New Khodorkovsky Trial Tests Medvedev's Power

How serious is President Dmitry Medvedev about repairing Russia's corrupt courts? A trial opening this week in Moscow could be a key test. Former Yukos oil tycoon Mikhail Khodorkovsky, who was jailed in 2004 on tax-evasion charges after vexing the Kremlin by supporting opposition groups, faces new charges of stealing 350 million tons of oil—an amount, his lawyers point out, that's greater than Yukos's entire production. If convicted, he could get 22 years tacked onto the eight-year term he's serving in Siberia. The latest trial is a Putin-era legacy (it's been two years coming) and some Kremlinites fear Khodorkovsky could still be a rallying point for opposition if released.The new trial will be a bellwether of how much influence Medvedev really wields. While he's avoided comment on the case for fear of seeming to criticize Putin, Medvedev's steadily projected a liberal message of judicial independence and the rule of law. A fresh conviction for Khodorkovsky would be catastrophic...

Will Russia Help With Iran?

To judge from the mating signals coming from both sides, you'd think a major thaw in U.S.-Russia relations was imminent. Barack Obama backpedaled on his predecessor's vow to put a missile defense system near the Russian border, and Vice President Joe Biden recently called for "pushing the reset button" in dealings with Moscow, which had also been strained by America's support of NATO expansion into Georgia and Ukraine. For his part, in a possible sign of good will, Russian President Dmitry Medvedev agreed to suspend efforts to place Iskander short-range missiles in the Russian Baltic enclave of Kaliningrad.Why the sudden turnaround? The main reason is that Washington, along with the European Union, wants Russia's help on Iran. They see Russia as a vital player in preventing Tehran from getting nuclear weapons. "It is up to Russia to decide which face it wants to show," French President Nicolas Sarkozy said earlier this month. "If it wants to be a global player, it should help us...

Simon Montefiore's Gripping Novel 'Sashenka'

Sashenka is the rich, spirited daughter of a Jewish industrialist, growing up in Petrograd during the First World War. She's also a revolutionary who reads Marx after lights-out at the Smolny Institute for Young Noblewomen."Sashenka," Simon Sebag Montefiore's first novel, begins on the last day of winter term, as Sashenka hurries out of classes to her waiting nanny—and to the secret police who are there to arrest her as a subversive. As the revolution unfolds, Sashenka plunges into its intrigues and sheds her past like dead skin. Two decades later, we find her married to a Soviet party boss and living in splendor near the Kremlin. But the choices she made in the heady days of the revolution come back to haunt her, and her friendship with Stalin cannot protect her family when it's their turn to be plunged into the secret police's "meat grinder."Montefiore paints Russia in bold colors, from Rasputin's sordid salon to parties at the dachas of Stalin's cronies. He draws on rich material...

Turkey Signals A Shift Towards Arab Radicals

Is Turkey shifting away from the United States and Israel, and toward Arab radicals? For years, its military has had close ties with Israel's, and Ankara has acted as a gobetween for Jerusalem and Arab capitals. But after Israel's Gaza campaign, Turkey is taking a strong anti-Israel and anti-Western stance. Prime Minister Recep Tayyip Erdogan has called the assault a "crime against humanity," and last week stormed out of a Davos meeting after accusing Israel's President Shimon Peres of having a "guilt complex" for "killing people." He also blasted the West for remaining "spectators." Ordinary Turks seem to share the sentiments and greeted Erdogan like a hero on his return to Istanbul. Large crowds in dozens of Turkish cities have also recently burned American and Israeli flags and shouted anti-Semitic slogans.Other signs of a shift have Washington worried. Turkey is strengthening ties with Iran, including intelligence-sharing on Kurdish insurgents. And last fall, Erdogan told a...

Ukraine and Russia Both Desperate In Gas Struggle

The last time Russia cut off gas to Ukraine, in 2006, energy prices were soaring, and with them the Kremlin's ambitions. The then President Vladimir Putin vowed to use the country's vast gas reserves to make it into an "energy superpower." Now the tables have turned. Gazprom once again shut off gas to Ukraine, and to European customers too, in a dispute over Kiev's unpaid bills. But this time, it acted out of desperation. Gas prices are expected to fall from a current high of $460 to as low as $280 per 1,000 cubic meters by the middle of 2009. Six months ago, it looked as though Gazprom might become the world's largest company by market cap. Now the company, whose revenues provide more than 20 percent of the national budget, looks like proof of Russia's overdependence on gas and oil.Kiev recognized Gazprom's weakness (every day of the shut-off cost Moscow close to $200 million) and was holding out for a price of $205, well under market rates. But Kiev was in deep trouble too, thanks...

Recession Hits Russia As Economic Protests Loom

Russia's ruble and its stock market have been sliding since June—down 30 and 70 percent, respectively. Still, the state-controlled media have stuck to the Kremlin line that the economy is doing just fine (the word "crisis" was even banned by producers at one television channel). But the official state of denial is cracking—Prime Minister Vladimir Putin admitted that the nation would be affected by a "global crisis," and Russia's deputy economic development minister recently said, "A recession has started."Estimates vary, but economists predict that GDP growth will drop from an annual 7 percent rise over the last eight years to close to zero in 2009. Such a steep fall would dent the Kremlin's popularity, and could spark unrest in a population that suffered in the last crisis (the 1998 ruble devaluation) but has since become used to rising fortunes.That prospect has clearly unnerved authorities, who are arming themselves with ever more repressive means to subdue dissent. On Dec. 15,...

The Kremlin Looks to Rebuild Bridges With the West

Is the Kremlin turning dovish in its most recent confrontation with the West? After two months of high tensions following Russia's invasion of Georgia, there are signs that President Dmitry Medvedev is finally trying to rebuild diplomatic bridges.Russia's already agreed to pull back from self-declared "buffer zones" around the breakaway regions of Abkhazia and South Ossetia, and last week it allowed 200 EU observers to start supervising that withdrawal. An informal working group, led by Medvedev's deputy chief of staff, has also been discussing measures to repair damaged relations. One olive branch under consideration, according to Kremlin-connected commentator Konstantin Remchukov, is to allow more Western participation in Russian gas- and oil-exploration projects like the Shtokman gas field under the Arctic Sea. Another possibility would be to fire some of the more-hawkish ministers, notably the abrasive Foreign Minister Sergei Lavrov.Moscow's retreat has been spurred by a lack of...

Investors Losing Confidence in Russian Markets

Under Vladimir Putin, it seemed, no Kremlin ploy could shake world confidence in Russian markets. The 2004 jailing of tycoon Mikhail Khodorkovsky on politically motivated charges sent the market into a swoon, but recovery was swift as oil prices rose. In 2005 Russia's top foreign-portfolio investor, Hermitage Capital's Bill Browder, had his visa revoked after criticizing the secretive books of Kremlin-controlled companies. The market barely flinched. Last year, after the Kremlin pressured Royal Dutch Shell into selling offshore-gas operations to state-owned Gazprom at a below-market price, the capital kept rolling in. But has the well of confidence finally run dry?The flight of Robert Dudley may have drained the last drop. The CEO of a joint venture between BP and Russia's TNK oil company, Dudley left Moscow on July 24 after months of harassment aimed at pushing the British partners out. Federal agents raided TNK-BP headquarters, a "technicality" left most BP staffers without visas...

Moscow Journal: The Flaw in the Boom

Russia's new president, Dmitry Medvedev, inherited a rising power with an Achilles' heel: galloping inflation, which threatens to undercut seven years of healthy economic growth, buoyed by ever-rising energy and commodity prices. In the first quarter of 2008, consumer prices rose 5.3 percent (compared with 3 percent in the same quarter last year), and inflation has toppled alcoholism as Russians' No. 1 worry, according to a March poll by the All-Russia Center for the Study of Public Opinion. Earlier this month, protests erupted in Moscow against high food prices and low state wages.Vladimir Putin, who went from the presidency to the prime minister's office last week, presides over a cabinet divided as to how to handle the crisis. The veteran Finance minister, Alexei Kudrin, wants to cut state spending—some economists warn that current levels of government spending could push inflation up to 14 percent by the year-end. But the new Economic Development and Trade minister, Elvira...

Pages