THE BRETON/GEROL NEWSLETTER
THE NEW ISTANBUL QUARTET
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| Angela Merkel, Vladimir Putin, Recep Erdogan and Emmanuel Macron October 27th, Istanbul ©President of Russia Website |
The
previously unannounced and relatively short-notice meeting in Istanbul between
Recep Erdogan, Angela Merkel, Emmanuel Macron and Vladimir Putin was formally
called to discuss the further developments in Syria, especially the situation
in the Idlib area. It has appeared however that such issues as Ukraine, arms
control and even the recent brutal murder of Saudi journalist Jamal Khashoggi
were on the agenda as well. Remarkably such important players as the US and
Iran were not invited. There are reasons to assume that Europe is trying to
find its own way and stand in the turbulent world of Trumpovian impulsiveness
and unpredictability. All four participants in the summit agreed that Syria
should maintain its territorial integrity and that the current conflict should
be resolved through a political solution. They disagreed, however, on the role
of Bashar al-Assad in the future of Syria. Merkel, Macron and Erdogan continued
to define the Syrian leadership as the "Assad's regime" while Putin
insisted that Syria is led by a legitimate government. On Idlib specifically,
Macron and Merkel were more fully briefed on the recent Russia-Turkey agreement
and, if only by their presence, gave it their blessing.
The Istanbul
meeting could be interpreted as a diplomatic success for Putin because it
recognized and legitimized Russia's role in Syria, as well as the validity of its
efforts to avoid a humanitarian crisis in the Idlib region.
Angela
Merkel also informed other summit participants that she decided to step down as
leader of Germany's ruling Christian-Democratic Party. She will though remain a
Federal Chancellor till the end of her mandate in 2021.
Recep
Erdogan can also consider himself a winner after that summit. He reminded his
guests that Turkey has accepted 3,5 million refugees from Syria. He requested
more financial aid from those countries where the refugees truly wanted to settle.
With a sarcastic smile President Erdogan looked at Angela Merkel and stated
that if Turkey will not get financial assistance from the EU he will have no
choice but to let the refugees go into Europe. Macron who, in the absence of
Theresa May due to Brexit and the just announced departure of Merkel, truly
feels as the sole remaining leader of Europe, essentially agreed with Erdogan.
A French
observer concluded that the Istanbul summit confirmed that Europe is looking
for more balanced relations with Russia, less dependence on the US and a bigger
role in the international decision-making process.
--o--
JOHN BOLTON IN MOSCOW
The US
President's National Security Adviser John Bolton's October visit to Moscow was
unusual in the sense that Bolton alone conducted negotiations with the Minister
of Defense, the Minister of Foreign Affairs, the Russian National Security
Chiefs and Vladimir Putin himself. As Sergei Lavrov, Russia's Foreign minister
noted with a touch of sarcasm, "John personified everyone who matters in
Washington".
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| Vladimir Putin receiving John Bolton at the Kremlin October 23rd ©President of Russia Website |
The main
reason for the visit was the Trump Administration's announcement that the US
will be pulling out of the INF Treaty. (The Intermediate-Range Nuclear Forces
Treaty is a 1987 arms control agreement between the United States and the
Soviet Union that was signed by Presidents Reagan and Gorbachev).
According
to that treaty the US scrapped 800 missiles and the then USSR 1,800. Step by
step both sides began to build those missiles again. For years Washington
accused Russia of violating the treaty. The Obama administration decided,
however, to maintain the treaty. The reasoning then was that the outright
annulment would be the worst of two evils. Since Bolton, a well-known opponent
of any arms reduction deals with Russia, joined the Administration, the
situation changed radically. Moscow relented and admitted that the treaty is
imperfect, but emphatically denied violating it. Bolton insisted during the
negotiations that any future solutions to the problem of Intermediate-Range
Nuclear missiles should also include China that has the largest arsenal of such
weapons. China meanwhile refuses even to discuss the issue according to the
statement from the Chinese Foreign ministry.
Some
experts with more nuanced views on the issue believe that though the recent
developments indicate that there is an evident sliding towards a Cold War
stance, it is still too early to talk about a doomsday scenario. Putin and
Trump will meet in Paris on November 11 and most likely some new deal will be
arranged.
John Bolton
used his Moscow trip to talk about the whole spectrum of US-Russia relations.
In his meeting with Russia's Defense Minister Sergei Shoigu, it was discussed
how to avoid direct engagement between two nuclear superpowers in conflict
zones around the world, particularly in Syria. The coordination of
anti-terrorist efforts was also discussed with Nikolai Patrushev, Head of Russia’s
Security Council.
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| Putin-Bolton discussions October 23rd ©President of Russia Website |
President
Putin and John Bolton met for almost two hours which in itself a sign that the
talks were detailed and wide-ranging.
At a press
conference after the meetings Bolton mentioned that the US will put brakes on
the next set of sanctions against Russia.
--o--
UKRAINE;
SANCTIONS FROM THE OTHER CORNER
On October
22nd President Putin adopted a decree that paves the way for Russia to impose
sanctions on Ukrainian individuals and legal entities, in response to
“unfriendly acts on the part of Ukraine”. This follows on Ukraine’s own decision
to end its friendship treaty with Russia as well as other specific actions by
Ukraine against Russian interests in Ukraine.
The
specific details of the measure still have to be worked out, but its
significance is probably more in what it reveals about the current thinking in
the Kremlin. Despite everything that is wrong in the current relationship
between Ukraine and Russia, Russia remains Ukraine’s most important commercial
partner, as an individual country. The official trade balance is in Russia’s favour.
The new measure may eventually affect Russia’s own access to the Ukrainian
market should Ukraine respond in kind. Clearly, Moscow has concluded that,
politically it had to respond to Ukraine and that, economically, the risk of
losing a share of the Ukrainian market is manageable and that losing Ukrainian
suppliers is even more manageable. At the beginning of the current conflict,
Russia was dependent on Ukraine for some military supplies, that is no longer
the case. As for the transit of Russian gas through Ukrainian territory,
despite Ukrainian legal victories against Russia’s Gazprom or in fact because of them, Russia
has little to lose from the current arrangement and would welcome any
development that reinforces the case for NordStream II, the undersea pipeline
that will strengthen the process of bypassing Ukrainian territory.
--o--
UKRAINE: DISSENT
IN THE MODERN ERA
On
October25th, Oleg Sentsov received the European Parliament’s Sakharov Prize.
Sentsov is a Ukrainian film director, sentenced to 20 years in prison for
“plotting terrorist acts” against the Russian “de facto” rule in Crimea.
Amnesty International has described the court process as “an unfair trial
before a military court”.
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| Oleg Sentsov, 2015 ©Wikipedia |
Announcing
this year’s laureate, Parliament President AntonioTajani said: "Through
his courage and determination, by putting his life in danger, the film maker
Oleg Sentsov has become a symbol of the struggle for the release of political
prisoners held in Russia and around the world.
"By
awarding him the Sakharov Prize, the European Parliament is expressing its
solidarity with him and his cause. We ask that he be released immediately. His
struggle reminds us that it is our duty to defend human rights everywhere in
the world and in all circumstances."
Moscow’s
official response was that the decision to award the prize to Sentsov was
“absolutely politicised”.
--o--
UKRAINE-RUSSIA: GOOD NEIGHBOURS, STILL
The
Constantinople Patriarchate’s decision to award the tomos of autocephaly to the
Orthodox Church of Ukraine continues to create heated discussions. A well-known
Ukrainian journalist was even quoted as saying that this could eventually lead
to the dismemberment of Ukraine. Thus far, there may have been a few scuffles
among various factions in proximity of religious buildings, but nothing too
serious. The full implementation of the Constantinople decision may however
bring more trouble.
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| President Poroshenko receiving Constantinople exarchs October 16th, Kyiv ©President of Ukraine Website |
To the
supporters of the Moscow patriarchate, the Constantinople decision to lift the
anathema against the two leaders of the hitherto un-recognized Kyiv based
churches is even more unacceptable as they argue that by doing this the
Patriarch of Constantinople has himself incurred anathema. In the process, the
Constantinople Patriarchate, whose followers include Ukrainian Churches in
North American, is also establishing a more active presence in the territory of
Ukraine. It is, however, clear that the other patriarchates of the Orthodox
Church are not supportive of Constantinople and that the ensuing open conflict
between the Patriarchates of Moscow and Constantinople will create major rift
in the Orthodox world for the foreseeable future.
Whereas the
political objective of the pursuit of the creation of an autocephalous
Ukrainian church was to create greater spiritual distance between Ukrainian
believers and the Patriarchate of Moscow, it looks as though there is still a
strong bond between the people of Ukraine and Russia, at least in one
direction. The latest opinion polls conducted by reputable polling agencies,
the Kiev International Institute of Sociology and the Levada Centre in Moscow,
are in fact somewhat surprising.
48% percent
of Ukrainians hold a positive attitude toward Russia, according to survey
results published in early October, up from 37% percent last year.
By
contrast, only 32% of Ukrainian respondents said they hold negative views of
Russia, down from 46% last year.
Meanwhile,
only one-third of Russian respondents expressed positive attitudes towards
Ukraine this year, the independent Levada Center reported, and a majority of
Russians said they viewed Ukraine negatively (55%).
--o--
INTERNATIONAL INVESTORS CONSIDERING UZBEKISTAN
Uzbekistan,
Central Asia’s most populous country, has been mainly known for its cotton
production and tourism opportunities. Yet, the country is rich in gold, silver,
copper, oil, natural gas, tungsten and uranium. Some international companies,
including Canadian ones are already present in Uzbekistan. Very soon however
the country is planning to change its economic strategy from a heavy reliance
on natural resources towards modern industrialization, development of an IT sector
and related services. The administration of President Shavkat Mirziyoyev, who
replaced the long-serving dictator Islam Karimov in 2016, introduced a more
liberal investment climate, free exchange of currency and tax free areas of
development. The country wants to build several nuclear power stations and
related industries. During President Putin’s recent state visit to the country,
the two presidents launched the construction of a Russian-supplied nuclear power
plant by initiating the process through which the location of the plant will be
decided. France may still be hoping to participate in Uzbekistan’s nuclear
programme. President Mirziyoyev was in France in early October. Tashkent is
also looking to resurrect its airplane manufacturing base that existed when
Uzbekistan was a Soviet republic.
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| Presidents Putin and Mirziyoyev October 19th, Tashkent ©President of Russia Website |
In addition
to the greater activation of the relationship with Russia, that was signalled by
Putin’s visit, Uzbekistan is simultaneously developing its relationship with neighbouring
Kazakhstan. Until recently, the two countries were perceived more as
competitors for the regional leadership in Central Asia. Indications are that a
strong cooperation atmosphere has already set in under the new Uzbek
leadership. There are even rumours that Uzbekistan may consider acceding to the
Eurasian Economic Union. This could relatively quickly lead to a major increase
in trade flows within the Union as well as provide a significant boost to economic
growth both in Uzbekistan and Kazakhstan.
As an illustration of the new political atmosphere, the Presidents of Russia, Kazakhstan and Uzbekistan had an informal meeting in a small town in Kazakhstan, less than 25 kilometers from
Tashkent.
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| Presidents Putin, Nazarbayev and Mirziyoyev October 20th, Saryagash, Kazakhstan ©President of Kazakhstan Press Service |
Uzbekistan has
the advantage of offering a skilled and educated labor force for new industrial
and technological projects. It has a solid scientific base with a network of
universities, technical colleges and various institutes. The development
program for the next decade is ambitious and challenging. According to the
Asian Development Bank Uzbekistan has a good potential to become the next Asian
tiger.
--o--
PERSON OF THE MONTH: ELVIRA NABIULLINA, CHAIRWOMAN OF THE BANK OF RUSSIA
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| Elvira Nabiullina ©Wikimedia |
Elvira
Nabiullina was born on October 29, 1963 in the city of Ufa, in Russia’s Ural
region. She is a Tatar, which is Russia’s largest ethnic minority.
In 1986
Elvira Nabiullina graduated from the prestigious Moscow State University with a Master’s degree in Economics. She is broadly regarded
as unusually brilliant as well as a hard worker.
In the
1990’s, Nabiullina worked in various private sector jobs, including as the
Chairwoman of a successful Promtorgbank. She then took the position of Vice
President at the newly-created Center for Strategic Research, an
economics-related think tank formed to advise Vladimir Putin, who was at that
time running in his first campaign in a Russian presidential election. The
Center developed what is known as Strategy 2010, a set of reforms designed to
fix the damage of the crises of the preceding decades in order to bring back
Russia to more stable development.
Early in
the 2000's Nabiullina began to rise to prominence when she worked with Herman
Gref, a noted liberal leaning reformer, head of the Ministry of Economic
Development and Trade. Nabiullina served as First Deputy Minister at the
Ministry from 2000 to 2003. Her work greatly contributed to seriously curbing
Russian inflation.
From 2003
to 2007 Nabiullina was in charge of Center for Strategic Research and was
instrumental in helping Russia for a highly prestigious presidency of the G8
(2006). A year later Nabiullina was
selected by Yale University as one of 18 “emerging leaders” to participate in
its World Fellows program.
The same
year Herman Gref stepped down as
Minister to head Sberbank, Russia’s largest private bank. Nabiullina replaced
him as Minister of Economic Development and Trade.
Elvira
Nabiullina is known for her ideological neutrality. She also was not afraid to
clash with such influential men as Alexei Kudrin and Dmitry Medvedev.
To combat
rapid inflation, Nabiullina boosted Central Bank interest rates to 17%, drawing
in deposits both domestically and internationally and directing these funds to
refinance foreign currency loans. The market also helped correct itself, with
Russian suppliers, for instance, replacing imports of American beef with
Brazilian beef, where the exchange rate was more favorable. In addition, higher
prices and government programs encouraged investment in Russia’s food industry,
bringing down prices by localizing production.
In 2013 she
was appointed as the Chairwoman of the Bank of Russia. In that capacity she
managed to bring down inflation to 4%.
Nabiulina
is known for her outspoken style and cold-blooded professionalism, but also
with taking controversial decisions.
In 2014
Forbes magazine named her one of the most influential women in the world and
noted that she was instrumental in keeping the ruble exchange afloat during the
difficult aftermath of the Ukrainian crisis and keeping Russian economy
relatively steady without a slide into major recession. In 2017 British magazine The Banker picked
Nabiulina as "Central Banker of the Year in Europe". In 2018 she gave
a memorable and highly instructive lecture to the IMF gathering in Washington
DC.
BRIEFLY NOTED
UK-RUSSIA
In
connection with the Skripal affair, BGN wrote in March 2018: “in Russia, the Intelligence services, rich
oligarchs, criminal world and some echelons of power often intersect in unusual
ways. It is not unlikely that this brazen assassination attempt came from
within those murky structures and could have been designed as an act of
vengeance or an act of sabotage, or even an act of insubordination.”
In an
October 25th story that did not attract a lot of attention a BBC investigative
journalist wrote “Far from living quietly in retirement, Skripal had been
travelling extensively across Europe and to the United States providing
information to Western security services about Russian intelligence, including
its alleged links with the mafia”.
The BBC
story does not draw the conclusion that Skripal was directly targeted by the
Russian mafia, but it raises a number of interesting questions about mafia
interest in targeting him.
For more
details, please see:
ARMENIA
Armenian
Prime Minister Nikol Pashinyan, who only recently came to power as the result
of a popular but peaceful revolution, announced his resignation on October 16th.
that he was resigning from his post in order for parliament to be
dissolved and an early election held. This move was done in order to obtain a
clear majority in the next parliamentary elections and to have a legitimate
mandate to implement a cardinal reform of the political and administrative
structures of the country. Pashinyan
currently enjoys a high popularity rating, unlike the traditional parties
currently holding a majority in Parliament.
GEORGIA
Georgians
will choose a new president in a runoff second round after a very close,
inconclusive first-round vote. The first round election was labelled by international
observers as competitive, but clouded by "an unlevel playing field" (without
specifying in whose favour, but implying the ruling party)and private-media
bias.
French-born
former Foreign Minister Salome Zurabishvili, who has the backing of the ruling
Georgian Dream party, will face opposition candidate Grigol Vashadze in the second
round to be held by December 2nd.
Should the
opposition candidate win in a second round, the possibility of bringing back former
president Mikhail Saakashvili as a political star could become a reality.
TURKMENISTAN
This
Central Asian country is experiencing an acute shortage of basic food products.
The situation is driving people from provinces to the capital city of Ashkhabad
where they can still find some products. The authorities are, however, trying
to prevent people from taking large quantities of food from the capital by
setting up police roadblocks. According to local sources, police officers also
demand bribes. The overall situation in the country is worrisome.
MOLDOVA
The
Moldovan Constitutional Court has suspended the powers of the country's
Russia-friendly president amid a standoff over ministerial appointments with
his opponents in the pro-Western government.
The court
ruled that President Igor Dodon’s powers should be suspended because he failed
to approve the candidates put forward by Prime Minister Pavel Filip’s for Minister
of health care, social protection, and family, and for Minister of agriculture,
regional development, and environmental protection.
As well,
the country was visited by the President of Turkey Recep Erdogan who openly
expressed his support for president Dodon's political stance and promised to
provide Moldova economic assistance and investments.
MACEDONIA
Macedonia's
parliament has taken a critical step toward renaming the country North
Macedonia, a move that would end a decades-long dispute with Greece and pave
the way for Skopje to join NATO and the European Union.
With not a
vote to spare, a bare two-thirds majority of 80 of the Macedonian parliament's
120 members voted for the name change after a tense week of debate, back-room negotiations,
and delays that pushed the vote into the late hours of October 19th.
Amendments
will now be drafted to incorporate the new name into Macedonia's constitution,
after which another parliamentary vote will be required to enshrine the changes,
most likely in January.
Ilya Gerol,
former foreign editor of the Citizen in Ottawa, syndicated columnist in
Canadian, US and European media specializing in international affairs. His
particular area of expertise includes Russia, Eurasian Economic Union, Eastern
and Central Europe. Ilya Gerol has
written several books, one of them, The Manipulators, had become a textbook on
relations of media and society.
During his
career in the Canadian Foreign Service, Gilles Breton had three assignments at
the Canadian Embassy in Moscow. His first posting there began during the Soviet
period, in 1983. His last was from 2008 to 2012 as Minister-Counsellor and
Deputy Head of Mission. He also served as Deputy Director responsible for
Canada’s relations with Russia from 2000 to 2008. As an international civil
servant, he was Deputy Director of the OSCE Office for Democratic Institutions
and Human Rights in Warsaw from 1994 to 1997.
Gilles Breton
also currently serves as Chairman of the National of the Canada-Eurasia-Russia
Business Association. The views expressed in this newsletter exclusively
reflect the opinion of the authors.
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