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

To: Jon Koplik who wrote (1082)	1/25/2000 12:37:00 AM
From: CIMA	Respond to of 1301

The West Loses Its Grip On Georgia Summary The Russian and Georgian interior ministers announced Jan. 22 the launching of joint border patrols to police the Chechen-Georgian border, reported Russian Radio. If true, this marks a collapse in Georgian government policy and establishes a new Russian military presence in Georgia. The West must react quickly, or Russian policies will further erode Georgian independence. Analysis Russian Interior Minister Vladimir Rushailo and his Georgian counterpart Kakha Targamadze announced Jan. 22 the beginning of joint border operations - codenamed Undercover - to police the Chechen-Georgian border, reported Russian Radio. If true, this marks a significant policy shift for the Georgian government and establishes a new Russian military presence in Georgia. The West must react quickly or face losing Georgia as an ally in the Caucasus. At the beginning of the Chechen war, Georgian President Eduard Shevardnadze steadfastly refused any Russian presence on the border stating that Georgia was capable of monitoring it. This view has incrementally changed over the past five months. A few weeks into the Chechen campaign, in early November 1999, Georgia insisted that in addition to monitoring the border, it would seal it. But instead, in December, Russia dropped paratroopers at the most accessible connection between Chechnya and Georgia, at the top of the Argun Valley, and sealed it themselves. Georgia responded by welcoming an Organization for Security and Cooperation in Europe monitoring group, hinting that Russians could join this effort. Now, with a contentious CIS summit [http://www.stratfor.com/SERVICES/giu2000/012100.ASP] as a backdrop, Georgia has agreed to participate in the joint operation. The Russian component, the composition of which has yet to be determined, must be flown into Georgia, because Russia does not have land access to the border from the north. It is likely the force will be based somewhere in Georgia. The logical headquarters for the operation is the Russian base near the Georgian city of Vaziani - the same base the Georgian government has doggedly tried to wrest from Russian control for several years. Shevardnadze's original position of refusing Russia access to its borders has collapsed. Georgia's agreement to participate in what is likely a Russian- dominated operation on Georgian territory serves two purposes for Russia's acting President Vladimir Putin. First, sealing the Georgian border will finally prevent the Chechens from resupplying their forces. This signals the beginning of the end of the Chechen War. Second, Georgia's decision informs Putin that the West will not significantly intervene in his efforts to manipulate the states of the South Caucasus into assisting him in eliminating the Chechen rebels. For the last five months, Shevardnadze has sought Western support to maintain Tbilisi's independent line vis-a-vis Moscow. Having realized that Washington will not support him, he has changed Georgian policy to placate Russia. The only way Georgia can be prevented from falling back into Russia's orbit is if Turkey establishes a military presence in Georgia - something that becomes less likely with every passing day. Other CIS states have noticed that the West has abandoned Georgia. Normally independent-minded Uzbek President Islam Karimov recently stated that if Islamic militants threatened his country, then "Russia is a country we can rely on." Turkmenistan is also sounding conciliatory toward Russia. It is now looking to Russia as a petroleum export route after Azerbaijan rebuffed it in a pipeline deal. Azerbaijan, too, is speaking of diversifying its oil export routes to include additional Russian pipelines. This is a far cry from its "Baku-Ceyhan or bust" rhetoric of the past several years. The shift from a willingness to "observe the border" without Russians to "secure the border" with Russians marks a transformation in the Georgian government's perception of geopolitical realities. Russia is economically and diplomatically, and in the case of Georgia, militarily, reasserting its influence in the states of the former Soviet south. [http://www.stratfor.com/CIS/specialreports/special13.htm] The lack of Western support and Putin's more aggressive strategy in Chechnya [http://www.stratfor.com/CIS/commentary/c0001190220.htm] have forced Shevardnadze to seek a "normalizing of relations" with Russia - code for establishing relations on Russia's terms - at the CIS summit. Unless the West begins to invest the resources required to maintain Georgia's independent line - and quickly - Georgia will be only the first former Soviet state to capitulate to Russian demands. (c) 2000, Stratfor, Inc. stratfor.com __________________________________________________ SUBSCRIBE to FREE, DAILY GLOBAL INTELLIGENCE UPDATES by clicking on stratfor.com UNSUBSCRIBE FROM THE GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com or send your name, title, organization, address, phone number, and e-mail to alert@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 ___________________________________________________

To: Jon Koplik who wrote (1082)	2/11/2000 1:43:00 AM
From: CIMA	Respond to of 1301

Diplomatic Blitzkrieg: The West Responds to Russia's Assertiveness Summary European Commission President Romano Prodi said Feb. 10 that the European Union (EU) would extend absolute security guarantees to all of its members. This statement in a single stroke redefines Russia and the West's struggle for the countries of Central Europe. No longer will Russia have the luxury of viewing EU expansion as a harmless process. Prodi essentially announced de facto NATO expansion under the guise of EU security guarantees. Analysis European Commission President Romano Prodi surprised his Latvian audience Feb. 10 by declaring that "any attack or aggression against an EU [European Union] member nation would be an attack or aggression against the whole EU, this is the highest guarantee." If implemented as stated, this marks a quantum shift in EU policies from the purely economic into the security realm - a change that Russia cannot afford to ignore. Now Russia will feel just as threatened by EU expansion as it has by NATO expansion. Prodi's announcement intensified the ever-escalating race to establish a new frontier between Russia and the West. At the Jan. 24-25 Commonwealth of Independent States (CIS) Summit, [http://www.stratfor.com/SERVICES/giu2000/012100.ASP] Russia compelled its fellow CIS members to participate in tighter security measures [http://www.stratfor.com/CIS/commentary/c0001260125.htm] to combat terrorism and Islamic fundamentalism - Moscow's code names for Chechen militants. Until now, the West has responded to Russia's new assertiveness with piecemeal measures. First, there was a tug-of-war for Georgia's loyalties [http://www.stratfor.com/CIS/commentary/c0002030025.htm] over joint Russian-Georgian border patrols. Then, the United States directly challenged Russian interests in the Persian Gulf [http://www.stratfor.com/MEAF/commentary/m0002040010.htm] by boarding a Russian tanker that was evading U.N. sanctions. Russia responded to these challenges by strengthening its ties with old Soviet client states [http://www.stratfor.com/SERVICES/giu2000/020800.ASP] such as Iraq, North Korea and Vietnam. Now, the West has seized the Russian gauntlet. High-level delegations are taking off to entice much of Central Europe to fully join the Western fold. Russia cannot help but take this diplomatic blitz seriously. Among the delegations are the European Commission president, NATO's secretary-general and NATO's supreme commander. Their target audiences include an array of states traditionally within the Russian sphere of influence: Estonia, Latvia and Lithuania border Russia; and Christian Orthodox Romania and Moldova share religious ties. To underscore the completeness of the Western response, NATO even dispatched a delegation Feb. 9 to Russia's Caucasus neighbor, Georgia. But it is Prodi's statement that will truly shock Russia. The fact that the proclamation came from the European Commission's president - the highest non-rotating position within the EU superstructure - indicates that the intent to implement security guarantees is no mere trial balloon, but new EU policy. However, Prodi's promise of an explicit security guarantee cannot be supported by current EU capabilities. Even if the Eurocorps functions as Prodi envisions, it will have a scant 60,000 troops at its command. This is just barely enough to handle a Kosovo-style operation; it would do little to deter a large-scale attack from a hostile power. Even the defense establishments of Europe's larger countries would be hard-pressed to project sufficient power to Europe's eastern fringes in times of crisis. Only the United States could possibly provide the level of force that Prodi envisions. Prodi's wording itself sounds remarkably similar to NATO's Article V security guarantee: "that an armed attack against one or more of them shall be considered an attack against them all." This indicates that Prodi - the steamroller of EU reform [http://www.stratfor.com/services/giu2000/012800.asp] - is either bluffing his way through Central Europe or has plans to integrate NATO into the EU in order to produce a militarily credible Europe. Prodi's assurance of security to all EU members extends NATO guarantees to the countries that will be on the EU's new eastern border. Suddenly, Russia's perception of the EU becomes much less benign. What makes the announcement more dramatic is Prodi's choice of audiences - Latvia. Of all the former communist states, this small Baltic country has had the most venomous relations with its former master. Prodi's statement and the locale in which he made it indicate Prodi's willingness - even enthusiasm - to stare down Russia over issues of importance to Europe. Russia may have the advantage in the race for Caspian oil routes [ stratfor.com] and in the contest for Central Asia [http://www.stratfor.com/CIS/specialreports/special13.htm], but Prodi has firmly set his mind on the EU fully absorbing all of Eastern Europe - Baltics included. Now he has shown a unique willingness to use NATO to achieve that goal. It remains to be seen how the rest of the Union will respond to this sudden policy shift. Prodi will have his plate full convincing the EU's four neutral states to militarize under any common banner. Persuading France to allow the United States an even more prominent position in Europe will prove thorny as well. If the EU fully adopts Prodi's plans, it would conjure a nightmare scenario for Russia. A soft-power EU and hard-power NATO would become formal partners in Western expansion. Traditionally neutral countries such as Austria, Finland, Ireland and Sweden would be co- opted into a NATO-EU military structure. An economically powerful EU, backed by a militarily powerful NATO, would dig in along vast lengths of Russia's eastern border. Russia's acquiescence to EU expansion will rapidly come to an end, and what little is left of the Russia-West "friendship" may be completely gone. (c) 2000, WNI, Inc. __________________________________________________ SUBSCRIBE to FREE, DAILY GLOBAL INTELLIGENCE UPDATES by clicking on stratfor.com UNSUBSCRIBE FROM THE GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com or send your name, title, organization, address, phone number, and e-mail to alert@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 ___________________________________________________

To: Jon Koplik who wrote (1082)	4/23/2000 7:26:00 PM
From: CIMA	Respond to of 1301

Baghdad, Belgrade and Moscow Collaborate Against Washington SUMMARY Russia has reportedly brokered a deal to upgrade Iraqi air defense systems. The weapons upgrades Iraq could receive are of the same type that may have downed an F-117 stealth plane over Serbia during Operation Allied Force. After a visit to Belgrade, Iraq's defense minister met his Russian counterpart in Moscow April 14. There is a substantial history of military cooperation among the three countries, and Iraq and Yugoslavia have recently indicated a possible alliance. The possibility of such an alliance, tacitly supported by Russia may be nearing reality and could threaten U.S. policy. ANALYSIS Iraqi Defense Minister Col. Gen. Sultan Hashim Ahmad arrived in Moscow April 14 and met with Russian Defense Minister Igor Sergeyev, reported Interfax. Prior to his arrival in Moscow, Ahmad was in Belgrade, Yugoslavia. The past military cooperation among the three countries offers an explanation of Ahmad's travels. The three may be cooperating to create simultaneous crises for U.S. policy. Prior to and during Operation Allied Force, Yugoslavia and Iraq maintained close military cooperation. A Yugoslav military delegation, headed by the deputy defense minister, visited Baghdad just before commencement of the NATO bombing of Serbia, according to a March 1999 Jerusalem Post report. Both nations, threatened by U.S. warplanes, needed improved air defense systems. Serb technicians regularly serviced Iraq's Soviet-made MiG-21s and MiG-29s, according to the Jerusalem Post. The two nations also reportedly worked out a deal. In return for Yugoslavia rebuilding Iraqi air defenses, Baghdad would provide Belgrade with oil and cash to sustain the war effort. The Washington Times in March 1999 cited a U.S. intelligence official who said that some of Iraq's integrated air-defense system, including surface-to-air missiles (SAM), was of "Yugoslav origin" and may have been sent from Russia via Yugoslavia. The paper also claimed that there were reports of limited contacts between Iraqi and Yugoslav air-defense officials several months prior to Operation Allied Force. During Operation Allied Force on March 27, 1999, a U.S. Air Force F-117 stealth fighter-bomber went down over Yugoslavia. A U.S. Pentagon official initially assessed that a Serb SAM hit the F-117, reported The Washington Times. The official said the plane apparently dropped below 20,000 feet, at which time the Serbs optically spotted the plane and launched either an SA-3 or SA-6 SAM. The report also cited several unnamed U.S. sources, who speculated that Russia had helped upgrade Serbia's air defenses. The Times of London reported Oct. 7 that Russia, in violation of an arms embargo, had actually supplied the Yugoslav army with new warheads, fuses and sensors for its SA-6 missiles. The Pentagon has still not officially disclosed its findings on what caused the F-117 to go down. Operation Allied Force stretched U.S. forces to their limits. When the bombing campaign began in March 1999, the aircraft carrier USS Theodore Roosevelt, stationed in the Persian Gulf, re-deployed to assist the war effort. Another carrier, the USS Kitty Hawk re- deployed from the Pacific region to cover the Persian Gulf - leaving the entire Pacific region void of a U.S. carrier presence for 86 days. Additionally, many U.S. warplanes stationed in Turkey to enforce the northern no-fly zone in Iraq were used for missions in Yugoslavia - leaving the northern no-fly zone under-patrolled. Recently, Iraq and Yugoslavia have expressed renewed enthusiasm in mutual cooperation. A Yugoslav delegation, headed by Deputy Prime Minister Maja Gojkovic, was in Baghdad March 28 and met with Iraqi Vice President Taha Yasin Ramadan, who expressed Iraq's eagerness to expand comprehensive cooperation with Yugoslavia. Iraq now appears to be looking to Yugoslavia and Russia to upgrade its air defenses. Interfax Russian News reported April 16, 2000, that Iraqi Defense Minister Col. Gen. Sultan Hashim Ahmad arrived in Moscow via Belgrade. In Moscow, Iraq's defense minister met with Russian Defense Minister Igor Sergeyev. On the same day, the London-based Sunday Telegraph reported that Russian military officials have brokered a deal with Belarus to rebuild Iraq's air defenses. The report stated that the Belarussian state-owned military hardware company, Beltechexport, agreed to upgrade Iraqi air defense systems. Under the deal, Beltechexport will upgrade Iraqi anti-aircraft guns as well as Iraq's SA-3 anti- aircraft missiles. Also, Iraqi air defense crews will reportedly be sent to Belarus for specialized training, where they will be familiarized with the latest Russian electronic warfare systems. If the report is true, it would not be the first time Iraq has attempted to upgrade its air defenses to threaten U.S. and British warplanes. In 1998, the CIA uncovered a plot by Iraqi agents to secretly purchase Tamara - a special electronic warfare system made in Czech Republic that can track radar-evading stealth planes like the F-117 and B-2 and may have been involved in the F-117 stealth shoot-down over Serbia. Military and technological cooperation between Baghdad and Belgrade poses potential simultaneous threats in two different arenas. Milosevic may simply be helping Iraq to give himself some leeway without launching his own crisis. However, if Iraq seriously threatened U.S. warplanes while Milosevic simultaneously ignited a crisis in Kosovo, the United States would have serious trouble containing both crises. It is not certain that Saddam acting alone would want to shoot down U.S. planes even if he could. There would be severe repercussions, such as the extensive bombing of palaces and military facilities. The real threat is dual-crises in Iraq and Yugoslavia. Russia is positioned to challenge U.S. policies and has criticized the NATO bombing of Yugoslavia and the U.N. bombing of Iraq. The downing of the F-117 in Serbia was linked to reports that Moscow upgraded Yugoslav air defenses, and Russia is now reportedly behind Iraqi attempts to upgrade its air defenses. The possibility of an Iraqi-Yugoslav alliance tacitly supported by Russia is becoming more of a reality. The ramifications of such an alliance could result in simultaneous crises that threaten the safety of U.S. forces and the maintenance of U.S. policy in each region. (c) 2000 WNI, Inc. stratfor.com SUBSCRIBE to FREE, DAILY GLOBAL INTELLIGENCE UPDATES by clicking on stratfor.com UNSUBSCRIBE FROM THE GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com or send your name, title, organization, address, phone number, and e-mail to alert@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 ___________________________________________________