Policy Documentation Center

Eralp, Yalim

 Istanbul Kultur University 
Atakoy Campus,Bakirkoy, 34156 Istanbul-TURKEY 
T: +90 212 498 44 76 | F: +90 212 498 44 05 
www.gpotcenter.org 
The Kurdish Question:  
The process and the grave mistakes by the Governments  
 
Yalım Eralp 
October  2009 
Abstract: For many years successive governments in Turkey have ignored an even denied 
the existence of Kurds in Turkey. What would have been possible in the past by recognizing 
cultural rights has now been a problem whereby an operation seems to be needed. Two 
common and important mistakes of governments: one is to say Kurds are primary citizens 
of this country as if there are secondary citizens! The second is “end the terror and we will 
recognize some rights”. Basic rights cannot be negotiated. This second mistake has led 
Öcalan to announce his own road map paralel to the Governments. Negotiating with 
hostile entities is very difficult and needs public consensus. Turkey, unlike Britain and 
Spain does not have public consensus. The best way was and is to follow EU’s 
democratisation road map. 
    We need to admit that “the Kurdish    
problem” is the outcome of long-running 
consecutive mistakes on the part of our 
governments and institutions. For a long   
time the state claimed there were no Kurds 
in Turkey and refused to acknowledge the 
Kurdish identity. The mere utterance of the 
word was forbidden. 
 
    Yet, this led to comical situtions. While 
those in Northern Iraq were called “Kurds”, 
once the border was crossed we assumed the 
Kurds just vanished. It will be useful to 
briefly examine this process of denial and 
expose the picture it created. 
 
    To begin with, the Lausanne Treaty had a 
clause that could have prevented the 
Kurdish problem from being a problem. 
Between articles 37-44, which deal with 
minority rights, there is a significant 
paragraph that says “every Turkish 
citizen.” 
 
    It will be useful to remember that article 
in its entirety. Article 39/4, either forgotten 
 
GLOBAL POLITICAL TRENDS CENTER 
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or effaced, says: “No restrictions shall be 
imposed on the free use by any Turkish 
national of any language in private 
intercourse, in commerce, religion, in the 
press, or in publications of any kind or at 
public meetings.” Had this article been 
implemented, there would not have been 
any restrictions on ethnic identity through 
language, and perhaps the problem we are 
facing today would not be so grave. Let us 
look at main aspects of the picture. 
 
    The Kurdish problem was initially 
discussed because of the uprisings in 
Turkey. Some might remember the 
arguments between the “hawkish” İnönü, 
who gave weight to a military operation in 
the matter, and “moderate” Fethi Okyar, 
who argued the problem did not have a 
military aspect only. Different approaches 
existed back then as well. 
 
    During the 1930s Kurdish citizens were 
banned from naming their children as they 
pleased. Names of villages and counties 
were gradually changed and Turkified by 
the 1970s. People could no longer openly 
talk of being Kurdish. Even Hikmet Çetin, 
who was Foreign Minister in 1991, did not 
like the mentioning of his Kurdish heritage. 
In the process of nation-making, certain 
initial restrictions could have been 
understood, but the situation turned to the 
extreme and became a serious case of 
identity denial in time. This ban on the 
language reached its climax when in the 
aftermath of the 1980 coup “speaking 
Kurdish even at home” was banned. The 
late Turgut Ozal lifted this ban in 1991 after 
much effort. 
 
    In 1965, when the Ministry of Foreign 
Affairs heard from diplomatic circles that 
“the Southeast was boiling,” a delegation of 
3 people were secretly dispatched to the 
region. In the report this delegation 
prepared upon their return, it was said that 
an uprising was likely within the next 20 
years. The government of course 
disregarded the report. In reality everybody 
was well aware of the problem but chose to 
ignore it. During the 1980s some high-up 
state officials objected to investing in the 
Southeast, worrying that they would “wake 
up the people.” 
 
    Then the PKK terror started in 1984. As 
the person who typed up the 1965 report     
(it could not be done by secretaries since the 
text included he word Kurd), this did not 
surprise me. In 1988, Ambassadors abroad 
were still asked to explain to the authorities 
of their respective countries that the word 
Kurd came from “kart kurt” (t.n.: It was the 
state’s official stance that the population in 
the Southeast were “Mountain Turks” and 
the word Kurd came from sound “kart kurt” 
made by walking on snow.) Demirel 
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recognized the Kurdish identity in 1991 
when he became Prime Minister, but for 
some reason never used that word again 
after that. 
 
    In 1993, when I was an advisor to PM   
Çiller, I told her “This question cannot be 
the question of any single party; it belongs 
to the Parliament. You should form a 
commission in the Parliament that will 
include bureaucrats working in the region, 
selected individuals from the region and 
those informed about the situation, which 
will then issue a report on the subject to be 
discussed at the Parliaments General 
Assembly”. The Prime Minister took the 
idea to the Speaker of Parliament Cindoruk, 
who rejected it on the grounds of it being 
unconstitutional. It is difficult to understand 
Cindoruk’s stance… 
 
    When I was received by President Demirel 
for a briefing before an upcoming OSCE 
summit in Istanbul in July of 1999, I told him 
that a state-run Kurdish TV channel would 
be a wrong step, that Turkey’s international 
obligation was to lift the ban on cultural 
identities, that the state need not engage in 
these sorts of activities and it would be more 
suitable to allow private local channels to 
broadcast in Kurdish. The President wanted 
me to recount the issue to the Chief of Staff, 
which I did. When the Chief of Staff told me 
the state was in the process of establishing a 
TV channel in Northern Iraq, I pointed out 
that this would be an unnecessarily 
complicating tactic. It was still not 
comprehended that the state needed to lift 
the obstructions before cultural identity. 
 
    Yet, during the same time newspapers 
and magazines started to get published in 
Turkey in Kurdish. Turgut Ozal has a big 
part in this. The government, too, wanted 
this to be publicized abroad in response to 
criticism regarding the bans. Right when this 
was about to be reported to OSCE, the late 
Bülent Ecevit, then Prime Minister, declared 
there was “no such language as Kurdish.” If 
there was no language, how could the 
newspapers be explained! Contradictions 
continued. 
 
    The picture is as described above. This 
issue, which could have been solved 
through a serious recognition of basic rights, 
when -so to speak- could have been treated 
with aspirin and antibiotics, the “patient” 
has been laid on the operating table. 
 
    During the 1990s when the word 
“Kurdish” began to be used more freely, 
almost all PMs and Ministers fell into two 
grave mistakes. The first one is the “Kurds 
are the primary components (of the nation)” 
argument. What does this mean? Are there 
secondary components in Turkey, and who 
are they? They failed to see the contradiction 
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in claiming equal citizenship was the 
unifying bond between the country’s 
citizens and then separating them into 
primary and secondary components. Some 
Kurdish leaders, upon hearing this branding 
of “primary component” asked to go back to 
the 1921 Constitution that rested on a certain 
amount autonomy. They also demanded 
that Kurds and Turks are mentioned 
together and that Kurdish becomes an 
official language of the state. These days 
prominent Kurdish leaders call this 
“consitutional guarantees.” The “primary 
component” expression put forth carelessly 
to show Kurds are not a minority is now 
interpreted in different ways. 
 
    The second common mistake of PMs has 
been the approach that can be summarized 
as “we will give rights only after terror is 
ceased.” This approach is perhaps even 
graver than the first mistake. The question, 
semantic at first sight but essential to the 
conflict in reality, needs explaining. The 
current government has found it difficult to 
name the latest (Kurdish) “initiative.” It was 
first called the Kurdish initiative, then a 
“democratic initiative, and then the National 
Unity project. The approach taken up by this 
government is the process of “granting 
rights while terror is abolished.” In the 
words of Deputy PM Bülent Arınç, “we 
must drink the bitter medicine.” Such 
statements encourage Öcalan. 
    Cultural identity rights, which are part of 
fundamental rights cannot be made into a 
point for negotiations. Cases such as 
everybody learning their native language, 
naming their children however they please, 
villages and towns being granted their 
original names, offering elective Kurdish 
lessons in high schools and establishing 
Kurdish Language chairs in universities do 
not require an amendment in the 
Constitution. If one says “I will grant these 
rights along a process, during which terror 
needs to stop”, then one risks appearing to 
be negotiating with İmralı (Ocalan). Even if 
terror continues, fundamental rights should 
be granted unconditionally. In fact, 
whatever action is being planned is already 
on the roadmap given to Turkey within the 
framework of the Copenhagen criteria after 
Turkey officially became an EU candidate in 
1999, including recognition of ethnic and 
cultural identities and the application of 
appropriate measures. Couldn’t these be   
done within the democratization condition 
put forth by the EU? 
 
    On the international plane, negotiating 
with hostile governments or entities is the 
most difficult task. This can either be direct 
or indirect, and inevitably requires 
compromise. The Republic of Turkey is 
inexperienced in this field. Today 
negotiations that are going on in 
Afghanistan with the Taliban are of this sort. 
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England has been through this process by 
negotiating with the IRA via Sein Fein, the 
political arm of the terrorist organization 
IRA. The English are quite experienced in 
the field, thanks in no small part to their 
colonial past and experience. What Spain 
did with ETA, on the other hand, comes 
from a different history. In the aftermath of 
the fascist Franco regime, Spain, which was 
thirsty for freedom and compromise, had 
the perspective of EU membership ahead of 
it, and the public wanted compromise as 
well. 
 
    A similar process requires concurrence in 
public. It appears from recent developments 
that the Turkish public is not ready for this. 
A number of visits by the Minister of 
Interior to certain intellectuals was not 
sufficient. Indeed, these meetings led to 
suspicions as to what the ultimate objective 
is, since the impression emerged that the 
objectives were different than those in the 
EU roadmap. When in addition to these 
statements were made from İmralı in 
conjuction with the Minister’s statements, 
suspicions arose that the government was 
talking to Ocalan through DTP. Ocalan’s 
agenda, on the other hand, was different 
than the government’s; he was aiming for 
amnesty and becoming active in politics. In 
short, two incompatible projects emerged 
and led to scenes in Habur that angered 
even the government. In reality this was 
inevitable; those who came into Turkey from 
Northern Iraq were following Ocalan’s 
roadmap. The rhetoric of “putting an end to 
mothers’ tears” and the inadmissability of 
the current situation encouraged Ocalan, 
and he announced having drawn a roadmap 
by himself. 
 
    Yet it is also wrong for the Prime Minister 
to angrily state that they would “cross 
everything and go back if those coming 
down from the mountains continue to be 
welcomed with ecstacy .” What has been the 
right thing to do all along was to solve the 
question in the Parliament within the EU 
democratization process, without involving 
the discussion of whether the terror would 
cease or not. If this would have been done, 
Ocalan would have been disadvantaged to a 
certain extent. However, when the present 
picture is one of “granting the rights in 
parallel to terror ending”, it ended up 
signaling that Ocalan will get those rights by 
force, which in turn caused a negative public 
response. As a result, we have a dangerous 
divergence instead of national unity. If the 
Prime Minister is going back anywhere, he 
should be going back the EU roadmap and 
do what’s necessary without engaging in 
any negotiations. 
 
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www.gpotcenter.org 
Ambassador (R)Yalım Eralp 
 
Yalım Eralp is a member of the High Advisory Board at the Global Political Trends Center, a 
faculty member at the Department of International Relations of Istanbul Kültür University 
and a diplomatic commentator at CNN TÜRK. Yalım Eralp was born in 1939 in Istanbul. In 
1958, he graduated from Forest Hills High School, New York City. In 1962, he graduated 
from the Faculty of Political Sciences, Ankara. Between 1962-1983, he served as a diplomat 
in New York, Greece, and in Rome NATO Defense College from where he graduated. Later 
on, he was appointed as Counselor at the Turkish Delegation within NATO, Brussels. He 
served in Washington D.C. as the Deputy Chief of Mission. Having served as the 
Spokesman of the Ministry for four years, he became Ambassador to India in 1987. Between 
1991-1996, Ambassador Eralp served as Principal Advisor to Prime Ministers Mesut Yılmaz 
and Tansu Çiller and was also the Director of NATO Affairs at the Ministry. In 1996, he 
became Ambassador to the Organisation for Security and Cooperation in Europe (OSCE) 
Delegation in Vienna. In 2000, Ambassador Eralp retired from the Ministry of Foreign 
Affairs. 
About GPoT  
 
Global Political Trends Center (GPoT) was established as a research unit uder the auspices of 
Istanbul Kultur University in 2008. 
 
GPoT Center aims to produce innovative and distinctive policy recommendations by 
analyzing the contemporary trends in regional and international politics. 
 
 
*The opinions and conclusion expressed herein are those of the individual author and does not necessarily 
reflect the views of GPoT or Istanbul Kultur University. 


The Kurdish question: the process and the grave mistakes by the governments

The successes and failures of EU pre-accession policy in the Balkans:
support to civil society

Prohni\u21bchi, Valeriu

Oprunenco, Alex

Popa, Ana

Luecke, Matthias

Tekce, Mahmut

Hristev, Eugen

Mincu, Georgeta

Vasilescu, Victoria

A Free Trade Area between the Republic of Moldova and the European Union: Feasibility, Perspective and Potential Impact

 ICPS, GfK Ukraine – MARCH THAW HITS UKRAINIAN CONSUMER MOOD [21.04.2009] 1 
MARCH THAW HITS UKRAINIAN CONSUMER MOOD 
Press release Results of consumer confidence survey in Ukraine, a joint project 
between GfK Ukraine and the International Centre for Policy Studies 
21 April 2009 Contact: Maksym Boroda, Project manager 
.icps.com.ua, .gfk.ua Tel. (044) 484-4400, e-mail: @icps.kiev.ua 
 
At the start of Spring 20009, the Consumer Confidence survey registered a mild improvement in the 
consumer mood in Ukraine. The Consumer Confidence Index (CCI) stopped its continuing decline in 
February, while in March it began to grow again, rising 10.1pp to 52.4. This growth during the first 
month of spring is the largest jump the Index has shown in the last few years. And although this is against 
the unprecedentedly low level of CCI at the end of winter, it confirms our prediction that the peak of 
pessimism among Ukrainian consumers caused by the economic crisis has passed. Still, the CCI’s current 
level indicates that nearly three quarters of the population remains negatively inclined. 
 
The two main components of consumer confidence grew as convincingly as the CCI itself in March. 
Improved economic expectations have been growing for the last two months. Still, whereas the Index of 
Economic Expectations (IEE) inched up a mere 1.9pp in February, it jumped by a healthy 12.2pp in 
March, reaching 56.9. At the same time, evaluations of their current situation among Ukrainians grew for 
the first time in the last six months. The Index of the Current Situation (ICS) rose 6.9pp to 45.7. The last 
time this Index rose was in August 2008. This means that Ukrainian not only expect things to improve 
now, but are beginning to feel some positive changes in their current financial standing. 
 
A positive dynamic could be seen in all the components of economic expectations and assessments of 
current standing in the first month of spring 2009. The most significant improvement was in expectations 
of further economic growth, both in the up coming year (x3), which surged 13.4pp to 43.3, and in the next 
five years (x4), which jumped 14.3pp to 69.8. This suggests that more and more Ukrainians expect the 
economic situation to improve, not only in the long run, but even in the short term. Assessments of 
personal material standing (x1) and expectations of changes in it (x2) improved more modestly. The 
Index x1 grew 8.9pp to 57.6, while the Index x2 rose 7.3pp to a still-negative 40.3. The Index of 
Propensity to Consume (x5) grew least of all, rising 6.4pp to 51.0. On one hand, this can be explained by 
the depletion of personal savings among Ukrainian consumers during more than half a year of economic 
recession, and, on the other, by expectations of further price deflation on specific goods markets. 
 
March 2009 showed a clear increase in optimism in the mood among Ukraine’s consumers on all levels. 
Nor were the indices inflationary expectations (IIE) and expectations of change in unemployment (IECU) 
an exception. The IEE contracted by 0.6pp to 185.8, which could be a response to the mild improvement 
in the hryvnia exchange rate to the US dollar, coupled with relative stability in prices. The IECU 
improved more significantly, falling 7.3pp to 155.2. The reason for this is most likely a stabilizing 
situation on the labor market, where there is so far no major trend toward improvement—or deterioration. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ICPS, GfK Ukraine – MARCH THAW HITS UKRAINIAN CONSUMER MOOD [21.04.2009] 2 
 
Consumer Confidence Index in Ukraine 
 
Sources: GfK Ukraine, International Centre for Policy Studies 
 
 
Dynamic of Consumer Confidence Index in Ukraine 
Month, year Consumer Confidence Index 
(CCI) 
Index of the Current Situation 
(ICS) 
Index of Economic 
Expectations (IEE) 
03’09 52.4 45.7 56.9 
02’09 42.3 38.8 44.7 
01’09 41.8 40.4 42.8 
12’08 53.9 56.0 52.6 
10’08 69.3 72.6 67.2 
08’08 96.0 98.5 94.3 
06’08 90.2 88.7 91.3 
04’08 88.0 91.8 85.5 
02’08 97.9 101.2 95.7 
12’07 100.2 101.9 99.0 
10’07 95.0 96.6 93.9 
08’07 102.7 105.8 100.7 
06’07  96.9 102.8  93.0 
04’07  92.3 98.8  88.8 
02’07  92.2 92.4  92.1 
12’06  90.6  95.9  87.1 
10’06  91.2  96.6  87.5 
09’06  87.5  93.9  83.3 
06’06  84.9  92.2  80.0 
04’06  97.1  98.4  96.2 
02’06 103.7 103.5 103.8 
12’05 103.1 105.8 101.3 
09’05  95.5  95.5  95.5 
06’05 105.2 100.5 108.4 
03’05 107.3  92.9 117.0 
Sources: GfK Ukraine, International Centre for Policy Studies 
30
40
50
60
70
80
90
100
110
120
03
’0
5
06
’0
5
09
’0
5
12
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04
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9
CCI
ICS
IEE
 ICPS, GfK Ukraine – MARCH THAW HITS UKRAINIAN CONSUMER MOOD [21.04.2009] 3 
How the indices are calculated  
 
From January 2009 consumer confidence survey is conducted on a monthly basis. 
 
In Ukraine, the Consumer Confidence Index is determined through a random survey of domestic 
households. The poll involves 1,000 individuals aged 15–59, an age group that represents 61.3% of 
Ukraine’s population and the country’s most active consumers. A representative sample is selected by 
gender and age, also by type and size of settlement. The margin of error is 3.2%.  
To define the CCI, respondents are asked these questions:  
1. How has the financial standing of your family changed over the last six months?  
2. How do you think your family’s financial standing will change in the next six months?  
3. Looking at economic conditions in the country as a whole, do you think the next 12 months will be 
good or bad?  
4. Looking at the next five years, will they be good ones or bad ones for the country’s economy?  
5. In terms of large purchases for your home, do you think now is generally a good time or a bad time to 
make such purchases?  
Each of these questions is related to a corresponding index:  
 
• Index of Current Personal Financial Standing (x1);  
• Index of Expected Changes in Personal Financial Standing (x2);  
• Index of Expected Economic Conditions in the Country Over the Next Year (x3);  
• Index of Expected Economic Conditions in the Country Over the Next 5 Years (x4);  
• Index of Propensity to Consume (x5).  
 
Indices are constructed thus: the share of negative answers is deducted from the share of positive answers, 
and 100 is added to this difference in order to eliminate negative values. On the basis of these five 
indices, three aggregate indices are calculated:  
 
• Consumer Confidence Index (CCI) as the arithmetic average of indices x1–x5;  
• Index of the Current Situation (ICS) as the arithmetic average of indices x1 and x5;  
• Index of Economic Expectations (IEE) as the arithmetic average of indices x2, x3, and x4.  
 
Index values range from 0 to 200. The index equals 200 when all respondents positively assess the 
economic situation. It totals 100 when the shares of positive and negative assessments are equal. Indices 
of less than 100 indicate the prevalence of negative assessments.  
To determine the Index of Expected Changes in Unemployment (IECU) and the Index of Inflationary 
Expectations (IIE), the respondents are asked these two questions:  
1. Do you think that within next 12 months the number of unemployed (people who do not have job and 
are looking for work) will increase, will remain roughly the same, or will decrease?  
2. How do you think that prices for major consumer goods and services will change in the next 1–2 
months?  
The IECU and the IIE are calculated thus: the share of answers that indicate a decrease of 
unemployment/inflation is subtracted from the share of answers that indicate the growth of 
unemployment/inflation, and 100 is added to the difference to eliminate negative values. The values of 
indices can vary from 0 to 200. The index totals 200 when all residents expect an increase in 
unemployment/inflation.  
GfK Ukraine is a Ukrainian research company, offering a comprehensive range of survey services and 
market research in Ukraine, Moldova and Belarus. GfK Ukraine is a member of the worldwide GfK 
Group which is the No. 4 market research organization worldwide. The Group has 115 companies 
covering over 100 countries.  
The International Centre for Policy Studies is an independent research organisation whose mission is to introduce 
public policy concepts and procedures in Ukraine. ICPS focuses on key programs of importance for the reform 
efforts of the Ukrainian government 
 


Consumer Confidence No. 44 (April)

Bell is here to ring. Issue 1-2, January 2009

  
 
A Test of Honesty, Not Knowledge 
By Konstantin Sonin 
Soviet leader Josef Stalin and his henchmen discredited the word "sabotage" by accusing political
opponents and their followers of the crime with reckless abandon. The dictionary defines sabotage as
"deliberately disrupting an event, evading work or working in a deliberately dishonest or unscrupulous
manner." However, because Stalin's regime never produced any proof that various groups were actually
guilty of sabotage -- from kulaks accused of undermining the grain harvest to engineers blamed for
sabotaging industry and peasant Soviet Army commanders accused of subterfuge in their war preparations
-- the word became discredited. 
But "sabotage" is a good word, and it is difficult to avoid the temptation to use it when speaking about the
way the EGE -- the nationwide standardized college admissions exam -- was administered in Moscow 
recently. A professor at one of Moscow's leading universities told me of how, during the math exam on June 
4, his department was overrun with a throng of parents and friends of the test takers -- who, by the way, 
had downloaded entire sample tests and math problems onto their cell phones. University students were
also constantly taking calls, answering questions from the kids as they took the test. This is no isolated
incident: The scene was repeated in thousands of classrooms all across Russia. High school teachers have
complained to me that the individuals charged with administering the test were especially lax this year. This
suggests that opponents of the EGE who were unable to convince the authorities to abolish the test have
resorted to discrediting the exam in order to achieve the same result. 
Of course, the government should have the courage to defend its standardized exam (all the more since the
results of the math exam indicate that saboteurs had little success in subverting the test). However, it is not
always appropriate to be overly uncompromising. It is one thing to resist self-serving opposition from this or 
that special interest group but quite another to ignore educators, students and their parents when their only
goal is to express genuine dissatisfaction with shortcomings in the test itself. What if, for example, the 
people administering the test in Moscow simply wanted to help the students make a better showing against
students from Russia's other regions who unexpectedly performed better than expected them last year?  
This phenomenon is not peculiar to Moscow alone. Last year, a teacher from a regional capital complained
to me that standardized test results from rural students were significantly higher than students in city
schools had scored -- the reverse was to be expected under normal circumstances. Some changes are 
perhaps in order for the EGE. 
One obvious problem is that colleges and universities must place too much emphasis on EGE results for
their admission process. The whole process would be easier for everybody concerned if the institutions
were allowed to set the number of places that would be allocated on the basis of EGE results -- and would 
therefore be eligible for state scholarships -- as well as how many would be determined according to the
university's own placement test and how many would be available to all comers willing to pay a standard
fee. That way, students with exceptional or above-average abilities (who, by the way, suffer the most from
artificially high scores from the regions) would not be forced to achieve outstanding EGE scores at any 
price, and those who currently sabotage the results in order to help them would feel less of a need to do so,
thereby making discipline easier to enforce. In principle, the annual nationwide "Olympiads" hosted at
universities that test students in their knowledge of basic academic subjects should serve this function to
some extent. But somebody got the brilliant idea that the Olympiads should be broken down by grade and
that universities should admit students based on standardized tests conducted by an "independent" and 
"impartial" system. Was it really so difficult to foresee that the people charged with administering such a test
would be willing to fudge the results in favor of the test takers? Or is it necessary to go back to the
dictionary and reread the definition of "subversive activity"? 
 
 
Konstantin Sonin, a professor at the New Economic School/CEFIR, is a columnist for Vedomosti.  
18 June 2009 
 
© Copyright 2007. The Moscow Times. All rights reserved.  
 
 


English

A test of honesty, not knowledge

  
 
Give Credit Where Credit Is Due 
12 February 2009 
By Konstantin Sonin 
Last week, the government announced policies aimed at expanding the credit available to businesses. 
The banks that were the major recipients of government bailout funds were instructed to increase the 
amount they lend by 2 percent per month. At the same time, the government refused to consider taking 
toxic assets off banks' balance sheets, even though all leading countries of the world are moving in that
direction. Unfortunately, this shows that the government does not understand how to treat the severe 
blood clot that is blocking the flow of money into the economy. 
There are two reasons banks are not lending more money. First, they need those funds to pay off their 
own debts. Second and more important, they know that most borrowers won't be able to pay back the 
loans during the crisis. 
 
In developed economies, bankruptcy is the best tool for protecting a creditor when a debtor is insolvent. 
But in Russia, the bankruptcy process is slow, costly to lenders and ineffective, particularly when applied 
to large corporations. It is well-known that the country's court system is not an effective resource for 
regulating bankruptcy cases. 
 
Before the crisis, the loan return rate was relatively high. In Russia's booming economy, corporate 
earnings were sufficient to cover credit payments, investors' dividends and new investments at the same 
time. During the crisis, however, all of this is grinding to a halt. 
 
What should the government do to solve the credit crunch? First, what it shouldn't do: It should not force 
banks -- even state-owned banks -- to give out credit. If banks extend credit against their will, it only 
increases the number of loan defaults. On the other hand, if the government can guarantee that it will 
force borrowers to repay their bank loans, it would be a concrete step toward expanding available credit. 
 
Second, the government should help creditors meet their own debt obligations. The greater the chance a 
financial institution has of paying off its own debts, the more desire it will have to extend credit to others 
at reasonable rates. 
 
Third, the government should force major banks to revalue assets on their balance sheets to reflect their 
drop in value. This is tough medicine, but it is beneficial in the long run. The Swedish government 
adopted this practice in 1992, and although it cost the country 6 percent of its gross domestic product, 
the move prevented a prolonged recession. 
 
In contrast, the Japanese government allowed banks to retain assets on their balance sheets at book 
value, and this contributed to the stagnation that lasted a decade. When the Japanese government 
forced banks to extend credit to firms unable to repay the loans, they allowed political goals to eclipse 
fundamental market principles. This led to the creation of numerous "zombie" firms that became an 
additional burden to the Japanese economy.  
 
The two tasks that the government needs to place at the top of its priority list -- protecting creditors' rights 
and increasing the flow of credit to businesses and homeowners -- require significant political will and 
effort. 
 
In this respect, the crisis can be beneficial. During the good years, politicians can sit passively on the 
sidelines and reap the benefits of a boom economy. But during a crisis, politicians need to fight for their 
political survival, and this forces them to act quickly to find tough solutions to save the economy.
 
Konstantin Sonin, a professor at the New Economic School/CEFIR, is a columnist for Vedomosti.  
 
© Copyright 2007. The Moscow Times. All rights reserved.  


Give credit where credit is due

NATO - Tasks and challenges

1Aleksandr Alesin, AC Wider Europe 
 
On September 29th, large-scale military exercises 
were completed in the west of Russia and Belarus. 
Military training under the name Zapad 2009 (West 
2009) can be described as largest in recent years. 
Armed forces of the Republic of Belarus together 
with military units of Moscow military district, 
Kaliningrad region as well as coastguard units and 
the Baltic Fleet, five large landing crafts of Russian 
Northern and Black Sea Fleets (that specially for 
the given purpose went around Europe to arrive in 
Baltijsk) interacted during the training. 
The main military exercises were held on practi-
cally all the territory of Belarus: from Grodno and 
Brest regions in the west to Mogiliov and Vitebsk 
in the east.
During the military exercises Russia was represented 
basically by the brigade of constant combat readiness 
of Moscow military district, units of the Ivanovo 
98th Airborne Forces and Operative Command 
of the 20th Army. 
On the Belarusian side, structural units of the 
Ministry of Defence, the General Staff of Armed 
Forces (AF), together with other bodies (military 
command, operative command, communication, 
escort and servicing, task forces, etc) of the AF 
military participated in the training. 
All in all around 12.5 thousand military service-
men were involved in the exercises: 6.5 thousand 
of Belarus and 6 thousand of Russia and around 
thirty Kazakh military personnel. Military hard-
ware used: more than 220 combat tanks, around 
470 armoured combat vehicles, 230 self-propelled 
and towed artillery units, mortars and multi-rocket 
launchers, 60 planes and 40 helicopters.
The exercise started on 8 October and was carried 
on under the joint management of  the Minister of 
Defence of Belarus colonel-general Leonid Maltsev 
and the Chief of the General Staff of the Armed 
Forces of Russia colonel-general Nikolaj Makarov. 
The final stage of the exercise was observed by 
the Generals-in-Chief of the Armed Forces of 
both countries Presidents Dmitriy Medvedev and 
Alexander Lukashenka.
Talking about the nature of the exercises, high-
standing representatives of both armies did not 
conceal that they were initiated in order to simu-
late military actions in the conditions of possible 
future wars. In particular, the training was aimed 
The October issue of the Bell concentrates on the 
event that took place in September but has not yet 
been analyzed in this publication - military training 
Zapad 2009. Joint military exercise carried out 
on the whole territory of Belarus has spread tense 
atmosphere among the neighboring countries. 
Latvia responded with the statement regarding 
its intention to hold retaliatory large-scale military 
exercises next summer, whereas Estonia urged 
NATO to react accordingly. The contribution by 
Aleksandr Alesin presents the evaluation of the said 
military training as well as the assessment of realistic 
technical and financial potential of Russia. 
The other article of the present issue analyses the 
fourlateral relation between Belarus, Ukraine, 
Poland and Lithuania. Three latter countries are 
very eager to start a closer political and, most im-
portantly, tighter economic relations with Belarus. 
As Roman Yakovlevsky claims, Ukraine is one of 
the most active lobbyists of various projects in-
volving Belarus, especially in the sphere of energy. 
The recent visit of A. Lukashenka to the Ukraine 
demonstrates huge interest from Belarusian side as 
well. One can easily understand it having in mind 
the allowances that Belarus obtained on Ukrainian 
electricity. During the meeting it was agreed that 
they will amount to 50 mln. USD, however, during 
an uncertain period of time.  
Certainly, cooperation with Belarus is not wrong 
per se. However, as Roman Yakovlevsky states in 
his article, while bargaining and negotiating with 
the official Minsk, one has not to confuse expecta-
tions and illusions.
V i t a l l y  i m p o r t a n t  a l l y 
Issue 10 (10), October 2009
Vi l n i u s ,  L i t h u a n i a
C o n t e n t s
V i t a l l y 
i m p o r t a n t  a l l y 
A l e k s a n d r  A l e s i n , 
A C  Wi d e r  E u r o p e 
1
B e t w e e n 
e x p e C t a t i o n s 
a n d  i l l u s i o n s 
R o m a n  Ya k o v l e v s k y, 
p o l i t i c a l  a n a l y s t
3
Julija Narkeviciute, Editor
1 0  ( 1 0 ) ,  O c to b e r  2 0 0 9
2
at investigating the transition to the new military 
command based on the system of network-centric 
wars. The goal was to analyze how the new com-
mand system is able to control the Air Defence and 
Air Forces as well as approbate the joint military 
command system of Belarus and Russia. 
It has to be reminded that the concept of a network-
centric war has been worked out in Pentagon. 
Initially it has been approved during military 
operations in Iraq. Network-centric war presup-
poses such type of combat actions whereby single 
electronic satellite and aviation (including the use of 
un-piloted intelligence aircraft) command systems 
are used in order to operate different forces and 
military devices. 
The essence of the network-centric wars, however, 
is not only large-scale use of electronic means of 
intelligence and targeting but also employment of 
mobile forces that can promptly move and attack 
enemy from flanks or rearward.
According to the Commander-in-Chief of the 
Ground Forces of Russia, General Vladimir Bold-
yrev, 85 highly-maneuverable brigades of constant 
combat readiness were formed. They could be used 
in practice without delay in such areas of military 
operations where a likely threat to the national and 
military security may arise.
There are three such threatening directions: west, 
east and south. Each of them has its own charac-
ter and differences with respect to the manner of 
military action that can be taken. Beginning with 
June strategic exercises under the joint name Osen’ 
2009 (Autumn 2009) were conducted along the lines 
of these directions. They included the operative-
strategic exercises Kavkaz 2009, Ladoga 2009 and, 
finally, Zapad 2009.
Military analysts raise a number of questions con-
cerning the given military trainings. First of all, the 
question is whether the Russian army (not to speak 
of the Belarusian) possesses adequate resources 
(satellites, un-piloted planes, computers, etc.) to 
conduct network-centric wars. The other issue is 
whether it has at its disposal a sufficient number 
of special transport vehicles to ensure mobility 
of troops. 
For Russia, the conclusion is far from satisfactory. 
Enormous resources (they may amount to the 
hundreds of billions of US dollars) are necessary 
to reform Russian armed forces according to the 
network-centric military strategy.  
Even putting aside the issue of satellites and mili-
tary electronics, numerous problems exist in other 
spheres. For example, Russia does not possess a 
necessary number of transport vehicles in order 
to re-deploy the troops. First of all, there is a lack 
of heavy military-transport planes and helicopters. 
Russia has only 10 planes An-124 Ruslan, which 
can transport tanks and sundry bulky equipment, 
whereas the number of helicopters is somewhat 
bigger – it amounts to 35.
A simple example may be adduced. The 4th separate 
tank brigade of the 20th army of Moscow military 
district needed nearly five days to arrive to the 
operative-strategic exercise Zapad 2009. Loading 
military equipment onto railway echelons (around 
twenty), unloading, moving forward to the concen-
tration area, camping at a new location, carrying 
out necessary measures related to the coordination 
among subunits took a lot of time. The 15th, 21st and 
23rd motorized infantry brigades of the 2nd Army 
of the Privolzhsko-Uralskij military district were 
traveling from Samara even longer.
And although all of them got through the prescribed 
standards, even non-professionals perceive that in 
the conditions of a network-centric war an enemy 
armed with satellites of the optical and radio-
technical intelligence, planes of distant radiolocation 
detection, let alone un-piloted flying devices, would 
have detected all those movements at their initial 
stage. And would have done his best not to allow all 
those echelons to arrive to their destination.
However, carrying out of the said exercises is im-
portant not only from the military point of view 
but mostly as an indicator of the allied relations 
between Belarus and the Russia. Allied military 
relations with Belarus matter for Russia because 
of its strategic interests (disruption of the military 
union with Belarus would pose a threat to Russian 
defence potential), for Minsk military union with 
Russia is of economic importance. 
By no means, neither the separate radio-technical 
center Baranovichi of the Russian missile attack 
early warning system (MAEWS) in the settlement 
of Gancevichi (Belarus), nor the object Antej (43rd 
communication center of the naval fleet of the RF) 
in Vilejka, nor even the AAD system is the essen-
tial military resource for the Russian military and 
political leadership.  
Mostly important is the very geo-political situa-
tion of Belarus – Russia’s strategic forefield. It is 
kind of a bulge driven into the depth of NATO, a 
‘balcony’ hanging over the whole European theatre 
of military operation.
As the analyst of the Internet newspaper Vzgliad 
(A Look) Genadij Nechaev claims, true is a general 
principle assuming that in case of any conflict be-
tween Russia and Europe, a party striving to take 
the upper hand in it has to ensure control over 
Belarus. At present it is Russia that has advantage 
in the given respect.
If due to any reason Minsk refuses to take into ac-
count Moscow’s strategic interests, Russia will be at 
great pains in an attempt to defend its western and 
north-western borders. Most probably it will have 
to renounce the Agreement on the medium-range 
and shorter-range missiles (MSRM) and create 
missiles of the new generation ensuring a launch 
of preventive strikes against the regions wherein 
NATO troops are concentrated.
It goes without saying that the given development 
of events is unwelcome for Russia. Thus Russian 
authorities will do everything to maintain status 
quo and to keep Belarus its strategic partner.
Carrying out of the 
said exercises is 
important not only 
from the military 
point of view 
but mostly as an 
indicator of the allied 
relations between 
Belarus and the 
Russia.
1 0  ( 1 0 ) ,  O c to b e r  2 0 0 9
3
B e t w e e n  e x p e C t a t i o n s 
a n d  i l l u s i o n s 
Roman Yakovlevsky, political analyst
Belarus’ activity in external politics in 2009 was 
called forth by external as well as internal factors. 
The former was a dialogue between the EU and 
Belarus commenced as an effort to normalize the 
mutual relationship and the aspiration of Europeans 
to involve Belarus into various integration proc-
esses. This, in particular, concerns neighbouring 
Lithuania, Poland and the Ukraine.
As for the internal factors, that made A. Lukash-
enka’s regime become more active in external affairs, 
first and foremost the global financial-economic 
crisis should be taken into account since it is an 
ever-increasing threat for the archaic post-soviet 
economics of Belarus. In fact, so far Belarus failed 
to experience all consequences of the given crisis. 
Belarusian authorities see a panacea against them 
in unrestrained borrowing from the IMF and other 
sources rather than in proclaimed economic liber-
alization. In the opinion of the famous Belarusian 
economist and the former head of the National 
Bank of Belarus Stanislav Bogdankevich, so far 
Belarus basically managed to veil the crisis by 
means of loans spent on consumption. According 
to him, the amount of foreign debt alone is ap-
proaching an enormous value of 20 billion USD. 
The debt increased by one third in 2009. Internal 
debts to the banks amounted to 23 billion USD by 
the early October of 2009, having increased since 
the beginning of the year by more than 5 billion 
USD, or 22.5 %.
Despite the worsening economic situation of Belarus 
and its dependence on Russia in terms of its credits 
that usually are rendered in exchange for agree-
ments increasing the presence of Russian business 
in Belarus, the EU and the West in general tries to 
use its leverages in order to maintain Belarus on 
the geopolitical swing. 
As concerns the EU, its expectations regarding 
Belarus are mostly associated with the implementa-
tion of programmes and projects in the frames of 
the Polish-Swedish Eastern Partnership initiative 
promoted by the Presidents of Poland and Lithuania. 
As is known, the given initiative was accepted with 
great suspicion in Moscow since it was perceived 
as a threat to its influence in the post-soviet space, 
especially in the field of energy security. Last news 
regarding the given issue show that the Russian 
authorities have no intention of staying passive 
observers. As is known, the project of the energy 
bridge via Belarus to supply electricity from the 
Ukraine to Lithuania is still in the air. The infor-
mation concerning the agreement with Belarus on 
energy price that has been finally reached fails to 
alter the essence of the problem. De-monopolized 
energy system is simply non-existent neither in 
Lithuania, nor in Belarus. So nobody should have 
any illusions regarding the obstacle to the above 
mentioned energy bridge - the Russian Inter RAO 
UES. 
Not only in Minsk, but in Moscow as well market 
relations are perceived rather peculiarly – they 
usually have a considerable political aftertaste. 
The same applies to the importance of Belarusian 
export to the Lithuanian seaport Klaipėda. Today 
Belarus ascribes greater importance to the Latvian 
Ventspils. It has to be admitted that A. Lukashenka 
plays the given card expertly by making Lithuanian 
business exercise pressure on its authorities to be 
exceptionally pragmatic in their cooperation with 
A. Lukashenka’s regime. The question to what 
extent the given approach is in line with national 
interests of Lithuania remains open. 
After the series of meetings of the Presidents of 
Belarus and the Ukraine, secretaries of the Security 
Councils of Belarus, the Ukraine and Poland, opti-
mism related to the participation of Belarus in the 
project of the oil pipeline Odessa-Brody-Plock could 
be observed among the politicians and experts. 
The situation today, however, is that the concern 
Belneftekhim refuses to comment the perspectives 
of the Belarusian participation in the development 
of the oil pipeline Odessa-Brody, which might 
become an alternative to the supply of the Russian 
crude oil. Press service of the concern declared that 
Belneftekhim considers any information related to 
the given issue to mass media as premature.
The most active lobbyist of the participation of 
Belarus in the given project is the Ukraine. On 19 
October in Minsk the Minister of Foreign Affairs of 
the Ukraine Piotr Poroshenko once again confirmed 
the interest of his country in the involvement of 
Belarus in the given project.
Thus successful carrying out of the military exer-
cises of such a large scale and of such importance 
for Russia have become a favourable background 
for the reloading of Belarusian-Russian relations 
that recently have been considerably damaged. 
Experience showed that the underlying formula, 
on which the relations are being built up (economic 
preferences in exchange for the regard of strategic 
interests), was not bad at all. The more so that it 
might be difficult to exchange it into something 
else in the foreseeable future.
It should be noted 
that in Warsaw, as 
in Minsk, there is a 
common negative 
attitude towards 
the project North 
Stream, which 
can considerably 
belittle the transit 
significance of 
the two countries 
in terms of the 
transportation of 
energy resources to 
Europe.
1 0  ( 1 0 ) ,  O c to b e r  2 0 0 9
4
So far, successful were only the attempts to involve 
Minsk into the Kiev Initiative, which aims to coor-
dinate and develop regional cooperation between 
the Ukraine, Belarus and Poland in such spheres as 
illegal migration, combating drug trafficking and 
issues of energy security. Heads of the Security 
Councils of the given three countries are considered 
to be able to find common grounds more easily 
than, for example, the heads of the foreign policy 
institutions of the Ukraine, Belarus and Lithuania. 
Nonetheless, the forthcoming meeting in Kiev of the 
heads of MFA of the Ukraine, Belarus and Lithuania, 
cancelled earlier, remains vitally important. As has 
been stated, they have to discuss the issues related 
to the implementation of the programmes, projects 
in the frames of the Eastern Partnership as well 
as issues of the trilateral cooperation. It should 
be noted that in Warsaw, as in Minsk, there is a 
common negative attitude towards the project 
North Stream, which can considerably belittle 
the transit significance of the two countries in 
terms of the transportation of energy resources 
to Europe. Nevertheless, for Lukashenka it is the 
level of the presidential relationship with Warsaw 
that, however, has not matured yet. 
The ongoing dialogue of Minsk with the European 
Union, that enabled the head of the MFA of Belarus 
Sergej Martinov to pay regular visits to Brussels 
and other European capitals, is far from making 
him abstain from such public statements as, for 
example, “we don’t even discuss the possibility of 
becoming member of the EU”. Even greater anxiety 
arose in Europe, not in all its parts though, when 
S. Martinov and A. Lukashenka himself started 
claiming that Belarus would itself decide concern-
ing the participation of Belarus in the initiative’s 
programmes wherein the regime would find it 
advantageous to participate. No need to discuss 
here the principles of common values that should 
form the basis of mutual cooperation. 
Thereby the statements of A. Lukashenka made 
during his meeting with the Minister of Foreign 
Affairs of Estonia Urmas Paet in Minsk regard-
ing the Ukraine and Belarus forming a big part of 
Europe “that we would not let anybody push out” 
may be interpreted as a sign of aggression that is 
alien to Europe.
There are reasons to assume that in case of further 
extension of the suspension of sanctions of the 
European Union for Belarus and its participation 
in the EU organized Eastern Partnership Initiative 
additional difficulties might ensue. It is not clear to 
what extent the initiative might influence the whole 
eastern strategy of the EU. However, since Minsk 
overtly ignores the value component of the given 
partnership, it becomes increasingly difficult for 
Brussels to proceed further, even having in mind 
its tolerance. Not less complex will be for the 
neighbouring countries of Belarus to overcome the 
fatigue resulting from the present dialogue with 
A. Lukashenka. Nevertheless, Vilnius, Warsaw and 
Kiev continue to expect positive changes in Minsk 
as well as hope for the possibilities to coordinate 
and develop cooperation in the bilateral relations 
(within the nascent format of quadro-group of 
Lithuania, Poland, the Ukraine and Belarus) and 
within the framework of the Eastern Partnership. 
The most important thing, certainly, is not to 
confuse expectations and illusions.
TO CONTRIBUTE TO THE NEXT ISSUE OF “BELL”, PLEASE CONTACT:
Julija Narkeviciute
Phone: +37067805634 
Fax: +37052736953
E-mail: julija.narkeviciute@eesc.lt
EASTERN EUROPE STUDIES CENTRE 
Nordic Council of Ministers
Not less complex 
will be for the 
neighbouring 
countries of Belarus 
to overcome the 
fatigue resulting from 
the present dialogue 
with A. Lukashenka.


Electronic Newsletter "Bell" No. 10 (10)

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Sustainable development indicators in Hungary