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    MOSCOW, September 18 (RIA Novosti)
    Russia gets right to set up military bases in Abkhazia and South Ossetia/ Russia strengthens its presence close to the United States/ Missile shield can only damage trust in Russia-West relations/ Russia stakes claim to Arctic shelf/ Financial crisis will teach Russians to work/ Russia's loyal allies should not expect large economic dividends


    Russia gets right to set up military bases in Abkhazia and South Ossetia

    On Wednesday, by signing treaties of friendship, cooperation and mutual assistance, Russia officially sealed its relations with Abkhazia and South Ossetia, whose independence from Georgia it recognized on August 26 and where it continues to station its troops, which are no longer peacekeeping.
    Experts believe Moscow has exercised its right as a victorious nation to establish the existing status quo.
    "These treaties are nothing to speak of, in fact," said Timofei Bordachev, director of the Center for Comprehensive European and Global Studies at the Moscow-based Higher School of Economics. "They fit into the context of Russia's August 26 recognition of the two republics' independence."
    The context is simple: Russia has formalized its relations with the two South Caucasian republics by exercising its rights as a victor, experts believe.
    The new states will differ little from Russia's regions: their residents will be Russian citizens, they will make payments in rubles, and will be protected by Russian border guards.
    The text of the two documents is identical for both republics, and emphasizes the security of the newly formed nations. "It is a message to Georgia and a message to NATO, a reply to the unfriendly tone they have adopted against Russia," said Alexei Vlasov, director of the Moscow-based Center for Social and Political Processes in Post-Soviet Countries.
    Experts are also finding other arguments favoring the inclusion of the point on broad-based military cooperation directly in the treaty. "The peacekeeping format was first scuppered by Georgia attacking Tskhinvali, and ultimately demolished by Russia, which recognized the independence of both republics," said Vladimir Zharikhin, deputy director of the Institute of the CIS Countries.
    Political analysts say the treaties signed in Moscow are "nothing but a formalization of the established order of things." "The economies of the two republics are so closely tied up with Russia and the ruble has been its basic currency for so long that it could not have been otherwise," Vlasov said. "Neither Abkhazia nor South Ossetia, being what they are economically, will be able to support their existence as independent states. In effect, these countries are becoming Russia's regions, although formally they remain independent," said political analyst Alexander Kynev.
    "For some fifteen years Abkhazia and South Ossetia have been, not Georgia's autonomies, but quasi-states tightly tied to Russia," Vlasov said.

    RBC Daily, Kommersant

    Russia strengthens its presence close to the United States

    Russia has stepped up its activity in Latin America after the recent confrontation with the United States over Georgia's attack on South Ossetia. Analysts say the Kremlin's so far symbolic activity in the U.S.'s "soft underbelly" may undermine Washington's feeling of invulnerability and warn it against taking moves that may displease Russia.
    Moscow's geopolitical ambitions coincide with its economic interests in Latin America.
    Deputy Prime Minister Igor Sechin yesterday finished his second visit to Latin America in the last two months, where he discussed Russia's space and high technology cooperation with Cuba and Venezuela. His visit coincided with the flight of the Tu-160 strategic bombers there.
    According to RBC Daily, the situation is not unlike the dangerous bargaining during the 1962 Cuban missile crisis provoked by the deployment of American and Soviet missiles in Turkey and Cuba. This time the point at issue is the two countries' military presence in the Caucasus and the Caribbean.
    Vladimir Yevseyev, a military expert at the Institute of World Economy and International Relations of the Russian Academy of Sciences, said: "The common air defense system of the United States and Canada is looking mostly northward, from where they feared a nuclear strike during the Cold War. Areas south of the U.S. are poorly protected, which became apparent when Russia's strategic bombers landed in Latin America."
    "By getting a foothold in Venezuela, Russia will be able to patrol both the Pacific and the Atlantic coasts. It only needs a permit to use the flight corridor from Nicaragua, which has recognized the independence of Abkhazia and South Ossetia," Yevseyev said.
    He said Russia might start joint production of arms in Venezuela, which would simplify their sale to other regional countries hostile to Washington. Moscow has made its Latin American move to caution NATO countries against inviting Ukraine to join the military alliance and prevent conflicts in the Caucasus, Yevseyev said.
    Dmitry Yevstafyev, an expert at the Moscow-based PIR Center for policy studies, said Russia's political and economic interests coincided in Venezuela, which is a major oil and gas producer. Since the global economies are now fighting off a financial crisis, Latin America is becoming a most promising market.
    According to the popular business daily Kommersant, a Chilean officer once said the United States had left Latin America not because it had been forced to do so, but because it had lost touch with the situation by spending too much time in Iraq and Afghanistan, which made its presence on the continent meaningless.
    As a result, Russia has got the chance to practice a new policy and see how far it can go in a possible confrontation with the U.S.


    Missile shield can only damage trust in Russia-West relations

    "I don't think we need to threaten each other, but the West must remember that Russia will see any threat to its security as a threat of terrorism," Russia's NATO envoy writes in the Gazeta.ru online newspaper.
    Dmitry Rogozin writes: "If they claim their ballistic missile defense system is directed against the mujaheddin in Iran and not against Russia, we can equally easily say we are creating the 'flying hammer' against bin Laden. If he takes hold of these antimissiles, we will need to give him 'a hefty punch in return,' as Prime Minister Vladimir Putin has said. Russia's response will be simple, fast and very cheap, but highly effective."
    "If the Czech and Polish leaders are true patriots, they should think again if they need a strike to be directed at them because they house the ABM systems," Rogozin writes.
    "The prospect of deploying antimissiles in Poland, once rather vague, became a reality when the Georgian conflict began," the Russian official writes. "It would be naive to say this has no connection to Russia. The Americans have made a highly unfriendly move, and Poles have helped them make it. This has put an end to the claims that the ABM system is not directed against Russia."
    "The Polish cabinet is trying to look pragmatic so as to reduce Russia's displeasure regarding the ABM system. The possibility of monitoring the facility, which we have been offered, is totally useless. Nobody can now convince Russia that the system is not directed against it," Rogozin writes.
    "If I were a Polish patriot, I would seriously consider whether it is worth the trouble, because all the troubles Poland had created for Russia before boomeranged at it. Warsaw is not located close to Iran, but close to Russia. It is therefore clear that the antimissiles have no connection to Iran, but are directed against Russia the same as the missile tracking radar in the Czech Republic," Rogozin writes.
    "Here is one more interesting conclusion from Washington's talks with Poland and the Czech Republic. Poland demanded additional security guarantees from the U.S. This means that it does not trust NATO, which has expanded so much as to become shapeless. The international community should thoroughly analyze this significant fact. NATO is no longer a military political alliance but a club of gentlemen who are reacting fiercely negatively to the growth of Russia's influence in Europe," the Russian representative at NATO writes.
    "The ballistic missile defense system will not ease the feeling of additional danger, but can only increase mistrust in our relations. It will spur a race for offensive weapons, especially because it is ineffective and quite useless against potential terrorist attacks against Russia, the Czech Republic, Poland or the United States. You cannot use tanks to fight mosquitoes," Rogozin concludes.


    Russia stakes claim to Arctic shelf

    The Kremlin wants Russia to get many of its resources from the Arctic throughout the 21st century. On Wednesday, the Security Council discussed ways of developing the region's vast mineral deposits.
    Alexander Danilov, deputy director of the Arctic and Antarctic Research Institute, said a document approved by the Security Council called for additional arguments to justify Russian claims to an expanded economic zone.
    In 2011, Russia must submit another request to the UN Commission on the Limits of the Continental Shelf, offering scientific evidence that the underwater Lomonosov and Mendeleyev ridges are a continuation of the Siberian shelf.
    In 2001, a similar request was turned down due to the lack of convincing evidence. In August 2007, a polar expedition headed by Arthur Chilingarov, a member of the State Duma, the lower house of parliament, collected such evidence, also planting the Russian state flag on the bottom of the Arctic Ocean.
    Under the 1982 UN Convention on the Law of the Sea, the 200-mile exclusive Russian economic zone will expand by another 150 nautical miles, or 1.2 million square kilometers, if the afore-said Commission on the Limits of the Continental Shelf agrees with Moscow's claims.
    A Russian Navy officer said the government was preparing to set aside more money for the navy and coastguard and air-patrol units of the Federal Security Service's Border Service because Russia needed a stronger navy to expand its presence in the Arctic.
    U.S. political analyst Nikolai Zlobin said Russia's claims to the Arctic shelf were fraught with serious disagreements with the United States and Canada, and that the West might tell Russia that it lacked the tremendous funding needed to develop the Arctic.
    The concerned countries, rather than the UN, will make the relevant political, and not academic, decision, Zlobin told the paper.


    Financial crisis will teach Russians to work

    The popularity and the legitimacy of the current political system in Russia are based on the high rate of economic growth and an increase in incomes. The financial crisis is the first and probably not the last test for Russian authorities' crisis management capabilities.
    Both officials and ordinary people have learned to spend money and relax, now they will probably have to work harder. Economic woes, if they affect ordinary people, could also affect the stability of the country's political system.
    The Russian stock market is not developed enough for its undercapitalization to make "common Russians" feel poor and cut down their consumption level, like in the United States.
    On the other hand, the financial crisis, if causes the crash of a couple of major banks and then triggers a similar reaction from major companies in other markets, will have a much graver effect on ordinary Russians, who learned to prepare for the worst through a series of slumps from 1991 and 1998.
    The financial crisis was largely caused by the obvious risk, posed by a huge private foreign debt and dependence on the global market, but despite this, the risk's actualization was a surprise for regulators.
    The game is not over yet, however. Now the oil-boosted Russian economy has to move from hothouse conditions to a tougher environment, which could have been done with awareness before. The financial crisis requires precise economical tactics, free from the influence of pressure groups, from the government. A number of experts suggest switching to a floating ruble rate, as it would be favorable for the banking system and domestic manufacturers, but this would hit private companies who have borrowed large sums of money abroad. A precise economic strategy, involving structural reforms, is also needed.


    Russia's loyal allies should not expect large economic dividends

    In 2009, Armenia will have to pay more for natural gas, although the price hike will not match European levels. Analysts said Yerevan would profit more than other CIS countries.
    Just like other post-Soviet republics, Armenia will gradually switch over to market prices, stage-by-stage.
    On Wednesday, Karen Karapetyan, board chairman at ArmRosgazprom, a company 72.1% owned by energy giant Gazprom, said the new prices would be introduced stage-by-stage in 2009-2010, and that Russia would start charging European prices for its gas as of January 1, 2011.
    Although ArmRosgazprom declined to specify exact price hikes, Gazprom recently said it planned to charge $165 per 1,000 cubic meters, a 50% increase on current prices.
    Even then Yerevan would pay less than other CIS countries, analysts told the paper.
    Svetlana Savchenko, the head of investment planning at 2K Audit-Business Consulting, said the price of Armenian gas was unlikely to soar by over 100% by 2011.
    She said global oil and gas prices had stopped skyrocketing and were beginning to plunge, and that the same could happen to European prices.
    According to Savchenko, CIS countries are entitled to a discount, and are unlikely to pay as much as Europe does. She said ArmRosgazprom was implementing several important projects for Gazprom, including the construction of the second stage of the Iran-Armenia gas pipeline.
    "It appears that Armenia would not pay more than $220-230 per 1,000 cubic meters by 2011," Savchenko told the paper.

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