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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: 350  (25/02/10)

A new encirclement?
The Soviet Union always felt it was being encircled by the West in the Cold War, notably of course by the US. It was right – it was. There were strings of American bases surrounding it across Eurasia from Western Europe and Turkey to the Far East and Alaska.

When Khrushchev tried to install missiles in Cuba, Kennedy reacted strongly and obliged him to pull them back, albeit in a secret agreement to withdraw US missiles from Turkey. But the US retained an overwhelming preponderance in the number and ubiquitous disposition of missiles for all Kennedy's talk of 'a missile gap' in the 1960 election, which Kennedy cynically admitted later existed, – but in the US's favour.

The US had a far stronger economy of course and a far superior geographical position, on its continental island thousands of miles from any potential enemy, Alaska excepted. It still does.

The Russian successors to the Soviets have a visceral fear of encirclement too, as well they might. The Americans are natural allies of the Central Europeans, as of countries all around Eurasia.

When President Bush mooted the idea of a missile shield, with interceptors and radar equipment in the Czech Republic and Poland in his last term, it certainly seemed implausible that the targets were Iran and North Korea, rather than nearby Russia, which is a rather more formidable adversary and with a huge nuclear arsenal.

The Russian leaders are petrified that this, their trump geopolitical card, is going to be nullified by an American anti-missile shield, as the Kremlin was by Reagan's Star Wars project. Last year they were relieved when the new Obama Administration apparently dropped the idea, at least for Northern Central Europe. But it has now been revived for further south.

Russian anger as Romanians to host US anti-missile system
Russia has reacted furiously to plans by the United States to deploy an interceptor missile system in Romania. This was exactly a week after Romanian President Traian Basescu announced on February 4 that his country’s Supreme Defence Council had “approved a US proposal that Romania takes part in the anti-rocket shield system”. Mr Basescu said that “terrestrial interceptors will be located inside the national territory” and that they should be operational by 2015.

Under the agreement between Washington and Bucharest, Romania will host SM-3 ship-based anti-ballistic missiles as part of the planned American defence shield to protect Europe from a missile attack from Iran.

However, the Kremlin also views the shield as a threat to its nuclear deterrent. Responding to the announcement by the Romanian government, Russian Foreign Minister Sergei Lavrov said: “We expect the United States to provide an exhaustive explanation, taking into account the fact that the Black Sea regime is regulated by the Montreux Convention,” which permits naval vessels of non-Black Sea countries to remain in the Black Sea for up to 21 days only.
Dmitri Rogozin, Russia’s hard-line envoy to NATO, said the SM-3 missiles constitute a threat to the Russian strategic nuclear arsenal. He warned: “The US is using Iran’s actions to globalise its system of missile defence. We need to go on the assumption that a foreign military potential is approaching our borders.”

Kate Hudson, chair of the Campaign for Nuclear Disarmament, warned that the decision to place missiles in Romania does nothing to “help make Europe safer.”

This is shown by the fact that Poland has expressed a readiness to take part in the new project and could potentially host some of the SM-3 interceptors that target short and medium-range missiles.

Romania is nearer the Middle East; that's why
"The U.S. has determined that Romania is well-suited for the location of this system to provide protection for European NATO Allies," the U.S. embassy in Bucharest said in a statement. Foreign Minister Teodor Baconschi said the plan was first presented to Basescu during a visit by U.S. Vice President Joe Biden to Bucharest in October, but was not made public. "This became official today," Baconschi said - that is February 4.

Unlike some other EU states, popular support for U.S. military policy is very high in Romania. It hosts a small base at the Black Sea and training facilities, part of a Pentagon shift from large Cold War-era centres in Western Europe toward smaller installations nearer hot spots such as the Middle East.

'Not meant to threaten Russia'
Basescu said the participation of Romania, a European Union and NATO member of 22 million perched in the south-east corner of the continent, was not meant to threaten Moscow. "The new system is not against Russia. I want to categorically stress this, Romania (will) not host a system against Russia, but against other threats," he said.

Obama's revamped plan, unveiled last September, includes land-and sea-based missile systems in and around the Gulf to defend against what it says is a growing Iranian missile threat. His administration argues the plan addresses those threats more effectively than the Bush plan, although it has drawn ire from Tehran, which accuses Washington of stirring up anti-Iranian sentiment.

Poland has revived interest in rejoining the project. But one thing that might motivate in a contrary sense is a new desire by Moscow to have a rapprochement with the Poles.
Putin invites Tusk to Katyn massacre event

Russian PM Vladimir Putin has invited his Polish counterpart, Donald Tusk, to a ceremony to mark the 70th anniversary of the Katyn massacre. It is the first Russian ceremony to mark the murdering by Soviet secret police of more than 20,000 Polish prisoners of war in April 1940.

The invitation is being hailed in Poland as a breakthrough that could lead to improved bilateral ties.

Mr Putin said he understood the significance of the massacre to Poles. He told Mr Tusk in a telephone call that their joint appearance at the ceremony in April would be an important symbolic gesture, said a Polish government spokesman.

A former Polish foreign minister, Adam Rotfeld, who now heads a committee tackling difficult issues between the two countries, hailed Mr Putin's invitation as an important event in the normalisation of Polish-Russian relations.

The mass execution of Polish army and police officers in the forests of Katynand other sites has long been one of the most difficult issues between the two countries.

For half a century the Soviet Union blamed the killings on the Nazis. More recently, Moscow's refusal to declassify the archives, and a Russian court ruling that the massacre did not warrant the term genocide, has angered many in Poland.

In 1990, Russian President Mikhail Gorbachev finally admitted Soviet responsibility.

Putin would have preferred Tymoshenko
Russia's response to the pro-Russian candidate Viktor Yanukovych in the Ukrainian presidential elections, concluded in the second round on February, has been surprisingly low-key – a reflection of tensions between Yanukovych's party and Moscow in the run-up to the polls – and amid strong signs that the Russian prime minister, Vladimir Putin, would have preferred to deal with Julia Tymoshenko.

Speaking in early February, Yanukovych hinted that he is likely to renew the contract on Russia's Black Sea fleet, which is due to expire in 2017. There are even rumours he is planning a 30-year Guantánamo-style lease. During the campaign he also promised to recognise the independence of South Ossetia and Abkhazia – Georgia's Russian-occupied rebel regions.

One observer noted: "Both Ukrainians and world leaders will have to get used to their often boorish new president – and to the fact that he will preside over the European championship football final in 2012."

Putin simply likes her as a person a lot more than him, exactly the sort of indeed 'boorish' Russian, prone to booze and to crime and corruption (he is an ex-lag), that has been the blight of Mother Russia for long. And then there is the small matter that she is rather brighter and better-looking than the bleary Yanukovich. Whom would anyone prefer to have as a regular interlocutor?

Nord Stream clears last hurdle
Nord Stream, the proposed gas pipeline between Russia and Germany, has cleared its final regulatory hurdle after Finnish environmental authorities on February 12 approved the €7.4bn project.

The authorities gave the go-ahead two days after Vladimir Putin, Russian prime minister, visited Helsinki to pledge his commitment to cleaning up the heavily polluted Baltic Sea. The decision paves the way for construction to start in April on the controversial 750-mile Baltic Sea link that will reduce Russian dependence on pipelines through Eastern Europe.

Approval was secured last year from Finland, Sweden and Denmark, through whose territorial waters the pipeline will pass.

Shrinking Russia?
The Russian economy shrank 7.9% in 2009 compared with 2008, the Federal Statistics Service has announced. This was less bad than the government's 8.5% forecast, but it was still the biggest annual fall in 15 years.

The oil exports that previously underpinned Russia's growth have been hit by a sharp drop in energy prices. The preliminary official statistics show that the decline also sharply affected construction, manufacturing, restaurants and hotels.

However, 2010 may see a return to growth. Manufacturing data indicated a month of expansion in January, with the country's purchasing managers' index rising to 50.8 from the previous month's reading of 48.8.

Kingsmill Bond, strategist at Troika Bank, said he expected to see the Russian economy expand in 2010, since indicators such as retail sales had been growing since last summer.

The Federal Statistics Service did not give a quarterly breakdown of the latest GDP figure.

 

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