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Russia refuses peacekeepers as Kyrgyz violence erupts again; Bakiyev tries to regain power, as the new government alleges Taliban ties. Medvedev twitters, parties with the governator, chows burgers with Barack, and seeks WTO membership. Cisco invests $1 billion as Russia pledges a freer economy. Plus, chilling out on Moscow’s terraces.
Top News: Two months after its government was overthrown in a bloody revolution, Kyrgyzstan saw more violence. The spark was political– ousted president Kurmanbek Bakiyev never lost support in the south, and a telephone call alleges to show his powerful son plotting to instigate unrestin order to wrest back control from the interim government of Roza Otumbayeva. But the manifestation was ethnic violence, as bands of Kyrgyz attacked ethnic Uzbeks in the southern cities of Osh and Jalalabad.
The official death tollstands at 261, with over 2,000 injured. Even Kyrgyz authorities admit it is probably much higher. One of the most underreported stories is alleged widespread rape. The UN says over 100,000 people fled their homes and crossed into nearby Uzbekistan and has warned that though the flare-up of violence has settled, more unrest likely lies ahead.
Russia has refused to send peacekeepers. The U.S., which maintains a key re-supply base in northern Kyrgyzstan for its war in Afghanistan, has limited its involvement to $48 million in aid. The Kyrgyz government, slated to hold a nationwide referendumon a new constitution on Sunday, continues to appeal for help, asking the OSCE this week for an international police force. It also made a bizarre statement saying the Bakiyevs had collaborated with the Talibanin organizing the violence – a possible means of drumming up further US support for the country.
President Dmitry Medvedev’s trip to the U.S. has proven to be a barrel of laughs. He joked around with Arnold Schwarzenegger! He ate a hamburgerwith Obama! He opened a Twitter account, for goodness’ sake! There was serious stuff too. Medvedev’s US visit comes one year after Obama visited Moscow, and further promotes the much-touted “reset” in relations. In California, Medvedev toured Silicon Valley, hoping to gain insight into the high-tech Mecca as Russia seeks to create its own just outside Moscow. Then it was off to Washington, D.C. to meet Obama, and win a U.S. promise to see Russia in the WTO by September. Many deadlines have been set before and many deadlines have passed. But Russia, eager to boost foreign investment, needs the move now more than ever.
Two top Russian officials testified at the trial of ex-Yukos chief Mikhail Khodorkovsky, giving some hope that the trial could take a turn and not result in his inevitable conviction. Two days after the testimony of German Gref, a former economics minister, and Viktor Khristenko, current trade minister, a Moscow court unexpectedly dropped chargesagainst Khodorkovsky’s ally and former Yukos VP Vassily Aleksanyan, who is sick with AIDS and cancer. Rights activists had long been calling for the dismissal in a case that is widely seen as politically-motivated.
Money: One of Medvedev’s main goals on his U.S. visitwas picking up business deals as Moscow gets proactive in seeking out foreign investors. He hit the jackpot. Cisco, the IT giant, said it would invest $1 billion in Russiaover the next decade, put in $100 million of venture capital and open an office in Skolkovo, the technology hub modeled on Silicon Valley that will soon open outside Moscow.
Medvedev’s modernization project, designed to diversify the economy away from oil, has plenty of skeptics. Corruption and murkiness in the economy remain obstacles to development, say some.
A politicized gas dispute at home cast a shadow over Medvedev’s liberal talk. Russia cut gas supplies to Belarusthis week, claiming a $200 million debt. Belarus has since paid the debt and Russia has restored supplies, but the cut-off bore distinct similarities to previous disputes with Ukraine, which have ceased since the country ousted its Western-leaning government in elections earlier this year.
Russia held its biggest annual economic conference this month, as global CEOs descended upon the country’s second city for the St Petersburg Economic Forum. Russia managed to conclude over 50 deals worth over $15 billion euros. Medvedev pledged to loosen state controlsover the economy and promised to scrap capital gains taxon long-term FDI next year. For Western investors, the event wasn’t the usual brown-nosing love-in it became when Russia was riding high on soaring oil prices. Many took the chance to criticize the country’s poor investment climateand corruption.
Elsewhere: Summer has officially arrived in Moscow, with temperatures finally hovering around 90 degrees. That means it’s time to hit the city’s terraces. A welcome new edition has recently opened at Strelka, an architecture institute topped with a gorgeous café that has stunning views of the Cathedral of Christ the Savior. Trendy and reasonably priced, Strelka would be perfect if it weren’t for the horrid service. Expect to wait at least 1.5 hours just to get your hors d’oeuvres.
The St Petersburg Economic Forum, Russia’s answer to Davos, was slightly overshadowed this year by a protest carried out the night before its opening. Anarchist art group Voina painted a phallus on one of St Petersburg’s drawbridgesso that when it, um, rose, the symbol faced the city’s FSB headquarters. They managed to get away with a small fine.