Georgia Lashes Out at Russia at U.N., Moves Towards NATO

While the maniacal dictators of Venezula and Iran, Russia’s allies, were attacking the United States at the U.N. last week, America’s new ally Georgia was returning fire against Russia. Kommersant reports on Russia’s total foreign policy failure in Georgia, driving the country right into the welcoming arms of NATO:

Saakashvili made his eyebrow-raising appearance at the Friday session of the UN General Assembly in New York. During his 20-minute expose of Russia’s destructive role in the restoration of Georgian territorial integrity, he demanded that Moscow withdraw its peacekeeping troops from Abkhazia and South Ossetia immediately, since “their mission has nothing to do with maintaining peace.” Then the Georgian president criticized Kremlin policy toward Georgia. “Those regions,” he said, referring again to Abkhazia and South Ossetia, were annexed by our neighbor to the north, Russia, which supports their inclusion as part of it, intentionally mass issuance of Russian passports in violation of international law… The residents of the disputed regions live under the bandit occupation of Russia. I doubt that there is anyone in this auditorium who would tolerate that type of interference on their territory.”

Saakashvili’s strong words were unprecedented. Russia had never been accused of “annexation” before, much less from the floor of the UN. Previously, Tbilisi had criticized Moscow through Georgian Defense Minister Irakly Okruashvili and the fact that such serious accusations are now coming from the head of state is an indication that Georgian-Russian relations have reached a new level of hostility. According to information obtained by Kommersant, the U.S. administration asked Saakashvili to tone down his statements. Nonetheless, such phrases as “bandit occupation” and “accomplices of the Russian peacekeepers” remained.

The Georgian president’s boldness is obviously a byproduct of Tbilisi’s recent diplomatic victory. Before Saakashvili’s UN appearance the top foreign officials of the 28 member states of NATO decided to integrate Georgia more closely into their ranks and approved the transition to a phase of “intensive dialog” with the country.

Former Czech president Vaclav Havel coined the term “intensive dialog.” The phase implies closer integration into NATO and is essentially the penultimate step toward membership in the alliance. The Czech Republic, Poland and Hungary were the first country to complete the intensive dialog phase successfully and the phase has been a mandatory step for all entrants since 1997. Thus Georgia, which has always made its desire for membership clearly known, has received the signal that its wish may become reality. Georgia is the first, and so far only, CIS country that can boast of this close relationship with NATO. NATO’s step is exceptional also because one of the conditions for accession to the organization is the lack of conflicts on the territory of the candidate state. Georgia has two conflict zones, Abkhazia and South Ossetia, and armed conflicts breaks out in them from time to time. It seems Brussels has decided to close its eyes to that detail.

Georgian authorities are unabashedly happy and they are certain that nothing will interfere with their speedy progress in NATO. “We are close to NATO membership,” Saakashvili said yesterday as he congratulated Georgian judoists on their victory over their Russian opponents in a world championship finals match in Paris. “The Russian judo team has created certain problems for the Georgian sportsmen, just as Russia is creating problems for Georgia on its way to NATO. But Georgia is already in the semifinal in that question, and nothing will stop it from going to the final.”

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The Old Neo-Soviet Switcheroo

Diligent watchers of Russia may recall that some time ago the Kremlin made noise with the claim that Russia’s GDP would double in 10 years. Now that this goals has proved, to put it mildly, elusive, the Kremlin has changed its approach, as is evinced from the following report by the Moscow News (pay close attention for the classic Neo-Soviet sleight of hand):

Russian Finance Minister Alexei Kudrin said on Sunday, Sept. 24, that in his opinion it is possible that Russian economy would be equal in strength to the financial systems of the United States of Germany. In an interview with Russia’s Channel One, Kudrin said: “We want to create a system that would be equal in strength to the economies and financial systems of the United States or Germany. I have to say that this distance can be covered in ten years in the country conducts a very skilled financial policy.” Kudrin stressed that over six years — from 2000 to 2006 — Russia has gone up eight levels in the rating system of the world’s largest ratings agency. It started out with one of the lowest ratings, which correspond to financial crisis, and worked its way up to investment-grade rating. The minister noted that it still has seven steps to go to the highest rating, which is held by the United States, France and Germany. To reach this rating is an ambitious task, but one that Russia can surely fulfill, Kudrin said. The Russian minister also stressed that a new default would be impossible in Russia. “There will be no default under any conditions,” Kudrin said. He pointed out that the country has a “serious protection from all kinds of defaults” – the Stabilization Fund, which collects windfall oil revenues. Earlier on Friday, the minister explained that Stabilization Fund will be divided into reserve part, which is going to amount to 7-10 percent of the GDP, and the fund of future generations, which will accumulate all the money above of this sum. “Today we already have a fund with a size of 6.4 percent of the GDP,” Kudrin said on Sunday. He explained that soon the 7 percent of the GDP level will be exceeded and the fund of future generations will be spun off from the Stabilization Fund. “We will put the money in securities that have proved their reliability,” the minister noted.

Did you see it? Smooth, huh? So now we’re no longer talking about actual economic growth, we’re only talking about Russia’s credit rating matching that of the West. In this way, the United States and Germany can be neatly lumped together as a single target for Russia to aim at, even though the economy of the United States is fives times larger than that of Germany.

And what, pray tell, does the government of Russia want to do with a really high credit rating (assuming it can get one — remember, Kudrin is the man who swore Russia’s admission to the WTO was a done deal at the St. Petersburg G-8 meeting, so nothing he says is, excuse the pun, creditworthy)? How will such a credit rating help it to pump oil out of the ground (it clearly has no intention of developing a consumer economy since that would empower a class of entrpreneurs, and it just got finished sending their key figurehead to Siberia)? This remains unclear.

But in any case, it’s Russia’s plan to have the same credit rating as the United States and Germany some time over the course of the next ten years, while its people continue to wallow in abject poverty and literally become extinct.

Quite some plan, isn’t it? La Russophobe dares to wonder what’s next, when that too proves beyond Russia’s grasp. Maybe Russia will then move on to exceeding Germany and the United States (put together) in consumption of alcohol. But with Russia’s recent disastrous failure in trying to impose new alcohol regulations in mind, that too may be a pipe dream.

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Russian Bear Devours Russian Stock Market

Investors in the Russian stock market are being battered by tens of millions of dollars in losses.

Last Friday, the RTS Index of the Russian Stock Market fell 2%. In yesterday’s trading, the RTS lost nearly 3.5% of its value, plunging from above 1500 at the start of the day’s trading to 1450 by its close, as the graph below illustrates:

At the end of August, the RTS Index crested just above 1650, meaning that it has shed 250 points in one month — over 15% of its total value — as shown below:

The Moscow Times reported that “investment funds focused on Russia and the CIS lost $11 million in the week ending Wednesday and $18.5 million in the week ending Sept. 13, according to figures from Emerging Portfolio Fund Research.”

These losses are coming as the price of oil falls, something Americans are now seeing at the gas pump. As La Russophobe has said before, Russia now has a vested fundamental interest in keeping the price of oil high, meaning that it has a strong incentive to inflate the price of oil by causing turmoil in the Middle East. Thus, it’s support for terrorist organizations like Hamas and Hezbollah, as well as for rogue regimes like Iran and Syria, is not suprising. New policies to deal with this worsening horror are needed.

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