The Moscow Times yesterday contained an article by George Mason University professor Stuart S. Malawer (pictured, would you buy a used car from this man?) arguing that the United States should not have opposed Russia's admission to the WTO. The article so full of misrepresentaions, half-truths and Russophile screeching that it could easily have been written by a KGB spy seeking to subvert American opposition to rising dicatorship in Russia. Indeed, La Russophobe challenges the reader to explain how a KGB propaganda screed would have been any different (viewed as such, it's actually rather impressive; viewed as an attempt to fairly and accurately report on the WTO process, it's a travesty of truth). One can only wonder why the eminent professor could only find the Moscow Times, as opposed to say the New York Times, willing to publish his little ditty. Wikipedia has never heard of Professor Malawer, nor can La Russophobe find any reference to him on ratemyprofessors.com which rates three quarters of a million instructors (so apparently he doesn't teach much). If you Google him, you get less than 200 hits (La Russophobe herself has more than 20,000). Here is the full article (in black), with running commentary (in red) from La Russophobe pointing out the factual lapses

One important issue from July's G8 summit in St. Petersburg has significant implications for the United States and the global trading system, but received little play in the Western media: Russia's accession to the World Trade Organization. The United States has glaringly politicized this issue for domestic purposes, while its actions in St. Petersburg provided many important lessons for U.S. trade and foreign policy. Little play? La Russophobe just searched "Russia WTO" in the Google News engine and got more than FIVE HUNDRED hits.

The Russian government approached the summit as a major milestone. President Vladimir Putin highlighted his great domestic popularity and Russia's economic revitalization as a result of its oil and gas exports and booming commodity markets. The summit also cast a spotlight on St. Petersburg -- Putin's hometown -- itself. Great domestic popularity? Putin has approval ratings in excess of 70% in a country where the average monthly salary is $300 and the population is dramatically falling, while bloody war is being fought in Chechnya at extravagant cost while being condemned by human rights organizations across the globe. The Polituro had the same kind of popularity, but the USSR wasn't a member of the WTO. When the spotlight shone on Piter, a great number of horrifying defects were revealed. Apparently the good professor doesn't read much, especially not La Russophobe. Like our motto says, you don't really understand Russia unless you do.

Putin wanted the summit to focus on energy security, but in the lead up to the event the U.S. side looked more interested in raising questions involving Russian domestic politics. Ultimately the outbreak of hostilities in Lebanon and Israel hijacked the conference. While this may have obscured the issue of Russia and the WTO, it is still an issue that deserves examination. This is a blatant misrepresentation. What the U.S. was interested in was Russia giving U.S. military secrets to Iraq during the invasion, financial support to Hamas, weapons to Venezuela and nuclear technology to Iran. The bald dishonesty necessary to ignore all these facts indicates that George Mason University shouldn't be at the top of your list of places to send your impressionable younguns.

Russia is the world's largest economy not within the WTO. Its application for membership has been pending for more than a decade. During this period, countries such as Saudi Arabia, China, Armenia and Croatia have become members and Vietnam is expected to join this year. Russia possesses the second largest oil reserves in the world and many of its corporations (state-owned natural gas monopoly Gazprom, for example) are now involved in global transactions, mergers and acquisitions. Some of the largest IPO's in the world this year have involved Russian companies, such as Rosneft. None of the countries listed have proud KGB spies as their presidents, do they? Are any of them giving nuclear technology to America's arch foe Iran? Not really. Apparently, the good professor thinks it would be a fine idea for America to sell its soul for oil, but his obvious hatred of the Bush administration makes it unlikely he supported the Iraq war for that reason. If he read even a little, he'd know that Russia's oil IPOs have been ridiculed by financial experts across the globe. Or maybe he does read, he just lies about it afterwards.

Russia is clearly in a state of economic and diplomatic ascendancy after the disastrous 1990s. The RTS stock index has been reaching new heights, foreign currency reserves are the third-highest in the world and the economy is growing at an annual clip of 6 percent. Announcements of plans for new foreign direct investment have accelerated. As reported on La Russophobe and elsewhere, the bottom dropped out of the Russian market at the beginning of the summer, and within a few weeks the market had lost 1/3 of its value. The professor doesn't care to menton that, does he? In fact, Russia has had a whole spate of economic disasters culminating with the recent news that personal incomes fell by 5%. The professor seems not to understand what even Maryanne and Ginger know, which is that because the base of the Russian economy is so tiny, 6% growth in Russia produces nothing remotely like the value it would in a first world economy like Japan's or Germany's, which can have a far lower rate of growth and produce far more value. Notice how the good professor doesn't care to mention Russia's $300 per month average incomes?

WTO accession agreements have been concluded between Russia and all of the WTO member states except the United States. This agreement is required before Russia can join the WTO. Another outright misrepresentation. As La Russophobe has noted, Kommersant reported weeks ago that Russia does not have agreements with Moldova, Costa Rica or Georgia.

On the eve of the summit, the Russian delegation announced a trade breakthrough with the United States. Finance Minister Alexei Kudrin was quoted by Russian media as saying the accession protocol would be signed at the beginning of the summit. But what seemed like a sure thing quickly dissolved. The United States immediately declared that some unresolved issues remained, primarily involving market access and lingering concerns over intellectual property rights. At this point the Russians belatedly raised the minor issue of meat imports from the United States. The Russian delegation demanded the right to inspect U.S. farms in order to protect against mad cow disease (there have been two cases reported in the United States). It was clearly a face-saving measure. This is blatant misrepresentation. There is no evidence of any kind that Kudrin was ever told by any member of the U.S. team that Russia's WTO proposals would be accepted. As La Russophobe has reported, in late June Senate Finance Committee Chairman Charles Grassley, one of the most senior an influential of American legislators, said there would be no WTO deal for Russia in Piter. By ignoring these basic facts, professor Malawer exposes himself as the most base and disgusting of partisan shils.

The G8 states then mumbled something about resuscitating the moribund Doha Round and the United States and Russia said they hoped to move forward on Russian accession in the fall. (WTO chief Pascal Lamy subsequently declared a suspension of the Doha Round negotiations.) U.S. President George W. Bush indicated at the summit that more concessions would be required to get congressional approval. Just prior to the summit, Senate Democrats had urged Bush not to enter into an agreement. They had doubts about Russia's reliability as a trading partner and its willingness to comply with WTO obligations. The U.S. Chamber of Commerce also raised its long-standing concerns over corruption and the defense of intellectual property rights in Russia. Senator Grassley is a ranking Republican, not a Democrat. So members of Congress on both sides of the aisle AND the Chamber of Commerce opposed the measure, yet the Professor thinks President Bush should have run roughshod over all of them. Sounds like something Putin or Stalin might suggest.

Partly as a result of this stalemate, several major transactions involving U.S. and Russian firms remain stalled, including Boeing's effort to sell aircraft to Aeroflot and Chevron and ConocoPhillips' proposal to partner with Gazprom partners in the Barents Sea gas project. The St. Petersburg Times reported on August 15th that "with President Vladimir Putin’s blessing, Boeing struck an $18 billion deal Friday with VSMPO-Avisma to supply titanium for its airplanes."

The situation clearly demonstrates that trade has become a secondary policy objective for the United States. Susan Schwab, the newly installed U.S. trade representative, and her leadership team are simply not senior or experienced enough to create new political realities. The default inclination of anti-Russian and protectionist forces within Congress and the Bush administration are surfacing, as they often do, at exactly the worst moment. The United States needs a strong global economy, a viable multilateral trade organization and a partner on a host of diplomatic and national security issues, including Iraq, Iran, North Korea, Afghanistan, global terrorism, secure energy supplies and global economic development. So, what the good professor is saying is that no matter what the Chamber of Commerce or the U.S. Congress wants, Ms. Schwab should be able to ram a WTO agreement right down their throats, and if she can't that can only mean she's "not senior or experienced enough" (code for incompetent). In other words, if you don't agree with the professor, you're a fool.

The breakdown of the Russia-U.S. accession discussions speaks volumes. Russia thought it had an agreement, so much so that it made the announcement. The agreement would have been the crowning achievement of the G8 summit for all of the members. But the United States refused to allow this to happen, for the same old reasons: congressional pressure, business lobbying and, most importantly, presidential administration officials who still just don't get it. Yeah, that darned old democracy sure is a downer. No wonder the professor is so fond of Putin.

By standing in the way, administration officials demonstrated that they did not understand the folly of pressuring a country that spans 11 time zones into adopting domestic policies stemming from U.S. political and cultural ideological perspectives developed during the United States' own unique political history. Russia has its own political and cultural history spanning 1,000 years. Yes, corruption is a problem. But that is true in many other countries. There is significant pressure in Russia already to sign the UN Convention Against Corruption. Is corruption in Russia any more of a problem than in a large number of other countries? Clearly, many in Congress and the Bush administration still view Russia through a latent Cold War prism. Well, the professor is at it again. More boldfaced, propagandistic distortions. As La Russophobe has already reported, this year's Corruption Index by the German think tank Transparency International says that Russia is tied for the 9th most corrupt nation in the world. Russia has the same level of economic corruption as Niger and Sierra Leone, and neither of those countries has ICBMs or is governed by a proud KGB spy who spent his life thinking of ways to destroy the United States. It's simply intellectual fraud of the first order to ignore these basic facts (unless of course the good doctor didn't even know about them, which would rather decisively disqualify him on competence grounds).

The integration of Russia into the global economy is essential. The WTO is the only major multilateral organization that really works. Its goal is the creation of a rule-based trading system and its dispute-resolution system is extraordinarily effective. Global trade has expanded exponentially since the organization's founding in 1995. The underlying premise of the WTO is that, as a rule-based system developed to govern global trade, it will help foster rules and institutions within the civil society of member states, making them more democratic and wed to the free market. This system is the critical link between global trade, economic prosperity and political development -- as envisioned by the United States as the architects of the WTO. How can Russia be part of a rule-based trading system when it has the world's ninth-most-corrupt economy? Why shouldn't the U.S. oppose the admission of a country whichis providing military assistance to America's most hardened enemies, like Venezuela and Iran?

The goal of Russian accession should not be sacrificed on the altar of atavistic perceptions. The United States should modify its trade and foreign policy. It must develop a comprehensive national security policy, integrating global trade and foreign policy concerns without domestic political intrusions, to enhance trade relations and to give political development a boost -- both in Russia and around the globe. "Sacrificed on the alter of atavistic perceptions." Wow. What seething hatred the professor has for anyone who disagrees with him. Apparently, if you do, you're a savage who needs to be broken or euthanized.

Stuart S. Malawer is a professor of law and international trade at the George Mason University School of Public Policy.

Let's check in on the Russian sex scene and see how wonderfully well the "oil-rich" and civilized country is doing, shall we? Let Malina introduce herself, won't you gentlemen:

Приветик. Я маленькая, легкая и нежная девушка. Живу в марьино недалеко от м. братиславская. Классический секс, глубокий минет, за анал+3000р, за минет без резинки тоже допл$. Выезд 2часика 4500р,ночь-9000р

Oh, you don't speak Russian? Well, let La Russophobe translate:

Hi baby. I'm a little girl, soft and easy. I live in Marino, not far from the Bratislavskaya Metro Station in Moscow. I do straight sex and blowjobs. $75 for an hour, $125 for two hours and $300 for a whole night. $50 extra per hour outcalls, and there's an extra charge for blowjobs without a condom or anal sex.

Malina (well, her pimp) has her own web page (children are welcome to visit any time, but they have to promise to be 18 before they enter) and an ICQ account (312771739). She doesn't mind if you bring your video camera. Malina promises she's 18 too but . . . well . . . you know. Russia does have its standards.

If Malina is not to your taste, just ring up her pimp at 8-909-955-6551 and there's undoubtedly no shortage of other choices for your amusement.

Unabashed, well-publicized child prostitution -- just one more reason to love the Neo-Soviet Union. Not.

MOSCOW (Reuters) - Russia is to create its first women-only traffic police unit because commanders believe they are less corrupt than men, a newspaper reported on Monday.

The male-dominated traffic police routinely forgive traffic violations in exchange for bribes. Many believe this culture helps make Russia's roads among the world's most dangerous: about 35,000 people are killed in accidents each year.

"The first female platoon of 26 traffic officers will patrol the centre of Volgograd (in southern Russia)," Izvestia daily quoted regional police chief Mikhail Tsukruk as saying.

"There is research which proves that women are not inclined to bribe-taking," the paper quoted him as saying. A few women already serve in the traffic police.

That is quite an insight. The logical extension of it is a female-only rule for the Russian presidency as well, which means Vladimir Putin is out on his ear. La Russophobe could not more heartily agree with this obviously scientific conclusion.

You routinely hear that "President" Vladimir Putin is loved and adored by the overwhelming majority of his countrymen. Why, then, would he need to shamelessly manipulate the political parties? Is he afraid someone might vote against the ones he endorses? CNN reports (relying on the Associated Press):

MOSCOW, Russia (AP) -- Three parties that support President Vladimir Putin announced plans to merge Tuesday, a move widely seen as part of Kremlin-orchestrated maneuvering before parliamentary elections next year and Russia's 2008 presidential vote.

The leaders of the Party of Life, the nationalist Rodina (Motherland) and the Party of Pensioners said they were joining forces to create a new, as-yet-unnamed party to compete with the Kremlin-controlled United Russia, which dominates Russian politics and holds a massive majority in the lower parliament house, the State Duma.

The new party supports Putin's goals, opposes "political monopolism" in their implementation, Party of Life leader Sergei Mironov, a staunch Putin supporter who is chairman of the upper parliament house, said in televised comments.

"We favor a genuine multiparty system in Russia, and therefore are in opposition to United Russia," Russian news agencies quoted Mironov as saying.

Elections for the State Duma will be held in December 2007, followed a few months later by a presidential vote in which Putin is barred from running by term limits. The presidential balloting could be tense, as his allies seek to ensure they retain power and Kremlin factions wrestle for prominence.

The three parties merging have all cast themselves as more socially oriented and sensitive to the needs of economically struggling Russians than United Russia. Political analyst Igor Bunin said one of the goals of the merger was to create a force to attract voters who support Putin but dislike United Russia.

Bunin, head of the Moscow-based Center for Political Technologies, said the merger was also driven by Kremlin forces seeking to create a "spare party of power" that could counterbalance United Russia -- ensuring it does not become mightier than the president's administration -- and that could replace it as the majority party if necessary.

The party created by the merger would have a good chance of winning seats in parliament, along with United Russia, the Communist Party and flamboyant ultranationalist Vladimir Zhirinovsky's Liberal Democratic Party, Bunin said. But he said it could have trouble attracting support because it is unlikely to be seen as a real alternative to those in power.

The Guardian has already reported something along these lines:

Political fixers at the Kremlin think they have found a solution to the failing fortunes of the party that was engineered to support President Vladimir Putin: create another one that pretends to be an opponent.

Mr Putin's aides are concerned that United Russia, the pro-Kremlin party that dominates parliament, is jaded and losing the support of the electorate. Vladislav Surkov, deputy head of the presidential administration, said Russia needed "a second major political party, which will need time to come to life, though we've become used to thinking that everything must be done at one go". He said it could eventually replace United Russia, which lacks ideology besides offering unwavering support for the president.

Analysts predicted the new political force - which could unite several embryonic parties - would be entirely Kremlin controlled, but presented to voters as an opponent or alternative to United Russia.

Mr Surkov, who is known as the chief architect of fake opposition movements in Russia's world of virtual politics, made his comments in a speech to members of the Russian Party of Life. "The problem is that there is no major alternative party," he said. "Society lacks one leg to stand on when the other gives way."

The news was greeted coolly by political commentators, who said it confirmed the Kremlin's paternalistic attitude to political parties rather than a genuine desire for a competitive system.

"In reality, we are not talking about the two legs of society," said Vladimir Pribylovsky of the Panorama thinktank. "We are talking about the two hands of the presidential administration."

It is thought the new political bloc will be a centre-left patriotic movement formed of the Party of Pensioners and Rodina, two parties whose outspoken leaders were recently replaced with Kremlin-friendly figures. A third component would be the Party of Life, controlled by a devoted Putin supporter, Sergei Mironov.

So much for Russian democracy! Putin can only be viewed as the man who killed any last vestige of hope in Russia, and the results are predictable. RIA Novosti confirms them:

The average Russian is paying less and less attention to politics and delving deeper and deeper into his or her own personal, everyday problems. The reasons for this attitude are not only economic; this political apathy is caused by narrowing political choices due to changes made to election legislation (such as the abolition of the "against all" option) and the lack of an alternative, which has become the main attribute of current Russian politics.

Sociological research shows that due to the absence of a dominant ideology and people's de-politicization, Russians are willing to accept a one-party system and the political dominance of the ruling pro-Kremlin party, United Russia. This is not because United Russia is seen as extremely good, but because ordinary Russians no longer care who controls politics: They want to be left in peace to work for their own survival or, on the contrary, enrichment. Ordinary people do not see a direct connection between politics and their prosperity. Surveys by the Levada Center show that people are inclined to blame the government for all negative developments. At the same time, they view the government not as a political institution, but as an economic body that is unable to cope with people's chief concerns, i.e. inflation (the biggest concern, according to polls), poverty and corruption. As many as 66% worry about low incomes, while 70% of Russians fear a price hike. The government's two main tasks, polls indicate, should be to fight corruption and reduce prices.

Russians do not see a serious alternative to the incumbent president. According to the Levada Center, if Vladimir Putin decided to run for a third term, he would receive 48% of votes. As many as 40% are ready to vote for Putin's handpicked successor, while 55% are positive that this person will be from the president's inner circle. This may help to explain the steady growth of First Deputy Prime Minister Dmitry Medvedev's approval rating, which reached a new all-time high of 26% in July. Only 16% are willing to support alternative candidates, and this is the most vivid proof of people's political apathy and their unwillingness to influence political developments in the country even when its future is at stake.

One of the reasons is their conservative expectations. Most of them do not think that the situation in the country or their personal situation will change for the better or for the worse in the near term. Their assessment of the present situation is philosophically neutral: 25% said it was not all that bad for them, while 51% said life was hard, but bearable.

The ability to adjust to current circumstances with realistic expectations and focus on personal problems is projected onto politics. Fewer people now believe that the incumbent president will make a great improvement in their lives in the near future: their share has fallen from 43% in 2001 to 32%. Instead, the number of those who do not see any alternative to Putin has grown from 34% to 38%. In July 2006, the president's approval rating surged as high as 79%, with only 19% of people disapproving of him.

Still, this apathy and de-politicization cannot last long. With all the relative predictability of the parliamentary and presidential elections in 2007 and 2008, respectively - and it is this predictability that causes apathy - Russians' future political preferences are unclear. For lack of clear ideological priorities and goals that unite the nation, populist doctrines and nationalist parties have a fairly good chance of succeeding. So far, complete apathy has played a paradoxically positive role, toning down the most radical and quasi-fascist sentiments. Yet this phenomenon has another side: the nationalist minority can become a majority because of most people's absolute indifference to what is going on in politics.

For people to vote consciously and with interest, they need incentives. Perhaps, an adequate solution would be to democratize election legislation in the next political cycle. The first step could be to lower the 7% threshold in the parliamentary election. This measure could lead to a fledgling multi-party system appearing in Russia. Then even apathetic voters would suddenly be interested in the choices on offer.

According to an official of the Sova Center, as reported in The Guardian, racist incidents are increasing at the horrifying rate of 30% every three months in Russia (hat tip to reader Jeremy Putley for pointing us to the article).

A blast that killed 10 people in a Moscow market on Monday was caused by homemade bombs planted by two students targeting Asian traders, officials said yesterday. Prosecutor Yuri Syomin said the pair carried out the attack because they thought there were "too many people [there] of Asian background, towards whom they experienced bad feelings".

The attack, which marks a sharp escalation in the campaign by Russian ultra-nationalists against immigrants, was originally thought to have been provoked by a business dispute.

However, Oleg Kostyryov and Ilya Tikhomirov, both 20-year-old university students, were charged with racially motivated murder. They were arrested at the scene of the explosion at the Cherkizovsky market in the north-east of the city, soon after it took place. A third man, Valery Zhukovtsov, is being questioned.

Russia has seen a rise in xenophobia in the past two years, expressed in a series of murders and beatings of people with dark skin, often from central Asia or the Caucasus. Markets have often been points of tension as immigrants work there, selling food, clothes and other goods.

Neither of the suspects is known to be a member of a neo-Nazi group, and their attack differed from a spate of recent racist killings in which the victims were stabbed, shot or beaten to death.

Mr Syomin said the two had confessed to the crime, and that components of makeshift bombs were found at the halls of residence where Mr Kostyryov lived. In a confused reference to Chechens, they told investigators their aim was to "get revenge on the 'illegals' who are filling up Russia and carrying out terrorist attacks".

According to police, the pair learned how to prepare a bomb on the internet. They used ammonium nitrate, aluminium powder, acetone and sulphuric acid, with an alarm clock detonator. Mr Kostyryov was a chemistry student at the Mendeleev Institute and may have used his knowledge to make the devices.

Police said earlier that Mr Kostyryov and Mr Tikhomirov had entered a building at Cherkizovsky at 10.30am on Monday and planted one explosive device each, concealed in a plastic bag. Surveillance pictures showed Zhukovtsov lagging behind them, without carrying anything.

The blast, which tore through shops and a walkway, killed 10 people and 40 had to be sent to hospital. Two of the dead were Russians but the others were citizens of Uzbekistan and Tajikistan.

Mr Kostyryov and Mr Tikhomirov are thought to have planned the attack weeks in advance and recruited Zhukovtsov last weekend to help them escape afterwards.

Kamilzhan Kalandarov, a Muslim leader and member of the government-controlled Public Chamber (an ombudsman body), said the attack showed xenophobia had reached a dangerous level, with nationalists opting for the use of terror.

The blast was "not an instance of banditry, but a large-scale mass terror attack motivated by ethnic enmity," he told Interfax.

Galina Kozhevnikova of the racist violence monitor Sova said: "This demonstrates the quick growth of ultra-right tendencies. We are seeing a 30% increase in xenophobic attacks every three months."

An article about the Russian stock market by one Maria Ermakova, published in Bloomberg News and excerpted in the International Herald Tribune is wildly misleading. La Russophobe reproduces it below, with running commenary (in red) to clear up the confusion. There's so much of it that La Russophobe can't help but wonder if this reporter has been bought and paid for by the Kremlin.

Russian stocks are approaching $1 trillion in value, an emerging-market record, mostly because of the country's burgeoning oil industry. In other words, the only reason the market is up at all is that the price of oil has risen. It has nothing to do with any growth or dynamism in the Russian economy or any particular enterprise, and if the price of oil falls your investment will evaporate. More important, foreigners are being systemmatically excluded from access to Russia's oil resources.

"Russia has a great potential,'' said Jacob Grapengiesser, who helps manage $4 billion at East Capital Asset Management AB in Stockholm. "There has been political stability, the economy is strong, and things are getting better for people, not just the market.'' The firm has about half its holdings in Russia. A person who spends his life convincing people to invest their money in Russia so he can collect a commission is perhaps not the best source of objective information about how good an opportunity actually is. He may be slightly biased. Just a word to the wise.

The Russian Trading System Index has surged 88 percent over the past 12 months. OAO Gazprom, the country's natural gas monopoly, ranks as the world's third-largest company at $276.9 billion, behind Exxon Mobil Corp. and General Electric Co. and ahead of Microsoft Corp. and Citigroup Inc. As La Russophobe has previously reported, in just a few weeks at the beginning of the summer the Russian market lost one-third of its value, the biggest plunge in its entire history. Wouldn't it have been appropriate to at least mention this fact?

Investors have looked past deterrents such as President Vladimir Putin's seizure of OAO Yukos Oil Co. to reclaim control of the energy industry. The Russian index, a dollar-denominated gauge of 50 companies, is the third-best performer in the past year among 80 benchmarks tracked by Bloomberg. Actually, that's a boldfaced lie. The number of people who have invested in Russia's stock market is microscopic; its investors consist primarily of a small group of wealthy elites known as "oligarchs." This reporter really should get out more.

Russia's market capitalization on Aug. 16 reached a record $946.2 billion, 15 percent larger than South Korea, the next biggest emerging market, at its peak in May, according to data compiled by Bloomberg. A July share sale by OAO Rosneft, a state oil producer, added $68 billion in value to the market. As reported on La Russophobe. this IPO was lampooned and castigated across the globe because the company is being manipulated by the Kremlin and is founded based on misappropriated assets. A fool and his money are soon parted.

Shares of Moscow-based Gazprom, the world's largest natural- gas producer, have jumped 60 percent this year. The same thing can happen when you put money in a slot machine. But they don't call them one-armed bandits for nothing.

Banks, Mobile Phones

The country's biggest companies outside the oil and gas industry include OAO Sberbank, Russia's biggest lender; OAO Unified Energy System, the national power utility; OAO GMK Norilsk Nickel, the world's largest nickel miner; OAO Cherkizovo Group, Russia's largest meat producer; and OAO Mobile TeleSystems, eastern Europe's No. 1 mobile-phone operator. Notice how she doesn't tell you anything about the performance of these companies? Two such major enterprises just posted multi-million-dollar losses, as reported her on La Russophobe.

The price of the country's main oil export, Urals crude, has soared 164 percent in the past five years. The surge has boosted earnings prospects for energy producers in Russia, the world's second-largest crude exporter behind Saudi Arabia. During the past 12 months, it's up 17 percent and touched an all-time high of $73.63 a barrel on Aug. 7. "I am not surprised by market valuations,'' said John Lomax, an emerging markets strategist at HSBC Holdings Plc in London. "Given high oil and gas prices it is likely to continue this way. The Russian market may come down a little but in the long term it will outperform other emerging markets.'' Investing in Russia because it has oil is like investing in Nazi Germany because it has auto factories. Maybe not the best long-term move you can make.

Greater Weight

Institutional investors are according Russia a bigger place in their portfolios. Morgan Stanley Capital International said this month it will almost double Gazprom's weighting in the firm's Emerging Markets Index to 5 percent in September, making it the biggest component of the benchmark. The firm took the step after Putin dropped limits on the stock's foreign ownership. About $3 trillion in investments is benchmarked to MSCI's indexes. If he can drop them, he can raise them. Doesn't anyone remember Mikhail Khodorkovsky?

Vanguard Group, the second-largest U.S. mutual-fund manager, last week added Russia to the countries in its $9.6 billion Emerging Markets Stock Index Fund. Previously Vanguard excluded Russia on concern that it was too hard or risky to trade in. The country now warrants inclusion in the fund, the Valley Forge, Pennsylvania-based firm said. $9.6 billion is nothing for Vanguard, and Russia is a neglible part of that nothing.

Record initial public offerings in Russia also helped boost the value of the market. Russian IPOs may total $18.3 billion this year, surpassing the record $4.6 billion in 2005, according to Renaissance Capital, a Moscow-based investment bank. Rosneft's July IPO raised $10.6 billion, making it the world's fifth- largest public offering. OAO Magnit, a food retailer, raised $368 million in April. The stock market is worth $1 trillion and there are less than $20 billion in IPOs? Not very impressive.

Impact of Yukos

Moscow-based Rosneft in 2004 bought the largest unit of Yukos, which was seized and auctioned by the government to help recover more than $30 billion in tax claims against Yukos. Yukos once was Russia's biggest oil exporter, and the government's seizure of the company and prosecution of its founder, Mikhail Khodorkovsky, raised concern that Putin didn't respect private property rights. Yukos was declared bankrupt Aug. 1. The Moscow-based company, valued at $43 billion less than three years ago, now has a market value of $1.8 billion. "The case with Yukos has clearly hurt the market, but it's over,'' said Grapengiesser. "People have moved on from that period of time.'' Again with the Russian broker! Isn't this just a bit much? Of course, Russia has gotten over that silly business with the gulags too, now hasn't it?

Dependent on Commodities

To be sure, many investors say that Russia's nominal market value of $942.2 billion overstates its size, because it includes shares owned by the state and thus not available for trading. The government, for example, owns more than 85 percent of Rosneft, more than 50 percent of Gazprom and almost 64 percent of Sberbank. Index providers such as MSCI exclude shares held by the government and other equity not available for trading. The firm counts only $178 billion of Russian market value in its stock indexes. Wow, at last some truth! So that business about the $1 trillion up front was total B.S., wasn't it. And yet you mention it, and the truth is buried way down here. Gee, La Russophobe dares to wonder why.

The market also is captive to swings in commodity prices, which may be depressed by slower economic growth in the U.S. and China, according to Guenter Faschang from Vontobel Asset Management in Vienna. "The risk is quite high that the U.S. and global economic growth will slow,'' said Faschang, who manages about $1 billion. "This will cut demand for commodities and raw materials, and their prices will go down.'' The firm has been selling holdings in Russia and eastern Europe. And what about U.S. efforts to find replacement oil supplies, such as the gigantic Canadian shale project? What about conservation? What about Cold War II? What about the possibility that Vladimir Putin, a proud KGB spy, will run Russia right into the ground just the way every other leader of Russia has done since the beginning of recorded time?

`Bubble' Fear

Russian Economy Minister German Gref in March said he was "very afraid of the formation of a so-called bubble'' in the stock market. The RTS has risen 12 percent since then, and it's outperforming other emerging markets this year even after a slump in May and June. The Russian index is up 46 percent year to date versus an 8.3 percent gain for MSCI's emerging markets index. A slump? The market lost one-third of its value in the largest one-day crash in its history, and she calls it a slump? Seems like Gref was spot-on in predicting the bubble, but the "reporter" ignores it.

Concern about political stability in the country as Russia prepares for presidential elections in 2008 may also weigh on the stock market, said East Capital's Grapengiesser. "The risk of course is commodity prices and who will succeed Putin,'' he said. "I don't think it's going to be much of a problem, but with Russia, you never know.'' What exactly would you expect a Russian stock broker to say? Get your money out while you have a chance, you fool? I want to go to the poor house?

Writing in the Lebanon Daily Star Konstantin Eggert, Moscow bureau editor for the BBC Russian Service (this commentary first appeared at bitterlemons-international.org, an online newsletter) provides readers with vital insights into the Neo-Soviet ambitions of Russia in the Middle East:

The year 2006 has become "the" year of the Middle East for the Russian leadership. First was the controversial visit by a Hamas delegation to Moscow, then President Vladimir Putin's trip to Algeria. In the early summer, reports surfaced that Russia was engaged in modernizing facilities in the Syrian ports of Tartus and Latakia (followed by a lukewarm denial by the Russian defense minister). Then came the crisis in Lebanon.

Over the last few weeks, Moscow has taken a very assertive position in the United Nations Security Council. Together with China (yet more vigorously), it opposed the initial joint US-French draft resolution that suited Israel. The Russians have taken it upon themselves to be the international advocates for the Lebanese and Syrian governments. In the first days of the crisis, while hosting the G8 summit in Saint Petersburg, Putin freely admitted that he successfully lobbied his Western partners to exclude any mention of Syria from the G8 statement on the Middle East situation. In his words, "the guilt" of Damascus "is not proven."

Official ties between Moscow and Damascus are increasing rapidly.

It all started with a January 2005 visit to Moscow by Syrian President Bashar Assad. The Russians announced that they were writing off nearly three-quarters of Syria's $12-13 billion debt. It was then that Russia confirmed its willingness to continue supplying Syria with SA-18 light air-defense rockets and allegedly suggested selling much more sophisticated "Iskander" missiles. After vigorous pressure from the United States and Israel, Putin had to personally cancel the deal.

However, since then high-level contacts between the Russian and Syrian militaries have increased. In September last year, the chief of the Syrian General Staff, General Ali Habib, visited Russia. His Russian counterpart, General Yuri Baluyevsky, reciprocated and was given a grand tour of Syrian military facilities this year. And although officially all talk is of small arms and ammunition shipments, exchanges between military academies and the like, there is a feeling that something bigger is afoot.

It is now beyond reasonable doubt that the Kremlin has decided to take Syria under its wing and use it to stage a "comeback" to Middle East politics. The Syrian-Iranian-Hizbullah connection does not bother the Kremlin. Russia's Federal Security Service refused to put Hizbullah on the list of terrorist organizations because it "does not operate on Russian soil." According to rumors circulating in Moscow, the Russian military mission in Syria might be aware that the Syrians have supplied Russian-made rockets to Hizbullah.

The rationale for Russia's new course in the Middle East lies in the same motivation that drives Moscow's foreign policy as a whole: primarily, deep dislike of the United States combined with a desire to at least partly avenge Russia's defeat in the Cold War. Moreover, the Russian political class sees the American policy of promoting democracy as a direct threat to its own interests in the former Soviet Union and even in Russia proper. The idea that US influence has to be curbed as much as possible and wherever possible is very popular among influential people in Putin's administration. And in this game every ally counts. To quote Dmitry Trenin of the Carnegie Moscow Center, "Russia is busy constructing an international universe of its own."

Giant oil revenues make the Kremlin feel more confident domestically and provide for much more assertive behavior abroad. The West, particularly the US and Britain, is increasingly seen as an enemy rather than a partner.

In these circumstances, Syria becomes Russia's natural ally in the Arab Middle East. Syria is the only Arab country that is genuinely isolated by and from the West. It has regional ambitions but few resources to back them up. Its young president, although increasingly skilled in politics, does not feel strong enough and looks for backers on the outside that are not international pariahs like Iran. Russia fits this bill well.

However, the future of this relationship is unclear at best. The Russians like to tickle the Americans by standing up to them in the Security Council and making mischief. American problems in the region, stemming from the invasion of Iraq and Washington's support for Israel, make Moscow's task of wooing the Arabs easier. But Moscow lacks the military muscle it had in the Soviet days. It will not be able to project military power the way the Americans can. Putin even excluded sending peacekeepers to Lebanon - in full knowledge that they would be completely insignificant.

It is difficult to imagine Putin or his successor deciding on full-scale support for Damascus if the latter finds itself on a collision course with the US or Israel. In the end, the Russian political class has no stomach for a full-blown standoff. Those in the Middle East who count on Moscow should study the lives of Russia's former friends, Saddam Hussein and Slobodan Milosevic.

The Moscow Times reports that, despite the absurd Russophile propaganda spouted from some irresponsible sources (primarily Yuri Mamchur's "Russia Blog"), terrorist violence has remained unchanged over the past two years in Russia's southern regions and, while a brutal Russian crackdown in Chechnya (condemned widely by human rights organizations including multiple convictions in the European Court for Human Rights) has resulted in a reduction in rebel action there, rebel activity in areas outside Chechnya has dramatically increased. In other words, the Kremlin's policy is obliterating Chechnya, supposedly a part of Russia, as a place of human habitation while driving the rebels closer and closer to Moscow.

Chechen attacks against Russians in neighboring provinces are skyrocketing as law enforcement agencies in Chechnya crack down on rebels, forcing them to look elsewhere for targets.

There were 18 attacks in Ingushetia and 11 in North Ossetia from January through July of this year, 50 percent more than during the same period in 2005, Nikolai Patrushev, director of the Federal Security Service, or FSB, and chairman of the National Anti-Terrorist Committee, or NAC, said at a NAC session Friday in Rostov-on-Don.

Meanwhile, on Saturday, three riot police were killed and another was seriously wounded in Ingushetia after gunmen attacked their vehicle, The Associated Press reported. LR: See also RIA Novosti. Also on Saturday, in Dagestan's capital of Makhachkala, police and suspected militants exchanged fire, leaving four of the suspected militants dead and one wounded, the AP reported. The early-morning gun battle was the latest in a long string of similar police operations in the predominantly Muslim region, where attacks targeting police and government officials are common.

On Thursday, assailants shot and gravely wounded a member of an anti-terrorism unit as he was driving out of his backyard in the village of Nestervoskaya in Ingushetia, the AP reported.

The sharp spike in attacks outside Chechnya is due to the elimination of many Chechen rebel leaders, including Shamil Basayev, Abdul-Khalim Sadulayev and several less senior figures, Patrushev said.

The crackdown on Chechen leaders in Chechnya "has allowed us to significantly reduce the activities of the bandits operating underground in the territory of Chechnya," Patrushev was quoted by Interfax as saying. At the same time, he continued, "the terrorists have shifted their focus to the territory of the republics that neighbor Chechnya."

Ingushetia, Dagestan and other republics in the North Caucasus have been infiltrated by Chechen-based groups in the past, but these provinces have also seen indigenous insurgency movements emerge. These movements are comprised mostly of militant Islamists and individuals seeking revenge for abuse by local authorities.

Patrushev voiced concern about the growing number of crimes committed with firearms in the North Caucasus, noting that such offenses had more than doubled in North Ossetia in the first seven months of the year.

The FSB chief called on law enforcement to identify the causes of this increase in an effort to prevent future escalation of these crimes.

Patrushev also said the nation's law enforcement community, and authorities in general, must shift their focus from interdiction of individual terrorist attacks to "early warnings of the emergence and the spread of terrorism in society," Interfax reported.

Dmitry Kozak, President Vladimir Putin's envoy in southern Russia, agreed with Patrushev. "The prevention of terrorism should be the main subject of discussion for all government agencies" in the Southern Federal District, the envoy said at Friday's NAC meeting.

Putting the recent attacks in perspective, Kozak observed that while the number of attacks in some republics had increased, the whole Southern Federal District had seen no serious change between 2005 and 2006

The Independent reports on a plan of Russia's elite to literally build a country within a country, where they will be insultated not merely from the rabble in the streets but from Mother Nature herself. Not only has the Russian elite learned nothing from the past century of Soviet dictatorship, but they learned nothing from the centuries that came before. Apres moi le deluge! This obscene, insular attitude is exactly what brought down the Tsar AND the Politburo, but Russians go merrily on making the same mistakes over and over and over and over and over.

An entire Moscow suburb is to be built within a space-age glass cone conceived by architect Norman Foster to shield its residents from the Russian winter.

Plans for the futuristic development have already been presented to Moscow's city fathers by Lord Foster, who is rapidly taking a leading role in the Russian capital's most radical transformation since the 1930s.

The city's mayor, Yuri Luzhkov, has approved the £1.6bn project, and excited officials believe it could emulate the global status of the Foster-designed Swiss Re "Gherkin" tower in the City of London.

The cone will be situated in southern Moscow on a spit of land near the Moscow River and will be topped by an imposing 150m-high spire. Those inside it will be able to see out through its transparent skin.

But by far the best thing about it from a Russian point of view is that people inside will be protected from the elements in a city where the mercury can fall to a bone-tingling minus 30C in the depths of winter.

"It won't matter what the weather is like outside," said someone familiar with the project. "The elements have been made irrelevant."

The exact design of the cone is being kept under wraps by the architect, who is famously protective of his creations until the last moment, and no artist's impressions have yet been released. But Moscow officials have seen it and described it with enthusiasm. According to Aleksander Kuzmin, Moscow's chief architect, the lower part of the cone has been designed to look like an upturned flower with 12 giant petals radiating from its centre.

Inside, the cone itself will be a 20-hectare area split into six different levels, each one with several floors.

Lord Foster has designed a one-hectare observation point close to the cone's apex from where residents and visitors will be able to gaze over the Moscow skyline. The area will be surrounded by large swaths of greenery. The design is grandiose. Beneath its main cupola will be a public space that can be used as a sports stadium, a concert hall, a circus or an ice-rink. The cone's "guts" will look a bit like a see-through wedding cake; different levels will be stacked with apartment developments, shops, bars, restaurants and all the facilities you would expect to find in a small town.

Check out La Russophobe's latest article on Publius Pundit regarding the indications of coming economic apocalypse in Russia. The article takes as its jumping off point the shocking news, reported here last week, that Russian personal incomes tumbled by 5% last month. Reader comments about the future of the Russian economy and the impact of a downturn on democratic values in Russia are welcome.

RIA Novosti reports that Vladimir Sokolin, head of Russia's Federal Statistics Service, stated last Thursday that "the age of retirement should be raised, arguing it would prolong life expectancy in the country, which is facing a severe demographic crisis." He noted that "Russia is one of the three [post-Soviet] countries, including Belarus and Ukraine, which has not changed its retirement age" and said: "I believe raising the age of retirement is inevitable. I do not know when we will launch the reform, but this will probably have to be done."

The retirement age in Russia today is 60 for men and 55 for women. The average life expectancy among men in the country was 57 years, compared with 60-65 years in Soviet times.

In other words, raising the age to qualify for pensions for men even a little will mean that the men will not live long enough to collect it. Who is Sokolin trying to kid with this insane bit of Neo-Soviet logic? Clearly, the Russian government is running out of cash to pay pensions and wants to eliminate them, but to argue that doing so will INCREASE THE LIFESPAN of Russians is clearly insane, and the report doesn't contain a hint of explanation as to how this could be so.

There was more drunken insanity from Sokolin: He claimed that Russia's falling birthrate (it dropped by 5,000 to 715,000 in the first half of 2006 according to Sokolin) was "partly due to women's increasingly important role in society and business, a trend also shared by many developed countries." One would be hard-pressed indeed to show that Russian woman have made recent strides into "soci

Reuters reports that all is definitely not well on Russia's natural resources front:

Russia's Novatek falls short of expectations in Q2MOSCOW, Aug 25 (Reuters) - Russia's No.2 gas firm Novatek reported second quarter net profit and sales on Friday that fell well short of analysts' expectations. Second quarter IFRS net profit slid to 3.499 billion roubles ($130.6 million) from 5.608 billion roubles ($199 million) in the same period of 2005. A Reuters poll of eight analysts showed an average expectation of $150 million. Second quarter sales rose to 12.553 billion roubles ($468.5 million) from 9.154 billion roubles in the second quarter of 2005, below the average analyst estimate of $489 million. Earnings before interest, tax, depreciation and amortisation fell to 5.829 billion roubles ($217.6 million) in the quarter, 31 percent down year-on-year and below the average forecast of $236 million. The firm said operating expenses jumped 46 percent in the quarter to 7.672 billion roubles largely because of increases in non-controllable expenses such as production taxes and transport costs. The profit figure for the first half of the year also lagged analysts' expectations. Net profit was 7.216 billion roubles (269.4 million), below the anticipated $281 million and almost 9 percent lower than a year earlier. However, first half sales jumped to 24.170 billion roubles ($902.2 million), 35 percent higher than in the same period of 2005, and above analysts' average forecast of $884 million. Last year's profit figure was flattered by income from disposals of assets, and the firm said that if those disposals were excluded, profits rose by 577 million roubles ($21.54 million) in the second quarter, and by 1.979 billion roubles ($73.87 million) in the first half of the year. Novatek's London-listed global depository receipts, which had traded slightly up before the results were released, closed at $51, 1 percent down on the day.

Global Voices translates Russian blogs on the recent spate of air disasters in Russia:

Papa was gone. But he did have a premonition… On July 15, two weeks before the crash, on the 30th anniversary of [my parents’] wedding, when they were at a restaurant, he suddenly began speaking about it, about his death: what would need to be done, how he would like to see it. Mama interrupted him, but he managed to continue with this topic.

It’s true that their equipment was on the verge [of collapse]. The crashed IL-86 RA-86060 was made in 1983 and had flown 18,370 hours - and this type of plane can be used for 20 years. Only the so-called human factor was capable of dealing with problems arising in the air, not vice versa, as is commonly believed. How many times he spoke of those problems!

One of the scariest episodes happened during the flight over the ocean, from New York, USA, to Shannon, Ireland. It was a miracle that they reached their destination, they did it [manually], because the navigation broke down and they were going blind. He didn’t worry for his life, but for the lives of 350 passengers behind him.

He used to say: “I’ll go quickly… I’ll crash… I’ll be shown on TV… Your children will be proud of their heroic grandfather!” And this is what did happen. LR: I thought she just said he cared deeply about his passengers . . .

He promised to bring mama a bouquet of exactly 30 flowers from Sochi, to celebrate the 30th anniversary of their wedding. They must have been gladioli… Here, they aren’t as beautiful, and they are expensive, too…

I was there, at the site of the air catastrophe, in the fall of 2002… I wanted to see it… By that time, I was prepared to see it. It is so close to the airport. The snow covered all the horror a little and only a modest cross stood over the dug-up part of the field and the forest. The ground still smelled of kerosene, and there were still torn pieces of metal underneath my feet. And above my head, very low, flew the planes… Up and down… I’ll never be able to forget this.

Another account:

Do you know what a pilot’s life is worth in our country? Because, it turns out, pilots are insured! The whole $3,000 received each family of the dead pilots, regardless of the number of people in these families. And do you know how much the company received for the plane - because it was insured as well? Two million dollars, which is twice as much as the plane’s remaining cost. So it’s a very profitable business to lose a plane! Well, they also had to pay the pilots’ salaries to the relatives, as [the law] requires, but it’s incomparably less than the profit they received, isn’t it!

At the final women's tour event before the U.S. Open last week in Connecticut, four of the eight seeded players in the draw were Russians: #3 Dementieva, #4 Petrova, #5 Kuznetsova and #8 Myskina. Only one, Kuznetsova, made it as far as the semi-finals, where she was pulverized by #2 seed Henin-Hardenne. Kuznetsova only reached the semis by drawing a feeble Dementieva (who was stretched to three sets by the world #18 in her first match) in the quarters, while both Petrova and Myskina lost their opening matches against players not ranked in the world's top 25. Once again, the vast majority of the Russian field was eliminted by lower-ranked, usually much lower ranked, competition -- when there should have been an excellent chance of a Russian taking the title and even of an all-Russian final. To read the pathetic, Neo-Soviet rationalizations of Russia's tennis czar Shamil Tarpichchev, who not long ago predicted a "Russian tsunami" would sweep through the women's game, click here.

Meanwhile, Russia (the host country), after squeaking by New Zeland, has been booted out of the FIFIA U-20 women's world championship in the quarter-finals, getting crushed there by China (4 nil).

The Moscow Times reports that the Kremlin's alleged plan to fill the ranks of Russia's military with professional soldiers has come to utter failure:

Professional soldiers are jumping ship because of low wages and a lack of social infrastructure, Nezavisimaya Gazeta reported Thursday.

Only 15 percent to 19 percent of volunteers sign up for a second hitch in the armed forces when their original three-year contract expires, the newspaper reported, citing a Defense Ministry survey.

As a result, the military will lose its core of professional soldiers within three years, the newspaper concluded, adding that the personnel drain would hit units on permanent combat readiness status the hardest.

These units contain the majority of volunteer soldiers, who signed up in 2004 and 2005.
The General Staff of the armed forces plans for 50 percent of the soldiers in the armed forces to be professionals by 2008.

In a poll conducted by the Defense Ministry's Sociology Center, 29 percent of current contract soldiers said they would not renew their contracts because the military provided no facilities for rest and relaxation such as clubs and gyms, the newspaper reported.

Another 27 percent of those polled intended to leave the military because of low wages, which average 7,000 rubles to 9,000 rubles ($261 to $336) per month.

Even the Defense Ministry's 42nd army division, deployed in Chechnya, is expected to lose large numbers of contract soldiers, despite wages of 15,000 rubles ($560) per month.

Another 26 percent of professional soldiers want a discharge because they cannot afford a decent place to live, the Defense Ministry's survey indicated.

No margin of error or other information about the survey was provided in the report.

Calls to the press office of the Defense Ministry went unanswered on Thursday

The Associated Press reports that the Trinity Cathedral in St. Petersburg (pictured), built in 1835, with the second-largest wooden dome in Europe and where Dostoevsky was married, was destroyed by fire yesterday (click here for slidewhow). If that isn't a sign of the neo-Soviet apocalypse, we don't know what is. The churches have probably figured they might as well avoid the rush and start burning themselves down, denying the KGB the satisfaction just like Russians burned up Moscow to deny it to Napoleon. On the other hand, perhaps it was a practice run and stealthily accomplished . . .

MOSCOW, Aug. 25, 2006 (UPI) -- A Russian scientist predicts a period of global cooling in coming decades, followed by a warmer interval. Khabibullo Abdusamatov expects a repeat of the period known as the Little Ice Age. During the 16th century, the Baltic Sea froze so hard that hotels were built on the ice for people crossing the sea in coaches. The Little Ice Age is believed to have contributed to the end of the Norse colony in Greenland, which was founded during an interval of much warmer weather Abdusamatov and his colleagues at the Russian Academy of Sciences astronomical observatory said the prediction is based on measurement of solar emissions, Novosti reported. They expect the cooling to begin within a few years and to reach its peak between 2055 and 2060. "The Kyoto initiatives to save the planet from the greenhouse effect should be put off until better times," he said. "The global temperature maximum has been reached on Earth, and Earth's global temperature will decline to a climatic minimum even without the Kyoto protocol."

Writing in Japan Times, Nina Krushcheva describes the latent desire Russians have to control other countries, the fundamental driving force behind the rise of the Neo-Soviet Union:

It is now 15 years since the failed coup of August 1991 against Mikhail Gorbachev. At the time, Gorbachev's policies of perestroika and glasnost were seen by Soviet hardliners as a sellout of communist Russia to the capitalist West. But it is now clear that the KGB and the military who launched the coup were not defending the idea of communism. They were protecting their idea of Russia's imperial mission, a notion that had given the Kremlin commissars greater control of the vast Russian empire, and of Russia's neighbors, than any of the czars had ever enjoyed.

Gorbachev's reforms not only liberated ordinary Russians from the straitjacket of Marxism-Leninism, but also released the national aspirations of people who had been locked in the empire for centuries. Having seen the peoples of Central Europe free themselves from Soviet domination just two years before, the constituent nations of the Soviet Union were beginning to seek the same freedom for themselves.

The Baltic republics of Estonia, Latvia and Lithuania were the first to insist on traveling their own national path, and have since linked their fate to Europe as members of the European Union and North Atlantic Treaty Organization. Others soon followed. By December 1991, the Soviet empire was no more.

But only the Baltics have secured the sort of independence dreamed of in 1991. Georgia, which is both European and Asiatic, teeters on the edge of instability.

Traditionally Asian Uzbekistan and Turkmenistan have resumed the tribal forms of autocracy they practiced throughout the centuries. Azerbaijan and Kazakhstan have in essence become their presidents' wholly owned family fiefs.

Ukraine's break with Russia was perhaps the most wrenching, both for those in the Kremlin nostalgic for imperial control and for ordinary Russians who see Ukraine as the wellspring of Russian civilization. The Orange Revolution of 2004, which overturned a rigged presidential election, proved that Ukraine was no longer a Malorossiya (a small Russia), an inferior and subordinate Slavic brother.

That peaceful revolution, led by Viktor Yushchenko and Yuliya Tymoshenko, was a reminder of how enlightened Kievan Rus had been before it was forced to give way to the despotic princes of Moscow.

Two years after the Orange revolt, Yushchenko (a politician who seems out of his depth) has now accepted the Kremlin placeman Viktor Yanukovich, the foe he had vanquished in 2004, as his new prime minister. Nonetheless, the Orange movement -- now led by Yushchenko's former partner and prime minister, Tymoshenko -- has not fully lost its way, and still aims to preserve Ukraine as a truly independent and free country. Malorossiya, for the majority of Ukrainians, remains a thing of the past.

Despite all these epochal changes, Russians cannot accept the loss of their imperial role. The dream of empire is, indeed, the gulag that imprisons the Russian mind. Most Russians do not regard Europe's approach to their country's borders as a sign that they have, at long last, fully united with the civilization of which they are a part, but as a source of insecurity.

Something more is at work here than mere nostalgia. During the chaotic years of Boris Yeltsin's presidency, it was perhaps understandable that Russians regretted their loss of great power status. Something had to be blamed for their dire economic conditions. Yet under President Vladimir Putin, with the economy growing robustly, these feelings have hardened, not diminished.

Russians are reverting to the past -- to the grand pronouncements of Russia as a unique great nation, destined to rule the world. As before the advent of Gorbachev -- indeed, restoring a centuries-old tendency -- Russians yet again believe that the people should be willing to forfeit their freedoms for the sake of the greatness of the state, which wins wars and launches Sputniks. A free press, free speech and free elections, it is feared, may diminish the brute power that is needed for Russia to assert itself.

Russians have long boasted of their various unique forms of greatness: first it was the holy Russian soul, so superior to Western practicality. In the 15th century, Moscow was declared a "Third Rome," the savior of spiritual Christianity. The 17th century united this spiritual mission with imperial expansion, which eventually encompassed a landmass spanning 11 time zones. In the early 20th century, the imperial and spiritual mission became one, as Russia became the bastion of world communism.

All these forms of greatness, however, demanded that ordinary Russians accept debasement and enslavement. Development is not seen as a means of improving people's lives, but as helping Russia prove itself to be superior to everybody else. So, ultimately, the material achievements of Russian development always come with a body count. Josef Stalin's industrialization killed millions -- and became obsolete in only 30 years.

Putin's Russia doesn't go in for mass killing, yet it has not lost the country's "superiority" complex.

For Russia's elite, a restaurant bill cannot be too expensive, and one can never have enough bodyguards waiting out front for you. On a grander scale, Putin's Russia has become a great power in terms of energy production, but that looks to be temporary, as scant investment is being made to maintain and improve the oil and gas fields. What matters is selling the reserves and being rich now, not finding more for later.

So, as always, the trouble with Russia is that the state develops, but society doesn't. The good of the people is sacrificed for the good of the nation. The dream of great Russia remains the gulag of the Russian mind.

Nina Khrushcheva is the grand-daughter of former Soviet Premier Nikita Krushchev and teaches international affairs at The New School University in New York City.

Writing in National Review, Lt. General Ion Mihai Pacepa, the highest-ranking intelligence officer ever to have defected from the former Soviet bloc, exposes the horror of Soviet and Neo-Soviet support for terrorism. His book Red Horizons has been republished in 27 countries.

The Kremlin may be the main winner in the Lebanon war. Israel has been attacked with Soviet Kalashnikovs and Katyushas, Russian Fajr-1 and Fajr-3 rockets, Russian AT-5 Spandrel antitank missiles and Kornet antitank rockets. Russia’s outmoded weapons are now all the rage with terrorists everywhere in the world, and the bad guys know exactly where to get them. The weapons cases abandoned by Hezbollah were marked: “Customer: Ministry of Defense of Syria. Supplier: KBP, Tula, Russia.”

Today’s international terrorism was conceived at the Lubyanka, the headquarters of the KGB, in the aftermath of the1967 Six-Day War in the Middle East. I witnessed its birth in my other life, as a Communist general. Israel humiliated Egypt and Syria, whose bellicose governments were being run by Soviet razvedka (Russian for “foreign intelligence”) advisers, whereupon the Kremlin decided to arm Israel’s enemy neighbors, the Palestinians, and draw them into a terrorist war against Israel.General Aleksandr Sakharovsky, who created Communist Romania’s intelligence structure and then rose to head up all of Soviet Russia’s foreign intelligence, often lectured me: “In today’s world, when nuclear arms have made military force obsolete, terrorism should become our main weapon.”

Between 1968 and 1978, when I broke with Communism, the security forces of Romania alone sent two cargo planes full of military goodies every week to Palestinian terrorists in Lebanon. Since the fall of Communism the East German Stasi archives have revealed that, in 1983 alone, its foreign intelligence service sent $1,877,600 worth of AK-47 ammunition to Lebanon. According to Vaclav Havel, Communist Czechoslovakia shipped 1,000 tons of the odorless explosive Semtex-H (which can’t be detected by sniffer dogs) to Islamic terrorists — enough for 150 years. The terrorist war per se came into action at the end of 1968, when the KGB transformed airplane hijacking — that weapon of choice for September 11, 2001 — into an instrument of terror.

In 1969 alone there were 82 hijackings of planes worldwide, carried out by the KGB-financed PLO. In 1971, when I was visiting Sakharovsky at his Lubyanka office, he called my attention to a sea of red flags pinned onto a world map hanging on the wall. Each flag represented a captured plane. “Airplane hijacking is my own invention,” he claimed. The political “success” occasioned by hijacking Israeli airplanes prompted the KGB’s 13th Department, known in our intelligence jargon as the “Department for Wet Affairs” (wet being a euphemism for bloody), to expand into organizing “public executions” of Jews in airports, train stations, and other public places.

In 1969 Dr. George Habash, a KGB puppet, explained: “Killing one Jew far away from the field of battle is more effective than killing a hundred Jews on the field of battle, because it attracts more attention.”By the end of the 1960s, the KGB was deeply involved in mass terrorism against Jews, carried out by various Palestinian client organizations.

Here are some terrorist actions for which the KGB took credit while I was still in Romania: November 1969, armed attack on the El Al office in Athens, leaving 1 dead and 14 wounded; May 30, 1972, Ben Gurion Airport attack, leaving 22 dead and 76 wounded; December 1974, Tel Aviv movie theater bomb, leaving 2 dead and 66 wounded; March 1975, attack on a Tel Aviv hotel, leaving 25 dead and 6 wounded; May 1975, Jerusalem bomb, leaving 1 dead and 3 wounded; July 4, 1975, bomb in Zion Square, Jerusalem, leaving 15 dead and 62 wounded; April 1978, Brussels airport attack, leaving 12 wounded; May 1978, attack on an El Al plane in Paris, leaving 12 wounded. In 1971, the KGB launched operation Tayfun (Russian for “typhoon”), aimed at destabilizing Western Europe. The Baader-Meinhof, the Red Army Faction (RAF), and other KGB-sponsored Marxist organizations unleashed a wave of anti-American terrorism that shook Western Europe. Richard Welsh, the CIA station chief in Athens, was shot to death in Greece on December 23, 1975. General Alexander Haig, commander of NATO in Brussels was injured in a bomb attack that damaged his armored Mercedes beyond repair in June 1979. General Frederick J. Kroesen, commander of U.S. forces in Europe, barely survived a rocket attack in September 1981. Alfred Herrhausen, the pro-American chairman of Deutsche Bank, was killed during a grenade attack in November 1989. Hans Neusel, a pro-American state secretary in the West Germaninterior ministry, was wounded during an assassination attempt in July 1990.

In 1972, the Kremlin decided to turn the whole Islamic world against Israel and the U.S. As KGB chairman Yury Andropov told me, a billion adversaries could inflict far greater damage on America than could a few millions. We needed to instill a Nazi-style hatred for the Jews throughout the Islamic world, and to turn this weapon of the emotions into a terrorist bloodbath against Israel and its main supporter, the United States. No one within the American/Zionist sphere of influence should any longer feel safe. According to Andropov, the Islamic world was a waiting petri dish in which we could nurture a virulent strain of America-hatred, grown from the bacterium of Marxist-Leninist thought. Islamic anti-Semitism ran deep. The Muslims had a taste for nationalism, jingoism, and victimology. Their illiterate, oppressed mobs could be whipped up to a fever pitch. Terrorism and violence against Israel and her master, American Zionism, would flow naturally from the Muslims’ religious fervor, Andropov sermonized. We had only to keep repeating our themes — that the United States and Israel were “fascist, imperial-Zionist countries” bankrolled by rich Jews. Islam was obsessed with preventing the infidels’ occupation of its territory, and it would be highly receptive to our characterization of the U.S. Congress as a rapacious Zionist body aiming to turn the world into a Jewish fiefdom.

The codename of this operation was “SIG” (Sionistskiye Gosudarstva, or “Zionist Governments”), and was within my Romanian service’s “sphere of influence,” for it embraced Libya, Lebanon, and Syria. SIG was a large party/state operation. We created joint ventures to build hospitals, houses, and roads in these countries, and there we sent thousands of doctors, engineers, technicians, professors, and even dance instructors. All had the task of portraying the United States as an arrogant and haughty Jewish fiefdom financed by Jewish money and run by Jewish politicians, whose aim was to subordinate the entire Islamic world. In the mid 1970s, the KGB ordered my service, the DIE — along with other East European sister services — to scour the country for trusted party activists belonging to various Islamic ethnic groups, train them in disinformation and terrorist operations, and infiltrate them into the countries of our “sphere of influence.”

Their task was to export a rabid, demented hatred for American Zionism by manipulating the ancestral abhorrence for Jews felt by the people in that part of the world. Before I left Romania for good, in 1978, my DIE had dispatched around 500 such undercover agents to Islamic countries. According to a rough estimate received from Moscow, by 1978 the whole Soviet-bloc intelligence community had sent some 4,000 such agents of influence into the Islamic world. In the mid-1970s we also started showering the Islamic world with an Arabic translation of the Protocols of the Elders of Zion, a tsarist Russian forgery that had been used by Hitler as the foundation for his anti-Semitic philosophy.

We also disseminated a KGB-fabricated “documentary” paper in Arabic alleging that Israel and its main supporter, the United States, were Zionist countries dedicated to converting the Islamic world into a Jewish colony.We in the Soviet bloc tried to conquer minds, because we knew we could not win any military battles. It is hard to say what exactly are the lasting effects of operation SIG. But the cumulative effect of disseminating hundreds of thousands of Protocols in the Islamic world and portraying Israel and the United States as Islam’s deadly enemies was surely not constructive. Post-Soviet Russia has been transformed in unprecedented ways, but the widely popular belief that the nefarious Soviet legacy was rooted out at the end of the Cold War the same way that Nazism was rooted out with the conclusion of World War II, is not yet correct.

In the 1950s, when I was chief of Romania’s foreign intelligence station in West Germany, I witnessed how Hitler’s Third Reich had been demolished, its war criminals put on trial, its military and police forces disbanded, and the Nazis removed from public office. None of these things has happened in the former Soviet Union. No individual has been put on trial, although the Soviet Union’s Communist regime killed over a hundred million people. Most Soviet institutions have been left in place, having simply been given new names, and are now run by many of the same people who guided the Communist state. In 2000, former officers of the KGB and the Soviet Red Army took over the Kremlin and Russia’s government. Germany would have never become a democracy with Gestapo and SS officers running the show.

On September 11, 2001, President Vladimir Putin became the first leader of a foreign country to express sympathy to President George W. Bush for what he called “these terrible tragedies of the terrorist attacks.” Soon, however, Putin began moving his country back into the terrorist business. In March 2002, he quietly reinstituted sales of weapons to Iran’s terrorist dictator, Ayatollah Khamenei, and engaged Russia in the construction of a 1,000-megawatt nuclear reactor at Bushehr, with a uranium conversion facility able to produce fissile material for nuclear weapons. Hundreds of Russian technicians also started helping the government of Iran to develop the Shahab-4 missile, with a range of over 1,250 miles, which can carry a nuclear or germ warhead anywhere in the Middle East and Europe.

Iran’s current president, Mahmoud Ahmadinejad, had already announced that nothing could stop his country from building nuclear weapons, and he stated that Israel was a “disgraceful stain [on] the Islamic world” that would be eliminated. During World War II, 405,399 Americans died to eradicate Nazism and its anti-Semitic terrorism. Now we are facing Islamic fascism and nuclear anti-Semitic terrorism. The United Nations can offer no hope. It has not yet even been able to define terrorism.