Top News: A level of violence unseen in years hit Russia’s restive Caucasus region this week, as a suicide bomber killed at least 21 people and injured over 130 at the main police station in Ingushetia.

 

The brazen strike came after of months of deadly attacks in Ingushetia, Dagestan and Chechnya. One analyst to warned of the “Afghanization” of the Caucasus, with growing radical Islam, rampant unemployment, and nonfunctioning governments leading to spiraling violence. The Kremlin lacks any strategy to deal with the region. A previous round of violence in the late 1990s was met with little regard until Chechen Islamist separatists reached Moscow, killings hundreds of civilians in a series of apartment bombings and prompting a response that led to the second Chechen war. President Dmitry Medvedev acknowledged that militancy and terrorism remained a real threat in the region, despite previous government statements to the contrary.

 

Violence continued apace in Chechnya, where another human rights worker was killed just weeks after the murder of the region’s leading activist Natalia Estemirova. Zarema Sadulayeva, who headed the children’s charity Save the Generation, was abducted with her husband in Grozny, and both were found shot dead in a car trunk the next day. Human rights groups and journalists have begun flooding out of the republic amid the violence that is targeting them. Russia’s leading opposition newspaper, Novaya Gazeta, where murdered journalist Anna Politkovskaya published her dispatches on Chechnya, said it was pulling its reporters out of the republic.

 

It was a week of horrific accidents. An explosion at Russia’s largest hydropower plant left at least 17 people dead, with 57 missing four days after Monday’s accident, leaving little hope they would be found alive. Prime Minister Vladimir Putin said the accident showed the need to upgrade Russia’s Soviet-era infrastructure. Days earlier, pilots practicing for the MAKS airshow outside Moscow, which Russia hopes will one day rival fairs like Le Bourget, collided in air, killing the leader of an elite aerobatic squadron. Putin visited the show, saying his government would not step in to bail out failing aerospace firms, and gave them until Oct. 1 to think of an anti-crisis strategy.

 

The most bizarre story to hit the country in a long time was the alleged hijacking of the Arctic Sea, a cargo ship that went missing after leaving Finland with, apparently, a load of nearly $2 million worth of timber. The Russian navy eventually tracked down the ship near Cape Verde, but many observers doubt the story that the Russians are presenting – that this was the first case of piracy in European seas in centuries. The Russians are currently questioning the alleged hijackers — a group of eight men from Russia, Estonia and Latvia. Some of Russia’s more astute observers wonder if it was an illegal arms trafficking deal gone wrong, or a commercial dispute taken to new levels.

 

Also this week, Medvedev met Israeli President Shimon Peres, discussing a host of issues including Russian willingness to ease military cooperation with Iran.

 

Russia expelled two Czech diplomats in a tit-for-tat response to the expulsion of two Russians from Prague on suspicions that they were spies.

 

Closer to home, Georgia pulled out of the Commonwealth of Independent States, a post-Soviet group, further distancing itself from Russia. Medvedev launched a war of words with Ukraine, warning of deteriorating relations as Moscow begins a campaign to meddle in its neighbor’s upcoming election.

 

Money: As countries around the world begin to pull out of crisis and recession, Russian officials have taken on a decidedly downbeat tone on their own country’s economic forecast. Medvedev warned that the economy risked hitting a “dead end” unless reform was implemented soon.

 

New figures show Russia’s economy shrank 10.9 percent in the second quarter, year-on-year, worse than most analysts expected. The good news is industrial output slumped less dramatically than it did in June, leading some to think the worst might be over.

 

The fallout from the dramatic hydropower plant explosion spread to Russia’s economy. Demand has overwhelmed alternative power suppliers, leading prices on the Siberian spot market to jump 24 percent. Plant owner RusHydro, once a stock favorite, lost $1.5 billion in market value in the wake of the accident, and was downgraded by several major banks. One of the worst affected companies is expected to be aluminum producer RusAl, which heavily depended on the plant to power its factories in the region.

 

Officials are still trying to figure out how to save the country’s ailing automobile industry, which has seen demand slump by nearly 60 percent since the crisis hit. Reports this week said the government was considering launching its own “cash for clunkers” program, offering awards of 50,000 rubles (around $1,570) to people who trade in cars that are over 10 years old, so people can use the money to buy Russian-made cars.

 

Elsewhere: The big society news is that Dasha Zhukova, long-time girlfriend of oligarch Roman Abramovich, is pregnant. This will be Abramovich’s sixth child, and a first for 28-year-old Zhukova, who went to college in the U.S. and is now something of the doyenne of the Russian fashion and contemporary art scene. She was the subject of a big profile in U.S. magazine Interview this month.

 

A family in Abkhazia, the Georgian breakaway region that has come under Russia’s fold, named newborn twins after Putin and Medvedev. The woman gave birth just minutes before Putin visited the Abkhaz hospital, and named her boys “Vladimir” and “Dmitry” in honor of Russia’s ruling duo. After much fanfare and publicity, the gag ran into a problem. The family decided to withdraw the name of Dmitry from one of the boys, giving him the name Roman instead, after a relative who had been killed in Abkhazia’s war with Georgia soon after the fall of the Soviet Union. The family insists they would like to explain this to Mr Medvedev personally and hopes he won’t take offense.

 

 

http://www.globalpost.com/passport/russia/090821/southern-discomfort