Strategy Page reports:

India and China are both playing rough with their largest arms supplier; Russia. China and India both have price disputes with Russia, and India is also upset that Russia is supplying China with RD93 jet engines for Chinese made fighters that are being sold to Pakistan. Both China and Russia are threatening to halt purchases if Russia does not back off on attempts to raise prices on contracts that have already been agreed to. China is playing a weak position here, because of a Western embargo on arms sales to China (because of China being a sometimes brutal police state and behaving badly by selling weapons to all manner of nasty people). India is in a stronger position, and is buying more and more weapons from Western suppliers. Currently, India is in the market for 126 top-line fighters. India has told Russia that if those RD93 equipped Chinese fighters keep going to Pakistan, Russia can forget about its chances of winning the competition (worth over $6 billion) for the 126 fighters.

How did it get to this?

In November, 2007, after changing its mind several times over the last few years, Russia finally agreed to allow the use of Russian made engines, in Chinese made JF-17 (also known as FC-1) jet fighters that are exported (to Pakistan, Algeria, Egypt, Nigeria, Bangladesh and Saudi Arabia.) Lebanon, Burma, Iran and Sri Lanka have also shown interest in this low cost fighter that is similar to early model F-16s.)

Earlier in 2007, Russia announced that none of the 500 Russian RD-93 jet engines China is buying could be exported to a foreign country. This was a problem, as China needs those engines for the 150 JF17 fighters it is building for Pakistan. What makes this particularly nasty is that Pakistan has invested $150 million in the development of the JF17. Pakistan thought Russia would give China permission to export the RD93 equipped aircraft. After all, China was such a large customer for RD93 engines (originally designed for the MiG-29), and those 500 RD93 engines are worth $1.25 billion.

But apparently India played hardball, and demanded that the Russians forbid the export of the RD93s from China to Pakistan. India is a major customer for Russian weapons, including cooperative development deals. China is a big customer for Russian weapons as well, but India buys more stuff, and is seen as less of a future threat to Russia than China. Pressure from many other nations interested in the JF-17 apparently caused the Russians to finally relent.

But it gets more interesting. China has been developing a similar (apparently identical) engine to the RD93, the WS-13. Actually, this effort is being aided by Russia, which is selling China technology needed for the manufacture of key engine components. Russia isn't happy about this, because they don't want competition in the low cost jet engine market. Then again, China has a history of stealing technology it cannot buy, so the Russians are making the best of a bad situation. China says the WS-13 is nearly ready for service. Maybe, maybe not. Building high performance military jet engines is difficult, and China has had problems mastering this kind of stuff. Not that they will not eventually acquire the skills, but until they do, they need the Russian made RD93s.

China shipped two RD93 equipped JF-17s to Pakistan in March 2007, and informed the Russians that, according to the their interpretation of the 1992 RD-93 contract, China could re-export the RD-93 engines. The situation sat, unresolved, until the Summer of 2007, when the Russians said that they believed that the 1992 contract was quite clear about China needing Russian permission, and China didn't have it. The Russians were playing hardball, at the behest of the Indians. Apparently, India is expected to use this RD-93 veto to get Pakistan to offer up some appropriate in the current peace talks between the two countries.

Russians problems are largely of its own making. In several warship and fighter sales deals, they screwed up and quoted too low a price. Russia admits that, and wants to change to a higher price. Both China and Russia are not cooperating. To further complicate matters, China has been shamelessly stealing Russian military technology, and producing copies, without compensating the Russians for the stolen technology. China denies this, but it's all pretty blatant.

No one knows how this will all turn out. All three nations believe they have strong negotiating positions, but eventually, someone will have to blink, and back off.

(1) Latest on Kozlovsky

(2) Russia Continues to Arm Rogue State Iran

(3) Nemtsov Drops Out

(4) Exposing Russia's Sham Economy

(5) Annals of Khodorkovsky

(6) Bird Flu Continues to Ravage Russia

Oborona reports (LR staff translation):

On December 27, Oborona activists held a protest direct action against the illegal recruitment of Oleg Kozlovsky in front of the Ministery of Defense of the Russian Federation. The activists stretched a banner reading "FREE OLEG KOZLOVSKY" and lit flares. Then they chanted slogans in solidarity with Kozlovksy

Oborona also reports:

On December 26th, the leader of the Moscow branch of the Yabloko political party, Sergei Mitrokhin, sent Moscow Mayor of Moscow Yuri Luzhkov a letter calling for the rescission of the decision to induct Oleg Kozlovsky forcibly into the army.

According to Mr. Mitrokhin, the decision was illegal on several grounds:

• First, Kozlovsky has a disqualifying medical condition but the medical documentation thereof has been totally ignored, nor were any actual medical examinations conducted at the induction center.

• Second, Kozlowski has completed a course of study in the military faculty of Moscow State University, after which he should be automatically awarded the rank of lieutenant. For some reason this has not been done.

Yesterday, in telephone conversations with the head of a military unit 12691, which sent Kozlovsky to Ryazan, and with the head of the hospital, Sergei Mitrokhin demanded that Kozlovsky be sent immediately the hospital to undergo screening. The chief of the military unit said that Kozlowsky will be sent to the hospital only after the New Years holidays.

Today Sergei Mitrokhin sent a telegram to the military unit confirming his demand to immediately send Kozlowski to the hospital. In addition, inquiries were made to the Defence Minister, Military Commissioner of Moscow, and the head of the military faculty of Moscow State University.

Click "kozlovsky" at the bottom of this post to read background on this topic.

Suppose America were to deliver missile systems to Chechnya, and when asked why by Russia George Bush answered: "Why did we do this? I can explain why. We did this so that Iran did not feel it had been driven into a corner. So that it didn't feel that it was in some kind of hostile environment." What would Russians think about that?

The Chicago Tribune reports:

Iranian officials said Wednesday that they have signed a contract to buy an advanced Russian anti-aircraft system, a move that could complicate any plans for an air attack by U.S. or Israeli warplanes.

The sale to Tehran of powerful new air-defense missile technology also would create new sources of friction between the Bush administration and the government of Russian President Vladimir Putin. U.S. officials harshly criticized Russia for an earlier missile sale to Iran completed in January. In Crawford, Texas, where President Bush began a post-Christmas holiday, Deputy White House Press Secretary Scott Stanzel expressed concern over the disclosure, which had not been confirmed by Moscow as of late Wednesday. "We have ongoing concerns about the prospective sale of such weapons to Iran and other countries of concern," he said.

U.S. officials suspect Tehran of seeking to build nuclear bombs, although Iran has denied doing so. A U.S. intelligence report concluded last month that Iran suspended any nuclear weapons effort in 2003. The White House has consistently said it is committed to diplomacy to prevent Iran from acquiring nuclear weapons but always adds that no option is off the table, including military force. Administration officials are frustrated with the lack of progress in arranging a new round of UN sanctions against Iran, heightening international fears of a possible military showdown. By sharply upgrading its national air defense system, Iran is likely to only fuel such fears.

The new Russian technology is part of its S-300 anti-aircraft system, which consists of long-range weapons that have been compared to the U.S. Patriot missile in their sophistication and capability. The S-300 system would augment the TOR-M1 anti-aircraft missiles that Tehran received from Russia this year. While the TOR-M1 missiles are intended for lower-flying planes, unmanned vehicles and precision-guided weapons, the S-300 missiles are able to reach high-flying support squads and far-off, approaching attackers. Its range is about 90 miles, or an altitude of about 90,000 feet, weapons experts said. The contract was signed Tuesday in Tehran and announced Wednesday by Iranian Defense Minister Mustafa Mohammad Najjar, according to state-controlled media. "Russia will provide Iran with the S-300 missile system under a deal signed between the two countries," said Najjar, according to state media. "The exact date of the delivery will be announced later."

The S-300 was developed by the former Soviet Union to combat aircraft and cruise missiles, but later variations were designed to fight ballistic missiles. Until recently, Iran's air defense system was based on 1970s technology and was concentrated on protecting its military bases and nuclear installations. Because the systems were in fixed locations, they were considered vulnerable, especially to possible U.S. or Israeli attack. However, Russia agreed in 2005 to sell Iran its modern, mobile TOR-M1 anti-aircraft systems, which are based on the platform of a battle tank launcher. Russia promised Iran 29 launchers, each with its own radar and eight guided missiles.

U.S. officials bitterly protested the sale. The Bush administration last year placed Russia's state arms trader, Rosoboronexport, under State Department sanctions, along with the Russian fighter jet manufacturer Sukhoi. The move prevented U.S. companies from doing business with the Russian companies. Sanctions against Sukhoi, which also is selling aircraft to Venezuela, were rescinded months later after a meeting between Bush and Putin. Russia argued that engaging Iran offers a more promising chance for future stability than threatening the country. Putin dismissed questions about the TOR-M1 missile deal in Munich in February.

"Why did we do this? I can explain why," Putin said at an international security policy conference. "We did this so that Iran did not feel it had been driven into a corner. So that it didn't feel that it was in some kind of hostile environment."

The earlier sale, estimated to be worth at least $700 million and as much as $1.5 billion, also was part of what Western officials have said is Russia's drive to re-establish itself as a world arms supplier. However, the Russians had resisted Iran's requests for access to the more advanced S-300 system, in part to avoid an increase in international tension. Some arms experts have speculated that Iran could have been making plans to acquire missiles elsewhere. Russia has agreed recently to sell some of the S-300 missiles to Belarus and Cyprus.

The Washington Post reports that Boris Nemtsov has concluded there will not be a real election in March for the Russian presidency and therefore has dropped out of the race, urging the other candidates to do the same; it also reports that Putin will impose the same draconian restrictions on elections monitors that were present during the parliamentary vote:

For the second time this month, a leading Russian opposition figure has withdrawn from March's presidential election complaining of a political landscape that has made open competition impossible.

"It's clear that the presidential election, like the parliamentary elections, will be a farce, since candidates do not have equal opportunities to campaign," Boris Nemtsov, a deputy prime minister in the 1990s and a leader of the Union of Right Forces party, said in a statement Wednesday. "Goebbels-like propaganda, force and bureaucratic pressures are being used against the opposition."

Joseph Goebbels was Adolf Hitler's propaganda chief.

Nemtsov's withdrawal follows the decision of Garry Kasparov, the chess grandmaster and critic of President Vladimir Putin, not to seek registration as a candidate. Kasparov said the authorities had blocked his attempts to hold a nominating convention this month.

Neither Kasparov nor Nemtsov presented any real threat to the Kremlin's anointed candidate, First Deputy Prime Minister Dmitry Medvedev, according to opinion polls. Medvedev is backed by Putin and the pro-Kremlin United Russia party, and he enters the race as the overwhelming favorite.

Medvedev has said he would like Putin to remain on as prime minister, a prospect that burnishes the untested candidate's standing with the electorate and ensures that the current president will continue to wield considerable influence in Russia after he leaves the Kremlin.

Nemtsov called on the remaining two candidates who are independent of the Kremlin to also withdraw unless they receive pledges that they will have equal access to the news media and that state resources will not be used to damage their campaigns.

"I think that if authorities refuse to fulfill these absolutely justified demands, this will be serious grounds not to take part in the elections," Nemtsov said, directing his plea to Gennady Zyuganov, head of the Communist Party, and Mikhail Kasyanov, a former prime minister under Putin who later broke with the Kremlin.

Nemtsov said the Kremlin should agree to meet four conditions: Medvedev must take part in televised debates; all candidates must have equal access to state-controlled TV channels; national TV channels must stop blacklisting certain members of the opposition; and the use of state resources to promote Medvedev and marginalize his opponents should be barred.

"Your participation in the elections add to their legitimacy," Nemtsov said, addressing Zyuganov and Kasyanov. "I call on you to give up taking part in the election campaign."

Kasyanov responded that he was not considering dropping out; Zyuganov told reporters he didn't rule out quitting. "I have been nominated by my party, but if the government keeps using dirty tricks, my party will question my further participation," he said.

"There is even greater administrative pressure in the course of the current election campaign than was the case during the parliamentary elections," he said. That vote took place Dec. 2.

Zyuganov said he had spoken to Nemtsov by telephone Wednesday. The Communist leader said that Nemtsov had suggested demanding specific governmental measures to guarantee honest elections and that this was an "interesting" suggestion.

To get on the ballot, Kasyanov still faces the formidable task of gathering 2 million signatures by Jan. 16. Zyuganov, because he is backed by a party with seats in parliament, doesn't have to meet that requirement.

Also running are Vladimir Zhirinovsky, an ultranationalist, and Andrei Bogdanov, head of the Democratic Party, a tiny group that ostensibly advocates such steps as Russia joining the European Union. Their candidacies are backed by the Kremlin, which political analysts say sees them siphoning votes from Medvedev's opponents.

Russian officials also said Wednesday that they will not issue invitations to international election observers until the end of January and that approximately the same number of observers will be invited as took part in the parliamentary elections this month.

The region's principal election monitoring group, the observation arm of the 56-nation Organization for Security and Cooperation in Europe, refused to observe the parliamentary elections, citing visa delays and obstruction by the Russian authorities.

The Motley Fool reports:

Today, I stumbled across one such theme over in my old stomping grounds: Russia. You've all heard that the Russian market is hot, hot, hot, right? ExxonMobil (NYSE: XOM) is sucking out its oil and gas. Ford (NYSE: F) and GM (NYSE: GM) are building a new Detroit on the Neva.

As the world's biggest oil producer, and the repository of its largest natural gas reserves, Russia is swimming in "petrorubles" -- petroleum traded in the Russian ruble. According to state media outlet RIA Novosti (RIA), incomes are up, too, with the average worker's "real wages" rising 15.1% in 2007.

Nice, huh? But according to another RIA report, inflation is eating up much, if not all, of that rising income. Non-foodstuffs suffered just 6.6% inflation in 2007, but the average price of services rose 13% in 2007, and food price inflation reached 16%. With much of the nation living in privatized apartments and paying state-subsidized rates for power and gas, that 16% number is the one to focus on. Once you take heat and shelter out of the picture, food looms large as the biggest remaining expense. What these numbers suggest to me is that in much of the country, "real" wages aren't growing at all, because inflation is siphoning away much of the new income.

If this is true, what might it mean to investors? In the big picture, it means the Russian economy isn't as strong as its current growth rates may suggest. But that doesn't mean the country isn't full of investing opportunities. In fact, in the first half of 2007, the net flow of foreign investments into Russia increased 150%, to more than $60 billion, compared to the first half of 2006.

Rising food prices are certainly an issue in the country and do present a threat to future growth. Yet, aside from inflationary pressures, the food retail industry has shown signs of significant growth because of the rising amounts of disposable income. According to a Russian Food and Non Food Retail Forecast report, retail food sales accounted for more than 46% of Russian retail sales in 2006.

Local producers such as juice-and-dairy manufacturer Wimm-Bill-Dann (NYSE: WBD) are one way to play the insatiable Russian appetite. And for more diversified investment vehicles that also have a hand in the Russian food markets check out McDonald's (NYSE: MCD), Coca-Cola (NYSE: KO), and PepsiCo (NYSE: PEP), which have been investing in Russia for some time.

Russia may be known for its lucrative oil and gas sector. But as the country becomes more stable and its population increases its wealth, investors should turn to food retailers associated with the Russian economy, as it is the fastest-growing retail food sales market in the world.

RIA Novosti reports:

Russia's Supreme Court has overturned a lower court decision stating that a new investigation into the activities of jailed Yukos founder Mikhail Khodorkovsky and his business partner was illegal. The Supreme Court thereby upheld an appeal filed by the Prosecutor General's Office. It did not comment on its motives. A district court and the Moscow City Court had earlier upheld the illegitimacy of a new investigation.

Lawyers acting for Khodorkovsky and Platon Lebedev said they would appeal the Supreme Court's ruling at the European Court of Human Rights. "Everything that has taken place in connection with this case has already been translated into the official languages of the European Court," the former oil tycoon's lawyer, Yury Shmidt, said.

Khodorkovsky and Lebedev, who were convicted of fraud and tax evasion in 2005 and are currently serving eight-year prison sentences, were transferred to a detention center in Chita, east Siberia, last December for a new probe on charges of embezzling government shares, expropriating oil, and laundering $25 billion of illegal oil receipts in 1998-2004. Both businessmen have denied the accusations, calling them politically motivated. Khodorkovsky and Lebedev participated in the court session via a video link from Chita. Once Russia's largest oil producer, Yukos collapsed after tax evasion claims, which led to the company being broken up and sold off to meet debts. The bulk of its assets were acquired by government-controlled oil company Rosneft.

RIA also reports:

Santa Claus, known in Russia as Ded Moroz, will deliver presents and cards to jailed Yukos founder, Mikhail Khodorkovsky, and his business partner Platon Lebedev. A Chita city court earlier extended custody for the former Yukos CEO and ex-Menatep Group head until February 8, 2008, over a new probe against the imprisoned former businessmen. "Santa Claus and his granddaughter Snegurochka will also decorate a Christmas tree near the prison," said Marina Savvateyeva, the chairman of a committee supporting the two jailed businessmen.

The new charges against Khodorkovsky and Lebedev, who were convicted of fraud and tax evasion in 2005, include stealing government shares, expropriating oil, and laundering $25 billion earned from oil sales in 1998-2004. Both businessmen have denied the allegations, calling them politically motivated. The new investigation against the Yukos founder was upheld by the Moscow City Court on September 19, and Russia's Supreme Court ruled on December 25 that the investigation was legal. Khodorkovsky, who acquired oil assets through controversial privatization deals in the 1990s, insists that his prosecution was orchestrated by the authorities to silence his criticism of President Vladimir Putin, and as part of a campaign to bring oil and gas assets under the Kremlin's control. Once Russia's largest oil producer, Yukos collapsed after claims of tax evasion, which led to the company being broken up and sold off to meet debts. The bulk of its assets were subsequently bought by government-controlled oil company Rosneft.

The International Herald Tribune reports:

Authorities have culled more than half a million domestic birds on a farm in southern Russia hit by the H5N1 strain of bird flu, officials said Tuesday. More than 600,000 chickens on the Gulyai-Borisovskaya farm in the Rostov-on-Don region have been destroyed to prevent the virus from spreading, said Oleg Ugnivenko, a spokesman for the regional branch of Russia's Emergency Situations Ministry. The virus also sickened birds in the neighboring Tselinsky district, and authorities have taken steps to stop it from spreading, Ugnivenko said.

In September, authorities reported an H5N1 outbreak at a poultry farm in the neighboring Krasnodar region, and early in the year the strain was confirmed in several other regions across Russia.

No human cases of bird flu have been reported in Russia, which had its first reported cases of H5N1 in Siberia in 2005. World health authorities are tracking the H5N1 strain out of concern that it could mutate into a form more easily transmitted among people, sparking a global flu pandemic.

(1) The Latest on Kozlovsky

(2) Popping Putin's Fraudulent Balloon

(2) Novaya Gazeta on Yuri Chervotchkin

(3) Time Magazine Dirty Little Coverup

(4) Putin: Mother of all Oligarchs?

NOTE: Kim Zigfeld's latest installment on Pajamas Media reviews the situation with Oleg Kozlovsky, which we have led the world in reporting. Feel free to leave a comment in support of Oleg on Kim's post over at Pajamas, this is the highest media level the story has reached to date and Oleg's life hangs in the balance. He needs us! Let's not fail him!

NOTE: Also of great interest is a new piece on Slate magazine by professor Michael McFaul which rips Time magazine yet another new one over the selection of Vladimir Putin as "Person of the Year). Michael Weiss of Pajamas has already done yeoman work along those lines as we've previously reported, and we carry an item today revealing how Time fraudulently tried to cover up a hideous error made by its reporter interviewing Putin, an error we pointed out some time ago on Publius Pundit (but we had no idea Time would stoop to trying to hide it from readers).

Oborona reports that a group of opposition figures have drafted a letter to the Russian Prosecutor General demanding the release of Oleg Kozlovsky from compulsory military service (this post is based on LR staff translation from Oborona's website, it is not provided by our professional translators; corrections appreciated, especially anyone who can give us a medically accurate translation of the diagnosis specified in Russian!).

The text of the letter is as follows:


Recently the Izmaylovsky Military Commissariat in the city of Moscow carried out an involuntary military recruitment to the ranks of the Armed Forces of the Russian Federation of a citizen of the Russian Federation named Oleg Yuryevich Kozlovsky .

According to the parents Mr. Kozlovsky, from the age of 14 he has been afflicted with a serious varicose vein problems which, with confirmation of the diagnosis, in accordance with the Regulations on the examination conscript recruits as approved by decree of the government of the Russian Federation dated 25 February 2003, 123, is a basis for disqualification from military service.

Accordingly,, we have reason to believe that the conscription procedure was carried out in violation of the laws and the Constitution of the Russian Federation, including:

1) Clause 2 of Article 29 of Federal Law 53-FZ "On Military Duty and Military Service" regarding the activity of military commissions evaluating fitness for military service based on the results of medical examinations;

2)Paragraphs 6-7 of Article 28 of Federal Law 53-FZ "On Military Duty and Military Service" regarding the production by the Military Commissioner of copies of decisions of military commissions at the request of a citizen and a citizen's opportunity to appeal such a decision, which is also guaranteed paragraphs 1-2 of Article 46 of the Constitution of the Russian Federation, but was not afforded to Mr. Kozlovsky.

We certain that the induction of Mr. Kozlovsky was politically motivated, and believe that it was implemented in a manner designed to silence the leader of a leading opposition organization and, as such, represents a further escalation of repression against the opposition.

We demand:

1) The immediate suspension of Mr. Kozlovsky's service in the army and an immediate medical examination to determine his fitness for service;

2) The opportunity for Mr. Kozlovsky and his parents to appeal the decision of the military commission in court should the necessity arise;

3) The investigation identification of those responsible for violations of the Russian laws in implementing military recruitment;

4) In accordance with paragraph 3 of Article 7 of Federal Law 53-FZ "On Military Duty and Military Service", the punishment of all those found responsible for violations of the existing legislation and the Constitution of the Russian Federation.

The signatories are:

• Andrei Khachaturov, Federation Council member
• Alexei Novoselov, Yabloko youth party chairman
• Maria Dronova, Chairman Yabloko Sverdlovsk Office
• Lyudmila Alexeyeva, President of the Moscow Helsinki Group
• Maria Gaidar, coordinator of the youth movement "Yes!"
• Garry Kasparov, chairman of the Joint Civil Front and "Other Russia"
• Mikhail Kasyanov, presidential candidate
• Svetlana Kuznetsova, Chairman of the Committee of Soldiers' Mothers
• Eduard Limonov, political activist
• Julia Malysheva, President People's Democratic Youth Union
• Alexander Podrabinek, journalist;
• Lev Ponomarev, executive director For Human Rights
• Ilya Yashin, co-chair of the faction Youth Young Democrats-Yabloko

Oborona also publishes a letter to the same authorities from Kozlovsky's mother Marina:

December 20, 2007

My son Oleg Yurevich Kozlovsky, born 1984, was conscripted into military service. Without referring to the numerous procedural irregularities which are subject to appeal I would like to draw attention to the manner in which my son's medical condition was evaluated.

Oleg has suffered from varicose vein disease since 1998. Since then, he has been under the supervision of specialists. [Here she sets for the technical medical terms for his condition: "Гемодинамически значимый синдром, функциональный стеноз. Функциональная недостаточность клапанного аппарата поверхностных и глубоких вен во всех отделах обеих нижних конечностей. Снижение венозного оттока по глубоким и перфорантным венам в дистальном отделе правой голени."]

The diagnosis indicates not only superficial circulatory issues but also chronic blood circulation deficiencies in the deep veins making my son unequivocally unfit for military service. His medical charts and diagnoses were transferred to Dr. Fadeichevoy at the conscription collecting point. However, Dr. Fadeichevoy ignored this data and based his medical conclusions on visual examination only, declaring my son fit for military service. I do not understand how such a conclusion could be possible.

I demand an objective investigation of the obviously improper determinations of Dr. Fadeichievoy and the recall of my son from duty for a full examination by qualified medical specialists.

Showing that the opposition press and politicians still do have some clout in Russia, the Russian Defense Ministry has issued a formal response to the charges:

Response to claims regarding the alleged illegal detention and call for military service of citizen Oleg Yuryevich Kozlovsky

Between December 20th and 24th a number of media articles have been published about the alleged illegal detention and call for military service citizen Oleg Yuryevich Kozlovsky .

The Information and Public Relations Division of the Moscow Military District officially declares that Mr. Kozlowski was called up for military service in full compliance with existing standards and legislation. In the personnel actions of the military commissions there were no legal violations.

Unfortunately, rash and unsubstantiated statements have been made by journalists regarding "lost documents verifying reserve officer rank" and "ignoring medical data" and "inappropriate assignment for service." In fact, Mr. Kozlovsky's actions suggest that he intentionally violated the conscription statutes in order to avoid military service.

In the period between June 6, 2002 and July 30, 2006, Mr. Kozlovsky, in compliance with federal law, was exempted from military service in order to receive an undergraduate education at Moscow State University. He did, in fact, undergo military training while at the university, receiving the rank of reserve "lieutenant," but the sole purpose of that training was to avoid military service. His deferment ended in July 2006 and he failed to complete the necessary paperwork for an extension. Prior to his deferment, the Military Commission duly considered an application for disqualification based on medical disability and discounted it, finding him fit for military service.

The Information and Public Relations of Moscow Military District encourages journalists not to jump to conclusions or to pursue "hot" stories without proper basis in fact.

Oborona explains that the delay in processing Kozlovsy's subsequent deferral paperwork was a bureaucratic one involving deficiencies on the government side having nothing to do with Kozlovksy, and that the Military Commission does not have any qualified medical personnel to evaluate Kozlovsky's medical condition, which until now had been a moot point since he was serving as a reserve officer on educational deferment. It further points out that there is simply no basis to strip Kozlovsky of his officer's rank and induct him as a private even if it were somehow legal to draft him into active service, which is palpably isn't, and there is no doubt whatsoever that Kozlovsky was pursuing a legitimate graduate degree which is the basis for automatic deferment of service.

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Writing in the Washington Post, Fred Hiatt pops the Putin balloon:

So Time magazine is the latest to swoon at Vladimir Putin's "steely confidence and strength," his "chiseled facial features and those penetrating eyes." The Russian president is a man of "contained power," Time finds, whose gaze says: "I'm in charge."

Time's elevation of Putin as Person of the Year is not all hagiography by any means. The designation is reserved for consequential but not necessarily beneficent figures. Time found Putin to be charmless and humorless, a czar who has "dramatically curtailed freedoms."

But the magazine buys into the central myths that Putin has fostered, that the Bush administration consistently has promoted and that increasingly are accepted as historical truth.

Foremost among these is that, by transforming democracy into autocracy, Putin also transformed chaos into stability. Russia a decade ago, Time senior editor Nathan Thornburgh observes, was "a rudderless mess, defined most by a bestial crime rate and Boris Yeltsin's kleptocracy in the Kremlin."

In fact, crime worsened after Putin succeeded Yeltsin as president in 2000, as did corruption. In a useful corrective to the conventional wisdom just published by Foreign Affairs magazine, Michael McFaul and Kathryn Stoner-Weiss of Stanford University cite official Russian statistics to show that the average annual total of murders increased from 30,200 between 1995 and 1999 to 32,200 between 2000 and 2004. Meanwhile, in 2006 Transparency International ranked Russia at a new low of 121 out of 163 countries for corruption, the Stanford experts point out, "putting it between the Philippines and Rwanda."

And, while soaring oil prices larded the Russian treasury and the government payroll more than doubled, Russians were dying younger (life expectancy for Russian men is 59 years), getting sicker, having fewer children and drinking more.

What then is the basis of the myth? Russia is more prosperous today than when Putin took over, and Russians at all income levels have benefited. Like all post-Communist countries, it endured a rise in poverty and political upheaval in the first half of the 1990s. In 1997-98, Russia along with other "emerging markets" suffered a financial crash. Yeltsin appointed a new prime minister, Yevgeny Primakov, who restored fiscal solvency and began Russia's recovery, before Putin appeared on the scene. The forlorn babushkas selling their personal effects that many foreigners remember were ancient history by the time Putin took power.

Putin continued the economic reforms in his first years, to good effect. But as he clamped down on political freedoms, he also went after independent businesses and began to resocialize the economy, dampening investment. Stunningly, even with all its oil, Russia's rate of economic growth fell from second among the 15 post-Soviet republics in 2000 to 13th in 2005. "If there is any causal relationship between authoritarianism and economic growth in Russia," McFaul and Stoner-Weiss conclude, "it is negative."

Russia, like Poland, Estonia and many other countries, went through tough post-Communist times. It was approaching a safe shore by the time Putin took office. Yeltsin's greatest sins involved impinging on democracy -- not allowing too much of it -- but he nonetheless bequeathed Putin a country with a lively press, competitive political parties and an energized civil society. Like Poland, Estonia and the rest, Russia could have opted for prosperity and democracy. Putin made a different choice.

Why then is he so popular? There's the oil boom, of course, and the fact that government-controlled television -- the only kind now -- lionizes him ceaselessly. But maybe the better question would be: Is he so popular?

Generally, an answer could be derived in two ways. One is polling. But the Kremlin has gradually sapped the independence of Russia's polling industry, just as it did with the media, and it's fair to ask how honestly respondents will be evaluating -- publicly, speaking to strangers -- a leader whose enemies tend to end up poisoned, shot or in prison.

The other method is elections, and here perhaps we should defer to Putin's considered judgment. Garry Kasparov, the famous chess grandmaster, wanted to run for president against Putin's handpicked successor. A candidate must be nominated at a public meeting, but no one would rent Kasparov a meeting hall. Officials menaced his wife and daughter when they sought to fly out of the country. Kasparov himself was jailed when he attempted to take part in a political demonstration. Ten days ago, he finally gave up.

Why would a leader of such steely confidence, heroic achievement and massive popularity be so afraid of political competition? Perhaps he will explain at Time's awards banquet.

Novaya Gazeta's Rostislav Bogushevsky reports (we have edited them for linguistic and explanatory issues):

The New York Post reports:

TIME Inc. editor-in-chief John Huey got off on the wrong foot when he sat down to interview Russian President Vladimir Putin, along with Time managing editor Rick Stengel and deputy managing editor Adi Ignatius. According to a "full and complete" transcript of the interview that first turned up on a New Zealand Web site, Huey started off a question about the Cold War by saying, "You were born in 1946 - I was born in 1948. We belong to the same generation." Putin gives the correct year of his birth, 1952. The exchange is missing from the "full transcript" posted on Time's Web site, and now some bloggers are screaming "fraudulent cover-up." But Time spokeswoman Ali Zelenko told Page Six that even "full" transcripts need some editing. "It's embarrassing, but it was a false start and they moved on. There's no cover-up. We knew the Kremlin was releasing its own transcript. It was a three-and-a-half-hour interview."

The Telegraph reports:

President Vladimir Putin of Russia has been likened to an African plutocrat after a controversial political scientist claimed that he had acquired control of £20 billion in energy assets - enough to make him Europe's richest man. Stanislav Belkovsky, a colourful figure on the political scene, claimed that Mr Putin had made a multi-billion pound fortune by controlling stakes in three Russian energy companies. The allegations – if true – would suggest that Mr Putin is one of the wealthiest men ever to hold public office. Mr Belkovsky alleged that Mr Putin had acquired $40 billion during his eight years in power, through a network of front-men. He compared the president to Mobutu Sese Seko, the dictator who plundered Congo, and Ferdinand Marcos, the former ruler of the Philippines. "Russia under Putin is not a version of modern democracy but a typical third world kleptocracy," said Mr Belkovsky. But Mr Putin's spokesman denounced the claims. "It's nothing but trash," said Dmitry Peskov. "Certainly it has nothing to do with seriousness; it has nothing to do with professionalism. It's just trash."

According to Mr Belkovsky, Mr Putin controls a 37 per cent stake in Surgutneftegaz, an oil exploration company, as well as 4.5 per cent of Gazprom, the state energy giant, and at least 50 per cent of Gunvor, a Swiss-based oil trading company that has won a series of state contracts. Mr Belkovsky claimed his information had come from credible sources in the Kremlin - but admitted he had no documentary evidence. "European and U.S. special services have access to these documents but I don't," he said.

Observers were sceptical. "In a system of state capitalism and total corruption, it would be strange if Putin was not rich," said Leonid Radzikhovsky, a political analyst. "But the information about this treasure island seems a little exaggerated. Most Russians do not think about corruption at presidential level or do not want to think about it." Mr Radzikhovsky added: "It is difficult to understand Belkovsky. He is known as a source of confusing information and it is hard to treat it seriously. "He is an adventurer. He may be driven by his own morbid ambitions. He really knows a lot of people in high places but who is he to know the secrets of the person who has all the possible and impossible ways to hide his secrets?"

The endgame of Mr Putin's presidency, and his plans for the succession, have been thrown off balance by infighting between rival Kremlin clans. At least three groups, two led by ex-KGB officials, have been in open warfare since October. On Oct 3, General Alexander Bulbov, deputy head of the federal drug agency, and a member of a hardline clan of "Siloviki" - former KGB and security officials - was arrested by a rival Siloviki faction. The "liberal" faction was damaged when Sergei Storchak, the deputy finance minister, was arrested last month. Far from being watertight, Mr Putin's Kremlin now leaks like a sieve. The President is theoretically above the clans and tries to balance their clashes. If he does have a faction, it consists of businessmen who have become very wealthy under his rule. Mr Belkovsky named at least three of them as front-men for the president's alleged fortune. He also cited Igor Sechin, a deputy chief of Kremlin staff, leader of the most hardline "Siloviki" faction and one of the country's most powerful men. Mr Putin appeared to have sidelined Mr Sechin's clan when he announced that Dmitry Medvedev, a relative liberal, would be his successor as president.

Mr Sechin and other ex-KGB figures would never rally around Mr Medvedev. Mr Putin may calculate that he can keep their loyalty, leaving the new president isolated. Mr Putin may calculate that he can keep their loyalty, leaving the new president isolated. What game Mr Belkovsky is playing - and on whose behalf - is unclear. He has been accused of starting a smear campaign against the oligarch, Mikhail Khodorokovsky, a fierce critic of Mr Putin who was jailed in 2005. Mr Belkovsky's allegations about the president's money first emerged in a book he published last year.

Yes, quite possibly the story is exaggerated. Putin probably stole just a few billion from the treasury of a country whose men on average don't live to see their 60th year. No big deal.

(1) EDITORIAL: The Malignant Little Troll Who Stole Christmas

(2) Latest on Kozlovsky

(3) Merry Christmas, Everyone!

(4) Kasparov Challenges Putin to a Duel

(5) Russia and Qatar

NOTE: We make reference in our editorial to a brilliant new analytical piece in Foreign Affairs showing that Russia would be far more economically prosperous if it were not being ruled over by a proud KGB thug like Vladimir Putin. Entitled "The Myth of Putin," it's required reading for all those concerned about Russia and its impact on the world.

Confirming what we have already reported, heroic Russian human rights activist Yulia Malysheva writes: "Oleg is in the army in Ryazan as an ordinary soldier. Tomorrow he will see a doctor who will officially say whether he is 'OK.' Oleg said that every time a doctor sees him there is a FSB person present who directs the physician as to what to write in the medical documents. Oleg wants this to be known. Oleg is a reserve officer of Russian army but his documents somehow were 'lost.' His friends have a video of him taking the oath as an officer. Hopefully it can be published soon."

Meanwhile, FinRosForum reports:

A Moscow court handed sentences today on four activists arrested earlier for taking part in a demonstration protesting the illegal military draft of Oleg Kozlovsky, Moscow coordinator of the opposition youth movement, Oborona. The four being tried were Sergey Konstantinov from Kaliningrad, Yekaterina Kushner from Barnaul, Dmitry Konstantinov from Surgut, and
Alexey Ignatenko from Cheboksary. They were accused of non-compliance with police demands.

The judge sentenced Sergey Konstantinov to 15 days of administrative arrest. Eyewitnesses said Konstantinov gave the finger to the judge, after which he was dragged out of the courthouse into a waiting police van where he was beaten up severely.

Four activists present at the court session were arrested and carried away by the hands and feet after they refused to leave without the judge ordering the session to be a closed one. One of the four arrested, Valentina Chubarova, is the daughter of the TV and radio journalist, Viktor Shenderovich.

Sergey Konstantinov was taken by ambulance to hospital. Of the three other accused, Yekaterina Kushner received a fine of RUR 2,000, while Dmitry Konstantinov and Alexey Ignatenko were sentenced to fines and 10 days of administrative arrest. They will spend their New Year's Eve under arrest.

Other Russia updates the situation on those arrested protesting Kozlovsky's induction:

Sergei Konstantinov, one of the leaders of the “Free Radicals” movement, has been beaten by law enforcement officers after a court hearing on his recent arrest. He has been hospitalized at a Moscow clinic for his wounds, with a tentative diagnosis of a concussion to the brain.

Konstantinov had been arrested at a sanctioned demonstration on December 21st, and was standing trial along with three other activists. Individuals in the courtroom reported that four witnesses, Nikolai Zboroshenko, Aleksei Kazakov, Maria Paramonova and Valentina Chubarova, were forcefully expelled from the proceedings.

Sergei Konstantinov was ultimately sentenced to 15 days of administrative arrest, and was fined 1000 rubles (€28 or $40). The three other arrested activists were also fined between 1000 and 2000 rubles, and two of them were sentenced to 10 days arrest. All four were charged with noncompliance to a militsiya officer and participating in an unsanctioned picket.

On December 21st, OMON Special Forces violently dispersed an opposition protest in Moscow, and arrested around 20 participants. Protesters had formally registered the demonstration to protest against violations in the December 2nd State Duma elections, but had also used the occasion to speak out against the illegal arrest and conscription of Oleg Kozlovsky.

It could not be more clear that the Kremlin is in deadly earnest and means to destroy Oborona from the top down, using the most extreme and brutal means available.

In related news, the Moscow Times reports that six candidates have been approved to run for president in March: "First Deputy Prime Ministry Dmitry Medvedev, Communist leader Gennady Zyuganov, Liberal Democratic Party leader Vladimir Zhirinovsky, former Prime Minister Mikhail Kasyanov, Union of Right Forces leader Boris Nemtsov and Democratic Party leader Andrei Bogdanov." Garry Kasparov has been kept off the ballot, as has Yabloko's candidate Vladimir Bukovsky. And the two liberal candidates Kasyanov and Nemtsov "now have to collect 2 million signatures in support of their bids and submit them to the commission by Jan. 16."

Writing the Wall Street Journal, Kasparov sums up the situation:

Ever since President Vladimir Putin took office eight long years ago, the political and media leadership of the West have had a full-time job trying to look on the bright side of Russia’s rapid turn from democracy.

The free press has been demolished, elections are canceled and rigged, and then we hear how popular Mr. Putin is. Opposition marches are crushed, and we’re told — over and over — how much better off we are today than in the days of the Soviet Union. This week Time magazine named Mr. Putin its 2007 “Person of the Year.” [Vladimir Putin] Vladimir Putin

Unfortunately, there is no silver lining to Russia’s descent into dictatorship. If anything there is a look of iron to it.

Condoleezza Rice, hardly a Putin critic, said recently that Russia “is not an environment in which you can talk about free and fair elections.” A good start, but this comment was not made where one would imagine — perhaps at a press conference insisting that Putin’s Russia be removed from the G-7 for making a mockery of democratic practices. No, her remark came as a side note to her very early endorsement of Mr. Putin’s handpicked heir to the throne, Dmitry Medvedev. The most revealing moment in Ms. Rice’s comments came when the topic of Mr. Medvedev as the next president was first broached. The official transcript reads: “SECRETARY RICE: Well, I guess, they’re still going to have an election in March. ” Perhaps my sense of humor was dulled during the five days I spent in a Moscow jail last month for protesting against these sham elections. Or maybe it was reading about the constant persecution of my fellow activists across the country that did it. Madam Secretary went on to speak approvingly of Mr. Medvedev, making the undemocratic nature of his selection sound like a minor annoyance. The last remaining element of democracy in Russia, the transition of power, will be destroyed. Will Mr. Putin and his successor still be welcomed with open arms in the club of leading democracies?

In the early days of our opposition activities last year, when members of Other Russia were harassed and arrested, the “bright siders” in the West said it could be worse. Later, when our marchers were badly beaten in St. Petersburg and Moscow, Mr. Putin’s fans in the West said at least the police weren’t killing us in the streets.

Last week, 22-year-old opposition activist Yury Chervochkin died in hospital after several weeks in a coma. He had been beaten nearly to death an hour after making an anxious cellphone call to our offices saying he was being followed by members of the organized-crime task force known as UBOP, which has become the vanguard of the Kremlin’s war on political opposition. A witness saw him clubbed repeatedly by men with baseball bats. Yury’s sin was not chanting Nazi slogans or praising the deeds of Josef Stalin, activities that regularly go unremarked in Russia these days. No, he had been caught throwing leaflets that read “The elections are a farce!” That was enough to make him a marked man. Now, for agitating for real democracy in Russia, he is dead.

The stakes have been raised to the highest level, and what bright side will be found now? Where is the line that cannot be crossed without a serious response from the West? So far Mr. Putin hasn’t found it — and he has good reason to suspect such a line simply does not exist. It is for the leaders in Washington, D.C., Paris and Berlin to decide what it means to denounce the Russian elections as fraudulent, only to then embrace the winners as democratic partners.

Lesser tragedies than that of Yury Chervochkin are occurring on a regular basis in Russia today. Last week journalist Natalya Morar was denied entry into the country on secret orders of the FSB security force, after writing investigative articles on financial deals with Kremlin connections. Lyudmila Kharlamova, a political organizer for Other Russia, was arrested after heroin was planted among her possessions in Orenburg. Activist Andrei Grekhov suffered a similar fate in Rostov, though the police chose to plant bullets instead of drugs in his pockets.

This is a good opportunity to remember Anna Politkovskaya, the investigative journalist who was murdered on Oct. 7, 2006, Putin’s birthday. The police investigation into this infamous assassination has stalled and talk of it has died down. The Kremlin is counting on the same thing happening with “minor” cases like that of Yury Chervochkin.

In a recent speech, Mr. Putin said “the enemies of the state must be wiped out!” It has been made quite clear that by “enemies” he means anyone who opposes his total authority. It is no surprise that his words are taken at face value across the country, and acted on by security forces eager to prove their loyalty and enthusiasm.

The presidents and prime ministers of the West seem just as eager to bow down to the Kremlin and the great god of business as usual. Nicolas Sarkozy raced to congratulate Mr. Putin on his party’s election victory, despite the overwhelming evidence of massive fraud at the polls. A few days later France’s Renault picked up a 25% share in Russian automaker AvtoVaz, a purchase made from Sergei Chemezov and his arms-dealing company Rosoboronexport. Why should Mr. Putin and his oligarchs worry about democracy as long as the money keeps rolling in?

Time magazine, of course, took obvious pains to explain that its award to Mr. Putin is “not an endorsement” and that it goes to the person who made the most news “for better or for worse.” Nonetheless the article praises Mr. Putin for restoring his country to prominence in the international arena, dispelling “anarchy” and recovering national pride. The magazine does express concern about his “troubling” record on human rights.

The same things could have been said about Adolf Hitler in 1938, when he took his turn as Time’s Man of the Year. “Fascism,” Time wrote then, “has discovered that freedom — of press, speech, assembly — is a potential danger to its own security.” Again these words apply equally well to this year’s winner.

Most of the criticism leveled against Mr. Putin regards “alleged” abuses or comes directly from known critics. This abdicates the journalist’s role to report the facts as facts.

Consider the timing of this announcement, right after the counterfeit parliamentary elections that added to Mr. Putin’s record of eradicating democracy across Russia. The Time article will be trumpeted by Kremlin propaganda as an endorsement of Mr. Putin’s policies. The man on the street will be told that even America, constantly blasted by the Kremlin as an enemy, has been forced to recognize the president’s greatness.

Internationally, the focus will be on the myth that Mr. Putin has built a “strong Russia.” In fact he and his cronies have hollowed out the state from within. Most of the power now resides in the super-corporations like Gazprom and Rosneft, and among the small group of loyalists who run them.

The Putin regime has taken Russia from a frail democracy to an efficient mafia state. It was an impressive balancing act — behaving like a tyrant while at the same time staying in the good graces of the West. After each crackdown, with no significant international reaction forthcoming, Mr. Putin knew it was safe to take another step. As ever, appeasement in the name of realpolitik only encourages would-be dictators. And such moral weakness inevitably leads to very real costs in human life

It's a pity of course that Kasparov did not manage to make reference to Kozlovsky's fate; even he is coming up short in many respects, clearly not doing all in his power to stand up for democracy in Russia -- but he is doing far more, and risking far more, than most. The West looked the other way as Stalin and Hitler rose to power, then paid a huge price for their indifference.

Will we make exactly the same mistake all over again?