July 2009 Archives

A businessman close to Timchenko said he "succumbed to his emotions."

He later learned that the proceedings would be open and that he would have to disclose information about Gunvor's business and partners, the source said.

"He wasn't ready for that, so a peaceful settlement was the best way out," he said.

On Friday, three judges at the Court of Appeal in London backed a previous judgment granting jurisdiction for a legal claim for a stake in UC Rusal, his aluminium group, which was launched by Michael Cherney, a former business partner.

In what amounts to a stinging critique of Russian justice, the judges said they found no evidence to counter a previous ruling which found that Mr Cherney risked assassination or arrest on trumped up charges should he pursue the case in Russia.

The filing is a new twist on Mr. Browder's case, which began almost four years ago. His lawyers say the wire transfers will show a fraud larger than previously disclosed -- remarkable even by the standards of Russia.

In its sweep and scale, the case has echoes of the Bank of New York money-laundering scandal in the late 1990s, though this time there are no allegations that American banks other than the subsidiary of a Russian investment company were involved.

The French philosopher André Glucksmann has been one of Europe's most outspoken advocates in support of liberty of Russian political prisoners, such as Mikhail Khodorkovsky.  Here in City Journal is a translation of a thought piece by Glucksmann relating to Russia's ambitions in terms of "spheres of influence," European sovereignty, and of course the Georgia problem.

Independent Georgia must survive through this summer. Last year, the Russian army positioned itself just 20 miles from Georgia's capital, Tbilisi--one hour on the highway by tank. Clouds are gathering: large military maneuvers, inflammatory media rhetoric, and a Russian veto in the UN Security Council that interrupted the work of neutral observers. The UN and the OSCE have packed their bags, leaving 200 observers, restricted to the Russian side. Pavel Felgenhauer, a military specialist based in Moscow, fears that the Russian military command will take advantage of the absence of observers in Georgia to concoct some pretext to invade and fulfill their fondest wish--to "hang Saakashvili by the balls," as Putin threatened in 2008. (After all, didn't Germany invade Poland in 1939 by trotting out two unfortunate Polish border guards, whom the Germans accused of "invading" the Third Reich?)

When I'm abroad, I often get asked who of the leaders of the Russian opposition I think stands out in some way. Usually I name Boris Nemtsov, Garry Kasparov, and Vladimir Ryzhkov. In doing so I always reiterate that I am not a political scientist, not a specialist, not an expert, and god knows not some kind of maven on the subject of Russian political reality... My opinion, it is absolutely subjective, as such I'll explain some of my perspectives before getting into this interview, so the reader knows what they are getting.

Если Вы хотите прочитать оригинал данной статьи на русском языке, нажмите сюда.

Personal impressions play a role: I am acquainted with Vladimir Ryzhkov and Garry Kasparov. These days Boris Nemtsov is known as the leader of the Solidarnost opposition movement, but he has a long history in politics, as the head of the SPS political party, and even earlier he was vice prime minister of the Russian Federation. I had come into contact with Nemtsov a long time ago, but only in writing. At that time, when I was sitting in jail, he had helped as he could, especially my lawyers. And so it was that a few days ago we finally met face to face. Perhaps even this meeting never would have happened if I felt the same level of consistent disillusionment towards Boris as I do with regard to many of his former SPS colleagues. But I don't.

I am not convinced by the arguments of his critics, those who say he can't be trusted in office because of his past: none of these critics seem able to point out what he specifically did that was so bad for Russia, earning him a placement in the ranks of Chubais, Gaidar, and Kiriyenko. On the contrary - he did a lot for the country. At any rate, a lot more than his current opponents ever did. He is consistent: in his antagonism towards Putin and in his politics (if this can even be called politics), in his commitment to democratic principles of the development of the country and society... You cannot accuse him of corruption or illicit gain: if you could, then Putin would have done this long ago with the hands of his very own KGB. And, if he really were the kind of guy who "gets with the program", he'd be sitting in a cushy office under the gloomy shadow of the wings of today's power right now.

Nobody to keep him under surveillance?

Grigory Pasko, journalist

Boris Nemtsov doesn't have any guesses as to who attached a mobile telephone with a tracking function underneath his car. And I don't either. Nor do you, I'll warrant. Or Putin, for that matter. An enigmatic country, enigmatic inhabitants with enigmatic souls... It's hard to get concrete about something like this. Boris and I met on Thursday: I was listening to his answers to my questions and thinking: he's young, he's smart, he's experienced, obviously not suitable to be a slick lackey of the powers or dictators. This is the kind of people who should be running the country. And then I thought: he stands out too much, it's precisely this type that the current power doesn't like. Fears them to the point of wanting to annihilate them. And so - the little tracking telephone... Who could have put it there? It's beyond me.

Editor's note: Tomorrow morning we will be posting Pasko's interview with Nemtsov

Photo of Boris Nemtsov by Grigory Pasko

Yet, although it is tempting to see the poor people of Moldova as torn between East and West, that would be an exaggeration. According to opinion polls, 75 per cent want to join the EU, and 80 per cent trust Russia more than any other country. They want to have it both ways. (...)

Moscow clearly wants Moldova to remain part of its "privileged sphere of interest", however miserable it may be. The EU wants to embrace it as part of its "Eastern partnership". It is not an equal contest: Russia exerts its influence through a monopoly of energy supplies (and a growing Moldovan debt). The EU is offering vague promises of closer trade links and easier visa regulations.

Moldova has no interest in choosing between them. It needs them both.

What motivated Natasha Estemirova? Why did she do this work that led eventually to her death? She did this for nearly 17 years, having started in 1992 during the Osset-Ingush conflict. I don't think that patriotism, at least as it is generally understood, was her motivation. She didn't have well-defined political views. She was neither a supporter nor an opponent of Chechen independence. She wanted political questions to be resolved without blood, without shooting, without suffering and killing. She was interested in politics only when this would help her to resolve her human rights cases successfully, to the small degree that this is still possible in Russia.

This doesn't make sense logically. After all, if a patient does not recover from an illness, does that mean the chemistry and biology courses the doctor studied as a student were of no value? If we hear that a building somewhere has collapsed, does it mean the laws of physics have ceased to operate? No, we simply assume that the builders were negligent, that they pocketed part of the money intended for construction or that officials took bribes to overlook safety violations. And even if the properties of some building materials were described incorrectly in the textbook, a few minor corrections to the text would eliminate the problem. Nobody would suggest rewriting physics textbooks from scratch. The same is true of economic science: It provides a solid basis for analyzing crises, and nothing has happened to warrant changing basic economics textbooks in any way.

It is no coincidence that the sharp rise in skepticism toward economics as a science is largely confined to Russia. It is Russia's misfortune that the economics discipline is in such a sorry state. Economic science in the West has evolved for the past 200 years. It has traveled down the same path of development that other sciences have taken, formulating logically consistent theories and hypotheses.

Yevgeny Zhovtis, director of the nongovernmental organization Human Rights Bureau, said that he was driving a car that struck a man and killed him late on July 27.

Zhovtis said he was returning home from a fishing trip when two cars on the other side of the road suddenly switched on their high-beam lights and a person went in front of his car.

He said there was no chance for him to stop the car in time and the person was killed.

Zhovtis added that medical tests confirmed he was not intoxicated while he was driving. Zhovtis is known as one of the most prominent human rights activists in Kazakhstan.

The revenue of ExxonMobil is more than the ones for CNPC, Sinopec and CNOOC, combined but the number of employees of those companies, combined, is 30 times more than ExxonMobil's. Oil price has become internationalized; the price of oil products in China is higher than in U.S., indicating low efficiency and perhaps lack of competition. We all hope to improve the efficiency, but we are still not clear how this can be done.

China's reliance on foreign oil is more than 50 percent and is increasing. However, our petroleum industry has been built on a "self reliance and self sufficiency" model. Half century has passed since that model, petroleum industry reform has been going 20 years, and yet our petroleum organizational frame is still confined by the state. Because of the recent good economic growth and profit, there has been not much motivation for further reform. The most important capital in petroleum companies consists of oil and gas reserves. During the last 30 years of reform, this capital had been transferred from the public to the companies and investors for free. The good performance of our petroleum companies might not be as good as it looks if reserves were considered, especially taking into account the crude oil and oil products price increase. The oil embargo made Brezhnev very happy and he thought that there was nothing to worry over the next 15 years and there was no need to reform the petroleum industry. But less than 15 years later, the collapsed petroleum industry brought the Soviet Union, a giant in appearance, with it. Hope this is just my imagined fear about China.

Canadian investors should think long and hard about the objectives of politically connected individuals from emerging economies like Russia and China who are investing in Canada. While these international transactions potentially bring significant capital and investment opportunities for the Canadian public, they may force Canadian firms to bear significant political risk from politically unstable markets. (...)

The benefit for Magna, Canada's largest automobile parts manufacturer, in entering this deal is apparent: access to the expanding auto market in Russia with one of the best-connected businessmen in the Kremlin. However, Magna may have discounted the opaque nature of Russian businesses and the objectives of its newest investor when agreeing to the deal. Mr. Deripaska has stated publicly that his interests corresponds to the Kremlin's, which are likely not the same as the interests of the existing stakeholders in Canada.

Russian politics are quite volatile. Last month, Vladimir Putin publicly blasted the oligarchs and, before a TV audience, forced Mr. Deripaska to sign a contract for supplies to restart production at idle factories. Should Mr. Deripaska fall out of favour, his existing companies' future would be very uncertain, adversely affecting Canadian co-investors.

During a business trip to Ghana last year, I got into a casual conversation at one point with a local mining executive about the West-vs.-China dynamic when it comes to thinking about the intersection of business, politics and development aid in Africa. And this executive said to me something that I will never forget: "The West tells Africa what it needs. The Chinese give Africa what it wants."

So now we have the news that China is offering a $1 billion line of credit to Moldova, doubling the amount Moscow promised and dwarfing by a factor of more than 40 the funding available from the U.S. Millennium Challenge Account.

Reports so far have not detailed what, if any, political price comes attached with this largesse, but its relative scale - Moldova's GDP is a mere $8 billion and its budget $1.5 billion - as well as its terms -3% annual over 15 years with 5 years grace on interest payments, none of those annoying human rights strings attached - suggest that something beyond the short term horizon our narrow pointy little heads are accustomed to watching awaits. According to the Wall Street Journal:

China's interest in Moldova, a small and distant country with few natural resources, has baffled some diplomats in the capital, Chisinau. But they note that China has long had close relationship with Mr. Voronin's government, one of the last in Europe to call itself communist.

China Overseas Engineering Group didn't return calls for comment, and the Chinese Embassy in Chisinau couldn't be reached.

Um, sure...but China has pulled exactly this move in several non-communist countries across the world, not all of which are replete with natural resources...though if natural resources are not the point, there's usually something else, maybe to do with Taiwan, maybe to do with a UNHCR action, maybe something else off the grid entirely. After all, one can never have too many friends. I'm not a conspiracy theorist by any stretch of the imagination, but I just can't stop thinking about a certain Monty Python sketch......

The state-dominated banking system remains a morass. The five dominant state banks are in poor shape. The government pours more and more money into them, but it helps little as the banks lose it in short order on politically motivated, nonperforming loans. The state banks pose a threat of nationalizing big Russian companies, while they provide little credit. In effect, the Kremlin maintains a detrimental liquidity squeeze.

Senior officials interfere arbitrarily in big enterprises, asking them to hire more workers, to reduce prices and to expand production under threat of confiscation, further undermining the country's weak property rights. This is the worst possible policy.

This press release comes from the website of the Greens of the European Free Alliance on the European Parliament:

The murder of Andrei Kulagin, activist for human rights organisation Spravedlivost (Justice), has been announced by authorities more than two months after his disappearance and almost two weeks after his body was found. Rebecca Harms, President of the Greens/EFA Group in the European parliament and Finnish Green MEP Heidi Hautala, the EP's newly appointed EP human rights subcommittee chair, commented:

"Greens are shocked and saddened by the death of Andrei Kulagin and we extend our condolences to all who were close to him.

Professor Stern says Gazprom needs the South Stream pipeline to shore up its own transit. The company's biggest problem is unreliable transit countries, he says, and points out the company is also suffering from the low prices set by the government at home in Russia - its biggest market.

But for Nigeria and Venezuela? Political motives are much more likely there, Stern believes: "No one expects Gazprom to make vast sums of money in Nigeria and Venezuela."

Russian President Dmitry Medvedev congratulated Venezuelan President Hugo Chavez on his 55th birthday on Tuesday, the Kremlin press service announced.

Medvedev's letter was passed on to Chavez by Russian Deputy Prime Minister Igor Sechin, who was in Caracas on Monday to discuss plans for a bilateral Intergovernmental Committee meeting in St. Petersburg in August and President Hugo Chavez's next visit to Russia.

Medvedev also called for a further strengthening of relations with Venezuela.

"The head of state emphasizes the importance of holding another high-level Intergovernmental Committee meeting in mid-August, which will give an additional impulse to expanding mutual ties, primarily in the trade and economic spheres," the letter reads.

A strategy that assumes the Russians will once again decouple economic and military power requires a different response than ongoing, subcritical pressure. It requires that the window of opportunity the United States has handed Russia by its wars in the Islamic world be closed, and that the pressure on Russia be dramatically increased before the Russians move toward full repression and rapid rearmament.

Ironically, in the very long run of the next couple of generations, it probably doesn't matter whether the West heads off Russia at the pass because of another factor Biden mentioned: Russia's shrinking demographics. Russian demography has been steadily worsening since World War I, particularly because birth rates have fallen. This slow-motion degradation turned into collapse during the 1990s. Russia's birth rates are now well below starkly higher death rates; Russia already has more citizens in their 50s than in their teens. Russia can be a major power without a solid economy, but no one can be a major power without people. But even with demographics as poor as Russia's, demographics do not change a country overnight. This is Russia's moment, and the generation or so it will take demography to grind Russia down can be made very painful for the Americans.

Biden has stated the American strategy: squeeze the Russians and let nature take its course. We suspect the Russians will squeeze back hard before they move off the stage of history.

Mr. Biden's common sense observations undermine President Obama's rationale for a "reset" with Russia built on arms control and a softening of U.S. support for Eurasia's democracies.

For example, why lock in lower numbers of U.S. nuclear warheads and delivery vehicles such as bombers and missiles in a new arms deal if Russia can't afford to maintain its stockpile of either? Why indulge Russia's illusions about its "privileged interest" in Eastern Europe, by signalling a desire to abandon missile defenses in Poland and the Czech Republic, when as the Vice President notes Moscow's current regime lives "in the past" and dreams of reclaiming the Imperium? And what, precisely, does the U.S. expect to get in return for these concessions to a "withering" partner?

Mr. Biden may not like the comparison. But in his willingness to speak the truth about Russia, Mr. Biden reminds us of Dick Cheney.

Though this paper bears a date of "June 2009," I have just now come across it.  Stanislav Secrieru of the excellent Centre for European Policy Studies (CEPS) has a piece which considers whether or not the economic crisis and lower oil prices will motivate Russia to scale back its more aggressive foreign policy ambitions.  Secrieru envisions two scenarios:  one in which a more compliant Kremlin seeks to bridge the gap with the West, or second, that things remain the same with Russia maintaining its normative independence in foreign policy making.

Below is a quote, download the 10-page paper here:

Rationalists argue that power capabilities define the actors' foreign policy goals. Accordingly, they assume that a decline in state resources will compel Russia to scale down its international ambitions. There are expectations that, as the crisis strikes with full force, Russian foreign policy will soften and Moscow will adopt a more conciliatory tone. Thus, the crisis is seen as an opportunity "for a new beginning" in relations with the West. It is considered that it would be wise for the US and EU to take several concrete steps to meet Russia's regional and global concerns. Such an approach would neutralise the Kremlin's suspicion that the West is likely to speculate on the vulnerabilities of a weakened Russia and extract more advantages. Alleviating these fears might help to find the right balance between the "three branches of European civilisation" - Russia, the EU and North America.

Some newspapers and commentators noted that Russians say the same things about themselves. The question, they said, was why Biden made the comments so quickly after this month's summit by Obama and President Dmitry Medvedev, and after Biden's own trip last week to Ukraine and Georgia, former Soviet republics whose growing ties to the West are deeply resented in Moscow.

Sergei Rogov, director of the government-funded USA and Canada Institute, was quoted in Kommersant as saying the interview was aimed in part at addressing criticism in the U.S. that the Obama administration was too soft on Russia.

Some commentators said it was wrong to see Biden as diverging from the policy set by Obama, as suggested by Prikhodko.

Georgy Matyushkin, Russia's representative to the European Court of Human Rights, believes that cases already submitted to the court would be retracted and sent back for review by Russian courts. This includes thousands of cases that deal with counterterrorist operations in the North Caucasus, particularly in Chechnya. The law could also prevent any future cases from reaching the European court.

Simply put, the new law has the potential to cut off the world from knowing about the impunity and lawlessness in the North Caucasus. (...)

According to Memorial, there are up to 5,000 people missing from the second Chechen war alone. So far, the European Court of Human Rights has made rulings on only several dozen of these cases because of a severe backlog.

By passing a law that would keep thousands of cases from potentially reaching the Strasbourg court, Russia would save millions of dollars in compensation that it wouldn't have to pay. More important, however, the Kremlin is hoping that this law will allow Russia to be dropped from Council of Europe's list of the worst human rights offenders.

A Moscow court has freed on bail Semyon Mogilevich, a suspected organised crime boss who is wanted by the FBI for alleged racketeering and fraud, 18 months after his arrest by armed commandos in Moscow on charges of tax fraud, the FT has learnt.

The Russian bear needs to be attractive to be respected by the rest of the world and it cannot become stronger without good foreign relations, President Dmitry Medvedev said on Sunday.

"Our image needs to be comfortable for those who deal with us," Medvedev said in an interview to NTV television due to be broadcast at 1500 GMT.

"We should not be prickly and hard to approach, but at the same time we should be able to give a firm response when circumstances call for it," he added, according to a transcript provided by the Kremlin.

Asked whether he felt uncomfortable with Russia's image of a bear, Medvedev, whose own family name derives from the word "bear" said: "It's an image close to my heart."(...)

"If we want to present the right image to the world, we need to resolve our pressing problems, above all our social and economic problems," Medvedev said.

"We are striving to create a modern, competitive country," he added. "We can only create such a country if we have normal ties with the world."

Financial Times:  Clinton Moves to Calm Russia Spat

The following is a letter from the human rights advocate Sergei Kovalev in support of Mikhail Khodorkovsky. The letter was also published on korpunkt.com and khodorkovsky.ru.

With the YUKOS trial, the power is engaging not only and not so much in judicial pillaging as in educational work. Which is not to say that it didn't indeed pillage and divide up the oil company, stuffing billions into its pockets in the process. But what worried it and continues to worry it most of all in this affair is educational objectives -- the updating, refinement, and universal introduction of the Stalinist political model.

There are several lessons to be taught here at once. And not only to society as a whole, but also specifically to its big-business stratum.

On whether Russian leaders will accept the White House's outreach efforts:

"These guys aren't absolute average-intellect ideologues who are clinging to something nobody believes in. They're pretty pragmatic in the end."

* * *

On the need for the U.S. not to overplay its hand with Moscow:

"It is never smart to embarrass an individual or a country when they're dealing with significant loss of face. My dad used to put it another way: Never put another man in a corner where the only way out is over you. It just is not smart."

* * *

On Russia's post-Cold War position in the world:

"It's a very difficult thing to deal with, loss of empire. The empire was not justified, but still, you're sitting there and all of a sudden...this country Russia is in a very different circumstance than it has been any time in the last 40 years, or longer."

There are some things that should be sacred.  A funeral, no matter who it is for, should not be disturbed like this.  Hasn't the Kremlin sent enough messages to their people that they should be afraid?  From the New York Times:

Police officers in Moscow broke up a memorial service for the human rights worker Natalya Estemirova on Thursday evening and detained the organizer of the event, according to Memorial, the organization where Ms. Estemirova worked. The service for Ms. Estemirova, who was abducted in the Chechen capital, Grozny, and shot to death last week, attracted about 200 people, exceeding the number allowed for the event, the police said. After the event, riot police officers pushed about 15 people into a bus. It was unclear on Friday whether they had been released.

From Reuters:

When all but 20 of the mourners had dispersed, about a dozen police officers moved in to arrest Viktor Sotirko, the Memorial activist who had organized the event, according to a Reuters witness.

"I asked them: 'Why? When our activist has died, when the government has been accused, why aggravate the situation with arrests?'" Sotirko told Reuters Friday. Estemirova worked for rights group Memorial in Russia's turbulent Chechnya region.

The other thing that I heard, and that I think is credible, is that they need time to prepare a kind of pretext. It's not a simple direct invasion of Georgia without any pretext like the one that Saakashvili so generously provided them for the first invasion. That would be difficult because not only would it cast doubt on the legitimacy of the second invasion, it would raise questions about the first one. Now, to prepare a real pretext for invading Georgia, you need to put some work in. For the first invasion, the preparations began months before the actual crossing of the border. It might be the same in this case. I think for the moment they don't have the pretext that they need and I think that, more than anything else, is what is restraining them.

Although we can expect passionate supporters of Chávez to manufacture arguments as to why kidnapping the children of judges is a necessary part of the revolutionary process (after all, the crime family of Barinas is quite good at it), or perhaps debate the merits of legal actions based on taxidermy, none of this should leave in doubt the overwhelming body of evidence that confronts us on the country's justice system. Without control over the courts, Chávez loses his ability to act with impunity and without oversight in his dangerous transformation of the region.

If this president is indeed an embodiment of the people's will, who only seeks constructive and cooperative relationships in his foreign policy, then he should have nothing to fear from an independent judiciary. Unfortunately, that does not appear to be the case, and one fears that without a genuine Venezuelan perestroika in the near future, the current crisis could send the people tumbling toward yet another terrible collision.

The president of the European Parliament Jerzy Buzek called on 23 July for Russian authorities to bring the killers of human rights activist Andrei Kulagin to justice. 

Kulagin disappeared two months ago and officials were quoted by Russian media on Wednesday as saying his body had been found in a quarry on 10 July. He led the local branch of Spravedlivost (Justice), a rights organisation in the Karelia, around 1,000 km (620 miles) north of Moscow. 

Buzek said those responsible for the murder must be brought to justice. 

"I would like to [...] insist upon an impartial and credible investigation conducted by the Russian authorities," Buzek said in a statement. 

"The international community cannot allow this case to add to the long list of unsolved murders of human rights activists in Russia," Buzek added.

Almost nothing is guaranteed to raise the hackles of Russian Prime Minister Vladimir Putin more than the suggestion that Georgia should be permitted to join NATO; a close second would be the same formulation for Ukraine. Russia regards both nations as its own. Indeed, Russian Deputy Foreign Minister Grigory Karasin responded by saying that Georgia is "remilitarizing" after being pummeled by Russia in a five-day war last August, and saying that Moscow might move to stop it.

So why did the Obama administration choose to put irritating language into Biden's mouth? The answer is realpolitik. Washington truly does want calmer, more constructive relations with Russia. It knows that neither Ukraine nor Georgia are capable of meeting NATO requirements; it also knows that the two aren't welcome as members by much of Europe, which -- there is no delicate way of putting it -- allows Russia to call the shots on issues including further NATO enlargement and the direction of new natural gas pipelines.

Yet, putting aside for now the question of whether NATO in fact should expand further, for reasons of politics and appearances, Washington cannot be seen to be acceding to Russia's wishes. So you have speeches like Biden's in Ukraine and Georgia.

The government enacted a range of economic reforms, many of them successful. However, it made a key miscalculation, thinking that the quickest way to reform was to put unparalleled power in the presidency and weaken the powers of the parliament. Presidential selection of judges ensured a compliant legal system. Tbilisi removed also the local autonomy and local tax-raising powers of municipalities, which contributed to Georgia's depressingly poor democracy rating in the recent Freedom House assessment. On every indicator, Georgia was either unchanged from the previous year or had worsened. As the report puts it: "Georgia remains a hybrid system in which a parliament loyal to the president fails to curtail authoritarian tendencies on the part of the executive." (...)

We had read several rumors reported in the past about the Russian authorities making legal moves to avoid their obligation to pay compensation to victims who had won cases in the European Court of Human Rights.  Fresh over the wire on RBK Daily here comes another volley, this time from a Kremlin official:

Yesterday on the air on Radio Liberty, a staff specialist representing the Russian Federation at the European Court of Human Rights (ECHR), Elena Mayboroda, let it be understood that Russia has suspended the payment of compensation on cases lost at the ECHR. In the evening Minjust declared that Ms. Mayboroda does not have the right to give such commentaries, while in Minfin they reported that it is not planned to cease payouts. Nevertheless, the large sums that Russia spends on the payment of claims, and attempts by officials to economize budgetary money make such a decision possible.

In short, no one used to believe the Kremlin. No one believed there could be a war with Georgia, that gas was a weapon, that Russia could cut off the Ukraine's gas and say that the Ukrainians had themselves turned off their supplies. But people believe the Kremlin now.

Here's a disturbing piece of news courtesy of the Newsru.com Technology page. Disturbing not only because it portends yet more restrictions on the free flow of information in Russia on the heels of the recently implemented law permitting the organs to open mail (something they've always done before, of course, even without the blessing of the law), but also because of the identity of the instigator of this particular proposed restriction - the Russian Union of Industrialists and Entrepreneurs (also known by its Russian initials, RSPP).

Back when Mikhail Khodorkovsky was one of the leading figures in the RSPP, this organization was known as a staunch defender of the right to free enterprise without excessive state meddling. This all quickly changed with Khodorkovsky's arrest in October 2003. The RSPP's initial reaction was to voice its protest about the arrest to the power. Vladimir Putin refused to even meet with its leadership on the subject, quickly putting the RSPP in its place. Within a remarkably short few weeks, it had become obvious that the RSPP had no stomach to take on the power and had been completely cowed into submission, its members deciding that it would be best to meekly toe the party line in the hopes of not becoming the next Khodorkovsky.

Ukrainian traffic police blocked a column of Russian military vehicles from carrying missiles along residential streets in Sevastopol on Thursday, writes Roman Olearchyk in Kiev.

It was the third such incident in a month on the Crimean peninsula, .

Kiev and Moscow are engaged in tough negotiations over Russia's use of the port at Sevastopol as a naval base. A rental agreement for the base is due to expire in 2017.

The Ukrainian interior ministry said police turned the convoy back because it had not secured permission to transport military equipment along city streets.

Local media reports cited Russian officials as saying they had full permission to use armoured personnel carriers and missiles in a rehearsal for a forthcoming Russian navy parade.

Coke, which sells more than 400 different drinks around the globe, claims that Russia is its 12th largest market by volume, and the company's CEO, Muhtar Kent, has claimed that Russia will eventually become one of the top five markets for Coke and its bottlers in terms of revenues and profit. Meanwhile, Pepsi executives called the country a "very attractive growth market," in announcing the expansion of their investment in the country.

We think Coke and Pepsi executives spend too much time worrying about how to wage their market-share war, or perhaps just sample too much Vodka during their visits to Russia, because the country represents one of the worst growth prospects in the developed world.

It is not altogether new for Central and Eastern Europeans to feel they are neglected by the U.S. and Western Europe. What is unprecedented, as John Vinocur pointed out in the International Herald Tribune, is that they should express such feelings so openly, so strongly and so undiplomatically. Their description of current Russian policy - "it uses overt and covert means of economic warfare, ranging from energy blockades and politically motivated investments to bribery and media manipulation in order to advance its interests and to challenge the transatlantic orientation of Central and Eastern Europe" - is harsh. But there is a great deal of evidence to support it.

Which is exactly why the letter poses such a complicated dilemma for Washington. If its analysis is correct, then the U.S. can hardly place much trust in its new "reset" Russian policy. So it can hardly agree wholeheartedly to the letter. Nor can it reject the letter out of hand, because it is signed by America's most distinguished European supporters.

In related news, today in Georgia VP Joe Biden gave the have-it-both-ways approach his best shot.

It is quite stupid to play the role of a "Big Brother" if there are no brotherly feelings on either side. It is even more stupid to support a whole nation in exchange for sham loyalty. It is utterly unbearable to burden oneself with responsibility for an alien way of life, for something that is unjust and horrifying to us, but quite normal to others.

We didn't bother making a big deal out of Liz Cheney's Wall Street Journal article from a few weeks back, which excoriated President Barack Obama for his speech in Moscow, arguing that he seemed a little too nice to the Russians and presented distortion of the Reaganite Cold War history.  (For example, I don't recall W. bothering to meet with Nemtsov and Kasparov while swooning in Putin's gaze.)  Cheney's article was a hit among some members of Russia's opposition, who are eager to discard the reset diplomacy approach as a sign that Obama is politically identical to Putin and Medvedev.  Riiiight.  Anyways, this piece from Alexei Victorovich Chadayev in Nezavisimaya Gazeta last week makes an interesting comparison on the non-intervention statements made by Obama being similar to Vladislav Surkov's sovereign democracy doctrine.

The BBC has got an interesting bit here on the memoir former British intelligence agent Anthony Blunt, who shared confidential information with the Soviet Union's Comintern during and after WWII.  Blunt's regrets and opinions on what led him to become a turncoat are only now available to the public, as he turned over his manuscript in 1984 with the provision that it remain locked for 25 years.  The British-Russian espionage rivalry may have become more heated in recent years, but it is nothing compared to this.  I also recommend checking out this 2001 piece on Blunt published in the London Review of Books.

In it, he describes his recruitment by Moscow: "I found that Cambridge had been hit by Marxism and that most of my friends among my junior contemporaries - including Guy Burgess - had either joined the Communist Party or were at least very close to it politically."

However, Burgess - who had already begun working for Stalin's Comintern - persuaded him not to join the party but instead to work undercover.

"What I did not realise at the time is that I was so naive politically that I was not justified in committing myself to any political action of this kind," says Blunt.

The Swedish Presidency, together with the European Commission, intends to organise the first meeting of the Eastern Partnership Civil Society Forum this autumn. We hope to see the start of parliamentary cooperation, as well as exchanges between local and regional authorities of the 33 EU and partner countries. At the end of the year, a meeting of EU foreign ministers and their colleagues from the six partners will assess the progress made so far and give guidance on the way ahead.

The Eastern Partnership is about EU integration, about the six countries moving closer to the EU's values, legislation, and ways of working, and about the EU being there to support and help this convergence. In Russia, there is a perception that is sometimes fostered which suggests that the partnership is directed against it. But this, of course, is untrue. On the contrary, Russia, like Turkey, will be welcome to take part in relevant activities within the Partnership's multilateral dimensions.

The Eastern Partnership is not an answer to all the problems and difficulties that the six partners are facing. Nevertheless, it does represent a clear commitment by the EU to lend its political and economic support to their transition and reform - a process that should bring prosperity and stability to the whole region.

Medvedev, formerly Putin's campaign manager, had not held public office before his election last year - and would likely have remained an obscure apparatchik but for Putin's endorsement. But speculation, rife 12 months ago, that the new man was merely keeping the presidential podium warm pending an inevitable Putin return in 2012, is subsiding. Kremlin insiders now suggest Medvedev is in the process of acquiring sufficient political clout to chart an independent future. (...)

Russia still sees itself as a great power, a perception vigorously promoted by Putin. But the toughest challenge facing Medvedev may be to tailor and trim that inflated self-image to fit a less glamorous reality. Russian weakness, subtly exploited by Obama in Moscow, was the hidden story of the Putin years. In the Medvedev era, developing a law-abiding, economically diversified civil society at home while pursuing less un-civil, more co-operative behaviour abroad may be the path to returning strength and a second term.

Indeed, all that has changed, it would seem, since Medvedev has come into power, is the surface rhetoric. Instead of being told that the victim was inconsequential, we're now told that she was very important and that the president sends his condolences. But this doesn't stop the president from ruling out one of the most likely culprits before the investigation has even started, and we can be pretty certain that whoever really ordered the murder of Estemirova will never be brought to justice.

As a footnote to all of this, it also came out last week that Shalva Chigirinsky, the businessman whose empire has dissolved around him since the financial crisis hit, has filed a statement saying that a 50-percent stake was secretly held in his company by Elena Baturina, development magnate and wife of Moscow Mayor Yuri Luzhkov. Chigirinsky said he had gone into partnership with Baturina to get ahead in construction projects because "no major projects can proceed in the city without her backing." Baturina, of course, denies all the claims, but what is interesting is the forum in which they are being aired - London's High Court. As so often, it is the London courts where juicy details about the backroom deals between Russian oligarchs come out - the idea of anyone being able to file similar claims in a Moscow courtroom is simply unthinkable.

This kind of case, plus the Mikhail Khodorkovsky trial, plus the general fragility of the court system and supreme vulnerability of judges to administrative pressure from above, suggests that Medvedev has a lot of work to do to improve the legal situation here. But his comments in response to the murder of Estemirova hint at the fact that he is not genuine in his desire to do so.

With no real functioning courts in Russia, apart for the celebrated practice of the show trial, the legal systems of London and Strasbourg find themselves choked with business disputes and human rights cases.  The Financial Times has a new piece about some of the biggest cases between the oligarchs, including Berezovsky vs. Abramovich and Cherney vs. Deripaska.

One senior western banker said disclosures in the Deripaska case - where legal arguments are taking place over whether it should be heard in London or Moscow - could be "extremely damaging".

The banker said: "[It] does not encourage the world to invest in Russia. It also shows that Russia does not have the necessary legal system to sort all this out and people have to go to foreign courts."

The two cases are separate but overlap intriguingly in that both involve disputes over the allocation of proceeds of investments in UC Rusal, the aluminium giant. Rusal was formed through a merger of Sibal, Mr Cherney and Mr Deripaska's aluminium company, with the metals empire of Mr Abramovich and Mr Berezovsky.

Obama spoke to Russian leaders as equals in a manner befitting the leaders of sovereign states. The U.S. president could not behave otherwise; after all, Bush's grandiose plan to build a Pax Americana, a global empire led by the United States, came crashing down with a bang. The United States, overburdened by its attempt to shoulder world hegemony, collapsed and fell into the clutches of a severe crisis affecting both domestic and foreign affairs.

The United States must undergo its own perestroika, and American voters put Obama in the White House because of his realization of the need for change and determination to carry it out. Of course, the United States is like a huge ocean liner, and its course cannot be changed quickly. But Obama is trying, and this includes efforts to improve U.S.-Russian relations.

In response to the outrage the Estemirova murder triggered abroad, Kadyrov, seemingly with utter conviction, announced that the "terrible crime" would be swiftly investigated and said he would personally see to it that that happened. And then he added: "As determined by the centuries-old traditions and the mentality of the Chechen people, we will also search for the criminals using other, traditional methods -- methods that sometimes prove to be very effective."

Traditional methods? The words sound like they came from a mafia boss, not a president. (...)

The Russians are keeping a close eye on Kadyrov. The Chechen president's bodyguards are elite fighters from Russia's FSB intelligence service. They protect him -- but they also report anything out of the ordinary to their superiors in Moscow.

The bodyguards recently noted that Kadyrov was becoming increasingly audacious, especially in his quest for new sources of income. "Kadyrov is a toad raised by Putin," says an FSB general. "Putin could easily choke on him."

At Friday prayers July 17 at Tehran University, the influential cleric and former Iranian President Ali Akbar Hashemi Rafsanjani gave his first sermon since Iran's disputed presidential election and the subsequent demonstrations. The crowd listening to Rafsanjani inside the mosque was filled with Ahmadinejad supporters who chanted, among other things, "Death to America" and "Death to China." Outside the university common grounds, anti-Ahmadinejad elements -- many of whom were blocked by Basij militiamen and police from entering the mosque -- persistently chanted "Death to Russia."

Death to America is an old staple in Iran. Death to China had to do with the demonstrations in Xinjiang and the death of Uighurs at the hands of the Chinese. Death to Russia, however, stood out. Clearly, its use was planned before the protesters took to the streets. The meaning of this must be uncovered. To begin to do that, we must consider the political configuration in Iran at the moment.

Throwing his backing behind Mr Khodorkovsky's suit in the European Court of Human Rights, Mr Kasyanov said he had laid out in an affidavit filed to the court in Strasbourg last week Mr Putin's explanation in July 2003 for the rising state pressure on Mr Khodorkovsky and his Yukos oil company.

"He told me Khodorkovsky...was financing the Communist party without his agreement," Mr Kasyanov told the FT.

Mr Kasyanov said he had pressed Mr Putin for an explanation many times about the July 2003 arrest of Platon Lebedev, Mr Khodorkovsky's closest associate, and about mounting state pressure on Mr Khodorkovsky as prosecutors began to investigate tax fraud claims.

This year's Presidential Cup horse race, a traditional cue for an informal gathering of the 11-member Commonwealth of Independent States (CIS), drew only five top guests: the leaders of Armenia, Azerbaijan, Kazakhstan, Moldova and Tajikistan.

The presidents of Ukraine, Belarus, Uzbekistan, Turkmenistan and Kyrgyzstan all failed to show up, citing personal reasons. Belarus President Alexander Lukashenko went instead to ride a Harley-Davidson at a local bikers' rally.

The exclusively domestic content of Monday's speech underlines the new, less-promising political reality Georgia faces after Russian forces defeated its army last summer, allowing two breakaway Georgian republics to declare their independence.

A comprehensive peace in the northern Caucasus would require long-term policies to win over the non-Russian peoples through political and social inclusion and economic development, and stabilise the whole region.

This would take years. But one move Mr Medvedev could make now would be to show he really does intend to apply the rule of law in the northern Caucasus by bringing to justice Ms Estemirova's killers. That would mean pursuing not only those who pulled the trigger but those who ordered the execution. Memorial, the human rights group with which Ms Estemirova was working, has blamed Mr Kadyrov. He denies the charge. Mr Medvedev could show he is serious by appointing a prosecutor to investigate fully Memorial's claim.

Ms Estemirova's colleagues fear there is not the slightest chance this will happen because Mr Medvedev has already dismissed claims of Mr Kadyrov's responsibility. The president has an opportunity to prove them wrong - and prove when he says he wants justice, he means what he says. Chechnya would be a difficult place to begin, given that the chain of command in Chechnya leads to Moscow and that Mr Putin has personally played a big role in its recent bloody history. But the gravity of the Chechnya-linked cases means they cannot be ignored if there is to be justice in Russia.

Whereas Medvedev's statement on the murder, may have averted international repercussions, reactions in Russian media were sparse, and LJ user tupikin accounts for [RUS] his own feelings and others' neglect to cover the issue:

Almost the entire day was spent in a realm of black colour. At first, the press conference about yesterday's kidnapping and murder of Grozny Human Rights defender Natalya Estemirova (judging from comments on my post - a single one - one might think that it is only of interest for anti-Kremlin websites, whereas none of my best friends showed any interest whatsoever). Tell me, honestly, do you think that Human Rights' defenders are crazy? Or rather, predestined to die? OK, the press conference gathered 60 journalists, including ten TV-cameras. When Ludmila Alexeyeva, chairman of the Moscow Helsinki group, asked national [i.e. Russian] journalists to raise their hands, it turned out to be no more than 15 people. The news, which has circled world media, is received, here in our country, with amazing stoicism, as if that simply is the way it has to be. Really, not 60, but 160 journalists should have come... Well, that is not some other country, but it is all ours. [--] and then Ludmila Alexeyeva added that two people were guilty - Ramzan Kadyrov and Vladimir Putin. [--] I don't know whether the tacit readers of my LiveJournal understand, that this is a sensation of all-Russian proportions [--] that two of the most high-ranking state officials in Russia were named as accomplices to a political murder in front of TV-cameras and tens of journalists. The ground did not shake, only silence followed. As I wrote these words on the keyboard of my old notebook, it was as if the finger-touches forming letters were like the strikes from the Tsar Bell...

"Where were the police while people were being killed?" said Cheng Wei, 41, a landscaper whose neighbors, poor fruit vendors from Henan Province, lost a son in the riots. "They were completely useless."

Large street protests that turn violent, and that officials and security forces have been powerless to stop, have been on the rise in recent years, analysts say. The government usually avoids reporting the number of protests or riots in China, but an article in January in Outlook Weekly, a policy magazine published by Xinhua, the state news agency, said there were 90,000 such events in 2006, up from 60,000 in 2003.

The central government still can completely lock down areas when it anticipates protests, as it did across the Tibetan plateau in the spring or for the 20th anniversary of the student rallies at Tiananmen Square in June. But increasingly, security forces seem to have been caught unaware.

The rampage by Uighurs on July 5 was followed for days by reprisal killings by Han vigilantes who defied police orders to refrain from violence. At least 192 people were killed and 1,721 injured in all of the violence, most of them Han, according to the government. Many Uighurs say the Uighur casualties have been severely undercounted. The Han, who dominate China, are the majority in Urumqi, even though the Uighurs, a Turkic people largely resentful of Chinese rule, are the biggest ethnic group in this western region of Xinjiang.

What is not simple is Russia. That quintessentially Russian query -- What is to be done? -- continues to bedevil the Kremlin. The country is, after all, falling apart. The price of oil is down sharply from its high of $147 a barrel in July 2008. The markets have been badly shaken by Putin's attack on steel giant Mechel, the breakup of the oil conglomerate TNK-BP (during which the Russians none-so-subtly squeezed out their British partners), and last summer's war with Georgia. And then, of course, there's the global financial crisis, which has hit Russia particularly hard. On top of all the economic woes, there's a shrinking population, a military that remains something of a joke and a problem with AIDS. Plus, you still can't (or shouldn't) drink a glass of tap water in central Moscow.

"China supports Russia's crackdown on smuggling crimes and wholeheartedly guides enterprises and businesspeople to obey Russia's laws and regulations. But the emergence of the unlawful 'gray customs clearance' phenomenon has its own special historical background. Chinese merchants doing business in Russia have, objectively, long found it difficult to clear customs, among other obstacles. The transformation of business activities also requires a certain transition period. Many Chinese merchants have been doing business in Russia for many years, and they have made outstanding contributions to the prosperity and economic development of Moscow and other Russian cities," the statement said.

Ivan Safronov, 51, a prominent military correspondent for the business daily Kommersant and a reserve colonel in the Russian Space Force, fell to his death from a staircase window in his Moscow apartment building on March 2, 2007. He had just returned from a business trip to the Middle East, where he had learned of purported sales of Russian defense technology to Iran and Syria. Three days before his death, Safronov told colleagues that he had been warned not to publish portions of the information, Kommersant reported. The journalist had also embarrassed defense officials two months earlier by reporting on the third consecutive test failure of the Bulava ballistic missile. Authorities classified the death as a suicide, yet Safronov left no note and, in the hours before his death, had made plans with family and friends and had shopped for groceries.

So now comes the hard part: consolidating the new atmosphere by following up in all areas of mutual relations. Success must be the work of both sides. It is encouraging that the two presidents will head a joint commission to guide and oversee this work.

The new course in U.S.-Russian relations will meet with resistance from various quarters. There is also the danger that the new relationship could be mired in inertia and routine.

Later that night in her kitchen, we were looking through pictures on a laptop of Mikhail Galustov, a freelance photographer I was working with. Before coming to Natasha, we had spent two days at Kadyrov's residence; at the time he was Chechnya's prime minister and heir apparent after the death of his father, the Kremlin's handpicked leader. The pictures featured Kadyrov showing us around his private zoo: cages with little lions and bears, ostriches running around the garden.

In one series of pictures, Kadyrov was taking his huge dogs out of their cage and baiting them, trying to get them to fight. "I know what else he uses these dogs for," Natasha said in a heavy voice. The story Natasha told us that night was breathtaking. It was about a teenage boy, a brother of a guerrilla, who had told Natasha that Kadyrov's police threatened to put him in that cage with the dogs, so he would tell where his brother was. Natasha was telling us story after a story that night about Kadyrov's methods of "making relatives talk." Her face darkened, her big beautiful eyes looked tired.

Sergei Kuznetsov Content Group, one of the biggest Russian web studios, has opened a contest called "Drawing the Court" that invites anyone to submit drawings of Khodorkovsky's trial, which started in March in Moscow's Khamovnichesky District Court.

There is only one rule: The artist must draw the artwork in court.(...)

The contest aims to raise interest in Russian court processes and provide a showcase for courtroom art, an obscure genre in Russia, according to the contest's web site, Risuemsud.ru.

The first drawings have been posted on the web site and include three pencil sketches by Svetlana Sorokina, a former liberal commentator with NTV television. One sketch, titled "Tired," shows a prosecutor with closed eyes and a drooping mouth sitting at his table in the courtroom. No recognizable likenesses of Khodorkovsky were among the five entries on the site Thursday. All appeared to be supportive of Khodorkovsky.

No one can cast personal blame for a murder when the culprit is an entire system of grand corruption. For years now, self-enriching state officials have gorged themselves on public institutions while withering away democratic rights, reflected by a corruption ranking of 147. The government of Chechnya is perhaps one of the worst, as the decision by Putin to pass total control of the region to the 32-year-old Kadyrov is akin to placing the State of New York under control of the Gambino crime family (no disrespect to the Gambinos).

When such a high number of government officials are in on the take, by definition the justice system does not work. From here, there is a thread connecting Estemirova's murder to other state conduct, such as the attack on history, the rhetoric of aggression and expansion against neighbors, the extortion and racket of the energy trade, show trials, and the stranglehold on media. Journalists are not safe when a government attacks civil society organizations like Memorial, when they refuse to investigate shootings five years after the fact, and when it shows no inclination toward transparency. David Satter recently wrote in Forbes that there may even "be attempts by the authorities to use the killing of journalists for their own purposes, for example, by hinting that they were carried out by the regime's political enemies."

The reality known well enough inside Russia. Human rights leader Lev Ponomarev, who has suffered his own fair share of violence (he was beaten right before Medvedev's first meeting with Obama) told The Financial Times, "When they kill three people in a row in a short space of time who worked on the same subject, then all questions disappear. (...) Politkovskaya, Markelov and now Estemirova, they were all investigating abuses by law enforcement and the killings of peaceful citizens in Chechnya - and all these people have been killed . . . It is absolutely clear."

A couple of years ago, at a memorial service for the great Russian journalist Anna Politkovskaya put together by PEN, I had the honor of interviewing onstage one of Politkovskaya's friends, the human-rights activist Natalia Estemirova. Politkovskaya, who was murdered at her home in Moscow in 2006 (as Michael Specter and Keith Gessen have written in The New Yorker), did her best and bravest work in Chechnya for the newspaper Novaya Gazeta, one of the few remaining outlets with the audacity to continue publishing the truth about Russia in the Age of Putin. In Chechnya, one of her closest friends and sources of information was Natalia.

Natalia was one of those remarkable people whom reporters depend on in every ominous corner of the world: the human-rights activists who know so much, and who give completely of themselves, with little thought to their security. They are the ones who reap no glory or profit; they are the ones for whom the violence and corruption is not a "story" but the center of their lives. Natalia did her work for Memorial, a human-rights group that began during the Gorbachev years. It started out intending to unearth the buried facts of the Stalin era. Now it concentrates largely on the present tense.

It is some time since strategists in the Kremlin have been pulling out their hair, wondering how they created the monster which is Kadyrov. Installed as a fixer who could stamp out the rebels and rebuild Grozny, he has largely done both things while turning the republic into his own personal fiefdom. Chechnya, traditionally an egalitarian society in which no individual is considered above his peers, is now full of risible billboards of Kadyrov clutching smiling children like some modern day Enver Hoxha ("The streets in Grozny are so clean," say his fans, but the streets are clean in Belarus and North Korea). Political opposition in parliament has been extinguished and many potential opponents are no longer a threat. Kadyrov's greatest rival, the former battalion commander and Hero of Russia, Sulim Yamadayev - himself, admittedly, no fluffy democrat - was rubbed out by an assassin in Dubai in March.

The European Union called Thursday on member nations to ramp up natural gas storage and build more pipelines to cope with any future cutoff in energy supplies from Russia.

In January, thousands of homes went without heating and some power plants shut down when gas stopped flowing through pipelines from Russia due to a payment dispute with its neighbor Ukraine.

EU officials complained that Europeans were held hostage by the row and are seeking new routes and sources for energy -- something that will take years to realize.

Vaclav Havel, Lech Walesa, and a long list of other former leaders of Eastern European states have penned an open letter to U.S. President Barack Obama expressing their fears over what kinds of sacrifices to their sovereignty might come along with Washington's effort to improve relations with Russia.  Full text of the letter below from Gazeta Wyborcza, news coverage from Associated Press and Reuters.

An Open Letter to the Obama Administration from Central and Eastern Europe

by Valdas Adamkus, Martin Butora, Emil Constantinescu, Pavol Demes, Lubos Dobrovsky, Matyas Eorsi, Istvan Gyarmati, Vaclav Havel, Rastislav Kacer, Sandra Kalniete, Karel Schwarzenberg, Michal Kovac, Ivan Krastev, Alexander Kwasniewski, Mart Laar, Kadri Liik, Janos Martonyi. Janusz Onyszkiewicz, Adam Rotfeld, Vaira Vike-Freiberga, Alexandr Vondra, Lech Walesa.

We have written this letter because, as Central and Eastern European (CEE) intellectuals and former policymakers, we care deeply about the future of the transatlantic relationship as well as the future quality of relations between the United States and the countries of our region. We write in our personal capacity as individuals who are friends and allies of the United States as well as committed Europeans.

Our nations are deeply indebted to the United States. Many of us know firsthand how important your support for our freedom and independence was during the dark Cold War years. U.S. engagement and support was essential for the success of our democratic transitions after the Iron Curtain fell twenty years ago. Without Washington's vision and leadership, it is doubtful that we would be in NATO and even the EU today.

President Dmitry Medvedev has expressed "outrage" at Miss Estemirova's fate. But Russians know that real power rests with their prime minister. Mr Putin must now condemn this crime and guarantee an impartial investigation. Moreover, he should rein in the militia who support his repugnant protégé in Chechnya - seven of Mr Kadyrov's critics or rivals have been killed since last September.

If Mr Putin does not take these steps, the world can only conclude that he leads a government which, at the very least, tolerates the murder of its critics.

CNN's Matthew Chance reports on the Natalia Estemirova, and mentions President Dmitry Medvedev's statement through a spokesperson.  I haven't yet seen a direct Medvedev quote, though Reuters has collected a number of reactions from Carl Bildt, HRW, Amnesty International, and others.

Ms Estemirova had recently completed a report for Memorial documenting the burning of homes belonging to the families of suspected insurgents and extrajudicial executions in Chechnya in which Chechen law enforcement officials were alleged to have been involved.

The most recent example was the death of Abusubyan Albekov, a Chechen villager who was reported to have been gunned down in the Kurchaloi district after being detained by law enforcers on July 7. The abuses were also documented in a recent report by New York-based Human Rights Watch, which Estermirova worked closely with. (...)

Ms Denber said Ms Estemirova "was a monumental person in the human rights movement and we're totally shattered." "She was instrumental to telling the truth about what is happening in Chechnya. She was interested not in scandal but in real justice for people in Chechnya," Ms Denber said, adding she had actively encouraged victims of human rights abuses in Chechnya to seek justice in the European Court of Human Rights.

The Pikalyovo incident is a classic example of how the Kremlin makes decisions. The roles and script are assigned in advance. First, Putin gets demonstratively angry at one of his court oligarchs. Then, Putin makes a decision ostensibly "for the benefit of the people,"  but since his decision is based on information provided by the oligarch in question, the oligarch walks away with everything he wanted -- and more.

Why does Putin allocate state funds for uncompetitive factories and on terms that are kept secret from the public?

Today the OECD has published its Economic Survey of the Russian Federation for 2009.  The report essentially declares an end to the decade-long recovery since 1998, when the country enjoyed an undervalued ruble, spare production capacity and labor resources, and makes recommendations to government for urgent reforms in banking, exchange rate models, and regulatory frameworks for products and services.  The OECD sees a 6.8% contraction of Russia's GDP this year, followed by a predicted recovery of 3.7% for 2010.

Some of the recommendations appear pretty painful:  cut lending rates, allowing the ruble to depreciate, and tightening up lon government spending.  How can Russia build a better growth model to catch up after getting hit so badly by the crisis?  Even the OECD points to the primacy of rule of law:  "This [model] should be one based on innovation, investment, the accumulation of human capital and coherent implementation of the rule of law within a well regulated and competition‑enhancing market economy, rather than one largely driven by strong but temporary improvements in the terms of trade and the increasing reliance on state corporations with inadequate governance structures as well as ad hoc support of selected banks and corporations."

Rumyantsev said Tuesday that he suspected that the real reason for the closure last week was an article critical of Matviyenko that was posted on the site's magazine section on June 15, four days before the police warning.

"It was a very quick reaction," he said. "'Mein Kamp' was on the site for two years, and no one lifted a finger."

Complex Geopolitics

Lula displays appreciation for Chavez, a foreign policy that observers classify as nonconfrontational

By Sergio Leo in Brasilia
VALOR

In order to defend the insertion of Venezuela in Mercosur - action which was criticized and threatened to be rejected by the Senate - an ambassador devoted two days to visit congressmen in Brasilia. What was unheard of, in the diplomat's efforts to defend the Venezuelan, was his origin: he was not the ambassador of Venezuela in Brazil, but the office holder at the Brazilian embassy in the country presided by Hugo Chávez, Antônio Simões, who traveled to Brasília for the task. The senators were surprised - this is only an example of the Brazilian government's effort to keep the relationship with the neighbors in good shape.

CONTINUE READING ON ROBERT AMSTERDAM'S VENEZUELA REPORT.

"If the Opel deal does not go ahead, Russia's car industry is only going to survive