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Friday, April 23, 2010

Serbia: Current Issues and U.S. Policy

Steven Woehrel
Specialist in European Affairs

Serbia faces an important crossroads in its development. It is seeking to integrate into the European Union (EU), but its progress has been hindered by a failure to arrest remaining indicted war criminals and by tensions with the United States and many EU countries over the independence of Serbia's Kosovo province. 

Parliamentary elections were held in Serbia on May 11, 2008. On July 7, the Serbian parliament approved a new government coalition led by pro-Western forces, but which also includes the Socialist Party (once led by indicted war criminal Slobodan Milosevic). The global economic crisis poses serious challenges for Serbia. The downturn has required painful budget cuts. In January 2009, the International Monetary Fund approved a $530 million stand-by loan for Serbia and another $4.2 billion loan in April. Serbia has also received loans from the World Bank and EU. 

Serbia's key foreign policy objectives are to secure membership in the European Union and to hinder international recognition of Kosovo's independence. The European Union signed a Stabilization and Association Agreement (SAA) with Serbia on April 29, 2008. It provides a framework for enhanced cooperation between the EU and Serbia in a variety of fields, with the perspective of EU membership. In December 2009, the EU agreed to allow the trade provisions of the SAA to be implemented, although ratification of the accord and the implementation of the remaining provisions awaits an EU determination that Serbia is fully cooperation with the former Yugoslavia war crimes tribunal. In late December 2009, Serbia submitted an application to join the EU. It hopes to join the organization as early as 2014, although many observers are skeptical about the likelihood of such a rapid accession. 

Serbia has vowed to take "all legal and diplomatic measures" to preserve Kosovo as part of Serbia. So far, 65 countries, including the United States and 21 of 27 EU countries, have recognized Kosovo's independence. However, Russia, Serbia's ally on the issue, has used the threat of its Security Council veto to block U.N. membership for Kosovo. Serbia won an important diplomatic victory when the U.N. General Assembly voted on October 8, 2008, to refer the question of the legality of Kosovo's declaration of independence to the International Court of Justice. A decision on the case is expected later this year. 

In December 2006, Serbia joined NATO's Partnership for Peace (PFP) program. PFP is aimed at helping countries come closer to NATO standards and at promoting their cooperation with NATO. Although it supports NATO membership for all of its neighbors, Serbia is not seeking NATO membership. This may be due to such factors as memories of NATO's bombing of Serbia in 1999, U.S. support for Kosovo's independence, and a desire to maintain close ties with Russia. 

U.S.-Serbian relations have improved since the United States recognized Kosovo's independence in February 2008, when Serbia sharply condemned the U.S. move and demonstrators sacked a portion of the U.S. Embassy in Belgrade. During a May 2009 visit to Belgrade, Vice President Joseph Biden stressed strong U.S. support for close ties with Serbia. He said the countries could "agree to disagree" on Kosovo's independence. He called on Serbia to transfer the remaining war criminals to the ICTY, promote reform in neighboring Bosnia, and cooperate with international bodies in Kosovo.

Date of Report: April 12, 2010
Number of Pages: 12
Order Number: RS22601
Price: $29.95

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Tuesday, April 20, 2010

Russian Political, Economic, and Security Issues and U.S. Interests

Jim Nichol, Coordinator
Specialist in Russian and Eurasian Affairs

William H. Cooper
Specialist in International Trade and Finance

Carl Ek
Specialist in International Relations

Steven Woehrel
Specialist in European Affairs

Amy F. Woolf
Specialist in Nuclear Weapons Policy

Steven A. Hildreth
Specialist in Missile Defense

Vincent Morelli
Section Research Manager

Russia made some uneven progress in democratization during the 1990s, but according to most observers, this limited progress was reversed after Vladimir Putin rose to power in 1999-2000. During this period, the State Duma (lower legislative chamber) came to be dominated by government-approved parties and opposition democratic parties were excluded. Putin also abolished gubernatorial elections and established government ownership or control over major media and industries, including the energy sector. The methods used by the Putin government to suppress insurgency in the North Caucasus demonstrated a low regard for the rule of law and little respect for human rights, according to observers. Dmitry Medvedev, Vladimir Putin's chosen successor and long-time protégé, was elected president in March 2008 and immediately chose Putin as prime minister. President Medvedev has continued policies established during the Putin presidency. In August 2008, the Medvedev-Putin "tandem" directed wide-scale military operations against Georgia and unilaterally recognized the independence of Georgia's separatist South Ossetia and Abkhazia, actions that were censured by most of the international community but which resulted in few, minor, and only temporary international sanctions against Russia. 

Russia's economy began to recover from the Soviet collapse in 1999, led mainly by oil and gas exports, but the sharp decline in oil and gas prices in mid-2008 and other aspects of the global economic downturn put a halt to this growth. The government reported an 8% drop in gross domestic product in 2009. This decline exacerbated existing problems: 15% of the population live below the poverty line; an unreformed healthcare system and unhealthy lifestyles contribute to a population decline; domestic and foreign investment is low; inflation hovers around 12%-14%; and crime, corruption, capital flight, and unemployment remain high. 

Russia's military has been in turmoil after years of severe force reductions and budget cuts. The armed forces now number about 1.2 million, down from 4.3 million Soviet troops in 1986. Readiness, training, morale, and discipline have suffered. Russia's economic revival in the 2000s allowed it to substantially increase defense spending, and some high-profile activities were resumed, such as Mediterranean and Atlantic naval deployments and strategic bomber patrols. Stepped-up efforts were launched in late 2007 to further downsize the armed forces and emphasize rapid reaction and contract forces. The global economic downturn and strong opposition among some in the armed forces appear to have slowed force modernization. 

After the Soviet Union's collapse, the United States sought a cooperative relationship with Moscow and supplied almost $17 billion to Russia from FY1992-FY2008 to support urgent humanitarian needs, encourage democracy and market reform, and prevent the acquisition of nuclear, radiological, or biochemical materials by terrorist groups or nations for use in weapons of mass destruction (WMD). U.S. aid to reduce the threat posed by WMD proliferation has hovered around $700-$900 million per fiscal year, while other foreign aid to Russia has dwindled. Despite rising U.S.-Russia tensions in recent years on issues such as NATO enlargement and proposed U.S. missile defenses in Eastern Europe, the two countries found some common ground on Iranian and North Korean nuclear issues and on anti-terrorism and non-proliferation; Russia's 2008 conflict with Georgia threatened such cooperation. The Obama Administration has been endeavoring to "reset" relations with Russia, which welcomed the Obama Administration's announcement in September 2009 of the cancellation of the planned missile defense setup in Eastern Europe. On March 26, 2010, President Obama announced that the United States and Russia had reached agreement on a new Strategic Arms Reduction Treaty.

Date of Report: April 2, 2010
Number of Pages: 47
Order Number: RL33407
Price: $29.95

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Saturday, April 17, 2010

U.S.-Russia Meat and Poultry Trade Issues

Renée Johnson
Specialist in Agricultural Policy

Geoffrey S. Becker
Specialist in Agricultural Policy

In December 2008, the United States and Russia signed a protocol aimed at resolving various emerging trade issues between the two countries in order to continue U.S. livestock and poultry exports to Russia through the end of 2009. By December 2009, however, Russia had escalated these trade issues in a series of actions that threatened to shut out U.S. livestock and poultry exports. These actions, in part, followed on Russia's statements throughout 2008 and 2009 regarding its concerns about antimicrobial use in U.S. meat production. 

Russia has continued to cite various food safety concerns, including concerns about antimicrobial residues and the use of chlorine rinses on U.S. meat exports, and identified several U.S. poultry and meat processing companies as ineligible to export meat to Russia. In 2008 and again in 2009, Russia announced that it was banning poultry imports from several U.S. establishments due to safety concerns. In addition, throughout 2008 and 2009, Russia refused imports of pork products from several U.S. plants because trace amounts of antibiotics were found in some of the meat tested. As part of these actions, Russian officials signaled that U.S. permits to import poultry and pork under that country's quota system might be restricted. (Russia also banned pork products for most of 2009 from several countries, including the United States, following reports about the H1N1 influenza virus in April 2009.) 

In December 2009, Russia announced that it would implement its previously proposed ban on poultry imports treated with chlorine washes from all exporting countries, effective January 1, 2010. This action was expected to effectively ban all U.S. poultry exports to Russia, since pathogen reduction rinses are commonplace in U.S. poultry production. (A similar European Union (EU) prohibition has kept U.S. chicken out of the EU since 1997.) By late March 2010, trade reports were indicating that a potential resolution of the poultry dispute might be close. The delistings, as of late 2009, of virtually all U.S. pork plants that exported to Russia (purported to be mainly due to concerns about findings of trace amounts of antimicrobials on pork) was reportedly resolved earlier in March. 

Also in December 2009, reports emerged that Russia would reduce its 2010 import quotas for U.S. pork and poultry below 2009 quota levels. Russia's import quotas for U.S. beef, however, would be increased above 2009 levels. Quota allocations for U.S. pork and poultry are expected to be reduced even further in both 2011 and 2012. 

Many U.S. producers believe that Russia's food safety restrictions, including those regarding antimicrobial use, are not science-based, but are instead intended to protect and promote Russia's own growing domestic pork and poultry production. Some further point out that Russia's perceived "zero tolerance" regarding antimicrobial use is the most restrictive among all U.S. trading partners. 

For U.S. poultry and meat producers, the economic stakes of Russian import actions are significant. In 2008, Russia was the single largest export market for U.S. poultry products, with exports valued at more than $820 million (about 18% of total U.S. poultry exports). Russia was also among the leading export markets for U.S. pork and beef products, valued at $330 million and nearly $70 million, respectively. All these export products had also experienced strong growth in the Russian market. Members of Congress with important poultry and meat industry constituents have been monitoring events and ongoing negotiations between the United States and Russia to resolve these disputes.

Date of Report: April 2, 2010
Number of Pages: 13
Order Number: RS22948
Price: $29.95

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The April 2010 Coup in Kyrgyzstan: Context and Implications for U.S. Interests

Jim Nichol
Specialist in Russian and Eurasian Affairs

Kyrgyzstan is a small and poor country in Central Asia that gained independence in 1991 with the breakup of the Soviet Union (see Figure A-1). It has developed a notable but fragile civil society. Progress in democratization has been set back by problematic elections (one of which helped precipitate a coup in 2005 that brought Kurmanbek Bakiyev to power), contention over constitutions, and corruption. The April 2010 coup appears to have been triggered by popular discontent over rising utility prices and government repression. After two days of popular unrest in the capital of Bishkek and other cities, opposition politicians ousted the Bakiyev administration on April 8 and declared an interim government pending a new presidential election in six months. Roza Otunbayeva, a former foreign minister and ambassador to the United States, was declared the acting prime minister. 

The United States has been interested in helping Kyrgyzstan to enhance its sovereignty and territorial integrity, increase democratic participation and civil society, bolster economic reform and development, strengthen human rights, prevent weapons proliferation, and more effectively combat transnational terrorism and trafficking in persons and narcotics. The significance of Kyrgyzstan to the United States increased after the September 11, 2001, terrorist attacks on the United States. The Kyrgyz government permitted the United States to establish a military base at the Manas international airport outside Bishkek that trans-ships personnel, equipment, and supplies to support U.S. and NATO operations in Afghanistan. The former Bakiyev government had renegotiated a lease on the airbase in June 2009 (it was renamed a transit center), in recognition that ongoing instability in Afghanistan jeopardized regional security. The lease is up for renewal in July 2010. Otunbayeva has declared that the interim government will uphold Kyrgyzstan's existing foreign policy, including the presence of the "transit center," although some changes to the lease may be sought. 

Cumulative U.S. budgeted assistance to Kyrgyzstan for FY1992-FY2008 was $953.5 million (FREEDOM Support Act and agency funds). Kyrgyzstan ranks third in such aid per capita among the Soviet successor states, indicative of U.S. government and Congressional support in the early 1990s for its apparent progress in making reforms and more recently to support anti-terrorism, border protection, and operations in Afghanistan. 

As Congress and the Administration consider how to assist democratic and economic transformation in Kyrgyzstan, several possible programs have been suggested, including those to buttress civil rights, bolster political institutions and the rule of law, and encourage private sector economic growth. (See also CRS Report RL33458,
Central Asia: Regional Developments and Implications for U.S. Interests, by Jim Nichol.)


Date of Report: April 12 2010
Number of Pages: 15
Order Number: R41178
Price: $29.95

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Friday, April 2, 2010

Russian Energy Policy Toward Neighboring Countries

Steven Woehrel
Specialist in European Affairs

The Russian oil and natural gas industries are key players in the global energy market, particularly in Europe and Eurasia. Another trend has been the concentration of these industries in the hands of the Russian government. This latter phenomenon has been accompanied by an authoritarian political system, in which former intelligence officers play key roles. 

Russian firms have tried to purchase a controlling stake in pipelines, ports, storage facilities, and other key energy assets of European countries. They need these assets to transport energy supplies to lucrative western European markets, as well as to secure greater control over the domestic markets of the countries of the region. In several cases where assets were sold to non-Russian firms, Russian firms cut off energy supplies to the facilities. Russia has also tried to build new pipelines to circumvent infrastructure that it does not control. Another objective Russia has pursued has been to eliminate the energy subsidies former Soviet republics have received since the fall of the Soviet Union, including by raising the price these countries pay for natural gas to world market prices. 

It is not completely clear whether the pursuit of Russian foreign policy objectives is the primary explanation for the actions of its energy firms. Few would disagree in principle that the elimination of subsidies to post-Soviet countries is a sound business decision, even if questions have been raised about the timing of such moves. Even the pursuit of multiple pipelines can be portrayed as a business decision. On the other hand, many countries of the region are concerned that Russia may use their energy dependency to interfere in their domestic affairs or to force them to make foreign policy concessions. Countries of the region also fear that by controlling energy infrastructure in their countries, Russian energy firms are able to manipulate the internal political situation by favoring certain local businessmen and politicians. However, the current global economic crisis has hurt Russia's energy firms and Russia's international clout, as energy prices have tumbled. 

Bush Administration officials repeatedly criticized what they viewed as Russian efforts to use its energy supplies as a political weapon. The Obama Administration, like its predecessor, has urged European countries to reduce their dependence on Russian energy, but has said the United States is trying to cooperate with Moscow on the issue. The United States has strongly advocated the building of multiple pipelines from Central Asia and Azerbaijan to Europe. Members of Congress have expressed concern about the impact on European countries of their dependence on Russian energy. In the 111th Congress, committees have held hearings that have touched on the issue. Congress has also passed resolutions that refer to worrisome aspects of Russian energy policy.

Date of Report: March 22, 2010
Number of Pages: 25
Order Number: RL34261

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