STRATFOR'S MORNING INTELLIGENCE BRIEF
SITUATION REPORTS - Dec. 9, 2003

1304 GMT - IRAQ - Hours after a suicide bombing injured 41 U.S. soldiers in
Tall Afar, Iraq, a second suicide bomber approached a U.S. military barracks
north of Baghdad and detonated his explosives when he came under fire from
military police, but there were no reported U.S. injuries.

1257 GMT - NORTH KOREA - North Korea said Dec. 9 that it would freeze its
nuclear program if the United States would take simultaneous measures. The
official North Korean news agency quoted an unnamed foreign ministry
spokesperson as saying, "As the first step, when we freeze our nuclear
activity, the United Sates on its part must take reciprocal steps," but
demands also include removing Pyongyang from the list of nations sponsoring
terrorism, and the lifting of political, economic, and military sanctions.

1253 GMT - PAKISTAN - Energy ministers from Afghanistan, Pakistan and
Turkmenistan said Dec. 9 that construction on a 1,013-mile pipeline --
expected to transport gas from the Turkmen oil fields at Daulatabad to the
central Pakistani city of Multan via Kandahar in Afghanistan -- will begin
in the first quarter of 2004.

1249 GMT - AFGHANISTAN - Hundreds of U.S. troops supported by helicopter
gunships have arrived in southeastern Afghanistan as part of Operation
Avalanche with soldiers from the Alaska-trained 501st Parachute Division
taking part in a raid in Khost province.

1240 GMT - LIBERIA - Hundreds of soldiers formerly loyal to ousted Liberian
leader Charles Taylor staged angry protests demanding immediate compensation
for putting down their weapons after only half the $300 guaranteed amount
was paid up front. According to reports on Dec. 9, the soldiers fired guns
in the air and assaulted people passing by the U.N. disarmament center.

1235 GMT - JAPAN - The Japanese cabinet approved a plan on Dec. 9 to send up
to 600 troops to Iraq as Prime Minister Junichiro Koizumi emphasized that
the troops would be restricted to humanitarian and re-construction
activities in what will be the country's biggest overseas military
deployment since World War II.

1221 GMT - RUSSIA - At least one female suicide bomber triggered a car bomb
blast outside the National Hotel in central Moscow on Dec. 9 killing five
people. The bomb -- packed with nails and pieces of metal - exploded in the
late morning and some witnesses claimed the bomber asked the way to the Duma
shortly before the blast. Police later used a robot to detonate another
suitcase lying in the street.

1215 GMT - IRAQ - A suicide bomber wounded 41 U.S. soldiers and six Iraqi
civilians on Dec. 9 when an explosive-laden vehicle was detonated at the
gates of a military barracks compound in Northern Iraq. The early morning
attack occurred in the town of Tall Afar, 30 miles west of Mosul.

1207 GMT - UNITED STATES - The U.S. dollar weakened again against the euro
on Dec. 9. The dollar, which has dropped 2.2 percent in the past five days,
fell to a record $1.2276 to one euro, apparently prompted by speculation
that the Federal Reserve will keep the interest rate at a 45-year low in the
months ahead.

************************************************************************

Geopolitical Diary: Tuesday, Dec. 9 2003

Russia held parliamentary elections Dec. 7, and President Vladimir Putin's
party won. That isn't major news. It also won big: The United Russia Party,
Putin's parliamentary mainstay, gained about 37 percent of the vote.
Vladimir Zhironovsky's Liberal Democratic Party -- which usually votes with
Putin -- came in third. The two parties together give Putin a major bloc in
Parliament. That isn't major news either. The Communists came in second with
only 12.7 percent of the vote, and the liberal parties did not take enough
votes to be represented in Parliament. In the Russian voting system, Putin's
allies will dominate Parliament. And that isn't major news.

Here is the major news: the Organization for Security and Cooperation in
Europe (OSCE) condemned the elections. Bruce George, an OSCE official, said
the election was "one of regression in the democratization of this country."
His complaint is that government-controlled television relentlessly attacked
Putin's opponents and that the Russian bureaucracy used its resources to
increase Putin's support. The OSCE did concede that the voting itself was
conducted in an appropriate fashion.

Considering where Russia was 20 years ago, the charges against Putin are
fairly tame. If using bureaucratic levers to maximize votes puts a country
beyond the democratic pale, few countries would be considered democratic,
not to mention the city of Chicago. Putin ran a tough, nasty campaign, took
every possible advantage and won big.

It is interesting, though, that the OSCE deliberately raised such concerns
about Russia's elections. The fact is that Putin has developed broad
support, particularly for his stance on national security. The train bombing
in Chechnya just before the elections drove the point home. Russia faces
domestic insurrection in Chechnya, and it appears that Putin is dedicated to
suppressing it and to preventing Russia's disintegration. Whatever the
reality on the ground, this perception of Putin resonates with the Russian
public. After more than a decade of structural disintegration, Putin has
given Russians the sense that the trend is being reversed. In our opinion,
if Putin had run the elections to OSCE's satisfaction, he would have fared
about as well.

What bothers the OSCE is less the hardball campaign tactics than the size of
Putin's win. Putin has nearly a two-thirds majority in both chambers of
Parliament. The liberal parties have been devastated. The Communist Party is
Putin's main opposition. Putin's ally is the right-wing politician
Zhirinovsky. The shape of Russian politics is shifting as anti-authoritarian
parties disappear. Increasingly, the choice is between mild or hard
authoritarianism.

Most important, if Putin does get a two-thirds majority in Parliament, he
will be in a position to pass constitutional amendments. He can pass
amendments, for example, on the length of a presidential term, or whether a
president can run for a third term. Indeed, with the ability to change
Russia's constitution, Putin could reshape the presidential elections
scheduled for March, should he choose to do so.

Putin is emerging with an interesting mix of positions. Certainly, he is
determined to create a strong presidency that focuses on national security
issues. At the same time, he continues to endorse free market reforms. In a
sense, we are reminded of the KGB's position under Yuri Andropov. The KGB --
the institution that shaped Putin -- sought economic modernization and
institutional restructuring -- not to weaken the state, but to save it.
Gorbachev sought economic reform, but tried to retain a strong
Communist-dominated state. Putin's strategy appears to follow the same
principle. He wants a strong state that guarantees Russia's integrity and
national interest, and he wants economic reforms. His reforms serve three
purposes: to facilitate importation of foreign capital, to cement the
relationship between pro-Putin oligarchs and the state, and to legitimize
the state through increased economic growth.

The point is this: For Putin, economic reforms are not ends in themselves.
Free markets and property rights are not moral issues to be defended, nor
are they part of a matrix of political liberalization. Rather, economic
reforms are the means to a stronger Russian state. In the tradition that
shaped Putin, economic and political reforms are separate spheres that are
not even necessarily compatible, let alone jointly required.

And that is why the OSCE is getting nervous -- not so much because of
Putin's election practices as the magnitude of his victory and the way he
likely will put that victory to use. Putin is, first and last, a Russian
nationalist, utterly pragmatic (or ruthless) in the tools he will use to
strengthen the Russian state. He has greater power now than anyone in Russia
since the collapse of communism. He can reshape the regime. Consequently,
the OSCE and Europe are nervous about where Putin is taking Russia. They
have every reason to be: Putin is slowly and systematically changing
Russia's direction. When Russia changes direction, the rest of Europe should
indeed be nervous.







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