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Strategies & Market Trends : Investment in Russia and Eastern Europe -- Ignore unavailable to you. Want to Upgrade?

To: Paul Berliner who wrote (1060)	9/1/1999 1:56:00 PM
From: Netwit	Read Replies (1) \| Respond to of 1301

That and a potential market. I just figure it can't go down much from here.

To: Paul Berliner who wrote (1060)	9/14/1999 12:35:00 AM
From: CIMA	Respond to of 1301

Who Gains From the Moscow Apartment Bombings? Summary: The explosions in Moscow during the past week are among the most deadly in Russia's recent past. The Russian administration blames the Chechens, but we will not attempt the impossible task of assigning blame. Rather, we will discuss who could benefit from the bombings. We can find no evidence that Chechen rebels - or the Russian mafiya, another suspect group - would benefit from bombing Moscow apartment buildings. Only political forces in Moscow would seem to benefit. Analysis: Explosions in two apartment buildings in Moscow have claimed over 200 lives in the past five days. No group has claimed responsibility and the police have made no definitive statements indicating they have specific suspects under investigation. While there is not enough information to assign blame for these bombings, we can eliminate some of the suspects and discuss who could gain - namely, political forces in Moscow. The target and death toll from the recent spate of bombings in Russia are inconsistent with previous acts of political or criminal retribution dating from 1996. Bomb attacks in Russia are forms of political protest, gang warfare and ultra-nationalism. Hence, the target is defined for each case, inhibiting collateral damage. Strictly political bombings occurred in Moscow immediately before and after the 1996 presidential elections, killing four and injuring dozens in separate incidents. The highest toll on lives lost in the republics until the recent attack was in North Ossetia in 1998, with 53 dead and 100 wounded. The current casualty count for the first bombing on September 9 is 92, higher than any single bomb attack in Russia since World War II. Russian leaders, including Moscow Mayor Yuri Luzkhov, have chosen the Chechens as the preferred scapegoat. Interior Minister Vladimir Rushailo, who was appointed head of the investigation into the bombings, has also announced that his prime suspects are the Chechens. Although Prime Minister Vladimir Putin's September 13 statement that the bombing was "a clear terrorist act" did not specifically name the Chechens, proof that they were responsible would legitimize further force in Chechnya. He said if a link is found between the bombings in Moscow and the fighting in Dagestan, the "federal government will consider itself within its rights to use all resources at its disposal to rebuff the aggression." Russians may be willing to believe that Chechens are attacking in Moscow as well as the Caucasus, but it is highly unlikely. In his statement of denial, rebel leader Shamil Basayev said, "We had nothing to do with the explosion in Moscow. We never kill civilians. This is not our style." Based on the group's activities in Dagestan, Basayev is correct. Generally, Chechen forces have targeted military and police forces. The bombing early this month of Russian military housing in Buinaksk killed 64 people, including members of military families. The target, though, was clearly a military installation. Chechen militants also have not attacked regions outside the ones they intend to claim - Dagestan and Chechnya. And finally, since the Islamic rebels have a spokesman and a press center through which to publicize their fight, we would expect them to claim their actions; they have not. These reasons lead us to believe that the Islamic militants led by Basayev are not the perpetrators of the Moscow bombs. Organized crime is another potential but improbable suspect. Russian organized crime is motivated by profit and expansion. The mafiya is not known to commit mass murders, especially through such overt actions as bombs large enough to demolish entire apartment buildings. According to an FBI report, the Russian mafiya prefers economic crimes such as fraud, extortion, theft, drug trafficking and contract killing. The apartment building bombs were not tightly controlled to target one or a few specific targets. Reports of typical mafiya activities do not suggest that these explosions were coordinated by the Russian organized crime element. Large-scale bombings against civilian targets simply do not fit into the Russian mafiya's modus operandi. Having eliminated both the mafiya and Chechens as likely suspects, it is now interesting to question who else could gain from the bombings. With President Boris Yeltsin in his last year in office and parliamentary elections due this December, the political situation in Russia is tense and agitated. The war in the Caucasus adds to the situation, and a Chechen bombing crusade could give Russia license to execute a full force campaign against Chechnya. The Moscow bombings could also push the Duma to declare a state of emergency in the outlying regions. Preliminary debate on how to enforce such a condition is scheduled for September 14. Until recently, most of the nation was strongly against this type of action. Speaker of the Federation Council, the upper house of parliament, Yegor Stroyev, firmly opposed emergency measures due to the situation in Dagestan. However, after the second Moscow apartment block bombing, he said there was "a need to consolidate the legal base for combating the rampage of terrorism and crime." Speaker of the lower house, the State Duma, Gennadiy Seleznev, said September 13 that the Duma would begin its September 14 meeting by discussing a draft law on regulating a state of emergency in some regions. A state of emergency would interfere with December parliamentary elections. This could benefit Yeltsin, who would like to see the elections postponed until he can ensure a loyal successor. Yeltsin's opponents, such as former Prime Minister Yevgeny Primakov, have long feared that Yeltsin would call a state of emergency for political gain. The recent bombings could give him the excuse to do this legitimately. __________________________________________________ SUBSCRIBE to FREE, DAILY GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com or send your name, organization, position, mailing address, phone number, and e-mail address to alert@stratfor.com UNSUBSCRIBE FROM THE GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com ___________________________________________________ STRATFOR.COM 504 Lavaca, Suite 1100 Austin, TX 78701 Phone: 512-583-5000 Fax: 512-583-5025 Internet: stratfor.com Email: info@stratfor.com ___________________________________________________ (c) 1999, Stratfor, Inc.

To: Paul Berliner who wrote (1060)	9/28/1999 12:59:00 AM
From: CIMA	Respond to of 1301

Russia Tries to Force Georgia's Cooperation Summary: Relations between Russia and Georgia have deteriorated over the past week since Russia's decision to lift a 1994 border security arrangement with the breakaway republic of Abkhazia, thus opening the northward route from separatist Abkhazia. To Georgia's chagrin, this open border allows for a substantial increase in traffic flow, including commerce and weapons, between Russia and Abkhazia. This is Russia's reply to Georgia's failure to guard its northern border with Chechnya and Georgia will now be made as vulnerable as it has made Russia. Analysis: Russia's decision on Sept. 9, 1999, to lift border controls on the separatist region of Abkhazia has raised Russia- Georgia tensions at a time when cooperation is critical. Russia's sudden maneuver is clearly timed to push Georgia toward a more cooperative policy on Chechnya. At the height of an air campaign in Chechnya, Russia has opened the northward route from the separatist Abkhazia, doing its best to coerce Georgia into cooperation. Georgia's response to Russia's provocation could mold interstate relations for the near-term. Previously, Russia oversaw border policing in Abkhazia's north, while maintaining a U.N.-backed contingent in Abkhazia's south. Though Russian peacekeepers will stay on the buffer zone on the Abkhaz-Georgia border, Russian border police will no longer monitor the north. Consequently, Abkhazia and Russia share an open border, allowing Abkhaz separatists to foster trade and military contact in Russia and the North Caucasus. This could potentially bolster Abkhazia's defenses against Georgia. Abkhazia was an autonomous republic administered by Georgia until a bloody, yearlong war ended on Sept. 27, 1993. More than 3,000 soldiers from the Georgian army were killed, along with 7,000 civilians of Georgian, Russian, Armenian and Abkhaz nationality. Over 300,000 (60 percent) of Abkhazia's pre-war population, most of whom were Georgian, fled the region and sought asylum elsewhere. Georgian President Eduard Shevardnadze portrays this conflict similarly to the ethnic cleansing in Bosnia, though lacking international sympathies. Since 1994, Russian forces have patrolled the Georgia-Abkhazia border in a peacekeeping capacity under the U.N. Observers' Mission in Georgia, and maintained a cordon between Russia and Abkhazia. Russia decreased its military presence last July and demobilized the remaining 1,800 forces along Georgia's borders with Chechnya and Turkey, at the urging of the Georgian government. Barring any regional conflicts, Georgia's military and police structure could have adequately protected its own borders. However, with the onset of war in Chechnya, the situation has changed. Georgia does not have the military capacity or the transportation facilities to seal its border with Chechnya per Russia's request. Georgia's reluctance to cooperate in the war effort, coupled with President Shevardnadze's amicable relations with Chechen Aslan President Maskhadov, has polarized Russian-Georgian interests. On September 9, Russia unilaterally annulled bilateral resolutions, in place since 1994, for securing the northern borders of Abkhazia and Azerbaijan. Georgia's foreign ministry was informed by memo more than a week later. Caucasus Press judged the memo to be a thinly veiled threat for noncooperation with Russia along the Georgia-Chechnya border. At present, Abkhazia has an open border with Russia. Georgia does not have the material capability to restore the northern Abkhaz border or deploy troops along the 80 km border with Chechnya. Nor does Georgia have the political leverage to compel Russia to reinstate its border resolution, or maintain economic sanctions on Abkhazia. By opening its southern border with Abkhazia, Russia is challenging Georgia's sovereignty and mocking its military self- sufficiency. In reply, Georgia has a variety of options. It can fight back diplomatically and continue its appeals to the OSCE and Council of Europe to remove four of Russia's last military bases from Georgia. Georgia could continue to leave its border with Chechnya unguarded, risking an influx of refugees and rebels. Or Georgia could do the politically unconscionable and assist Russia in its war effort, cooperating to capacity with Russian troops and fortifying the Georgian-Chechen border. Dagestan, Ingushetia and North Ossetia have all thrown the welcome mat down for Russian forces, making the quarantine of Chechnya almost complete. Georgia, however, is a sovereign state and a gaping whole to Chechnya's south. It could be a sieve for rebel forces either in retreat or gunrunning into Chechnya. If Georgia continues to balk on military cooperation, President Shevardnadze might find himself in the same league with Chechen President Maskhadov as accomplice to the Chechen rebels. Committees within the Russian Duma and Ministry of Defense are already bustling with allegations against Georgia for noncooperation. Though Russia is in no position to impose itself militarily against Georgia, Georgia is in a position to help Russia in its fight in Chechnya. If it does not, Russia may pressure Georgia even further, lifting economic sanctions on Abkhazia altogether and perhaps interfering in Georgian pipeline projects. __________________________________________________ SUBSCRIBE to FREE, DAILY GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com or send your name, organization, position, mailing address, phone number, and e-mail address to alert@stratfor.com UNSUBSCRIBE FROM THE GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com ___________________________________________________ STRATFOR.COM 504 Lavaca, Suite 1100 Austin, TX 78701 Phone: 512-583-5000 Fax: 512-583-5025 Internet: stratfor.com Email: info@stratfor.com ___________________________________________________ (c) 1999, Stratfor, Inc.