[excerpt re Russia]
Annual Threat Assessment of the Director of National Intelligence for the Senate Select Committee on Intelligence
5 February 2008
J. Michael McConnell
Director of National Intelligence
Let me turn now to Russia and Eurasia. In March, Russia is set to reach what many anticipated would be an important milestone—the first on-schedule change in leadership since communism and the first voluntary transfer of power from one healthy Kremlin leader to another. That milestone has been clouded, however, by President Putin’s declared readiness to serve as prime minister under his hand-picked successor, Dmitry Medvedev, a move that raises questions about who will be in charge of Russia after Putin’s presidential term expires in May. Coming at a time of uncertainty about Russia’s direction, the Medvedev-Putin “cohabitation” raise questions about the country’s future and the implications for Western interests.
While many of the essential features of the current system are likely to endure, including weak institutions, corruption, and growing authoritarianism, we will be alert for signs of systemic changes such as an indication that presidential powers are being weakened in favor of a stronger prime minister.
ELEMENTS OF RUSSIA’S REVIVAL
We judge the Russian economy will continue to expand under a new leadership, although at a slower rate than over the last eight years, given capacity constraints, the slow pace of institutional change, the impact of real ruble appreciation, and developments in the international economy. Negative longerterm demographic challenges loom and investment will remain a significant constraint, particularly in the energy sector.
Other elements of Russian national power—from trade and energy, to diplomatic instruments and military and intelligence capabilities—are on a path to grow over the next four years. For example, Russia is positioning to control an energy supply and transportation network spanning from Europe to East Asia. Aggressive Russian efforts to control, restrict or block the transit of hydrocarbons from the Caspian to the West—and to ensure that East-West energy corridors remain subject to Russian control—underscore the potential power and influence of Russia’s energy policy.
The Russian military has begun to reverse a long, deep deterioration in its capabilities that started before the collapse of the Soviet Union. Although determined that defense spending not harm Russia’s economic performance, Putin has been committed to increases for defense commensurate with GDP growth that has averaged just under 7 percent this decade. By 2006 the military had significantly increased the number of high-readiness units from 1999 levels, ramped up ground forces training—including mobilization exercise activity—and begun to man its high-readiness units with longer-term “contract” personnel rather than conscripts.
Moscow also is making more use of its strengthened armed forces. A growing number of exercises with foreign militaries and an increased operational tempo in the North Caucasus Military District, often focusing on potential Georgian contingencies, are designed primarily to demonstrate regional dominance and discourage outside interference. Russia has used widely publicized missile launches and increased longrange aviation (LRA) training flights to the Pacific, Atlantic, and Arctic Oceans to showcase Russia’s continued global reach and military relevance.
The military still faces significant challenges, and recent activity does not approach Soviet era operations. Demographic, health problems, and conscription deferments erode available manpower. Strategic nuclear forces remain viable, but Russia’s defense industry suffers from overcapacity, loss of skilled and experienced personnel, lack of modern machine tools, rising material and labor costs, and dwindling component suppliers.
EURASIA AND BALKANS IN FLUX
The other states of Eurasia remain in a state of flux. Unresolved conflicts in the separatist Georgian regions of Abkhazia and South Ossetia will remain potential flashpoints even if Russia—in response to Western recognition of Kosovo—does not follow through with its implicit threat to recognize the two regions as independent. President Saakashvili’s reelection in January will help renew his democratic credentials and leadership mandate.
Elsewhere in the Caucasus, the stalemated Nagorno- Karabakh conflict between Azerbaijan and Armenia continues to produce dozens of casualties annually along the Line-of- Contact. Moreover, Russia’s recent suspension of its Conventional Forces in Europe obligations could lead to similar suspensions by Azerbaijan and Armenia and a subsequent arms race.
Ukraine will continue to experience an unsettled domestic political situation for months to come. The struggle for power between various factions, however, has remained within the political system since the Orange Revolution, decreasing the possibility of violence.
Prospects for major political change in Belarus are dim over the next year. Lukashenko’s populist rhetoric, image as the defender of Belarus, and ability to keep the economy stable have maintained his high popularity. Opposition efforts to promote a pro-Western democratic agenda and build support for his ouster have gained little traction.
Central Asian Trends. Central Asia remains fertile ground for radical Islamic sentiment and movements, due to socioeconomic and other factors. In Uzbekistan, President Karimov is intent on retaining firm control, but faces increased public dissatisfaction over a weakened economy and higher commodity prices. He has already demonstrated the willingness to use force against his people and could move quickly to suppress protests. Kyrgyzstan and Tajikistan lack the energy resources of other Central Asian states and have weak economies, but appear relatively stable for now. In the last year, Turkmenistan has shown progress on human rights and has begun to expand contacts with the outside world, but is still recovering from years of isolation.