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STRATFOR.COM Global Intelligence Update
December 7, 1999


Yeltsin Recovers - Long Enough to Ask for China's Support


Summary

On Dec. 6, the government of Russian President Boris Yeltsin
announced that he had recovered enough from a bout of pneumonia to
hold a long-awaited informal summit with Chinese President Jiang
Zemin in Beijing. The president's sudden recovery and the summit
coincide with the intensification of Russian military operations in
Chechnya, particularly a new ultimatum to the people of Grozny.
Russia is making a final bid to gain international political
support in anticipation of a renewed offensive against Grozny.


Analysis

Russian President Boris Yeltsin was released from the hospital Dec.
6 following a week-long stay for a respiratory infection. Following
his release, the Kremlin announced that Yeltsin will attend an
informal summit with Chinese President Jiang Zemin in Beijing
December 8-10. The meeting between the two leaders has largely been
ignored by the West but widely anticipated both in Russia and
China. And throughout the autumn it has been repeatedly and
inexplicably postponed.

The sudden visit by Yeltsin to Beijing is not likely to be a mere
coincidence. Indeed, it appears to be an attempt by Russia to
guarantee political backing from China for what it is about to do:
make a concerted and unpopular push in the conflict in Chechnya.
The announcement of the summit came as the Russian military issued
an ultimatum to civilians and rebels alike in Grozny, the Chechen
capital, warning that if they fail to leave by Dec. 11 they will be
"annihilated with air and artillery bombardments."

Yeltsin's visit to China suggests urgency. It has been postponed
several times this year. He has canceled or postponed other
international trips, such as the one to Japan, which implies the
importance Moscow places on China's support. The Russian Duma
elections are just two weeks away, and stories of Russian
casualties have leaked out of Chechnya.

Russia is likely concerned that its apparent intention to flatten
Grozny will trigger a backlash from Islamic fundamentalists,
particularly terrorist organizations. Opposition to the war is
growing among Islamic nations, unconvinced by Moscow's diplomatic
campaign to emphasize that the rebels are terrorists and that
religion has nothing to do with the conflict. Fundamentalist
clerics in Egypt are calling for a boycott of Russia. The
Organization of the Islamic Conference has sent a delegation to
Moscow and called for a peaceful solution to the war in Chechnya.
If Russia and China share a worry, it is the prospect of increased
terrorism and separatism in Central Asia.

Moscow is also likely to try to enlist China's support during what
will surely be an even more trying economic period. Because of the
war in Chechnya, the West has threatened to withhold the next
disbursement of International Monetary Fund (IMF) loans. Without
the $640 million, Russia cannot pay off previous loans
( http://www.stratfor.com/cis/commentary/c9912020015.htm ). More
important, if Russia defaults, it stands to lose the future
confidence of foreign investors. The Russian government may be
warning Beijing that it will forego the money to wage the war in
Chechnya and is telling the Chinese government to brace itself for
economic turmoil.

Or Moscow may be trying to signal the Chinese leadership that
economic ties will continue - regardless of what the West and the
IMF do. On Dec. 1, Russian oil giant Yukos signed a deal with China
that will double the amount of exported Russian oil. ITAR-Tass
reported that Yeltsin and Jiang will discuss a proposed gas
pipeline, which would bring Russia $2 billion to $3 billion
annually.

Like Moscow, Beijing does not want to see the West continue to
intervene in internal separatist struggles.

Russia appears to be engaged in a broad effort to shore up
international political and economic ties in advance of a renewed
assault on Grozny. Until recently, Yeltsin has been too ill to talk
to visiting dignitaries. But Yeltsin rose from his sickbed to meet
with Ukrainian President Leonid Kuchma - and offered to restructure
Ukraine's $1.8 billion debt for Russian gas. Yeltsin is also
scheduled to sign the treaty for Russia-Belarus unification before
heading to China. As well, Moscow has recently reinforced ties with
India.

This meeting between Yeltsin and Jiang is only a precursor to re-
defining the broader relationship between Russia and China. The
real strategic relationship between the two nations will most
likely be shaped in January at a formal summit, which will include
Prime Minister Vladimir Putin. Right now, the internal pressure to
deal swiftly with Chechnya is strong. Russia has delivered an
ultimatum and appears bent on solving the problem once and for all.
In courting China, Russia is seeking support in advance of
international economic and political backlash.




(c) 1999, Stratfor, Inc. http://www.stratfor.com/




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