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Key Economic Data 
  2003 2002 2001 Ranking(2003)
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)

Books on Russia


Update No: 330  (30/06/08)

War impending?
There is no more important question for a country than whether it is on the brink of war. It is not impossible that Russia may be once again. It is in the Caucasus yet again, extending its presence, but not this time in Chechnya .

Tensions between Georgia and Russia over Abkhazia flared anew on June 18, prompting a warning from Russian President Dmitry Medvedev not to provoke his country's troops in the breakaway zone.

The latest flare-up came a day after Georgian officials said they had detained four Russian peacekeepers transporting guided missiles in a western Georgian region just outside the disputed territory.

Russian defence officials denied the accusation and a Georgian interior ministry spokesman, Shota Utiashivili, said that the soldiers would be released, because Georgia had no authority over them.

But by late on the same day, Georgia had returned only the empty vehicle that the soldiers were travelling in when detained near the western Georgian city of Zugdidi. In a statement, the Kremlin said that Medvedev spoke by telephone during the day with Georgian counterpart Mikheil Saakashvili. "Medvedev said provocations against Russian peacekeepers, who are acting under international obligations, are unacceptable," the Kremlin said. They did not explain why Russian peace keepers required guided missiles.

"Saakashvili promised to sort the situation out," the statement said, adding that the two leaders agreed on the need to stay in contact "with the aim of resolving existing problems and developing bilateral relations."

A softer line from Medvedev than Putin
Despite the warning from Medvedev, the Kremlin statement -- notably the reference to Moscow and Tbilisi working on their bilateral relations -- was softer in tone than similar missives under former president Vladimir Putin.

Tensions surrounding the rebel Abkhazia region have soared since Moscow announced in April that it was establishing formal ties with its separatist government. In a move denounced by Tbilisi and the West, Russia has also sent hundreds of extra peacekeeping troops into Abkhazia, saying that Georgia was preparing an assault.

Separately, the Russian foreign ministry called on Tbilisi to tone down its opposition to the Russian peacekeepers in Abkhazia. "Tbilisi should radically review its relations with Russian peacekeepers, who have alone for many years ensured peace and order in the area of conflict," ministry spokesman Andrei Nesterenko told RIA Novosti news agency.

In another development, a senior official in Abkhazia accused Georgia of resuming spy drone flights near the disputed territory, but Tbilisi immediately denied the claim.
Ruslan Kishmariya, a representative of Abkhaz leader Sergei Bagapsh, told Russia's Interfax news agency that Georgia had resumed spy drone flights last week along the border with Abkhazia.

Utiashvili, the Georgian interior ministry spokesman, denied the flights had resumed. "In the future we might resume them, it depends on the situation in the conflict zone, but for now the moratorium remains in place," he told AFP. 

The doves not the hawks
This tense affair is of great interest. Medvedev does now appear to be in charge in the Kremlin, to a greater degree. Saakashvili said previously that whenever previously he rang the Kremlin and asked for Medvedev, since his assumption of office, he was put onto Putin, the new prime minister. Now he gets Medvedev.

He is gaining in stature. It is premature to write him off as a mere stooge of his predecessor, although everybody knows who is the real boss. 

He is going to be the representative of Russia on the world stage for the next four years. He has already met Angela Merkel, who as an eastern German by origin detested Putin. She took rather a shine to Medvedev and is charmed by his gorgeous wife, Svetlana, who has yet to be given a global airing. She will beat Madame Sarkozy to a frazzle.

At any rate perhaps the world can be re-assured that two comparative doves are in discussion over Georgia.

A New Deal?
The world has many problems on its plate - and Russia is vital to their successful resolution. The emergence of a new president of the United States within seven months could change everything. Medvedev and Obama could get on very well. It is noticeable that Bush and Medvedev have seen no reason to make their acquaintance soon. 

They have very different views of the world. 

Obama would be well disposed to Medvedev, a man of liberal inclinations compared with his predecessor - as is true of Obama too.

These two men could transform world politics.

What is needed needs to be worked out by the clever back-room boys behind the scenes over the next half year. An end to missile shields in Central Europe by the US - and an opening up of Russian energy fields to Western investment - belied of late by a battle between BP and its partners in BP-TN, initiated on a 50-50 basis, but BP being pressured to concede dominant control to the Russian oligarchs. It seems that Russia has taken a short term decision to hound out those western oil companies that years ago took big risks to enter the Russian market place, with all their usual nonsense about concerns for the ecology (Sakhalin Island) and phony tax claims adjudicated by phony Russian courts (many of the tax claims that put Khordakovsky behind bars, subsequently did not survive scrutiny –but they had served their purpose). 

The bottom line of which attitude to western investment longterm, is that they will be severely and deservedly down rated as an investment destination. Right now as they are awash with oil money they don’t care, but although they may be able to fund their capital requirements, they are a long way behind the west where technology is needed, and that is the kind of investment that they are putting at risk 

It could all change dramatically by this time next year. 

A genuine relationship was never likely under the Bush-Putin axis, for all the surface bonhomie, divided by Iraq and Iran and many other matters, as they were. The Obama-Medvedev package could be a very different business.

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