USEC Inc., a Bethesda uranium enrichment company, has a lot of potential but it must first resolve two troublesome pricing issues with its clients and competitors, analysts say. USEC, formerly known as U.S. Enrichment Corp., is the only American uranium producer and one of a few in the world that enrich uranium to sell to utilities. The other main uranium producers are government-related companies in Europe and Russia. Created in 1993, the company went public in the summer of 1998. Shares of USEC closed at $6 on the New York Stock Exchange Friday, having reached their 52-week high of $6.56 two days before. The stock price is unexpected, analysts say, considering USEC announced earnings for its second quarter ended Dec.31 were lower than the same period last year. The company said profits fell 36 percent to $20.9 million (26 cents per diluted share) from $32.6 million (36 cents). Diluted shares reflect the value of options, warrants and other securities convertible into common stock. Net sales also dipped by 13.5 percent to $387.1 million from $447.6 million. "The increase is more explainable when one looks at the political issues," says David Schanzer, an analyst with Janney Montgomery Scott LLC in Philadelphia. "It's a mixed bag, but the market seems to be reacting to them in a very positive way."
USEC's main unresolved problem surrounds a 20-year deal it has with Russia to convert uranium from the country's nuclear warheads into usable energy products. The deal was set up by the U.S. government to keep warhead uranium away from terrorists. Under part of the contract, USEC is paying $88 per unit for the product, well above the market price of about $80 per unit. "Existing low prices have dramatically diminished the profitability of the company's contract," wrote Scott Sprinzen, analyst with Standard & Poor's in New York, in his last report on USEC. "Increased competitive pressures from lower-cost producers and weakening uranium prices have eroded profitability measures."
One of the Clinton administration's last decisions was to approve an informal agreement between USEC and Russia to sell Russian uranium at market prices. Russia, in turn, could sell some of its non-weapons grade materials to the United States.
"But this OK only takes you so far," says Mr. Schanzer, referring to the administration's decision. "The Russians have to be in the same mind as they were several months ago, that they want to go ahead and do this deal . . . and the Bush administration would have something to say about this, and that has not yet been heard."
In a separate matter, the International Trade Commission, an independent agency, backed the USEC's request for an investigation into whether its two main competitors, Eurodif SA of France, and Urenco Ltd., which is jointly owned by the British, Dutch and German governments, are selling uranium in the United States at below production-cost rates. If those charges are true, the United States could levy duties on its two competitors. USEC holds 75 percent of the uranium market in the United States and 25 percent of the global market.
"From that perspective, a lot of people are happy and that has had to do with the stock price," Mr. Schanzer says. return to menu
B. Plutonium Disposition
1. 500 Mln for Reprocessing
Interfax Russian News
January 15, 2001
(for personal use only)
The U.S., Great Britain, Japan and France are ready to assist Russia in the implementation of a program aimed at re-processing Russian weapons-grade plutonium and to give Russia $500 million for this purpose, a Russian Nuclear Energy Ministry release reads.
According to the release, some $2 billion is required to implement the entire twenty-year program. The U.S. has already said it is ready to give Russia a $200 million credit, which will enable Russian nuclear specialists to start implementing the program.
At present, the Russian Atomic Energy Ministry has agreements and is cooperating with Germany and France as part of a weapons-grade plutonium reprocessing program.
In addition, the Russian and U.S. governments on September 1, 2000, signed an agreement on the reprocessing of plutonium that is no longer used for defense. Under the terms of this agreement, Russia and the U.S. are to reprocess 34 tonnes of weapons-grade plutonium each to produce fuel for existing and future nuclear reactors.
The work on the problem of reprocessing Russian weapons-grade plutonium is continuing, but at the moment there is no talk of starting its reprocessing right now, the press release reads.
The Atomic Energy Ministry notes that the program is currently going through its initial stage, namely, the development of the weapons- grade plutonium reprocessing technology. In particular, this means the technology for turning metal weapons-grade plutonium into an oxide, and also the technology for producing MOX fuel for Russian BN-600 and VVER- 1000 reactors. return to menu
C. Nuclear Waste
1. MONEY OVER (NUCLEAR) MATTER
The Russia Journal
January 27, 2001
(for personal use only)
A fury of lobbying has erupted between Russia's Atomic Energy Ministry and environmental activists as the State Duma prepares for a second vote on a bill easing import restrictions for nuclear waste.
The draft law, an amendment to Article 50 of the 1992 Law on Environmental Protection, was passed by the State Duma lower house of parliament in December by a vote of 319 to 39. After the February vote, it will need yet another Duma reading before it is sent to Russia's upper house, the Federation Council, for a final vote.
At stake, according to officials at the Atomic Energy Ministry, or Minatom, is more than $20 billion in revenues for the storage and recycling of spent radioactive materials - funds that could be used to reenergize the sector's sagging infrastructure.
But activists argue that the amendments would turn Russia into the world's largest toxic dumping ground. Moreover, they say, the influx of waste would overstress the country's decrepit transport and storage facilities, creating a potential ecological and humanitarian disaster in the waiting.
"This [draft law] is just a quick and foolish way to solve some of Russia's current economic problems," said Vladimir Kuznetsov, a former employee at the Chernobyl nuclear power plant who now works as an environmental advocate.
"More than 100 accidents [in the transport of radioactive materials] have happened in the United States since 1971," he said. "In Germany and Switzerland, leakage was found seeping from transport containers in 1997 and 1998 respectively. These things happened in developed countries, and Russia is even more ill-equipped to deal with them."
In order to get the waste to Russia's remote storage and recycling facilities - to restricted cities including Siberia's Krasnoyarsk-26 and Urals' Chelyabinsk-65 - containers would have to travel by aging trains that environmental advocates claim do not meet international safety standards. The situation looks even worse, they argue, when examined in light of the poor condition of Russia's railways and their bad accident record.
Activists also say there are problems with the facilities. "Chelyabinsk-65 has technologies dating back to the 1950s," said Vladimir Slivyak, co-chairman of the Ekozashchita environmental organization, who added that in many instances the radioactive composition of foreign waste was not compatible to local recycling technology.
In addition, many of these facilities have already reached capacity, environmentalists say, with some pointing out that Krasnoyarsk's recycling and storage plant can only accept three tons more of radioactive material before shutdown, and Moscow's Kurchatov Institute, which also receives waste, is also almost full.
"What is Russia to do?" asked Slivyak. "We can't just dump the stuff or bury it in the ground."
In trying to put pressure on state officials to reject the bill, Slivyak and his advocacy group have organized protests and petitions directed at the State Duma and regional parliaments. So far, he said, 10 regional Duma meetings, including in the Sakhalin, Volgograd, Sverdlovsk, Saratov and Karelia regions, have expressed sympathy for his campaign.
Meanwhile, Minatom officials have denied any dangers. "Why do these advocacy organizations blame our ministry and State Duma deputies for acting only in the interests of profit?" said Konstantin Leonov, a ministry spokesman. "Duma deputies are not incompetent, and in fact many of them have experience in the nuclear-energy sector.
"For the last 50 years, not a single serious accident has occurred," he added.
The battle reached its height before the State Duma's first reading of the draft law late last year, when environmental advocates brought a petition signed by 2.5 million people demanding a referendum on the matter. Russian authorities rejected the petition on the grounds that 700,000 signatures were invalid. return to menu
2. MINATOM LIES ABOUT SAFE TRANSPORTATION OF NUCLEAR WASTE THROUGH RUSSIA
Vladimir Kuznetsov and Vladimir Slivyak
January 27, 2001
(for personal use only)
Minatom' press-secretary declared that "transportation of nuclear waste" in Russia is absolutely safe, according to January 24' statement. It can only confirm that press-secretary of Minatom Yury Bespalko not familiar with the topic he is speaking about. By pushing absolutely incompetent official for the public speech, Minatom violated the constitutional right of Russian citizens - the right for true environmental information.
Environmental groups presented report last week in Moscow focused on poor practice of radioactive waste transportation in Russia. Report titled "Transportation of radioactive materials and nuclear fissil materials in Russia: practice of unavoidable risks" included chapters: on accidents happened while trans-porting radioactive materials in 90s, Russian new containers and its safety, general issues of safety on railroads.
Document will be mailed to Russian prime minister, all members of the lower house of parliament (State Duma), several Russian ministries, said authors of the report while speaking at the press-conference in Moscow' Press Development Institute.
Report appeared to be the result of studying the situation with accidents on the railroads of Russia, con-ducted by non-governmental environmental groups during 2000. According to authors of report, only part of study is finished and presented, but work will be continued through 2001. Because the State Duma approved the amendment to Environmental Protection Law on December 21, 2000, lifting the ban on importing spent nuclear fuel from across the world, environmental groups decided to release what they called "worrying" information on how dangerous the transportation of nuclear waste and other radioactive materials through Russia is. To become law, the amendment must be approved by Duma in second and third readings, then by president and the federation council. After that happened, "many hundreds of new nuclear transports will cross the country. Taking into account the technical quality of Russian railroads and problems in the organizing field, nuclear transportation in Russia will dramatically increase the danger of great accidents involving highly radioactive materials", authors of the report said.
Each year there are millions of nuclear transports cross the globe. According to the report, the number of accidents in Russia is 2-3 times higher compared to the Western world. There are many examples described in the study: - Ural Electro-Chemical Plant (UEHK, Novouralsk city) is often practicing the transportation of different radioactive solution. In 1994, train carrying the solution containing uranium crashed that caused the release of 1000 litre of uranium-containing solution on the railroad outside the plant, contaminating the ground near greatly populated cities; - Special car carrying the containers with Ir192 and Co60 run into the civil bulldozer near the Tubuk village, in Chelyabinsk region, on September 11, 1997. Hermetically sealed containers were broken and released radioactivity into the environment;- September 20, 1991, accident happened at Bilibino nuclear plant, Far North of Russia, while transporting the radioactive waste to the storage. One of containers has fallen on the ground what caused the radio-active contamination.
In 1999, there were two cases of the illegal transporting of radioactive waste through Russian rail roads. Also during 1999, there were 4 big accidents with crashing trains by the South-East railway and the North-Caucasus railways. Safety condition of the Russian railways in all directions becomes poorer.
According to the report, containers used in Russia to transport radioactive materials do not correspond with the norms of safety. At the Sibirsky Chemical Plant (SHK, Tomsk-7) identified the facts about transportation of the nuclear materials in the containers of AT-316 and BT-134 types, such containers do not correspond with the Russian nuclear safety norms (Main rules for safety and physical protection of the nuclear materials' transportation, OPBS-83). The SHK practice such transportation having not obtained the certificates and licenses. The same containers without necessary approvals widely used by the "Mayak" nuclear reprocessing facility near Chelyabinsk, Ural region of Russia.
According to the authors of report, "Russian nuclear safety norms are far not ideal. But even in such situation Russian Ministry of atomic power (Minatom) was regularly violating the Russian norms of nuclear safety. The main reason is lack of respect for legislation set up by nuclear inspectorate GAN."
"The Minatom' plan to import nuclear waste for storing/reprocessing on commercial basis must be reviewed and disapproved by the Russian legislators. Extremely dangerous nuclear transports may result in great accidents causing wide-spread contamination of the environment, exposing any people to radiation, paralyzing the main transport roads in country", concluded report. return to menu
D. Russian-Iranian Relations
1. Russians tighten ties to Iran
The Christian Science Monitor
January 26, 2001
(for personal use only)
A new cooperation agreement paves the way for future arms deals, as US worries.
Moves by Russia and Iran to reestablish military ties are raising anew US fears of nuclear proliferation.
Defense Minister Igor Sergeyev - in the highest-level Russian visit to Tehran since Iran's 1979 Islamic revolution - heralds a late-December agreement as a "new phase of military and technical cooperation." Iranian President Mohamad Khatami calls it "an important landmark."
The spread of Russian advanced weaponry and nuclear know-how to Iran has worried Washington for years. In his presidential campaign, George W. Bush accused his opponent, Vice President Al Gore, of looking the other way as Russia sold arms to Iran. The Bush administration has set a goal to stop such sales.
Russia desperately needs cash and wants to keep its vast arms factories going. Iran - with oil revenues $9 billion above 1999 levels - says it wants to buy. "We are their brothers-in-arms, and have long-term interests together," says Pavel Felgenhauer, an independent military analyst in Moscow, ticking off mutual concerns including Caspian oil to security issues in Central Asia and Afghanistan.
Russia is edgy over Mr. Bush's stated support for creating a missile-defense system, and US readiness to walk away from the 1972 Antiballistic Missile treaty if Moscow won't permit changes.
The US, by far the world's largest arms dealer, has sought to curb some Russian sales. But on the eve of the US elections, the Kremlin abrogated a 1995 deal, made with then-Vice President Al Gore, in which Russia promised not to sell advanced conventional weapons to Iran.
Estimates of the potential value of new arms sales to Iran range from $1 billion to $7 billion.
Despite strong American concerns - and the threat of sanctions from Congress and the Clinton White House - Russian officials deny that their expertise and hardware will aid Iran's nuclear and nonconventional weapons programs. Russia says it will continue building a nuclear reactor for Iran at Bushehr, now nearly complete, despite US disapproval.
The warming relations go hand in hand with an effort by President Vladimir Putin to reassert Russia's role in world affairs and challenge what it disdainfully calls the "unipolar" world dominated by the US.
"The 'problem' of Iran is a relic of American imperialist ambitions," says Leonid Fituni, director of the Center for Strategic and Global Research in Moscow. "There is no real threat to the US from Iran."
Americans have warned for years that illegal proliferation - especially from Russia - has boosted Iranian nuclear-weapons ambitions. Several Russian institutions are already subject to US sanctions for this reason.
On Jan. 12, President Bush used the example of "some nation like Iran," to illustrate what he saw as the missile threat, in an interview with The New York Times.
Analysts say strident US opposition to closer Iran-Russia ties may be one reason for the new coziness. "The pressure from America ... is forcing a closer, more serious relation with Russia," says Nasser Hadian-Jazy, an American-educated political scientist at Tehran University. The US doesn't appreciate that Iran is stuck "between nuclear Pakistan and an Iraq with chemical weapons."
Iran may not fulfill Russian dreams of huge, cash-down sales, however, Mr. Hadian-Jazy says. "Even if we have it, still we are reluctant to spend it."
Increasing ties between Russia and Iran could affect US-Russian cooperation on various projects. In the decade since the breakup of the Soviet Union, the US has spent $5 billion to help Russia safeguard its nuclear materials. A bipartisan panel commissioned by the Energy Department to review those programs recommended earlier this month that an additional $30 billion be spent in the next decade - if Russia cuts off weapons ties with Iran.
"One of the major obstacles to going forward is the Russia-Iran relationship," said Lloyd Cutler, former White House counsel and a leader of the panel, in comments reported in The New York Times. "What the Russians are doing vis-a-vis Iran is violating all the norms."
Yevgeny Adamov, Russia's nuclear energy minister, affirmed days later that nonproliferation "remains a priority" for Moscow, calling US rhetoric about Iran "politics, pure and simple."
"Not a single real fact" proves any Russian contribution to Iran's nuclear weapons development, he added, "It is really a question of whether the new administration will use this card in politics."
Crunching the numbers
The question many analysts are asking is how the numbers add up for Russia. In exchange for halting conventional arms sales to Iran, the 1995 agreement allowed Russia to launch Western satellites on its rockets. That deal has earned Russia nearly $2 billion and prevented the collapse of its space agency, says Konstantin Makienko, of the Center for Analysis of Strategies and Technologies (CAST) in Moscow. He estimates that Iran could, at most, have paid only $1.5 billion in those years on Russian arms.
Russia's weapon sales were worth $3.8 billion last year, according to CAST figures. Defense officials have stated goals of $6 billion per year.
Russia has become the biggest arms supplier to China, another foe of the US missile-defense shield. A new Russia-China military pact may result in $15 billion in Russian arms sales according to Jane's Intelligence Review in London.
Russia's arms bazaar could present a new challenge to Washington.
"Bush has told the Russians that it won't be business as usual, that 'the [American aid] fountain is going to dry up if you don't listen,' " says Shirzad Bozorgmehr, deputy editor of Tehran's English-language Iran News. return to menu
E. U.S. - Russian Relations
1. PUTIN SAYS U.S. DELAY ON NMD A MOSCOW VICTORY
January 29, 2001
(for personal use only)
PUTIN SAYS U.S. DELAY ON NMD A MOSCOW VICTORY... In a speech to the staff of the Foreign Ministry on 26 January carried in full on strana.ru, President Vladimir Putin said that "the fact that Washington has so far put off its decision on deploying a national missile defense (NMD) system confirms that if one acts with purposefulness and with thought...it is possible to achieve real positive results." He said Russian diplomats must continue to work with "our partners" in the full expectation that the outcome of dialogue with them and with Washington will be "quite positive." PG return to menu
2. Bush's Slow Boat to Russia
The Washington Post
January 28, 2001
(for personal use only)
Europe comes before Russia, and not only in the alphabet: President George W. Bush will move slowly to engage Vladimir Putin in a working dialogue after shoring up transatlantic relations.
Bush's still-unfolding choice to use all deliberate speed in dealing with Moscow is based on sound principles. But it also faces pitfalls. The new administration has to sort out exactly what "Europe" is in the 21st century. It must also determine what kind of Russia Putin aims to command. Neither of these tasks is easy.
In its first important shift in foreign policy emphasis, the Bush White House has indicated to Moscow that the new president will consult fully with America's chief European allies on missile defense and other issues before sitting down with Putin, U.S. and European officials tell me.
The first contact between Bush and Putin is not scheduled to occur before the July summit of the Group of Eight in Italy. Even then, Moscow has been told, the two leaders will engage in no more than a "get acquainted" session in Genoa.
The pause should not come as a complete shock to the Kremlin. Bush laid out his intention to make a slow boat to Russia in his presidential campaign. He repeatedly emphasized that his first priority would be reaffirming American alliances and friendships abroad.
The pledge makes strategic as well as political sense. To move forward smoothly on national missile defense, Bush will need to overcome European misgivings and minimize Russian and Chinese opportunities to play the allies against Washington. It buys him time to look more carefully at the controversial weapons system as well. His hopes to have friendly nations take over some of the defense burdens that U.S. troops now carry abroad also requires prolonged and deft diplomacy with European countries and Japan.
Bush and campaign aides also promised to pull back from what they saw as intrusive and unproductive U.S. involvement in Russia under Bill Clinton, who assigned top priority to integrating Russia into a global order of free-market democratic nations.
Putin can live with less U.S. involvement in Russian affairs. But the Kremlin worries that Bush is drawing sharp, ideological differences among the world's major nations and consigning Russia to the status of an enemy, potential or current. A worried Putin has asked friends in the West why Russia is being treated differently, as Bush's lack of enthusiasm for immediate talks with him has become clear.
The contrast will be glaring by early summer: After attending a hemispheric summit in Quebec City in April, Bush is due to go to Sweden in mid-June for a semi-annual presidential meeting with European Union officials. Discussions are also underway about Bush visits to European capitals and convening a NATO summit in Brussels in the same period.
Bush's presence at a NATO gathering so early in his presidency would carry powerful symbolism. It would underline the U.S. attachment to NATO as the bedrock of U.S.-European relations and perhaps diminish the claim of the European Union to growing global importance. That result would not bring grief to some members of Bush's foreign policy team concerned about growing EU influence on defense.
At the same time, the Bush team seems aware of the need to balance alliance-centered strategy with outreach to Russia. Steve Hadley, an expert on European and Russian affairs who is Bush's deputy national security adviser, predicted to a Washington audience earlier this month that the president would push hard to move U.S.-Russian relations "beyond the Cold War logic" of mutually assured destruction.
U.S. and Russian officials "need to develop a common framework to show that a mix of offensive and defensive weapons systems is in fact stabilizing," Hadley said, outlining a basis for a new strategic approach to Moscow. "We can arrive at a lower nuclear posture."
But the Bush administration needs to do more than voice hopes for cooperation while it waits for the diplomatic stars to move into alignment six months from now. The president should dispatch Secretary of State Colin Powell to Moscow to deliver a personal message from Bush to Putin by the end of March, well before a NATO summit is announced.
The Russian leader needs to hear directly from America's top diplomat how the coming pause fits into a strategy that will not automatically consign Russia to a lowly or enemy status.
Getting right, and tight, with friends first is common sense. So is avoiding reinventing the Cold War. return to menu
3. Bush Repeats Call for Arms Reduction and Missile Shield
Steven Lee Myers
The New York Times
January 27, 2001
(for personal use only)
WASHINGTON, Jan. 26 Treading into national security policy after a week devoted to education, abortion and tax cuts, President Bush said today that he intended to keep his campaign pledge to reduce the nation's nuclear weapons as he moved ahead with construction of a defense against ballistic missiles.
Mr. Bush repeated a proposal he made last spring and suggested he would proceed with reductions in nuclear warheads and the construction of a missile defense as a way to spur new arms-control negotiations with the Russians.
"I think it's important for us, commensurate with our ability to keep the peace, to reduce our nuclear arsenal on our own," Mr. Bush said after meeting at the White House with a bipartisan group of governors on his education proposals released this week. "And I'm going to fulfill that campaign promise. That may, you know we'll see how that affects the possible arms talks."
Mr. Bush made his remarks, in response to a question, a day after receiving a letter from Russia's president, Vladimir V. Putin, outlining major issues facing both countries and calling for greater cooperation.
Mr. Bush said he had not responded to Mr. Putin's letter, though he planned to, joking that he had read about the letter, presumably in the media, "before it hit Washington." He made it clear, however, that he did not intend to balk away from his commitment to build a missile defense, even though it is one of the most contentious issues between the United States and Russia today.
"My point is, is that I want America to lead the nation lead the world toward a more safe world when it comes to nuclear weaponry," he added, emphasizing his intent to build a missile shield and reduce nuclear warheads. "On the offensive side we can do so, and we can do so on the defensive side, as well."
While he has moved aggressively on issues of abortion, education and taxes, Mr. Bush and his national security advisers have moved more cautiously in matters of foreign affairs.
Secretary of State Colin L. Powell swept into the State Department with a flourish, greeting the diplomatic corps at two pep rallies this week but outlining few details of how he intends to sell the administration's policies, including missile defense, which is strongly opposed by Russia and China.
Across the Potomac, Donald H. Rumsfeld began his second tenure as secretary of defense, wrestling with the Pentagon's budget and reining in the armed services' lobbying for more money.
Neither General Powell nor Mr. Rumsfeld have appointed their senior aides - a point Mr. Rumsfeld noted when he made his first public appearances as President Bush's defense secretary today. Only today did Mr. Bush hold formal ceremonies at the White House to swear in General Powell and Mr. Rumsfeld, his two most important foreign policy advisers along with Vice President Dick Cheney and his national security adviser, Condoleezza Rice.
As of last year, the United States had 7,519 nuclear warheads on missiles, submarines or bombers, while Russia had 6,464. Under the second strategic arms control treaty, or Start II, both countries are supposed to reduce their arsenals to roughly 3,000 to 3,500 warheads.
Russia's Parliament ratified Start 2 last year, though with conditions that many Republicans in Congress say they oppose. The two countries have also agreed in principal to a third round of negotiations aimed at reducing the numbers to 2,000 to 2,500 warheads.
Asked today when the administration would begin negotiations with Mr. Putin, General Powell replied simply, "In due time."
Mr. Bush, as he did during the campaign, indicated that he was prepared, after a Pentagon review, to move ahead with reductions in the American arsenal unilaterally. Though he did not spell out his rationale today, he suggested in the campaign that such steps would clear the way for a new era in arms control and, possibly, Russian acceptance of an American missile defense.
At the Pentagon today, Mr. Rumsfeld restated his argument that the Antiballistic Missile Treaty, negotiated with the Soviet Union in 1972, was no longer relevant at a time when more countries were developing missiles capable of carrying nuclear warheads and striking the United States.
"We're in a very different world," said Mr. Rumsfeld, who served as secretary of defense under President Gerald R. Ford. "The Soviet Union is gone. The principal threats facing the United States are not the fear of a strategic nuclear exchange with the Soviet Union."
Although he did not explicitly advocate withdrawing from the treaty, he added that he believed "it ought not inhibit a country, a president, an administration, a nation from fashioning offensive and defensive capabilities that will provide for our security in a notably different national security environment."
Mr. Rumsfeld declined to say how quickly the Pentagon would move ahead with development of a missile system, including whether to begin construction of a sophisticated new radar on Shemya Island, Alaska, this summer, a step certain to antagonize the Russians, the Chinese and even some allies. He did say it was among the issues he would focus on in meetings next week.
A senior adviser to Mr. Rumsfeld said today that lifting the constraints imposed by the A.B.M. treaty would allow the Pentagon to develop a limited ground-based system, like than the one being considered under President Bill Clinton, more quickly. The adviser also said officials could more quickly expand the defense to include sea-based missile interceptors.
The adviser said "the contours of something" could be ready within 60 days. return to menu
4. Putin sees positive U.S. arms signal
January 27, 2001
(for personal use only)
MOSCOW (Reuters) - President Vladimir Putin said on Friday Russia faced a difficult diplomatic year keeping arms control on track but was counting on a positive dialogue with the administration of new U.S. President George W. Bush.
In a major speech at the imposing Stalin-era Foreign Ministry in central Moscow, Putin also set out his foreign policy priorities. They included attracting investment, fighting terrorism and relations with ex-Soviet neighbors.
Putin noted Russia, given its reduced post-Soviet circumstances, did not have the diplomatic clout it perhaps would like and needed to analyze events and prioritize.
On arms control, the Kremlin leader said Russia faced a challenging foreign policy year to try to preserve the 1972 Anti-Ballistic Missile Treaty, which Washington wants to alter to allow it to deploy a national missile defense (NMD).
But he added: "The most recent statement by the leadership of the administration of the new U.S. president suggests that dialogue could be positive. I very much count on precisely that kind of joint work."
It was not clear which statement Putin was referring to.
Bush appointees -- notably Defense Secretary Donald Rumsfeld, National Security Adviser Condoleezza Rice (news - web sites) and Secretary of State Colin Powell -- have so far stuck to their view that a national missile defense is necessary.
But some, such as Rice deputy Stephen Hadley, have also said they see room for a deal with Russia on their overall post-Cold War strategic relationship.
Foreign Policy Priorities
On Tuesday, Putin sent a note to Bush setting out Moscow's views on how to improve bilateral relations. Few details have emerged from the Kremlin or Washington.
There can be little doubt NMD will be one of the toughest challenges. Rumsfeld has called the ABM treaty "ancient history." Russia regards the ABM treaty as a cornerstone of nuclear arms accords and says changes would render it useless.
Moscow has called, instead, for joint efforts to limit proliferation and develop defenses that could be placed close to risky countries and intercept rogue rockets soon after blast-off rather than in mid-flight or close to their targets.
Putin said Russia wanted to strengthen ties with NATO.
"But we still consider its policy on enlargement a mistake," he said in his speech to Russia's top diplomats.
Putin said the Foreign Ministry could do much more to attract investment, protect Russian economic interests and protect ethnic Russians abroad.
He said the Commonwealth of Independent States -- a loose alliance of 12 ex-Soviet republics -- remained a priority but Moscow also wanted closer links with the European Union.
Russia sought greater international cooperation fighting terrorism, he said.
Separately, Foreign Minister Igor Ivanov, who lobbied hard for Putin to visit his ministry, praised the restoration of Russia's voting rights at the Council of Europe and pledged to redouble efforts to find a political solution in Chechnya. Russia views the separatist region as a source of terrorism. return to menu
5. Bush says to meet pledge to cut nuclear arms
January 27, 2001
(for personal use only)
WASHINGTON (Reuters) - President George W. Bush said on Friday he will honor a campaign pledge to unilaterally reduce the U.S. nuclear weapons arsenal, suggesting it could affect the course of arms control relations with Russia.
"I think it's important for us, commensurate with our ability to keep the peace, to reduce our nuclear arsenal on our own, and I'm going to fulfill that campaign promise," Bush told reporters at a White House meeting with governors. "We'll see how that affects possible arms talks."
Bush said during his campaign that the United States could cut its nuclear arsenal beyond limits in existing treaties without hurting national security.
Russia is regarded as wary of unilateral U.S. nuclear weapons cuts, out of concern they could reduce pressure for negotiated, binding treaties and give the United States more freedom to develop a national missile defense system.
The United States and Russia are already committed under the START II treaty to slash their nuclear arsenals from more than 6,000 deployed weapons to 3,000-3,500 weapons by 2007.
Putin has suggested that Russia, which is finding it difficult to maintain its nuclear arsenal because of economic problems, was willing to cut its arsenal further.
Bush also reiterated Friday, in his response to a reporter's question on his approach to Russia and arms control, that he has vowed to deploy a missile defense system, which Russia and China strongly oppose.
"I want America to lead the world toward a more safe world when it comes to nuclear weaponry. On the offensive side we can do so, and we can do so on the defensive side as well," he said.
Defense Secretary Donald Rumsfeld told a Pentagon press conference the administration was committed to a national missile defense, to protect against potential threats from states such as North Korea, Iran and Iraq.
The Russians must realize a missile defense was not a threat aimed at Russia, he said. "I think it's something that's manageable. I don't know quite how it will be managed."
Bush's comments were his most substantive remarks on foreign policy since his inauguration last Saturday. Russia has expressed eagerness to begin a dialogue with the United States on arms control and other issues, but Bush wants to review U.S.-Russia relations first.
"Our relationship with Russia is very complex. We are going to be doing a comprehensive review, we want to address all issues," said White House National Security Council spokeswoman Mary Ellen Countryman.
Putin wrote a letter to Bush this week expressing a willingness to "deepen interaction" between Russia and the United States. Putin said in a major foreign policy speech on Friday that he had seen signals from Bush that relations between the two countries could be positive.
A top aide to National Security Advisor Condoleezza Rice said last week he saw "a real opportunity" to reach some kind of accord with Moscow on the missile defense issue.
Bush said he had not yet responded to Putin's letter.
Secretary of State Colin Powell, asked when the United States could begin a dialogue with Putin, said, "In due time."
State Department spokesman Richard Boucher told a news briefing that Powell had received a letter from Russian Foreign Minister Igor Ivanov Wednesday, saying he looked forward to meeting Powell soon. Powell agreed they should "get together," Boucher added, but suggested no date for talks.
Powell and Ivanov would have a "positive and productive relationship, but one that deals with all the issues of cooperation, as well as the areas where we disagree," Boucher predicted. He noted it would bear in mind U.S. concerns about the conflict in Chechnya.
On Friday Bush held swearing-in ceremonies at the White House for Powell and Rumsfeld, who were officially sworn in last Saturday.
Bush praised Rumsfeld as an expert on missile defense. "We will work to defend our people and our allies against growing threats: the threats of missiles, information warfare, the threats of biological, chemical and nuclear weapons," he said.
Focusing On Domestic Issues
Bush has spent most of his first week focusing on domestic issues, particularly his multibillion-dollar plan to reform public education. Bush's meeting with governors on Friday was to promote his education plans.
Bush also hosted a traditional presidential lunch with new members of the House of Representatives. He has met with 90 lawmakers, including 29 Democrats, this week to promote his legislative agenda and underscore a pledge of bipartisanship.
Next week Bush is to lay out proposals on prescription drug insurance coverage for retired people and on federal support for social programs run by religious organizations.
"Foreign policy is always important, but these are the issues on which he ran; that's why he's focusing on them first," Bush spokesman Ari Fleischer said.
The new president has had 12 introductory telephone calls with foreign leaders.
In addition, the White House announced on Friday Bush will host British Prime Minister Tony Blair on Feb. 23-24, the third meeting with a foreign leader Bush has agreed to since his inauguration.
Bush is to meet Canadian Prime Minister Jean Chretien in Washington on Feb. 5, and is to travel to Mexico to meet Mexican President Vicente Fox on Feb. 16. return to menu
6. Ivanov proposes meeting, Powell agrees as missile defense fight heats up
January 26, 2001
(for personal use only)
WASHINGTON, Jan 26 (AFP) -
Russian Foreign Minister Igor Ivanov has proposed a meeting with US Secretary of State Colin Powell in the near future, the State Department said Friday as the battle over a proposed American missile shield heated up.
Powell received a letter Wednesday from Ivanov suggesting an early meeting, spokesman Richard Boucher said, describing the missive as "a greeting and an expression of a hope to get together.
"The foreign minister said he looked forward to getting together at an early date and the secretary, of course, agrees that they should get together," Boucher told reporters.
No date or place for a meeting has been determined, he added.
The two ministers had not yet spoken to each other by telephone but rejected speculation that a lack of contact only five days into Powell's term indicated anything about US-Russian ties or Washington's policy toward Moscow.
"Obviously, this is going to be an important relationship," Boucher said.
He referred to Powell's Senate confirmation hearing in which he "talked about the various aspects of our relationship with Russia, both our support for reform and democracy and our desire to work with them where we can, but also our concerns about some of the things that were going on there."
Boucher's remarks came as the US-Russian debate over Washington's controversial plans for a national missile defense system heated up in both capitals.
New US President George W. Bush, an unabashed supporter of a missile shield, vowed Friday to follow through on a campaign promise to proceed with the shield, a decision deferred by his predecessor Bill Clinton.
"I'm going to fulfill that campaign promise," Bush said, when asked about his response to a congratulatory letter from Russian President Vladimir Putin earlier this week in which Putin had expressed hopes for a "constructive dialogue" on missile defense.
But earlier Friday in Moscow, Putin warned the United States that deployment of a missile shield would "irreparably damage" global stability.
Deployment of the system would do "irreparable damage to the architecture of international relations," Putin told Russian diplomats in a foreign policy address.
Russia, along with China and others, vehemently oppose a US missile defense believing it to be a threat. Moscow also says it would violate the 1972 Anti-Ballistic Missile treaty, a cornerstone of current nuclear non-proliferation and disarmament agreements, signed between the United States and the former Soviet Union. return to menu
7. Bush Planning Missile Defense
January 26, 2001
(for personal use only)
WASHINGTON (AP) - President Bush said Friday he intends to go ahead with plans for building a nationwide missile defense, despite Russian objections, and also for reducing U.S. nuclear weapons.
In comments at the White House, Bush recalled his pledge on those subjects during the presidential campaign, and he said, "I'm going to fulfill that campaign promise." He gave no details but stressed the importance of reducing U.S. nuclear forces, "commensurate with our ability to keep the peace."
"My point is I want America to lead the world toward a more safe world when it comes to nuclear weaponry," Bush said. "On the offensive side we can do so, and we can do so on the defensive side as well."
At the Pentagon, Defense Secretary Donald Rumsfeld said that although it was too early to discuss details of how the administration will proceed with the development of a national missile defense, "the president has not been ambivalent about this. He intends to deploy a missile defense capability for the country."
The Clinton administration had pursued development of such a system to protect all 50 states, but President Clinton decided late last summer that the technology was not sufficiently mature to make a firm commitment to deploy it. Clinton also said more time was needed to address the strong objections of Russia and China, as well as the misgivings of many of America's European allies.
During the campaign Bush said that if elected he would make missile defense a top priority and deploy it even if it meant abandoning the Anti-Ballistic Missile treaty that prohibits nationwide missile defenses.
In Moscow on Friday, President Vladimir Putin spoke out against missile defenses and said Russia expects the United States to adhere to the ABM treaty. Putin has warned that Russia will scrap all existing arms control agreements if Washington backs out of the treaty. He did not repeat that warning Friday, but said "Russia is actively working with our partners" and "counts on joint work" to preserve the ABM treaty.
Rumsfeld, in his Pentagon news conference, was asked about his comment at his Senate confirmation hearing that the ABM treaty is "ancient history," implying that it is no longer relevant.
"It was a long time ago that that treaty was fashioned," he said, noting that it predated his first term as defense secretary in 1975-77.
"We're in a very different world," he said. "The Soviet Union's gone. The principal threats facing the United States are not the fear of a strategic nuclear exchange with the Soviet Union. And it strikes me that we should accept the treaty in that sense. And I personally believe it ought not to inhibit a country, a president, an administration, a nation, from fashioning offensive and defensive capabilities that will provide for our security in a notably different national security environment."
Asked whether a decision would be made within the next few months on deploying such a system, Rumsfeld said, "I don't want to put a time limit on myself."
The next flight test of the missile interceptor under development is expected this spring, although no firm date has been set.
Rumsfeld said he supported Bush's view that a national missile defense is needed to deter missile attack.
"(Bush) has concluded that it is not in our country's interests to perpetuate vulnerability" to such attacks or threats of attack, Rumsfeld said. "And the Russians know - they have to know - that the kinds of capabilities that are being discussed are not capabilities that threaten them in any way."
The Russian government is concerned that while an initial U.S. missile defense system would be too thin to neutralize Russia's nuclear forces, it could form the basis for a more robust system later.
China, which has a much smaller nuclear missile force than Russia, is equally concerned. European countries have raised questions about the U.S. plan and want to preserve the ABM treaty.
Rumsfeld said he planned to attend a European security conference Feb. 3 in Munich, Germany, where he will meet with many of his counterparts for the first time to discuss missile defense and other issues. return to menu
8. Russia's Ambitions [Excerpts]
January 16, 2001
With David Hoffman
(for personal use only)
Veteran Post correspondent David Hoffman is completing a four year assignment in Moscow where he has covered the rise of Vladimir Putin, Putin's efforts to restore symbols of the Soviet era, his bid to stop a U.S. missile defense system, and his reliance on the security services.
Washington, D.C: Nuclear arms control and democratic reform in Russia: which one do you think is more important for Bush's policy toward Russia? And, in retrospect, who should be blamed for the failed economic and political reform of Russia?
washingtonpost.com: To put a point on "Washington's" questions: Do you think Clinton administration policymakers bear some responsibility as some of Bush's advisers have charged?
David Hoffman: Hate to pick there, both are. Clinton booted away an historic opportunity for arms control, more power to Bush if he can realize it. The window is still open. As for democracy, there's a lot of work to do still, and if Bush has any sense he will realize the folly of turning his back on this. As for blame, this is a very, very big subject. First of all, it is not "failed," not in the least, just incomplete. All the more reason not to turn our backs on the subject. The other day I read where Condi Rice said she was perfectly happy to leave economic questions to the markets. But these markets are not yet fully formed. There's a lot of work to do -- property rights, rule of law, you name it. Anyone who throws up their hands and says "failed!" and "let's go home" is historically wrong and foolish.
Harrisburg, PA: How much is the United States policy toward Russia governed by a need on the art of some in the military and foreign policy establishments to limit the ability of Russia to again be a superpower? [and ] ...to have foreign "enemies" so that they can justify large defense budgets and an "imperial" world view? [edited]
David Hoffman: Well, if that was the policy goal, Russia has helped; the country is still a nuclear superpower but in countless other ways is weaker than it was before. So, I don't think any conspiracy is needed. The country has been going through an enormous and difficult collapse, and struggling to rebuild. Do our Pentagon wizards make it like this? Come on! Even if they put something in the water they could not have made it this hard!
Toronto, Ontario.: In December Mr. Putin sealed a deal to assist India with its nuclear program, and further signed a $3 billion technology transfer deal involving their most lethal Sukhoi fighter plane; 150 fighters are to be assembled under license in India. In May 1998 the Clinton administration slapped India with economic sanctions which were the direct result of India's nuclear detonations, and this is the very program the Russians are going to assist them with.
Is this an economic windfall for Russia or a Cold War tack, which is meant to challenge America's international policy?
David Hoffman: Economic for sure, as are most of Russia's nuclear exports. But that does not exclude that they will contribute to the spread of weapons of mass destruction. return to menu
F. Nonproliferation Policy and Implementation
1. Russia breaks its word
The Economist (UK)
January 27, 2001
(for personal use only)
If it goes ahead with its plans to sell nuclear reactors and uranium fuel to India, Russia will be in clear breach of its anti-proliferation promises
TO HEAR President Vladimir Putin tell it, Russia leads the world in its efforts to rein in weapons of mass destruction and-glaring hard at America and its proposed missile defences-to prevent a new arms race. Last year it ratified the Comprehensive Test-Ban Treaty that America's Senate had rejected, and that China's parliament is still pondering. It also belatedly ratified the Start-2 nuclear-reductions treaty with America. And, after a lot of American chivvying about dodgy nuclear- and missile-technology exports by Russian firms, new export controls were published. So why is Russia proposing to drive a nuclear-propelled coach and horses through the guidelines of the Nuclear Suppliers' Group (NSG) and its commitments to other members of the Nuclear Non-Proliferation Treaty (NPT) by selling up to four nuclear reactors to India, plus uranium fuel for a fifth?
If Russia goes ahead, it would break no actual treaties. In 1993 the NSG, an informal group that includes Russia and most major suppliers of nuclear equipment, decided to ban all nuclear trade with countries that did not have international safeguards on all their nuclear facilities, thus committing its members to action well beyond their existing export controls on goods that might help a country build nuclear weapons. Two years later, most NPT members reached a similar agreement. India refuses "full-scope" safeguards, has never joined the NPT, which legally requires them, and in 1998 conducted five nuclear-weapons tests.
Russia claims that the "full-scope" rule does not apply to its proposed sale of nuclear reactors to India, since the idea had come up in the late 1980s-that is, before the NSG ban. That is wholly disingenuous. The contracts being negotiated break the rule. So does what is presumably the sweetener for the deal: the supply of uranium fuel for India's Tharapur reactor. America stopped supplying its fuel after India's first, supposedly "peaceful", nuclear explosion in 1974; France pulled out to comply with the "full-scope" rule; only China, outside the NSG, has in recent years helped India find nuclear supplies it could not get elsewhere.
Fission for compliments
Part of the explanation for Russia's nuclear dalliance with India lies in the fissile nature of its own politics. Russian firms, following up old Soviet connections and often with the connivance of officials who are supposed to police them, have been implicated in illegal transfers of missile and nuclear technology to several countries. Russia's minister for atomic energy has a foreign policy all his own: he wanted to sell laser enrichment technology that could help in bomb-making to Iran (which has signed the NPT but barely disguises its weapons ambitions). Already building one reactor in Iran, Russia hopes to build more. Foreign-ministry officials who see the dangers are overridden in the drive for contracts, as they were recently by the arms industry's desire to sell conventional weapons to Iran, despite Russia's promise not to do so.
In their defence, Russia's nuclear bureaucrats claim the best way to influence nuclear programmes in countries like Iran, and also India, is to work with them. More likely, when scientists sit down together, what gets passed on is not restraint, but skills and know-how of direct use in bomb-making. That is how India first got started on its bomb.
Mr. Putin seems intent, for now, on making life as uncomfortable for America as possible-in India, Iran or anywhere else. India would prefer nuclear help from France or America, and hopes the bait of its deals with Russia may eventually draw them in. But India could just as easily get caught in the crossfire on this issue between the bigger powers.
If Russia is determined to go ahead, can anything be done to stop it? Another of Russia's commercial wheezes is a plan to build an international repository for spent nuclear fuel. Already controversial, given the lousy safety record of Russia's nuclear industry, this could be made a non-starter if Russia's nuclear co-operation with countries like India and Iran causes America and others to lean hard on potential customers. But pressure must also be put directly on Russia itself. It is threatening to turn its commitments on nuclear export-controls into a cheater's charter.
Countries that care about proliferation should not let it get away with it. return to menu