Rossiya Scan: CAR, Belarus and the Russian Army

"How The World Sees Russia" Issue #40: 01/19/2019 From the Publisher: In this week’s Rossiya Scan we revisit a lot of topics priorly covered by our publication. The world of news is ongoing, and most important stories have legs of their own and evolve with time. We begin by looking at the latest on Russia from the Central African Republic (CAR). Moscow has changed its ambassador to CAR, and is being more vocal about a potential military base in the country. This year could be one of consolidation for Russia in CAR. As it begins to fortify its position, and also understand that the U.S will likely begin to counter its moves in the continent. Are Russia and Belarus in the midst of a potential break in their relationship? Moscow has cut its aid to Minsk, and is working toward further broadening the political unity of both countries. Belarus is becoming weary of its neighbor, and we look at what this could means for both countries from a geopolitical context. Are Oleg Deripaska and his companies going to finally be free of U.S sanctions? For now, despite attempts to please the U.S Treasury, it appears that no. In this issue, we again unpack the ramifications that this situation has had on the global aluminum market, plus the different different scenarios that could result from it. Finally, the Russian army is starting to show signs of malaise. The Kremlin's impressive work towards modernizing its armed forces has not necessarily been felt as far as economic benefits by the average soldier. This is something that the Kremlin needs to pay attention to, as the Russian army remains a powerful political force, as well as a source of pride for the country. -Rossiya Scan Russia Consolidates in Central Africa... Russia is strengthening its position in Central Africa. Moscow is making moves that signal both a change in its leadership team for the region, while also laying the seeds for a longterm regional play. For starters, Russia will have a new man in Bangui, Central African Republic (CAR). Vladimir Titorenko, a career diplomat who has served as ambassador of Russia to Qatar and Algeria, will be replacing Sergei Lobanov. We are still not sure as to what this change actually means. There is currently not enough quality information in the public domain for us to comfortably make a worthwhile prediction as to how this choice will affect Russia’s ongoing strategy in Central Africa. However, the change does show that Russia is adjusting its position in the area, at a time where it is said to be doing the necessary legwork for establishing a permanent military base. “We haven’t yet talked about developing the base specifically,” said CAR’s defense minister Marie-Noëlle Koyara to a state-run Russian news outlet. “But this possibility is not excluded in the [August 2018] framework agreement.” Russia has already established a training facility that is increasingly looking more and more like a permanent military settlement. Therefore, an additional military base with permanent structures would most likely be seen like a thought out decision by Russia to come out in the open with its long term military strategy in the region. As previously discussed, the West ( e.g the U.S and France) effectively abandoned the CAR . This allowed Russia to operate without much opposition. In fact, the only opposition the Kremlin seemed to face in the CAR was from Russian businessman Mikhail Khodorkovsky. The latter provided funding to a group of three Russian journalists who were brutally murdered while investigating the role of Russian private military contractors in Africa. Now though, Russia could have its role altered or limited as the U.S is currently making moves to strengthen its position in the area. U.S National Security Adviser John Bolton recently stated that Africa is a strategic battleground, and that countering China and Russia are going to be a priority for the Trump administration. “In short, the predatory practices pursued by China and Russia stunt economic growth in Africa, threaten the financial independence of African nations, inhibit opportunities for U.S. investment, interfere with U.S. military operations and pose a significant threat to U.S. national security interests,” said Bolton in a speech last December in Washington D.C. Russia started making inroads into the Central African Republic in 2017. The year that Moscow obtained an exemption from the UN-imposed arms embargo to provide light arms. Military instructors were also sent along with the weapons, and a sort patronage from Moscow towards the embattled-Bangui government resulted. All of course, in exchange for mineral rights concessions. Something that could yield a lot of economic benefits for Russia in the long run. If Moscow wants to ensure that it will get the economic and geopolitical benefits of its work in the CAR, then it needs a strong permanent position in the country. A military base that can guarantee the defense of a friendly government, as well as Russian business interests is a way of ensuring that. With the U.S now making it clear that they are making a comeback to Africa , it is likely that Russia will continue to fortify its position in CAR and other African states. Read more: "Putin Names New Central African Envoy as Ties Deepen," by Alexei Anischuk for Bloomberg. "Russia Base in Central Africa On The Table While U.S Refocuses Its Strategy," by John Vandiver for Stars & Stripes. "Central African Republic Open to Russia Base," by Moscow Times staff. Could Russia Lose its European Ally? “Be sure to taste your words before you spit them out,” - Auliq Ice, venture capitalist and philanthropist. In Rossiya Scan we have already discussed the rugged relationship between Russia and Belarus. Belarus has unsuccessfully re-negotiated favorable oil prices with Russia for the coming years. Last Thursday, Belarus President Aleksander Lukashenko stated that Russia's refusal to offer compensation could result in, "the loss of its only ally in the West”. However, this is not the first time a disagreement happens between both neighboring nations, as far as not reaching an agreeable target for oil prices. Given Russia’s recent stance, which is pretty susceptible to such declarations; its likely that Lukashenko and thus Belarus will endure reprisals. The question is how, when and why? Belarus is pretty dependent on Russian hand-outs. Moscow’s economic aid includes cheap energy, subsidies, trade and military cooperation. This new revision of oil prices, could represent $11 billion of lost revenue for Minsk in the next 6 years. This is a hefty amount, but not enough to burn the bridge with Russia. Belarus has been ruled by Lukashenko single-handedly since 1994. Much of his success, or let’s say stability, has been thanks to Russian support. However, winter is coming and high energy prices will not be very popular amongst Belarusians’, of which 40%-50% still feel Russian. We have already discussed previously the Moscow devised plan of unifying Russia and Belarus , which was suspected in the 1990’s. Perhaps, Putin is being opportunistic, knowingly weakening his neighbor and waiting for the opportunity or excuse to further “unify” it with Russia? If Russia were to attempt a stronger form “unification” with Belarus it would in principle have the support of at least half its population. However, any forced form of further “unification” whether done by military force, or political moves would likely elicit a negative response from the general population of Belarus, perhaps even some who are sympathetic to Moscow. That being said, Minsk’s relationship with Moscow remains strong despite their differences. Granted, it used to be stronger, and Moscow's insistence that both countries further unify could cause a rift. Belarus is a sovereign state, and pressure could lead it to develop a less pro-Russia policy. Unlike the Ukraine, however, Lukashenko’s authoritarian government does not have a positive relationship with either the EU or NATO. Minsk would thus have to make some very obvious changes to even consider an effective rapprochement with the EU or NATO, or consider the long road to membership in either organization. This reality gives Moscow plenty of time to react, and quash these aims if necessary. The bottom line, Belarus is in a tough spot. Only time will tell us if this relationship sours, or gets patched up. Read more: “Belarus Issues Tough Warning to Russia Over Energy Dispute,” by the Associated Press . "How Russia-Belarus Ties Evolved Over the Years," by Neave Barker for Aljazeera. "Belarus and Russia Dispute the Fundamentals of Their Relationship,"by Yahueini Preiherman for the Jamestown Foundation. “Is Russia Practicing a Dry Run for an Invasion of Belarus?” by Andrew Wilson for Foreign Policy . Sanctions, Aluminum...the Deripaska Saga Continues... Since last year’s U.S sanctions on Russian billionaire Oleg Deripaska and his businesses (e.g. EN+ and Rusal) the commodity markets have gone into a frenzy over the risk of a potential market glut on aluminum. Deripaska was swift in trying to negotiate a deal, in order to lift the sanctions on his group. The U.S Treasury seemed ready to ‘play ball’ and offered deadline extensions to the firms. The problem is that Russia is still perceived as a foe by many U.S politicians, and they use this opposition to score points. Hence, many politicians have begun this week to challenge U.S President Donald Trump administration’s desire to free Rusal (MCX:RUAL) - the world’s second largest aluminum producer - from sanctions. U.S Senator Chuck Schumer voiced his anger at the U.S Treasury’s plan and scrambled to assemble the 60 votes required in the U.S Senate to counter it. His bid was unsuccessful 52-47. Schumer failed to produce an alternative to the plan, and was hence unable to obtain a successful result. As we enter a world of increasing ‘realpolitik’,

"How The World Sees Russia"

Issue #40: 01/19/2019

From the Publisher:

In this week’s Rossiya Scan we revisit a lot of topics priorly covered by our publication. The world of news is ongoing, and most important stories have legs of their own and evolve with time.

We begin by looking at the latest on Russia from the Central African Republic (CAR). Moscow has changed its ambassador to CAR, and is being more vocal about a potential military base in the country. This year could be one of consolidation for Russia in CAR. As it begins to fortify its position, and also understand that the U.S will likely begin to counter its moves in the continent.

Are Russia and Belarus in the midst of a potential break in their relationship? Moscow has cut its aid to Minsk, and is working toward further broadening the political unity of both countries. Belarus is becoming weary of its neighbor, and we look at what this could means for both countries from a geopolitical context.

Are Oleg Deripaska and his companies going to finally be free of U.S sanctions? For now, despite attempts to please the U.S Treasury, it appears that no. In this issue, we again unpack the ramifications that this situation has had on the global aluminum market, plus the different different scenarios that could result from it.

Finally, the Russian army is starting to show signs of malaise. The Kremlin's impressive work towards modernizing its armed forces has not necessarily been felt as far as economic benefits by the average soldier. This is something that the Kremlin needs to pay attention to, as the Russian army remains a powerful political force, as well as a source of pride for the country.

-Rossiya Scan

Russia Consolidates in Central Africa...

Russia is strengthening its position in Central Africa. Moscow is making moves that signal both a change in its leadership team for the region, while also laying the seeds for a longterm regional play.

For starters, Russia will have a new man in Bangui, Central African Republic (CAR).

Vladimir Titorenko, a career diplomat who has served as ambassador of Russia to Qatar and Algeria, will be replacing Sergei Lobanov. We are still not sure as to what this change actually means. There is currently not enough quality information in the public domain for us to comfortably make a worthwhile prediction as to how this choice will affect Russia’s ongoing strategy in Central Africa. However, the change does show that Russia is adjusting its position in the area, at a time where it is said to be doing the necessary legwork for establishing a permanent military base.

“We haven’t yet talked about developing the base specifically,” said CAR’s defense minister Marie-Noëlle Koyara to a state-run Russian news outlet. “But this possibility is not excluded in the [August 2018] framework agreement.”

Russia has already established a training facility that is increasingly looking more and more like a permanent military settlement. Therefore, an additional military base with permanent structures would most likely be seen like a thought out decision by Russia to come out in the open with its long term military strategy in the region.

As previously discussed, the West ( e.g the U.S and France) effectively abandoned the CAR. This allowed Russia to operate without much opposition. In fact, the only opposition the Kremlin seemed to face in the CAR was from Russian businessman Mikhail Khodorkovsky. The latter provided funding to a group of three Russian journalists who were brutally murdered while investigating the role of Russian private military contractors in Africa.

Now though, Russia could have its role altered or limited as the U.S is currently making moves to strengthen its position in the area. U.S National Security Adviser John Bolton recently stated that Africa is a strategic battleground, and that countering China and Russia are going to be a priority for the Trump administration.

“In short, the predatory practices pursued by China and Russia stunt economic growth in Africa, threaten the financial independence of African nations, inhibit opportunities for U.S. investment, interfere with U.S. military operations and pose a significant threat to U.S. national security interests,” said Bolton in a speech last December in Washington D.C.

Russia started making inroads into the Central African Republic in 2017. The year that Moscow obtained an exemption from the UN-imposed arms embargo to provide light arms. Military instructors were also sent along with the weapons, and a sort patronage from Moscow towards the embattled-Bangui government resulted. All of course, in exchange for mineral rights concessions. Something that could yield a lot of economic benefits for Russia in the long run.

If Moscow wants to ensure that it will get the economic and geopolitical benefits of its work in the CAR, then it needs a strong permanent position in the country. A military base that can guarantee the defense of a friendly government, as well as Russian business interests is a way of ensuring that.

With the U.S now making it clear that they are making a comeback to Africa , it is likely that Russia will continue to fortify its position in CAR and other African states.

"Russia Base in Central Africa On The Table While U.S Refocuses Its Strategy," by John Vandiver for Stars & Stripes.

"Central African Republic Open to Russia Base," by Moscow Times staff.

Could Russia Lose its European Ally?

“Be sure to taste your words before you spit them out,” - Auliq Ice, venture capitalist and philanthropist.

In Rossiya Scan we have already discussed the rugged relationship between Russia and Belarus. Belarus has unsuccessfully re-negotiated favorable oil prices with Russia for the coming years. Last Thursday, Belarus President Aleksander Lukashenko stated that Russia's refusal to offer compensation could result in, "the loss of its only ally in the West”. However, this is not the first time a disagreement happens between both neighboring nations, as far as not reaching an agreeable target for oil prices.

Given Russia’s recent stance, which is pretty susceptible to such declarations; its likely that Lukashenko and thus Belarus will endure reprisals.

The question is how, when and why?

Belarus is pretty dependent on Russian hand-outs. Moscow’s economic aid includes cheap energy, subsidies, trade and military cooperation. This new revision of oil prices, could represent $11 billion of lost revenue for Minsk in the next 6 years. This is a hefty amount, but not enough to burn the bridge with Russia.

Belarus has been ruled by Lukashenko single-handedly since 1994. Much of his success, or let’s say stability, has been thanks to Russian support. However, winter is coming and high energy prices will not be very popular amongst Belarusians’, of which 40%-50% still feel Russian.

We have already discussed previously the Moscow devised plan of unifying Russia and Belarus, which was suspected in the 1990’s. Perhaps, Putin is being opportunistic, knowingly weakening his neighbor and waiting for the opportunity or excuse to further “unify” it with Russia? If Russia were to attempt a stronger form “unification” with Belarus it would in principle have the support of at least half its population. However, any forced form of further “unification” whether done by military force, or political moves would likely elicit a negative response from the general population of Belarus, perhaps even some who are sympathetic to Moscow.

That being said, Minsk’s relationship with Moscow remains strong despite their differences. Granted, it used to be stronger, and Moscow's insistence that both countries further unify could cause a rift. Belarus is a sovereign state, and pressure could lead it to develop a less pro-Russia policy. Unlike the Ukraine, however, Lukashenko’s authoritarian government does not have a positive relationship with either the EU or NATO. Minsk would thus have to make some very obvious changes to even consider an effective rapprochement with the EU or NATO, or consider the long road to membership in either organization. This reality gives Moscow plenty of time to react, and quash these aims if necessary.

The bottom line, Belarus is in a tough spot. Only time will tell us if this relationship sours, or gets patched up.

"How Russia-Belarus Ties Evolved Over the Years," by Neave Barker for Aljazeera.

"Belarus and Russia Dispute the Fundamentals of Their Relationship,"by Yahueini Preiherman for the Jamestown Foundation.

“Is Russia Practicing a Dry Run for an Invasion of Belarus?” by Andrew Wilson for Foreign Policy.

Sanctions, Aluminum...the Deripaska Saga Continues...

Since last year’s U.S sanctions on Russian billionaire Oleg Deripaska and his businesses (e.g. EN+ and Rusal) the commodity markets have gone into a frenzy over the risk of a potential market glut on aluminum. Deripaska was swift in trying to negotiate a deal, in order to lift the sanctions on his group. The U.S Treasury seemed ready to ‘play ball’ and offered deadline extensions to the firms.

The problem is that Russia is still perceived as a foe by many U.S politicians, and they use this opposition to score points. Hence, many politicians have begun this week to challenge U.S President Donald Trump administration’s desire to free Rusal (MCX:RUAL) - the world’s second largest aluminum producer - from sanctions.

U.S Senator Chuck Schumer voiced his anger at the U.S Treasury’s plan and scrambled to assemble the 60 votes required in the U.S Senate to counter it. His bid was unsuccessful 52-47. Schumer failed to produce an alternative to the plan, and was hence unable to obtain a successful result. As we enter a world of increasing ‘realpolitik’, the economic impact of political decisions are weighing ever more on government policies.

If Rusal remains sanctioned, it would undeniably spark another rise in prices. Industrial players would see an increase in their costs and this would indirectly lead to an increase in overall prices. Another aspect to be considered is that Deripaska is already foregoing (allegedly) the gains obtained from the sale of his shares.

If the U.S continues to pressure Rusal with more teeth on their sanctions, and a deal is rebuked, there would only remain two options; one, nationalization by the Russian state, or a sale of the business to a Chinese Conglomerate. Two options that the U.S government does not want based on the influence that this company yields on the global aluminum market. For example, China would effectively "own" the world’s two largest aluminum producers if the Chinese company scenario were to take place. Giving Beijing a strong weapon against the U.S with whom they are engaged in a trade war.

As the U.S House of Representatives prepares to challenge the plan once more, the question is to see how the markets will react to this, for the moment Rusal would be officially authorized to conduct its business. However, if the deal is challenged the prices for the commodity will start rising again.

Sanctions usually do not work, as there are usually ways to go around them. The fact that these sanctions have been deferred since May of last year show the unwillingness of the U.S Treasury to damage the commodity market, and its own industrial sector.

Another interesting corollary of the sanctions is that Rusal has announced that they are pivoting their business from producing solely commodity grade aluminum to specialized aluminum. This move would allow the firm to position itself in a niche that could have ever greater ripple effects across industries if hit by sanctions.

"Schumer’s Russia Sanctions Gambit," by the Editorial Board of the Wall Street Journal.

"U.S Senate up Russia Sanctions measure Tuesday," by Patricia Zengerle for Reuters.

"Bid To Keep U.S Sanctions on Russia’s Rusal fails in Senate," by Patricia Zengerle for Reuters.

"Sanctions on Rusal are Coming to End, Here’s What it Means," by Mark Burton and Yuliya Fedorinova for Bloomberg.

"Democrats Fall Short in Russia Sanctions Vote," by Kenneth P. Vogel for the New York Times.

The Russian Army Needs More....

“In the Soviet Army it takes more courage to retreat than advance” - Joseph Stalin, leader of the USSR.

Think carefully about the meaning of these words to a Soviet soldier.

Russia is a nation which since its birth has been in conflict with some of the most powerful nations and leaders of its respective times. Places and people who constantly challenged Russian hegemony in Eurasia. The Mongol Empire in the 13^th century, Swedes in the 17^th century, the Ottoman empire in the 18^th century, Napoleonic France in the 19^th century, and most recently Nazi Germany in the 20th century. The latter two were close to ruling Europe, be that as it may, the decision to attack Russia led to their downfall. The paws of the Russian bear, have rescued the world from tyranny in more than one occasion.

During the Invasion of Russia in 1812, Russians preferred to burn down Moscow and let French soldiers freeze to death, then let themselves be conquered. This says a lot about the strong feeling of patriotism instilled in Russians historically.

We are dwelling into these past sentiments to illustrate an important backbone of Russia (the army), which is no longer feeling as strong. Creating a serious threat for Russian international military superiority, and Russian President Vladimir Putin’s control on Russia.

Being a member of the Russian army has always represented a challenge. It combines one of the toughest physical and mental preparations in the world, with precarious living, health and pay conditions. Notwithstanding, this has reached all time lows.

Russia has focused resources on developing cutting edge military weaponry for domestic defense and international export; rather than taking care of its men. Adding to this feeling, Russia is struggling economically due to sanctions and low oil prices. The ruling elite have an overwhelming amount of wealth, and this is constantly being portrayed on social media. Thereby creating a feeling of aversion amongst the Russian people towards their rulers, especially from soldiers who risk their lives for Russia, and who feel that they are not being rightfully rewarded.

On top of all this, soldiers have been banned from using social media to exhibit conflicts, as well as their dire training and living conditions.

Putin needs to resolve this feeling of dissatisfaction amongst Russia's troops, not only for his foreign policy agenda, but also to quell domestic concerns. The military sector is still an important pillar of Russian pride, as well as the economy. Therefore, their concerns ought not to be ignored, and must be dealt with.

“Now We'll Know Less, Russia is About to Ban Soldiers from Posting About Themselves on Social Media,” by Gregory Levchenko for Meduza.

“Why Napoleon’s Invasion of Russia Was the Beginning of the End,” by Jesse Greenspan for National Geographic.

“Russians Are Most Unhappy With Putin Over Wealth Inequality — Poll,” by the Moscow Times staff.

Feel like commenting on our service or on what you just read? Want to make a suggestion? Got any complaints? Shoot us an email at [email protected]. Visit www.rossiyascan.com to signup!