N°86-87 - November 6 2008 Published every two weeks / International Edition CONTENTS EXCLUSIVE P. 1-4 Politics & Government c KREMLIN Shipbuilding: Moscow hopes to c Dmitry Medvedev asserts his authority in Moscow purchase warships from France c Army: Anatoly Serdyukov A true revolution – described by a source close to the matter as an “extraordinary event” – is ta- wants to break with Soviet heritage king place in cooperation in military shipbuilding between France and Russia. As Russia’s naval flags- hip, the Peter the Great missile launcher, anchored at Toulon on Wednesday 5 November – for the INGUSHETIA c Roza Malsagova : first time in a western country following the joint decision of presidents Sarkozy and Medvedev at “President Zyazikov’s very their meeting in Evian on 8 October – Russian Intelligence learnt that sensitive hitherto unpubli- life was threatened” shed documents were discussed by French industrialists and a big Russian delegation led by Navy DIPLOMACY Chief of Staff Admiral Vladimir Vysotsky in the corridors of the Euronaval International Naval De- c Russia-China: A well- fence and Maritime Exhibition and Conference. understood friendship ALERT The Admiral immediately drew the attention of journalists present at Euronaval to his strong in- c Gaddafi in Moscow: A visit terest in the exhibition stand of Thales, a group for which his words were almost laudatory, and to a for nothing? question asked in the form of a jest to an official at the DCNS military shipbuilders’ stand (“How much would such a ship cost and how long would France need to build one like it for Russia?”). Accor- P. 5-8 Business & Networks ding to information obtained by Russia Intelligence, Admiral Vysotsky’s action was everything but an FOCUS improvisation, and the discussion continued, though more discreetly, notably in the presence of Kons- c South Stream: Gazprom tantin Biryulin, the Number Two of the Federal Service of Military-Technical Cooperation (FSVTS), sounds out Romania Admirals Borisov and Trofimov of the general Chief of Staff, Captain Maksim Kazantsev – the Rus- ENERGY sian Federation’s Naval Attaché in France - as well as Alexandre Bryndikov, head advisor to Anatoly c NPO Saturn: Yuri Isaykin, the chairman of Rosoboronexport. The subject of the discussions was the Amphibious as- Lastochkin pushed out the sault, command and projection ship Mistral. The Russian side would like the DCNS to build a vessel door of this type with specifications almost identical to those of the French navy for 2013. An official let- c Inter RAO EES unaffected ter on this matter is due to be sent very soon by the Russian government to the French ministry of by crisis Defense. For its part, the Russian ministry of Defense is expected to request a visit of a Mistral class P. 9-12 Regions & CIS warship to the International Maritime Defence Show (IMDS) in St. Petersburg in June 2009. Accor- ding to information gathered by Russia intelligence, it would appear that during his discussions Ad- UKRAINE miral Vysotsky also brought up the subject of technical cooperation and exchanges of expertise in the c Why a gas war will (proba- bly) not take place context of formative programs like, for example, multi-mission frigates, aircraft carriers and even sub- marines. It is, in fact, understood that France and Russia are engaged in simultaneous processes of FOCUS c When Alexandre renewing their escort fleets and thinking about the construction of aircraft carriers for around 2015- Lukashenko “takes French 2017. leave” ALERTS The ball is now in the French camp. Thales and DCNS undoubtedly will undertake intense lob- c Dmitry Kozak does some bying so that the demands of CIEEMG (the inter-ministerial commission for examining exports of de- housecleaning in Sochi fense equipment) – that will undergo speeded-up procedures - are taken on board. But it is, of course, c Saint Petersburg not to the Elysée Palace that will make the final decision. The industrialists in question would like a prin- fund Gazprom tower cipled decision to be taken before the EU-Russia summit in Nice on 14 November. Is France ready to sell the most sophisticated military equipment to Russia? And, if this is the case, what are the limits SUBSCRIPTION Print Edition to such cooperation? It is understood, in fact, that for a long time French industrialists and particu- (23 issues, airmailed overseas) larly Thales have sought to obtain contracts on other projects such as the Fifth Generation Fighter. €770 TTC If Paris were to give the go-ahead for the sale of a PCB to Moscow it may reasonably be envisaged that The Web Pack other transactions that to date have been improbable – as, for example, the sale of radar systems and (Print Edition missiles – are possible. In any case, it will be interesting to see the reaction of other NATO members + PDF + archives acess) and especially that of the new US administration to closer relations between France and Russia which € 880 TTC – added to other matters like that of Shtokman and Alstom/TransmashHolding (Russia Intelligence The Premium No.85) – could somewhat resemble the 1890s. In any case this matter confirms that taboos are be- Subscription ginning to fall among the Russian military. The myth of the self-sufficiency of Russia’s defense indus- (Print Edition + PDF + access tries was one of the most tenacious among Moscow’s chiefs of staff (but not among far-seeing obser- to all the website contents) vers). The wide-ranging reforms launched by the Russian Defense minister Anatoly Serdyukov € 1200 TTC therefore should both be closely observed and taken seriously. d www.russia-intelligence.fr RUSSIA INTELLIGENCE Politics & Government KREMLIN c Dmitry Medvedev asserts his authority in Moscow As the eyes of the world were turned to the United States Russian executive are on the same wavelength when it comes on Wednesday, November 5, following the election of Barack to strategic issues. Referring to this summer’s conflict, Dmitry Obama, another highly important event was taking place in Medvedev declared that it “was used as a pretext for send- Russia: Dmitry Medvedev’s first annual state of the nation ing NATO warships to the Black Sea”. He hammered out address before parliament. The first major speech on gen- that Russia “will not stand back”. In his speech, the presi- eral policy given by Russia’s new head of state is very instruc- dent also reviewed in detail another sensitive subject: anti- tive, both because of its general tone and because of the pri- missile defense. Medvedev announced that Iskander tacti- orities he sets out. This was an opportunity for the president cal missiles will be deployed in the Kaliningrad region. He to assert himself in Russia’s power system by subtly taking a said Russia would also use electronic jamming there to counter distance from his prime minister, Vladimir Putin, on certain the proposed US missile installations in Poland. Multipolar- matters. The following points in his speech are, we believe, ity is still on the agenda and the president mentioned BRIC noteworthy: several times in his speech. It is interesting to note that Dmitry Medvedev explicitly mentioned his support to “the Reforms within the leadership are being prepared. Dmitry new face of the Russian armed forces”, a clear message ad- Medvedev proposed that the president’s mandate be extended dressed to sceptical military officials to show his backing of from 4 to 6 years, and that the mandate of deputies in the Anatoly Serdyukov’s reforms (see below). State Duma be extended to 5 years. Like Vladimir Putin in 2000, the Russian president said he also hoped to reform the The Kremlin wants to appear undaunted by the financial Federation Council. The 10-year residency clause upon be- crisis. “We will overcome the consequences of the global fi- ing elected to a region, which was introduced last year, will nancial crisis and will come out of it stronger”. The state- be repealed. Whereas currently regional executive leaders ment, which borders on a denial of reality, is typical. It is in- (governors or republic presidents) and the regional assem- teresting to point out one quote by the president – one that bly each delegate a senator to the upper house of parliament, may seem harmless except for the fact that Russia is a di- the Federation Council members will now be elected from archy: Dmitry Medvedev declared “Today the most impor- amongst the members of regional and local assemblies. Also, tant thing is to implement the anti-crisis measures fully. I in a bid to ensure greater representation in parliament, Dmitry would like to attract the attention of the government, the Medvedev proposed that a certain number of seats in the Central Bank of Russia and all governmental bodies to the Duma be reserved for parties that did not reach the 7% thresh- fact that any delays in applying these measures are unac- old currently in force. ceptable”. And so, with one sentence, Dmitry Medvedev makes it clear who now occupies the Kremlin, and who must give No change in foreign policy is expected. There was proof accounts on the crisis and, implicitly, on the economic poli- already during the Georgian crisis that the two heads of the cies put in place these past years. d Military reforms: Anatoly Serdyukov wants to break with Soviet heritage As Russia Intelligence pointed out in its conscripted soldiers in their second year of 106th Tula Airborne Division. The October 9 issue, Defense Minister Anatoly service (or third year for the fleet). Kantemirovskaya Tank Division and the Serdyukov appears quite decided to take Financing the creation of this new corps of 98th Guards Airborne Division stationed in advantage of the context resulting from the career noncommissioned officers will Ivanovo are expected to follow.