Pipeline Politics: Turkmen President in Turkey, Russian President to Ashgabat, more

by Roman Kupchinsky

As the summer of 2009 comes to an end, a rash of political maneuvers has begun on the Central Asian gas pipeline front. The greatest interest centered on Turkmenistan President Gurbangully Berdumykhamedov's visit to Bulgaria and Turkey in late August where he promoted his country’s willingness to join the Nabucco pipeline project.

His key stop was Antalya, Turkey where he met with his counterpart Abdullah Gul who appears prepared to mediate in a border dispute between Azerbaijan and Turkmenistan over important oil and gas fields in the Caspian Sea. If an agreement can be reached between the two regional energy giants, it would greatly improve Turkmenistan’s chances of selling gas to European consumers via the future Nabucco pipeline.

Turkmenistan is desperately in need of customers for its gas following Russia’s decision to stop buying Turkmen gas in April 2009 following an explosion in the Central Asia Center pipeline. In late 2008 Gazprom had contracted to purchase some 47 billion cubic meters (bcm) of Turkmen gas mainly for sale to the Ukrainian market. According to Kommersant daily from mid- April to the end of August, Turkmenistan has lost $3 billion in gas sales revenue.

After the drop in demand for gas in Ukraine in 2009 due to the world-wide recession along with lower demand in the EU, Gazprom was saddled with high-priced Turkmen gas. Gazprom spokesmen began demanding that the contract with Turkmenistan be renegotiated to reflect new market realities.

However, Turkmenistan’s recent support of the Nabucco pipeline project does not mean that more revenue from gas sales will begin flowing into Ashgabat soon. While forthcoming sales to China of 10 bcm and 6 bcm to Iran will help fill the coffers, there still remains 47 bcm of unsold gas and this gas will remain unsold unless a deal is struck with Russia.

Ukrainian President Viktor Yushchenko recently floated the idea that Ukraine buy Turkmen gas directly. However, all the transport routes from Turkmenistan to Ukraine go through Russia and it is unlikely that Gazprom will allow Ukraine to renege on its January 2009 ten year contract to buy all of its imported gas from Russia.

The Kremlin meanwhile is keeping a close eye on Berdumykhamedov’s trip as it prepares talking points and develops a new approach to Turkmenistan for Russian President Dmitry Medvedev to present during his visit to Ashgabat on September 13. Gas will head the list of topics to be discussed and given the instability today of the Russian gas industry - due to dropping production and reduced export revenue - Medvedev’s trip will test his skill as a negotiator in a region which today is the epicenter of the “Great Pipeline Game” between the West and Russia.

“The Great Pipeline Opera” is how Daniel Freifeld, director of international programs at New York Universities Center on Law and Security titled his excellent article in the August 24 issue of Foreign Policy magazine. Freifeld provided this piece of insight into how the libretto of this “Opera” is sung in Russian.

“If recent experience teaches anything, it is not to count Russia out, especially when so much is at stake. When I raised this issue with Russian Energy
Minster Sergei Shmatko at a meeting in Bulgaria in April, he shot me a threatening glare and cautioned against planning for an energy future without Russia,unless the Europeans were fully prepared to deliver it. "We have an expression in Russia," Shmatko told me, "Don't sell the skin off a bear before you kill it."

ON VACATION

The Jamestown Blog will be on vacation until September 1st

The Tymoshenko-Putin Axis?

by Tammy Lynch

Ukraine announced yesterday that Prime Minister Yulia Tymoshenko will meet her Russian counterpart Vladimir Putin next month in Warsaw, Poland. The announcement came on the same day that Russian President Dmitry Medvedev brusquely denounced Ukraine’s “leadership” during a press event with German Chancellor Angela Merkel in Sochi. Medvedev also claimed that “normal relations” would not be possible until “new leadership” takes over in Ukraine.

Days earlier, Medvedev had released a harsh video blog criticizing everything from Ukraine’s treatment of Russian speakers to its “resistance” toward Russian business to its gas deals with the EU. (An English text of Medvedev’s video blog is here.)

Medvedev’s remarks have created numerous questions. The Putin-Tymoshenko meeting could begin to provide some answers.

The video blog appears to be an attempt to undermine Ukraine’s President Viktor Yushchenko in advance of the upcoming presidential election, while increasing support for “pro-Russian” candidate Viktor Yanukovych (and possibly others considered “pro-Kremlin”). However, Medvedev included harsh words for “Ukraine’s political leaders” who “do deals with the European Union on supplying gas.” The Russian president’s use of the plural in his video blog, as well as an ambiguous reference to Ukraine’s “leadership” during his recent press event, should not be overlooked.

In fact, it was Prime Minister Tymoshenko – not Yushchenko – who negotiated and signed the Joint EU-Ukraine Declaration on the Modernization of Ukraine’s Gas Transit System. The Declaration provided for a framework to modernize Ukraine’s transit pipelines in order to increase transit capacity for Russian gas to Europe. This has the potential to undermine competing transit pipelines planned by Russia that would bypass Ukraine and led to a loud, threatening – and effective – response from Moscow.

So, is Medvedev’s wording a sign that Moscow does not understand the diarchy of power in Ukraine? Or simply doesn’t care? The Russian President clearly is proceeding as if there is one unified power center in Ukraine – and suggesting that Russia will oppose anyone associated with that center.

Or, is Medvedev perhaps signaling that concessions will be necessary from Tymoshenko if Russia is to either back the Prime Minister in the election (assuming she wants this backing) or stay out of the election?

This last question in particular will undoubtedly come up at the Putin – Tymoshenko meeting on September 1st – a meeting which was initiated by Polish Prime Minister Donald Tusk.

Tymoshenko and Putin have maintained a cordial, if sometimes strained, working relationship. In fact, Tymoshenko first began working with Putin while he was president; at that time, he clearly showed an understanding of the significant power held by the prime minister’s position in Ukraine.

The implication by Tusk that a meeting between Putin and Tymoshenko may ease tensions is a significant repudiation of Medvedev’s claim that “normal relations” with Ukraine are not possible. And the fact that both prime ministers have agreed to take part is more interesting.

Given Tymoshenko’s strained relationship with Yushchenko, she is happy to appear statesmanlike and effective at his expense. But are Medvedev and Putin working together? Will Tymoshenko meet the good cop in Warsaw? Or, is Medvedev attempting to use Ukraine as a demonstration of his own power? If so, will he be allowed to succeed?
Stay tuned......

A Mystery Surrounding The Arctic Sea: More Questions than Answers

by Giorgi Kvelashvili

On August 18, 2009 the official website of the Russian president made an announcement about a meeting between Dmitri Medvedev and his Defense Minister Anatoly Sedyukov (www.kremlin.ru, August 18, 2009). Mr. Serdyukov informed the president of the Russian Federation on “the details concerning the freeing of the cargo vessel Arctic Sea.” During the operation eight people were arrested – citizens of Estonia, Latvia, and Russia.

According to the Russian version of the story, on July 24 “these people boarded the ship and threatening with weapons, demanded that the crew change the course. Afterwards the vessel was pursuing the route ordered by the hijackers in the direction toward Africa, switching off the navigational equipment.” Earlier the Kremlin website stated that “there was a crew of 15 Russian citizens on board of the lost vessel loaded with timber and headed toward Algeria.” On August 17 the same official website posted the information that “the vessel connection with which had been lost since July 28 was found in the vicinity of Cape Verde Islands” (www.kremlin.ru, August 17). “The members of the crew are alive; they had been taken to the Russian anti-submarine vessel Ladny and are being questioned,” Defense Minister Serdyukov reported to President Medvedev during “a working meeting” in the city of Astrakhan on the Caspian Sea during the president’s trip to the Southern Federal District. The Russian president ordered the minister to “thoroughly investigate and report back.”

According to the Russian news agency Interfax, the ship loaded with timber, worth more than one million euros (1.41 million USD), left the Finnish coast on July 22 and should have arrived in Algeria on August 4. Two weeks after its disappearance “the Russian military fleet notified the ships and vessels of its disappearance” (www.interfax.ru, August 18, 2009,

The Kremlin-controlled English language TV channel Russia Today that broadcasts for the international audience reported on August 18 that “while the crew is being questioned by naval officials…the speculations are beginning to run wild; there is even talk that there may have been nuclear materials on this ship, and they might have something to do with this mystery” (Russia Today, August 18). In his interview with Russia Today, Wayne Madsen, an investigative journalist, said that the vessel loaded with timber left Finland for Algeria after “undergoing repairs in Kaliningrad” and in Swedish waters the vessel was boarded by “masked policemen.” According to the journalist, “They held the crew hostage for a while” and after asking them “very detailed and probing questions,” “they left all of a sudden.” According to Mr. Madsen, there are some jurisdictional issues involving Finland and Sweden and “we have NATO getting involved.” Madsen also talked about the possibility that “nuclear materials could have been onboard.” Interfax, on the other hand, reported that “NATO forces helped [the Russians] in the search operation.”

According to Russia Today, the only available information concerning the people arrested in connection with “the hijacking” is their nationality, but the same TV channel reported that “the vessel may have gone through two hijacking attempts – one in Swedish waters” and another “after the ship passed the English Channel.” Interfax also came up with the speculation about two separate incidents.

In his interview to Russia Today, Dmitri Rogozin, Russia’s envoy to NATO, highly commended the operation of “freeing the vessel,” saying that “all stages of the operation were excellently managed…the Russian vessels took over the ship that had been captured by pirates at the planned time and place preventing it from getting close to the African coast. ”Mr. Rogozin’s commentary could be read as Russia emerging a great naval power, which is capable of conducting successful anti-piracy operations. Interestingly enough the Russian journalist, Oxana Boyko, who covered the story for Russia Today added that “it may have been NATO forces that actually seized the ship.”

There are several issues in this story that are difficult to explain. It is striking that the Russians did not officially announce the disappearance of the vessel until August 12, although, according to the official Russian sources the connection with the vessel had been lost on July 28 and the people “threatening with weapons” boarded the vessel on July 24. The Russians would have detected the change of course or some irregularities from July 24 to July 28. Needless to say that piracy in the Baltic Sea is almost unheard of for at least several centuries and if independently confirmed, this case would be truly sensational. And why is the state-controlled Russian media talking about “nuclear materials” allegedly being on the cargo vessel? It is difficult to imagine that they are doing this without consent of the Russian government.

It remains unclear who owns the vessel and why the Russians were so nervous about its disappearance, not reporting for two weeks and after having reported the president of the country himself right away got involved. Was this due to the fact that the crew of the vessel was comprised of Russian citizens exclusively? According to the Russian website navy.ru, the cargo ship Arctic Sea, operated by Solchart Arkhangelsk Ltd. and owned by the Latvian company Aquachart SIA, was built in 1991 and it has the deadweight of 4706 tons.

According to Interfax the vessel is registered in Finland and the Finnish authorities “are waiting for an official notification from the Russian side on the seizure of the cargo ship and want to investigate this case of hijacking together with the Russian side.” Finnish President Tarja Halonen visited Russia and held talks with her Russian counterpart in Sochi on August 11, one day before Russia officially announced the “disappearance” of the Arctic Sea. At the moment it is virtually impossible to make a connection between Mrs. Halonen’s visit and the breakout of the vessel story but what we can safely state is that by the time of the visit the Russians did have at least some information and they might discuss it with the Finnish president.

The Russians are saying that among the hijackers who are now in Russian custody “there were four Estonians, two Latvians and two Russians” although, interestingly enough, neither Estonia nor Latvia has been officially notified about the involvement of their citizens in “the hijacking.”

Unless the Russian Federation reveals a complete picture of the mysterious disappearance of the Arctic Sea, its seizure and the investigation of the incident, there will be even more speculations about “the secret cargo” on the vessel ranging from the already mentioned “nuclear materials” to “four X-55 Russian missiles whose destination was Iran” – the operation was allegedly thwarted by “a major Western power.”

Erecting a Wall inside Georgia

by Giorgi Kvelashvili

On August 14 the head of the legitimate government of Abkhazia, Gia Baramia, addressed the Abkhaz people from a bridge on the Enguri River, which now separates Russian-occupied Abkhazia and the rest of Georgia. He made his appeal to commemorate the 17th anniversary of the beginning of hostilities in 1992 between the authorities in Tbilisi and Moscow-backed anti-government forces in Abkhazia.

Born and reared in Sokhumi, Mr. Baramia invoked a long tradition of “brotherhood between the Georgians and the Abkhaz who throughout the centuries lived on the same land in peace and harmony - united by identical traditions and customs and by bonds of friendship and intermarriage.” Recently appointed to this post, Baramia, the head of the Abkhaz government in exile, who is not even allowed to travel to Sokhumi and whose house in Abkhazia is currently occupied by strangers, tried to avoid mentioning political issues and concentrated mainly on humanitarian aspects of the unsettled conflict. Nonetheless, he did say bitter words about the “ignominious third force that had intruded into our lives… and had separate relatives, friends, neighbors, and classmates.” At the end of his speech the leader of more than 300,000 Georgian citizens, victims of ethnic cleansing who are not permitted to return to their homes in Abkhazia, called on “the Abkhaz compatriots to engage in bilateral dialogue that will restore confidence and renew old ties.”

On the same day the very same bridge on the administrative border was crossed by a man who said he lives in Gudauta, a town near Sokhumi, and “asked for Georgian citizenship.” In his interview to the Georgian TV channel Rustavi 2, Tengiz Lakerbaia, an ethnic Abkhaz, explained the motivation to make such a move: “It is very hard to live in Abkhazia…people have no jobs…and our president [Sergei Bagapsh] sells everything to the Russians. Many people want to leave Abkhazia but they are afraid…We will have unrest in December.”

There are signs that the situation in Abkhazia is indeed deteriorating. Opposition factions constantly accuse the de facto regime of increasingly heavy reliance on Russia and abandoning the cause of independence. Following the interview to the Moscow radio station Ekho Moskvy on July 15 in which Sergei Bagapsh did not exclude the possibility that Abkhazia, in the future, might become part of Russia through a “referendum of the people” the de facto leader’s critics came out with a statement condemning “the incompetent authorities whose actions pose a real threat to the statehood and the people of Abkhazia.”

On August 12 Russian Prime Minister Vladimir Putin traveled to Abkhazia to give new impetus to already heavy Russian presence there. During his visit two bombs were detonated in Sokhumi and Gagra, killing two people and injuring seven. Shortly afterwards, the Russian occupational forces intensified their efforts to strengthen the “border” between Abkhazia and Georgia proper. According to Rustavi 2, “the bridges on the Enguri river are being mined” and the Russians “are putting in place fortifications and barbwire fences along the 85-kilometer border.” Georgia’s Deputy Foreign Minister David Jalagania said on August 17 that “this is a continuation of the Russian policy of aggression and occupation.” President Saakashvili of Georgia repeatedly called the Moscow-drawn lines separating Abkhazia and Tskhinvali from other parts of Georgia “a new Berlin Wall in Europe.”

While Georgian officials are trying to reach out to the populations on the other side of the “wall,” Moscow is doubling its efforts to militarize the two occupied regions and fortify the “borders” in order to minimize contact between ordinary Georgians, Abkhaz and Ossetians.

Governments of Abkhazia, South Ossetia Hire US PR Firm

By Roman Kupchinsky

The governments of the break-away Georgian provinces of Abkhazia and South Ossetia have hired the Pasadena, California - based public relations firm of Mark Saylor LLC to promote their image in the West. The two governments will pay Saylor $30,000 a month for their services.

News of this was first reported on the website of the Russian newspaper Kommersant on August 14.

In documents filed with the US Department of Justice’s Foreign Agent Registration Act (FARA) on July 28, 2009 Saylor stated that it will aim to: “Underscore the importance of maintaining a close relationship with Russia (by their client), including the need for a Russian military presence within its borders, to protect Abkhazia from military aggression by Georgia.”

In the filing for South Ossetia, Saylor included a letter sent on June 17, 2009 to David Sanakoev, the human rights ombudsman for the republic, outlining the services which Saylor was prepared to offer to their client. Among others, Saylor wrote:

“Explain how the Russian military saved the civilian population of South Ossetia from Georgian military forces, and the necessity of continued Russian military support to protect the Republic of South Ossetia from another attack by Georgia.”


Yet, on the FARA website the Saylor filing is found under “Georgia” as the “country or location being represented”! In effect, Saylor will, with the go-ahead by FARA, help protect Georgia from military aggression by Georgia and show that Russian troops stationed in Georgia are vital to accomplish this mission!

The United States, as most of the world community, does not recognize Abkhazia and South Ossetia as independent states; therefore they are not listed on the FARA website as countries or locations.

It might be useful to convince the U.S. Justice Department to create new categories of locations for FARA: “Countries invaded by the Russian Federation,” “Break Away Regions”, “Islamic Militant Organizations” and so on. This would help clarify who is being represented by U.S. public relations firms and to what end.

Kadyrov Pleads he is an Innocent Warrior

By Yuri Zarakhovich

The interview that Chechen President Ramzan Kadyrov gave to U.S. international broadcaster Radio Liberty on August 9, 2009, evokes a famous line by a Russian playwright Evgeni Shvartz: “Pray, hush, Princess! You’re so innocent, you can say awful things!”

Kadyrov blames the West for the war in Chechnya: “The West…wanted to break up the sovereign Russian state through Chechnya.”Why, then did Kadyrov chose to fight the sovereign Russian state at the tender age of 17?

“Because the people were against (Russia). They were forced by Yeltsin, Beresovsky and the like, who sought to break up the Russian Federation the way they had broken up the Soviet Union.”

It was Putin, Kadyrov says, who helped the Chechens see the light and turn sides. Still, Putin publicly pays homage to Yeltsin.. His hatred for democratic reform, rightly or wrongly associated with Yeltsin, is the Kremlin’s inner matter, not to be mentioned openly. Kadyrov just let slip what’s on Putin’s mind.

What else did Kadyrov pick up in the hallways of power?

Says Kadyrov: “They (the West) attack. We defend. The time will come, when we’ll attack, too.”

“Why should we give away South Ossetia, or Abkhazia?” Kadyrov wonders. Well, why, indeed, if Moscow can keep them under whatever disguise: “Let them be sovereign states, independent states, but for Russia they will be allied states,” Kadyrov spells out.

“One thing I really know how to do well is making war. I’m a very good strategist,” Kadyrov adds dreamily. Neighbors, beware!

On July 16, 2009, Natalya Estemirova, a human rights activist, who had angered the authorities with reports of torture, abductions and extrajudicial killings, was discovered with two close-range gunshot wounds to the head in the woods. The human rights community laid the responsibility for the murder on the Chechen President, who claims he is responsible for everything that happens in Chechnya. This is how he comments both the murder and the charges:

“Why should Kadyrov kill a woman whom nobody needed? She never had any honor, dignity, or scruples. Still, I appointed her Head of the (Public) Council. She wouldn’t attend the meetings, or would merely talk all kind of nonsense…So I dissolved that Council. So what is my fault, if they killed Estemirova?”

Is it any wonder then, that on August 11, just two days after Kadyrov said that, two more human right activists--Zarema Sadulayeva and her husband Umar Dzhabrailov—were murdered in the same fashion: abducted and later found in the woods with gunshot wounds to their heads?

Kadyrov emphasizes that he is Putin’s man: “I’ll die for him!” Kadyrov wants to see his idol as Russia’s President for life. “Still…our President is Dmitry Medvedev, a strong, wise and proper politician. If he were not, the team would not have elected him.”

The Constitution, which Kadyrov swears by, says it’s the people who elected him President. He must have missed a nuance.

This Prince is hardly innocent -just uncouth and unsophisticated. Hence, he blurts out inadvertently what is on his mind. Or does he?

Yuri Zarakhovich is an analyst for the Jamestown Foundation

In Ukraine, Campaigning to Avoid the Crises

by Tammy Lynch

Russian President Dmitry Medvedev was kind enough earlier this week to kick off Ukraine’s election campaign by attacking his Ukrainian counterpart. Therefore, this appears as good a time as any to look at how Ukraine’s likely candidates are attempting to convince voters to show them some love at the ballot box.

Despite election-day being five months away, the domestic political scene is awash with odes to the Ukrainian people. From property giveaways to billboard competitions to promises of fraternal love to the Russian people, politicians in Ukraine are campaigning (informally) with gusto. Unfortunately for Ukraine, this political posturing means that few political “leaders” have risked responding to the severe economic problems and foreign policy questions facing the country.

There are four major political figures expected to compete in the election on 17 January 2010: President Viktor Yushchenko, Prime Minister Yulia Tymoshenko, Party of Regions leader Viktor Yanukovych and former Speaker of Parliament Arseniy Yatsenyuk.

According to a recent poll, Yanukovych, the man who would have been president in 2004, sits atop the field with 26%-30%. Tymoshenko’s rating is around 16%, with Yatsenyuk at 12-13%. Despite Yushchenko’s apparent belief that he remains popular – his rating hovers at 5%.

From his lofty perch, Yanukovych generally has maintained radio silence, with periodic bursts of activity to remind voters he exists. The strategy is understandable. Tymoshenko is taking the brunt of voters’ ire over the current economic situation; why interfere with her fun?

Following Medvedev’s broadside, Yanukovych predictably appeared. When he takes office as president, Yanukovych said his “first job” will be “a restoration of normal, neighborly, equal and mutually beneficial relations with our strategic partner, Russia."

Tymoshenko has ignored Medvedev’s statements, but donned her martyr costume. “Today I am fighting one-on-one with the crisis. Everyone else is being irresponsible …,” she said.

Simultaneously, a billboard/banner campaign suddenly appeared in Kyiv. Each advertisement contains the tag line “She is working,” while suggesting, “They are interfering,” “They are obstructing,” or “They are talking.” The “she” and “they” aren’t identified, but does anyone really wonder?

Meanwhile, Arseniy Yatsenyuk debuted a billboard campaign, which features the modest statement: “To Save the Country: Arseniy.” Still, Yatsenyuk has yet to detail major economic policy initiatives to “save the country.” Perhaps, like Yanukovych, he understands that it’s best to save the country after the election.

In fact, this seems to be understood by most Ukrainian politicians. The parliament spent most of its spring session beset by internecine battles. As a result, a series of economic anti-crisis measures sat largely undiscussed. In the end, the government simply enacted the most desperately-needed legislation by direct decree of the prime minister.

The government also unveiled some old pre-election rhetoric, topped with a few treats; free apartments, an investigation of producers for setting consumer prices too high, promises to help companies upgrade their equipment, promises to pay wage arrears, etc.

All the while, Russian pressure over everything from the Black Sea Fleet to gas deliveries receives limited practical response, as does an agreement with the EU to implement energy reforms in exchange for a $1.7 billion loan. But what can we expect? There’s campaigning to be done, after all.

Tammy Lynch is a Senior Research Fellow at Boston University's Institute for the Study of Conflict, Ideology & Policy.

Dmitri Medvedev's Disinformation Blog

by Roman Kupchinsky

The Kremlin never fails to astonish its world-wide audience.

In what can best be described as an open letter to Ukrainian President Viktor Yushchenko posted on the Russian President's website on August 11, Dmitri Medvedev took the proverbial gloves off and lashed out at the democratically elected Ukrainian President.

The pretext of his letter was a directive he signed that day postponing the appointment of a new Russian ambassador to Ukraine.

By publicizing his private communication on his website and his video blog Medvedev turned what should have been a civil debate on differing views between him and Yushchenko on the nature of the Ukrainian-Russian relationship, into a new confrontation.

The Russian President did everything in his power to popularize his views in order to turn them into an instrument of anti-Ukrainian and anti-Western propaganda and prolong the ongoing anti-Ukrainian campaign that began in 2004.

The Kremlin's disinformation campaign that the Ukrainian Orange Revolution in 2004 was not a popular one, but was funded and organized by the government of the United States, remains alive and well in the imagination of many Russians. “Democratically elected” is a term which is still widely misunderstood on the streets of Russia.

The letter to Yushchenko appears to have been carefully crafted by the Kremlin’s spin- doctors in order to incite an anti-Ukrainian backlash among the Russian folk. Medvedev’s letter includes denunciations of Ukraine’s support of Georgia during last year’s Russian invasion of that country; Ukraine’s continued efforts to join NATO; and attempts to diversify gas supplies –denouncing Ukraine’s agreement to allow the European Union to have a say in the main Ukrainian pipeline which brings gas to Europe.

Medvedev did not fail to include historical issues such as the role of the Ukrainian Partisan Army and its struggle for Ukrainian independence against both the fascist invaders and the Red Army during World War Two, which he characterized as the “glorification of Nazi collaborators” and his rejection of the Stalinist man-made famine in Ukraine as “genocide.”

That same day, Medvedev met with veterans of the “Great Fatherland War” at a round table and went out of his way to praise Ukrainian Red Army veterans.

The Russian President’s video blog site received a number of comments by visitors to Medvedev's letter to Yushchenko on the site and they reveal a stark microcosmic view of Russian attitudes towards Ukraine.

“We can get a knife in the back from Ukraine anytime. History has not taught Russia anything.“

“Ukraine is an artificial state” (Vladimir Putin once whispered this same theory into the ear of former U.S. President George Bush) “something created by the Bolsheviks after their coming to power…”

“I am a Russian citizen unfortunate to be living in Odessa… I was against the collapse of the USSR and observed the era of Gorbachev – Yeltsin which was very strange…I am very grateful to you, Dmitri Anatolevich about what concerns Ukraine…”

Ukrainian acting Foreign Minister,Volodymyr Khandogiy's response to Medvedev’s letter was low-key: “I am not personally upset by this, but it does evoke a somewhat disappointing feeling.”

Reforming the National Security Council of Georgia

by Giorgi Kvelashvili

On August 7, 2009, in an unprecedented move for a post-Soviet state, President Saakashvili invited opposition leaders to the newly built presidential palace to attend what was dubbed “the first expanded meeting of the National Security Council of Georgia.” Symbolism aside, this event marks a new era in Georgia’s consolidation as a modern state and is a major step in its democratic development.

The Council gathered to mark the first anniversary of the Russian invasion of Georgia on August 7, 2008. Mr. Saakashvili apparently wanted to demonstrate his country’s defiance in the face of Russia’s ongoing occupation in Georgia’s Abkhazia and Tskhinvali regions and the resolve of Georgian society to face new threats from its northern neighbor.

The presence of the leaders of all factions of parliamentary opposition in the meeting was noteworthy enough, but even more significant was the participation of some of the most vocal opponents of President Saakashvili’s government from the so-called radical opposition, who just weeks ago led continuous rallies in Tbilisi to demand the president’s resignation.

Warmly greeting his political rivals, Mr. Saakashvili said “as we all can see, when we do not speak in loudspeakers, we can hear each other even better. This will only make our country stronger.” He thanked the opposition for their active participation in the meeting and “for sharing their viewpoints with the government.” Stressing the importance of political dialogue, he added: “This is no more just a monologue about the need to talk to each other; we are decisively engaged in productive dialogue.”

The Georgian leader indicated that “expanded sessions” of the Security Council – the president’s chief advisory board – will occur regularly and asked other opposition leaders to participate in the future: “Our enemy would not be happy to see all of us gathered in this hall…It is a great disappointment to them, but it is the best message we can send to the Georgian people.” He also noted, “This event also shows how Georgia has advanced along the path of democratic transformation, with its political leaders both in the ruling party and the opposition showing responsibility and growing maturity in spite of serious differences on many issues.”

Irakli Alasania, leader of the newly created Our Georgia-Free Democrats opposition party, in his interview to the Georgian TV channel Rustavi 2, said that he raised two issues during the meeting: “One issue is related to external threats against the background of the continuous Russian occupation, which must be common for every political force, and the second one concerns the end to the political harassment in the country.” He announced that the opposition leaders “already reached agreement with the government to discuss this topic during the upcoming meetings with the top-level officials in the Ministry of Internal Affairs.”

One of the leaders of the Christian Democratic opposition faction in Parliament, Levan Vepkhvadze, who also attended the meeting, added that “reform of the Security Council will be the focus of the upcoming discussions with Eka Tkeshelashvili, Secretary of the Security Council.”

President Saakashvili hopes that continued dialogue with the opposition will help consolidate Georgian society, increase trust between political leaders and ameliorate the political climate before the municipal elections next year. Apparently, the Security Council will be permanently transformed to ensure the participation of the opposition parties, making room for constant dialogue and political debates. At the same time, the Ministry of Internal Affairs also plans to host a series of meetings with the opposition to address their grievances on the alleged “disproportionate use of force” to counteract excesses by some opposition activists during recent street rallies in the capital Tbilisi.

It is worth recalling that U.S. Vice President Joseph Biden, during his visit to Georgia at the end of July, particularly stressed the significance of the peaceful 2003 Rose Revolution that signaled the dawn of democratic transformation in the post-Soviet space. Moreover, he eagerly noted that “the Rose Revolution was a clear signal to the world that we have entered the 21st century, and the shackles of the 20th century have been shed.” Support for freedom and democracy is “a bipartisan sentiment in my country,” Mr. Biden told the audience.

Giorgi Kvelashvili holds a Master's degree in International Relations from Yale University, and currently serves as a research assistant at the Jamestown Foundation.

Ukraine Stockpiles Gas for Possible Gas War

Russia Turkey Sign South Stream Deal




by Roman Kupchinsky

Ukraine is preparing for a new “gas war” with Russia according to the Russian newspaper Nezavisimaya Gazeta. The new conflict, according to this prediction is expected to begin in December. As proof, the Russian newspaper reported on August 7 that Naftohaz Ukrayiny, the state-owned gas and oil company stated that it had already stored 22.7 billion cubic meters (bcm) of gas in its underground storage facilities – the total capacity of which is 32 bcm.

Earlier, Ukrainian Prime Minister Yulia Tymoshenko said that by the end of 2009 the country would have 27 bcm squirreled away – enough to ensure sufficient supplies for the fall-winter heating season. Ukraine's ability to reach this level is suspect and if Naftohaz is unable to meet the Prime Minister’s goal, Eastern and South Central Europe, dependent upon Russian gas transiting Ukraine, might once again face shortages as they did in January 2009.

Thus far Kyiv has been meticulous in paying Russia’s Gazprom for gas deliveries in 2009. On August 5, Naftohaz paid its bill of $605 million for July. Gazprom, which has been claiming every month that Ukraine would be unable to meet its payment deadline, once again refused to comment.

The money however was made available to Naftohaz through a new emission by the Ukrainian Central Bank. Whether the Ukrainian government is willing to risk such a maneuver again is doubtful. It appears to be relying on the European Commission’s recently approved loan of $1.7 billion by European banks and the World Bank to Ukraine which is to be finalized only in January 2010.

U.S. Special Envoy for energy, Richard Morningstar told Trend Capital that the United States does not view the South Stream pipeline project as a competitor to the Nabucco pipeline.

“Nabucco and the South Stream shouldn’t be viewed as competitors. The U.S. policy is to diversify the energy security of Europe by different resources,” Morningstar said.

The comments came after Russian Prime Minister Vladimir Putin’s visit to Turkey in early August where he convinced his Turkish counterpart, Recep Tayyip Erdogan, to allow Russia to begin initial work on South Stream.

“It’s clear now that the South Stream pipeline is a reality, and it [is] particularly important in the context of providing energy security for the whole of Europe, and in developing complex relations between Russia and Turkey. Our talks have shown that with Turkey’s leadership we can come to decisions that open the door to massive new energy projects,” Putin said.

It appears that Turkey did not have much choice but to sign the South Stream agreement. It not only receives two-thirds of its gas from Russia, but by supporting both the Russian project and Nabucco, it helps Turkey become a vital gas hub for Europe and improves its bargaining position in its bid for EU membership.

Russia’s Triads - Chinese Organized Crime in Russia

by Roman Kupchinsky

The jewel in the crown of the Russian Far East is Vladivostok, a hilly maritime city often compared to San Francisco. And while San Francisco prides itself on having a thriving Chinatown, Vladivostok is home to a thriving Chinese criminal community.

The damage these criminal gangs do to the region’s economy is enormous, yet, according to a 2007 study conducted by the Vladivostok Center on Organized Crime: “Political and academic circles in Moscow believe that the “problem” is exaggerated and warn those who write about the Chinese Mafia in Russia that this topic might harm relations with China.”

In March 2007, the mayor of Vladivostok, Vladimir Nikolayev, a supporter of the pro-Kremlin United Russia party, was removed from office after the city’s Leninsky District court approved a motion from the prosecutor’s office to strip him of his post. Nikolayev, also known by his criminal underground name of “Winnie the Pooh,” was charged with illegal land deals and embezzlement.

Five other criminal investigations of high level municipal officials, including the deputy mayor, were opened at this time but apparently were dropped. The funds allegedly embezzled by Nikolayev and his accomplices topped $3 million. Prosecutors have linked Nikolayev to Chinese organized crime gangs operating in the city which are suspected of bribing the former mayor. (International Herald Tribune, 1 March 2007)

Such Chinese crime groups as The Wolves, The Snakes and The Mad Dog have made heavy investments not only in the above listed activities, but also in local tourism and fishing as well as extorting protection money from both Chinese and Russian businesses in the city.

In 2006 a number of highly placed customs officials, Federal Security Service (FSB) and Ministry of Internal Affairs (MVD) officers, along with local prosecutors were fired during a crackdown on illegal food smuggling from China. One such smuggling operation involved a shipment of food products filling 150 railway carriages. The leaders of the gang were Chinese triad members and Russian businessmen according to Vladimir Ovchinsky, a retired MVD Major General and former head of the Russian Interpol office.

A great deal of Chinese organized crime activities involves natural resources. According to the Far Eastern Economic Review of May, 30, 2002, “Chinese and Russian groups illegally fell 1.5 million cubic meters of timber a year worth some $300 million, the WWF says. Much of it ends up in China and South Korea.”

Parameters of U.S. Military Assistance to Georgia Emerge from Congressional Hearings

by Alexander Melikishvili

The testimonies and comments by senior U.S. diplomats and military officials during the three recently held congressional hearings flashed out the parameters of the military assistance that Washington is willing to provide to Tbilisi at this point and in the foreseeable future. On Tuesday, July 28, the Subcommittee on Europe of the U.S. House of Representatives Committee on Foreign Affairs held the hearing entitled "The Reset Button Has Been Pushed: Kicking Off a New Era in U.S.-Russian Relations," which featured two testimonies by Philip H. Gordon, Assistant Secretary of State for European and Eurasian Affairs and Celeste A. Wallander, Deputy Assistant Secretary of Defense for Russia, Ukraine, and Eurasia Policy. On Thursday, July 30, the House Armed Services Committee held the hearing "The U.S. Security Relationship with Russia and its Impact on Transatlantic Security," which, apart from Philip Gordon's, included the testimonies of Assistant Secretary of Defense for International Security Affairs, Alexander Vershbow and Director for Strategic Plans and Policy of the Joint Chiefs of Staff, Vice Admiral James A. Winnefeld. Finally, on Tuesday, August 4, the Subcommittee on European Affairs of the U.S. Senate Committee on Foreign Relations held the hearing "Georgia: One Year After The August War," which featured three testimonies, including those of Philip Gordon and Alexander Vershbow as well as the one by S.Ken Yamashita, Acting Assistant Administrator of the Bureau for Europe and Eurasia at the U.S. Agency for International Development.

It should be noted that the tone of the overall remarks regarding the thorny topic of the U.S. military assistance to Georgia was initially set by the National Security Adviser to the Vice President Tony Blinken, who, during the press briefing on the eve of Vice President Joe Biden's trip to Georgia and Ukraine, specifically noted that the focus of U.S. work with Georgia in the area of defense reform and defense modernization is "on doctrine, on education and on training, and preparing for Georgia's future deployments to Afghanistan." This was later echoed in Celeste Wallander's remarks on July 28 during the congressional hearings, when she was asked by the Representative William Delahunt (Democrat, Massachusetts), who opposes the weapons transfers to Georgia. Wallander responded that the U.S. government "supports a responsible and robust defense cooperation program with Georgia that is focused on improving Georgia's [military] education, training, command capabilities and building NCO [non-commissioned officers] corps." More importantly, Wallander explained why the United States would not supply defensive weapons to Georgia at this point, when she stated:

“But Georgia is not ready for the kind of weapons acquisitions that the President [Saakashvili] floated. In the future, that’s not off the table, but certainly the United States is not in the position of believing that Georgia is ready for that kind of defense acquisition."

Far richer in detail were the remarks by Alexander Vershbow at the senate hearing this week dedicated to the approaching one year anniversary of the August war. Vershbow, who co-chairs the Security Working Group* of the U.S.-Georgia Strategic Partnership Commission with Philip Gordon, pointed out that "the United States has not provided lethal military assistance to Georgia since last August." According to Vershbow, the program of U.S.-Georgian defense cooperation entails a phased approach developed on the basis of the comprehensive assessment of Georgia's defense needs carried out by the United States European Command (E.U.C.O.M.). As Vershbow explained, the E.U.C.O.M. assessment "found defense institutions, strategy, doctrine and professional military education in Georgia to be somewhat deficient." Vershbow stated:

"As Georgia moves forward, it recognizes the need for careful and rational defense transformation plan reflecting a long-term approach and strategic patience. This has been a major theme in our defense consultations in working groups since last August and our defense assistance has reflected this reality. As I mentioned, our current focus is on institutions, doctrine, education and training and preparing for Georgia's future deployments to Afghanistan. At the same time the United States does believe that any sovereign state has the right to legitimate territorial defense capabilities and Georgia is no exception."

Perhaps the most revealing was the exchange during the questions-and-answers session when Republican Senator from Tennessee Jim DeMint pressed both Vershbow and Gordon to explain in more details the U.S. government's position on providing defensive weapons to Georgia. Senator DeMint asked Vershbow if there were any policy or national security interests that were preventing the Obama administration from supporting Tbilisi's requests for defensive weapons to which he replied:

"We have not refused any requests, but we have tried to work with the Georgians, starting in the immediate weeks after the conflict, to come up with the sensible, phased strategy for helping them to improve their defense capacities and to begin to modernize along the Euro-Atlantic lines, recognizing that there is no military solution to the problem of the separatist regions and that Georgia needs to take a long-term approach, reflecting strategic restraints, strategic patience. So we feel that the way to go, and the Georgians have accepted this based on the E.U.C.O.M. assessment to which I referred in my remarks, we should begin with the things like personnel reforms, improving their military education, professional standards of their military, helping them to rewrite their doctrine, to come up with a general defense plan, and draft a more coherent national military strategy. And this can provide a foundation for modernization of their capabilities over time. Our priority in the short-term therefore is on these professionalization and training programs. But as their capacity to absorb equipment improves based on this preparation, other forms of assistance can take place. Nothing is off the table, but we believe a phased approach is the way to go and I think we have a general understanding in the Georgian government in this regard."

So it appears that mindful of how sensitive this topic is for the Russian government, the Obama administration decided to pursue a rather delicate balancing act, wherein on the one hand Washington is trying to maintain the "reset" momentum with Russia, but on the other it is gradually implementing the phased defense cooperation with Georgia. Based upon this information it appears that the Pentagon's timeline with regard to Georgia is predicated on postponing the transfer of much-needed anti-tank and anti-aircraft weapons as much as possible in order not to incur Moscow's ire, which may manifest itself in the annulment of the recently signed transit agreement that is indispensable for supplying U.S.-led coalition troops in Afghanistan with manpower and materiel across the Russian territory. However, given the reality on the ground in the Caucasus, by the time the Pentagon does finally decide to shift focus of its assistance to Georgia from military "software" to "hardware," it maybe too late as Georgian statehood can simply collapse under the relentless military pressure and constant provocations from the separatist territories and Russia proper.

*NOTE: The U.S.-Georgia Strategic Partnership Commission was set up in accordance with the United States-Georgia Charter on Strategic Partnership signed on January 9, 2009.

**NOTE: According to Alexander Vershbow's testimony on August 4, the first meeting of the Security Working Group was held on June 22 and the next round of bilateral defense consultations is planned this fall in Georgia.

What was the Iranian Delegation doing in Abkhazia?

Sergei Bagapsh

by Giorgi Kvelashvili

On July 16, 2009, Sergei Bagapsh, the leader of the separatist government in Georgia’s Abkhazia region, currently under Russian occupation, gave an interview to the Moscow radio station Ekho Moskvy.

During the interview he addressed issues ranging from the possibility that Abkhazia, in the future, might become part of Russia through a “referendum of the people” to the supposed international relations his regime has been conducting recently.

Mr. Bagapsh boasted that he is “conducting serious talks with serious states” and to prove his point told Ekho Moskvy that “a few days ago we hosted a serious delegation from Iran, and it seems that we will have economic cooperation with Iran in the future.” He was careful to dismiss the possibility that in order “to avoid complications’ Iran would recognize Abkhazia as an independent state, but stressed that “we will be ready to develop contacts, economic, cultural and human-to-human relations” with Iran.

It is hard to imagine that the Iranian delegation visited Sukhumi without Russian consent since the only access into Abkhazia is through Russian territory. The official website of the “President of Abkhazia”, which usually posts every development in and around Abkhazia, has not posted any information about the Iranian delegation’s visit.

It is difficult to speculate about the purpose of the visit that apparently took place from July 11 to July 14. According to Russian news agencies Rosbalt and Apsnypress, the Iranian delegation was comprised of “experts on the Caucasus” held “talks with the Abkhaz authorities” that were closed to journalists “at the request of the Iranian delegation.” (Apsnypress, July 13, 2009). The delegation whose composition remains secret visited different parts of Abkhazia. According to Rosbalt, “Iran is currently engaged in establishing relations with Abkhazia and South Ossetia.”

Such secrecy could be explained by at least two factors. First, Iran has never questioned Georgia’s sovereignty and territorial integrity and although it has close ties with Russia, Tehran has not joined Moscow in recognizing Abkhazia’s and South Ossetia’s independence.

Second, besides the historical sites and lovely natural landmarks the Russian news agencies claim the Iranian delegation visited, Abkhazia is home to several Soviet-era nuclear facilities, most importantly the Vekua Institute of Physics and Technology (SIPT) in Sukhumi, which remains outside Georgia’s effective control and according to some sources is still operational. Georgia has long requested that appropriate international bodies conduct a comprehensive inventory of the Sukhumi facilities.

Whatever the reason for the highly secretive visit of the Iranian delegation to Abkhazia, the Georgian government might seek clarification from Iran on the purpose of the visit, if it has not already done so. Likewise, the United States and Turkey are likely to take a closer look at Iranian activity in Abkhazia.

Eurasian Energy Briefs

By Roman Kupchinsky

Germany appears to be on the path to greater diversification of it natural gas suppliers.

On July 15, RWE signed an agreement with Turkmenistan which outlines conditions for the development of gas deposits in a section of Turkmenistan’s part of the Caspian shelf. According to the Warsaw-based Center for Eastern Studies, the agreement improved Germany’s chances of becoming the leading player in the export of Turkmen gas to the West as part of the Nabucco pipeline consortium.

Since the start of the still unresolved gas conflict with Russia in April 2009, “Ashgabat has been increasingly courageous in seeking closer co-operation with the West – for example, it has openly declared support for the projected Nabucco gas pipeline. Signing an agreement with Germany’s RWE while the gas conflict with Russia is ongoing is a way for Turkmenistan to strengthen its position in the gas negotiations with Gazprom concerning the terms on which the exports of Turkmen gas could be resumed.”

The European Commission along with international financial institutions agreed to extend Naftohaz Ukraine, the state-owned oil and gas monopoly, $1.7 billion in credits. Participating will be the European Bank for Reconstruction and Development ($750 million), the European Investment Bank ($450 million) and the World Bank $500 million).

The Commission had demanded a restructuring of the Ukrainian gas sector before extending any credits and apparently the Ukrainian government’s decision to raise domestic gas prices in September-October this year satisfied the banks.

Kommersant wrote that the Ukrainian government had asked for $4.2 billion, but this was rejected. Moreover, Naftohaz will only receive $300 in 2009, a sum which will hardly make a dent in improving the monopoly’s dire financial problems.

Exxon and Gazprom seem to be on a collision course. The Russian government is now demanding that Exxon divert gas from the Sakhalin-1 project to Russian domestic consumption in the Khabarovsk region and is mounting pressure on the U.S. company to drop plans to export gas to China.
"Given that nearly all the gas from the Sakhalin-2 project has already been sold under long-term contracts and other Sakhalin projects are not expected to start production in the medium term, the gas from Sakhalin-1 can be the only source for domestic supplies until at least 2015," said Vladimir Kozlov, head of Gazprom's Sakhalin office.

This is not an unexpected development. Western and Russian analysts have been predicting for years that Russia would use gas from Sakhalin island for domestic needs.

Speaking at the annual oil and gas conference in the island's capital of Yuzhno-Sakhalinsk, Vladimir Kozlov, the head of Gazprom’s Sakhalin office, said the growing demand for gas in Russia's four far eastern regions would reach 13 billion cubic meters by 2010 and further grow to 16 bcm and 19 bcm by 2015 and 2020, respectively.

This development will most likely strain Russian-Chinese relations and further scare Western investors from entering the Russian gas market.

Russian MVD Colonel Slams Gazprom

by Roman Kupchinsky

Russian police Colonel Oleg Mansurov worked for the Ministry of Internal Affairs (MVD) for 28 years. He was a graduate of the MVD Academy, and had been assigned to the headquarters of the ministry since 2001 where he worked at the Main Directorate combating serious economic crimes as a senior investigator.

On July 31, Mansurov shared with the Russian internet publication, Novaya Gazeta, a sensational letter he had sent to Prime Minister Vladimir Putin.

Mansurov claimed that in February 2003, when he worked in the Department of Criminal Investigation of the energy and power sectors, he conducted an investigation into the legality of a contract signed between Gazprom and a Hungarian company, Eural Trans Gas (ETG). The company had been linked in the media to Semyon Mogilevich, a Russian mobster, wanted by the FBI for fraud and money laundering.

Mansurov writes that in April 2003 he participated in a meeting of officials from the MVD Main Directorate for Combating Organized Crime with U.S. FBI agents who informed their Russian colleagues that Semyon Mogilevich was indicted for fraud and money laundering and was on their most wanted list.

During the meeting Mansurov asked the FBI to provide any information they might have about Mogilevich.

“That same day” Mansurov wrote Putin, “I was summoned by one of the deputy heads of the department and was told to end all investigations [about Mogilevich] and turn over to him all my reports relating to his case.

Mansurov wrote that he complied with the order and turned over his Mogilevich case file to a different unit where the investigation was discontinued.

On July 1, 2003 the colonel was told that he must leave his unit due to a reduction of staff, but could ask for a transfer to a different department. On June 5, 2008 he was fired.

Mansurov took his case to a court which ruled in his favor and ordered that he be reinstated in his job, but the court order was ignored by the MVD.

“I believe that this persecution is due to my initiative in investigating the legality of the Gazprom (ETG) deal. Had they allowed me to conclude my investigation, then we would have rejected the use of intermediary companies as far back as 2003 and possibly the New Year’s gas conflict (with Ukraine) would not have taken place and Gazprom’s, as well as Russia’s reputation would not have suffered” Mansurov wrote.