What Russia’s Treatment Of Greenpeace Activists Reveals About Its Arctic Policy

Sochi Olympic flame 4-month relay begins, highlighting Putin’s Russia

“In fact, he has protected them from political pressure.” Artyom Konstandyan, chief executive of Promsvyazbank, acknowledged Nabiullina’s independence but had greater appreciation for her engagement with the financial community. “Banking has its own specifics that the current chairman will learn with practice,” Konstandyan told Reuters. “But there is a willingness not only to manage, but to listen and to hear, and it is greater than in the previous chairman.” Significantly, Ignatyev, who retired after 11 years in the has been retained by Nabiullina in an advisory role. The central bank has only limited scope to meaningfully influence the cost of credit to Russian borrowers, while overseeing Russia’s unruly collection of 1,000 banks poses huge challenges. But, under Nabiullina, it has simplified its interest-rate toolkit while offering longer-term funds at a narrower premium in a bid to improve the ‘transmission’ of its policy via the flow of affordable credit to the real economy. The bank’s clout is undeniable – it is one of the country’s most respected institutions and holds half a trillion dollars in reserves, an important buffer to protect Russia’s resource-dependent economy against external shocks. For Anders Aslund, a senior fellow at the Peterson Institute for International Economics in Washington, Nabiullina draws her authority from her ties to Putin and the central bank’s own growing credibility. “The question has been whether the conservative Russian economic policy establishment could withstand this pressure or give in or be replaced,” Aslund said. “So far, it does hold up.” WOMEN MAKING HISTORY The fact a woman now chairs Russia’s central bank is noteworthy in itself. And Nabiullina has appointed another, Ksenia Yudayeva, as a first deputy. Yudayeva, who until recently was Russia’s “sherpa” to the Group of 20, is regarded as one of the brightest in the country.

NEWSMAKER -Russia’s new central bank head shows independent streak

This event seems like yet another skirmish in the new Cold War, much heralded in the aftermath of Russias planting of its flag on the Arctic seabed in August 2007. But Russias stance on the Greenpeace protestors is not primarily about the Greenpeace protest: Its about the future of the Arctic. Will international actors seek to restrict Russias activities in a region that, for a variety of geographical and historical reasons, it sees as its own? For most of the 1990s Russias interests in the region were ill-defined, but since 2000 it has adopted a more active stance on the Arctic; a region in which around one-fifth of Russian territory lies and upon whose resources Russias global economic competitiveness will, in the future, largely depend. In 2003, Russia resumed the Soviet-era practice of sending manned drifting ice stations to the North Pole. The year after Russia planted a flag in the Arctic seabed in 2007, it adopted a formal Arctic policy document. These developments were accompanied, on occasions, by self-serving nationalist and aggressive rhetoric. Putin is clear that Arctic oil and gas will form the basis of Russias future economic prosperity, and thus Russia wants to send the message that anybody who attempts to interfere in its Arctic activities will feel the full legal and political force of the state. In stark contrast, between 2009 and 2011 Russia pursued a policy of cooperation in the region, suggesting a realization by the Kremlin that if its relations with the other Arctic states improved, then it could focus on the economic benefits the area offers. In April 2009, the Arctic Council (of which Russia is a member) proclaimed an atmosphere of complete mutual understanding in Arctic affairs. In September 2010, Russia resolved a 40-year-old dispute with Norway over dividing the Barents Sea (and part of the Arctic Ocean) between the two countries. And, in May 2011 the Arctic Council signed its first legally binding treaty. WhileRussia claims that its response to the challenges provided by climate change and the opening up of the Arctic is purely peaceful, its behavior since 2011 suggests otherwise. In July 2012, Russia beganconstruction on afourth Borei-class submarine, designed to carry its newest and most powerful intercontinental nuclear missile, the Bulava, while patrolling the Arctic Ocean.

Russia demands Netherlands apology

President Vladimir Putin of Russia said on Tuesday, aThis is the most gross breach of the Vienna Convention. We are waiting for explanations and apologies and also for those guilty to be punished.a aWe will react depending on how the Dutch side behaves,a Putin added. Russian Foreign Ministry spokesman Alexander Lukashevich announced earlier in the day that Moscow had handed over a note of protest to the Dutch ambassador to Russia. aLast weekend, armed people in camouflage uniform stormed the apartment of Dmitry Borodin, a minister counselor at the Russian embassy, and roughly beat up the diplomat in front of his children, on the absolutely made-up excuse that he allegedly mistreated them,a Lukashevich said. The spokesman added that Borodin was taken to a police station where he was held overnight and then alet go without any explanations or apologies.a The Dutch police refused to comment and the Foreign Ministry of the Netherlands has said that it has launched an investigation into the incident. Tension between Russia and the Netherlands was triggered when a Dutch-flagged ship carrying Greenpeace activists staged a protest last month against Arctic oil drilling. The protesters were arrested on September 18 while boarding Prirazlomnaya oil platform in Russiaas Pechora Sea. The group is currently being held in custody in the Russian northern city of Murmansk. Russian authorities have pressed piracy charges against the 30 protesters and if convicted, they could be sentenced up to 15 years in prison. The arrests caused the Netherlands to file a lawsuit against Russia at the United Nations Tribunal for the Law of the Sea on October 4 in a bid to win the immediate release of the ship and those who were onboard. Russia has dismissed legal action and says the groupas protest was apure provocation.a CAH/HSN

Russia to invest $1 billion in rare earths to cut dependence on China

The United States, Japan and the European Union have complained to the World Trade Organization about China’s efforts to control the sector, saying China is trying to use its stranglehold over supply to drive up prices and gain a competitive advantage. Rostec and IST group, an investment company belonging to Russian tycoon Alexander Nesis, have agreed to invest $1 billion in rare earths production by 2018, they said in a statement on Tuesday. Rostec aims to cover Russian demand for these raw materials by 2017, the company added. “The (Russian) President (Vladimir Putin) and the government have set a task to expand rare earths production as Russia’s stocks are almost depleted,” a source in state industrial and defense conglomerate Rostec told Reuters on Tuesday. “Stocks need to be replenished as the main producer, China, has increased prices sharply,” the source said. TriArkMining, a joint venture (JV) between Rostec and IST, has won the right to acquire 82,653 tonnes (1.1023 tons) of monazite concentrate, stored in warehouses of state-owned Uralmonatsit in the Sverdlovsk region of Russia’s Urals. Advertise The JV plans to extract about 40,000 tonnes of rare earths from the monazite concentrate stored in the warehouses over the course of seven or eight years starting from 2015, the companies said. The stock is rich in heavy rare earths, such as dysprosium and terbium, crucial for high-power magnets needed by the auto, defense and clean energy industries. Heavy rare earths are scarcer than cerium and other light rare earths, making them much more valuable. Russia consumes about 1,500 tonnes of rare earths per year and annual demand is expected to reach 6,000 tonnes by 2020, Rostec said. Major Market Indices The company, which has eight firms producing a wide range of defense products, sees rare earths as a strategic raw material. China will cap rare earth production at 93,800 tonnes for 2013 as part of efforts to rein in unlicensed production in the sector, it said last week. “Russia accounts for only 2 percent of the world’s rare earths production.

___ MURMANSK Murmansk, the largest city in the world above the Arctic Circle, played an important role in the Allied victory in World War II as the port of call for U.S. and British convoys bringing in supplies to help the Soviet Union fight Nazi Germany. In more recent weeks, though, the city has made the news because of the 30 Greenpeace activists in its jails, charged with piracy after a protest at a Russian offshore oil platform. ___ KHANTY-MANSIYSK The center of a Western Siberian region where more than half of Russia’s oil is produced, Khanty-Mansiysk is a boom town in the middle of the taiga that looks more Scandinavian than Russian. The city and region were named for the indigenous people, the Khanty and Mansi, who by tradition are reindeer herders. ___ MAGADAN This northeastern city was the gateway to the most notorious Gulag labor camps under dictator Josef Stalin. The Mask of Sorrow monument in Magadan honors the tens and perhaps hundreds of thousands of people who died either en route to or in the Kolyma camps, where prisoners, many of them intellectuals, mined for gold, cut lumber or built roads during long, brutally cold winters. At the protest rallies in Moscow in the winter of 2011-12, demonstrators chanted “Putin, skis, Magadan.” ___ ANADYR The easternmost point of Russia on the Bering Sea, Anadyr is the capital of the Chukotka region, whose governor from 2001 to 2008 was Roman Abramovich. The Russian billionaire is now better known as the owner of the Chelsea Football Club, a soccer team in London. ___ VLADIVOSTOK This city is the final stop on the Trans-Siberian Railway, a seven-day journey from Moscow, and Russia’s largest port on the Pacific Ocean. Vladivostok’s economy is greased by the import of Japanese cars, and used cars from Japan with the steering wheel on the right fill the streets. In preparation for hosting the Asia-Pacific Economic Cooperation summit in 2012, Vladivostok got new roads and bridges, including one of the longest cable-stayed bridges in the world. ___ BIROBIDZHAN Birobidzhan is the capital of the Jewish Autonomous Region, which Stalin created in the 1920s in an unpopulated area along the Chinese border. Jews now make up a small minority of the population, but the city has seen a revival of Jewish culture in recent years. ___ IZHEVSK Mikhail Kalashnikov put this industrial city on the map.