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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 433,491 346,520 310,000 16
         
GNI per capita
 US $ 2,610 2,140 1,750 97
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 321  (24/09/07)

Putin the king or kingmaker?
Leading figures in world politics are facing the exit. Bush and Putin are barred from standing again by the constitution. Bush's departure will be no great loss, so a majority of his own country now believe, with the rest of the world in warm agreement. Roll on Rudy Giuliani or Hilary Clinton or whomever else.

But Putin is still highly popular at home, even if frowned upon in the West, where he is deemed to be returning Russia to despotism. Maybe he is, but with a spectacular resurgence economically and a measure of success against crime and corruption. Moreover, that elusive feel-good factor is operating in his and Russia's favour. What other world leader basks in 80% approval ratings?

Yet he is prepared to leave office voluntarily. Few doubt that the rubber-stamp of a parliament would amend the constitution for him to allow him to stand a third term, should he so want. But he is evidently not interested. He may genuinely want more time with his family, having a successful marriage and two teenage daughters. But there is doubtless more to it than just that.

Few doubt that he is an able man, with knowledge of world history. He may see himself as Russia's De Gaulle, who will make a triumphant return in due course, having been a decided success first time round and still young enough at 54 to entertain prospects of recall, maybe as soon as 2012. 

He must know that he has had a large measure of luck. World oil prices soared in the early years of his presidency, while his main opponent abroad. President Bush, became distracted by the consequences of 9:11. He can foresee problems enough ahead. The economy needs to be diversified; and the demographic decline of Russia continues unabated. He wants time off to think them through. He can bank his extraordinary popularity and come back as a saviour in due course.

President Hugo Chavez of Venezuala, one of the few world leaders with a comparable popular base, made a trip to Moscow in August just to find out what Putin is up to and who his successor is to be. For whoever succeeds is going to be the leader of the only country that can stand up to American 'full spectrum dominance,' as Moscow is reminding everyone by patrolling the global skies again with its nuclear bombers (see below).

But Chavez left none the wiser. Putin is not giving the game away to a foreign head of state of however friendly a country. His own entourage will know first. 

New premier; new government
Putin seems to enjoy keeping everyone guessing. He certainly startled everybody on September 12th by appointing a new premier, Viktor Zubkov, a rank outsider, who has a strong dislike of public speaking. He is as colourless and nondescript as his predecessor, Mikhail Fradkov. The Duma, Russia's lower house of parliament, duly ratified his appointment on September 14th. Only the Communists opposed him, although other opposition figures expressed their disdain.

He is one of the St Petersburg clan, with whom Putin has surrounded himself. Zubkov was his deputy in the external relations office of St Petersburg's mayor in the early 1990s. He led Edintso (Unity), a pro-Kremlin party, before becoming an official in the Finance Ministry. But he has so far a virtually invisible political profile. 

Is Putin grooming him as a dummy successor, to be shunted aside whenever he so wants? Zubkov immediately began to speak of himself as a potential president, which he would hardly have done without Putin's approval. 

There is speculation that Putin is wanting a complete cipher to succeed him, agreeable to resigning in a year or two, which would call for new presidential elections, in which Putin would again be eligible to stand. It is probably too early to say. Zubkov may perform too indifferently as premier for even this innocuous role. 

Putin kicks off the campaign that will lead to his successor 
Putin fired the starting gun on September 5th on an election campaign that will end with his departure from the Kremlin, if he sticks to his decision to stand down. Campaigning for seats in the Duma began after Rossiiskaya Gazeta, the state newspaper, published the presidential decree setting the elections on December 2nd. 

Pro-Kremlin parties are expected to win a majority of seats in a contest that is being fought under new rules. Individual candidates are barred from standing and voters must choose from different party lists. 

United Russia party, which holds 70 per cent of seats in the 450-seat chamber, is predicted to retain an overall majority. Three other parties - A Just Russia, which is pro-Putin, the Communists, hostile to the Kremlin, and the right-wing nationalist Liberal Democrat Party, headed by the eccentric Vladimir Zhirinovsky - are also expected to gain seats. Liberal opposition parties complain that they stand little chance of success because the minimum proportion of the vote required to qualify for seats has been raised from 5 to 7 per cent. This is clearly directed to seek to eliminate them.
The Duma elections are largely viewed as the curtain-raiser to the presidential election, which will take place on March 2nd. In stark contrast to the United States, where candidates for the November 2008 election have been campaigning for most of the year, none of the main contenders in the Kremlin has even declared an interest in the presidency, only six months before the polls open. 
Putin's endorsement is seen as the critical factor in determining which of them will succeed him. Kremlin spokesman Dmitry Peskov confirmed that the President intended to use his popularity with voters to back a particular candidate. "The President has the right to say 'I think this guy is best' and give him a boost by sharing with him his unimaginable popularity," Mr Peskov said. 

The joint first Deputy Prime Ministers Sergei Ivanov and Dmitri Medvedev remain the front-runners, even after the change in government. Mr Ivanov, 54, served with Mr Putin in the KGB and has the backing of the siloviki, the security service and military factions in the Kremlin. He is Putin's oldest friend among the contenders. 

Mr Medvedev, 42 in September, is a former lawyer and academic who worked under Mr Putin in the St Petersburg mayor's office in the 1990s and is viewed as the standard-bearer of the Kremlin's liberal wing. He was once regarded as the obvious successor, when Mr Putin created the post of First Deputy Prime Minister specially for him in 2005, but Mr Ivanov is now regarded as the stronger candidate.

One intriguing possibility is that Russia's next president may be a woman. The influential Nezavisimaya newspaper suggested that voters were ready to support Valentina Matviyenko, the flamboyant Governor of St Petersburg, as Mr Putin's successor. 
Mrs Matviyenko, 58, is totally loyal to Mr Putin and has denied any intention to stand. Her candidacy would spark speculation that he planned to return in 2012 after she had served a single term as president. 

Sergei Naryshkin, 52, a Deputy Prime Minister, is a dark horse contender, who has been handed new responsibilities in recent months by Mr Putin. He, too, is from St Petersburg, worked under Mr Putin, and is said to be a former KGB agent. 

The new Cold War?
Russia has resumed flights of its nuclear bombers all over the world for the first time since the Cold War. It is re-asserting its military might all right.
The RAF scrambled to intercept eight Russian nuclear bombers heading for Britain on September 7th in the biggest aerial confrontation between the two countries since the end of the Cold War. The Tupolev-95 Bear bombers were approaching in formation when they were met by four Tornado F3 fighter jets. Defence sources said the Russian pilots turned away as soon as they spotted the approaching Tornados and did not enter British airspace. 

Norway had earlier sent four F16 jets to shadow the Russians as they neared its airspace in what Moscow insisted was a training mission. The bombers had flown over international waters from the Barents Sea to the Atlantic before heading for Britain. 

Russian Bears flying in pairs have triggered several alerts this year as they neared the 19km British airspace zone, but this was the first time that so many bombers had simultaneously tested British air defences. 

Russian air force spokesman Colonel Alexander Drobyshevsky said 14 long-range bombers began missions over the Pacific, Atlantic and Arctic oceans on September 5th. In an echo of the Cold War chess game the Soviet Union and NATO continuously played in the skies around Europe, he acknowledged "virtually all of our strategic planes are being shadowed by NATO fighters". 
He later told Interfax that up to 20 NATO jets had scrambled to intercept the Russian aircraft. Colonel Drobyshevsky had announced on September 3rd that a dozen bombers would practise firing cruise missiles over the Arctic. 

This was Russia's biggest show of strength since President Vladimir Putin ordered strategic air patrols to resume in August. They were suspended after the Soviet collapse because the Kremlin could not afford them. 

Putin ordered strategic flights to resume on August 17th after noting that other countries had maintained their patrols in the past 15 years. Bear bombers can carry nuclear warheads; but strategic aviation head General Pavel Androsov said they were not armed and the goal of the patrols was pilot training.

The flights are the latest example of Putin's ability to irritate the West with bold strokes that cost the Kremlin little and delight many ordinary Russians, who enjoy seeing NATO discomfited. He has already pulled Russia out of the Conventional Forces in Europe treaty on arms limitation, and railed against US proposals to install a missile defence shield in Poland and the Czech Republic. 
With presidential elections just six months away, such assertive nationalism convinces many Russians that he has restored the country's international prestige. Some critics have suggested a siege mentality is being fostered to create support for a presidential successor from the siloviki, the Kremlin's hardline military and security service faction. 

As NATO scrambled its jets, Putin was in Indonesia to seal a $US1 billion ($1.2 billion) contract for his hosts to buy Russian fighter planes, submarines and helicopters, with a loan provided by Moscow. 

The new arms build-up
Russia's economy is flush with petro-dollars. Putin has set a new course. Russia is to spend $200bn to return it, as near as can be (but a long way away), to the state of military might of the USSR, but obviously this is still aeons behind the US that has been spending some three times that amount annually.

Combat aircraft production is to be doubled, no less, by 2025. The MiG-35 and MiG-29 fighters, which Moscow showcased at the international air show there in late August, were only a small part of the package. Russia's current force size is a fleet of 1,390 fighter aircraft and 990 ground attack aircraft. The maiden flight of the Sukhoi T-50 is expected in late 2008. Other planes on order include the TU-160 strategic bomber and the SU-34 "Fullback" fighter-bomber. Once this full complement of planes is flying, there is no doubt that NATO will have a competitor again, as it actually has already.
At the moment Russia has only one aircraft carrier, Kreml- class, capable of hosting 52 planes. Six new nuclear-powered aircraft carriers and eight ballistic missile submarines (to augment its present fleet of seven) are on order. Its ability to fly its bombers and missiles all over the world will not be in doubt. 

Russia is not short of tanks. It has 21,820 of them, plus 25,975 armoured fighting vehicles. (When Hitler attacked the Soviet Union in 1941, it had 17, 000, some 7,000 more than guaged by Panzer General Guderian in his 1938 book, Achtung Panzer, which Hitler read but did not believe, because he didn't want to. He later told Guderian that, if he had realised how near the truth he was, he would never have launched the war).
Putin has ordered more tanks and of superior design, the T-90s and the new variant T-90 Ss. Any new Hitler beware. 

The Indonesian card to be played 
Putin is well aware that diplomacy is as important as military posturing. His visit to Indonesia, the world's most populous Muslim nation, in early September forms part of a Kremlin drive to convert economic power into a new global political and military reach. Russia is to extend a $1.2bn loan to the South-East Asian country to enable it to buy its arms. 

Russia has already sought to restore its influence in India, the Middle East and Africa, and is building ties in Latin America, as with Chavez's Venezuala. 

Russian and Chinese special forces are on joint counter-terrorism exercises, further evidence of their growing military relationship. This is a dicier business than relations with insular and far-away Indonesia. Russia and China share the longest border in the world.

Caspian hydrocarbon reserves worth $100 Bln - Ivanov 
The bedrock of all this geopolitical belligerence and bonhomie is Russia's energy wealth. Oil and gas reserves in the Caspian Sea are estimated at $100 billion, First Deputy Prime Minister Sergei Ivanov said on August 31st, just days before the announcement of the electoral timetable, perhaps no coincidence. "The entire hydrocarbons market in the Caspian amounts to about $100 billion. This enormous, gigantic sum calls for shipbuilding in Astrakhan to be developed," Ivanov told the press in Astrakhan. He held a working conference on advancing shipbuilding in the region and the prospects of oil extraction in the Northern Caspian. Meanwhile, Lukoil (RTS: LKOH) President Vagit Alekperov announced that shipbuilding potential in Astrakhan is insufficient to support oil and gas extraction in the Caspian. He said that presently the sector is capable of handling 50,000 tonnes of metal while by mid-2015 demand will increase tenfold to about 500,000 tonnes.Putin in Jakarta Putin visited Indonesia in early September, granting the
south-east Asian nation a loan of $1 billion to buy Russian arms. Putin held a series of meetings with his Indonesian counterpart, Susilo Bambang Yudhoyono, in a bid to strengthen economic and military cooperation between the two countries. Russia's ambassador to Indonesia, Alexander Ivanov, says Moscow intends to play a significant role in Asia. "For us, the primary objective in this region is a collective security system," he said. "One of the priorities, equally important for us, is to include Russia in the new integration processes we are witnessing here these days."

                                               ******

APEC, not OPEC
Russia's oil and gas resources are so huge that it might seem to be logical for it to join OPEC. Actually it prefers, like Norway and the UK, to take a free ride on that organisation, with no commitments to curtail output. 

It is far more interested in APEC, the Asia-Pacific Economic Cooperation organisation. Let Putin give the reasons why in his own words. 

In an article for the Herald, Russian President Vladimir Putin explains why it is vital for his country to be more involved in APEC.
Next year will mark the 10th anniversary of Russia becoming a full-fledged member of Apec. It was a committed and strategic choice for us, based on objective economic factors and geopolitical circumstances. Life itself has since then convincingly demonstrated that the decision made then was timely and well-founded.
On the eve of the Asia-Pacific Economic Co-operation summit in Sydney, I would like to share with you my vision of the prospects for Russia's participation in this influential regional association.
Apec has entered the 21st century as a major and authoritative regional structure with a uniquely broad membership of countries on both sides of the Pacific.
Represented in it are Asia, the Eastern American continent and the Southern Pacific. Russia has been successfully co-operating within its framework.
Due to the rapid development of the Asia-Pacific region, Apec can be called the most promising economic association on the planet. The member states account for 57 per cent of the world's gross domestic product, 48 per cent of world trade and more than 40 per cent of direct foreign investments.

And according to expert estimates, these figures may go up in the coming years. Such a prospect is also held out by Apec's basic priorities aimed at improving the trade environment in the Asia-Pacific region, as well as broadening regional integration.
Active and multifaceted participation in the work of Apec is becoming an increasingly important aspect of Russia's foreign policy on its eastern frontiers. Accordingly, our interaction with the forum has been growing every year. Apec's share in Russia's foreign trade has increased to 18.1 per cent, including up to 16.6 per cent in Russian exports. Such influential Apec members as China and the US are among our top 10 partners and, if combined with Japan, they are among the top 10 leaders of investment co-operation with Russia.
Our key task is to make use of Apec's possibilities so that Russia could join the Asia-Pacific integration mechanisms in a most effective and efficient way. This naturally complements Russia's national plans for social and economic development. Top priority is given to projects of intensive development of Siberia and the Far East.
A large scale modernisation of leading economic sectors, industrial and transportation infrastructure, is being pursued, notably by the programme for the development of the Far East and Trans-Baikal regions, the areas that directly belong to the Asia-Pacific region.
Russia has officially stated its readiness to chair Apec in 2012. And it is not by chance that we have suggested that the Apec summit be held in the eastern part of our country - in Vladivostok. 

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