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Russia: a recession, oil sales, exports, arms and.......subs

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Russia: a recession, oil sales, exports, arms and.......subs

Postby U-5075 » Fri Dec 05, 2008 3:11 pm

http://www.strategypage.com/qnd/russia/ ... 81205.aspx

Scary Press Releases

December 5, 2008: Watching Russian mass media, you'd have a hard time finding out that the Russian stock market has plunged 75 percent in the last four months, and that oil exports have dropped as well. Russia is suffering from a recession, but the state controlled mass media has been ordered to ignore it. Older Russians feel a twinge of nostalgia, for the Soviet period and the need for rumor networks to find the truth that the state controlled press hid. The Internet makes it easier to find the truth, although the government is putting a lot of effort into limiting what news gets into Russia via the web. The government also wants to prevent Russians from getting the truth about Russian history. There is a campaign underway to rewrite the history books and play down the mass murders and state sponsored terror of the Soviet period. During the seven decades of communist, Russia had a third of its population killed off. The Soviet government killed more Russians that German armies and nazi death camps, and the current Russian government wants to keep that knowledge buried along with all of Stalin's victims.

Criminal gangs in the south Caucasus (mainly Chechnya and its neighbors) are growing bolder and more troublesome. The gangs contain separatists and religious fanatics, and are trying to intimidate local police into backing off. Attacks on police stations, and individual cops, are on the rise. The national government has sent down more counter-terror forces, which are also getting hit by the local gangs. Long term, the government usually wins these wars, but determined gangsters can win a lot of the battles.

Russia is making a lot of noise about the U.S. anti-missile systems being installed in Poland and the Czech Republic. Russia believes the anti-missile systems are meant to negate Russia's nuclear weapons (the only really effective military weapon Russia has left). East European countries are fine with that, but the main purpose of the anti-missile system is to knock down the handful of ballistic missiles Iran might be able to fire at Europe in the near future. Nevertheless, Russia sees the anti-missile system as a threat, and has made a series of announcements about new ICBMs being developed that will negate the anti-missile system. In fact, Russia has not been able to develop a new ICBM design, to replace it's "heavy" Cold War era ICBMs (the SS-18 and SS-19). All it really has is the Topol-M (SS-27 in NATO parlance), which was developed at the end of the Cold War. The Topol-M was modified to serve as a new sea launched ICBM (Bulava) and as a heavy ICBM (RS-24) to replace the elderly SS-18s and SS-19s. There is no money for a major new ICBM development program, but Russia can afford to create some scary press releases.

In the last few months, there has been some unrest in the military over major reforms underway. One of these was the dismissal of about half the officer corps. Most of these guys were basically on welfare, with jobs that really had no responsibilities (like commanders of reserve units that lacked equipment, or reserve troops to man the non-existent equipment). Retirement pay is less than active duty pay, and the younger officers won't even get the pension (but a smaller lump sum separation payment instead). With over 150,000 officers getting sacked, there was bound to be some grumbling. But since most of these officers were drones, not go-getters, this is all smoke (and not much of that) and no fire.

Oil exports last month were down 15 percent compared to a year ago, and the oil price continues to plummet (towards $40 a barrel, compared to $140 six months ago).

November 25, 2008: Russia's nuclear-powered battlecruiser, Peter the Great, the destroyer Admiral Chabanenko, and a supply ship, arrived in Venezuela, to provide to support for the leftist government (and major customer for Russian weapons) there. While Russia has made some well publicized naval deployments, most Russian warships are not getting a lot of sea time.

November 23, 2008: Natural gas is again being used as a diplomatic weapon. Two years ago, Ukraine was paying bargain rates ($130 per thousand cubic meters, which is equivalent to $74 per barrel of oil, a price that is nearly half what natural gas went for on the world market). After much diplomatic pushing and shoving, Russia raised the price to $179.50. Now Russia wants to boost the price to $400, and also collect $2.4 billion in unpaid (and disputed) gas bills. Ukraine complains that Russia is demanding higher prices from them than Western Europeans pay. There, the price of natural gas is based on the price of oil. That price has declined over 60 percent this year. At most, Ukraine was expecting to pay $250 per thousand cubic meters of natural gas in 2009. These negotiations make Western Europe nervous, because there were threats of interrupting supplies of Russian gas to Western Europe. Russia can't stop gas shipments to Ukraine without cutting off supplies for Western Europe. Such interruptions were a major issue when Russia first proposed selling natural gas to Western Europe. Russia promised that the gas supply would never become a political issue. Now it is, and West Europe's traditional distrust of Russia is revived. Western Europe is paralyzed by fear of losing a quarter of its natural gas supplies. Two years ago, when Russia cut Ukraine off, the Ukrainians simply diverted gas meant for Western European customers.

November 22, 2008: After earlier hinting, that the long planned deal to lease a new Akula II nuclear submarine to India, was off, officials now insist the deal is still on. The submarine in question, which was completed with Indian financing, was on sea trial last month when a poorly designed fire extinguishing system (it was too easy to accidently turn it on) was activated and killed twenty people. Russia has had major accidents like this in its nuclear subs several times before. Sloppy work and poor design are typical in Russian weapons, even high tech ones. Users learn to live with it, and suffer additional (compared to similar Western equipment) deaths and injuries. India has been using Russian equipment for decades, and knows what they are getting into. The earlier Russian suggestion that the Russians might keep the Akula II sub, was quickly dropped because the Russian government is facing a big deficit because of how hard Russia getting hit by the global recession. Mainly, the drop in oil prices (off over 70 percent from an earlier peak of about $140 a barrel) and shipments has cut Russia's main source of export sales, and main source of government income.

A U.S. Burke class guided-missile destroyer arrived in Georgia for a four day visit. This annoys the Russians a great deal, as they had long seen the Black Sea as their own private late. The U.S. destroyer visit also reduces the glamour of the Russian battlecruiser visiting South America.

November 20, 2008: Russia agreed to allow Germany to ship military equipment to NATO troops in Afghanistan. Earlier, Russia agreed to allow rail shipment of non-military goods (food, medical equipment, fuel) to NATO troops in Afghanistan.

November 17, 2008: Apparently as part of a deal that had Russia halting shipments of S-300 (similar to the U.S. Patriot) SAM missile system to Iran, Russian arms buyers are negotiating to buy Israeli UAVs. Russia UAVs are a generation or two behind what Israel and the U.S. have. Apparently Israel is going to help Russia catch up, and keep S-300s out of Iran.

November 16, 2008: Russian troops in the south Caucasus continue to allow local militias to cause mischief. Militia gangs in South Ossetia fire, and sometimes move, across the border into Georgia. But if the Georgians fire back, or chase the militiamen into South Ossetia, they risk clashing with Russian troops. Russia is still punishing Georgia for not showing proper deference to Russia. This is something that is happening to all of Russia's borders.
U-5075
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