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Institute of Defense Studies

The outflow of capital from Russia abroad, with the TEK (fuel-energy complex] accounting for the lion's share, is estimated to be from one to two billion dollars monthly. The bulk of these funds settle in foreign bank accounts of "new Russians" or is invested in real estate, stocks, and bonds abroad. But even the receipts from export that return to Russia often go for comprador imports and for importing expensive consumer goods into the country for the "new Russians." Or they go via the budget to commercial and above all "authorized" banks for "investment." Or in the final account they are directed toward realization of various expensive projects of dubious importance, above all in the construction area. It should be recalled here, for example, that the local Mafia in Sicily traditionally makes its main money specifically on construction contracts by inflating by many times the estimate of work done.

It is also important to note that all major operations of pumping resources and funds out of the country are being carried out with the involvement of foreign partners. In the petroleum export area alone there are approximately 20 various joint ventures operating in Russia today. And according to up-todate information from Russian special services, a considerable number of the foreign associates of such structures are persons connected with one

Toro Westen countries. It follows from the Federal Security Service press release "On Federal Security Service Activity in 1994" that "around 10 identified intelligence agents and around 90 specialists and advisers whose affiliation with foreign special agencies generates no doubt have been exposed just within the system of a number of major RF economic departments.

foreign firms and organizations including in the banking sphere, are being sudad cover by-special service Special services of Western countries have full access today to all documentation of joint ventures and other partners of Russian exporters, they have the originals of financial documents, they are knowledgeable regarding the movement of commodity resources and financial flows, they have information on bank account numbers of the "new Russians," and they know about their real estate and securities transactions abroad. And it should be understood that the activity of the outflow of resources and capital from Russia abroad in the form in which it is being accomplished today is criminalized to the highest degree and represents not only a violation of domestic laws, but also the grossest violation of laws of the Western countries themselves. Consequently, foreign intelligence agencies have in their hands compromising criminal information on many

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Institute of Defense Studies

Russian parties to foreign economic activity and on the politicians and state officials connected with them. As a result, these con itine un police gendannes

agentes de pendent in their in and are extraordinarily vulnerable to the pressure of outside forces who possess compromising information. It follows from what has been said that they are by definition incapable of following a consistent policy conforming to Russia's national interests. The most striking example of that situation lately appears to be Russian Government policy on the question of Caspian oil. Another notable example is the "peacemaking process" in Chechnya.

b. Les political penetration and U.S., UK, and FRG economic and intelligence penetration into Azerbaijan is in full swing. This is the most suitable base of operations for subsequent Turkish and Western expansion in the direction of Central Asia, the Povolzh'ye and the North Caucasus using the "Turkic" and "Islamic" factors. And Turkey is acting here as an instrument by which U.S. policy is being pursued.

The principal goal of such a policy is to establish control egy rostos and above all, patroleum resatinner of the Caspian Sea. Caspian oil reserves are commensurable with oil reserves of the North Sea and Alaska at the moment their exploitation began, but oil resources of the latter two will be exhausted in the foreseeable future. Therefore to avoid the Persian Gulf region's total monopoly in the oil export area, the West is showing an extreme degree of interest in Caspian oil. It should be noted that the problem of Caspian Sea oil arose immediately with the USSR's disintegration. It was then that the regimes of Caspian states cast doubt on the 1940 SovietIranian Treaty on the division of the Caspian and began its repartition without prior arrangement. And this is being done illegally--the Caspian is not a sea, but a lake. Since that is so, then rules of international maritime law do not extend to it. Any decisions relating to use of Caspian resources must be made based on a consensus of all Caspian countries of the CIS. And the 1940 Soviet-Iranian Treaty, ratified at one time by the USSR Supreme Soviet, can be revoked only by Parliamentary vote, not by a decision of particular RF Government representatives. It follows from this that the so-called "contract of the century" concluded by the Azerbaijan government with an international consortium of eleven oil companies isrom the very beginning, the Wagamany ignores this fact.

Institute of Defense Studies

With the actual assent of a number of highly placed Russian government officials and businessmen, the question of the right of ownership of Caspian shelf resources is being replaced by a discussion of pipeline routes over which it is proposed to pump "early oil.

Another aspect of the West's Caspian policy is the attempt to cut Russia off from the Transcaucasus by encouraging separatism in the North Caucasus, above all in Chechnya. In particular, there are projects for establishing an antiRussian "Confederation of Mountain (gorskiy) Peoples" made up of Dagestan, Chechnya, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia and Adygea. It is presumed this formation will gain direct egress to the Black Sea and to Turkey through the territory of Abkhazia.

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VONATO future is seen as an attempt sinplate Russten cofimately oust it from Europe. An eastward expansion of the NATO bloc obviously is inevitable and is planned in several stages. In the first stage (over 2-3 years) Poland, Czechia, Slovakia, and Hungary will be accepted in NATO. In the second stage (tentatively by 2000) it is planned to accept Slovenia, Romania, Bulgaria and, if possible, also Lithuania, Latvia, and Estonia in NATO. The inclusion of Finland and Austria in NATO is likely in this same stage. Finally, the

Martonceded in the third stage (approximately in 2005). But Russia will not be accepted in NATO under any circumstances.

The FRG is the main instigator of NATO's eastward expansion (the decision on expanding NATO was ultimately made after the withdrawal of the Western Group of Forces from the former GDR had been completed).

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motorunder und Wernerom The United States is another instigator of NATO's eastward expansion. In the opinion of a number of influential representatives of the American elite, such a line will permit reinforcing the U.S. leading position on the European continent and thereby compensate

Institute of Defense Studies

somewhat for America's obvious economic weakness compared with the European Union headed by the FRG.

panna give the assurance that they do not plan a NATO expansionojamoans of the Balde and Ukraine.be the stationing of Westergatenpuolearaneaponei: Easton Europe, but there meno

iu. Pust two years ago Russia was assured that they did not plan to expand NATO at all, even by means of Poland, Hungary, and Czechia. Moreover, there generally was uncertainty in NATO during 19911992 with respect to the future of this military-political alliance. Today, however, proposals for stationing tactical nuclear weapons in Czechia and Poland are being discussed, operational plans for the movement of NATO mobile forces to the Baltic in case of its conflict with Russia are being drawn up, and the idea of establishing a 60,000-person "Baltic Corps" from troops of Poland, Denmark, and the FRG is being discussed.

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d. The line toward Russia's unilateral disarmament, which threatens strategic stability in the world, also should be examined in the very same direction. With respect to strategic nuclear weapons, this line is being fulfilled today in two main directions. First of all, due to the absence of financing a rapid degradation is occurring in strategic systems presently in the inventory, and much RDT&E in this area has been slowed or entirely halted. Secondly,

medisang antavorable to Russia are being imposed on ATA Eaton proposed changes to the 1972 ABM Treaty:

With respect to the START II Treaty, there are two groups of arguments, military-strategic and political, against its ratification. In speaking of the first group of arguments, one should single out the problem of inequality in socalled

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walpation proposal the cemevi talks are hou like the fight to create a strategia system for ABM.

to And the Republican majority in the U.S. Congress is stepping up pressure on the U.S. administration to persuade it to take such

Institute of Defense Studies

a step even without coordinating with Russia and in spite of international restrictions which are in force.

In considering the second group of arguments, one should direct attention to the fact that as of the moment the Teaty was signed in

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Above all, observance of the principle of quantitative equality with the United States in strategic arms may become practically unattainable. The importance of observing this principle is explained by the fact that the majority of Western politicians are not specialists in the military area and are capable of grasping only the simplest quantitative parameters characterizing the ratio of the sides'-nuclear forces. Under these conditions the expected future substantial lag of Russia's strategic nuclear forces behind U.S. strategic forces in the number of operational nuclear warheads (the expected result of START Il implementation in a version curtailed for financial considerations is no more than 500-600 Topol'-M missiles in the Strategic Missile Troops by 2003-2005, and new nuclear-powered missile-armed submarines have not been built at all since 1990) obviously will be perceived in the West as grounds to regard Russia as a second-rate nuclear power, which the only remaining nuclear superpower, the United States, will be able to subject to nuclear blackmail for the purpose of dictating its will.

The situation also is largely similar in the area of the Treaty on Conventional Arms in Europe--CFE (Conventional Armed Forces in Europe). Russia's partners in the CFE Treaty refused to accommodate Russia until recently on the question of so-called flank quotas; i.e., to agree that Russia can have as many heavy weapons in the inventory in North Caucasus and Leningrad military districts as necessary for the country's defense, and not as many as specified by the Treaty concluded in November 1990 under quite different

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