Russia & CIS

Baku City Karting Center has been opened in the Aquatics Palace with the support of Baku City Circuit Operations Company (BCC) and Azerbaijan Automobile Federation (AAF), according to bakucitycircuit.com.

Today’s MCIS slides installment comes from Lt. General Sergey Kuralenko, the Deputy Commander-in-Chief for Peacekeeping Operations of the Russian Ground Forces. This comes from the breakout session on soft power as a tool to pursue military-political objectives.

Sadly, it seems that the Russian MOD has not posted video or speech texts from the breakout sessions, so I’ll provide a brief summary here, in addition to the slides. Kuralenko’s speech can be summarized in three points:

1. Russia is in Syria to help Syrians.
2. The U.S. is in Syria to pursue its geopolitical ambitions and does not care about collateral damage.
3. People in the military, regardless of country of origin, understand the consequences of conflict and seek to avoid it. More mil-mil contact would help to avert the worst consequences of war.

Kuralenko was followed by Vladimir Padrino Lopez, the Minister of Defense of Venezuela, who made the argument that many countries use soft power as a tool for political domination of weaker countries without having to resort to military force. He contrasted positive soft power, a tool for cooperation as practiced by Hugo Chavez when he led Venezuela, with negative soft power, as practiced by the United States for subjugation and regime change. He also helpfully pointed out that the United States was using the humanitarian crisis in Venezuela to destabilize the country and also noted that there was no humanitarian crisis in Venezuela…

The sole American speaker, Ariel Cohen, highlighted the transition of the concept of soft power from a national branding tool to a weapon. Starting from Joe Nye’s original conceptualization of soft power, he focused on soft power as a tool for expanding national influence through persuasion and attraction, rather than through military or economic pressure. Soft power is the idea that any product of human activity can be weaponized to achieve geopolitical goals.

He was followed by the Russian journalist and television personality Vladimir Soloviev, who gave a typically inflammatory speech. Soloviev opened by saying that he didn’t believe in soft power, since it can only be useful in addition to hard power rather than in and of itself. He argued that the West had rejected all of the norms of international law and had aggressively rejected diplomacy as well. He likened the West (and the United States specifically) to a casino owner telling the players what the rules should be. He accused Boris Johnson of lying about the Skripal case. His larger point was that the West was using soft power together with its technological advantages to solve its military and political issues, with the dollar being the most effective soft power tool. He argued that a new iron curtain was descending over Europe, but this time from the Western side.

Soloviev made the argument that Russia needs  to become more active in defending itself against soft power attacks. Russia, for him, has not been pushing an ideology. Furthermore, since it does not own or operate the platforms, it will always be behind.  It therefore needs to leave the casino altogether and stop playing the game.

Soloviev’s arguments were seconded by Yakov Kedmi, an Israeli expert who has developed a reputation for his pro-Russian positions. In discussing  soft power, he highlighted that power is the key word in that phrase, with the soft modifier being secondary. Soft power is used to pressure opponents or support allies in circumstances when military power can’t be used. He then argued that soft power is as illegitimate as any other use of force and should therefore be prohibited through international law and countered with military power, as that is the most effective tool against it.

After a completely unmemorable presentation by the first deputy defense minister of Argentina, the final (and best) presentation was given by Dan Smith, director of SIPRI. He countered Kedmi’s perspective quite effectively, noting that power is not the same thing as coercion or the use of force. The most effective kind of soft power is silent, intangible and irresistable. It comes from culture, economic strength, and reputation  and offers influence and helps diplomacy. At its most effective, it stops conflicts before they start. It can change the nature of the game. Soft power in the world has declined in general as trust of other countries has declined. No state has as much power today as it used to and none are viewed as models for others.

Here are Kuralenko’s slides… I’ll have one final post on MCIS later this week with overall impressions and takeaways.

The US understands the value of relations with Russia but sees it as its strategic competitor at the current stage, US Deputy Secretary of Defense Patrick Shanahan told a Defense Writers Group breakfast on Tuesday answering a question from a TASS correspondent.

Prime Minister Binali Yıldırım on April 24 blasted a call by the Monitoring Committee of the Council of Europe Parliamentary Assembly (PACE) for the postponement of Turkey’s upcoming early elections on June 24, according to Hurriyet.

In the first quarter of 2018, operations in securities market amounted to AZN 6.2 billion, up 2.7-fold from previous year, APA reports.

Head of the Azerbaijani Presidential Administration Ramiz Mehdiyev has introduced new Chairman of the State Committee for Refugees and Internally Displaced People (IDPs) Rovshan Rzayev to the staff of the State Committee and wished him success in his activity, the State Committee said April 24.

President Ilham Aliyev has visited a monument to National Leader Heydar Aliyev in the Turkish capital, Ankara, APA reported.

President of Azerbaijan Ilham Aliyev has arrived in Turkey on an official visit.

Secretary General of the United Nations Antonio Guterres has congratulated Ilham Aliyev on his victory in the April 11 presidential election in Azerbaijan.

One of the reasons for Serzh Sargsyan's resignation from the post of Prime Minister of Armenia could be the death of his mother Nora Sargsyan.

President Putin may sign a new decree after his inauguration on May 7 about the development of healthcare system and infrastructure in Russia. It is believed that the decree will stipulate the budget of nearly ten trillion rubles for these purposes, Bloomberg said. The number can be revised. Most of the spending is scheduled for the period after 2020, although it was said that in order to increase spending on social needs, the authorities will cut expenditure in other areas and will look for other sources of income. In particular, it is planned to raise taxes and introduce a new 4% sales tax, although these measures have not been approved yet. The new decree is part of Putin's assignments that were promulgated following the results of the president's message to the Federal Assembly. The presidential administration is to prepare decrees on "improving the living standards of citizens, ensuring the sustainable growth of their real incomes, increasing the level of pensions above the inflation rate and halving the level of poverty in the country."In addition, by analogy with 2012 decrees, new "national goals" are to be elaborated to target such issues as education, health, housing, roads and small businesses.The chief of the Accounting Chamber, Tatyana Golikova, noted that to achieve the above-mentioned goals, the Russian economy needs to grow by four percent a year. "The programs that we have today do not embrace resources of the regions," she said. The authorities are not going to expose the sources, from where they are going to find the funds for Putin's new ten-trillion ruble decree. Some of the costs will be realized by reducing spending, for example, on defense or by redistributing budget funds. Conducting a tax maneuver for the entire economy for 2019-2020 could increase budget revenues by almost 450 billion rubles. Another possible source of income is raising the retirement age. Depending on how significant it will be, the budget may save 0.1-0.2% of GDP by 2050.The vectors of increasing Russia's spending have been chosen correctly, the head of the Center for Economic Studies of the Institute of Globalization and Social Movements, Vasily Koltashov told Pravda.Ru. "Social spending and improving the financial situation of Russians who work for the state is a very important goal to pursue. It, in fact, determines the future of the domestic market and, probably, the society in general. Therefore, the redistribution of funds for such purposes is the right move to make. The problem that arises immediately after such a decision is called the liberal bureaucratization of such departments as health care, education, and the entire social sphere."It goes about a lot of paperwork, formalities and reports, especially for science and education workers. If we talk about tax reforms, then we do not have a progressive tax. There are very large taxes on salaries - the Russians pay 13 percent of this tax. Plus, there are a lot of fiscal deductions that make poor people even poorer. I believe it would be reasonable to take some from defense. The state needs to pay more attention to social needs and send positive signals to the private sector."Pravda.Ru Read article on the Russian version of Pravda.Ru

Police have arrested a 25-year-old IT student over the Toronto van rampage that left ten people dead.

The Azerbaijan national gymnastics team have captured bronze medal at the AGF Junior Trophy in Baku.

Delivery of cargoes for holding 2018 Formula 1 Azerbaijan Grand Prix to the Heydar Aliyev International Airport in Baku has started.

A new medal "100th anniversary of the Azerbaijani justice (1918-2018)" has been established in Azerbaijan.

French President Emmanuel Macron congratulated Ilham Aliyev on his reelection as a president.

The Kremlin spokesman said drawing parallels between the current events in Armenia and the past developments in Ukraine is inappropriate.

A bill “On employment” was tabled in the first reading at a meeting of the Azerbaijani Parliament on April 24, APA reports.

Last week, it was reported that the Central Bank of Turkey withdrew the national gold reserve from the US Federal Reserve System. Given the fact that the United States has been imposing whole packages of sanctions on Russia one after another since 2014, why does Russia still keep its gold and other assets in the USA? If it is not in the USA, then where does Russia keep her gold? Turkey's "American gold" was partly returned to Turkey and deposited to European banks, particularly in England and Switzerland. Ankara's gold reserve totals 564.6 tons.Accumulating physical gold by central banks has become a trend lately. Even such a small European country as Hungary returned three tons of its gold from London in early 2018. Venezuela, Holland, Austria and Germany did the same - the countries that feel pressure from the part of the Washington consensus. For example, both the European Union and the Western world have been criticizing Hungary heavily. The nation's gold reserve gives Hungarian Prime Minister Viktor Orban a reason to feel more confident.What about Russia? She has been the main "whipping girl" in the eyes of the "civilized world" lately. Yevgeny Fedorov, a member of the State Duma Committee on Budget and Taxes, told Pravda.Ru, that the information about the location of Russia's gold is classified." "Some of Russia's gold used to be stored in the USA, but we do not know whether Russia has returned that gold," the MP said. According to Yevgeny Fedorov, the Central Bank of Russia "is a branch of the US Federal Reserve, so I would not be surprised if we still keep some of our gold in the United States," he said. "If we don't keep our gold in the USA, then we do keep some of our assets there - i.e. we support the US economy, which is a very bad phenomenon," Fedorov told Pravda.Ru. This policy, the MP added, is stipulated in Article 15 of the Constitution, the system of international treaties and the status of the Central Bank of the Russian Federation. To change such a state of affairs, Russia needs to conduct revolutionary reforms. "It is only now, when the law on counter-sentences raises the need to remove US managers from Russian ministries and the Central Bank. If Putin wins with his policy to end the subordination to the American unipolar world, then everything may work out well," Yevgeny Fedorov told Pravda.Ru. In turn, researcher Mikhail Khazin told Pravda.Ru that Russia does not keep its physical gold in the US. "We keep our assets in US government securities, but we have been recently reducing the share of these assets significantly. There is a probability that the Americans will not give them back, so we need to get rid of those bonds," the expert told Pravda.Ru. Pavel Salin, director of the Center for Policy Studies of the Finance University, also said that Russia does not keep its physical gold in the United States."The Russian gold reserve is stored in Russia, and the foreign exchange reserves are kept at US Treasuries. We tend to reduce their amount, but it is impossible to do it instantly, because it will look like an attempt to collapse the US debt market with all ensuing consequences. It could also trigger a major conflict with China that holds $1 trillion 200 million in these bonds and Japan - about one trillion dollars," the expert told Pravda.Ru.According to the US Treasury, the Central Bank of Russia sold US government bonds worth 11.9 billion dollars from December to February, having this reduced the volume of assets by 11.2 percent ($93.8 billion). It is worthy of note that immediately after the introduction of sanctions against Russia in March 2014, the Central Bank of Russia withdrew about $115 billion from the US Federal Reserve System (FRS). However, two weeks after the incident, the Russian Central Bank returned the funds to Fed accounts, Reuters says. Pravda.Ru Read article on the Russian version of Pravda.Ru

Director of the Institute of the USA and Canada Valery Garbuzov compared the qualities of the commanders-in-chief of Russia and the United States. Russian Foreign Minister Sergei Lavrov stated that Vladimir Putin and Donald Trump, as well as the military of the two countries, will never let a military confrontation spark. "Getting back to the question of risks of a military confrontation, I am 100% certain that the military will not allow it, and, of course, neither President Putin nor, I'm sure, President Trump will allow it. They are the leaders elected by their peoples, and they are responsible to their people for peace and tranquility," Lavrov said in an interview with RIA Novosti. Director of the Institute of the USA and Canada, Valery Garbuzov, suggested in an interview with Pravda.Ru that Lavrov's optimism is based on one argument: "The United States and Russia are nuclear powers. "We saw from the Cold War experience that the confrontation was tough, but it had not developed into direct confrontation," the expert told Pravda.Ru.