Russia Reform Monitor: No. 1968

March 20:

Are the Kremlin's plans for the region beginning to unravel? The Moscow Times reports that, during his most recent trip to the Kazakh capital of Astana, Russian President Vladimir Putin proposed the formation a regional currency union encompassing Kazakhstan and Belarus. However, the idea was apparently greeted with skepticism by Belarusian President Alexander Lukashenko and Kazakh President Nursultan Nazarbayev, and for practical reasons. The steep decline of the ruble over the past year has left Minsk and Astana wary of the strength of the Russian economy - and reluctant of aligning their economic fortunes with those of Moscow. As an alternative, Kazakhstan has suggested that the three nations coordinate their monetary policy, a step that falls far short of the economic integration that Putin has envisioned.

March 21:

Western sanctions and low oil prices have taken a bite out of the Russian federal budget of late, but the country’s propaganda budget isn’t suffering. In fact, writes Paul Goble in his Window on Eurasia blog, it is thriving. "Vladimir Putin's new budget numbers show that for him, propaganda is more important than the Russian people and even more important than national defense," notes Goble. He cites Russian plans to dramatically slash federal spending on the environment (by 16.2 percent), communal services (by 10 percent), education (by 4.9 percent), and culture (by 7.3 percent), juxtaposed with significant increases to state propaganda outlets like Russia Today and the TASS news agency. The former will see its budget (estimated at $300 million annually) boosted by as much as 400 percent, while the latter will enjoy an 80 percent increase in its operating budget. The picture that emerges is that Russian President Vladimir Putin is putting propaganda "over people and even national defense."

March 22:

America's top military official in Europe is raising the alarm over the adverse effects of Western "inaction" in Ukraine. The Wall Street Journal reports that Gen. Philip Breedlove, the Supreme Allied Commander Europe, has told a German Marshall Fund conference that a failure by the United States and Europe to promptly and resolutely counter Russian aid to separatists active in eastern Ukraine could lead to "destabilizing" effects. "We continue to see disturbing evidence of air defense, command and control, resupply equipments coming across a completely porous border," the general noted. As well, Russia is exerting "great pressure" on European nations like Romania and Poland, who are currently attempting to assist Ukraine. "Anyone else who wants to join into this defensive capability will come under this diplomatic and political pressure," he predicted.

Moscow has warned Denmark over its plans to join NATO's emerging missile shield. Russia’s ambassador to Denmark, Mikhail Vanin, told the Danish newspaper Jyllands-Posten in comments carried by Reuters that if Copenhagen goes ahead with its planned membership in NATO's anti-missile architecture, "Danish warships will be targets for Russian nuclear missiles." According to Vanin, Denmark's membership in NATO defenses mean it "will become a part of the threat against Russia. It will be less peaceful, and relations with Russia will be damaged."

March 22:

Moscow is expanding its outreach to the Middle East, reports Al Jazeera. Russia's latest overture is aimed at the Hashemite Kingdom of Jordan, where it has pledged to build the country's first nuclear plant. The planned $10 billion project is aimed at ameliorating the country's grave energy situation - which has been adversely affected of late by instability in Iraq and Egypt. As a result, Egyptians officials have said, the country is spending some $3 billion annually on foreign energy supplies, a state of affairs the Russian nuclear project will alleviate considerably once it comes online in 2022.

Russia's expanding military profile in Europe has regional states on edge. The Associated Press reports that four Russian warplanes were tracked over the Baltic Sea by NATO and Swedish forces, and that the maneuver raised significant warning bells throughout the EU. The way the planes flew - with their transponders off in violation of international rules - "has happened now on a number of occasions and in a very challenging way," Swedish Foreign Minister Margot Wallstrom has said.