#6 - JRL 7005
Trud
No. 234
December 2002
[translation from RIA Novosti for personal use only]
POLITICAL ARITHMETIC OF 2002
Vyacheslav NIKONOV, president of the Politika (Politics) foundation

Good News

1. There were surprisingly GOOD DEMOGRAPHIC TRENDS. Birth rate was up 10% and death rate was down 5%. The number of population in Russia dwindled but not as dramatically as in the previous few years.

2. Russia registered a stable ECONOMIC GROWTH, which was especially noticeable against the backdrop of economic slide in the West. The more than 4% of economic growth in Russia were more than double the average global rate. It is particularly pleasant that the average wage - and hence consumption - grew by 35%.

3. Russia was recognised as a MARKET ECONOMY COUNTRY by the USA and subsequently by the EU. The chances of Russian companies' getting better conditions on Western markets went up.

4. It is symbolic that RUSSIA HAS BECOME A MAJOR GRAIN EXPORTER, supplying grain to Brazil, Canada, Germany and Bulgaria. In fact, it was the first time in the past thousand years Russia produced more grain than it could consume.

5. G7 OFFICIALLY BECAME G8 after a statement to this effect was made at the summit in Kananaskis.

6. WE MAINTAINED CONTROL OF STRATEGIC ARMAMENTS. In early 2002 the USA planned to withdraw from all agreements in this area but in May it signed a treaty on strategic offensive reductions with Russia. It stipulates the reduction of nuclear warheads to 1,700-2,250 in either country.

7. THE GROUP OF TWENTY WAS CREATED. It does not mean genuine and meaningful partnership yet, but the intention has been stated.

8. SEVERAL VITAL REFORMS, including the agrarian one that stipulates land ownership, progressed quite well.

Bad News

1. The worst news was the HOSTAGE STANDOFF AT THE NORD-OST SHOW. A story of great human tragedy, it claimed many lives and buried the scenarios of a political settlement in Chechnya by provoking fierce anti-Chechen sentiments.

2. THE CHECHEN WAR WENT ON, claiming several hundred more lives. The efforts to create a new legitimate power in the republic, restore its economy and return refugees to their homes are way below the scale of the problems.

3. A SERIES OF NATURAL DISASTERS AND CATASTROPHES that swept the southern regions of Russia brought incredible destruction. We still do not know how many people died in floods in the Krasnodar and Stavropol territories and in the glacier slide in the Karmadon Gorge in North Ossetia.

4. THE US WITHDRAWAL FROM THE ABM TREATY was not very dangerous for Russia, as in the next few years the Americans will not create weapons that our deterrence potential cannot deal with. But the NMD project can encourage the race for nuclear missiles in third countries, for example China, which will trigger off a chain reaction in Asia.

5. THE NATO ENLARGEMENT is unpleasant not because it threatens Russia's security (as a military organisation, the bloc will be weakened by the admission of new, very weak members who will be the consumers of security). The trouble is that a new European security system that is being created on the basis of NATO does not stipulate the involvement of Russia.

6. RUSSO-GEORGIAN RELATIONS DETERIORATED more than we expected. The Pankisi Gorge turned into a recreation spot and a hinterland base for Chechen terrorists, which created a situation where Russian strikes at Georgia seemed imminent. But, yielding to US pressure, Tbilisi launched a counter-terror campaign by the end of the year, thus preventing the worst scenario.

7. THE RIGHTS OF RUSSIAN COMPANIES TO DEVELOP OIL FIELDS IN IRAQ were put in question. Saddam Hussein gave Russia a resounding slap when he ordered LUKoil to leave. One can only hope that Moscow will not sit back but will protect the interests of the country and its oil companies under any scenario of the Iraqi conflict.

8. SOME REFORMS, WHICH HAD BEEN DISCUSSED FOR YEARS, HAVE NOT BEEN LAUNCHED. For example, the energy, military, banking and judicial reforms failed to get off the ground. One more year missed in vain.

Big News

In addition to good and bad news, there has been and will be just big news in the world, whose long-term consequences will not affect Russia.

The EU decided to enlarge. It is good when your largest trade partner gets closer to you. But it is not very good when new members raise customs and transit tariffs or introduce anti-dumping procedures for themselves and Schengen visas for Russians.

The fourth generation of leaders, who did not study in Moscow, was brought to power in China. Though Jiang Zemin left the post of secretary general, he will remain the true leader of China and hence the policy of strategic partnership with Russia is not endangered.

Looking ahead, I would dare predict that the main domestic political event of 2003 in Russia will be the December elections to the State Duma and the beginning of the presidential campaign. Russia's foreign policy will be influenced by the US-British strike at Iraq and the task of overcoming its consequences. The most acute economic issue in Russia will be oil prices, on which the fulfilment of the 2003 budget recently signed by President Putin hinges.