Russia refuses to bail out crisis stricken economy of Belarus; Russian President has criticised the defence industry on the ground that it has failed to deliver on its promises; Russia faces one last hurdle in its effort to join the WTO; Russia marks vict
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    • Russia has rebuffed Belarus's request for a $1 billion stabilization loan and has asked the country to look for funds from elsewhere. The announcement by Russian Finance Minister Aleksei Kudrin on May 11 came as a bolt from the blue for Belarus which is reeling under a severe economic crisis. Kudrin has now told journalists that the most Belarus could hope to get from Eurasec's regional fund would be $1 billion and that the amount "would not be enough" to stem the crisis. He said Minsk should seek help from the International Monetary Fund. The announcement came at a time when Belarus's Central Bank lifted exchange-rate controls, allowing a steep currency devaluation in all but name. Officially, the Belarusian rouble’s exchange rate remains at 3,037 to the U.S. dollar. But the lifting of controls sent the local currency plummeting to around 4,000 to the dollar -- a 25 percent drop in one day. The collapsing currency has many Belarusians scrambling to buy foreign currency, precious metals, imported goods, and consumer staples like sugar and oil. Economist Yauhen Preigerman has said that the Minsk authorities are struggling to cope, and they "understand that if they formally announce a devaluation then that jump would instantly bring the wages of Belarusians almost to the level of Moldova, which is considered the poorest country in Europe." President Lukashenka has blamed the developing crisis on the interference of unspecified foreign governments and on Belarusians purchasing too many foreign automobiles. Independent experts blame it on populist pledges Lukashenka made during last year's presidential election campaign, rising energy tariffs, and widespread inefficiency in Belarus's state-dominated economy. The reasons for Moscow's apparent about-face have left experts baffled and there has been speculation for weeks that the talks largely cantered on Moscow's desire to purchase key Belarusian state companies, and it is possible those talks broke down.1

    Russian President Dmitry Medvedev has said that Russia's defence industry has failed to fulfill major weapons contracts, and has warned government and industry officials they will be held responsible. President Medvedev told officials during a televised meeting on May 10 that "The work is going very poorly and slowly," and that "It is unacceptable when decisions are taken -- and at the highest level -- money is allocated but the product is not delivered." Russia is the world's second-largest arms exporter. Despite that status, however, some analysts say Russia's arms industry has stagnated since the collapse of the Soviet Union.2

    Russia's tortured 17-year journey toward accession to the World Trade Organization (WTO) seems to be nearing its end. With Washington and the European Union strongly endorsing Russia's bid and pushing for it to happen before the end of the year, the only obstacle remaining, by all appearances, is tiny Georgia. The two countries held a second, inconclusive round of Swiss-mediated talks in Bern last month and have scheduled another meeting for the end of this month. Russia is the largest economy in the world that is not in the global trade body, and Moscow's accession is being advertised as a major achievement for the "reset" of U.S.-Russian relations that was proclaimed in 2009. The sticking point is Tbilisi's insistence that it be able to monitor trade along the borders between Russia and the breakaway Georgian regions of South Ossetia and Abkhazia, which Moscow recognized as independent countries following the Russia-Georgia war in 2008. Tbilisi maintains that WTO rules stipulate that members must have control of their own borders. It is a rare instance in which Georgia -- which says Russia is illegally occupying 20 percent of its territory -- has leverage over its giant neighbour.3

    Russia has paraded the best of its nuclear armaments and fighting forces to celebrate the 66th anniversary of the World War II victory over Nazi Germany. Some 20,000 troops marched through Red Square saluting President Dmitry Medvedev and Prime Minister Vladimir Putin. The display of advanced military hardware culminated in a display of the latest Topol-M intercontinental ballistic missile launchers. In a speech to the troops and guests, President Dmitry Medvedev said that "today Russia firmly upholds the principles of peaceful cooperation." 4

    In an apparent sign of Pakistan’s improvement of relationship with Moscow, Russian President Dmitry Medvedev and Pakistani President Asif Ali Zardari have promised to build up their cooperation in areas of mutual interest. President Medvedev pledged to coordinate efforts in the fight against terrorism, adding: "We have to do everything so that we can jointly counter this main evil of the 21st century." Russia has signed a new trade and aid agreements, including a plan to modernize a Soviet era steel plant in Pakistan. As the American killing of Osama bin Laden strains relations with the United States, Pakistan’s president is offering Russia a special relationship, saying in one interview, “Tsarist Russia was dreaming about getting access to the southern seas.”

    During the four-day visit to Russia, President Zardari also discussed energy cooperation, including Russia's participation in a proposed natural gas pipeline from Turkmenistan to India that would cross Afghanistan and Pakistan. Tensions also still linger over the Pakistani secret service's backing of mujahedeen insurgents against Soviet forces in Afghanistan during the 1980s. But at a rare summit in Russia's Black Sea resort of Sochi last year, which also included Afghanistan and Tajikistan, the four states agreed to pursue joint economic projects to help bring stability to the volatile region.5

    In another development, Japanese Foreign Ministry has lodged an official protest against the visit of a Russian high-ranking delegation to the disputed Kuril Islands. The Russian delegation led by Deputy Prime Minister Sergei Ivanov visited the island of Kunashir and Iturup on Sunday as part of a working tour around Russia's Far East. The delegation included Minister of Transport Igor Levitin, Minister of Economic Development Elvira Nabiullina, Minister of Natural Resources Yuri Trutnev, Minister of Regional Development Viktor Basargin, and governor of the Sakhalin region Alexander Khoroshavin. Japan has termed the visit as unacceptable and regretful. Both Japan and Russia have laid claims to the South Kuril Islands, called the Northern Territories by the Japanese, since they were annexed by the Soviet Union at the end of World War II. The dispute has prevented the two countries from signing a peace treaty to formally end hostilities. 6

    Reports noted that Russian President Dmitry Medvedev and his Slovenian counterpart Danilo Turk will discuss bilateral relations and urgent global issues during a meeting on 16th May 2011. They plan to discuss possibilities of closer foreign policy cooperation. The presidents are expected to focus on conflicts in the Middle East and North Africa, and issues of European security. The agenda of the talks also includes the review of bilateral economic and cultural ties. Russian-Slovenian trade grew 38 percent in 2010 year-on-year, and the sides are planning to further develop economic cooperation by expanding the presence of Russian investors on the Slovenian energy market through the implementation of the South Stream gas pipeline project in Slovenia. The Kremlin has also said that "traditionally close cultural ties could be expanded through cooperation in the framework of the Forum of Slavic Cultures - an international non-government organization with the headquarters in Ljubljana, established at the initiative of the Russian and Slovenian presidents in order to provide assistance to promote Slavic culture."7

    In another development, Russian President Dmitry Medvedev has sent a letter to the Russia-NATO Council asking for guarantees that the European missile defence project would be safe for Russia. The letter said the European missile defence shield would only be truly effective and feasible if Russia is involved in the project on an equal basis, and asked for reliable guarantees that the missile shield in Europe would not undermine strategic stability or be targeted at any of the parties. After years of dispute over the issue, Russia and NATO agreed to cooperate on the missile defence shield at a summit in Lisbon in November 2010. But the sides remain in dispute over how the shield should be implemented. NATO favours two separate shields which exchange information while Russia is pushing for a joint system. The United States and Romania have announced a deal to deploy missile interceptors in Romania as part of its plant to erect a missile shield over Europe. Russian has criticized the move on the ground that the scheme may compromise its security by weakening its nuclear missile arsenal.8

    Meanwhile, Russia’s Foreign Minister Lavrov has called for negotiations as soon as possible between Libyan rebels and Gadhafi’s government and emphasized Moscow's opposition to any foreign interference in Syria or other regional states. In wide-ranging remarks in Kazakhstan, Lavrov also said Iran must engage in "serious conversation" with global powers to dispel concerns it could be seeking nuclear weapons. He suggested that a resolution of the conflict would usher in a new government but that talks with Gadhafi's government were unavoidable. Russia has said that a Western-led coalition conducting airstrikes in Libya is overstepping its UN Security Council mandate to protect civilians, and has vocally opposed foreign intervention in other conflicts in the Middle East and North Africa. Lavrov said efforts to end bloody confrontation in Syria were complicated by "the desire of some participants in these processes to attract external forces to support their actions. On Iran, which has been involved in a diplomatic to-and-fro with Russia and five other global powers over potential new talks on its nuclear program, he said that Tehran must not avoid questions about activities that fuel suspicion.9

    In other developments, the Amnesty International has said that the Russian government's rhetoric on freedoms has changed and activism is growing, but police crackdowns on protesters and attacks on journalists have continued in a climate of impunity. The human rights group, in its annual report, also said President Medvedev’s efforts to end police violence, legal impunity and unfair detention have been "piecemeal" and done little to curb frequent rights abuses. The Foreign Ministry criticized the report as "politically biased" and accused Amnesty of using rights rhetoric to apply political pressure on the government. In the three years since Medvedev promised to fight graft and widespread flouting of the law, the authorities have voiced more support for freedoms, and people have shown more willingness to fight for their rights, Amnesty said. But the authorities, it said, continue to crack down hard on political opponents and others.10

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