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Russian War Games in the Baltics, Chinese Deal for Ukraine Farmland

Plus, Kosovo’s foreign minister accuses Serbian nationalists of killing a EULEX officer and Armenia convicts a former presidential candidate of shooting a rival.

by Ioana Caloianu, Ky Krauthamer, and Alexander Silady 24 September 2013

1. Chinese ink deal for huge swath of Ukrainian farmland


The government of China has agreed to a 50-year lease of Ukrainian farmland that will eventually make Ukraine the largest foreign producer of crops for Chinese companies, Radio Free Europe reports.


The initial deal for the lease of 100,000 hectares of land in the eastern Dnipropetrovsk region will eventually be expanded to 3 million hectares – 5 percent of the total area of Europe’s second largest country.


At a reported value of $2.6 billion, the deal between Xingjiang Production and Construction Corps (XPCC) and KSG Agro of Ukraine would be the largest lease or purchase of foreign land by a Chinese partner, the South China Morning Post reports.


XPCC is a government group formerly tasked with defending China's border against Soviet encroachment, but that now manages agricultural projects, according to the International Business Times.The first 100,000 hectares will primarily be used for cereal grain and pig farming by two Chinese government-owned conglomerates.


The Ukrainian government is insistent that the deal is a lease and not a purchase, because under Ukrainian law land cannot be sold to non-Ukrainian investors.


With one-fifth of the world’s people but just one-ninth of the available farmland, China is increasingly looking to foreign fields to raise food for shipment back home, RFE writes. China has invested heavily in agriculture in Argentina and Brazil, among other countries.


ukraine field


2. Baltic states exercised over Russian-Belarusian military training


A long-delayed border agreement between Russia and Estonia could become law soon following the Russian government’s approval of a border treaty, Estonian Public Broadcasting reports.


Negotiations on the treaty had been frozen since 2005, according to the broadcaster. Bilateral relations have been strained at times over such issues as the rights of Estonia’s numerous Russian minority and the relocation of a Soviet war memorial in Tallinn.


The Estonian government approved the draft in May, and it must still be signed by the foreign ministers and ratified by the parliaments of both countries.


The border rectification will also erase the “Saatse Boot,” a tiny, boot-shaped piece of Russian territory that juts into Estonia. The 115-hectare (284-acre) chunk of abandoned farmland will become Estonian territory in exchange for a similarly sized piece of land elsewhere on the border.




The welcome news from Moscow apparently did not divert Estonian officials from joining their Baltic neighbors to voice concern over joint Russian-Belarusian military exercises near the Lithuanian and Polish borders.


The “Zapad 2013” (West 2013) training exercises began last week and are scheduled to continue until 26 September in Russia’s Kaliningrad exclave and in the Baltic Sea. About 12,000 Russian troops are taking part.


The deputy chief of the Estonian general staff, Lieutenant Colonel Eero Rebo, said Estonia was consulting with NATO and its Baltic partners over the exercises.


Rebo said Moscow’s description of Zapad 2013 as a counter-terrorism exercise could "not be taken seriously," because the types of weapons and tactics being tested, including tanks, missiles, and amphibious landings, were not likely to be employed against terrorist threats.


Personnel from Russia’s partners in the Collective Security Treaty Organization are taking part in the annual western military training for the first time, analyst Siarhei Bohdan writes in Belarus Digest.


Leaders of the half-dozen former Soviet states that make up the CSTO held their annual summit 23 September in Sochi, Russia.


3. Kosovo wants more Serbian cooperation on killing of EU officer


Kosovo’s foreign minister is pressing Serbia for greater cooperation in solving last week’s killing of an EU law enforcement officer in northern Kosovo.


In an interview with The Wall Street Journal, Enver Hoxhaj said 22 September the attack on a convoy of police vehicles in which a Lithuanian customs officer died appeared to be “carefully planned” and blamed it on Serbian extremists in the Serb-dominated north of the country.


“Whoever wants to get deep clarity of what’s happened can get that clarity only in close cooperation with Serbia,” Hoxhaj said. “Serbia has the exact information and a full picture about the people, about organized crime structures in the north, about the motives of these people.”


EU officials and their Serbian counterparts said last week the attack probably was designed to disrupt confidence-building talks between Pristina and Belgrade, EUobserver reports.


"We have a strong feeling that this attack was directed against the normalization that we are trying to facilitate in Kosovo and in north Kosovo,” the EU Special Representative in Kosovo Samuel Zbogar said.


Serbia and Kosovo agreed on a plan for governance in northern Kosovo in April, allowing for autonomy but dismantling institutions that had been sponsored by Belgrade.


Many ethnic Serbs in the north are unhappy at the prospect of losing their status as a de facto Serbian protectorate. The area is also rife with violent smuggling gangs, EUobserver notes.

4. Former Armenian presidential candidate jailed for attack on rival


A former Armenian presidential candidate has been sentenced to 14 years in prison for wounding a rival candidate in the February election, Radio Free Europe writes. Vardan Sedrakian received the sentence on 23 September for plotting an attack on the head of Armenia's non-parliamentary National Self-Determination Union, Paruyr Hayrikyan, on 31 January.


The incident had little effect on the election, won easily by incumbent Serzh Sargsyan. Asbarez Armenian News writes that neither Hayrikyan nor Sedrakian could get more than around 1 percent of the vote.


Two other men, Khachatur Poghosian and Samvel Harutiunian, allegedly hired by Sedrakian, received 14- and 12-year sentences respectively for their involvement in the shooting.


Hayrikyan had to be hospitalized after being shot in the collarbone but returned to the campaign trail less than a week later.


Although Sedrakian proclaimed his innocence throughout the trial, Poghosian confessed that he had been hired by Harutiunian to intimidate, but not to kill Hayrikyan, Asbarez writes.


Sedrakian argued that the prosecution failed to explain his motives for eliminating an election rival and said the other two suspects withdrew their incriminating pretrial testimony against him during the hearings.


Hayrikyan said he believed Sedrakian acted as a middleman for the plot’s as yet unidentified true mastermind.


5. More bad economic news for EU rookie Croatia


There was more bad economic news for Croatia last week as the Fitch ratings agency cut the country’s credit rating to junk status, following similar cuts by Standard & Poor’s and Moody’s, according to Business New Europe.


A weak outlook for economic growth is interfering with prospects for cutting the country’s public debt to a more sustainable level, Fitch said, adding, "Measures to clamp down on tax evasion and improve compliance have borne fruit, but revenues have fallen this year, whilst pressures continue to build on the expenditure side."


The ratings cut adds to the blow delivered by the latest official economic figures earlier this month, showing a seventh consecutive quarter of contraction on the back of falling investment and personal consumption, Bloomberg reports.


The Croatian economy has declined by more than 10 percent since 2008 and foreign direct investment shrank by 80 percent over the same period.


Fitch also cut its ratings for Croatian long-term foreign and local-currency debt, according to Business New Europe.


The agency now ranks Croatian credit on a par with the limping Portuguese and Hungarian economies, Business New Europe writes.


Ky Krauthamer is a senior editor at TOL. Ioana Caloianu is a TOL editorial assistant. Alexander Silady is a TOL editorial intern.
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