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Russia's Central Bank does not hold Fannie Mae and Freddie Mac debt - but what about the rest of its U.S.-mortgage backed debt holdings?
Over a year ago I wrote about Deputy Secretary of the Treasury Robert Kimmitt's trip to Moscow ("Is the U.S. Seeking Capital from Russia's Stabilization Fund?"). In June 2008 RosBusinessConsulting reported that Mr. Kimmitt was in Moscow to ask the Kremlin and Russia's Central Bank to invest more petrodollars in the U.S. Mr. Kimmitt gave RBC an interview, but provided few details about his discussion with Russian Central Bank officials, so the report was largely ignored by the Western media.
At that time, American media outlets were more focused on the prospect of Arab and Chinese sovereign wealth funds acquiring equity stakes in U.S. companies, and the potential political backlash to such moves. Russian companies such as Evraz and Severstal have proven to be saavy about their American acquisitions, (so far) flying under the radar screen of an increasingly unpopular and protectionist U.S. Congress, which clearly has much bigger fish to fry now than worrying about what the Russians are buying.
As we now know, most of the Russian money that was invested in America went into "safe" U.S. government-backed agency debt securities. After the collapse of IndyMac Bank in California on July 12, 2008, Russia's Central Bank denied that it held any Fannie Mae or Freddie Mac securities, and declared its billions in U.S. debt holdings to be safe. Today the New York Times is reporting ("Trouble at Fannie Mae and Freddie Mac Stirs Concern Abroad") that Russian buyers currently hold $75 billion worth of U.S. agency securities backed by pools of mortgages, farm credits, and other loans.
Continue reading "NYT: Russians Hold $75 Billion of U.S. Agency Securities The Consequences of Growing U.S-Russia Financial Ties That Bind" »
Some Notes on the Discussion of the Captive Nations Resolution at the
Russian Academy of Sciences, Moscow, Russian Federation, July 15, 2008
In the not-too-distant past, it would have taken only a few sentences from a speech made last week by Philosophy Professor Andrei Zubov, who teaches at the Moscow Institute of International Relations (today the most prestigious school for Russia's future top level diplomats) for him to end up in a Gulag for at least five years or more. Especially considering that in his opening remarks, he was talking about horrific Soviet crimes against humanity while looking directly at Philip Bobkov, former head of the KGB's feared Fifth Directorate, which was tasked with fighting ideological subversion by dissidents and other "enemies of the state".
However, this time no one was arrested. Despite a few shouting matches between the roundtable participants at the Russian Academy of Sciences in Moscow, all of the proceedings ended peacefully with drinks and endless toasts afterward, as well as mingling between leading Russian and East European scholars, former political prisoners, the editors and authors of Kontinent (an anti-Soviet underground magazine that was funded by the CIA) and former Communist apparatchiks who were top ideologists for the regime in Soviet times.
Continue reading "The Captive Nations Resolution: 50 Years On
Remembering Russian Victims of Communism" »
By Henry Meyer and Sebastian Alison
Soviet-era Tupolev TU-160
July 21 (Bloomberg) -- Russian Prime Minister Vladimir Putin will meet U.S. President George W. Bush next month after Russia warned it would respond militarily to U.S. plans to deploy a missile-defense system in eastern Europe. Putin will hold talks with Bush on the sidelines of the Olympic Games' opening ceremonies in Beijing, the Russian prime minister's spokesman, Dmitry Peskov, said today by telephone in Moscow. The Olympics will open on Aug. 8.
Russia may send military aircraft back to bases in Cuba in response to the U.S. missile-defense plans, Izvestiya reported today, citing an unidentified ``highly placed source.'' The government said on July 8 that it would react with ``military- technical'' means to the U.S. system, which it said threatens Russia's security. Russian leaders threatened to aim nuclear missiles at the planned bases in the Czech Republic and Poland.
Continue reading "Bloomberg:
Putin to Meet Bush in Beijing After Missile Warning" »
The July/August issue of Foreign Policy (a glossy bimonthly magazine published by the Carnegie Endowment for International Peace in Washington D.C.) points out that Russian firms now own 10% of the U.S. steelmaking market.
Whereas many American analysts describe U.S. steelmaking as a sunset industry that cannot compete with cheap steel imports from China, Russian tycoons, who have experience modernizing outdated Soviet mills in Russia, perceive value. The weak dollar has made many U.S. companies cheap in comparison to their counterparts in the Euro zone, and many wealthy Russians are purchasing luxury properties in the U.S. for the same reason.
In addition to the dollar devaluation making American exports cheaper, in the past year skyrocketing world oil prices have tripled the cost of sending a standard shipping container from China to the U.S., reducing China's market share for steel in North America. Chinese manufacturers increasingly find themselves not only paying more to ship their low-margin goods abroad, but paying more for oil, iron ore, and other raw materials needed to produce these products, all while having their low-wage advantage undercut by competitors in Vietnam, India and other Asian countries.
Click on the extended post to read an excerpted article from Reuters.
Continue reading "Reuters: Russian Companies Now Own 10%
of U.S Steel Industry" »
The New Ford Focus...
...and the Chevrolet Lacetti are the most popular cars in Russia.
Russia has become Europe's largest automotive market after year on year sales grew 41 percent in the first six months of 2008, according to a survey by PriceWaterhouseCoopers (PWC), reported Moscow News. In this period, 1.65 million cars were bought in Russia compared to 1.63 million in Germany, which was previously Europe's largest market. The most popular cars in Russia are American Ford Focus and Chevrolet Lacetti. Gazeta.ru reports that according to the Association of European Businesses, in the first six months of 2008, Russians purchased 1,058,037 new foreign cars. General Motors had no explanation for such success with their Lacetti. “Probably, this model is what a Russian consumer needs at the moment,” said a GM representative.
The demand for American vehicles inspired General Motors to open a new factory in Saint Petersburg. The factory will produce 45,000 Lacettis a year. However, even having a factory in Russia is not going to be enough to satisfy Russian demand for automobiles. Russian drivers bought 45,000 Lacettis in just six months. Ford Focus has been an all-time favorite for middle-class Russian drivers, and the new redesigned model added popularity and stronger sales for this model. 47,500 Focuses were sold in the first six months of 2008. Korean and Japanese cars are also very popular with Russian families. The newest version of the Mitsubishi Lancer takes 5th place on the “hit parade” of the bestselling cars in Russia. However, the Japanese also cannot catch up with Russian demand; 34,000 Lancers were sold in the first half of the year, but there remains a long waiting list for more Lancers.
Continue reading "Russia Becomes Europe’s Largest Car Market; American Cars Lead Sales" »
Then Russian President (and current Prime Minister) Vladimir Putin
saluting young soldiers
Editor's note: In part two of his thesis, "The Misconception of Russian Authoritarianism", St. Petersburg State University graduate Kevin Cyron asks whether or not Russia is an authoritarian state, and answers in the negative. Mr. Cyron then explores the role of the Western media and lingering Cold War stereotypes in shaping global perceptions of modern Russia.
Click here to read Part 1 in Kevin Cyron's series on Russia and the West.
Click on the extended post to read Part 2 in the series.
Continue reading "The Misconception of Russian Authoritarianism:
Part 2 - The Problems of Media Bias
and Cold War Stereotypes" »
In February, Mr. Abramovich bought a five bedroom, 5,600-square-foot house in Snowmass Village, Colorado for $11.8 million. Two months later he spent $36.4 million on another property only a few miles away: a 14,300-square-foot, 11 bedroom ranch on 200 acres.
Russian oligarchs, pop stars, and rich people have bought properties all over Europe, pushing real estate prices in Prague and London to new heights. After a visit to Southern France in 2005, a friend of mine commented that, “Russian was the major language of the French Riviera.” With wealthy Muscovites finding it easier to obtain visas these days, perhaps now the time has come for America to become a popular destination for Russian elites. Wealthy Russians have figured out that the U.S. has spectacular mountain and ocean views, fresh air, wide open spaces, which can be enjoyed for home prices far below those of comparable properties in the playgrounds of Europe or the Russian Riviera.
“Sergey Skaterschikov, a Moscow-based private-equity investor, is shopping for a house in Palo Alto, California, because his son will attend school in the area. With a budget of $3.5 million to $5 million, the five- and six-bedroom houses the 36-year-old Mr. Skaterschikov has looked at struck him as cheap compared with Moscow real estate, which he called "insane…" reports The Wall Street Journal.
Please visit the extended post to read the newspaper’s report and see the photos.
Continue reading "WSJ: From Russia -- With Cash" »
Russian Automotive Market Overview
Download the PDF version of the report
The Audi Q7 became one of the most popular SUVs in Russia on the day of its introductory demonstration in Moscow in 2006.
The Russian market for 4x4 vehicle accessories and off-road equipment continues to develop at a rapid pace, as the growth of Russia’s car market keeps expanding year over year. According to a recent study led by the German Car Industry Association, the Russian car market will be one of the fastest-growing vehicle markets in the world over the next ten years.(1) The enormous opportunities presented by the Russian market have already attracted most of the major auto-manufacturers there as they vie to establish a presence in a country where, according to PricewaterhouseCoopers, sales of foreign car models increased by 100% over 2005.(2)
Nine straight years of consistently high GDP growth, along with political stability, high commodity prices, and a great influx of foreign direct investment, have transformed Russia into a modern and vibrant 9th biggest economy in the world.(3) Russia is already a bigger economic market than both India and Brazil, and is aiming to become one of the world’s top five economies by 2020.(4)
Continue reading "Market and Industry Report: Russian SUV Market" »
To be published in Harvard International Review
Summer 2008 (volume 30, issue 2), pp. 14-18.
This year, young people are coming out in record numbers to support their political candidates, not just in the United States but in Russia as well.
Although the phenomenon has been relatively ignored by the western media, young people in Russia have become markedly more politically active during Vladimir Putin's second term in office, a striking change for a country where young people (ages 18-35) have traditionally been among the most politically apathetic segment of the population. In the 2000 elections, for example, Putin's support among pensioners was significantly higher than it was among young people. Recently, however, young Russians have begun to display new patterns of both political and economic behavior that have led pollsters to refer to them as the "Putin Generation." The importance of this generation is epitomized by the rise of Dmitry Medvedev who, at 42, will not only be Russia's youngest president, but also the youngest leader in the G8. Its values will pose a fundamentally new and different challenge to the West— how to deal with an increasingly prosperous and self-confident Russia.
Continue reading "The Putin Generation:
How Will Its Rise Affect US-Russian Relations?" »
Can Russia be classified as a democracy - even an immature one?
Yes, says Kevin Cyron, an American graduate student in Russia
Editor's note: Kevin Cyron, an American living in the Russian Federation who recently graduated with a Masters degree in Sociology from St. Petersburg State University, has agreed to Russia Blog publishing his thesis titled, "The Misconception of Russian Authoritarianism".
Due to its length and detailed analysis, this extended essay will appear as a series of posts in the Articles and Essays section of Russia Blog.
Click on the extended post to begin reading this very timely and topical essay.
Continue reading "The Misconception of Russian Authoritarianism:
Part 1 - Defining Democracy in Russia" »
Editors - Even if this deal does not happen, the Russian company has two things for sure - global ambitions and cash. Please, read the Reuters story about this new business development:
The Russian gas export monopoly Gazprom wants to buy any available natural gas produced by Libya and some of the country’s oil, the top Libyan oil official said on Wednesday. “Gazprom has expressed its willingness to buy Libyan oil and any available quantities of gas,” the official, Shokri Ghanem, told Reuters, adding that it did not mean Gazprom would buy all of Libya’s oil.
Gazprom’s chief, Alexei B. Miller, met with Col. Muammar el-Qaddafi of Libya, after which the company said in a statement that it hoped to buy, at market prices, “all future volumes” of gas, oil and liquefied natural gas available for export. A cooperation agreement signed in 2006 between Gazprom, which supplies about a quarter of Europe’s gas, and Algeria led to fears that Europe’s biggest two suppliers could work together like the OPEC group of oil exporters.
Continue reading "Reuters Reports:
Gazprom Offers to Buy All of Libya’s Gas" »
View the PDF version of the report Overview of the Fast Food Industry in Russia and Ukraine
Summary of contents
I. Ukrainian Market Overview
A. Macroeconomic Conditions in Ukraine
B. Ukrainian Retail Industry
C. Ukrainian Restaurant Industry
D. Ukrainian Fast Food Market
II. Russian Market Overview
A. Macroeconomic Conditions in Russia
B. Russian Retail Industry
C. Russian Restaurant Industry
D. Russian Fast Food Market
III. Conclusion and Opportunities
Continue reading "Market and Industry Report:
Russian and Ukrainian Fast Food Market" »
By Henry A. Kissinger
Presidents Bush and Putin meeting at the Russian resort of Sochi earlier this year
Last month Mr. Kissinger joined former British Prime Minister Tony Blair in addressing Renaissance Capital's 12th Annual Investor Conference in Moscow
President Bush's meeting with Dmitry Medvedev in Hokkaido yesterday provides an opportunity to review American relations with the new Russian leadership. Conventional wisdom treated Medvedev's inauguration as president of the Russian Federation as a continuation of President Vladimir Putin's two terms of Kremlin dominance and assertive foreign policy. But after recently visiting Moscow, where I met with leading political personalities as well as those in business and intellectual circles, I am convinced that this judgment is premature.
For one thing, the emerging power structure seems more complex than conventional wisdom holds. It was always doubtful why, if his primary objective was to retain power, Putin would choose the complicated and uncertain route of becoming prime minister; his popularity would have allowed him to amend the constitution and extend his presidency.
My impression is that a new phase of Russian politics is underway. The move of Putin's office from the Kremlin to the building housing the government could be symbolic. Medvedev has said that he means to chair the National Security Council and, as Russia's constitution provides, be the public face of foreign policy. The statement that the president designs foreign and security policy, and the prime minister implements it, has become the mantra of Russian officials. I encountered no Russian in or out of government who doubted that some kind of redistribution of power was taking place, although they were uncertain of its outcome.
Continue reading "Former Secretary of State Henry Kissinger:
Finding Common Ground with Russia" »
Russia Blog's editors wish our American readers around the world a Happy Independence Day!
A Special Invitation to Russia Blog readers in Moscow!
The American Chamber of Commerce in Russia (AmCham) and the Coca-Cola Company are sponsoring an Independence Day celebration at the historic Kuskovo Estate tomorrow, July 5, 2008. This event will feature live music, spectacular fireworks, a huge cake from the Moscow Radisson SAS hotel, raffle prizes and games for children.
Getting to the Party
A free shuttle bus will take guests to and from the Ryazansky Prospekt metro station on the Tagansko-Krasnopresnenskaya_Line (purple) line beginning at 3 p.m. and running until midnight on Saturday, July 5. The bus will pick up and drop off passengers just past the city bus stop. (Exit the metro toward the last car of the train as it travels from the center.)
IMPORTANT - Purchasing Tickets at the Gate
For those who did not purchase a ticket in advance, tickets are just $17 (400 rubles) at the gate for adults entering from 3 p.m. to 7 p.m. Kids under the age of 12 get in free. After 7 p.m. only advance ticket holders will be admitted to the grounds.
Click on the extended post to watch a video clip with American patriotic music
Continue reading "Happy 4th of July America!" »
Graft remains a serious problem in the Russian Federation
Corruption et al. Medvedev mused that some provision should be made for transferring assets held by civil servants into trusts and said a first draft of a national plan for combating corruption has appeared. A presidential aide suggested that “independent directors” might replace state officials in some state-owned companies. Of course if that turns out to be a way of letting former members of Putin’s administration keep these lucrative positions… I can understand why you would want to place government officials in these important companies (remember Gazprom under Yeltsin?) but the problem then becomes: where do their interests now lie?
Balance in government. A Levada poll shows a probably important change in political reality. For years opinion polls have ranked the president distinctly higher than the PM or government. This was so even in the Yeltsin era (although all at very low levels in the latter years). What this poll shows is that Putin’s presence has pulled the government rating up: in the 40s through most of his presidency, it is now in the 60s. At the same time his public approval rating remains in the 80s and Medvedev’s is in the 70s. If this trend holds – and why shouldn’t it? – Russia’s political structure will be much better balanced than it has been. Further evidence, to my mind, of my fifth hypothesis.
Continue reading "Russian Federation Situation Report
July 3, 2008" »
President Bush (right) at the White House with Arizona Senator John McCain
According to the latest national polls, Barack Obama is topping the charts six to eight points ahead of his Republican rival John McCain. It is still a long way to the November election and things may easily change, but as matters stand now voters clearly favor the Democratic hopeful. The reasons are many, but several recent rows provoked by McCain's top aides certainly played some role.
For a start America's largest aviation company Boeing lost a hefty contract worth $35 billion to its European rival Airbus for supplying the U.S. Air Force with 179 aerial tankers. It turns out that the team of Airbus lobbyists included several of McCain's key advisors, like Tom Loeffler and Susan Nelson of The Loeffler Group, as well as John Green of Ogilvy Government Relations. Loeffler, a former congressman from Texas, headed the finance committee in the McCain election staff while Green acted as a Congressional liaison. Incidentally, Loeffler has been making some additional money on the side, lobbying for Saudi Arabia, too. Some observers believe that behind-the-scenes activities of McCain himself, who wrote several letters to the Pentagon, helped Airbus win the contract.
Continue reading "McCain Aides Are Pulling Him Under" »
View the PDF version of the report New Business Opportunities for Prefabricated Housing in Russia, Ukraine, and Kazakhstan
The housing market in the United States continues to cool and demand for pre-fabricated housing and housing components is slowing down. However, the markets for pre-fabricated housing in Eastern Europe, and particularly in Russia, Ukraine, and Kazakhstan present considerable expansion opportunities for U.S. manufacturers. Russia, Ukraine, and Kazakhstan, with a combined population of 200 million, represent a major untapped market for pre-fabricated housing manufacturers. Existing housing stocks are aging and need replacement, while demand for new housing is steeply trending upward in step with rapid economic growth.
Rapid economic growth in these countries means that salaries have risen considerably since 2000 with many people now seeking to purchase their own homes. However, the very slow process of constructing high rise multi-family housing combined with the desire to live in a single family home is driving the enormous interest in cost efficient pre-fabricated housing. Competition in the pre-fabricated housing market in Russia, Ukraine, and Kazakhstan is currently very low, making it the ideal time for U.S. manufacturers to establish manufacturing facilities and secure a significant portion of the market share.
Continue reading "Market and Industry Report:
CIS Housing Market" »
Aginsky Consulting Group is an internationally recognized, boutique consulting company, headquartered in Portland, Oregon, focused on providing a range of management consulting services to mid-size and Global 2000 companies worldwide. The company produces highly interesting reports on the conditions of different areas of the Russian market. The market and industry overviews cover many subjects, from cosmetics and wines to SUVs and luxury goods. Russia Blog is pleased to introduce our readers to the publications from Aginsky Consulting Group; the reports will appear weekly on Tuesdays. The entire list of the reports will be available via the Business section of the Russia Blog, or via searching in the upper left hand box on the main blog page for “Aginsky Consulting Group.”
Given the current conditions of the housing market in the U.S., we’ll start the new weekly column, brought to us by Alexander Aginsky, the company’s Managing Director, with the report that explores business opportunities for housing in Russia, Ukraine, and Kazakhstan.
Russian army soldiers in winter gear
Courtesy of Thomas P.M. Barnett's weblog and Wired magazine, comes an interesting story about high level U.S. defense strategy. According to Gen. Michael Moseley, who was recently dismissed from his position as U.S. Secretary of the Air Force, "there is almost zero chance we will fight a nation state" in the 21st century. Wired implied that Moseley was referring to Russia and China in his remarks. Actually, Moseley didn't mention Russia or any other country by name in the interview with the Air Force Times that Wired cites. U.S. Defense Secretary Robert Gates fired Moseley after a series of embarrassing incidents for the service, including the shipment of advanced weapons parts to Taiwan and the inadvertent placement of a nuclear weapon on a B-52 bomber during a routine transcontinental training mission.
While senior American flag officers acknowledge the increasing unlikelihood of great power war in the 21st century, a handful of U.S. think tank pundits continue to argue seriously that Russia is rearming for a possible confrontation with the West. For example, bestselling author and Wall Street Journal contributor Mark Helprin recently wrote in the Claremont Review of Books:
...as Western Europe dismantles its militaries, Russia builds, encouraged as much by European pacifism as by the Russian view of America's struggle in Iraq as a parallel to the Soviets' fatal involvement in Afghanistan. Like Germany between the wars, Russia is now eager and determined to reconstitute its forces, and with its new-found oil wealth, it is doing so.
Continue reading "Ex-U.S. Air Force Chief of Staff:
"Zero Chance" of War Between U.S. and Russia" »
Russian fans watching the game in Seattle
The Spanish team showed admirable professionalism and fully deserved to go on to the final against Germany. Nearly twenty unscheduled flights with fans left Moscow for Vienna this morning. Russia lost, but there are no bad feelings towards the squad or its Dutch coach. A young Russian team looked tired and overmatched, but it achieved something that no one could have dreamed of just two weeks ago, and the country is proud of its players for reaching the semi-finals of the European championship. Tonight fireworks can be heard in major Russian cities, but there were no riots by upset fans. Many Russian families went to bed around 2 a.m. Moscow time with the full understanding that today their team faced highly experienced professionals - and it will compete at the highest levels again very soon.
Heavy rain and thunderstorms made the game hard on both teams, but it did not interrupt the satellite broadcast (as it happened yesterday during the game between Germany and Turkey).
Congratulations to Spain - we can’t wait to see the final between German and Spanish teams this coming Sunday. The game, as usual, will be broadcast at 2:30 PM EST, 11:30 AM PST.
CNN: Spain beats Russia 3-0 to reach final vs. Germany
A Russian band and fans marching through the streets of Vienna before the game. Russian fans preferred taking photos with local statues dressed in Spanish jerseys, while Spanish fans enjoyed taking photos with Russian girls. The spirit was high and interactions were warm and friendly. More photos in extended post.
Continue reading "Next Time... Spain Defeats Russia 3:0" »
Russian Soccer team training in Vienna on Tuesday
We stongly recommend this video from CNN about Russia's victories this year.
Don’t miss this historic game! This is the first time that a Russian (not Soviet) team has made it to the European quarter-finals and then semi-finals. Previously, no Russian team made it past the qualifying round of the Euro soccer tournament. Now, after conquering the previously undefeated Dutch team, the Russian squad, led by a Dutch coach, will play Spain in Vienna. The Russian parliament may advise Russian vendors to avoid sales of alcohol the day of the game. Even though such suggestion is not a law, many businesses will most likely listen to it, because the profits to be made from alcohol sales cannot compare with the losses suffered from damage caused by rowdy fans. Last Saturday to Sunday night (June 21-22, 2008), Moscow became the scene of the largest Russian public demonstration since victory day in World War II. The spontaneous celebrations in the city streets were peaceful and continued until 8 a.m.
We wish luck to the Russian team!
NYT: 4 Worthy Survivors in Euro 2008 Battle
The Russians are coming West with money. Should we be scared?
There are some books that surprise you with their depth or give you a new insight on past, present or future world events. The new book by The Economist's Eastern Europe reporter Edward Lucas, The New Cold War: How the Kremlin Menaces Both Russia and the West does not fall this category. Rather, the book is largely a rehash of an argument anyone who has been paying attention to the Western media coverage of Russia over the past eight years will find familiar: after a brief flirtation with democracy under Yeltsin, the Russian people, led by their new Czar Vladimir Putin, are turning their backs on freedom in return for virulent nationalism and oil-fueled economic growth.
Continue reading "Dealing with a Resurgent Russia
A Review of Edward Lucas' The New Cold War" »
Dutchman Guus Hiddink, Russia's coach, celebrates victory over the Dutch team
This past Saturday, another example of Russia's global resurgence was exhibited on the soccer pitch in Basel, Switzerland, in a thrilling quarter-final match between Russia and a highly thought of Dutch squad, at the European 2008 men's soccer tournament ("Euro '08").
Open container? Yes. To the Russian soccer team!
Playing inspired soccer from the start, Russia had several scoring opportunities. After a scoreless first half, Roman Pavlyuchenko connected for Russia's first goal (so far, Pavlyuchernko is Russia's leading scorer in the tournament). Later on in the second half, the Dutch answered with a well executed header from Ruud Van Nistelrooy. After a 1-1 tie in regulation time, the two sides played to a scoreless first half of extra time. In the second half of extra time, Dmitri Torbinsky and Andrei Arshavin scored to ice the game for Russia.
Fans in Red Square, Moscow, celebrate Russia's victory
Continue reading "Russia Advances for Showdown with Spain " »
On June 22, 1941 Nazi Germany launched the largest invasion in history
Today is the 67th anniversary of the Nazi invasion of the Soviet Union. While Russians this year celebrated Victory Day and unprecedented peace and prosperity in Russia, the country remains deeply scarred by World War II. Some Western demographers believe that Russia's difficulty in maintaining its population is partially the result of the loss of nearly 20 million people in the Great Patriotic War. And a few older Russian military analysts fret that Russia may not have the manpower to maintain its borders in the 21st century.
The proposed installation of U.S. missile defense systems in Poland and Lithuania, combined with the possibility of NATO membership for Georgia, is rubbing salt in old Russian wounds. These "expand NATO eastward on autopilot" policies stand in stark contrast to the deliberate peacemaking President Reagan accomplished in the late 1980s, when he acknowledged the tremendous insecurities the Soviets felt as a result of their trauma from World War II. By offering to share missile defense technology, Reagan helped to convince Gorbachev and other Soviet leaders that the USSR could feel safe enough to end the Cold War. By promising no NATO military installations east of the Oder (a promise his successors did not keep), the George H.W. Bush Administration gave Boris Yeltsin even more confidence to break up the Soviet Empire. Interestingly enough, Russian President Dimitri Medvedev in his recent public speeches has revived the use of Gorbachev's phrase "from Vancouver to Vladivostok" to describe East-West relations after the Cold War.
Today the main threats to Russia come from within, rather than from without. Instead of Stalin's purges leaving the Red Army leaderless, the main problem today is cynical officers and NCOs all-too-often turning a blind eye to abuse and exploitation of the hapless conscripts under their command. Russia can and must do better. Russia should create an all-volunteer corps backed by reservists that can secure its borders against the main threats of the 21st century - terrorism, trafficking in people, narcotics and weapons, and natural disasters.
Click on the extended post to watch the PBS miniseries "Battlefield: The Battle for Russia" and for links to other Russia Blog posts about Russia's role in World War II.
Continue reading "Barbarossa: 67 Years Later" »
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