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Strategies & Market Trends : Investment in Russia and Eastern Europe

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To: Jon Koplik who wrote (1071)11/12/1999 7:03:00 AM
From: CIMA   of 1301
 
Russia Unleashes Final Offensive on Chechnya

Summary

After weeks of demanding that they alone be allowed to determine
the course of the 2 and a half month Chechen conflict, Russia's
military leadership is suddenly indicating that it is willing to
shorten the war. On its face, it appears that the military is
capitulating to intense domestic pressure. But the military will in
fact use the calls for negotiations as cover for an intensified
offensive. Winter is setting in. The Russian Army is strained. And
it is now poised to seize victory quickly, most likely leveling the
capital, Grozny.

Analysis

Defense Minister Igor Sergeyev told the Interfax news agency on
Nov. 11 that the Russian offensive in Chechnya might be over by the
end of the year. Shortly after, Foreign Minister Igor Ivanov told
reporters that the Russian government was eager to end the conflict
quickly and "start the process for a political settlement."

Until now, the Russian military has very publicly insisted that it
be allowed to run the war its way -- and complained bitterly at
even the hint of interference from civilians. Both men's comments
contrasted sharply with a Nov. 10 statement by Gen. Viktor
Kazanstev that the conflict could continue for as long as three
years -- unless the full might of the military was unleashed, in
which case the war would take one week.

But the latest turn of events does not in fact point toward
negotiations between Moscow and Grozny, as Western governments are
increasingly demanding. Both Russia's military and civilian
politicians have said that the only successful resolution is the
reclamation of Chechnya. Even leftist political leader Grigory
Yavlinsky, the harshest critic of the campaign, has demanded that
the rebels lay down their weapons before any peace talks begin. As
the rebels are unlikely to do this, there is little danger of this
sort of political solution.

Even though Russian forces are enjoying a vast advantage over the
rebels, internal and external pressures are mounting to bring a
quick end to the conflict. The Russian military has Grozny in a
state of siege, subject to air, rocket and artillery attacks. Novye
Investia reports as many as 100,000 Russian troops are deployed in
the breakaway republic, many occupying the Terek range above
Grozny, and surrounding Chechnya's second largest city, Gudermes.

Some of this military advantage will disappear with the onset of
winter. Some of Russia's front-line aircraft -- such as the Su-25
and Su-24 warplanes, and the MI-25 attack helicopters -- are not
well-suited for winter sorties. In addition, a long, cold winter
siege is both expensive for the army and hard on personnel. These
concerns argue for pushing the military campaign forward, and soon.

Politically, the war's popularity is waning in Russia and it is
increasingly time to find and claim victory. The chief sponsor of
the war, Prime Minister Putin, has been buoyed by the conflict,
which remains relatively casualty-free. Putin's popularity among
voters has reached a record level. The private Public Opinion
Foundation reports 29 percent of voters intend to vote for Putin in
the presidential election, Agence France Press reported Nov. 3.
Putin does not want to see the reputation of his war tarnished.

Yet on the cusp of Duma elections, public opinion may be turning.
Though political polling in Russia is often unreliable, only a
third of Russians surveyed in a recent poll said that they believed
their forces would win the conflict. In another poll, two-thirds of
Russians said that they were concerned or "ashamed" about the
conflict, the London Guardian reported Nov. 11. Civilian
politicians in Moscow are also growing squeamish about Western
calls for negotiations with the rebels. Alarmed at civilian deaths
and the flow of refugees, the European Union is increasing pressure
on Russia to halt.

The Europeans in turn are pressuring the United States to confront
Russia. State Department spokesman James Rubin accused Russia on
Nov. 10 of violating the Geneva conventions. The Organization for
Security and Cooperation in Europe (OSCE) is reportedly planning to
force the issue with Russia at an upcoming summit in Istanbul,
Turkey on Nov. 17. More than mere criticism, politicians in Moscow
are worried about the eventual impact on Western investment and
loans.

But there is no way that the Russian military will let politicians
snatch defeat from the jaws of victory.
[ stratfor.com ] In advance
of any kind of political settlement, the military is likely to push
forward -- decisively -- to secure its gains and grab as much of
Chechnya as possible. The military is eager to claim the victory it
was denied in 1996 when one of their own, Gen. Alexander Lebed,
arrived for truce negotiations; the generals are not about to let
politics interfere in Grozny this time. Playing the leading role in
Russia's foreign policy, the military-security apparatus is equally
disinterested in how this all plays in the West.

The military is now likely to break out of its combination of siege
and air strikes to unleash a renewed offensive against three
targets: the cities of Gudermes, Grozny and Bamut. The
second-largest city in Chechnya, Gudermes is surrounded and troops
are reportedly set to occupy the city. Tanks are now within range
of Grozny, according to the military. And 200 tanks are reported in
the area of Bamut. Apparently fearing a new offensive, President
Aslan Maskhadov, has intensified calls for talks.

From there, Russian forces could easily push remaining rebels into
the southern mountains, isolating them in the winter and picking
them off as opportunities allow. This would also easily set the
stage for eventual Russian probing -- if necessary -- along the
Georgian border. Instead of peace, renewed war is in the offing.

(c) 1999, Stratfor, Inc.
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