RUSSIAN FEDERATION WEEKLY SITREP

by Patrick Armstrong

Ukraine. On the 11^th Medvedev sent a sort of open letter to Ukrainian President Yushchenko complaining about relations and enumerating Russia’s complaints (for the majority of which Yushchenko would be most responsible). Reactions are  appearing: some mocking, some thoughtful. I don’t understand the point of this. Yushchenko will not be the next President of Ukraine and whoever replaces him will have a more reasonable relationship with Russia. According to Gallup, approval of their government by Ukrainians is “the lowest in the world”. Surely the best thing for Moscow to do, if it wants a Ukrainian government interested in more than the “colour revolution package” of irritating Moscow and joining NATO, is to keep its mouth shut and wait for the Ukrainian people themselves to toss Yushchenko out. They need no encouragement from Medvedev: the “Orange Revolution” was based on false premises. As to the Ukrainian arms deliveries to Georgia (and I’d still like to know who paid for them), that’s percolating away in the background in Ukraine and needs no help from Medvedev either. It will likely re-surface with the new President in January, whether Tymoshenko or Yanukovych. So, altogether unnecessary, silly and rather whiney.

Economy. Some numbers aren’t as bad as previously. Unemployment is reported to have slightly declined (from 6.7 million to 6.3 million or 8.3% of the economically active population).  GDP is reported to have grown 7.5% in the 2^nd quarter over the 1^st (but, year-on-year, is down 10.9%). Has it bottomed out?

The mighty Russian arms buildup. Deputy PM Sergey Ivanov announced that the Russian Armed Forces would receive about US$15 billion next year. To put this number in perspective, Canada’s defence budget this year was about the same. I know there is a big difference in purchasing power parity, and the Russian money will go much farther, but 15 billion is hardly an apocalyptical sum.

Pipelines. The South Stream pipeline comes a little closer with a Turkish-Russian agreement last week. The two also agreed on construction of a Russian-built nuclear power plant, Turkey’s first.

State corporations. Over the years Medvedev has mused that state ownership may have outlived its usefulness and I have been watching to see whether this would lead anywhere. He has ordered the Prosecutor General and the Director of the Presidential Control Directorate – interesting choices indeed! – to review and report on “the expediency of the future use of such business structures”.

Corruption. A Moscow court has sentenced Andrey Taranov, the former head of Mandatory Health Insurance Fund, to 7 years in prison on corruption charges.

Use of force aboard. Medvedev has submitted to the Duma a draft law establishing authorisation to use Russian Armed Forces abroad. The reasons given are: to counter attacks on deployed troops; to counter or prevent an aggression against another country; to protect Russian citizens abroad; to combat piracy and ensure safe passage of shipping. No doubt other countries have similar legislation.

Another murder. The bodies of Zarema Sadulayeva (head of Let’s Save the Generation) and her husband, who were kidnapped in the 10^th, were found the next day in Groznyi.  Investigators wonder whether the target may have been her husband, Alik Jabrailov, who was formerly a fighter against the government. Interestingly, Akhmed Zakayev does not blame Kadyrov for the murders. A discussion of various theories here. Personally I have no clue: I can imagine jihadists and other interested parties wanting to embarrass Moscow and Kadyrov; I can imagine score-settling; I can imagine Kadyrov “cleaning house”. The murders will not be solved, although, like those in Novy Itagi in 1996, we may learn more years later. But there will always be problems with the credibility of sources.

Chechnya. To no one’s surprise, the authorities have announced a big increase in kidnappings and murders in Chechnya: the former are up from 4 to 23, and murders from 52 to 78. Crimes of “a terrorist nature” are down. But how can one separate jihadist activity, rebel activity, score-settling and “normal” “bizness”?

Moldova. The four main opposition parties in Moldova have announced a coalition; 61 votes, of which they have 53, are required to name the next President; therefore, they need support from some of the 48 Communists. If they fail, there will have to be another election.

Comments

[Michael Averko]

Dr. Armstrong & Co:

Upon further pondering Medvedev's letter to Yushchenko, I consider a different idea from what has been offered (at least from what I've seen among the choking of qualitative input wonkdom out there).

With Yushchenko's low poll numbers in mind, it can be said that Medvedev is giving consideration to Ukrainian public opinion at large.

Ukraine has enough Russia friendly folks for Russia to get by (at least in the short term) without having an ambassador there. Besides, it's not the same as cutting diplomatic relations altogether. I take it that there's still a Russian embassy staff in Ukraine.

At his blog The Ivanov Report (under the comments ection below his July 12 post), ROPV contributor Eugene Ivanov suggests another possible factor.

It's no secret that some in the Russian foreign policy establishment aren't happy with Zurabov as Chernomyrdin's replacement as Russia's ambassador to Ukraine.

On this point, Eugene will look real good if the next Russian ambassador in Ukraine isn't Zurabov.

[Patrick Armstrong]

There are always wheels within wheels: see last para

MOSCOW, August 12 (RIA Novosti) - A Moscow court sentenced on Wednesday a former top health insurance official to seven years in jail and a million rubles (about $31,000) fine on corruption charges.

Andrei Taranov is the former head of Russia's Mandatory Health Insurance Fund.

Other defendants in the high-profile case earlier received prison terms ranging from 18 months to nine years. They were charged with receiving a total of 28 million rubles ($865,000) in bribes.

Investigators said the officials received bribes from the fund's regional branches, pharmaceutical and other firms involved in distributing medication and medical equipment under a state-run program to provide free or subsidized medication to people with low-incomes.

The court established that the defendants only released insurance funds to local authorities in exchange for 3-5% kickbacks.

The officials were arrested following an investigation into the fund's activities in 2005.

The scandal damaged the reputation of then health minister Mikhail Zurabov, who was subsequently dismissed. He was appointed Russia's ambassador to Ukraine in June.