Tags: Need | Careful | Giving | Financial | Help | Russia

We Need to Be Careful in Giving Financial Help to Russia

Wednesday, 02 January 2002 12:00 AM

New credits and loans, forgiveness and rescheduling of previous Russian debt, as well as other financial benefits, are under consideration in Washington and in some European capitals.

However, we know that previous multibillion-dollar financial assistance to Moscow simply disappeared, ending up in the private Western bank accounts of the corrupt Russian elite. There is no doubt that it could happen once more if the U.S. continues the failed Clinton-Gore policy and sends new funds to Russia, which is already enjoying sufficient profits from high oil prices and weapons sales abroad.

On Dec. 26, Russian President Vladimir Putin proudly announced that Moscow's arms exports leapt almost 20 percent to $4.4 billion in 2001, and insisted defense industries needed a radical overhaul to guarantee long-term success. He also told his Security Council that Russia should look carefully at what impact arms sales had on its foreign policy.

It is known that Russia has sold arms to over 60 countries, but mostly to Beijing, New Delhi and Tehran. Iranian President Mohammad Khatami last March made the first visit to Moscow by an Iranian leader in 30 years, fueling talk of a $300 million deal to buy Russian tanks and missiles.

Moscow also has boosted sales to India, signing a record arms deal with New Delhi in December 2000 that allowed India to build Su-30MKI warplanes under license. That contract was worth $3.3 billion and India is believed to want a similar deal to build the Russian T-90 main battle tank.

India's traditional rival, China, last summer struck a $2 billion deal with Russia for its Su-30 fighter, part of a planned spending surge to update its armed forces.

Putin's advice over the impact of weapons sales on Moscow foreign policy appeared to refer to Iran, China and India, whose purchase of Russian tanks, aircraft and missiles have caused increasing concern to the U.S. and American experts to keep a wary eye on Russian sales to these countries, which could seriously undermine the strategic military balance in Asia.

According to Putin, the results of arms sales abroad "are not bad," $4.4 billion worth of foreign currency revenue in 2001, which is "considerably more than the previous year."

However, in his remarks to the Security Council, President Putin didn't provide any details of Russia's arms exports in 2000, and he did not say how much money from the weapon sales went into the budget during 2001 and previous years.

However, at the same time, Russian Audit Chamber chairman Sergei Stepashin, who briefly served as prime minister in 1999, disclosed that in 2000 Russia exported weapons worth $3.7 billion, while government coffers took in only $7,000.

According to the Moscow press, Russia's Finance Ministry estimates that the budget may have received as much as $70 million in 2000 from the arms sales. In any event, it's clear that the vast sums have disappeared without leaving a trace.

Perhaps this can be explained away as routine Russian corruption, but some insiders say money from the arms trade is used to secretly finance "special projects" run by the Kremlin.

"Special projects" means the same private accounts for Putin's loyal supporters in Western banks, funds for Russian intelligence activity against the U.S. and American friends and allies, as well as for covert operations against the last roots of democracy in the country, and for the war in Chechnya.

Putin was extremely angry over the disclosure of new evidence of corruption in his inner circle and publicly criticized the Audit Chamber for its "style of business." On Dec. 27, Putin said that Audit Chamber officials need to work with "minimum publicity" – or, in other words, to keep secret acts of corruption disclosed by its investigators.

In this connection it would be impossible to expect any productivity from new Western financial assistance to Russia. If, in a time of economic difficulties and the war against terrorism, America still has some extra money lying around, we need to be very careful in spending it on meeting the needs of the Russian government. This could run counter to U.S. strategic interests.

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New credits and loans, forgiveness and rescheduling of previous Russian debt, as well as other financial benefits, are under consideration in Washington and in some European capitals. However, we know that previous multibillion-dollar financial assistance to Moscow simply...
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2002-00-02
Wednesday, 02 January 2002 12:00 AM
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