Moldova: Transnistria Blast Kills Eight

On Thursday, at least eight people were killed in an explosion in Tiraspol, the capital of Transnistria, a breakaway region of Moldova, BBC reports. Local authorities believe the blast, hitting a city minibus in early morning, might have been caused by a bomb, triggered by accidence. If so, this only adds to the picture of Transnistria as a region tarnished by violence and criminality.

Transnistria constitutes an ignored and absurd anachronism in contemporary Europe. It is still, officially, a part of Moldova, although the region de facto seceded as early as in 1990. Then Transnistria declared independence with assistance of the Russian 14th Army, making its commander, Aleksandr Lebed, a folk hero in Russia. This was followed by low intensity warfare, until a ceasefire was reached in 1992, putting an end to hostilities. Since then, the Transnistrian question is considered a frozen conflict by the international community.

During its roughly 15 years of independence, Transnistria has become a centre of organised crime and trafficking in people, drugs, alcohol, tobacco, weapons and whatever contraband one might imagine. The region is led by Igor Smirnov, who won a landslide victory in the 2001 presidential elections - even to the extent that he reportedly gained over 100% of votes in some districts. Smirnov's eldest son runs Sheriff, one of Transnistria's biggest and most lucrative businesses. As the dedicated football fan he is, he has founded his own professional football team and constructed an international standard football stadium in the capital of Tiraspol - a city numbering a mere 150,000 inhabitants. Such extravagance contrasts to the average income of some 100 USD a month for Transnistrians, which is roughly half that of Moldova - Europe's poorest country.

For long, Transnistria has been able to go about its business relatively undisturbed, not least because of massive backing from Moscow. In 1999, Russia however agreed to withdraw its troops from the region by the OSCE-negotiated Istanbul agreement. To this day, Russia remains reluctant to honour these commitments. During the last year, the tide all the same seems to have turned for Transnistria.

One of the key factors of Transnistrian subsistence has been smuggling. For this, the region was dependent on Kuchma's Ukraine turning a blind eye to such activities, especially as the Ukrainian port of Odessa served as a great outlet of contraband. Since the Orange Revolution, Ukraine has - with international assistance - made great efforts to curve smuggling, why the Transnistrian regime may slowly be approaching the brink of ruin. Also, in December 2005, the EU launched a monitoring mission to supervise the border between Transnistria and Ukraine.

This was followed in March 2006 by Ukraine imposing new customs regulations, demanding all imports from Transnistria to be processed by Moldovan authorities. The new regulations were an effect of the enforcement of a joint customs protocol between Ukraine and Moldova. In effect, this constituted a Ukrainian-Moldovan economic blockade, which both Transnistria and Russia were quick to point out. However, from an international law perspective, Ukraine and Moldova were in the right for the simple reason that Transnistria is still regarded part of Moldova by the international community.

As things now stand, the Transnistrian economy increasingly seems to lose out on its incomes from smuggling. This puts the very existence of Transnistrian independence in peril, which in the end might trigger the change that is so long overdue. It remains to be seen whether Russia will accept such change or if the country will step in to support the breakaway region to avoid yet another coloured revolution in its sphere of vital interests. Until then, Transnistria tragically remains an Absurdistan of Europe.

Russia: Foreign Wines Dry Up

After July 1, the imposition of a new law on liquor combined with usual bureaucratic tardiness threaten to dry up the Russian wine market by making imports of foreign wine virtually impossible for several months.

The new law aims at blocking the wide spread of counterfeit liquor by requiring mandatory excise labels on all wine and liquor bottles sold in the country. Despite the fact that the law has been long expected, Russian authorities have been slow in taking practical measures for it to work. Earlier this year, Russian liquor consumers were hit by a similar bureaucratic foulup, when there was a sudden lack of equivalent labels. Someone had simply forgot to order the labels in time for producers to put them on their bottles, which created a short but shaking "vodka crisis" for Russian society. Whether the issue was solved by postponing implementation of the law until now or if it is a case of separate laws with similar content is unknown. Nevertheless, the result is once again more or less the same.

This year, Russian liquor vendors have been especially hard hit by misdirected or poorly implemented government measures. In April Russia imposed an embargo on imports of the vastely popular Georgian and Moldovan wines, tendering a more traditional and low-price market. This might have been an eye-opener for consumers, but after some confusion Georgian wines were substituted with wines from other countries. This option now seems to peter out.

Indeed, representatives of liquor retailers do not expect that the market on imported alcohol will work properly again until November. Retailers expect a loss of some 900 million USD in revenues and that up to a third of Russian liquor stores might close indefinitely. Why the government has so blatantly bungled the issue remains unclear. Favouring a next to inexistant domestic wine production can hardly serve as an explanation, if the foulup is not directed at supporting Russia's vodka producers. The latter would, however, make no sense while such a move would but incur higher state costs for the consequences of alcholism. So, in lieu of any better explanation, one may only assume that this is yet another blunder of the infamous Russian bureaucracy.

Kazakh Leader's son-in-law New Oil Mogul

On Tuesday, Timur Kulibayev, Kazakh leader Nazarbayev's son-in-law, was elected chairman of the country's state oil and gas company, Kazmunaigas, Reuters reports. This strengthens the tendency towards increasing control of key positions in Kazakh society by the Nazarbayev family.

As is already the case, the Nazarbayev family exercises a disproportionate influence over Kazakhstan. Only last week, news came that Kulibayev's wife and presidential daughter, Dinara, is a large indirect owner of Halyk Bank, the country's third largest bank. Another daughter, Dariga, is a party leader and an MP, whereas her husband, Rakhat Aliyev, serves as deputy foreign minister.

The 65-year-old Nazarbayev is Kazakhstan's leader since 1989. During his reign, he has often been accused of nepotism and it is quite obvious that he deliberately places family members on central posts in government and business to gradually exert greater control over Kazakhstan.

Uzbekistan: Video of the Andijon Uprising

Last week, New York Times reported about video recordings from the events leading up to the 2005 Andijon massacre. The tapes were confiscated by Uzbek authorities after the massacre and have been used as evidence and propaganda by the Karimov regime. However, they may be interpreted in various ways, and cast considerable doubts on the Uzbek version of events. This comes as no surprise as the official Uzbek story has been twarted from the very outset. However, the tapes also give a much more complex picture of developments in Andijon prior to the massacre than has previously been the case.

In May 2005, public protests against a number of arrests in Uzbek city of Andijon led to a massive jail-brake. Protests were sparked by a trial of 23 local businessmen charged with involvement in Islamic extremism. On 12 May, an armed crowd stormed the local prison and prisoners were released, including also heavy criminals. By then, public disconent had peaked and people flooded the streets in massive demonstrations against the Karimov regime, which were to be know as the Andijon uprising. On 13-14 May, demonstrations were brutally quashed, and as many as 750 people - mainly civilians - were killed, although Uzbek officials have put the death toll at a mere 169. Thus far, accounts more or less concur.

The Uzbek government's version of events was that an uprising of Islamist extremists - with links to al-Qaida - had been put down by police and interior ministry troops. This version, backed also by Russia and China, holds that there were next to no civilian casualties and that the action was directed against Islamist insurrectors and bandits. Of course, this story is evidently incorrect. Testimonies by Andijon refugees instead clearly point to a majority of civilian casualties. Furthermore, it seems that also the military was used against civilians, at least judging from what arms apparently were used to put down the rebellion.

As the story came across to the international audience, more or less peaceful demonstrators had been brutally massacred by the Karimov regime. This version must be seen against the background of discontent over social and economic conditions that swept over Uzbekistan in Spring 2005.

As a consequence, massive international protests against the massacre were levelled against the Karimov regime. Thus, the international community reacted to the Andijon events. Following the lead of the UN High Commissioner for Human Rights, the OSCE called for an independent international investigation to find out what transpired in Andijon during those fatal 2005 Spring days. In September 2005, the EU imposed sanctions against the Uzbek leadership, walking a thin line between Human Rights concerns and the needs among its member states for the continued use of the Uzbek Termez airbase for supplies to international operations in Afghanistan. Still, such considerations were eventually put aside, and in retaliation Uzbekistan banned Nato, the US and most EU-states from continued use of Termez.

As is often the case with sanctions, international measures against the Uzbek leadership were somewhat blunt, hitting also reform-oriented regime politicians, e.g. the Uzbek Minister of Defence, Kadyr Gulyamov. Western critics of the sanctions have also argued that the only result was to drive Uzbekistan into the arms of Russia, while at the same time losing all possibilities for Western influence over political developments in the country.

Until now, the real events that took place in Andijon have remained obscure. The 70 minute recording now obtained by the New York Times gives a more nuanced picture of events leading up to the massacre. Recordings show the demonstrations after the prison-break but before troops arrived to quash the rebellion. Most of the demonstrators are unarmed civilians, but a number of armed insurgents and criminals take cover in the crowd. Also, a convicted murderer as well as a known female drug-dealer are agitating to the crowd to stir up wider protests. It is simply obvious that some of the escaped prisoners try to exploit the situation to their own advantage. However, it is even more obvious that the overwhelming majority of demonstrators are unarmed civilians exercising their democratic rights. Also, young men making Molotov cocktails are portrayed. When fire fighters arrive to put out fires ignited by insurgents, they are not only hindered to do so, but also taken hostage.

That public protests of this kind should warrant action by the police or interior ministry troops is clear. Needless to state, Uzbekistan - as any other state - has the right to preserve public order by the legal means at hand. However, there is no excuse for massacring civilians in the process of returning order. It is all too evident that the Karimov regime knowingly used excessive force to set an example to the Uzbek people to put an end to protests that had been growing throughout Uzbekistan during Spring 2005. That armed insurgents and criminals used civilians as cover and exploited public discontent in Andijon can never motivate indiscriminate shooting at civilians. Uzbekistan committed a haineous act against its own people no matter what the rationale for it might have been. That the now published recordings gives a more nuanced picture of events does not change this in the least, but only adds to what many observers guessed already from the outset, given the factors involved. Andijon still stands out as Karimov's worst crime. Let us but hope that the world and the Uzbek people will escape a repetion of similar events elsewhere, despite continued repression.

Russia: Putin's Power Purge?

In recent weeks, rumours have been going around that Putin is about to clamp down on Russia's legal and security structures. The reason for this, would allegedly be that they have grown too powerful and independent for the Kremlin. A purge among its ranks would consequently serve to set the balance right between security and economic interests. However, at a closer look, these rumours seem more an effect of simplification than a correct assessment of the realities of Russia's complex political landscape.

The reason why rumours were in sway, is a number of recent dismissals of high-ranking officials. The structure mostly affected seems to have been the customs services. Thus, Aleksandr Zherikov, head of the federal customs committee was dismissed in May, to be replaced by Andrei Belyanikov. At the same time, the Federal Customs Service was transferred from the ministry of economic development to direct government supervision. Also, Interfax reported that Vladimir Shamakhov, first deputy head of the Customs Service, might tender his resignation. Furthermore, two first deputy heads of the service were retired, namely Yuri Azarov and Leonid Lozbenko.

Turning to the Interior Ministry, a number of high-ranking ministry officials have been sacked from their posts. Also, the Federal Security Service (FSB) has been hit. Thus, three generals have been retired - Kolesnikov, Plotnikov, and Fomenko. As for the judiciary, some prominent judges and prosecutors were dismissed at the same time. Then, the Chairman of the Federation Council announced that a number of Senators were about to be relieved of their powers.

As all these actions occurred more or less simultaneously, there is no wonder that anticipations of a coming Putinist power purge were raised. When Putin announced the dismissal of his old ally Vladimir Ustinov, who recently got his term as Prosecutor General prolonged by five years, many drew the conclusion that the president was about to clamp down on the power structures. However, it did not take long before the soufflé collapsed. Only days later, Vladimir Ustinov was appointed Minister of Justice.

So, what conclusions might be drawn from this? First, that so much creedence has been given these rumours testifies to the tendency of Western analysts to overestimate political tendencies and occurrences in today's Russia. The system of power has become so closed that people are increasingly resorting to guesses. Secondly, the measures per se should not be underestimated. It might well be that Putin is preparing to reform the power structures, but then on a much narrower scale than these rumours have indicated. Third, some caution should be made when analysing Russia from a system's point of view, especially when relating changes in various structures to each other. The risk is that you wind up with wrong or exaggerated conclusions. Finally, what at a time seemed as a Putinist power purge, in reality turned out a mere whimper.

Ukraine: New Government in the Making

On Wednesday, news broke that a new orange coalition government is forming in Ukraine. Both president Yushchenko's Our Ukraine and the Timoshenko bloc (BYuT) confirmed that an agreement had been reached. The news comes amid rumours that Yushchenko was teaming up with orange revolution enemy Yanukovich and his Party of Regions.

If the deal goes through, Yulia Timoshenko will once more become Prime Minister, which has been her primary goal since she was sacked from the post last September. The coalition will be between Our Ukraine, BYuT, and the Socialist Party, which has been the main negotiating approach all along.

Indeed, negotiations to form a coalition between Our Ukraine, BYuT, and the Socialist Party, have been underway ever since the 26 March parliamentary elections. At the beginning of April, Our Ukraine announced that unity had been reached. Then, nothing happened. In mid-May, it was Timoshenko's turn to declare that a new government had been agreed on. Once again, nothing happened. So, one might well perceive news from Kiev on a new cabinet with sound skepticism, were it not for a constitutional deadline on forming a government. Therefore, it now appears that Ukraine will eventually get out of its post-election political deadlock. However, as BBC's Kiev correspondent states, "The deal will not be certain until it is signed."

If the deal goes through, BYuT is said to receive a dominant 11 cabinet posts, including the Premiership. Our Ukraine will get the post as speaker of the Parliament, and has already nominated Petro Poroshenko. The Socialist Party will appoint the vice-Premier.

By all appearances, Ukraine will be in for a tough political ride with its new cabinet. Neither president Yushchenko nor Poroshenko stand Timoshenko, since the fall-out and scandals leading to Timoshenko's dismissal as Premier last September.

Moreover, constitutional changes this year weaken the presidential powers to the benefit of parliament - the Verkhovna Rada. The Rada has a long tradition of relative independence, playing its role in the political balance of power, and party allegiance is far from granted. With fiery and controversial Yulia Timoshenko as Premier, parliament may decide to get in the way of her plans at leisure.

However, there is one strong binding-force uniting the new government. The political forces of the Orange Revolution has failed once. This time they have to succeed or face total political discredit for the foreseeable future. Thus, as Ukrainian political analyst, Volodymyr Fesenko, put it to AFP: "It's a second chance and if they fail, they'll all go down together."

Turning to Ukraine's international relations, with Timoshenko as Prime Minister, relations with Russia are in obvious jeopardy. Already the same day that the new coalition was announced, Timoshenko called for a review of the Russian-Ukrainian gas deal that ended the New Year's gas crisis earlier this year, BBC reports.

In addition to this, the US Marine Corps participated in exercises on the Crimean peninsula a few weeks ago, which sparked fears in Moscow of Ukrainian ambitions to join Nato. Thus, Russian foreign minister Sergei Lavrov warned Ukraine that such a move would seriously hurt relations Moscow and Kiev.

The majority of Crimeans are ehtnic Russians, and the Black Sea peninsula was transferred from Russia to Ukraine as late as in 1954 by Soviet leader Nikita Khrushchev. Therefore, the presence of US troops in a disputed Ukrainian region does not serve to improve Ukrainian relations with Russia. Indeed, the government that is now being formed will inevitably have to meet major challenges in its relations with the Kremlin.

Belarus: HR-Activists Get Swedish Awards

On Monday, the Anna Lindh Memorial Fund announced that this year's human rights' awards both go to Belarus. Thus, Tatiana Ravyaka receives the 2006 Anna Lindh Prize and Alyaksandr Byalyatski the Per Anger Prize. Both prize winners represent the Belarusian Human Rights Center Viasna.

Byalyatski, the leader of Viasna, has for a decade supported human rights in Belarus by offering legal aid to the thousands of people that have been repressed by Lukashenka's regime. He is awarded the Per Anger Prize for his "brave struggle for the rights of the individual in the fight against oppression of human rights."

Tatiana Revyaka, also of Viasna, receives the 2006 Anna Lindh Prize for her "committment, empathy and persistence in disclosing wrongs and supporting and advocating the oppressed. She courageously defies political oppression and spreads knowledge of an alternative society in which the rights of the individual are inviolable."

The Anna Lindh Memorial Prize was founded in honour of former Swedish minister of foreign Affairs, Mrs. Anna Lindh, who was murdered by a madman during a political campaign in 2003. The Per Anger Prize is in honour of ambassador Per Anger, Raoul Wallenberg's closest associate in salvaging jews in Hungary during WWII. The prizes will be presented to Revyaka and Byalyatski at a ceremony in Stockholm on 14 june.

Russia Warns Ukraine & Georgia of NATO

On Wednesday, Russian foreign minister Sergei Lavrov warned Ukraine and Georgia of joining Nato. During a speech in the Russian State Duma, Lavrov argued that such a "colossal geopolitical" change would threaten relations with the two countries. "We assess all possible consequences primarily from the point of view of Russia's national interests," Lavrov said.

According to Ukrainian foregn minister, Anton Buteiko, a majority of Ukrainians support that Ukraine would join Nato. If Buteiko would be right, this would constitute an enormous change in Ukrainian public opinion. As late as last year, only some 10% of public opinion supported Nato-membership. Why public opinion may have turned is unclear, but it might be as a consequence of the New Year's Russian-Ukrainian gas crisis. As for Georgia, Tbilisi has for long had the ambition to join Nato, but it has been regarded unrealistic as long as it is not accompanied by a Ukrainian application to enter the North Atlantic alliance.

That Russia, at this point, warns of the consequences primarily of Ukrainian Nato-membership, is due to regional political developments, not least with GUAM's recent formation of the Organization for Democratic and Economic Development, combined with increasing US openness to accepting the two countries as members of Nato. In Moscow eyes, such tendencies form part of a much greater geopolitical struggle between Russia and the US for influence over post-soviet space - Russia's traditional sphere of vital national interest.

Estonia: Gay Ambassador Flees Homophobia

The Dutch ambassador to Tallinn, Hans Glabitz, has decided to leave his mission to Estonia due to "persistent racist and homophobic abuse," BBC reports. Glaubitz is openly gay and lives with his coloured Cuban partner.

The problem has not been on an official level. The Estonian foreign ministry is, to the opposite, careful to point out that the couple has been well received at an official level. Instead, Glaubitz decision is due to widespread public homophobia in Estonia. According to Glaubitz, the couple has been constantly harassed in public by skinheads and drunkards with homophobic and racist remarks.

The Glaubitz case regrettably demonstrates the kind of homophbia still latent in many East European countries. That even a foreign ambassador finds his posting to a fellow European country unbearable, shows how profound a clash in cultures may be between the liberal Netherlands and relatively conservative Estonia.

Russia: Dollar vs Rouble

Last week, the Russian State Duma proposed a law prohibiting the use of prices in foreign currency. For all practical reasons, this would mean that price-setting in dollar and euro would be banned in Russia. The law proposal, which stands good chances of being passed, has been much ridiculed by domestic and international media alike. However, is there really reason for such ridicule if one would only closer consider the general idea?

Russians like to set their prices in dollar for the simple reason that any bigger business transaction in Russia is made in dollar. With inflation rates of up to 2,500% annually in the early 1990's, Russians have grown accustomed not to trust the country's own currency, viz. the rouble. Therefore, most Russians also keep their savings in US dollar. Despite a mere 11% inflation rate last year, people remember the latest great financial crisis in 1998, when the rouble dropped some 86% in the course of a year. Today's relative macroeconomic balance in the Russian economy, not least due to rising oil incomes, is therefore not reflected by greater trust in the rouble. Only this year, the rouble exchange rate has increased by 7% against the dollar. However, this does not seem to change how Russians value the rouble.

Nevertheless, sound scepticism is currently motivated to the dollar as store of value. Earlier this Spring, Russian Finance Minister, Aleksei Kudrin, questioned the US dollar as international reserve currency. In view of how volatile the dollar course has been in recent years, Kudrin's question has some rationale. People and national banks alike have, to an increasing extent, turned to the euro to hedge currency risks. Of course, this challenges the advantage of seigniorage for the US economy, allowing the country its current budget deficit due to the Iraq war. However, US deficit has now reached such levels that trust in the dollar is inevitably dropping. That oil producers are tending to turn to the euro for setting oil prices instead of the dollar, is a worrying tendency for the US. In view of increasingly diverging interests between Moscow and Washington, Russia's increasing scepticism towards the dollar comes at a time when the US economy is vulnerable to critique. Whether Russian initiatives to rid itself of dollar dependency also have a political motive sparked by deteriorating US-Russian relations is too early to say.

For now, the new legislation is interesting enough. So, will such a law actually work? No, of course not. Banning public use of dollar or euro denominations will have absurd consequences. Looking only at president Putin's recent annual address to the State Duma, it would have rendered him a considerable fine, judging from the number of times he used the "d" word. The new law may also create considerable confusion at the upcoming G8 Summit in Petersburg, as the Duma has recommended the Russian delegation only to use rouble denominations when presenting financial data. Former Finance Minister Boris Fedorov argues that the law will make Russia an international laughing-stock. His successor, Aleksei Kudrin, predicts that state officials will become totally confused by amounts "followed by an infinite number of zeros."

Still, is it not quite natural that a state uses its own currency denominations as a measurement of transactions? What would e.g. an American say if all US prices were in euro, despite the fact that payment would be made in dollar? That a reserve currency - such as the dollar or euro - is used in inflatory or crisis economies is quite natural, because people want to be sure of the value of their money. However, the rouble has preserved its value relatively well for such a long time now, that one should perhaps start reconsidering its value also in psychological terms. This will take time, but one has to start somewhere. It is quite evident that an economy the size of Russia cannot in the long-run go on using foreign currency as its financial gauge. The price of this is too great, not least in terms of transaction-costs and non-deposited money with no interest. So, despite the fact that the specific Duma bill and the debate surrounding it may be laughable, Russia has to start somewhere to normalise its economy. In light of this, the Duma may not be all wrong.