодворська про Україну, НАТО й Росію (5 kanal):
http://5.ua/img/forall/cytaty/mp3/chas_vajlyvo_novodvorska_5kanal_02042008.mp3

вопрос:
уважаемая валерия ильинична, я один из ваших самых преданных поклонников! многие вас не поддерживают, а я считаю одним из немногих трезвых людей из этой страны! скажите пожалуйста в связи с стремлением украины вступить в нато и ес и вообще интегрироваться в мировое сообщество подальше от россии. как ей следует (политикам украины) "умнее себя вести" с россией? и вообще как вы считаете в чем основные проблемы современной украинской политики и кризиса в украине, какие вы думаете есть выходы? буду с нетерпением ждать ответа!

васюков александр, украина, одесская область, город южный
----------
Послушать ответ Валерии Новодворской:

http://www.ds.ru/media/a092008-15.mp3

Articles by and about her:
http://www.ukrrudprom.ua/news/wtwet344525.html
http://www.grani.ru/opinion/novodvorskaya/m.141518.html
http://pravda.com.ua/ru/news/2005/8/8/20673.htm
http://www.bulvar.com.ua/arch/2008/38/48da6024bf804/
http://www.charter97.org/ru/news/2007/11/12/1495/
http://www.echo.msk.ru/programs/exit/33366/
http://www.grani.ru/opinion/novodvorskaya/m.137634.html

She is also widely published in Ukrainian press:

Just do a simple search in Google for: Валерія Новодворська

Unfortunately, Russian thought leaders like Valeriya Novodvorskaya do not get through to the majority of the Russian public, because the KGB knows how to use the media very skillfully to promote its propaganda, which is not at all friendly to Ukraine. If Ukraine is ever on the news in Russia, it's always in a negative light. And this was true even during Kuchma's term. This is one of the reasons why 50% of Russians think Ukraine is Russia's enemy, while only 20% of Ukrainians think that Russia is Ukraine's enemy. 60% of Ukrainians think that Russia is a friendly nation, while only 20% of Russians think this of Ukraine. KGB propaganda is one of the reasons why the Russian citizens see every other nation as an enemy. Belarus, for example, is practically a part of Russia already, but only 50% of Russians think of it as a friendly nation. And this is the highest number among Russians, because Belarus is seen as the most friendly nation. In essense, if you want most Russians to see your nation is friendly, you first need to become a slave of the Russians. And then they will think of you as a friendly people.

There is also a huge demographic problem in Russia, as a result of their own imperial policies. The Russian Federation is fast turning into a non-Slavic, Muslim nation. (Ukraine's demographic problem is much smaller by comparison.) The Russian army is already 40% Muslim. This is Russia's next generation of leaders. More than half of the children born in Russia today are born into non-Slavic, Muslim families. And unfortunately, thanks to Saudi money, Russia's moderate Muslims are fast radicalizing today. Almost all new mosques in Russia (in the thousands since USSR's collapse) are built on Saudi money, and staffed by Wahabbi-trained imams. (Who produce by far the greatest number of radical Islamic terrorists worldwide.)

There are several options the Russian leadership has in regards to this:

1. Russian leadership may see a necessity to ward off this radical demographic and religious/cultural change by increasing their Slavic population through adding Belarus, Ukraine and Northern Kazakhstan to Russia's territory.

2. If Russia's leadership does not see this as a problem and continues to finance the de-Slavization and Islamization of Russia (to the tune of $10,000 per child), then Ukraine is going to have much bigger problems to deal with in a couple decades. Not only is Ukraine going to have a large, aggressive and imperialistic neighbor to the East, but it is also going to be an empire with a majority radical Muslim population. I wish Ukraine's leaders much good luck in dealing with a problem of this magnitude.

3. If people like Valeriya Novodvorskaya governed Russia, Russia would solve its demographic problems by scaling down its empire and giving freedom to all of its restive Southern Muslim nations. And Ukraine and Russia would both be part of both NATO and the EU by now, and would be best friends forever. Unfortunately, we live in a different world with a different reality. KGB is an implacable, professional, cold, and calculating enemy. The only way to deal with them is by being cool, professional, rational, and strong. (Something unseen in Ukraine's current crop of leaders.)

Palin: If Obama Wins Russia Might Invade Ukraine

The American Vice Presidential candidate from the Republican Party has voiced a common concern of many Ukrainians:

'In Reno, Palin went on to hit Obama for opposing the troop surge in Iraq and for what she saw as "indecision" when Russia invaded Georgia, "After the Russian army invaded the nation of Georgia, Senator Obama's reaction was one of indecision and moral equivalence - the kind of response that would only encourage Russia's Putin to invade Ukraine next. "'

Source:
Fox News Notes
http://www.facebook.com/note.php?note_id=40431994739

West Europe's Appeasement Emboldened Russia's Belligerence in Georgia

Excellent article by John R. Bolton in the Washington Post and an excellent letter to the editor in response to it by Robert McConnell, the co-founder of the US-Ukraine Foundation. If only the Western European states would heed the message before it's too late.

Response 10/21/2008

A NATO Path for Ukraine and Georgia

A16 (Post)

Article 10/20/2008

Russia Unromanticized

John R. Bolton, A15 (Post)

There is only one thing Russians understand: the language of power

An excerpt from an article from Der Spiegel:

Language of Power

"And," Miroslav Mamchak asks, smiling, "what was the outcome of that war? Russia lost, and Sevastopol fell. All enemies that have ever come here have captured the city - that is the bitter truth about this city of heroes."

A retired sea captain in the Black Sea fleet, Mamchak was one of the first to swear an oath of allegiance to the Ukrainian flag, in 1992. Today he is one of the few who fearlessly expresses something that ought to be legally indisputable: that the port city is an inalienable part of Ukrainian territory and that the presence of the Russian fleet is contractually limited until 2017.

Mamchak, who is also the chairman of the "Ukrainian Society" and general manager of "Briz," a military radio station, has come under heavy fire from Russians in the city. He is caricatured on posters as an SS officer and fascist with a Hitler moustache, and, as he says, the words "Get out of Sevastopol" were scrawled onto the walls of his house. Mamchak insists that he will not be forced to his knees by "criminals" and "mentally ill" warmongers.

The sorely afflicted city of heroes, says Mamchak, urgently needs a civilian concept for the future. "We currently have 100 meters (328 feet) of quay for warships, but only 90 meters (295 feet) for cruise ships. That has to change," he says. Mamchak's vision of a Sevastopol of the future includes tourists instead of torpedoes in the city's harbors, and "Ukrainian culture" instead of post-Soviet hero worship.

And how is this to be achieved against Moscow's wishes? Quite simply, says Mamchak: "Ukraine desperately needs to become part of NATO. Or re-obtain nuclear weapons. There is only one thing Russians understand: the language of power."

Monday, October 06, 2008

Russia And Ukraine Jockey In The Black Sea

http://blog.kievukraine.info/2008/10/russia-and-ukraine-jockey-in-black-sea.html

RUSSIAN INTELLIGENCE SEEKS TO DESTABILIZE CRIMEA

An excellent article by Taras Kuzio in the Eurasia Daily Monitor.

One of the most atrocious facts that he brings up is that the Russian FSB actively tried hiring Ukrainians with military experience in Ukraine to go fight against the Russian forces during the Russian-Georgian War, so that they can then give the Russian propaganda machine a powerful tool to denounce "extremist Ukrainian nationalists".

The Ukrainian intelligence service SBU worked hard to prevent and foil all of these attempts by the FSB, and as a result none of them succeeded.

http://www.jamestown.org/edm/article.php?article_id=2373411

RUSSIAN INTELLIGENCE SEEKS TO DESTABILIZE CRIMEA
By Taras Kuzio
Wednesday,
October 1, 2008

On September 29 the Ukrainian Ministry of Foreign Affairs (MFA) protested against an appeal made by the Russian delegation to the OSCE about the Crimea. "Methods and dirty technology created in the '90s of the last century are being used to destabilize the situation in the ARK [Autonomous Republic of Crimea] by fomenting separatist movements in the territories of the former USSR... Such actions cannot be regarded as anything other than gross interference in the internal affairs of another state," the MFA said (www.mfa.gov.ua, September 29).

That Ukrainian-Russian relations are poor and deteriorating is increasingly obvious from mutual accusations, counter-accusations, and insinuations. Russian political technologist Sergei Markov, a Unified Russia deputy, described Ukrainian-Russian relations to all intents and purposes as non-existent (www.pravda.com.ua, September 24).

Even in the area of Soviet history the Ukrainian and Russian sides have diametrically opposite views. The Russian Foreign Ministry gloated over Ukraine's failure to find support for a resolution at the UN to recognize the 1933 artificial famine as "genocide" conducted against Ukrainians. The Ukrainian Foreign Ministry issued a strongly worded rebuttal. Writing in September's Prospect magazine Arkady Ostrovsky said, "an old fashioned nationalism, in neo-Stalinist costume, has become the most powerful force in Russian society" (www.prospect-magazine.co.uk).

Foreign Minister Volodymyr Ohryzko has officially accused Russia of seeking to destabilize the autonomous republic of the Crimea. It is undesirable that "the Russian consulate in Simferopol distributes passports" (EDM, September 15). Meanwhile, Russian politicians, such as Moscow Mayor Yuriy Luzhkov, travel to Ukraine and call for uniting the Crimea to Russia (Fokus, no.38, September 19).

Ohryzko also complained that Russia was attempting to block Ukraine's entry into NATO by using, among others things, the Crimean card. Russia also disrespected Ukraine's sovereignty (Fokus, no.38, September 19).

At a well-publicized press conference on September 25, the Security Service (SBU) provided extensive details of attempts by Russian intelligence to hire Ukrainian citizens to participate in conflicts in the Caucasus. The SBU gave details about recent attempts to hire Ukrainians for the August Georgian conflict. In August and September the SBU collected intelligence on many attempts by Russian intelligence to dispatch Ukrainians to the conflict. Ukrainians were offered $200 to $500 per day if they accepted the proposal.
Candidates approached by Russian intelligence should have "specific training, including in the field of subversive activity." Russian intelligence targeted those with existing connections to the Ukrainian military, including reservists (www.mfa.gov.ua, September 29).

The SBU warned Russia that it was carefully observing these approaches and was initiating counter-measures (www.sbu.gov.ua). "Every attempt at recruiting Ukrainian citizens in foreign games will receive a harsh rebuff," the SBU warned. Russian intelligence had established and supported "extremist organizations" in Tiraspol, Abkhazia, and South Ossetia; but "We will never permit such activity on our territory," the SBU stated. Following the Georgian-Russian war, Ukraine purchased its first unmanned drone from the Israeli Ministry of Defense (www.pravda.com.ua, August 29).

Senior Russian military officers have alleged that Ukrainians fought on the Georgian side during the August conflict. Such claims about "Ukrainian nationalists" are nothing new. In the first and second Russian interventions into Chechnya in 1995 and 2000, Russian officials and media alleged that numerous "Ukrainian nationalists" were fighting with the Chechens. The allegations revived Soviet ideological tirades against western Ukrainian "bourgeois nationalists."

The nationalist group most often accused of training recruits for battle against Russia is the extreme right UNA-UNSO (Ukrainian National Assembly-Ukrainian Peoples Self Defense Organization). Russia's intelligence on Ukrainian nationalists is, in fact, outdated, as the UNA-UNSO disintegrated in the late 1990s into at least three groups.

One wing of UNA-UNSO that remained committed to its nationalist ideology aligned with the radical opposition Yulia Tymoshenko bloc (BYuT) and Socialist Party in the "Kuchmagate" crisis. The radical opposition led the protests by Ukraine Without Kuchma and Arise Ukraine! from 2000 to 2003. UNA-UNSO members also acted as paramilitary stewards during the orange revolution. The UNA-UNSO was accused of organizing the March 2001 riots in Kyiv (in reality, this was apparently a provocation by undercover Interior Ministry personnel to discredit the anti-Kuchma opposition), and 20 senior UNA-UNSO leaders were charged and imprisoned. Following their release, many of the nationalist wing of the UNA-UNSO, such as Andriy Shkil, joined the BYuT. Shkil is still a BYuT deputy.

The other two wings of the UNA-UNSO were co-opted by Russian intelligence. They continue to be available for provocations by Russian intelligence in attempts to portray Ukraine's orange leaders (like their Georgian rose revolution counterparts) as "anti-Russian extremists."

The two co-opted former wings of the UNA-UNSO played a highly provocative role in attempts to discredit the opposition candidate Viktor Yushchenko in the 2004 presidential elections. Political technologists close to Russia's presidential administration (i.e., Markov and Gleb Pavlovsky) worked for the candidate supported by Russia, Viktor Yanukovych. They sought to portray Yushchenko as a rabid "anti-Russian, Ukrainian nationalist" to reduce his popularity in Russophone eastern Ukraine (see EDM, June 29 and September 23, 2004, May 13, 2005).

One of the two co-opted UNA-UNSO groups, led by Dmytro Korchynsky, was renamed Bratstvo (Brotherhood). Bratstvo and the Progressive Socialist Party are the only two Ukrainian parties in the Highest Council of the International Eurasian Movement and the Eurasian Youth Movement. Both of these organizations are devoted to the Eurasianist ideologist Aleksandr G. Dugin who has ingratiated himself with the Putin regime (see Andreas Umland's detailed analysis in www.pravda.com.ua, July 20, 2007).

The SBU has also unveiled Russian intelligence's attempts to recruit Ukrainians who would "testify" for money that they had undergone "subversive training" in UNA-UNSO bases in western Ukraine with the aim of undertaking "terrorist" attacks alongside Chechens in Russia. Recruited Tatars were also paid to speak on Russian television about the existence of alleged training camps for Islamic terrorists in the Crimea. The aim in both cases, the SBU believes, was to show that Ukraine was a host to training camps for religious and nationalist extremists.

Russia's accusations are doubly ironic. First, the UNA-UNSO wing with solid nationalist credentials joined the BYuT in 2001-2002. Tymoshenko meanwhile has been accused of "treason" by the presidential secretariat based on an unfounded allegation that she has "done a deal" with Russian Prime Minister Vladimir Putin. Second, the remainder of the former UNA-UNSO (i.e., Bratstvo) has long worked for Russian intelligence.

The Russian-Georgian Conflict Shifts Energy Supplies from the Caspian Region

One important consequence of Russia's war in Georgia was the suspension of Kazakhstan's and Azerbajan's energy exports through Georgia and their increased reliance on Russia. In the short term Russia has won by increasing transportation of Central Asian and Caspian energy through its territory, as well as by decreasing the reputation of the Russia-free Caucausus energy transportation network by destabilizing it. Russia's energy monopoly has been increased and strengthened.

Since the trend before the war was for Turkmenistan, Azerbaijan and Kazakhstan to actively expand new energy transportation routes bypassing Russia, this is a significant reversal. This is bad for Ukraine as well, because the Caspian oil that was supposed to be filling the Odesa-Brody pipeline in Ukraine is not going to be forthcoming anytime soon in large enough volumes to fill the pipeline. So, the pipeline will likely continue to run in reverse, delivering Russian oil to tankers in Odesa, which is exactly what Russians want. This is also bad for Europe as a whole, because it has further increased European dependence on Russian and Russian-controlled energy supplies.

Russia has also achieved a significant level of pressure against Azerbaijan, because the Azeris really don't want Russians to destabilize their own frozen conflict zone in Nagorno-Karabakh and have become much more cooperative and compliant with Russia's government after the war.

If Russia attacks Ukraine in the future, the United States may enter the conflict on Ukraine's side.

That would be insanity on the part of Moscow "leaders", but you never know with those guys.

When Ukraine gave up nuclear weapons in 1996 (as the world's third largest nuclear power) and transferred the weapons to Russia at the American insistence, both the United States and the Russian Federation gave Ukraine "security assurances". If Russia breaks its promises, the US would be morally obliged to defend Ukraine.

Aleks

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/12/AR2008091202154.html

US says it will support Ukraine if threatened

The Associated Press
Friday, September 12, 2008; 3:51 PM

KIEV, Ukraine -- A senior U.S. diplomat said Friday the United States would back Ukraine in case of a territorial dispute but Ukraine's defense minister said his country's role as the main natural gas conduit to Europe makes a conflict with Russia unlikely.

The recent Russia-Georgia war has aroused concerns in Europe and ex-Soviet republics such as Ukraine about Moscow's regional ambitions. The Kremlin has watched warily in recent years as Ukraine and other former republics have sought closer Western ties, and Moscow vehemently objects to their joining NATO.

Although Russian leaders insist they recognize Ukraine's borders, some nationalist politicians have suggested that Russia should regain control of Ukraine's Crimean Peninsula, a jewel of the Russian empire and home to a key Russian naval base.

U.S. Assistant Secretary of State Daniel Fried pledged Friday that the United States would back Ukraine in a territorial dispute.

"The United States, and I daresay Europe as well, support Ukraine's independence, its freedom, its democracy, its right to chose its own future," Fried told reporters after a meeting with his Ukrainian vounterpart.

"Our support for Ukraine has only increased as the result of pressure and will only increase if there is pressure from other places," Fried said. "I hope that no one puts Ukraine's territorial integrity into question."

Fried's remarks echo comments made last week by Vice President Dick Cheney. During a visit to the ex-Soviet Republic, Cheney said the U.S. has "a deep and abiding interest" in the country's "well-being and security."

However, Ukraine's defense minister said during a visit to Denmark Friday that a war with Moscow was unlikely because Ukraine is such an important link in Europe's energy supply.

Asked about a potential military conflict with Russia, Yuri Yekhanurov said he didn't "believe something like this might happen in the future."

A conflict would "have an influence on not only Ukraine but the whole world," Yekhanurov said, noting that 80 percent of the natural gas exported to Europe passes through Ukraine.

To Imperialist Russia Everything Is A Weapon

I don't think Russians want an autarky. They don't really want to close themselves off from the rest of the world. But they don't necessarily want free trade either. For them trade, just like energy, is just another weapon to use to bend other nations to their will.

What I am noticing is that to the Russians everything is a potential weapon. They love war and conflict too much. Throughout history Moscow has gained most of what it has through aggression and deception.

For example, both Russia and Ukraine have record harvests this year (Ukrainian exports of grain will even be higher than the Russian ones - 5 times what Ukraine exported last year). But when you read the Russian press they are already talking in anticipation of the harvest about using grain exports as a new strategic Russian weapon against the West.

Russians are quite good at traditional weapons of war: conventional military power, nuclear power, intelligence gathering, secret services, sabotage, psy-ops and propaganda.

But they also see pretty much everything else as a weapon to use against their enemies - all those who will not bend to the Kremlin's will. So, this is how the Kremlin sees it:

Energy is a weapon - complete state control inside of the nation and pipelines outside of it and turning off gas and oil supplies at will and manipulating prices to reward and punish other nations.

Trade is a weapon - creating various obstacles (tariffs or bans) for products from nations it wants to punish, almost always under the guys of "sanitary concerns", constant trade wars with other nations, complete blocking of trade in some cases, like Georgia for the past two years.

International law is a weapon - they will claim international law priviledge whenever it suits their purposes and strengthens their case, but will break it at will if it's within their interests to do so.

Investments are a weapon - they use foreign investments by state-owned companies to gain control of foreign gas and oil infrastructure, including pipelines, refining companies, energy trading companies, gas station networks, etc. For example, about 5 years ago, Russian companies bought up most of Ukraine's refineries and when Yulia Tymoshenko was putting pressure on them, they all simply stopped refining oil for a few days, citing "routine maintenance", and caused shortages in the Ukrainian energy market. Belarus fares even worse. Last year, the Belarusian government was forced to give up the ownership of all of the country's gas pipelines to Russian state-owned company Gazprom.

History is a weapon - the Kremlin writes and re-writes history as it sees fit, a past friendly nation can easily become an enemy in history books, almost overnight, and a past enemy can easily be portrayed as a friend, if the need arises, and all of the history is written to glorify and justify the Russian Empire and its expansion.

The media is a weapon - they believe TV is the most effective form of media and thus the Putin government has come to own or control pretty much the entire TV industry within the Russian Federation, which is very useful for pushing government propaganda whenever they want to, glorify the President, or create and castigate enemies - foreign or domestic - in the public's eye.

Non-profit organizations are a weapon - the Russian government has cut off foreign funding from non-profit organizations in Russia and is now using non-profit organizations as a political tool. For example, recently a Russian government-funded Jewish organization was trying to portray Ukraine as an anti-semitic nation, even though the level of anti-Semitic violence is significantly higher in Russia.

The church is a weapon - it is no secret that most of the top leadership of the Russian Orthodox Chruch are KGB agents and closely work with the government on a whole range of issues, thus putting the church at the use of the state.

You can just go on and on down the list. Like I said, for the Russian Empire, everything is a potential or actual weapon, quite literally everything.

Foreign Investors Flee Russia

Not only has Russia almost completely isolated itself diplomatically, it is also shooting itself in the foot economically by its unjustified agressiveness and expansionism.

The damage to Georgia has been estimated at $1 billion. And yet the Georgian stock market is booming. And now the US has pledged $1 billion in aid, which will replace the infrastructure damage, and European financial assistance should be forthcoming soon.

Russian stock market, however, is continuing to slide, as investors are pulling money out of Russia in droves. At least $25 billion in foreign investments has left Russia since the start of its imperialist operation in Georgia.


"For the first time since the Crimean War, Russia has no allies," said Garry Kasparov, chess grandmaster turned opposition politician. "We are encircled by countries that are either suspicious or alienated and very angry."

"Boris Nemtsov, an opposition politician, has said the invasion was a blunder, and that ordinary Russians will pay for it."

http://news.yahoo.com/s/ap/20080829/ap_on_bi_ge/georgia_russia_economic_impact

Fears of isolation as investors flee Russia

By CATRINA STEWART, Associated Press Writer
Fri, Aug 29, 3:16 PM ET

MOSCOW - At the outset of this year, Russia proudly proclaimed itself an island of stability at the annual economic gathering in Davos, setting itself apart from the tumult of the global financial crisis.

Then came the war with Georgia, which some here regard as Russia's 9/11.

Within hours of Russia's retaliation to Georgia's move to take back its breakaway republic of South Ossetia, Russia had attracted widespread condemnation and threats of isolation and expulsion from the international community.

"For the first time since the Crimean War, Russia has no allies," said Garry Kasparov, chess grandmaster turned opposition politician. "We are encircled by countries that are either suspicious or alienated and very angry."

On the economic front, investors are hightailing out of Russia, while Western politicians have hinted at sanctions, visa restrictions and even the denial of Russia's right to host the 2014 Sochi Winter Olympics.

Increasingly cut off from the global world, Russian President Dmitry Medvedev risks undoing many of the successes of the past 10 years, ranging from the country's robust economic growth to a growing sense of national prestige and purpose.

Stock markets plunged, and Russian Finance Minister Alexei Kudrin said more than $7 billion was pulled out of the country in just two days, exposing the fragility of Russia's nine-year economic boom.

Stock markets plunged, and more than $7 billion was pulled out of the country in just three days, exposing the fragility of Russia's nine-year economic boom.

The economy was already under strain.

The five-day war followed months of bad news on Russia's corporate front, led by a high-profile shareholder tussle for control at TNK-BP, the Anglo-Russian joint venture.

In early summer, Bill Browder's Hermitage Capital blew the lid on a catalog of intimidation and corporate theft at the hands of Interior Ministry officials, and in July Prime Minister Vladimir Putin publicly attacked steelmaker Mechel, sending its shares into a tailspin.

Inflation was running at nearly 15 percent.

But while the storm clouds gathered, investors clung on.

The war was the tipping point, said James Fenkner, managing partner at Red Star Asset Management.

French investment bank BNP Paribas has estimated that more than $25 billion has been withdrawn from the country since the outbreak of the conflict, and Russian stock markets have plunged more than 30 percent since May.

It's a far cry from last December, when investors and analysts said 2008 was the year that Russia's stock markets would recover from the previous year's mediocre performance, even in light of the global turmoil.

Now investors are pulling their money out in droves.

"Very few investors have to be here now," said Fenkner. "Unless they are Russia-dedicated, they will move to friendlier environments. Sentiment is just very bad."

To many, Russia's fundamentals look very attractive.

"Russia is extremely cheap, and most of the growth dynamics are still in place," said Peter Halloran, whose hedge fund Pharos Fund has $150 million under management in Russia. "If I look forward 12 months, I want to own Russia."

But as the uncertainty continues, Russia could be seen as a high-stakes geopolitical gamble.

"If there is a perception of Russia as a risky place or as an undesirable place to invest, then the damage will be more long term," said Chris Weafer, chief strategist at UralSib. "It will restrict the development of the economy and hurt the government's plans to create a more diversified the economy."

The war has played well at home. Russians have rallied to the government's decision to punish Georgia for what it calls aggression and recognize the independence of South Ossetia and another separatist-controlled region, Abkhazia.

Alexander Konovalov, president of Moscow's Institute of Strategic Assessment, said many in Western countries see a "big, strong, unmanageable Russia" attacking "a small, democratic, innocent Georgia."

"In Russia," he said, "it is big, aggressive, undemocratic and irresponsible Georgia who took small and innocent South Ossetia."

As Western politicians warn of sanctions and consequences, many ordinary Russians feel increasingly isolated — and blame the Western media for painting a distorted picture of the conflict.

Russians "are sad about the situation and I have had many e-mails from people asking why the media is reporting the situation only from one side," said Lioudmila Siegel, chairman of an organization for Russians in Sweden.

A minority of Russians, though, have denounced the government's decision to use military force in the conflict.

The Union of the Committee of Soldiers' Mothers, for instance, has railed against the use of conscripts in Georgia, despite promises by the Defense Ministry that it would not do so.

Boris Nemtsov, an opposition politician, has said the invasion was a blunder, and that ordinary Russians will pay for it.

"This is a strategic and long-term mistake, the effects of which will be felt by virtually all Russians," Nemtsov wrote. "This is the beginning of a new arms race."

It could, he predicted, also mean visa restrictions, expulsion from the G8 group of countries, discrimination against Russian business abroad and a reversal of the decision to give Russia the 2014 Winter Olympics.

But for the most part, liberal opposition to Russia's actions has been relatively subdued. "The liberals have been extremely quiet," said Konovalov. To stand up for "democratic values and cooperation with the West ... will be seen as a betrayal."

David Cameron, head of Britain's Conservative opposition party, called for the British government to suspend visas for some Russian nationals and even, possibly, suspend Russia's membership of the G8 club of rich nations.

Since the murder of Alexander Litvinenko on British soil nearly two years ago, relations between London and Moscow have deteriorated, and British tabloids were quick to pick up on anti-Russian sentiment.

On Thursday, the Daily Mirror tabloid newspaper condemned British foreign secretary David Miliband for allowing "hundreds of Russian oligarchs who prospered under Vladimir Putin" to use "Britain as a bolthole."

But while there is some popular bashing of Britain's very rich Russians — who the tabloids have long loathed because they benefit from Britain's relatively generous expat tax laws — the overwhelming political and business view of Russians in Britain is still positive.

But analysts warn that, even if Russians themselves are welcomed abroad, it may become more difficult for Russian big business to expand there — especially in sensitive areas such as defense and energy.

In a fit of pique two years ago, then-President Putin canceled foreign participation in the Shtokman gas project after European objections to a move by VTB, a major Russian bank, to acquire a minority stake in Europe's EADS aerospace and defense group.

"This Russia phobia is nothing new," said Fenkner. "But it's going to turn up a couple of notches. It's not a trend reversal."

Admit Ukraine and Georgia into NATO

Alexander J. Motyl, a professor of political science at Rutgers University, has published this wonderful opinion piece in International Herald Tribune:

"All of Russia's non-Russian neighbors, know that the war in Georgia is really about them."

http://www.iht.com/articles/2008/08/27/opinion/edlet.php
International Herald Tribune, August 27, 2008

Resurgent Russia
Alexander J. Motyl, PhD

Russia's blitzkrieg against Georgia has taken place 70 years after the infamous Munich Agreement of September 29, 1938, when France, Britain and Italy agreed to cede Czechoslovakia's Sudetenland to Nazi Germany in the hope of establishing "peace in our time."

Like Hitler's Germany, Vladimir Putin's Russia is a post-imperial authoritarian state that must expand. The Soviet empire's collapse in 1991 left the Russian population feeling humiliated; economic collapse in the early 1990s only compounded their demoralization. As in Germany, Russians blamed democracy for their collapse and humiliation. And, as in Germany, a strongman promising greatness and glory seized power, dismantled democracy, and created an authoritarian, hyper-nationalist regime with a personality cult based on promises to re-establish imperial greatness.

The war against Georgia is not the first instance of Russia's aggressiveness vis-à-vis its former colonies. Estonia was the target of a cyberwar; Latvia, Lithuania, Belarus, Ukraine and the Czech Republic have been subjected to energy cut-offs; Georgia, Moldova and Ukraine have been punished by trade sanctions.

These states, like all of Russia's non-Russian neighbors, know that the war in Georgia is really about them.

The Munich Agreement is considered a classic example of the perils of appeasement. Had the democracies said no then, it's possible that World War II could have been averted. At some point - and that point surely arrived with Russia's invasion of Georgia - the West must learn to say no to Russia. Expelling Russia from the G-8 would be symbolically nice, but Putin would respond with a laugh. Only an "anti-Munich" would say no in a meaningful fashion: Admit Ukraine and Georgia into NATO's Membership Action Plan - immediately. Putin will glare in response; he will threaten retaliation - and then, like all loud-mouthed dictators, he will acquiesce.

Alexander J. Motyl
Newark, New Jersey
Professor of political science, Rutgers University

Russia broke its own rules in invading Georgia

Not only is Russia's invasion illegal under international law, it also breaks the principles proclaimed by Russia's own government!

I am quoting below from a policy paper on Russian president's own website - posted just a month ago!

Президент России
12 июля 2008 года
КОНЦЕПЦИЯ ВНЕШНЕЙ ПОЛИТИКИ РОССИЙСКОЙ ФЕДЕРАЦИИ
http://www.kremlin.ru/text/docs/2008/07/204108.shtml

Российская Федерация ... твердо исходит из того, что санкционировать применение силы в целях принуждения к миру правомочен только Совет Безопасности ООН; рассматривает статью 51 Устава ООН как адекватную и не подлежащую ревизии правовую основу для применения силы ... Применение принудительных мер с использованием вооруженной силы в обход Устава ООН и ее Совета Безопасности не способно устранить глубокие социально-экономические, межэтнические и другие противоречия, лежащие в основе конфликтов, подрывает основы международного права и ведет к расширению конфликтного пространства, в том числе в непосредственном геополитическом окружении России.