The Pig rebuffs Obama’s warning about military intervention as Ukraine crisis escalates
Friday, March 7, 2014 8:56 EST
By Lidia Kelly and Alissa de Carbonnel
MOSCOW/SIMFEROPOL, Ukraine (Reuters) – President Vladimir Putin rebuffed a warning from U.S. President Barack Obama over Moscow’s military intervention in Crimea, saying on Friday that Russia could not ignore calls for help from Russian speakers in Ukraine.
After an hour-long telephone call, Putin said in a statement that Moscow and Washington were still far apart on the situation in the former Soviet republic, where he said the new authorities had taken “absolutely illegitimate decisions on the eastern, southeastern and Crimea regions.
“Russia cannot ignore calls for help and it acts accordingly, in full compliance with international law,” Putin said.
Ukraine’s border guards said Moscow had poured troops into the southern peninsula where Russian forces have seized control.
Serhiy Astakhov, an aide to the border guards’ commander, said there were now 30,000 Russian soldiers in Crimea, compared to 11,000 permanently based with the Russian Black Sea fleet in the port of Sevastopol before the crisis.
Putin denies that the forces with no national insignia that are surrounding Ukrainian troops in their bases are under Moscow’s command, although their vehicles have Russian military plates. The West has ridiculed this claim.
The most serious east-west confrontation since the end of the Cold War – resulting from the overthrow last month of President Viktor Yanukovich after violent protests in Kiev – escalated on Thursday when Crimea’s parliament, dominated by ethnic Russians, voted to join Russia. The region’s government set a referendum for March 16 – in just nine days’ time.
European Union leaders and Obama denounced the referendum as illegitimate, saying it would violate Ukraine’s constitution.
The head of Russia’s upper house of parliament said after meeting visiting Crimean lawmakers on Friday that Crimea had a right to self-determination, and ruled out any risk of war between “the two brotherly nations”.
Before calling Putin, Obama announced the first sanctions against Russia since the start of the crisis, ordering visa bans and asset freezes against so far unidentified persons deemed responsible for threatening Ukraine’s sovereignty.
Japan endorsed the Western position that the actions of Russia, whose forces have seized control of the Crimean peninsula, constitute “a threat to international peace and security”, after Obama spoke to Prime Minister Shinzo Abe.
China, often a Russian ally in blocking Western moves in the U.N. Security Council, was more cautious, saying that economic sanctions were not the best way to solve the crisis and avoiding comment on the legality of a Crimean referendum on secession.
The EU, Russia’s biggest economic partner and energy customer, adopted a three-stage plan to try to force a negotiated solution but stopped short of immediate sanctions.
The Russian Foreign Ministry responded angrily on Friday, calling the EU decision to freeze talks on visa-free travel “extremely unconstructive” and warning that Moscow would retaliate against any sanctions.
Brussels and Washington also rushed to strengthen the new authorities in economically shattered Ukraine, announcing both political and financial assistance.
Promises of billions of dollars in Western aid for the Kiev government, and the perception that Russian troops are not likely to go beyond Crimea into other parts of Ukraine, have helped reverse a rout in the local hryvnia currency.
In the past two days it has traded above 9.0 to the dollar for the first time since the Crimea crisis began last week. Local dealers said emergency currency restrictions imposed last week were also supporting the hryvnia.
In their telephone call, Obama said he urged Putin to accept the terms of a potential diplomatic solution to the dispute over Crimea that would take account of Russia’s legitimate interests in the region.
Putin was defiant on Ukraine, where he said the pro-Russian Yanukovich had been ousted in an “anti-constitutional coup”. But he underlined what he called “the paramount important of Russian-American relations to ensure stability and security in the world”, the Kremlin said.
“These relations should not be sacrificed for individual differences, albeit very important ones, over international problems,” Putin said.
The 28-nation EU welcomed Ukrainian Prime Minister Arseny Yatseniuk to an emergency summit, even though Kiev is neither a member nor a recognized candidate to join the bloc, and agreed to bring forward the signing of the political parts of an agreement on closer ties before Ukraine’s May 25 elections.
Yatseniuk said after returning to Ukraine that no one in the civilized world would recognize the result of the “so-called referendum” in Crimea. He repeated Kiev’s willingness to negotiate with Russia and said he had requested a telephone call with Russian Prime Minister Dmitry Medvedev.
The European Commission said Ukraine could receive up to 11 billion euros ($15 billion) in the next couple of years provided it reaches agreement with the International Monetary Fund, which requires painful economic reforms like ending gas subsidies.
Despite Putin’s tough words, demonstrators who have remained encamped in Kiev’s central Independence Square to defend the revolution that ousted Yanukovich said they did not believe Crimea would be allowed to secede.
Some said they were willing to go to war with Russia, despite the mismatch between the two countries’ armed forces.
“We are optimists. Crimea will stand with us and we will fight for it,” said Taras Yurkiv, 35, from the eastern city of Lviv. “How we will fight depends on the decisions of our leadership. If necessary, we will go with force. If you want peace, you must prepare for war.”
Alexander Zaporozhets, 40, from central Ukraine’s Kirovograd region, put his faith in international pressure.
“I don’t think the Russians will be allowed to take Crimea from us: you can’t behave like that to an independent state. We have the support of the whole world. But I think we are losing time. While the Russians are preparing, we are just talking.”
On the ground in Crimea, the situation was calm although 35 unarmed military observers dispatched by the pan-European Organisation for Security and Cooperation in Europe were denied entry into the peninsula on Thursday after landing in the southern Ukrainian port of Odessa.
A U.N. special envoy who traveled to the regional capital Simferopol on Tuesday was surrounded by pro-Russian protesters, some of them armed, and forced to leave on Tuesday. The United Nations said it had sent its assistant secretary-general for human rights, Ivan Simonovic, to Kiev to conduct a preliminary humans rights assessment.
Ukrainian television was switched off in Crimea on Thursday and replaced with Russian state channels.
The streets largely belong to people who support Moscow’s rule, some of whom have become increasingly aggressive in the past week, harassing journalists and occasional pro-Kiev protesters.
Part of the Crimea’s 2 million population opposes Moscow’s rule, including members of the region’s ethnic Russian majority. The last time Crimeans were asked, in 1991, they voted narrowly for independence along with the rest of Ukraine.
“This announcement that we are already part of Russia provokes nothing but tears,” said Tatyana, 41, an ethnic Russian. “With all these soldiers here, it is like we are living in a zoo. Everyone fully understands this is an occupation.”
(Additional reporting by Luke Baker and Martin Santa in Brussels, Steve Holland and Jeff Mason in Washington, Lina Kushch in Donetsk and Pavel Polityuk in Kiev; Writing by Paul Taylor; Editing by Giles Elgood)
Tatars flee Crimea for western Ukraine
By Agence France-Presse
Friday, March 7, 2014 10:29 EST
In the city of Lviv, across Ukraine from the crisis gripping Crimea, a group of Tatars fleeing the troubled peninsula disembarks on a train platform looking for security away from Russian forces.
“I’m scared for my children as long as Russian soldiers are in Crimea,” said a young Tatar mother accompanied by her three children, aged two to five.
“Here I feel safe,” she added, one of 200 Crimean residents who have accepted an invitation from Lviv authorities to come and stay in this bastion of Ukrainian nationalism in the west of the country near the Polish border.
Crimea, a Russian-speaking autonomous region of Ukraine, has come under the de facto control of Russian forces, and its regional parliament has unanimously voted to join Russia — raising the spectre of the break-up of Ukraine.
Most of the Crimean residents now arriving in Lviv are Tatars, the peninsula’s Muslim minority, which was deported to Siberia and central Asia under Soviet leader Joseph Stalin and returned after the fall of the Soviet Union in 1991.
For them, the creeping advance of Russian forces since late February has been especially alarming.
In Lviv, new arrivals were greeted by Petro Kolodiy, head of the regional council, which has set up a hotline for anyone wishing to relocate to the city.
“Like all Ukrainians, you are in a difficult situation created by the Kremlin. Lviv extends its hand to you,” he told the newcomers.
Not only the authorities but the local population have opened their arms to 500 Crimeans, with hotel and spa owners even offering to host them for free.
“When I was little, my grandmother told me that Lviv had welcomed people from eastern Ukraine during the great famine (in 1932-1933) and shared their last piece of bread with them,” said Kolodiy.
“Today, we’re trying to offer the Crimeans what we can.”
- Ready for guerrilla war -
Besides Tatars, families of Ukrainian soldiers in Crimea are also arriving in Lviv.
A flag of the Ukrainian navy — offered to Lviv’s mayor by a reserve officer — now flies above city hall as a sign of solidarity with Ukrainian soldiers.
Since the ousting of Ukraine’s pro-Moscow president Viktor Yanukovych last month, Russian forces have surrounded several Ukrainian bases in Crimea, with skirmishes erupting in some spots.
Moscow has denied sending any troops to the disputed region but insists it will protect its citizens.
In a video message, Lviv Mayor Andriy Sadovy appealed to Crimeans not to believe Russian propaganda that said Moscow needed to defend its people on the peninsula against alleged western Ukrainian extremists.
“If you expect armed men from the west, I can reassure you: we want a peaceful development for all of Ukraine,” he said, speaking in Russian, the better to reach Crimea’s majority Russian-speaking population.
Ukraine is in effect divided between a mostly pro-Moscow east and a more pro-European west that includes Lviv and the capital Kiev.
Alim Aliyev, the Crimean Tatars’ representative in Lviv, said he was optimistic about the region’s future. Tatar men were sending their families away so they could dutifully defend their land, he said.
“As long as Tatars are in Crimea, Crimea will remain part of Ukraine,” he said.
Tatars will launch a guerrilla war against the Russian forces if they do not pack up and leave the region, Aliyev warned.
“We will dance the haytarma and the hopak (traditional Tatar and Ukrainian folk dances) on the ruins of Putin’s post-imperialist ambitions,” he said.
U.S. warship crosses Bosphorus Strait towards Black Sea
By Agence France-Presse
Friday, March 7, 2014 10:22 EST
A United States warship crossed Turkey’s Bosphorus Strait Tuesday, headed towards the Black Sea, as tensions simmer over Ukraine’s Crimea region.
A coastguard boat was seen escorting the guided-missile destroyer, the USS Truxtun, an AFP photographer saw.
The US Navy said in a statement on Thursday that the ship was bound for the Black Sea to conduct military exercises with Bulgarian and Romanian naval forces.
According to the Montreux Convention, warships of countries which do not border the Black Sea can only stay in the waters for 21 days.
On Tuesday, two Russian warships crossed the Bosphorus after the Kremlin “summoned” the vessels back to its Black Sea fleet to strengthen its military presence in Crimea.
A Ukrainian vessel also entered the Black Sea the same day, according to the Turkish state-run Anatolia news agency.
The increased sea traffic comes at a time of growing tension between the West and Russia over Crimea, a predominantly ethnic Russian peninsula housing the Kremlin’s Black Sea fleet.
Hollande Meets Klitschko, Says No Crimea Referendum without Ukraine Consent
by Naharnet Newsdesk
07 March 2014, 18:25
France said Friday there could be no referendum on the future of Crimea unless Ukraine decided to organize one.
"The territorial integrity and sovereignty of Ukraine are non-negotiable," President Francois Hollande said after a meeting with Ukraine's former foreign minister Petro Poroshenko and Vitali Klitschko, the ex-boxer and leading figure of the protest movement that ousted the country's pro-Moscow president.
Russia has said it would respect a decision by lawmakers in Ukraine's flashpoint Crimea region to renounce ties with Kiev and stage a March 16 referendum on switching to Kremlin rule.
Hollande said the West's response to the crisis would be "modulated according to the situation."
"Our aim is to also always leave open the door for negotiations so that Russia can enter into talks if it decides to do so," he said.
Hollande said the "international community, Europe and France must work to preserve the territorial integrity of Ukraine."
He also warned that it was necessary to prevent a dangerous precedent.
"There are a lot of countries which could get worried if a precedent were set for breaching borders and territorial integrity," Hollande said.
Klitschko shared that view saying that "the instability threatens not only Ukraine but also the whole region."
To support the Ukrainians, Poroshenko called for "using all the sanctions possible" against Russia, saying the solution to the crisis "is not to be found in Kiev, or in Crimea but in Moscow."
He also said before any political solution could be reached there must be "the complete withdrawal of the foreign army" in Crimea, where Russian forces have taken effective control over the past week.
Ukraine Braces for New Demos as Russia Threatens Gas Supply
by Naharnet Newsdesk
08 March 2014, 07:07
Ukraine braced Saturday for new pro-Russian protests in the tense eastern city of Donetsk after Moscow threatened to stop crucial gas supplies to the country, further escalating hostilities with the West.
Donetsk, a focal point of the crisis engulfing Ukraine since the protests that toppled president Viktor Yanukovych, was expecting a large demonstration by activists demanding a secession referendum like the one planned for the Crimean peninsula.
The latest show of pro-Moscow sentiment in the largely Russian-speaking southeast comes after Russia threatened Friday to halt gas supplies to Ukraine following Western sanctions to punish the Kremlin for seizing de facto control of Crimea.
The warning by Russian state-run energy giant Gazprom, which could affect supplies to other countries, raised the specter of previous gas disputes between Russia and Ukraine that deeply rattled European economies in 2005-2006 and again in 2009.
Gazprom said the move was in response to unpaid bills, but the threat -- made after the European Union warned it could toughen sanctions against Moscow -- underscored the Kremlin's resolve to stand its ground in the biggest East-West crisis since the Cold War.
In a sign of the tensions racking Crimea, Ukraine's defense ministry said late Friday that unidentified militants had smashed through the gates of a Ukrainian air force base in Sevastopol.
No shots were fired in the incident.
A convoy of foreign observers from the Organization for Security and Co-operation in Europe (OSCE) was earlier stopped at a checkpoint in Crimea guarded by pro-Kremlin gunmen.
Russia's foreign ministry accused the OSCE of attempting to enter the Black Sea peninsula uninvited and "without considering the opinions and recommendations of the Russian side".
The OSCE observer mission is a crucial part of the "off-ramp" US President Barack Obama is pushing to de-escalate a crisis that threatens to splinter Ukraine, an ex-Soviet state of 46 million people perched on the threshold between Russia and the EU.
Obama spoke with German Chancellor Angela Merkel on Friday and hailed the US and EU's "unified position" on Ukraine, the White House said.
Obama and Merkel "agreed on the need for Russia to pull back its forces" and allow international observers and human rights monitors into Crimea, the statement said.
It said the leaders had also discussed a "contact group" to lead a direct dialogue between Russia and Ukraine -- an idea the Kremlin has scorned.
In Moscow, police said more than 65,000 people had attended a rally outside the Kremlin supporting Russia's full annexation of Crimea, a predominantly ethnic-Russian peninsula roughly the size of Belgium.
The heads of Russia's two houses of parliament said they would respect the decision by the flashpoint region's parliament to split from Kiev and hold a March 16 referendum on switching to Russian rule.
And in Donetsk, about 400 kilometers (250 miles) northeast of Crimea, tensions were high around Lenin Square, where pro-Russian activists have set up a round-the-clock picket under a red Soviet flag.
Militants occupied the city's regional government offices for three days this week, hoisting a Russian flag before being dislodged by police Thursday.
Riot police encircled the building ahead of Saturday's planned demonstration by pro-Russian activists.
Rival demonstrations brought thousands of people into the streets this week and degenerated into running street battles on Wednesday.
- Russian gas threat -
The EU has vowed to sign a landmark trade pact aimed at pulling Kiev out of Moscow's orbit before Ukraine holds snap presidential polls on May 25.
Yanukovych's decision to ditch that pact in November in favor of closer ties with Russia sparked the initial wave of protests that led to his regime's downfall late last month, and the rise of Ukraine's new pro-EU government.
With Russian forces in effective control of Crimea -- a region of two million people and the base of the Kremlin's Black Sea Fleet -- the threat of Ukraine splintering seemed more real than at any point since Putin won parliamentary approval to use force against his western neighbor.
Western allies have been grappling with a response to Putin's seeming ambition to create a Soviet-style sphere of influence that Moscow argues provides a defense for ethnic Russians coming under attack.
"Can Russia stand idly by when Russians somewhere in the world -- especially in neighboring Ukraine -- face mortal danger?" Putin spokesman Dmitry Peskov asked on Russian state television Friday.
Russian Foreign Minister Sergei Lavrov meanwhile told US Secretary of State John Kerry that Washington's sanctions against Moscow -- which so far include visa bans and asset freezes on targeted individuals -- would "boomerang" back on the United States.
The foreign ministry added that Russia would not leave any EU punitive measures "without a response".
Gazprom -- often seen as a political weapon wielded by the Kremlin against Western-leaning ex-Soviet states -- said a few hours later it might have to cut off Ukraine for the first time since 2009 due to a debt of $1.89 billion (1.36 billion euros).
"Ukraine has de facto stopped paying for gas," said chief executive Alexei Miller. "We cannot deliver gas for free".
Debt-laden Ukraine has said it will need $35 billion over two years to put its books in order. The EU has offered loans and grants worth up to 11 billion euros ($15 billion), and the US has announced a $1-billion loan guarantee.
But Russia has suspended a $15-billion aid package that was keeping the country solvent.
British Deputy PM Says Putin Stuck in 'KGB Mentality'
by Naharnet Newsdesk
08 March 2014, 07:09
Russian President Vladimir Putin has seemingly been in the "deep freeze" since the Cold War and is applying its outdated KGB mentality in Ukraine, Britain's deputy prime minister said Saturday.
Speaking to The Guardian newspaper, Nick Clegg said Putin was applying "yesterday's divisions and arguments to today's problems".
Clegg acknowledged there was a "pronounced Russian imprint" in the Crimean peninsula which meant it could not be viewed the same way as other parts of Ukraine.
The British deputy premier urged Putin to engage in a "civilized discussion" with the new government in Kiev.
"Putin's reaction is very revealing. It's as if he's been in a sort of deep freeze since the Cold War and hasn't moved with the times," Clegg said.
Former KGB spy Putin headed its successor, the Federal Security Service, shortly before he first became president in 2000.
"He gives every appearance of applying a KGB mentality rooted in the Cold War to new realities in 21st-century Europe," Clegg said.
"To regard closer ties between Ukraine and a non-military organisation like the European Union as the equivalent to American tanks on your lawn at the height of the Cold War suggests to me that we're dealing with a man who's applying yesterday's divisions and arguments to today's problems."
Clegg acknowledged Moscow's special links to Crimea, which was transferred from Russia to Ukraine in 1954 when they were both in the Soviet Union.
"Crimea already has a semi-autonomous status within Ukraine and clearly has a different history to other parts of Ukraine and has a very pronounced Russian imprint on it, not least because of the presence of the Russian Black Sea naval operation," which is based there, said Clegg.
"So it is already in a different category and I don't think anyone wants to deny that.
"No one is somehow suggesting that Crimea should be treated exactly the same as other parts of Ukraine given that it hasn't been treated like that in the past by the Ukrainians themselves."
British Prime Minister David Cameron has said Russia's actions in Crimea have been "completely unacceptable", echoing statements made by other European leaders and U.S. President Barack Obama since Moscow took de facto control of the peninsula in the wake of pro-Russian president Viktor Yanukovych's ouster two weeks ago.
EU leaders draw up plans to send gas to Ukraine if Russia cuts off supply
Europe braced for possible battle with Moscow after Gazprom threatens to cut off gas supply if Ukraine does not pay bill
Paul Lewis and Suzanne Goldenberg in Washington, Ian Traynor in Brussels and Terry Macalister in London
theguardian.com, Friday 7 March 2014 18.33 GMT
Gas pipeline near Kiev. A gas pipeline near Kiev. Gazprom said Ukraine missed a payment of $440m for gas received in February. Photograph: Andrey Sinitsin/AFP/Getty Images
EU leaders are rapidly drawing up plans to send some of their stocks of Russian gas back to Ukraine and other eastern European countries that need it, if Vladimir Putin reacts to western sanctions over the Crimea crisis by starving the continent of energy.
Russia’s largest gas producer, Gazprom, said on Friday that Kiev had missed a deadline to pay $440m for gas received in February and threatened to cut off the country’s supply if it did not make the payment.
Gazprom provides Ukraine with around half its gas, and other countries in eastern and southern Europe, including Poland and Greece, reportedly have low stocks of gas.
Although Gazprom said the threat to Kiev would not affect the supply to the rest of Europe, western leaders are steeling themselves for a possible battle with Moscow over energy supplies. At least half of the Russian gas that is piped to Europe passes through Ukraine.
Gazprom last cut off supplies to Ukraine in early 2009, leading to a slump in the supply of Russian gas to Europe. “Either Ukraine makes good on its debt and pays for current supplies, or there is risk of returning to the situation of early 2009,” Gazprom CEO Alexei Miller said on Friday, adding that Ukraine now owed $1.89bn in unpaid bills.
The move to consider reversing Russian gas flows comes amid growing pressure in Washington to exploit the huge boom in US gas – extracted through fracking technologies – to begin global exports, providing a counter-weight to Moscow’s influence.
Although it is the largest producer of natural gas, the US does not currently export its supplies, and the construction of a handful of export terminals will not be completed until at least 2015. But Barack Obama’s administration considering moves to accelerate a drive to export its energy, weakening Putin’s leverage in the future.
In Brussels on Thursday, European leaders engaged in detailed discussions about the feasibility of switching the flow of gas in eastern Europe’s pipelines. Storage reserves in Europe, particularly Germany and Hungary, which have ample supplies, could be used to pump gas back towards Ukraine.
José Manuel Barroso, the president of European Commission, said energy security was an early priority for Ukraine, adding: “We are looking in the short term at the gas transmission network to ensure that reverse flows with the European Union are fully operational.”
A project to modernise Ukraine’s gas transmission infrastructure forms part of the EU’s $15bn promised aid package to Kiev, with an initial loan possible in the near future. A European Commission memorandum specifically states it will seek to enable “reverse flows” of gas to Ukraine, ensuring they can be “operationalised as soon as possible”.
Such a move would likely occur first through Slovakia, and EU officials are pressing Slovakia and Ukraine to quickly sign an agreement that would enable gas to be piped in the opposite direction if the need emerges. Additional “reverse-flow corridors” could be introduced through Bulgaria and Romania, or Croatia and Hungary.
A senior German official briefed on Thursday’s meeting told the Guardian that Berlin was ready to help. “Our gas storage tanks are well filled after a mild winter and we stand ready to assist Ukraine in securing its energy supply including working on reserve flows.”
However, European officials and energy experts concede there are doubts over whether it would be technically possible to transfer sufficient gas through the continent, west to east, if Russia decided to restrict its supplies for a significant period of time. While short-term assistance through the summer months could help, western Europe would not have the capacity to supply neighbours in the east for an extended period of time.
Speaking on the condition of anonymity, one senior executive said reversing gas flows would be an extremely complex move. “This is not easy to do. Certainly the Gazprom export pipeline is built to move gas only in one direction, and it would involve a lot of time and money to reconfigure for imports,” the executive said. “You would also have to get the agreement of dozens of commercial and other organisations. It is not going to happen.”
Europe imported 155bn cubic metres (bcm) of gas from Russia in 2013, about 30% of its overall gas demand, according to Wood Mackenzie, an Edinburgh-based energy consultancy. Ukraine is the key transit route for Russian gas to Europe, with around 50% piped through the country in 2013.
Gazprom insists exports remain stable, and is desperate to avoid a repeat of the Russia-Ukraine “gas wars” of 2006, 2008 and 2009.
In Washington, there is a growing appetite to retaliate against Russia with a long-term, strategic acceleration in energy exports. Exporting US gas obtained through fracking would be controversial among environmentalists, Democrats, and US industries reliant on cheap energy, the price of which would be expected to rise if supplies were being piped abroad.
Republicans, backed by gas producers such as ExxonMobil, have for years been pushing to dramatically increase gas production to enable export trade, and are using the crisis in Crimea to argue for swift action by the Obama administration.
US gas production is projected to rise 44% by 2040, according to the US Energy Information Administration, and producers have been pressing the Obama administration to expand exports of natural gas.
The Republican leader of the House, John Boehner, used an an op-ed in the Wall Street Journal on Friday to call on Obama to “dramatically expand production of American-made energy” and make US supplies of natural gas available to global markets.
The Department of Energy as approved six applications to export domestically approved applications for terminals to export liquefied gas; five are in Texas and Louisiana, and one in Maryland. A further 24 applications are pending and Boehner and other top Republicans are calling on the administration to expedite their approval. “The ability to turn the tables and put the Russian leader in check lies right beneath our feet, in the form of vast supplies of natural energy,” Boehner said.
The Obama administration appears receptive to moving to undercut Moscow’s hold over the energy sector. White House press secretary Jay Carney said this week that while the Department of Energy is approving terminal requests on a case-by-case basis, the US would look for ways to wean Ukraine from its “dependence on Russian gas”.
A senior US official said the State Department was supportive of introducing substantial gas exports abroad as a move to counteract Russia’s influence.
Carlos Pascual, a former American ambassador to Ukraine, who leads the State Department’s Bureau of Energy Resources, told the New York Times that opening global markets to US exports “sends a clear signal that the global gas market is changing, that there is the prospect of much greater supply coming from other parts of the world”.
For First Time, Kremlin Signals It Is Prepared to Annex Crimea
By STEVEN LEE MYERS, DAVID M. HERSZENHORN and RICK GLADSTONE
MARCH 7, 2014
MOSCOW — Russia signaled for the first time on Friday that it was prepared to annex the Crimea region of Ukraine, significantly intensifying its confrontation with the West over the political crisis in Ukraine and threatening to undermine a system of respect for national boundaries that has helped keep the peace in Europe and elsewhere for decades.
Leaders of both houses of Russia’s Parliament said that they would support a vote by Crimeans to break away from Ukraine and become a region of the Russian Federation, ignoring sanction threats and warnings, from the United States and other countries, that a vote for secession would violate Ukraine’s Constitution and international law. The Russian message was yet another in a series of political and military actions undertaken over the past week that outraged the West, even while the Kremlin’s final intentions remained unclear.
As new tensions flared between Russian and Ukrainian forces in Crimea, the moves by Russia raised the specter of a protracted conflict over the status of the region, which Russian forces occupied last weekend, calling into question not only Russia’s relations with the West but also post-Cold War agreements on the sovereignty of the nations that emerged from the collapse of the Soviet Union.
To understand the current conflict between Ukraine and Russia, look to the interconnected history of the two countries.
The developments underscored how quickly the crisis has evolved. Earlier this week, President Vladimir V. Putin of Russia had said he did not foresee the possibility of the Crimean Peninsula becoming part of Russia. But on Friday, Russia’s parliamentary leaders, both strong allies of Mr. Putin, welcomed a delegation from Crimea’s regional assembly and declared that they would support a vote to break away from Ukraine, now scheduled for March 16.
The referendum has been denounced by the fledgling national government in Kiev, which said it would invalidate the outcome and dissolve the Crimean Parliament. President Obama has also rejected the referendum, and the United States government announced sanctions on Thursday in response to Russia’s de facto military occupation.
Russia denounced those sanctions in a blunt rejoinder on Friday evening, posted on the Foreign Ministry website. The statement said that Russia’s foreign minister, Sergey V. Lavrov, had spoken by telephone with Secretary of State John Kerry and warned that “hasty and ill-considered steps” to impose sanctions on Russian officials “would inevitably backfire on the United States itself.”
Russia’s Interfax news agency reported that Mr. Lavrov and Mr. Kerry would soon meet again. A senior State Department official traveling with Mr. Kerry, who was flying back to Washington after a trip to Europe and the Middle East, confirmed that Mr. Kerry had spoken with Mr. Lavrov, but that it was unclear when they would meet again.
The Russians also sent menacing economic signals to the financially ailing interim central government in Kiev, which Russia has refused to recognize. Gazprom, the Russian natural gas monopoly, which supplies Ukraine with most of its gas, warned that it might shut off supplies unless Ukraine paid $1.89 billion owed to the company.
“We cannot deliver gas for free,” Russian news agencies quoted Gazprom’s chief executive, Alexei Miller, as saying.
Gazprom cut off gas to Ukraine for nearly two weeks in January 2009, causing severe economic problems for Ukraine and for other European customers who were dependent on supplies delivered through Ukraine.
Valentina I. Matviyenko, the chairwoman of the upper house of the Russian Parliament, the Federation Council, compared the planned referendum in Crimea to Scotland’s scheduled vote on whether to become independent from Britain. She did not mention that the national government in Britain had agreed to hold a referendum, while the Ukrainian government has not.
The speaker of the Russian lower house, Sergei Y. Naryshkin, echoed Ms. Matviyenko’s remarks. “We will respect the historic choice of the people of Crimea,” he said.
Their assertions came a day after Crimea’s regional assembly voted in a closed session to secede from Ukraine and apply to join the Russian Federation, and to hold a referendum for voters in the region to ratify the decision. On Friday, a delegation of lawmakers from Crimea arrived in Moscow to lay the groundwork for joining Russia, strongly supported by senior lawmakers.
In another telling sign of Russian government support, the Crimean delegates were cheered at an officially sanctioned rally in central Moscow that was shown at length on Russian state television, with songs and chants of “Russia, Moscow, Crimea.” News agencies quoted the police as saying 60,000 people attended.
Even if the referendum proceeds, it was unclear what would happen next, given the wide gap between the positions of Russia and the West — most notably between Mr. Putin and Mr. Obama, who spoke for an hour by phone on Thursday night.
According to the White House, Mr. Obama urged Mr. Putin to authorize direct talks with Ukraine’s new government, permit the entry of international monitors and return his forces to the bases that Russia leases in Crimea.
In a statement, the Kremlin offered a starkly different account of the phone call, emphasizing Russia’s view that the new government in Kiev had no authority because it was the result of what Mr. Putin called an anticonstitutional coup last month that had ousted Viktor F. Yanukovych, the pro-Kremlin president.
The official Russian account of the phone call went on to say that the current Ukrainian leadership had imposed “absolutely illegitimate decisions” on the eastern and southeastern regions of the country, where pro-Russian sentiment is widespread. “Russia cannot ignore appeals connected to this, calls for help, and acts appropriately, in accordance with international law,” the statement said.
In the United States, Mr. Obama was taking a wait-and-see attitude. He spoke by phone to Chancellor Angela Merkel of Germany, who has been reluctant to pursue muscular sanctions against Russia because of the deep and interwoven economic relationship between the two countries. He headed to Florida for a speech on education and then a weekend off with his family, but aides promised he would be monitoring the crisis.
Weeks after protesters drove President Viktor F. Yanukovych of Ukraine from power, Maidan protesters in Kiev’s Independence Square mourn the dead and ponder where their revolution has left them.
“We’re hopeful that in the next few days, we’ll get greater clarity about whether or not the Russians are willing to take some concrete steps toward this offramp here,” said Josh Earnest, a White House spokesman.
In Kiev, anti-Russian sentiment was hardening. The Right Sector movement, a nationalist group that was important in the deadly protests last month that drove Mr. Yanukovych from power, announced that its leader, Dmytro Yarosh, would run for president. Andriy Tarasenko, chairman of its local branch, also said the group was prepared to fight, in Crimea and elsewhere, “if the Kremlin tramples on us further.”
With Washington and Moscow trading heated accusations of hypocrisy on the issue of respecting state sovereignty, validating Crimea’s secession would carry pointed political risks for Mr. Putin, given longstanding demands for independence from Russia by its own similarly autonomous republics in the Caucasus, including Dagestan and Chechnya.
Michael A. McFaul, a former American ambassador to Russia, noted the parallel in a sharp post on Twitter. “If Russian government endorses Crimean referendum,” Mr. McFaul wrote, using abbreviations needed for a 140-character limit, “will they also allow/endorse similar votes in republics in the Russian Federation?”
The West, which has insisted that the Ukrainian people are entitled to decide their future without interference from Russia, faces similar challenges as it seeks to explain why the people of Crimea should not necessarily decide their own fate.
The United States and its European allies typically support self-determination, but have opposed independence for regions within their own borders, like Scotland in Britain or Catalonia in Spain.
There was no sign on Friday that Russian armed forces were relaxing their tight clench on the Crimean Peninsula, with military bases surrounded and border crossings under strict control. There were news reports late Friday that pro-Russian militants had smashed through the gates of a Ukrainian Air Force base in the port of Sevastopol housing 100 Ukrainian troops, but that no shots had been fired. There were also reports that a number of Ukrainian journalists had been beaten by masked attackers and were missing.
For the second consecutive day, an observer mission from the Organization for Security and Cooperation in Europe, the 57-member organization that includes both Ukraine and Russia, was prevented from entering Crimea at a checkpoint blocked by armed men.
Astrid Thors, an envoy from the group who had gone to Crimea earlier in the week, said in a telephone interview from Amsterdam that she had faced noisy, threatening crowds chanting pro-Russian slogans during her visit and had been forced to leave. Ms. Thors, the group’s high commissioner for national minorities, said she could have experienced the sort of predicament faced by a senior United Nations diplomat, Robert H. Serry, who was chased out of Crimea by gunmen earlier this week.
“There was a risk the same could happen, that our movement could be hindered by the crowds,” Ms. Thors said. “We took precautionary principles. We shortened our stay.”
Crimean leaders get red carpet treatment on visit to Moscow
Russian parliament's speaker says people of Crimea will be welcomed if they vote to join country in referendum
Shaun Walker in Sevastopol
theguardian.com, Friday 7 March 2014 23.24 GMT
A day after Crimea's de facto rulers announced they had voted to join the Russian Federation, they were given the red carpet treatment in Moscow, in a further sign Russia plans to annex the territory.
"If the people of Crimea express their will and decide to join Russia, we as the upper house of parliament will support their decision," said Valentina Matvienko, the speaker, in a joint press conference with her Crimean counterpart.
Later in the evening, the assault against Ukrainian military bases in the territory continued, as two trucks of Russian troops stormed a base near Sevastopol and threatened to "shoot to kill" those inside if they did not surrender. In the end, the troops left.
Crimea's parliament on Thursday rushed through a bill which in effect declared independence from Ukraine, and brought forward a referendum on autonomy which the region's deputy prime minister, Rustam Temirgaliev, said would merely ratify the decision.
Ukraine's interim prime minister, Arseny Yatseniuk, said yesterday the vote would have "no legal grounds at all", adding that "no one in the civilised world" would recognise the result.
Earlier this week, the Russian president, Vladimir Putin, said the idea of joining Crimea to Russia was "not being considered" but events since have suggested the opposite.
Matvienko's comments are the strongest indication yet that Moscow is planning a move that would leave Kiev and the west furious.
"If the decision is made, it will be an absolutely equal subject of the Russian Federation with full rights and responsibilities … The citizens of Crimea will be equal to Russian citizens, with the same salaries, pensions, social benefits and social protection," said Matvienko.
Putin, in a conversation with the US president, Barack Obama, said: "Russia cannot ignore calls for help and it acts accordingly, in full compliance with international law," according to a Kremlin statement about the call.
Matvienko complained about the speed with which the new Ukrainian government wanted to hold presidential elections on 25 May, and said the conditions in Ukraine were not conducive to free and fair elections, referring to "continuing violence, intimidation, illegal decisions, seizure of buildings, humiliation of people, threats to life, a ban on speaking Russian, and the repression of political opponents and journalists".
She appeared less concerned by the political situation in Crimea, where Sergei Aksyonov came to power during a murky seizure of the local parliament, and where the referendum date has been brought forward twice and will now be organised in just over a week.
There is increasing concern about the lack of oversight of events in Crimea, where passions are high and groups of pro-Russian militia have behaved aggressively to journalists and monitors, forcing the UN's special envoy to cut short his trip and leave the region earlier in the week.
Yesterday, an OSCE mission intended to monitor the military activity in Crimea was again turned back at a road crossing into the peninsula. The mission of 52 unarmed military observers from 28 countries was turned away by armed irregulars.
The referendum will ask whether voters want Crimea to join Russia or be given more autonomy within Ukraine. Almost everyone in the region wants autonomy for Crimea, but it is far from clear that a majority are in favour of joining Russia.
In Moscow, a large government-sanctioned rally "in support of Crimea" gathered near the Kremlin yesterday, while in Sochi, Putin attended the opening of the Paralympics. Earlier in the day, he met the head of the Ukrainian delegation. Valeriy Shushkevich said he had asked Putin to keep the peace during the Olympic period.
"If there is an escalation of the conflict, intervention on the territory of our country, God forbid the worst, we would not be able to stay here. We would go," he said later.
Ukraine's border guard service claims there are 30,000 Russian troops in Crimea, compared with 11,000 stationed there permanently before the tensions.
"There's an incredibly tense situation now," said a Ukrainian military source in Sevastopol. "Neither side wants to be seen to shoot first, but if one side starts shooting, there is going to be chaos, and whoever fired the first shot will be held responsible. We feel they are trying to provoke us into that."
Late on Friday evening, two trucks of Russian troops stormed a Ukrainian missile defence base outside Sevastopol, driving two military trucks through the gates. The deputy commander of the base emerged and explained what had happened shortly after the standoff ended, late at night. Two trucks of people, "who did not identify themselves but we presume were Russian soldiers", stormed the base through the gates, and threatened to "shoot to kill" if the base was not surrendered, he said. The deputy commander said his troops ignored the orders and eventually negotiations took place with Russian officers, which ended with the Russians leaving. The two trucks sped out of the base at speed.
Outside, groups of "self-defence" irregulars gathered, and attacked at least two journalists, one Ukrainian and one Russian. As the Ukrainian, a cameraman, was being taken to hospital with a group of fellow journalists the car was stopped and they were again attacked. They were being treated in hospital in Simferopol overnight and the extent of their injuries was unclear.
Ukrainian Officials in East Act to Blunt Pro-Russian Forces
By ANDREW ROTH
MARCH 7, 2014
DONETSK, Ukraine — Officials loyal to the new central government in Kiev, Ukraine’s capital, have mobilized here in the country’s east to end a pro-Russian protest movement that has called for greater regional autonomy from Kiev and has raised the specter of separatism in the largely Russian-speaking regions of Ukraine.
In his first public remarks, Sergey A. Taruta, a metals magnate who was appointed governor of the Donetsk region on Sunday, condemned a series of recent pro-Russian demonstrations led by Pavel Gubarev, the founder of a local militia who had declared himself “the people’s governor,” and called for unity between eastern and western Ukraine.
“We are for peace,” Mr. Taruta, the chairman of the Industrial Union of Donbass, said at a meeting of the Donetsk public council in a university lecture hall on Friday. “We are now working so that the radical elements that are calling for divisive actions will be stopped decisively.”
Mr. Taruta’s remarks seemed to signify the end of a period of protracted political inertia here, during which local politicians and police officers seemed unable or unwilling to stop crowds in the thousands led by Mr. Gubarev from seizing regional government buildings.
The city police only began to respond on Thursday, five days after the demonstrations started, detaining more than 70 people as officers raided a regional administration building occupied by the protesters. Toward evening, the Ukrainian Security Service arrested Mr. Gubarev, the movement’s most visible leader, and hustled him on to a flight to Kiev, where he will be questioned as part of an investigation into the raids.
On Friday, Mr. Taruta announced that the regional government had banned protests near government buildings. Along with Oleksandr V. Turchynov, the acting president, Mr. Taruta appointed a new police commander, prosecutor and Security Service chief for the Donetsk region, replacing officials who had avoided direct clashes with Mr. Gubarev’s supporters.
The arrests and new appointments are likely to increase Kiev’s control here and help avert a situation similar to the one taking place in Crimea, where a hastily elected pro-Russian Parliament will hold a referendum next week on greater autonomy and possible secession from Ukraine.
Donetsk, the largest city in the coal-producing Donbass region and the political base of the deposed President Viktor F. Yanukovych, has been seen as a potential problem spot for the weak central government in Kiev.
The city was one of 11 in the east and south of Ukraine to erupt in protests last week against Kiev that have been fueled by economic grievances and fears about the new government in the capital, which some here believe will persecute ethnic Russians in the region. The protests have also been bolstered by President Vladimir V. Putin of Russia, who said that Russia could intervene militarily here if the lives of ethnic Russians were threatened.
“People are scared; people are alarmed,” Sergey V. Bogachev, the secretary of the Donetsk City Council, which had called for a referendum on greater independence from Kiev, said in an interview before Mr. Gubarev’s arrest. “Mr. Gubarev has violated the law, indeed. But look how many people have come out to support him.”
Since Mr. Gubarev’s arrest, however, protests for greater ties with Russia have gotten smaller, and a pro-Russian rally on Friday in the city center attracted only several hundred supporters. Mr. Gubarev’s allies, denouncing his arrest, have called for another demonstration on Saturday.
Mr. Taruta, who was sent by Kiev as one of several pro-government businessmen appointed to lead regions in the country’s east, tried on Friday to act as a cultural envoy for the new government and dispel fears of a political campaign to marginalize the ethnic Russian population of the east.
“If you think these are anyone’s actual political beliefs, then I must disappoint you,” he said. “These are all just scripts and stories designed to frighten the east of Ukraine.”
Why Russia Can’t Afford Another Cold War
MARCH 7, 2014
By JAMES B. STEWART
Russian troops pour over a border. An autocratic Russian leader blames the United States and unspecified “radicals and nationalists” for meddling. A puppet leader pledges fealty to Moscow.
It’s no wonder the crisis in Ukraine this week drew comparisons to Hungary in 1956 and Czechoslovakia in 1968 or that a chorus of pundits proclaimed the re-emergence of the Cold War.
But there’s at least one major difference between then and now: Moscow has a stock market.
Under the autocratic grip of President Vladimir Putin, Russia may be a democracy in name only, but the gyrations of the Moscow stock exchange provided a minute-by-minute referendum on his military and diplomatic actions. On Monday, the Russian stock market index, the RTSI, fell more than 12 percent, in what a Russian official called panic selling. The plunge wiped out nearly $60 billion in asset value — more than the exorbitant cost of the Sochi Olympics. The ruble plunged on currency markets, forcing the Russian central bank to raise interest rates by one and a half percentage points to defend the currency.
Mr. Putin “seems to have stopped a potential invasion of Eastern Ukraine because the RTS index slumped by 12 percent” on Monday, said Anders Aslund, a senior fellow at the Peterson Institute for International Economics in Washington.
On Tuesday, as soon as Mr. Putin said he saw no need for further Russian military intervention, the Russian market rebounded by 6 percent. With tensions on the rise once more on Friday, the Russian market may again gyrate when it opens on Monday.
Mr. Putin seems to be “following the old Soviet playbook,” in Ukraine, Strobe Talbott, an expert on the history of the Cold War, told me this week. “But back then, there was no concern about what would happen to the Soviet stock market. If, in fact, Putin is cooling his jets and might even blink, it’s probably because of rising concern about the price Russia would have to pay.” Mr. Talbott is the president of the Brookings Institution, a former ambassador at large who oversaw the breakup of the former Soviet Union during the Clinton administration and the author of “The Russia Hand.”
Russia is far more exposed to market fluctuations than many countries, since it owns a majority stake in a number of the country’s largest companies. Gazprom, the energy concern that is Russia’s largest company by market capitalization, is majority-owned by the Russian Federation. At the same time, Gazprom’s shares are listed on the London stock exchange and are traded over the counter as American depositary receipts in the United States as well as on the Berlin and Paris exchanges. Over half of its shareholders are American, according to J. P. Morgan Securities. And the custodian bank for its depository receipts is the Bank of New York Mellon.
Many Russian companies and banks are fully integrated into the global financial system. This week, Glencore Xstrata, the mining giant based in Switzerland, was in the middle of a roughly $1 billion debt-to-equity refinancing deal with the Russian oil company Russneft. Glencore said it expected to complete the deal despite the crisis. Glencore’s revenue last year was substantially larger than the entire gross domestic product of Ukraine, which was $176 billion, according to the World Bank.
The old Soviet Union, in stark contrast, was all but impervious to foreign economic or business pressure, thanks in part to an ideological commitment to self-sufficiency. As recently as 1985, foreign trade amounted to just 4 percent of the country’s gross domestic product, and nearly all that was with the communist satellite countries of Eastern Europe. But the Soviet Union’s economic insularity and resulting economic stagnation was a major cause of the Soviet Union’s collapse. According to Mr. Talbott, the Soviet Union’s president at the time, Mikhail Gorbachev, was heavily influenced by Soviet economists and other academics who warned that by the turn of the century in 2000, the Soviet economy would be smaller than South Korea’s if it did not introduce major economic reforms and participate in the global economy.
To attract investment capital, Mr. Gorbachev created the Moscow stock exchange in 1990 and issued an order permitting Soviet citizens to own and trade stocks, bonds and other securities for the first time since the 1917 Bolshevik revolution. (Before then, Russia had a flourishing stock exchange in St. Petersburg, established by order of Peter the Great. It was housed in an elegant neoclassical building directly across the waterfront from the Winter Palace. As a symbol of wealth and capitalism, it was one of the earliest casualties of the revolution.)
Even before this week’s gyrations, the Russian stock market index had dropped near 8 percent last year, and it and the Russian economy have been suffering from low commodity prices and investor concerns about the Federal Reserve’s tapering of bond purchases — factors of little significance during the Cold War.
By contrast, today “Russia is too weak and vulnerable economically to go to war,” Mr. Aslund said. “The Kremlin’s fundamental mistake has been to ignore its economic weakness and dependence on Europe. Almost half of Russia’s exports go to Europe, and three-quarters of its total exports consist of oil and gas. The energy boom is over, and Europe can turn the tables on Russia after its prior gas supply cuts in 2006 and 2009. Europe can replace this gas with liquefied natural gas, gas from Norway and shale gas. If the European Union sanctioned Russia’s gas supply to Europe, Russia would lose $100 billion or one-fifth of its export revenues, and the Russian economy would be in rampant crisis.”
Mr. Putin may be “living in another world,” as the German chancellor, Angela Merkel, put it this week, but surely even he recognizes that the world has changed drastically since 1956 or 1968. He has no doubt been getting an earful from his wealthy oligarch friends, many of whom run Russia’s largest companies and have stashed their personal assets in places like London and New York. The oligarchs “would not dare to challenge him,” a prominent Russian economist told me. (He asked not to be named for fear of retribution.) “But they would say something like they would have to lay off workers and reduce tax payments.”
During the Cold War, there were few, if any, Russian billionaires. Today, there are 111, according to Forbes magazine’s latest rankings, and Russia ranks third in the number of billionaires, behind the United States and China. The economist noted that the billionaire Russian elite — who are pretty much synonymous with Mr. Putin’s friends and allies — are the ones who would be severely affected by visa bans, which were imposed by President Obama on Thursday. Other penalties might include asset freezes. Many Russian oligarchs have real estate and other assets in Europe and the United States, like the Central Park West penthouse a trust set up by the Russian tycoon Dmitry Rybolovlev bought for $88 million. “This is what may have already forced Putin to retreat,” the Russian economist said.
And while the Cold War was a global contest between Marxism and capitalism, there is today “no real ideological component to the conflict except that Putin has become the personification of rejecting the West as a model,” Mr. Talbott said. “He wants to promote a Eurasian community dominated by Moscow, but that’s not an ideology. Russia’s economy may be an example of crony capitalism, but it is capitalism. There’s not even a shadow of Marxism-Leninism now.”
What brought down the old Soviet Union and ended the Cold War “was the economic imperative to make Russia into a modern, efficient, normal state, a player in the international economy, not because of military power but because of a strong economy,” Mr. Talbott continued. But “to have a modern economy, you need the rule of law and a free press.” Mr. Putin, he said, “isn’t advancing Russia’s progress.”
The Russian economist agreed. “The pre-2008 social compact was that Putin would rule Russia while Russians would see growing incomes,” he said. “Now, the growth has stalled, and he needs ideology, coupled with propaganda and repressions. Apparently, the Soviet restoration is the only ideology he can come up with.”
Russia does have uniquely strong ties to Ukraine. “Of all the former provinces of the old Soviet Union, it’s the most painful to have lost and the one many Russians would most want to have back,” Mr. Talbott said. “The ties between Kiev and Moscow go back over 300 years. Ukraine is the heart of Russian culture.” With Russian troops entrenched in the Crimean peninsula and some Russian Ukrainians clamoring for annexation, there may be little the United States or its allies can do to restore the status quo. “Containment, in a muted and modified way, will once again be the strategy of the West and the mission of NATO,” Mr. Talbott predicted.
But not another Cold War, which is surely a good thing. “A propaganda war is completely feasible,” the Russian economist said. “The recent events were completely irrational, angering the West for no reason. This is what is most scary, especially for businesses. Instead of reforming the stagnating economy, Putin scared everybody for no reason and with no gain in sight. So it is hard to predict his next actions. But I think a real Cold War is unlikely.”
Correction: March 7, 2014
An earlier version of this column misstated the purchaser of a Central Park West penthouse. It was a trust set up by the Russian tycoon Dmitry Rybolovlev, not Mr. Rybolovlev himself.
New Cold War Would Differ From Old
MARCH 7, 2014
by FLOYD NORRIS
RUSSIA had some real economic problems even before the Ukrainian crisis led the United States and European countries to threaten sanctions on the country after the Russian flag was raised in Crimea, a part of Ukraine, and troops who spoke Russian appeared to take over a significant part of the region.
Russia’s growth had slowed to almost nothing: Its real gross national product in the third quarter of 2013 was just 0.6 percent larger than it had been a year earlier. The ruble was weak.
Its manufacturers appeared to be doing much worse than competitors in other countries. Its stock market has trailed markets in most other countries over the last year.
If this is a new incarnation of the Cold War, it will be very different from the old one.
Back then, the Soviet Union and the members of its empire were in some ways in their own economic world. They largely traded with each other, and they controlled the value of their currencies. Now, the world is a far more globalized place.
Just which side would have the ability to frustrate the other is the subject of debate now that John Kerry, the United States secretary of state, has threatened to throw Russia out of the Group of 8, to which it had been added in 1997. The other members are seven traditional economic powers: the United States, Britain, Germany, France, Italy, Japan and Canada.
On the one hand, Russia is a major supplier of energy to Western Europe. If it cut off its natural gas exports, several countries — notably the Netherlands — would have a hard time coping. On the other hand, energy accounts for most of Russia’s exports. Its supply of foreign currency reserves could be depleted rapidly if cash from Western Europe stopped arriving.
Germany is a substantial customer for Russian gas, but it also is a major exporter to Russia. It would be damaged more than most countries if a trade freeze developed. Last year, Germany supplied 12 percent of Russia’s imports, more than double the share provided by the United States. Western Europe has more to fear than the United States does from a prolonged Cold War.
Western Businesses in Russia, Watchful and Wary
By LIZ ALDERMAN
MARCH 7, 2014
PARIS — Shortly after pro-Russian troops infiltrated Crimea last weekend, the phone in Alexis Rodzianko’s Moscow office started ringing. He is president of the American Chamber of Commerce in Russia, and local managers for some of the world’s biggest brands were calling to discuss the safety of their operations and the risks that might arise if the West were to impose sanctions.
A few miles away, at the Association of European Businesses, the main trade group for European multinationals, a similar scene unfolded. They all had an overarching concern: How hard might their Russian operations be hit if the turmoil kept escalating?
“Foreign companies have seen many ups and downs in their relationship with Russia, and we hope this is just another one of them,” Mr. Rodzianko said. “But this situation is full of uncertainties.”
Western multinationals with big investments in Russia have faced other crises over the years. But the standoff between Russia and the West is posing a range of new challenges that threaten to undermine Western companies’ business in Russia.
American companies including PepsiCo, McDonald’s and John Deere are active in Russia, of course. But for many Western European businesses, that market is even more crucial.
In Paris, officials at the French carmaker Renault have been in constant contact with their Russia-based executives to assess the rapidly shifting climate in the country, where Renault has a pivotal joint venture. Directors at Porsche in Stuttgart, Germany, are analyzing political frictions. At the giant beer brewer Carlsberg, managers in Copenhagen are providing additional security for assets and employees in Russia and Ukraine, the company’s biggest markets.
“Russia is important for European and American companies,” said Chris Weafer, co-founder of Moscow-based Macro Advisory, a consulting firm. “With events escalating and bringing Russia into greater conflict with Western governments, there could be serious consequences.”
One of the biggest concerns is that international sanctions may hit Russia’s large but increasingly sluggish economy and prod Moscow to retaliate against Western interests.
“This is a situation in which those applying the sanctions will get hurt as much as the side being sanctioned,” Mr. Rodzianko said.
The European Union’s economy is tightly intertwined with Russia’s. Europe does about $460 billion in business there, much of it in the energy sector, making it Moscow’s largest trading partner. And more than half of Russia’s foreign investment comes from European multinationals and financial institutions.
The United States is not even among Russia’s top 10 trading partners, exchanging around $40 billion worth of exports and imports each year. And yet, Russia remains a crucial market for American retail, construction and energy companies, as well as some of the biggest United States banks.
On Thursday, the United States and its allies imposed visa bans on individuals deemed responsible for undermining Ukrainian sovereignty, and threatened further sanctions if Russia did not de-escalate tensions. The Kremlin warned of countermeasures, including possibly seizing American property in Russia.
On Friday night, the Russian government issued a statement saying that its foreign minister, Sergey V. Lavrov, had spoken by telephone with Secretary of State John Kerry and warned that “hasty and ill-considered steps” to impose sanctions on Russian officials would harm relations. The statement warned that sanctions “would inevitably backfire on the United States itself.”
Earlier in the week Russian lawmakers also considered a proposed law allowing for the confiscation of property, assets and accounts of Western companies. Other Russian officials advocated dropping the dollar as a reserve currency and refusing to pay off Russian loans to American banks.
So far, the Russian threats have been only that. But the tenor of the statements has made Western multinationals jittery.
European businesses “have no interests in any deterioration of the current international situation linked to Ukraine,” Frank Schauff, the chief executive of the Association of European Businesses in Russia, said on Friday. “We call upon all parties to engage in a constructive dialogue, which will secure stability, welfare and economic growth on the European Continent.”
European Union leaders are not eager to pick an economics fight. A document photographed in the hands of a British official near 10 Downing Street this week and shown by the BBC read in part, “The U.K. should not support for now trade sanctions or close London’s financial center to Russians.”
Chancellor Angela Merkel of Germany, whose economy has deep ties to Russia, has also been reluctant to rush into sanctions.
The visa bans announced so far will not hit Russia financially. But any trade curbs could be painful. After years of growth propelled by oil and natural gas, the Russian economy is already slumping toward a recession. The ruble has been increasingly volatile against the dollar and the euro, and dipped to record lows against those currencies after the Russians moved into Crimea.
Jérôme Stoll, head of sales at Renault, said in a recent interview that the company’s top management was pondering what to do if a devalued ruble caused inflation to rise and undercut the buying power of Russian consumers.
Renault executives are discussing “how we can cope with the situation in case we have to raise our prices,” Mr. Stoll said.
But the situation is still too fluid to gauge the impact, he said. “When you have such a big financial crisis,” he said, “you don’t know how the situation will move.” Asked whether Renault had expressed its concern to the Russian government, he replied, “It’s not our duty.”
American companies are also nervously watching Russia. Those companies include Ford Motor, which operates three assembly plants in Russia and recently formed a joint venture there.
The John Deere Company, one of the world’s biggest makers of farm equipment, has two factories and an operations office in Russia. “We have taken steps to ensure the safety of our employees and have restricted travel in the region,” said Ken Golden, director of global public relations for Deere. Mr. Golden would not specify what those steps were.
While Russia represents less than 5 percent of Deere’s total equipment sales, the company recently cited Russia as being key to its future growth. “We urge political leaders to solve this issue without violence and in accord with international agreements,” Mr. Golden said.
Russia is Pepsi’s largest market outside the United States, contributing nearly $5 billion in annual revenue, about 7 percent of the company’s total. McDonald’s also has a sizable presence. The fast-food giant, which was the official restaurant of the recent Olympic Games in Sochi, has 413 Russian restaurants generating $2.5 billion a year, or around 9 percent of the company’s total revenue, according to an analysis by Deutsche Bank Securities.
“Russia is a high-growth market, and it’s important to them,” said Jason West, a research analyst for Deutsche Bank. “We don’t know how bad things are going to get yet, but it could really hurt growth prospects.”
Nor are Russian companies immune to the turmoil. State-owned banks that could be the target of further Western sanctions were pounded this week on Russia’s stock exchange. Shares in Gazprom, the behemoth Russian gas producer that sends gas through Ukraine to European markets, have also slumped.
Despite the uncertainty, American and European companies are hunkering down. None yet seem ready to heed Mr. Kerry’s admonition to “start thinking twice about whether they want to do business with a country that behaves like this.”
It is not that simple, according to Mr. Rodzianko of the American Chamber.
“Nobody is particularly happy with the fact that the business climate is suffering, but you don’t come in here, build a plant, and pull out tomorrow,” he said. “We have to stick to our knitting, and deal with the setbacks until the climate improves.”
Rebecca Ruiz contributed reporting from New York and Jack Ewing from Frankfurt.
Russia Warns Could Halt Foreign Arms Checks
by Naharnet Newsdesk
08 March 2014, 14:13
Russia is considering halting foreign inspections of its strategic weapons arsenal, including nuclear-capable missiles, in response to "threats" from the West over the Ukraine crisis, the defense ministry said Saturday.
"The unfounded threats towards Russia from the United States and NATO over its policy on Ukraine are seen by us as an unfriendly gesture that allows the declaration of force majeure circumstances," a high-ranking defense ministry official, who was not named, said in a statement to all Russian news agencies.
The inspections that could be halted are carried out in line with the Strategic Arms Reduction Treaty (START) with the United States and the Vienna Document between Organisation for Security and Cooperation in Europe (OSCE) member states.
Cutting off such inspections would likely be seen by the West as a major violation of such agreements, which are regarded as a cornerstone for the maintenance of global peace in the post-Cold War world.
"We are ready to take this step in response to the announcement by the Pentagon about stopping cooperation between the defense institutions of Russia and the United States," the Russian defense ministry official added.
"Inasmuch as these inspections are a matter of trust, then in a situation where the United States has de facto declared the imposition of sanctions then there cannot be normal, bilateral contacts on observing agreements."
The New START treaty between Russia and the United States, signed between U.S. President Barack Obama and then Kremlin chief Dmitry Medvedev in 2010, entered into force in February 2011.
The agreement provides for 18 on-site inspections per year as part of a verification regime for a treaty that envisages drastic cuts in missiles and nuclear warheads on both sides.
The United States has already imposed visa bans and set the stage for wider sanctions against Russia over the seizure of the Ukrainian region of Crimea by pro-Russia forces.
Obama also signed an executive order paving the way for economic sanctions against individuals or entities in Russia.
Hague: Europe faces 'shooting conflict' if Russia enters eastern Ukraine
British foreign secretary accuses Putin of major miscalculation but says pressure will not remove Russia from Crimea
Nicholas Watt, chief political correspondent
theguardian.com, Sunday 9 March 2014 11.02 GMT
Europe would face the "great danger of a real shooting conflict" if Russian forces move beyond Crimea to enter the main part of eastern Ukraine, William Hague has said as he accused Vladimir Putin of a major miscalculation.
As the foreign secretary warned of another "frozen conflict" in Europe, the energy secretary, Ed Davey said gas prices could increase if the Ukrainian crisis escalated into a military conflict.
But the foreign secretary, who said Putin had implemented carefully prepared plans to assume control of Crimea, acknowledged that none of the options on the table – diplomatic pressure and economic sanctions – would be able to remove Russian forces from the Black Sea peninsula.
Asked by the BBC's Europe editor Gavin Hewitt what would happen if Russian troops went beyond the Black Sea peninsula to enter "mainland" eastern Ukraine, Hague said: "There would be far reaching trade, economic and financial consequences. It would bring the great danger of a real shooting conflict. There is no doubt about that."
Asked whether Britain and the EU would advise the Ukrainians not to take up arms against the Russians, Hague said: "We have commended all of their restraint so far. It is not really possible to go through different scenarios with the Ukrainians and say: in these circumstances you shoot and in these you don't. We have commended their restraint. They have not risen to any provocation from Russia."
The warning from Hague came shortly after Davey told Britain's energy companies not to seek to make profits from the Ukrainian crisis, though he acknowledged that gas prices would increase if the crisis escalated.
The energy secretary told the Andrew Marr Show: "We use Norwegian gas and we have a lot of gas imported on ships – liquified natural gas. So our security of supply on gas – people shouldn't be worried about that.
"The companies who supply gas and electricity tend to buy their gas forwardly. They buy it 18 months in advance so they shouldn't be using it as an excuse to put up people's prices. They hedged quite rightly. But we have seen that when this crisis broke there was a spike in oil and gas prices. They have now come down.
"But if there was an escalation, if we saw military conflict, if that conflict went on for months and months and months, there could be an impact on prices."
Hague said he believed Putin would eventually be seen to have made a "big miscalculation" as the EU pivots away from Russia, particularly in the energy sphere. But he admitted that none of the proposed EU measures against Russia, to be introduced on a graduated basis if Moscow refuses to change tack, would remove Russian forces from Crimea.
The foreign secretary said: "None of these things force a Russian withdrawal from Crimea. That is well understood. But they will raise the cost to Russia over time."
But the foreign secretary, who rejected next Sunday's planned referendum in Crimea, said there was no "tacit acceptance" of the Russian occupation of Crimea. Some of the sanctions identified in the first phase of the EU's action will be triggered if Moscow refuses to discuss the long-term future of Crimea with Ukraine.
"This is the creation of another frozen conflict in Europe like Abkhazia, that is part of Georgia, like Transnistria, that is part of Moldova. There absolutely isn't a tacit acceptance."
Douglas Alexander, the shadow foreign secretary, said: "The priority in Ukraine must be a de-escalation and a diplomatic resolution to the crisis.
"So I welcome that the Foreign Secretary made this clear to the BBC this morning when he confirmed that all economic and diplomatic options should remain on the table in seeking to achieve that.
"It is also vital that the UK, along with EU allies, sets out a clear timetable for taking further economic and financial measures if Russia fails to change course in the days ahead.
"The UK should also work with the group of the worlds seven largest economies to agree to suspend Russia from the G8 if it refuses to agree a diplomatic resolution to the crisis."
Ukraine will not give 'an inch' of land to Russia: PM
Kiev, March 09, 2014
An armed man, believed to be a Russian serviceman, stands guard outside an Ukrainian military base in the village of Perevalnoye near the Crimean city of Simferopol March 9, 2014. (Reuters Photo)
Ukrainian Prime Minister Arseniy Yatsenyuk on Sunday vowed Ukraine would not give "an inch" of its territory to Russia, at a rally of thousands of people in Kiev in honour of 19th-century national hero Taras Shevchenko.
"This is our land. We will not give an inch of it. Russia and its president should know that," Yatsenyuk said after Russian forces and pro-Kremlin gunmen seized control of Ukraine's Crimea peninsula in the Black Sea.
Ukraine PM Says He Will Go to U.S. to Discuss Crimea Crisis
MARCH 9, 2014, 7:41 A.M. E.D.T.
KIEV — Ukrainian Prime Minister Arseny Yatseniuk said on Sunday he would go to the United States this week to discuss the standoff with Russia over Ukraine's southern region of Crimea.
"I am going to the United states to hold top-level meetings on resolving the situation unfolding in our bilateral and multilateral relations," Yatseniuk said at the start of a government meeting in the Ukrainian capital, Kiev.
He did not immediately give any dates and provided no other details of the visit. I
Originally published March 8, 2014
Crimea’s new leader, a man with a murky past
Two weeks ago, Sergei Aksyonov was a little-known businessman with a nickname — Goblin — left over from the days when criminal gangs flourished after the collapse of the Soviet Union. Times have changed.
By TIM SULLIVAN and YURAS KARMANAU
The Associated Press
SIMFEROPOL, Ukraine — Two weeks ago, Sergei Aksyonov was a small-time Crimean politician, the leader of a tiny pro-Russia political party that could barely summon 4 percent of the votes in the last regional election.
He was a little-known businessman with a murky past and a nickname — “Goblin” — left over from the days when criminal gangs flourished here after the collapse of the Soviet Union.
Times have changed.
Today, Aksyonov is the prime minister of Crimea’s regional parliament and the public face of Russia’s seizure of the Black Sea peninsula.
He is, by all appearances, a man placed in power by Moscow who is now working hard to make Crimea a part of Russia.
He also leads a brand-new army, 30 men carrying AK-47s who are still learning to march in formation. “Commander!” they greeted him Saturday, when they were sworn into service in a Simferopol park.
Speaking at the ceremony, the former semiprofessional boxer said that while Crimea’s March 16 referendum would make the peninsula a part of Russia, he holds no grudge against Ukraine.
“We are not enemies with those soldiers who pledged loyalty to the Ukrainian state,” he said, referring to the soldiers now barricaded into bases across Crimea, unsure what will happen to them. They will be allowed to leave for Ukraine if they wish, he said. He is, he insisted, a peacemaker.
But the people of Simferopol remember Aksyonov by his 1990s name, “Goblin.”
“He wasn’t a criminal big shot,” said Andriy Senchenko, now a member of Ukraine’s Batkivshchyna party, which was at the forefront of the Kiev protests that led last month to the downfall of pro-Russia President Viktor Yanukovych. Senchenko described Aksyonov as a “brigade leader” in a gang that was often involved in extortion rackets.
While Senchenko is not unbiased — his party opposes Aksyonov’s push for Crimea to become part of Russia — the editor of the region’s main pro-Russian newspaper, Crimean Truth, also accused Aksyonov of being in a criminal gang. Mikhail Bakharev made the allegations five years ago, when Aksyonov first emerged on Crimea’s political scene.
Aksyonov, who denies the allegations, sued Bakharev for defamation and won, but a higher court later dismissed the case against the editor.
Today, with Aksyonov at the center of Crimean politics, and with the Russian soldiers who back him deployed across the peninsula, Bakharev now insists he was mistaken.
The stories about a criminal past “were just his enemies attacking him,” Bakharev said during an interview, shifting nervously and clearly unhappy to be discussing the topic. He said further investigations showed Aksyonov had no ties to criminal gangs.
He now counts himself as an ardent Aksyonov supporter, calling him “a confident and brave person who is not afraid to take responsibility.”
His critics say it’s clear Aksyonov is simply a puppet, someone installed by Moscow to ease what has become, in effect, a Russian takeover of its former territory.
“If six months ago someone would have told me that Aksyonov would become prime minister, I would have laughed,” said Valentina Tsamar, a prominent Simferopol journalist with the TV channel Chernomorskaya.
Local journalists say Aksyonov emerged on the political scene with the backing of Vladimir Konstantinov, the speaker of Crimea’s parliament and a prominent builder now embroiled in scandals over unpaid bank loans and failed construction projects. Konstantinov’s company, Konsul, collected money from Ukrainians to build homes but never finished the projects, according to reporters who have looked into the deals.
Official investigations, though, never apparently began.
Members of the parliament are immune from prosecution, and Konstantinov’s powerful ties to the now-ousted Ukrainian ruling party meant investigations could be easily stalled.
“He’s untouchable,” said Sergey Mokrushin, an investigative journalist with Chernomorskaya.
Aksyonov does have his supporters.
Gennady Ivanchenkov, a 56-year-old Simferopol economist, said he’s impressed with Aksyonov’s leadership in such a tumultuous time. As for Aksyonov’s past, he isn’t sure the “Goblin” stories are true, and even if they are he isn’t worried.
“Those pages of his life, they are not relevant,” he said. “You know, the ’90s were such dark times and now I can only judge him by what he’s doing now.”
Obama confers with key European allies over Russian action in Crimea
• President speaks to UK, France, Italy and Baltic leaders
• John Kerry warns Russian foreign minister over Ukraine
• Live blog: how the day developed
• What next for Ukrainian soldiers in Crimea?
• Why does Russia see the Crimea as its naval stronghold?
Martin Pengelly in New York
theguardian.com, Saturday 8 March 2014 20.47 GMT
Sevastopol Putin rally A pro-Russian rally in Sevastopol on Saturday, the day President Barack Obama held telephone talks with key European allies. Photo: Viktor Drachev/AFP/Getty Images
President Barack Obama on Saturday spoke to world leaders including David Cameron of Great Britain and François Hollande of France about the continuing crisis in Ukraine.
Also on Saturday, secretary of state John Kerry warned his Russian counterpart that any steps to annex the Crimea region would “close any available space for diplomacy”.
Kerry, who this week visited Kiev, spoke by telephone to foreign minister Sergei Lavrov. A State Department official said: “He made clear that continued military escalation and provocation in Crimea or elsewhere in Ukraine, along with steps to annex Crimea to Russia would close any available space for diplomacy, and he urged utmost restraint.”
Regarding Obama’s call, a White House statement said “all of the leaders agreed on the need for Russia to pull its military forces back to their base” and to “allow for the deployment of international observers and human rights monitors to the Crimean peninsula”.
The White House said Obama also spoke to Matteo Renzi, the prime minister of Italy, and in a conference call to Andris Berzins, Dalia Grybauskaite and Toomas Ilves, the presidents of Latvia, Lithuania and Estonia. Obama spoke to the German chancellor, Angela Merkel, on Friday night.
Last weekend Obama spoke by telephone to the Russian president, Vladimir Putin, for 90 minutes. On Thursday afternoon, the two leaders spoke for an hour. Obama has been subjected to persistent domestic criticism over his perceived inability to deal with Putin.
Russia first sent troops into the Crimea on 28 February, in response to the fall of the government headed by Viktor Yanukovych. The troops have occupied military, transport and infrastructure installations and engaged in standoffs with Ukrainian forces. On Thursday the area’s regional government announced a referendum on whether the Crimea should be a part of Russia or Ukraine, to take place on 16 March.
In response, the US and the European Union have rejected the referendum and imposed sanctions and visa restrictions on Russia. On Friday two Republican senators called for Russia to be ejected from the 2014 World Cup in Brazil and stripped of the right to host the 2018 tournament.
On Saturday it was reported that a Ukrainian observation plane had been fired upon and that a large convoy of Russian military vehicles had been seen moving into the Crimea. Observers from the Organisation for Security and Co-operation in Europe were refused entry to the area after warning shots were fired near them, and a Russian defence official said the country might stop honouring international arms treaty commitments.
It was also reported that Ukrainian state institutions had come under cyber attack from unidentified hackers.
The White House statement continued: “All of the leaders rejected the proposed referendum in Crimea as a violation of Ukraine’s constitution and underscored that all decisions about the future of Ukraine must include the government in Kiev. The leaders made clear that Russia’s continued violation of international law will isolate it from the international community.
“They also discussed the need for the international community to provide strong support to the government of Ukraine as it works to stabilise its economy and prepares for elections in May. They agreed to continue close coordination, including through appropriate international organisations.”
The statement did not mention the G8 summit due to be held in the Russian city of Sochi in June. Last weekend the US and its allies, significantly referring to themselves as the G7, announced that they would boycott preparatory meetings for the summit.
In his conversation with the Lithuanian, Latvian and Estonian presidents, the White House said Obama, who is in Florida for the weekend, “reaffirmed the United States’ unwavering commitment to our collective defence commitments under the North Atlantic Treaty and our enduring support for the security and democracy of our Baltic allies”.
The US this week sent six more F-15 fighter jets to join Nato’s policing mission over the Baltic states. The jets are on call to respond to any violations of Baltic airspace.
Kerry Warns Russia Against Annexation of Crimea
By MICHAEL R. GORDON
MARCH 8, 2014
WASHINGTON — Secretary of State John Kerry warned his Russian counterpart on Saturday that steps by the Kremlin to annex Crimea would “close any available space for diplomacy,” a State Department official said.
Mr. Kerry’s warning came after leaders of Russia’s Parliament said they would support a move by Crimea to break away from Ukraine and become part of the Russian Federation.
He said during his recent trip to Europe that he had provided “suggestions” to Sergey V. Lavrov, the Russian foreign minister, on how the crisis set off by Russia’s military intervention in Crimea might be resolved.
“We have made suggestions to Foreign Minister Lavrov, which he is currently taking personally to President Putin in Sochi,” the secretary of state said Thursday, after meeting with Mr. Lavrov in Rome.
A major element of the United States’ diplomatic strategy is to form a “contact group” that would include France, Britain, Germany, Russia and Ukraine, and perhaps others. Such a group would provide a forum to try to negotiate a political solution, as well as a mechanism for Ukrainian and Russian officials to begin their first face-to-face talks on the crisis.
The Obama administration has been trying for days to broker direct talks between Russia and Ukraine. Russia, however, has yet to agree to the idea.
In his call on Saturday, Mr. Kerry again sought to pursue a political solution while warning that Russian annexation of Crimea would bring such diplomatic efforts to a halt.
“The secretary underscored U.S. readiness to work with partners and allies to facilitate direct dialogue between Ukraine and Russia,” said the State Department official, who declined to be identified under the agency’s protocol for briefing reporters.
“At the same time, he made clear that continued military escalation and provocation in Crimea or elsewhere in Ukraine, along with steps to annex Crimea to Russia, would close any available space for diplomacy, and he urged utmost restraint,” the official said.
Mr. Kerry and Mr. Lavrov agreed to speak again soon, the official added.
Putin takes economic gamble with Crimea swoop
Mar 9, 2014, 10.30 AM IST
So is it really the best time for President Vladimir Putin to launch an audacious bid to incorporate the Ukrainian region of Crimea into Russia within a matter of weeks?
Economists say that the swoop on Crimea carries huge economic risks for Putin, who faces retaliation from the West, increased pressure on the already-embattled ruble and yet more haemorrhaging of foreign capital from jittery investors.
The Russian strongman, who has not ruled out standing for re-election in 2018, has clearly put the political gain of grabbing Crimea before the short-term health of the Russian economy in the hope the damage will not be lasting.
But economists say such logic may be flawed and Russia's economic performance going forward will in any case make a mockery of its status as a member of the BRICS group of top emerging markets along with Brazil, India, China and South Africa.
"The crisis in Ukraine has increased the risks to Russia's already weakening economy presented by currency depreciation and capital flight," analysts at ratings agency Fitch said.
"Capital flight could accelerate, particularly if the threat of economic and financial sanctions increased."
Russia's growth was a measly 1.3 percent in 2013, with its economy suffering from a longstanding failure to implement reforms needed to wean it off an addiction to oil and gas income.
According to the economy ministry, private sector capital outflows have already reached $17 billion so far this year alone.
These factors and general nerves over emerging markets have put the ruble under sustained pressure.
But on Monday it suffered an all out assault, falling to record lows in value against the dollar and euro after Putin won approval from parliament for a de-facto invasion of Ukraine.
In that single day, the central bank spent over $11 billion propping up its currency, some five times more than any other intervention by the Russian central bank in its history.
"Capital flight, uncertainty and the higher interest rates needed to support the ruble will take their toll on Russia," said economists at Berenberg Bank in London, cutting their growth forecast for Russia to zero in 2014.
"Like the Soviet Union in the 1980s, Russia cannot afford a cold war," they said.
It said while other top emerging markets were taking measures to reform, "Russia is in effect ejecting itself from the BRICS."
Taken aback by the swiftness of Putin's reaction to Ukraine's turmoil, the West is planning retaliation but the Kremlin chief may be calculating that the bark is worse than the bite.
The EU is beset by divisions, with nations like Germany, Netherlands and Italy — which have the most economic interests in Russia — said to be opposing the toughest action. Former Soviet states like Lithuania are much more hawkish.
Europe imports one third of its gas from Russia and Moscow needs the hard currency from the energy sales for its own budget so sheer self-interest could block the most extreme scenarios.
But Russia's gas champion Gazprom upped the stakes in Friday by threating Ukraine with a repeat of the 2009 crisis over unpaid gas debts which saw much of Europe deprived of Russian gas supplies.
"Russia's bet on using the gas weapon is working," said daily business newspaper Vedomosti.
Analysts at Citi said: "Despite sharp criticism of the Russian move, there is clearly no appetite in Europe or the US for either a military confrontation with Moscow or meaningful economic sanctions."
The risk for Russia, at least on the currency markets, is cushioned by the fact the central bank still has immense forex reserves — which stood at $493.4 billion on February 21.
The Russian central bank is run by Elvira Nabiullina, a former economy minister who commands respect in the markets.
The same could not be said however of Kremlin economic aide Sergei Glazyev whose apocalyptic view of global economics as a fight to the death between Russia and the West causes alarm.
He blithely warned this week that Russia would "reduce to zero" its economic dependence on the United States and emerge the stronger for it.
But the Vedomosti warned that the crisis would only make Europe more determined to look for other sources of gas, especially with the United States thinking of exporting LNG for the first time.
"In the mid-term it is going to be a task for Europe to reduce its dependence on Russian gas," it said. "But for now it has nothing to replace Gazprom with."
Sovereignty vs. Self-Rule: Crimea Reignites Battle
By PETER BAKER
MARCH 8, 2014
WASHINGTON — They wanted to break away from a country they considered hostile. The central government cried foul, calling it a violation of international law. But with the help of a powerful foreign military, they succeeded in severing ties.
The Kosovars’ secession from Serbia in 1999 drove a deep wedge between the United States and Russia that soured relations for years. Washington supported Kosovo’s bid for independence, culminating in 2008, while Moscow saw it as an infringement of Serbia’s sovereignty.
Now 15 years later, the former Cold War rivals again find themselves at odds, but this time they have effectively switched sides: Russia loudly proclaims Crimea’s right to break off from Ukraine while the United States calls it illegitimate. The showdown in Ukraine has revived a centuries-old debate over the right of self-determination versus the territorial integrity of nation-states.
The clash in Crimea is hardly an exact parallel of the Kosovo episode, especially with Russian troops occupying the peninsula as it calls a March 16 referendum to dissolve ties with Ukraine and rejoin Russia. Though the United States intervened militarily in Kosovo, it did not do so to take the territory for itself. But the current case underscores once again that for all of the articulation of grand principles, the acceptability of regions breaking away often depends on the circumstances.
Consider the different American views of recent bids for independence.
East Timor? Yes.
South Sudan? Yes.
Palestine? It’s complicated.
It is an acutely delicate subject in the West, where Britain wants to keep Scotland and Spain wants to keep Catalonia. The United States, after all, was born in revolution, breaking away from London without consent of the national government — something that the Obama administration insists Crimea must have. The young American union later fought a civil war to keep the South from breaking away. Even today, there is occasional fringe talk of secession in Texas.
To understand the current conflict between Ukraine and Russia, look to the interconnected history of the two countries.
“No state has been consistent in its application of this,” said Samuel Charap, a Russia specialist at the International Institute for Strategic Studies. During a trip he took to Moscow last week, Mr. Charap said, Kosovo was the precedent cited repeatedly by Russians defending the Crimea intervention. “It’s like, ‘You guys do the same thing. You’re no better. You’re no different.’ ”
Russian officials have likewise cited Scotland, which will soon vote on whether to remain in the United Kingdom, as another example. But American officials note that no foreign power sent troops into Edinburgh to replace its local government and stage a vote days later under the barrel of a gun. The Kremlin, they argue, is trying to legitimize an invasion and a land grab with false comparisons to situations like Kosovo.
“It’s apples and oranges,” said Benjamin J. Rhodes, President Obama’s deputy national security adviser. “You can’t ignore the context that this is taking place days after the violation of Ukrainian sovereignty and territorial integrity. It’s not a permissive environment for people to make up their own minds.”
While the concept of state sovereignty can be traced to the Treaty of Westphalia in 1648, the issue has been especially tricky for American presidents in the quarter century since the end of the Cold War. Ukraine itself is the product of a breakup, that of the Soviet Union, when 15 separate nations emerged from the wreckage. Several of those new nations then confronted their own separatist movements, notably Chechnya in Russia; Transnistria in Moldova; Abkhazia and South Ossetia in Georgia; and Nagorno-Karabakh in Azerbaijan.
Although Woodrow Wilson championed self-determination after World War I, the United States like most powers generally prefers stability and the status quo, so it has largely supported preserving borders where they are. During the first Russian war in Chechnya, Bill Clinton even likened Boris N. Yeltsin to Abraham Lincoln, a comparison many in Washington came to regret amid the carpet bombing of Grozny, the Chechen capital.
“Self-determination has been a controversial doctrine since Wilson, and hell to apply,” said Stephen Sestanovich, a former ambassador at large to the Soviet states and the author of a new book, “Maximalist,” on American foreign policy. “One consistent point: It can’t be used as a cudgel by big states to break up their neighbors. Russia’s own record here does not entitle it to the benefit of the doubt.”
Russia’s two ferocious wars in Chechnya since the 1990s were fought to prevent the very strain of separatism it now encourages in Crimea. In backing President Bashar al-Assad of Syria in his civil war against rebels, Russia argues that state sovereignty should not be violated, an argument it has turned on its head in Ukraine.
Of course, the fractiousness that has chopped up the Soviet empire into increasingly smaller and often dysfunctional pieces is not relegated only to that part of the world, although in the West in recent years it has played through political and legal processes rather than military ones.
In September, for example, Scotland will hold a referendum on secession, a vote being held with the acquiescence of London. In November, Catalonia plans its own vote on independence from Spain, although in that case the Madrid government has called it illegal. Quebec held unsuccessful referendums on independence from Canada in 1980 and 1995 and as recently as last week its separatist government was discussing whether another should be held.
But Kosovo is the case that deeply divided Europe. After Yugoslavia fell apart, the Kosovo Liberation Army, a rebel group representing the Albanian minority, struggled against the Serbian government, which responded with punishing force until Mr. Clinton intervened in 1999 with a 78-day NATO bombing campaign.
Kosovo declared independence in 2008. The United States under George W. Bush recognized it, as did Britain, France and Germany, but Russia adamantly rejected it, as did Spain. The International Court of Justice later ruled that Kosovo’s declaration was legal.
“We never saw it as setting a precedent, but there were some nations that saw it that way and still do,” said James W. Pardew, who was Mr. Clinton’s special representative for the Balkans.
John B. Bellinger III, who was the top lawyer at the State Department under Bush, said: “We were very careful to emphasize that Kosovo was a unique situation. We were fond of saying it was sui generis — and it did not create a precedent that would likely be replicable anywhere else.”
That is not how the Kremlin sees it. Ever since, Russia has cited Kosovo to justify support for pro-Moscow separatist republics in places like Georgia, where it went to war in 2008 and recognized the independence of Abkhazia and South Ossetia over Western objections.
“Kosovo is very much a legitimate precedent,” said Dimitri K. Simes, president of the Center for the National Interest, a Washington research organization, agreeing with Moscow’s argument. “Independence was accomplished despite strong opposition by a legitimate, democratic and basically Western-oriented government of Serbia.” By contrast, he said, the new pro-Western government in Kiev “lacks legitimacy,” since it came to power by toppling a democratically elected president.
The Obama administration maintains that the cases cannot be compared. Serbia, White House officials said, lost its legitimacy and right to rule in Kosovo by its violent crackdown. Despite Russian claims, there has been little, if any, independent evidence of such a campaign against the Russian-speaking population in Crimea.
“There’s no repression or crimes against humanity that the government in Kiev has committed against the people of Crimea,” Mr. Rhodes said. “There’s no loss of legitimacy.”
Crimean Tatars Weary of Russia Referendum
by Naharnet Newsdesk
08 March 2014, 20:43
Victims of Stalin's mass deportations in 1944, Crimea's Tatar Muslim minority look wearily on next week's referendum on joining Russia, which could well bring the crisis on the tense peninsula to new heights.
At the Great Mosque in Bakhchysaray, near the southern tip of the Black Sea region, the local Tatar representative Akhtem Chiygoz slams the March 16 vote as "illegal".
The referendum is meant to confirm Thursday's decision by Crimea's pro-Moscow parliament to become part of the Russian Federation, even though the authorities in Kiev have deemed it "illegitimate".
Just before prayer, Chiygoz urges some 100 faithful in the nearly 500-year-old mosque to keep calm and not "give in to provocations".
Rushing by, the young imam adds quickly "we are for peace, that's all".
Over the past week, pro-Russian forces have gradually taken control over the rugged peninsula of two million.
While the move has been greeted by Crimea's Russian-speaking majority, it has drawn a less than enthusiastic response from the minority Tatars.
"There is no extremist rhetoric in our community," says Dilaver, 33, in response to comments about radical elements in the population.
"The only real threat is Russia, where there is no freedom of speech."
Eskender, a respected elderly man in the crowd, is equally outspoken: "We will not take part in the referendum, it's organised by Russian separatists."
But if a choice is to be made between annexation and a full blown conflict, joining Russia "will still be less awful than war," he admits.
Reports that panicked Tatars are fleeing Crimea amid Russia's tightening grip are mere "rumors," says Eskender.
A few hundred internal refugees have indeed left the peninsula in recent days and found refuge in western Ukraine, including the city of Lviv, many of them Tatars. But this represents a small fraction of the minority's population of 240,000-300,000 -- or 12-15 percent of Crimea's two million.
Tatars have had a long and tortuous relationship with Russia. Bakhchysaray was the former capital of the Crimean Khanate, a powerful Tatar state between the 15th and 18th century, but when Moscow defeated the Tatars allied with the Ottoman Empire in the late 1700s, Crimea fell to Russia.
Soviet leaders handed the region back to Ukraine in 1954.
"It's my home, my ancestors were born here. We won't leave, even if they come and kill us," says Rustem Mamutov, whose grandfather was deported by Stalin in 1944 and died in the train taking him to central Asia.
Mamutov himself only returned from Uzbekistan after the collapse of the Soviet Union at age 48.
Speaking with Agence France Presse in Crimea's capital Simferopol, Nariman Dzhelalov, vice-president of the Tatar assembly -- the Mejlis -- warns that Russian-speaking Crimeans could well "behave like conquerors towards us," if the peninsula becomes reattached to Moscow.
OSCE High Commissioner for Human Rights Astrid Thors, who visited Crimea this week, also expressed concern after for the Tatar community.
"Crimean Tatars have taken a different position to the majority population, which increases their vulnerability," she said, describing "a growing climate of fear" between ethnic groups in the region.
Most Tatars seem to want their region to remain part of Ukraine, with the prospect of later joining the European Union.
On the Russian-speaking Crimean side, opinions are meanwhile split.
"We are friends with the Tatars, they're our brothers," says Vladimir, a former army officer, now member of one of those self-defense groups seeking Crimea's attachment to Russia.
In front of the regional government in Simferopol, where unarmed pro-Russian forces still stand guard, an elderly woman however wanders around looking panicked: she has heard that Tatars plan to topple the statue of Lenin that dominates the square.
Adamantly, she says she will do everything she can to stop them, but asks not to be named.
"Otherwise they'll kill me, you understand," she says.
Edginess and a reluctance to rattle Russia's cage in former Soviet republics
Alec Luhn and Joanna Lillis examine the reaction to Russia's takeover of the Crimean peninsula
Alec Luhn and Joanna Lillis
theguardian.com, Saturday 8 March 2014
Russia's takeover of the Crimean peninsula has drawn condemnation from the west, but reaction has been more varied in the 14 former Soviet republics in Russia's "near abroad". Many have played a balancing act between Russia and the west, and almost all have significant Russian-speaking populations – like the one that served as a justification for Moscow's intervention in Crimea.
The oil-rich country in the South Caucasus has carefully played the United States and Russia off against each other, previously hosting a Russian radar base and American troops facilitating the transit of goods to Afghanistan. "It happened in South Caucasus and it's happening now in Ukraine, it's sort of the Soviet Union coming back," said Emin Milli, a journalist and activist in Baku. "This is what we feel in Azerbaijan, whether you're in government or civil society."
Reaction has perhaps been strongest in Georgia, which lost about 20% of its territory when Russia cemented its control of two breakaway republics in the 2008 war. "What you hear a lot is that Russia is repeating in Ukraine what they did to Georgia in 2008," said Koba Turmanidze, president of the CRRC Georgia research centre. "The government is trying to be diplomatic … because they came to power promising to improve relations with Russia and negotiate a deal over the territories they took from us."
A rising oil-and-gas power and the most influential country in central Asia, sparsely populated Kazakhstan is one of only two full members of Putin's customs union and hosts Russia's Baikonur Cosmodrome. Nargis Kassenova, director of the Central Asian Studies Center at KIMEP University, said: "There is a considerable chunk of the population whose opinions are formed by Russian media, and there are increasingly vocal patriotic and liberal community that are getting more and more upset with Russian politics and policies."
In 2013, Armenia declined an EU association agreement similar to the one offered to Ukraine and began moving towards membership of Russia's customs union. "Anti-Russian people have criticised [Moscow's takeover]; pro-Russian people have mostly kept silent," said musician Artyom Babayan. "Neutral people have mostly just drawn their own conclusions about what lessons Armenia should learn."
A revolution in impoverished, mountainous Kyrgyzstan in 2010 brought in a regime which voted decisively to close the US airbase at Manas, the main transport hub for the war in Afghanistan, in 2014. "We can imagine very vividly how the Russian airbase in Kant [in Kyrgyzstan] could be used to land paratroopers to 'restore constitutional order' at the behest of an ousted kleptocrat," said Edil Baisalov, a Bishkek-based political analyst. "But most Kyrgyz, including most of the political class, view the world through the prism of the dichotomy of good Russia versus evil America."
The US leased an airbase there until strong-arm president Islam Karimov, who has ruled the country since 1989, ended the arrangement in 2005 in an apparent move to improve relations with Russia and China. "Officials in Tashkent are seriously worried about the domino-effect consequences from an unbound Russia: in the minds of security-freak Uzbek officials, the fall of Ukraine will inevitably lead to the fall of Uzbekistan," said Alisher Khamidov, a researcher on central Asian affairs. "After Ukraine, Uzbekistan will move to beef up its military and build even closer military partnerships with China and the west."
Located on the border with Afghanistan, Tajikistan is the former republic most dependent on remittances, with half its GDP coming from Tajik citizens working in Russia. "All the countries in the former Soviet Union are on their guard; they understand that the strategy used in Ukraine, Ossetia, and Abkhazia could be used against them," said Parviz Mullodzhanov, a political analyst in Dushanbe. But the majority of the population doesn't criticise the intervention in Crimea, he added.
Estonia joined the EU and Nato in 2004 and has had frequent political clashes with Russia, including over the removal of a Soviet-era war monument in Tallinn. "People fear that Russia could use these methods against Estonia although we are members of Nato," said Silver Meikar, of the Institute of Digital Rights. "People living near the Russian border watch the Russian news, and then when they talk to another Estonian they have a very different understanding of what's going on in Ukraine … and it's because of the propaganda war."
Often called the last dictatorship in Europe, Belarus has not seen many of the market reforms and investment that many other former Soviet republics have, and its strongman leader Alexander Lukashenko is a persona non grata in Europe and a firm ally of Putin. "Speaking selfishly, a Russian Crimea is more preferable and comfortable as a vacation destination for Belarusians, but they see Hitler in Putin's methods," said photographer Andrei Dubinin. "If it wanted to, the Kremlin wouldn't have much trouble joining the whole country to Russia with economic and political methods."
Lithuania joined the EU and Nato in 2004 but retains a sizable population of ethnic Russians. "Most people know there is a small chance for something similar to happen here, but the Russian minority is too small here," said Jonas Bidva, a logistics manager in Vilnius. "Latvia and Estonia would be more on the radar. But the majority of the people do not believe that Nato or EU would do anything to defend us if it happened in the Baltics."
Russia has propped up Moldova's breakaway republic of Transnistria, but the country has had mixed relations with Moscow. About 1 million Moldovans work in Russia and half as many work in the EU. "Part of the population is more inclined toward EU, and it considers this to be Russian imperial expansion," said Tatyana Nita, international secretary for Moldova's Social Democratic party. "But others consider Russia to be a superpower that supports Moldova and other former Soviet republics, and that Europe wants to get revenge on Russia through economic ties with other former Soviet republics, like Belarus, Georgia, and Ukraine."
Baltic States Jittery over 'Unpredictable' Russia
by Naharnet Newsdesk
09 March 2014, 08:20
Standing in the shadow of a massive, grey former KGB building in a busy Vilnius street, Lithuanian pensioner Rimantas Gucas worries history could repeat itself if the West fails to stop Russia from absorbing Ukraine's Crimean peninsula.
As Lithuania marks 24 years since it broke free from the crumbling Soviet Union and a decade since it joined NATO, people here and in fellow Baltic states Estonia and Latvia are jittery over Russian moves in Crimea.
Russian President Vladimir Putin is a "madman" who "won't stop until he's stopped by force," Gucas, 72, who grew up under Soviet occupation, told AFP.
"Should we in the Baltic states be worried too? Ukraine reminds us of the takeover of Czechoslovakia in 1938. Should we now wait for a repeat of the 1939 attack on Poland?" he said, recalling the moves by Nazi German dictator Adolf Hitler that sparked World War II.
The former KGB Soviet secret-service building in Vilnius is now a court and museum with the names of partisans who fought Soviet occupation from 1944-1953 carved on its stony wall. Soviet troops also killed 14 civilians when they stormed a Vilnius television tower in January 1991 in a failed bid to crush independence.
"I think Putin should be called 'Putler' or 'Stalin II'," said Vilnius pensioner Birute Jurksiene, comparing the Russian president to Hitler and Soviet dictator Joseph Stalin.
"The West didn't suffer like we did, so they just can't understand."
The USSR occupied and then annexed Estonia, Latvia and Lithuania during World War II. Mass deportations to Siberia and Central Asia followed.
The trio remained firmly under Moscow's thumb until Kremlin leader Mikhail Gorbachev came to power and began the Perestroika and Glasnost political and economic reforms, which triggered the USSR's collapse in 1991.
Lithuania, where about six percent of the population are Russian, was the first Soviet republic to declare independence on March 11, 1990. Estonia and Latvia were quick to follow.
All three joined the EU and NATO in 2004 in a bid to seal their independence from Moscow.
- NATO Shield -
But an invitation to independence festivities in Vilnius on Tuesday posted by organizers on Facebook warned that events in Ukraine prove that "independence and freedom can be very fragile, even today".
Also comparing Putin to Stalin, Lithuanian President Dalia Grybauskaite starkly warned that Russia is "dangerous" and "unpredictable" during a recent emergency EU summit in Brussels focused on Ukraine.
"This is about rewriting borders," the tough-talking former EU budget chief said, pointing to Crimea.
The EU is mulling economic sanctions against Moscow over its actions there, with hawkish Eastern European members pushing the hardest.
Vilnius University analyst Kestutis Girnius is, however, more circumspect about the threat posed by Moscow. He said EU and NATO membership make the Crimea scenario highly improbable in the Baltic states.
"Since NATO would lose all credibility if it failed to defend them, it has an overriding motive to come to their defense. Russia knows this, and thus will avoid tempting fate," he told AFP.
Moscow has special links to Crimea, which was transferred from Russia to Ukraine in 1954 when they were both part of the USSR. That is not the case for the Baltics, he added.
"The Soviet occupation of the Baltic states was never recognized by the West and Moscow grudgingly accepted 'Baltic exceptionalism'. Russia made clear its opposition to Baltic entry into NATO, but made no serious efforts to halt the process," Girnius explained.
But Moscow's brief 2008 war with ex-Soviet Georgia and Russian military exercises focused on cutting off the Baltic states from the rest of NATO sparked concern.
As the Crimea crisis escalated, Washington sent six additional F-15 fighter jets Thursday to step up NATO's Baltic air policing mission from a base in Lithuania, expanding the squadron to 10.
- Promises -
Lithuanian Defense minister Juozas Olekas called the deployment a response to "Russian aggression in Ukraine and additional military activity in the Kaliningrad region," Russia's exclave bordering Lithuania and fellow ex-communist NATO member Poland.
Moscow slapped trade restrictions on Lithuania last year -- a move Vilnius dubbed retaliation for its key role in efforts to seal an EU association pact with Ukraine.
Ousted president Viktor Yanukovych rejected the agreement in favor of an aid deal with Russia, sparking the protests that ultimately led to his ouster last month.
Moscow's promises to "defend" ethnic Russians in Crimea have set off alarm bells in Latvia and Estonia, where Russian-speakers make up around a quarter of population.
Latvia's Foreign Minister Edgaras Rinkevics recently tweeted that the "Crimea scenario resembles occupation of the Baltic states by the USSR in 1940".
Leonid, one of Latvia's 300,000 Russian-speakers, insists Moscow has no business in Ukraine.
"Military force just isn't right," the 60-year-old told AFP in the capital Riga. "It's a tragedy that Russians and Ukrainians are against each other when we're brothers," he added.
But the largest party in Latvia's parliament has refused to condemn Russia outright.
Supported mainly by ethnic Russians and with ties to Vladimir Putin's United Russia party, the Harmony Center said that both Moscow and Kiev were to blame for tensions.
Enn Tart, a Soviet-era dissident in Estonia, warned Russia "will always make demands on its neighbors, as it has done for centuries".
"But I hope the EU and U.S. will finally understand that Putin should be stopped," he said.
Kiev Should Block Far-Right Leader's Presidential Bid, Says Russian official
by Naharnet Newsdesk
09 March 2014, 10:48
The Kiev authorities should block the presidential bid of the leader of Pravy Sektor, or Right Sector, movement, Dmytro Yarosh, the Russian foreign ministry's rights envoy said Sunday.
"The de facto authorities in Kiev and their Western protectors must close the road to power for the neo-fascist Yarosh and his supporters," foreign ministry rights envoy Konstantin Dolgov wrote on Twitter.
"The violent mayhem committed by ultra-nationalists, taking advantage of lawlessness, has completely discredited the Maidan movement," Dolgov added, referring to Kiev's Independence Square protest hub.
Pravy Sektor on Friday announced that Yarosh would stand in elections scheduled for May 25 and said it was ready to go to war with Russia.
The ultra-nationalist group was at the frontline of clashes with police in Kiev.
An ex-Soviet soldier with a degree in Ukrainian literature, Yarosh founded the group in November 13 to coordinate radical forces within the Kiev protests.
Russia is seeking Yarosh's arrest on suspicion of calls to commit extremist acts and "terror" in Russia.
Ukraine: Are oligarch appointments at odds with new sense of fairness?
Appointment of super wealthy to positions of political power upsets protesters who hoped for new era
Harriet Salem and Ludmila Makarova
The Observer, Saturday 8 March 2014 21.03 GMT
After losing control of Crimea, the embattled new Ukrainian government in Kiev has turned to the nation's oligarchs in a bid to calm secessionist sentiment in the pro-Russian east. But the appointment of oligarchs to positions of political power has not been welcomed in all quarters, and certainly not by the protesters who hoped last month's ousting of President Viktor Yanukovych heralded a new era.
Following days of unrest, including pro-Russia rallies and the storming of the parliament building in Donetsk by Moscow's supporters, the region now seems to be slowly calming down. Pro-Russia squatters have now been removed from the administration building, and on the orders of the newly appointed regional governor and Ukraine's 16th-richest man, Serhiy Taruta, the pro-Kremlin activists' leader, Pavel Gubarev, has been arrested.
In a further sign that the environment in the east is stabilising, boxing heavyweight turned politician Vitali Klitschko has a visit to Donetsk scheduled for Sunday. "People here respect power, the oligarchs are wealthy, well known and well respected. They are seen as guarantors of stability," says local journalist Denis Tkachenko.
But for those active in Kiev's Euromaidan, or Independence Square, protests, putting businessmen into positions of power may not have been what they dreamed of. "This is the most controversial step of the new government – it is a risky gamble," says Serhiy Leshchenko, deputy chief editor of Ukrainian newspaper Pravda, and an investigative journalist who has spent decades analysing Ukraine's business and political elite.
Political analysts say the vulnerable fledgling government, under attack from Moscow, may have had no other option open to it. "Those who think there was an alternative are not being realistic. Now the Party of the Regions [the pro-Russian party led by Yanukovych] has effectively gone, the oligarchs are the only actors with potential to stabilise this region," says Adam Swain, economic geographer at the University of Nottingham and a field researcher in Donetsk for more than 20 years.
Many of Ukraine's oligarchs, an elite club of around a dozen billionaires, amassed their wealth following the collapse of the Soviet Union. Rich in natural resources, Ukraine's east became a battleground for influence as a new generation of entrepreneurs vied for ownership of lucrative factories and coal and steel mines.
A lot has changed since then. The oligarchs' investments have bolstered the region's economy substantially. "Donetsk today is almost unrecognisable to the place I first visited in the 90s," says Swain. "The infrastructure and standard of living have improved immensely. The oligarchs have won respect here for their role in this."
And while the oligarchs may have benefited from the political chaos in Ukraine over the last two decades, they now have a vested interest in ensuring stability. Swain says: "It's not the same situation as the 90s. They want a more ordered system. Smoothly operating structures governed by a fixed set of rules help them to protect their wealth."
Tkachenko agrees: "It's a smart move to bring in the oligarchs – their business interests are here and they will fight to protect the region because of this."
Although most of Ukraine's business elite have strong ties with Moscow, if the east of the country were to fall under the influence of the Kremlin then Ukraine's billionaires would quickly be overrun by their wealthier and better connected Russian counterparts. "The Ukrainian oligarchs have no political influence over Putin," says Leshchenko. "If the east were to secede, their businesses would be snatched. They would become the small businessmen of a Russian province".
But perhaps no one is more admired in Ukraine's east than the country's number one oligarch, Rinat Akhmetov. Worth an estimated $15.4bn, according to Forbes, Akhmetov has not become politically involved, although he has entered the debate about the country's future. He is the owner of one of Ukraine's top two football clubs, Shakhtar Donetsk, and the biggest player in the Donbas region mining industry. In 2011 he paid a whopping £136.4m for a penthouse at One Hyde Park in London.
While he has been vocal in his support for a unified Ukraine, the tycoon has said he will not take any active role in government for the time being. But with presidential elections around the corner, and a parliamentary election to follow shortly after, that may change.
Akhmetov has said: "The future of our country has been put under threat. The use of force and lawless actions from outside are unacceptable. I believe that the crisis must only have a peaceful solution. I call upon all fellow citizens to unite for the sake of the unity and integrity of Ukraine."
One question on everyone's lips is what, if anything, do Ukraine's businessmen want in return for their support? Akhmetov does not want a repeat of the situation that followed the Orange Revolution; "this should be about finding ways to co-operate with business leaders not to overhaul the system in a damaging way," says a source close to the tycoon.
Following Ukraine's last revolution in 2004, the government led by Yulia Tymoshenko, herself an oligarch who amassed wealth from dealing in natural resources in the early 2000s, oversaw a controversial reprivatisation drive which stung some of Ukraine's most influential businessmen.
Speaking at a recent forum in Kiev, the bespectacled leader of Fatherland and Ukraine's interim prime minister, Arseniy Yatsenyuk made clear that he would not support the reprivatisation agenda advocated by some Maidan politicians.
Madrid's mayor seeks curb on protesters in central square
Ana Botella says Puerta del Sol blighted by demonstrations and has urged interior ministry to limit number to protect businesses
Ashifa Kassam in Madrid
theguardian.com, Friday 7 March 2014 17.07 GMT
Whether it's thousands of indignados camping out for weeks or a handful of older people rallying against a freeze in pensions, the backdrop is almost always the same: Madrid's Puerta del Sol square.
And that's a problem, according to the city's mayor, Ana Botella, local businesses and the regional government, who are calling on the interior ministry to limit the number of protests in the Spanish capital's best known and busiest square.
Regional government spokesman Salvador Victoria said: "It can't be that there are businesses with three protests a day at their doors. We're asking that they don't all gather in Puerta del Sol. You can't always hurt the same businesses, neighbours and public workers"
Amid economic crisis and swingeing austerity measures, the number of protests descending on the square has rocketed.
"Every time a march goes past shopkeepers see their sales drop dramatically. It's not nice to be out on the street shopping when there's a protest," said Florencio Delgado, president of the Federation of Businesses of Central Madrid.
Delgado said he understood the attraction of protesting downtown, but urged groups to "think about the bigger picture". Statistics gathered by the association showed that the announcement of a new protest triggered the cancellation of up to 25% of restaurant bookings in the area.
In 2012, 396 protests took place in the square, according to the federal government. Last year the number was 391. Although some of those demonstrations fill the square with thousands of people, nearly half the protests in 2012 consisted of fewer than 50 people.
The federal government's representative to Madrid, Cristina Cifuentes, has repeatedly tried to end the debate, arguing that although she understands "the desperation" of the businesses, the government is legally unable to dictate where protests can be held.
Now Botella has waded into the fray, saying Puerta del Sol square – like much of Madrid's downtown – is designated a protected area.
"Commercial activity should be protected," she said. "Protests should be held in places where they don't hurt economic activity."
She declined, however, to specify alternative locations for protests.
The mayor's response elicited derision from union leader Luis Miguel López Reillo. "The ideas of our mayor are often a bit strange," said the secretary general of the Unión General de Trabajadores. "How can you call it a protected area when it's a public space that belongs to Madrid and its citizens?" he said.
"It's outrageous. An absurdity." It's a square that is symbolic to us, a place where we go to assert our rights. The government seems to want us to protest outside of the centre, where we don't bother anyone and nobody sees us."
Businesses, he said, had conveniently forgotten that the protests bring thousands of people downtown, people who then shop and eat in the area afterwards. "It doesn't make sense that they say we're hurting businesses.
"I think there are bigger problems in Madrid that she could focus on," he said.
It may be within these bigger problems that the solution lies, one politician suggested delicately. As Ángel Pérez, spokesperson for the leftwing coalition Izquierda Unida in Madrid recently said: "If they want to avoid protests in Puerta del Sol, all the government has to do is stop applying the harmful policies that are generating these protests."
Spaniards Defend Women's Rights on Jobs, Abortion
by Naharnet Newsdesk
08 March 2014, 22:10
Thousands rallied in Spanish cities on Saturday to mark International Women's Day with noisy demonstrations for equality at work and against the government's bid to curb abortion rights.
The annual awareness day drew particular attention this year with campaigners defending women's labor rights as Spain struggles with a 26-percent unemployment rate despite exiting recession in 2013.
It also reflected anger at a plan by the conservative government to end a right for women to abort on demand up to 14 weeks of pregnancy -- a reform that has yet to reach parliament.
Several thousand demonstrators marched in central Madrid and Barcelona with flags and drums, Agence France Presse reporters saw. Similar demonstrations were called in several other cities.
"No legislation in our wombs, no mistreatment of our bodies, no cutting of our rights," read one banner in Madrid.
Protesters denounced the abortion plan and the government's 2012 crisis labor reform, which they say is making it harder for working mothers to hold down a job.
In Spain, International Women's Day "this year is very special," said one protester, Angela Barrios Manjon, 66.
"The labor reform and the abortion law are against women," she added. "The right wing wants women to stay at home and look after the children."
"It is the first time I have come, but this year with the abortion reform it was more important than ever," said a protester in Barcelona, Lara Rubio, 23.
The government said on Friday it had approved a three-billion-euro ($4 billion) "strategic equal opportunities plan" to boost women's labor rights and protect them from violence.
"A woman can feel proud to know that her government is working for real equality for women," the ruling Popular Party's deputy leader Maria Dolores de Cospedal told a conference on Saturday.
"But a great deal remains to be achieved," for example in access to jobs and equal salaries, she said.
The deputy leader of the opposition Socialists, Elena Valenciano, retorted in a televised speech: "The Spanish right wing has never lifted a finger for women.
"Despite the trumpeting of the economic recovery, the job market for women in Spain is an ever-harsher reality."
Dublin house price boom sparks fears over asset bubble
Irish capital's rich postcode areas see 22% increase in property prices while costs outside the capital remain stagnant
Henry McDonald in Dublin
The Guardian, Friday 7 March 2014 20.08 GMT
The Irish capital is at the centre of a new house price boom, according to a survey this week that named Dublin as the world's fifth fastest rising property market, and raised concerns over a new asset bubble in the republic.
The banks of the River Liffey are hosting a resurgent property market that is exceeded only by Jakarta, Auckland, Bali and Christchurch, said estate agency Knight Frank.
Its report on global house prices found that Dublin property prices rose faster than Los Angeles, Tokyo and Dubai, with values increasing by 17.5% in 2013 compared with the previous year.
However, a population scarred by the consequences of its last property boom – a €67.5bn (£56bn) rescue loan from a trio of international lenders – is wary of signs of a house market recovery.
A group representing thousands of Irish mortgage holders has raised concerns over the price increases, pointing to thousands of repossessed properties that are not on the market and whose absence from estate agents' windows could be holding up the prices of houses that are being sold.
David Hall, a co-founder of the Irish Mortgage Holders Association campaign group, said the latest figures on mortgage arrears this year showed that there were 1,600 empty properties held by the Irish banks that were not on the market. He also pointed out that Nama – the state agency which bought thousands of properties abandoned by banks and builders after the 2008 financial crash – has held back 14,000 properties from entering the market.
As a consequence, house prices are higher, said Hall, who added that price increases for commercial and domestic properties in Dublin had been "very patchy" as some homeowners continued to suffer from the after effects of the credit crunch.
Property prices in rich Dublin postcodes such as D14 may have increased by 22% last year, but tens of thousands of Irish mortgage holders are still in arrears and the hikes in the cost of a house are restricted to the richer suburbs of the Irish capital, especially south of the Liffey.
House prices are surging in affluent areas of south Dublin such as Clonskeagh, with a three-bed bungalow in the area fetching €740,000 – an increase of two-thirds on a similar property nine months earlier. Outside the capital, property prices remain stagnant at best. A 10-bedroom house in Monaghan, near the border with Northern Ireland, is being sold for €90,000.
Yet for a small country such as the Republic it is the scale of the mortgage arrears which will temper any talk about a new property boom.
By the end of 2013 the total value of mortgage arrears in the Republic was €2.1bn, including €1.8bn owned by borrowers who had fallen behind in their payments for more than a year.
Hall also referred to a report by the global ratings agency Fitch, which predicted further mortgage repossessions this year. Fitch said one in five houses where mortgages had been in arrears for more than three months could be repossessed.
There are still 700 "ghost estates", the name given to empty private housing estates built during the boom, many of them mini-new towns constructed around the edges of greater Dublin.
Hailing Ireland's exit from its bailout in December, the country's finance minister, Michael Noonan, said the nation had emerged from its worst crisis since the potato famine.
Warning that there must be no more debt-fuelled property sprees, he said: "We can't go mad again."
The Knight Frank report is raising concerns that the wrong kind of economic recovery is on the way, with thousands of homeowners still struggling on the sidelines.
In Iran, EU's Ashton Says No Guarantee on Nuclear Deal
by Naharnet Newsdesk
09 March 2014, 10:16
EU foreign policy chief Catherine Ashton said Sunday a final accord on Iran's nuclear program cannot be guaranteed, during a landmark visit that underscores a thaw in Tehran's ties with the West.
Ashton is in Tehran on an official visit that comes after Iran signed a preliminary deal in November with world powers under which it agreed to curb its disputed nuclear activities in exchange for sanctions relief.
The breakthrough was made possible after last year's election of Iranian President Hassan Rouhani, viewed as a relative moderate who has the ear of supreme leader Ayatollah Ali Khamenei.
The so-called P5+1 – U.N. Security Council permanent members Britain, China, France, Russia and the United States plus Germany -- hopes to reach final agreement by July 20, when the initial pact is due to expire.
"This interim agreement is really important but not as important as a comprehensive agreement (which is)... difficult, challenging, and there is no guarantee that we will succeed," Ashton told a joint news conference in Tehran with Iranian Foreign Minister Mohammad Javad Zarif.
The trip is the first to Iran by a European Union foreign affairs chief since 2008, thanks to the November deal that has raised hopes for diplomacy to resolve the nuclear issue.
"It is very important that with the support of the people of Iran for the work to going on by the minister and his team and with the support of international community for my work that we should aim to try to succeed," Ashton said.
The next high-level talks are scheduled in Vienna on March 17 and will be followed by more rounds until July.
Ashton, who leads the P5+1's engagement with Iran, is also due to meet with Rouhani as well as other senior officials.
Zarif, for his part, said Iran held up its end of the bargain and it was up to the other side to finalize the accord.
"Iran is determined to reach an agreement. We have shown good faith and political will. We have done our part," Zarif said.
Zarif said such an agreement would need to "respect the rights of Iranian people and serve national interest without ambiguities."
The minister expressed confidence that a deal was within reach by July.
Ashton's visit has been billed by one European diplomat in Tehran as a "goodwill gesture from the EU".
But Israeli Prime Minister Benjamin Netanyahu criticized it on Sunday.
"I'd like to ask her if she asked her Iranian hosts about the weapon delivery to the terror groups, and if she didn't ask, why not?" he said in reference to a ship the Israeli military intercepted allegedly transporting arms from Iran to Gaza.
The issue of human rights was also on Ashton's agenda, despite the potential to upset Iranian hardliners, sources said.
An eight-member European Parliament group visited Iran in December and met rights lawyer Nasrin Sotoudeh and film-maker Jafar Panahi, sparking criticism from conservatives.
MP Kazem Jalali called the meeting tantamount to "interference in Iran's internal affairs".
Sotoudeh was released from jail along with nearly a dozen other political prisoners last September, part of Rouhani's charm offensive.
The United States, other Western powers and Israel have long suspected Iran of using its civil nuclear energy program as a cover for developing atomic weapons, a charge denied by Tehran.
However, there are many outstanding sensitive issues including the scope of Iran's enrichment program, demands that its bunkered Fordo uranium enrichment site be closed along with the Arak heavy-water reactor.
The unfinished Arak reactor is of concern to the West because Tehran could theoretically extract weapons-grade plutonium from its spent fuel if it also builds a reprocessing facility, giving it a second possible route to a nuclear bomb.
Iran refuses to close its nuclear facilities, saying it could take measures to reassure the West about the peaceful nature of the plants.
Iraq suicide bomb attack leaves dozens dead in Hilla
At least 50 cars are set ablaze with passengers inside after bomber detonates minibus packed with explosives at checkpoint
Reuters in Hilla
theguardian.com, Sunday 9 March 2014 10.06 GMT
A suicide bomber driving a minibus packed with explosives has killed at least 32 people and wounded 147 in the southern Iraqi city of Hilla, police and medical sources say.
The attacker approached a main checkpoint at a northern entrance to the largely Shia Muslim city and detonated the minibus, a police officer said on condition of anonymity.
At least 50 cars were set ablaze with passengers trapped inside and part of the checkpoint complex was destroyed, the officer said.
It was not immediately clear who was behind the attack, but suicide bombings are a trademark of al-Qaida-affiliated groups.
"I was sitting inside my kiosk when suddenly a horrible blast threw me outside and hurled my groceries up in the air. I saw cars set ablaze with people burning inside," said Abu Nawar, owner of a makeshift kiosk made of palm tree leaves near the checkpoint.
Police were using cutting equipment to break inside the burnt vehicles and lift out charred bodies, the police officer said, adding that the death toll was expected to rise.
"When a policeman suspected the minibus, he asked the driver to pull over for a check, but the vehicle exploded," the police officer said.
Bombings and other attacks killed almost 8,000 civilians in 2013, the worst period for the country since 2008.
The Islamic State of Iraq and the Levant has been behind many of the bombings. The Iraqi government is battling the Islamist militant group in the western province of Anbar, where the group holds territory in the cities of Falluja and Ramadi.
Thousands of Iraqi women arrested and tortured, says Human Rights Watch
Campaigners say women may be held for years without seeing a judge, and urges Iraq to acknowledge prevalence of abuse
Associated Press in Baghdad
theguardian.com, Thursday 6 February 2014 12.01 GMT
Iraq authorities are illegally detaining thousands of women, many of whom are subjected to torture and ill-treatment including the threat of sexual abuse, Human Rights Watch said on Thursday.
A 105-page report contains the testimony of 27 women. They include a statement from one woman who said officers obtained a confession of terrorism from her by threatening to rape her teenage daughter. Seven months after speaking to HRW, the woman was executed.
Allegations of abuse are not new, but the findings by the New York-based human rights group – which come despite government pledges of reform – raise concerns about Iraq's ability to handle those detained in massive security sweeps targeting militants.
International rights groups are worried about the weakness of the Iraqi judicial system, accusing it of being plagued with corruption and falling short of international standards.
Human Rights Watch said women had been held for months or even years without charge before seeing a judge. Many were rounded up for alleged terrorist activities by male family members. Interviewed detainees described being kicked, slapped, raped or threatened with sexual assault by security forces.
"Iraqi security forces and officials act as if brutally abusing women will make the country safer," said Joe Stork, deputy Middle East and North Africa director at Human Rights Watch. "In fact, these women and their relatives have told us that as long as security forces abuse people with impunity, we can only expect security conditions to worsen."
Militants have frequently cited the mistreatment of women as a justification for their attacks.
HRW also called on the Iraqis to acknowledge the prevalence of abuse, promptly investigate allegations of torture and ill-treatment and urgently make judicial and security sector reforms.
One detainee used crutches to walk to her interview with the organisation in Iraq's death row facility in Baghdad's Kazmiyah prison. She said nine days of beatings, shocks and being hung upside down had left her permanently disabled.
Israa Salah, not her real name, said she had been arrested by US and Iraqi forces in January 2010 when she was in cousin's home. She was taken to the interior ministry's criminal investigations department where she was tortured until she confessed to terrorism charges against her will.
She said Iraqi security forces repeatedly called her "bitch", "slut" and "daughter of a dog" while in investigation. She described how they handcuffed her, forced her to kneel and beat her on her face, breaking her jaw. When she refused to sign confessions, they attached wires to her handcuffs and fingers.
"When they first put the electricity on me, I gasped; my body went rigid and the bag came off my head," she was quoted by the report as saying. "I saw a green machine, the size of a car battery, with wires attached to it," she added.
She then signed and fingerprinted a blank piece of paper after officers told her that they had detained her teenage daughter and would rape her. She says her lawyer later told her she was accused of blowing up a house and other attacks.
Salah was executed in September 2013, seven months after HRW met her. The execution came despite lower court rulings that dismissed some of the charges against her because a medical report documented that she had been tortured into confessing to a crime.
The HRW also said that Iraqi senior officials dismissed reports of abuse of women in detention as exceptional cases. Phone calls made to officials by the Associated Press went unanswered.
The report, entitled No One Is Safe: Abuses of Women in Iraq's Criminal Justice System, was based on interviews with 27 women and seven girls in custody detainees between December 2012 and April 2013 as well as their families, lawyers, medical officials in detention centres, Iraqi officials, activists and the UN. It also cited court documents and government decisions and reports.
Women protest against proposed Iraq law that would allow marriage of nine-year-old girls
Saturday, March 8, 2014 14:23 EDT
About two dozen Iraqi women demonstrated on Saturday in Baghdad against a draft law approved by the Iraqi cabinet that would permit the marriage of nine-year-old girls and automatically give child custody to fathers.
The group’s protest was on International Women’s Day and a week after the cabinet voted for the legislation, based on Shi’ite Islamic jurisprudence, allowing clergy to preside over marriages, divorces and inheritances. The draft now goes to parliament.
“On this day of women, women of Iraq are in mourning,” the protesters shouted.
“We believe that this is a crime against humanity,” said Hanaa Eduar, a prominent Iraqi human rights activist. “It would deprive a girl of her right to live a normal childhood.”
The UN’s representative to Iraq, Nickolay Mladenov, also condemned the legislation. Mladenov wrote on Twitter the bill “risks constitutionally protected rights for women and international commitment”.
The legislation goes to the heart of the divisions in Iraq since the overthrow of Saddam Hussein in 2003, as Shi’ite Islamists have come to lead the government and look to impose their religious values on society at large.
It describes girls as reaching puberty at nine, making them fit for marriage, makes the father sole guardian of his children at two and condones a husband’s right to insist on sexual intercourse with his wife whenever he wishes.
The legislation is referred to as the Ja’afari Law, named after the sixth Shi’ite imam Ja’afar al-Sadiq, who founded his own school of jurisprudence.
The draft was put forward by Justice Minister Hassan al-Shimari, a member of the Shi’ite Islamist Fadila party, and approved by the cabinet on February 25.
It must now be reviewed by parliament, but the draft could very well languish, with national elections scheduled for April 30, and vocal opposition among secularists.
Shi’ite religious parties first attempted to pass a version of the law in 2003 under U.S. occupation, angering secular Iraqis and prompting protests. Since then, amid Iraq’s turmoil, the tug-of-war has continued between Iraq’s secularists and Islamists.
Iraq’s current personal status law enshrines women’s rights regarding marriage, inheritance, and child custody, and has often been held up as the most progressive in the Middle East.
The proposed new law’s defenders argue that the current personal status law violates sharia religious law.
“This is the core of the freedom. Based on the Iraqi constitution, each component of the Iraqi people has the right to regulate its personal status in line with the instructions of its religion and doctrine,” said Hussein al-Mura’abi, a Shi’ite lawmaker and Fadila party leader.
(Reporting by Suadad al-Salhy. Editing by Ned Parker and Andrew Roche)
March 7, 2014, 9:22 am
A Rare Government Success Story for Women’s Empowerment in Kerala
By VISHNU VARMA
ERNAKULAM, Kerala — In a country that has been criticized as lacking commitment to women’s rights, one program in the southwest state of Kerala has been quietly serving as an example that a government can indeed successfully empower women, both economically and socially.
The program, Kudumbashree, meaning “family prosperity” in Malayalam, the local language, was started in 1998 by the then-Communist government to fight poverty through female emancipation and the collaborative effort of local self-governments.
It started with a few thousand women, but now Kudumbashree counts nearly 3.7 million women as members, who have collected a total of 16.9 billion rupees, or $276.7 million, in the form of a thrift.
By providing grants and arranging low-cost loans, Kudumbashree encourages women to run their own businesses, which include taxi services, handicraft shops, schools for disabled children, homes for destitute families and small paper mills.
Kudumbashree workers have been lauded both nationally and internationally for achieving community-based goals and efficiently harnessing the potential of women’s participation in the work force, which until then had been largely untapped. In 2002, the program was recognized in a study by the United Nations Development Program and the Indian government as one of the 20 best practices in India in governance.
“The initiative has helped women in realizing that they have a right to talk and voice their opinions,” said Santhosh P. Augustine, assistant district mission coordinator of Kudumbashree. “Today, they have the courage to go to banks and set up accounts. It is a proud feeling when we see these women even going out to other states to teach classes on gender empowerment.”
At the heart of the program are the local neighborhood groups, where women accumulate their savings in the form of a thrift. The state government provides financing in the form of grants and administrative support, but the savings generated within the neighborhood group act as the initial investment. State and private banks also provide loans to members at very low interest rates.
The goal is to make these private businesses self-sustaining. Regular assessment meetings are held to see whether an enterprise is profitable. If a business does not look like it can make money, it is eventually closed.
Over the years, the success of the program has been rewarded with more funds from the state government. In the 2013-14 fiscal year, which ends March 31, Kudumbashree received 1.2 billion rupees, an increase of 28 percent from the previous fiscal year.
Kudumbashree distinguishes itself from other government agencies by enforcing accountability through a unique three-tier system of local governance that begins from the neighborhood groups at the grassroots level, then the Area Development Society at the ward level, and finally the Community Development Society at the village, town or municipality level.
Officials at each level are accountable to the upper levels, and the Community Development Society units report to the district mission authorities of Kudumbashree.
Jacob John, an economist with the Kerala Development Society, a socioeconomic research institute, said Kudumbashree is made more effective through close coordination with the panchayati raj, the rural local governments, which are especially strong in Kerala because they receive 33 percent of the state’s planning funds each year. Other states provide much less to their panchayati raj and at varying levels each year.
“Kudumbashree enjoys a rare link with the panchayat, which in turn has helped in continuous and consistent fund flow,” Mr. John said.
The program’s vast network and hassle-free coordination with local bodies has led the central government to appoint Kudumbashree as the administrator of several major antipoverty programs in Kerala.
One of the crown jewels in Kudumbashree is its collective farming program, which has joined thousands of aspiring farmers to work together. In areas where government land is not available for cultivation, fallow lands belonging to private owners are leased out to women’s cooperatives.
Kudumbashree officials said around 260,000 workers currently till and harvest more than 60,000 acres throughout the state. The initiative, many experts and social activists say, has resulted in the cultivation of once-fallow lands.
“At one time, the paddy cultivation in the state was dwindling considerably due to high costs, and it was transforming into more commercial modes of agriculture like plantation farming,” said V.P. Raghavan, a senior fellow at the Ministry of Culture who wrote a research paper on Kudumbashree as part of his doctoral studies. “But today, Kudumbashree has brought back paddy cultivation through large-scale women community efforts.”
In Kadakkanad, a rural hamlet on the far outskirts of Ernakulam, Geetha Ayyappan, 48, and her farming associates say they feel indebted to Kudumbashree for having given them economic independence, which in turn has helped them to take on a more prominent role in their households.
“It has virtually lifted us out of poverty,” said Ms. Ayyappan, whose husband is a truck driver. “I feel like an independent and that I can contribute to my family and the education of my children.”
While Ms. Ayyappan said that one-third of the produce has to be given to the landowner, cultivators like her can divide the rest among themselves, which they sell for a profit after splitting the costs.
The empowered women of Kudumbashree are also playing a major role in shaking up Kerala’s political scene. In 2010, nearly 11,000 Kudumbashree workers contested local elections, and half of them won. In 2011, when the United Democratic Front, an alliance led by the Indian National Congress party, came to power in the state, P.K. Jayalakshmi, a party worker who entered politics through Kudumbashree, was sworn in as the minister for welfare of scheduled tribes and youth affairs in the state cabinet.
However, like all government programs, Kudumbashree has had its share of criticism. In a study, the Planning Commission noted that Kudumbashree was marred by local-level political differences at the municipal and ward levels that often led to theft and pressure on workers to carry out work for political parties.
But social activists and those who have studied the program say that Kudumbashree’s weaknesses are minor when compared with the improvements that it has achieved in the lives of millions of families in the state.
While successful, Kudumbashree’s model cannot be replicated in other states, said Mr. John. “Kudumbashree has worked because of Kerala’s strong panchayati raj system, which no other Indian state can boast of,” he said.
But he said other states could learn to take Kudumbashree’s hierarchical structure and its projects and incorporate it into their programs.
Copying Kudumbashree would also be impossible because its scope keeps expanding as it comes up with more initiatives. In January, it announced an insurance program to cover its 3.7 million members.
But the goal remains the same: to provide economic independence for women. And that has benefits far beyond the monetary gains, said the women in Kadakkanad.
“We are like a family now, tilling, sowing and harvesting together in the fields,” said Elsie Kuriakose, one of Ms. Ayyappan’s farming associates. “Earlier, I had to ask my husband or my parents for money to buy a sari, but today, I have respect in my own family.”
Myanmar Census: Risk or Reward for Rohingya Muslims?
by Naharnet Newsdesk
09 March 2014, 08:36
In the desolate camps of western Myanmar many homeless Muslims are determined to assert their identity as Rohingya after years of persecution, in a census some fear will spark further turmoil.
Myanmar's first census in 30 years -- which starts at the end of March with United Nations help -- will provide new data on the country, until now relying on figures from a flawed population tally in 1983.
But observers warn that controversy over rigid official definitions of ethnicity and entrenched mistrust of authorities after decades of junta rule risk damaging the country's fragile peace efforts and further inflaming religious tensions after waves of anti-Muslim violence.
Questions of identity go to the very heart of divisions in Rakhine State, where long-held animosity between Buddhist and Muslim communities erupted into bloodshed two years ago, leaving scores dead and displacing 140,000 people -- mainly among the stateless Rohingya.
Violence has already flared in the camps on the outskirts of the state capital Sittwe as anxieties over the possible impact of the census run high.
Eindarit, 36, lay beaten and bandaged in a wooden shack following an effort to prevent dozens of fellow Rohingya from fleeing Myanmar by boat.
"He asked them not to leave because we have to take part in the census," said Hla Mint, a 58-year-old retired policeman and de facto local leader, speaking his behalf.
But it ended in violence. Eindarit was badly wounded, losing most of his teeth. The attack left him requiring strapping to his jaw.
"He was cut with knives on his head and hands and beaten with a pipe," Hla Mint said, blaming the clash on local human traffickers.
The incident adds weight to observers' fears that the census is stirring up new divisions in the already combustible state.
"I think this is going to create a huge mess. Everyone is extremely worried this is going to erupt into a new stage of violence," said Chris Lewa, of the Arakan Project, which campaigns for Rohingya rights.
Myanmar's 800,000 Rohingya -- who are stateless, and considered by the U.N. to be one of the world's most persecuted minorities -- face restrictions that hamper their ability to travel, work, access health and education and even to marry.
Many Rohingya are deeply distrustful of the government -- which maintains that most in the community are illegal immigrants from neighboring Bangladesh -- and fear it could use its census findings to somehow extinguish their potential citizenship claims.
The survey form does not have a dedicated box for Rohingya, who are not one of the country's 135 official ethnic minorities -- despite the fact many can trace their ancestry back generations in Myanmar.
But they can still identify themselves as Rohingya in the census -- there is a box for "other" with space to write any group or name they wish to be identified as, which some see as a breakthrough in their efforts to assert their identity.
Many of Rakhine's Muslim population were listed as Bengali in the last census.
"We are labelled 'Bengali, Bengali' all the time. Evidence that we were born here, that we have been staying here, is crucial to us," Hla Mint told AFP.
The census "risks inflaming tensions at a critical moment" in Myanmar's democratic transition, according to a recent study by the International Crisis Group (ICG), which added that controversial sections on religion and ethnicity should be dropped in favor of a focus on key demographic data.
It said the results, many of which will be released before Myanmar holds its first national polls since the end of junta rule, had "direct political ramifications" because the country has some constituencies carved out along ethnic minority lines according to population size.
But the government and United Nations Population Fund (UNFPA) have rejected those suggestions.
They say information on ethnicity is needed as part of efforts to provide a crucial snapshot of the country for national planning.
UNFPA's Myanmar chief Janet Jackson said most ethnic armed groups -- apart from Kachin rebels near the Chinese border -- had accepted the census.
She told AFP that efforts are under way to ensure everyone is counted in Rakhine "sensitively and with calm", adding the survey would not be linked to citizenship.
The U.N. aims to find census-takers among Rakhine's Muslim population to ease inter-communal mistrust.
But divisions fester and in Sittwe, Buddhist politicians expressed deep animosity towards their Muslim former neighbors.
"There is no such thing as the Rohingya ethnicity... it is just a term. Ethnic Rakhines know their intention. It is a political aim," said Shwe Maung, a senior member of the Rakhine Nationalities Development Party.
The ICG said the previous census was believed to have deliberately under-reported the size of Mynamar's Muslim population, at four rather than 10 percent.
Consequently, this census could show a misleading "three-fold increase" in the Muslim population, "a potentially dangerous call to arms" for extremists in the Buddhist-majority nation, the study said.
For Muslims trapped between risking defiantly identifying themselves as Rohingya and the ongoing precariousness of statelessness, the path ahead is fraught with uncertainty, said Rohingya politician Kyaw Min.
"The future is very dark, gloomy -- very dangerous," he told AFP.
Japan Scrambles Jets against Chinese Plane
by Naharnet Newsdesk
09 March 2014, 09:37
Japan scrambled military jets Sunday to counter three Chinese military planes that flew near Japanese airspace, defense officials said.
One Y-8 information gathering plane and two H-6 bombers flew over the East China Sea, traveling in international airspace between southern Japanese islands and went to the Pacific Ocean before returning towards China on the same route Sunday morning, according to a spokesman at the Joint Staff of the Ministry of Defense.
"They flow above public seas, and there was no violation of our airspace," he said, declining to release more details about the incident.
Japan and China are locked in a bitter territorial row over islands in the East China Sea administered by Japan as the Senkaku Islands, but which China calls the Diaoyu Islands.
Chinese government ships and planes have been seen off the disputed islands numerous times since Japan nationalized them in September 2012, sometimes within the 12 nautical-mile territorial zone.
Tens of Thousands Stage Anti-Nuclear Rally in Tokyo
by Naharnet Newsdesk
09 March 2014, 12:19
Tens of thousands of citizens turned out for an anti-nuclear rally in Tokyo on Sunday, as the nation prepares to mark the third anniversary of the Fukushima disaster.
Demonstrators congregated at Hibiya Park, close to central government buildings, before marching around the national parliament.
They gathered to voice their anger at the nuclear industry and the government of Prime Minister Shinzo Abe, who has called for resumption of nuclear reactors to power the world's third largest economy.
"I felt it's important that we continue to raise our voice whenever possible," said Yasuro Kawai, a 66-year-old businessman from Chiba prefecture, east of Tokyo.
"Today, there is no electricity flowing in Japan that is made at nuclear plants. If we continue this zero nuclear status and if we make efforts to promote renewable energy and invest in energy saving technology, I think it's possible to live without nuclear," Kawai said.
This week, Japan will mark the anniversary of the deadly 9.0-magnitude earthquake that hit the northern region on March 11, 2011, that prompted killer tsunami that swept the northern Pacific coastline.
The natural disasters killed 15,884 people and left 2,636 people still unaccounted for.
Huge waves swamped cooling systems of the Fukushima plant, which went through reactor meltdowns and explosions that spewed radioactive materials to the vast farm region.
The plant remains volatile and engineers say it will take four decades to dismantle the crippled reactors.
Protesters in Tokyo stressed that Japan can live without nuclear power as it has done so for many months while all of the nation's 50 commercial nuclear reactors have remained offline due to tense public opposition to restarting them.
In a light-hearted approach to get their message heard, musicians performed using electricity generated by huge solar panels at the park, while dozens of merchants promoted products made in the tsunami-hit region.
The rally featured stars like composer Ryuichi Sakamoto, who played music he created three years ago to mourn for the victims of the disasters.
Although no one died as a direct result of the atomic accident, at least 1,656 Fukushima residents died due to complications related to stress and other conditions while their lives in evacuation become extended.
"The Fukushima accident continues today," Sakamoto told the audience.
Tokyo resident Michiko Sasaki, 80, said Japan's national priority should be to think about how to end nuclear power and to rebuild the northern region hit buy the disaster.
"In this small nation of ours, there are so many nuclear plants. We are prone to earthquakes," she added.
"Unless we end it now, what will happen in the future? Politicians must think about children of the future," she said.
Libya threatens to bomb North Korean-flagged tanker if it takes oil from rebels
Prime minister warns of an ‘environmental disaster’ if tanker leaves rebel-held port of Es Sider with oil cargo
Reuters in Tripoli
theguardian.com, Sunday 9 March 2014 07.39 GMT
Libya has threatened to bomb a North Korean-flagged tanker if it tries to ship oil from a rebel-controlled port, in a serious escalation of a standoff over the country’s petroleum wealth.
The rebels, who have seized three major Libyan ports since August to press their demands for more autonomy, warned Tripoli against staging an attack to halt the oil sale after the tanker docked at Es Sider terminal, one of the country’s biggest. The vessel started loading crude late at night, oil officials said.
The government is struggling to control militias that helped topple Muammar Gaddafi in 2011 but kept their weapons and now challenge state authority.
A local television station controlled by protesters showed footage of pro-autonomy rebels holding a lengthy ceremony and slaughtering a camel to celebrate their first oil shipment. In the distance stood a tanker. The station said the ceremony took place in Es Sider.
Prime minister Ali Zeidan appeared on television to warn the tanker’s crew. “The tanker will be bombed if it doesn’t follow orders when leaving [the port]. This will be an environmental disaster.”
He denounced the attempt to load oil as a criminal act. Authorities have ordered the arrest of the tanker’s crew.
There was no immediate sign of the country’s armed forces moving toward the port. Analysts say the military, still in training, would struggle to overcome rebels battle-hardened from the eight-month uprising against Gaddafi.
Zeidan acknowledged the army had failed to implement his orders last week to stop the protesters sending reinforcements from their base in Ajdabiyah, west of the regional capital Benghazi, to Es Sider.
“Nothing was done,” Zeidan said, adding that political opponents in parliament were obstructing his government. He said North Korea had asked the ship’s captain to sail away from the port but armed protesters had prevented that.
Abb-Rabbo Albarassi, the eastern autonomy movement’s self-declared prime minister, said Zeidan’s government had failed to meet its demands to share oil wealth, to investigate oil corruption and to grant regional autonomy.
“We tried to reach a deal with the government, but they and parliament ... were too busy with themselves and didn’t even discuss our demands,” he said at the televised ceremony. “If anyone attacks, we will respond to that.”
A successful independent oil shipment would be a blow to the government. Tripoli had said earlier it would destroy tankers trying to buy oil from Ibrahim Jathran, a former anti-Gaddafi rebel who seized the port and two others with thousands of his men in August.
Jathran, who was seen attending the televised ceremony, had commanded a brigade of former rebels paid by the state to protect petroleum facilities. He defected with his troops, however, to take over the ports.
In January, the Libyan navy fired on a Maltese-flagged tanker that it said had tried to load oil from the protesters in Es Sider.
The North Korean-flagged Morning Glory, which was previously flagged in Liberia, had been circling off the Libyan coast for days. It tried to dock at Es Sider on Tuesday, when port workers still loyal to the central government told the crew to turn back.
Storage tanks at Es Sider and other seized ports are full, according to oil sources.
It is extremely unusual for an oil tanker flagged in secretive North Korea to operate in the Mediterranean, shipping sources said.
A spokesman for the state-run National Oil Corp (NOC) said the Morning Glory was owned by a Saudi company. It had changed ownership in the past few weeks and previously been called Gulf Glory, according to a shipping source.
The Saudi embassy in Tripoli said in a statement that the kingdom’s government had nothing to do with the tanker, without saying who owned it.
The US ambassador to Libya, Deborah Jones, said in a series of tweets on Saturday that the only parties authorised to sell Libya’s oil were the NOC and its subsidiaries and partners.
“Any purchase of oil within Libya from anyone other than those entities amounts to theft from the Libyan people,” she said. Companies that engaged in illicit trade with separatist groups in Libya risked liability in multiple jurisdictions.
Nigeria violence: 'Our security forces area too outdated to meet these challenges'
Three leading Nigerian commentators give their views on the insurgency
The Observer, Sunday 9 March 2014
Public affairs commentator, writing in the Nigerian Daily Post
"The surging violence by the shadowy sect, Boko Haram, has continued to inundate us even if some no longer shudder at screaming headlines of dozens whose throats have been slit. The vicious group has shown no sign of slowing down, with a string of co-ordinated attacks.
"It is incomprehensible that terrorist attacks in villages and towns last for hours without security intervention. The escalation of violence between January and February alone has claimed over 650 lives. The Nigerian military still has a lot to prove that it is capable of putting down the insurrection.
"The military's symmetric approach to an asymmetric counter-terrorism battle in states under emergency has failed. The spate of almost daily attacks on hapless civilians underscores this point. These mindless killings from highly networked, richly financed groups waging insurgent war often from within civilian population use both traditional and modern weapons.
"Their tactics can best be quelled by military operations backed by the most advanced technology. The structure and design of Nigeria's national security is too outdated to meet challenges."
Expert in conflict prevention and resolution in Abuja
"The African method of raising children should be returned to: 'It takes one person to give birth to a child, but it takes a village to raise a child.' Programmes should be put in place for socialisation of children and youths to return to family values.
"The long-term implication of this is that such children would no longer be available as suicide bombers. Since it is in the hearts of men and women that violence begins, it follows that it is also in their hearts that peace through tolerance should begin.
"The criminalisation of the Nigerian state undermines counter-terror efforts. We note the growing nexus between organised crime syndicates and radical Islamist groups like Boko Haram and Ansaru. Terrorists are exploiting the phenomenon of the criminalisation of the state to expand their influence.
"Preachers in all religions – Christianity, Islam and traditional African religion – should be licensed. They should have a code of conduct, such that if any one of them is flouting any item in the code, the licence should be withdrawn. This would curb the rise of radical preaching in any religion."
Retired Major-General Adamu Ibrahim
Former general commanding 81 Division of the Nigerian Army, writing in the Nation
"Troops deployed to fight Boko Haram are only trained for conventional wars, not the urban guerrilla war where the enemies hit and run. In a conventional war, you know the enemies and their location, so you can direct heavy artillery and air attacks to shed or crush them before [a ground attack].
"Our troops don't know the enemies' sanctuaries; air surveillance jets cannot locate them; if you feel they are there and you attempt to bomb them, you end up killing innocent people.
"The whole thing boils down to training. The soldiers may have the necessary – and expensive – equipment, but they don't have the skills to handle it."
Communists, Islamists in Sudan 'Movement for Change'
by Naharnet Newsdesk
09 March 2014, 08:13
A politically diverse group of Sudanese including communists, Islamists and Arab nationalists on Saturday announced a National Movement for Change seeking a more inclusive form of government for the vast nation.
The group aims to challenge the Arab-dominated regime of President Omar al-Bashir, which has for years been fighting ethnic insurgencies fueled by complaints of economic and political neglect by the Islamist central government in Khartoum.
The conflicts include an 11-year-old insurgency in the western Darfur region and uprisings by the Sudan People's Liberation Movement-North (SPLM-N) that began nearly three years ago in South Kordofan's Nuba Mountains and Blue Nile areas.
And in 2011 South Sudan, which has a mostly Christian and animist population, separated from Sudan after successive civil wars lasting for most of the country's independent existence.
"The problem of Sudan, it is not in Darfur, it is not in Blue Nile. It is not in Nuba mountains, actually it is in Khartoum here," Khalid Tigani, a founder of the Movement for Change, told AFP on the sidelines of the group's first press conference.
Tigani and seven other Islamist intellectuals initially announced the movement in October, aiming to reach out to a cross-section of the multi-religious, multi-cultural country in a discussion about Sudan's future.
Their founding document contains a wider group of 28 signatories.
"Most of them are not Islamists," Tigani said. "We have some people from (the) national Arab movement, some of them are from ex-communist, some of them are from ex-SPLM-North, so we have different people from different backgrounds."
Bashir's regime took power 25 years ago in an Islamist-backed coup.
Faced with a ravaged economy, dissension within his ruling party and urgent calls for reform from outside it, Bashir in January appealed for a broad national political discussion and "renaissance".
But Tigani said the government's dialogue seems to be "for election purposes" when what is needed is a detailed look at the roots of the crisis, and for all Sudanese to have a role in shaping the country's future.
"One of the goals of this movement is to break the wall between the secularists and Islamists," Abdul Aziz Al-Sawi, a former Baath Party leader, told the news conference.
The movement's website, www.sudanchange.org
, pictures two clasped hands, one light-colored, the other dark, in a symbol of diversity.
C.Africa Leader Denounces Attacks against Muslim 'Sisters'
by Naharnet Newsdesk
08 March 2014, 20:03
The Central African Republic's interim president on Saturday denounced atrocities being carried out against "Muslim sisters" across the country due to the brutal sectarian violence, in a speech to mark International Women's Day.
"It is deeply sad that on this special day our Muslim sisters cannot be with us, simply because they were attacked yesterday and they fear for their safety," said Catherine Samba Panza, the first woman ever to lead Central African Republic.
Her speech, at the palace of the National Assembly, covered "the role of women in the Central African search for peace".
Samba Panza added: "We cannot continue to promote intolerance, xenophobia and vile acts against our Muslim brothers and sisters who have always lived in perfect harmony with us.
"Images of those brothers and sisters, forced to live in certain places like prisoners, or to flee our country in their thousands because some people do not accept them and make their lives impossible, are intolerable and do us dishonor."
Security in the capital Bangui is "gradually and significantly deteriorating", said Panza, blaming "agitators" for exploiting the country's youth.
Her comments came after four Muslims were killed and their bodies savagely mutilated in two separate attacks in Bangui on Friday, according to a source in the security services.
In the attacks, the body of one Muslim was chopped up by machete-wielding assailants in the Malimaka district of Bangui.
"Certain parts of his body, including his hands, were paraded around the neighborhood by local youths," said the security source.
Another three Muslims were attacked by armed fighters in the Combattant district on their way to Bangui's M'poko airport Friday.
They were shot after their car was rammed by fighters and their bodies were left mutilated, the source told Agence France Presse on condition of anonymity.
The Central African Republic has been torn apart by bloody sectarian clashes since the mostly Muslim Seleka rebels ousted president Francois Bozize in March 2013 and replaced him with their leader Michel Djotodia, who was himself forced out last month.
Violence has continued unabated since then, as mostly Christian anti-balaka vigilantes have taken their revenge.
Venezuela divisions deepen as protest over food shortages is halted
National Guardsmen prevent ‘empty pots’ march from reaching food ministry as Maduro government denounces US
Associated Press in Caracas
theguardian.com, Sunday 9 March 2014 04.38 GMT
Hundreds of National Guardsmen in riot gear and armoured vehicles prevented an “empty pots march” from reaching Venezuela’s food ministry on Saturday to protest against chronic food shortages.
President Nicolás Maduro’s socialist government, meanwhile, celebrated an Organisation of American States (OAS) declaration supporting its efforts to bring a solution to the country’s worst political violence in years, calling it a diplomatic victory. The United States, Canada and Panama were the only nations to oppose the declaration.
“The meddling minority against Venezuela in the OAS, Panama, Canada and the US, is defeated in a historic decision that respects our sovereignty,” government spokeswoman Delcy Rodriguez tweeted.
Later on Saturday, several hundred student protesters trying to block streets with barricades skirmished with riot police who fired tear gas in the wealthy Caracas district of Chacao, in what has become a near daily ritual.
There were no immediate reports of injuries as motorcycle-mounted riot police, taunted from apartment buildings, chased protesters through darkening streets.
Earlier, more than 5,000 protesters banged pots, blew horns and whistles and carried banners in the capital to decry crippling inflation and shortages of basics including flour, milk and toilet paper. Similar protests were held in at least five other cities.
All over Venezuela, people spend hours every week queuing at supermarkets, often before dawn, without even knowing what may arrive.
“There’s nothing to buy. You can only buy what the government lets enter the country because everything is imported. There’s no beef. There’s no chicken,” said Zoraida Carrillo, a 50-year-old marcher in Caracas.
The capital’s government-allied mayor had refused the marchers a permit to hold the “empty pots” rally, leading opposition leader Henrique Capriles to accuse authorities of trying to “criminalise” peaceful protests.
“Nicolas [Maduro] is afraid of the empty pots of our people. He mobilises hundreds of soldiers against empty pots,” he said of the man who defeated him by a razor-thin margin in April presidential elections.
Capriles also reiterated opposition complaints that the government is sending “functionaries and groups of paramilitaries which they have armed to put down protests”.
Maduro has faced several weeks of daily student-led protests across the nation, which he claims are an attempt by far-right provocateurs to overthrow him. They have been joined by mostly middle-class Venezuelans fed up with inflation that reached 56% last year and one of the highest murder rates in the world.
Late on Friday in Washington, the OAS approved a declaration that rejected violence and called for justice for the 21 people the government says have died in street protests since 12 February. The declaration offered “full support” for a government peace initiative that the opposition has refused to join until dozens of jailed protesters and an opposition leader are freed.
Twenty-nine countries voted in favor of the declaration after 15 hours of debate spread over two days. After Panama sought discussion of the crisis in the body, Venezuela broke off relations and expelled its ambassador and three other diplomats.
The objections from Washington and Panama attached to the declaration were longer than the declaration itself. They argued that it violated OAS rules by taking sides.
“The OAS cannot sanction a dialogue in which much of the opposition has no voice and no faith,” the US objection said. “Only Venezuelans can find the solutions to Venezuela’s problems, but the situation in Venezuela today makes it imperative that a trusted third party facilitate the conversation as Venezuelans search for those solutions.”