Russia



Russia 111130Basic Political DevelopmentsRussia condemns Iran’s attack on UK Embassy - The Russian Foreign Ministry has described the protesters’ attack against the British embassy in Iran as “unacceptable and deserving condemnation.” Russia is “expressing support for the British diplomats,” the ministry said in a statement, adding that the Iranian authorities should take necessary measures to immediately restore order and investigate the incident.Moscow slams NATO power games in Kosovo - Violence could have been prevented, the diplomat said during a Security Council meeting devoted to the Kosovo settlement, if “KFOR focused on providing security of the region’s residents, as stipulated in their mandate, rather than on eliminating Serbian barricades, which are a response to Pristina’s attempts to take under control the administrative border with Serbia.”[Churkin]North-Korea Stream moves ahead - Russian Ministry of Foreign Affairs envoy Aleksandr Timonin, representing Russia at the trilateral talks, told Kommersant that working groups would meet before the end of this year, the agreement would be signed in spring 2012, and the gas would start flowing by 2017, with 10-12bn cubic meters delivered annually.On the implementation of trilateral projects of Russia, DPRK and South Korea, the Russian Foreign Ministry Ambassador at Large Alexander Timonin, who oversees this area, told Alexander GABUEV, correspondent of "b". [Link to interview in Russian]Russia wants political processes in S. Ossetia to continue within realm of law - Foreign Ministry (Part 2)US involved in murder of Russian peacekeepers in S Ossetia - "The USA was directly involved in the murder of Russian peacekeepers, servicemen and citizens in South Ossetia," Nazarov stressed, "we have concrete proofs."McFaul confirmed as Russia ambassador - The Senate’s Foreign Relations Committee has confirmed Michael McFaul as the US Ambassador to Russia.Just in case? Russian fleet to reach Syria in December - The long-planned mission will begin on December 10 and one source in the Russian Defense Ministry has told Itar-Tass news agency that the ships will arrive at the port by the end of December. Meanwhile, other military sources told Ria Novosti news agency that the group will only carry out drill in the Mediterranean and in the Atlantic without entering Tartus and, in any case, the Admiral Kuznetsov is too large to be able to dock there.General: Russia to send northern fleet warships to SyriaRF expects clear signal from NATO to continue ABM talks - Russia expects a clear political signal from NATO states to continue missile defence negotiations , there are some chances to come to terms, Deputy Director of the pan-European cooperation department of the Foreign Ministry Yuri Gorlach said at the Moscow international conference devoted to the Euro-Atlantic security architecture on Wednesday.NATO general to discuss missile defense in Moscow - “General Bornemann will meet with Col. Gen. Valery Gerasimov, deputy chief of the Russian General Staff, to discuss the status of NATO-Russia military cooperation and the situation around the planned deployment of the European missile shield,” the Russian Defense Ministry said in a statement on Tuesday.NATO needs new approaches in relations with RF - NATO needs new approaches and ideas towards its relationship with Russia, head of the NATO Information Office in Moscow Robert Pszcel said at an international conference on Wednesday.Russia calls for broader donor support to Palestine, diversification of bilateral cooperation - Russia calls for broader donations to Palestine and diversification of bilateral cooperation, Director of the Foreign Ministry Middle East and North Africa Department Sergei Vershinin said at a ceremony, which marked the Day of Solidarity with the People of Palestine on Tuesday.Matviyenko to travel to Ukraine Wed to discuss ccop'n prospects - Immediately upon atriving at the airport, Matviyenko will go to meet with President Viktor Yanukovich. The program also provides for talks with Verkhovna Rada Speaker Vladimir Litvin and Prime Minister Nikolai Azarov.Russia to share military technology with CubaRussia to help Cuba with production of rifle ammunition - According to a source in the Russian Ministry of Industry and Trade, cited by Kommersant, an assembly line for 7.62-mm rounds used in Kalashnikov assault rifles and other Russian-made rifles will be built at Cuba’s Comandante Ernesto Che Guevara military plant.Russia denies allegations over Indian T-90 tank contract - “The Russian side is timely and completely fulfilling all agreements with India on the licensed production of T-90 tanks, including the delivery of all necessary components and the transfer of technical documentation,” the source said on Tuesday.Medvedev makes entry in Twitter about radar commissioningDiesel sub to join Vladivostok-based submarine force - The Ust-Kamchatsk is the first submarine from among a submarine squadron that will arrive at the PF main base within the scope of reforming of submarine forces in Vladivostok and the Kamchatka Peninsula.DM public procurement system to be more transparent - The pricing and public procurement system at the Russian Defence Ministry will become more transparent from year to year, First Deputy Prime Minister Igor Shuvalov said at a meeting with the workers of the Dalpribor plant in Vladivostok on Wednesday.Phobos failure mirrors problems in space industry – cosmonautAzerbaijani MPs to observe elections in RussiaLugovoy found injured party in Litvinenko murder caseInvestigators proved Lugovoy got poisoned with poloniumPolice open case into attempted murder of Lugovoi - sourceSwine-Fever Outbreaks Found in 2 Regions, Russian Watchdog SaysAssociation of Russian fans to defend fans’ rights with all available means - The national association of football fans is going to defend the rights of football fans within the framework of the existing legislation with all available means.PRESS DIGEST - Russia - Nov 30vedomosti.ruMosmetrostroi, a company controlled by Russia's richest state official Vladimir Kogan, has won more than a 30 percent share in a 258 billion rouble ($8.26 billion) project from Moscow city authorities to expand the metro network by 2014.The leader of the political party "Patriots of Russia" Gennady Semigin says in an interview ahead of parliamentary elections on Sunday that his party relies on medium-sized businesses who do not "look towards the West".kommersant.ruLeaders of some opposition parties were warned by Moscow police against carryingout illegal demonstrations on Dec. 4, when Russia holds its parliamentary elections, the daily says, adding that only pro-Kremlin movements have received permission to hold rallies in the capital.Russia is introducing new diplomatic positions at its embassies abroad which will be aimed at attracting foreign scientists and useful technologies for the modernisation of Russia's economy.Almost 51,500 police and security officials will be on duty during the Dec. 4 parliamentary elections.ng.ruVladimir Putin's election programme for the presidential election will be presented in January and will differ from United Russia's because he seems to be unhappy with the success of the ruling party, the daily says.rg.ruA group of lawmakers have asked prosecutors to check the legality of independent election observer Golos' activities, which they say may interfere in the parliamentary election campaign and attempt to influence the results of the voting on Dec. 4.rbcdaily.ruRussia's Lukoil is apparently in talks with U.S. major ExxonMobil on buying its share in the Western Qurna-1 project to become Shells' partner in the development of the Iranian oilfield.Geotech Oil Services Holding, co-owned by oil trader Gennady Timchenko, is about to closing a deal on a merger with two oilfield services giants Integra and Schumberger, head of Geotech Nikolai Levitsky says in an interview.mk.ruSophie Loren's purse, which was presented to the governor of Russia's Kusbass coal mining region Aman Tuleev in October is said to have been sold at a local charity auction for 7 million roubles, the daily says, adding the money will be spent on medical supplies for local children.Russian Press at a Glance, Wednesday, November 30, 2011Which path will Russia take after the 2012 election? – Yevgeny Shestakov is editor of the international desk at Rossiyskaya Gazeta.Russia's silent election campaign – by Grigorii GolosovPutin's next marquee moment: Russia's presidency - By Fred WeirRussia sees Europe as a “patient” – by Evgeny ShestakovThe great game is to avoid war in Iran - No other sphere of Russia’s foreign policy is subject to such wide-ranging scrutiny as Moscow’s policy towards Iran. Conservative American analysts in think-tanks such as the Heritage Foundation often view Russia as a tacit ally of Iran, turning a blind eye to its dangerous nuclear programme and ignoring the Iranian regime’s aggressive form of Islamist fundamentalism. By Dmitry BabichIskanders are not on Transdniester’s horizon - Moscow has not responded to Tiraspol’s call to deploy missile defense systems in the region, similar to those of the US. By Svetlana Gamova A Very Scary Movie - Russian Premiere of a New Documentary Highlights Continued Sensitivity Over the Khodorkovsky Affair Khodorkovsky: A Movie Review And Interview With The FilmmakerReporter Says RusAl Behind Visa Loss - An Australian-American journalist and self-declared doyen of the country’s foreign press corps has been barred entry into Russia in what he says is revenge from Oleg Deripaska’s RusAl for his "aggressive reporting" on the aluminum giant.Eurasia or EuRussia? – by ZAUR SHIRIYEV, Today’s Zaman“Lenders of Last Resort”: Sino-Russian Rivalry in Belarus? - Iacob Koch-Weser, contributing writerNational Economic TrendsReport Sees Economic Crime Decline Sharp drop in economic crime in Russia, says surveyNabiullina upgrades 2011 GDP growth projections from 4.1% to 4.2%Growth must be green - Russia could create millions of jobs by investing in clean-energy technology and insulating buildings.The head of the United Nations Industrial Development Organisation (Unido) gives Russia some tips on sustainability. Business, Energy or Environmental regulations or discussionsTelecoms Posting Monthly Gain as Futures Rise: Russia OvernightUPDATE 1-Sberbank's Q3 net profit $2.55 bln, beats forecastSberbank May Buy Lukoil’s Swiss Banking Unit, Kommersant SaysVTB Capital Said to Hire Credit Suisse Bankers for MENA EquitiesRaiffeisen Russia’s Monin Says Funds at Parent May Rise: VoicesRostelecom reiterates London listing plans Severstal to spin off gold producing unit UPDATE 2-Severstal to spin off gold unit, eyes IPOSeverstal: Spin-off of gold assets in the offingCEDC Says Welcomes Russian Standard Buying Stake in CompanyThis Russian Business Isn’t Up to Standard - This isn’t a rumor about a Russian billionaire buying a piece of Central European Distribution (CEDC), but an actual filing with the Securities & Exchange Commission.MRSK Holding gears up for additional share offering Rusal, RusHydro draft 10-year electricity contracts for KhakassiaRussian tycoon seeks $2 bln loan to buy Freight One-sourcesDeripaska files suit against Potanin in Swiss court Activity in the Oil and Gas sector (including regulatory)Med Crude-Urals strong as Shell, Total win tendersSlavneftegaz to Build $1.9 Billion Oil Refinery, Kommersant SaysLukoil seeks foray into another Iraqi oil project Lukoil, Shell May Buy Exxon Stake in West Qurna-1, RBC ReportsLukoil: Eyeing part of ExxonMobil's share in Iraqi West Qurna-1 projectLukoil 'oil strike' in Timan-Pechora - Russian giant Lukoil has reportedly made a major oil discovery in Komi republic in the Timan-Pechora region. 'Trans-Caspian pipeline not to be realized until Russia, Iran stop resistance' - News.Az interviews Andreas Heinrich, a researcher at the University of Bremen's Centre for East European Studies.Gas in Russia More Costly Than in U.S. - Russian industrial users will pay about $2.84 per million British thermal units for?gas this year, according to?Bloomberg calculations based on?Gazprom data. That compares with $2.83 per million Btu for?the next-day contract at?Henry Hub in?Louisiana, the?U.S. benchmark.GazpromThe local JV partner in Russia's South Stream project claims that the gas pipeline is definitely set to cross SloveniaGazprom’s new Arctic oil rig arrived to MurmanskLOANS: Gazprom signs US$800m clubEstonia Needs to Nationalize Gazprom-Owned Gas Grid, Report SaysGazprom delegation arrives in Sri Lanka to look at gas field development possibilitiesGazprom Alert: Russia-Belarus Gas Deal - Citi------------------------------------------------------------------------------------------Full Text ArticlesBasic Political DevelopmentsRT News line, November 30Russia condemns Iran’s attack on UK Embassy Russian Foreign Ministry has described the protesters’ attack against the British embassy in Iran as “unacceptable and deserving condemnation.” Russia is “expressing support for the British diplomats,” the ministry said in a statement, adding that the Iranian authorities should take necessary measures to immediately restore order and investigate the incident. Students storming the embassy have breached the commonly accepted principles that guarantee immunity for the territory and property of diplomatic missions, the ministry stressed.Moscow slams NATO power games in Kosovo: 30 November, 2011, 12:30Edited: 30 November, 2011, 12:30 Russia is concerned with the exacerbation of the situation in northern Kosovo, where NATO forces are pursuing their power politics targeted against Serbs, Russian envoy to the UN Vitaly Churkin is convinced.Violence could have been prevented, the diplomat said during a Security Council meeting devoted to the Kosovo settlement, if “KFOR focused on providing security of the region’s residents, as stipulated in their mandate, rather than on eliminating Serbian barricades, which are a response to Pristina’s attempts to take under control the administrative border with Serbia.”The Russian diplomat also said that Moscow has supported Serbian government’s appeal to the UN secretary-general to thoroughly investigate an incident on September 27, when KFOR resorted to force, leading to a number of civilian casualties. Russia also insists on full and objective probe into cases of human organ trafficking revealed by member of the Parliamentary Assembly of the Council of Europe Dick Marty.The process of the return to Kosovo of displaced people, most of whom are Serbs, is unsatisfactory, Vitaly Churkin went on to say. And one of the main reasons for this is that those people are not confident of their security. In addition, “incidents of looting and theft of Kosovo Serbs’ property remain unpunished.”He also demanded that all necessary measures be taken for the defense of Orthodox shrines and believers. “The UN mission to Kosovo should play a most active role in Kosovo settlement,” the Russian envoy to the UN stressed.On November 29, at least two Kosovan Serbs and two NATO peacekeepers were injured in a fresh wave of violence near the town of Zubin Potok in the north of Kosovo. Serbs were protesting NATO’s attempts to remove a barricade made of buses and trucks that was blocking a main road in the region. NATO responded by firing rubber bullets, tear gas and water cannons at the demonstrators. Churkin called the incident “outrageous.”North-Korea Stream moves ahead 30, 2011Russia to sign agreeement on gas pipeline to South Korea transiting North Korea spring 2012. According to business daily Kommersant, the signing of an agreement on a 700km gas pipeline transiting North Korea to supply natural gas from Russia to South Korea is slated for spring 2012. No gas will be supplied to North Korea under the agreement.Russian Ministry of Foreign Affairs envoy Aleksandr Timonin, representing Russia at the trilateral talks, told Kommersant that working groups would meet before the end of this year, the agreement would be signed in spring 2012, and the gas would start flowing by 2017, with 10-12bn cubic meters delivered annually.According to Timonin, the three sides have clarified the last remaining major issues: North Korea will not receive gas from the pipeline, which will be built by Gazprom but on the territory of North Korea using North Korean labour. North Korea has no demand for natural gas, according to Kommersant sources. Gazprom will hold a long-term lease for the land under the gas pipeline, the same format as used in Europe.But according to analysts, one key issue is not yet clear: will South Korea pay for gas at the Russian-Korean border or at the Korean-Korean border. In the latter case, Russia would bear the risk of transit stoppage a la Ukraine.According to the Korean side, natural gas piped from Russia will be cheaper than liquefied natural gas (LNG). The cost of the pipeline construction is put at 7 bn euros, the same cost as the Baltic seabed pipeline Nordstream.Experts note that the payment of transit fees to the breadbasket economy of North Korea will give Russia important leverage over the strategically important rogue state, and a thus a Russian bargaining chip in dealings with Western and Asian partners.Russian presidential envoy to the Far Eastern Federal District Victor Ishayev said on November 17 that North Korea could earn around $100m in transit fees annually from the pileline. "For a country that produces overall barely $10bn worth of gross product per year, that is a lot of money,” Ishaev said,‘Implementing the project could potentially help Gazprom to diversify its natural gas exports,’ write VTB Capital analysts. “However, in addition to capex surging, the issue contains significant political risks for the company, despite the guarantees provided by the North Korean government.” In an interview with Kommersant, Timonin said the project could contribute to stabilization of relations between North and South Korea. He added that Russia is pursing the idea of constructing a Transkorean railway link and also supplying electric power to South Korea via North Korea.Газета "Коммерсантъ", №224 (4765), 30.11.2011"The guarantee will be Pyongyang and Seoul’s interest in the success of the project"On the implementation of trilateral projects of Russia, DPRK and South Korea, the Russian Foreign Ministry Ambassador at Large Alexander Timonin, who oversees this area, told the correspondent of the "b" Alexander told GABUEV.November 30, 2011 11:44Russia wants political processes in S. Ossetia to continue within realm of law - Foreign Ministry (Part 2). Nov 30 (Interfax) - Moscow wants all political processes in South Ossetia to continue within the realm of law."Moscow has been closely following the situation in the friendly neighboring state [following the run-off elections] and wants the situation in this young republic to remain peaceful and stable, and political processes to continue exclusively within the realm of law," the Russian Foreign Ministry said in a statement on Wednesday."If this is to happen, all political forces must respect the decisions made by the supreme bodies of authority in compliance with the law," the Russian Foreign Ministry said.Run-off elections were held in South Ossetia on November 27. After hearing a complaint against serious abuses committed by supporters of one of the presidential candidates, South Ossetia's Supreme Court declared the elections invalid. The parliament called repeat elections which will take place on March 25, 2012, it said.sd jv(Our editorial staff can be reached at eng.editors@interfax.ru)12:04?30/11/2011ALL NEWSUS involved in murder of Russian peacekeepers in S Ossetia , November 30 (Itar-Tass) — Deputy Secretary of Russia's Security Council Vladimir Nazarov said Russia has concrete proofs that the USA was involved in the murder of Russian peacekeepers, servicemen and citizens in South Ossetia. Nazarov said so at the international conference in Moscow on Euroatlantic security architecture on Wednesday."The USA was directly involved in the murder of Russian peacekeepers, servicemen and citizens in South Ossetia," Nazarov stressed, "we have concrete proofs.""We'd like to remind our NATO partners about the role the alliance played in arming the Saakashvili regime, pushing it towards that war, and dragging Georgia in NATO in 2007 in 2008 ," the deputy Security Council secretary underlined.McFaul confirmed as Russia ambassador 30, 2011 11:56 Moscow TimeThe Senate’s Foreign Relations Committee has confirmed Michael McFaul as the US Ambassador to Russia.Reports that McFaul would succeed John Beyrle as Russia ambassador were published in May.President Obama made an official statement to this effect in September.Prior to his appointment, McFaul worked for the US National Security Council as Special Assistant to the President and Senior Director of Russian and Eurasian Affairs.MayakJust in case? Russian fleet to reach Syria in December: 30 November, 2011, 01:09Edited: 30 November, 2011, 02:04 Speculation is growing whether Russian war ships heading to the Mediterranean will indeed anchor by the Syrian coast. And, despite military officials’ assurances, some expect it to disturb the balance of power in the region.Conflicting reports are coming from the Russian military on whether the Russian battle group of three vessels led by the Admiral Kuznetsov aircraft carrier will in fact visit the Syrian port of Tartus. The long-planned mission will begin on December 10 and one source in the Russian Defense Ministry has told Itar-Tass news agency that the ships will arrive at the port by the end of December. Meanwhile, other military sources told Ria Novosti news agency that the group will only carry out drill in the Mediterranean and in the Atlantic without entering Tartus and, in any case, the Admiral Kuznetsov is too large to be able to dock there.The naval base in the Syrian port of Tartus is operated by the Russian military under an agreement signed in 1971 between Syria and the Soviet Union.Nikolay Makarov of the Russian Army General Staff said that the decision to send a group of Russian Navy warships to the Mediterranean Sea was due to “obligations before its Western colleagues” and the exercises were planned long before the tensions in Syria became so high.When asked whether the squadron of ships will approach the Syrian coast, Makarov evaded the question, saying that the Russian Navy has "a planned number of exercises which have nothing to do with Syria." The minister plenipotentiary at the Syrian embassy to Russia, Suleiman Abudiab, has also said that “one should not link the Russian warships' plans to call at Tartus with the current situation in Syria,” as cited by Interfax news agency. He added, however, that Russia is a friend of Syria and its ships can visit Syrian ports any time “for repair and other reasons.”Both Russian and Syrian officials are stressing that all drills and flights are planned to be performed in open waters, away from the Syrian coast.Nevertheless, with the international pressure on Syria growing and the US 6th Fleet patrolling the area at the moment, a neutral force not far from the troubled country’s coast might calm some nerves.There’s no speech about preventing a direct military intervention in Syria with the assistance of Russia’s or anyone else’s forces, Suleiman Abudiab stressed.“I think clever people understand that no one needs to light a fire in the Middle East," he pointed out.General: Russia to send northern fleet warships to Syria 29, 2011, 19:29 GMT Moscow - Russia will send warships from its Arctic Sea fleet for naval manoeuvres off the coast of Syria, a senior general told the Interfax news agency on Tuesday. 'This is regularly scheduled training,' said Nikolai Makarov, head of the Russian general staff. 'We are not sending the ships directly to Syria per se.' The aircraft carrier Admiral Kuznetsov will be the centre of a battle group scheduled to depart Russian Artic Ocean ports in December for the eastern Mediterranean, he said. The crew of the Kuznetsov and other ships in the support flotilla spent much of November in local manoeuvres including practice air strikes, live missile launches and navigation, ahead of the voyage, the report said. The flotilla's sailors will make a port call in the Syrian city of Tartus, Interfax said. Moscow reportedly began renovations of naval installations in the port in 2009. Russia's Izvestiya newspaper, which historically has had close links to the Kremlin, wrote Tuesday, 'The military says that the transfer of the Kuznetsov to Syria is not in any way connected with the military-strategic situation in the region. But experts are sure that the Russian warships will prevent military conflict.' Senior Russian officials have repeatedly spoken out against calls by western nations for an international military intervention against the regime of Syrian President Bashar al-Assad. Russia will not allow an international coalition to force a regime change in Syria, as was recently the case in Libya, they have said. 12:54?30/11/2011ALL NEWSRF expects clear signal from NATO to continue ABM talks, November 30 (Itar-Tass) —— Russia expects a clear political signal from NATO states to continue missile defence negotiations , there are some chances to come to terms, Deputy Director of the pan-European cooperation department of the Foreign Ministry Yuri Gorlach said at the Moscow international conference devoted to the Euro-Atlantic security architecture on Wednesday.“In the current situation we want to have a clear political signal from our partners and the leadership of NATO states so that the work of experts will already meet political instructions of these countries,” he noted.“Our common task is to create a common indivisible system to cover all countries along the external perimeter,” Gorlach pointed out.“Russia does not shut the doors to continue the dialogue. There are some chances to do it,” the Russian diplomatic official said.NATO general to discuss missile defense in Moscow 30/11/2011MOSCOW, November 30 (RIA Novosti)Lt. Gen. Jurgen Bornemann, the Director General of the International Military Staff of NATO, will arrive on Wednesday in Moscow to discuss military cooperation with Russia and the European missile shield.“General Bornemann will meet with Col. Gen. Valery Gerasimov, deputy chief of the Russian General Staff, to discuss the status of NATO-Russia military cooperation and the situation around the planned deployment of the European missile shield,” the Russian Defense Ministry said in a statement on Tuesday.Russia and NATO tentatively agreed to cooperate on the European missile defense network at the Lisbon Summit in November 2010 but differences in approaches toward the project led to a deadlock in negotiations.The Kremlin says the deployment of U.S. interceptor missiles and radars in Europe is a potential threat to the Russian nuclear arsenal, while Washington is trying to convince Moscow that the European missile shield poses no threat to Russia, as it is needed solely to protect against attack from "rogue states" such as Iran.Russia is seeking written, legally binding guarantees that the missile shield will not be directed against it. However, Washington has refused to provide those guarantees to Moscow and said it will not alter its missile defense plans despite increasingly tough rhetoric from Moscow.A new early warning radar capable of monitoring missile launches from Europe and the North Atlantic, was put in service in the Russian Baltic Sea exclave of Kaliningrad on Tuesday as part of Russia’s response to the European missile shield plans.Russia may also deploy Iskander tactical missiles close to its borders with NATO countries in the near future.12:33?30/11/2011ALL NEWSNATO needs new approaches in relations with RF, November 30 (Itar-Tass) — NATO needs new approaches and ideas towards its relationship with Russia, head of the NATO Information Office in Moscow Robert Pszcel said at an international conference on Wednesday.“Of course, today we need new approaches and new ideas to develop further dialogue,” Pszcel said.The international conference is devoted to European security architecture.23:18?29/11/2011ALL NEWSRussia calls for broader donor support to Palestine, diversification of bilateral cooperation, November 29 (Itar-Tass) —— Russia calls for broader donations to Palestine and diversification of bilateral cooperation, Director of the Foreign Ministry Middle East and North Africa Department Sergei Vershinin said at a ceremony, which marked the Day of Solidarity with the People of Palestine on Tuesday.“We unwaveringly support broader donor assistance to Palestine and support this policy with practical deeds,” the diplomat said. “Russia sends humanitarian aid to people on the West Bank and in Gaza. Last year we made another transfer of $10 million. This August the Russian government decided to provide targeted financial aid to the Palestinian National Authority (PNA) of 15.5 million rubles.”“We do not forget about other appeals of the PNA either,” Vershinin said. “For instance, we are considering the possibility of funding the construction of a secondary school in Bethlehem.”“We will continue to assist the PNA in the training of national personnel at Russian higher educational establishments on scholarship basis. More than 500 Palestinian citizens are being trained in technical, humanitarian and medical professions, most of them at the expense of the Russian budget. We are confident that these graduates will be in demand as public officers and other professionals in Palestine,” he said.“Russia is working on diversification of bilateral cooperation,” he said. “Together with Palestinian friends, we are broadening trade, develop tourism and promote investment projects.”Vershinin expressed his gratitude to the Palestinian authorities for assistance to the restoration and broadening of the Russian historical presence on the Holy Land. “The opening of the park museum in Jericho is an illustrative example to that. I am confident that the forming Russian Center of Science and Culture in Bethlehem will make a worthy contribution to these efforts,” he said.01:28?30/11/2011ALL NEWSMatviyenko to travel to Ukraine Wed to discuss ccop'n prospects, November 30 (Itar-Tass) — Valentina Matviyenko, Speaker of the Federation Council (FC) upper house of the Russian parliament, travels to Ukraine on Wednesday for a two-day official visit to discuss prospects for the development of bilateral cooperation, including regional contacts.Immediately upon atriving at the airport, Matviyenko will go to meet with President Viktor Yanukovich. The program also provides for talks with Verkhovna Rada Speaker Vladimir Litvin and Prime Minister Nikolai Azarov.The main subject of discussion during talks with Litvin is expected to be a search for ways to give greater scope to interparliamentary cooperation both with a view to invigorating the dialogue between Moscow and Kiev and within the context of efforts to step up integrational processes in the post-Soviet space.When speaking of the importance of this area of Russia-Ukraine interaction during a meeting with Vladimir Yelchenko, Ukraine's Ambassador to the Russian Federation (RF), Matviyenko pointed out such a task which is of current importance as "bringing closer together and synchronizing legislations".Her opinion is that the lawmakers of Russia and Ukraine must "create comfortable conditions for trade-and-economic, social and cultural cooperation between the two states". Later in the day the FC Speaker will visit the Russian science and culture center to socialize with members of artistic and scientific communities of Ukraine.On Thursday the FC Speaker will visit Zhitomir Region to meet with local authorities and businessmen. The FC as chamber representing regions traditionally devotes enhanced attention to the broadening of the RF regions' international contacts. Therefore, it is not ruled out that her conversations will also deal with possibilities to achieve new interregional accords and to determine interaction areas which generate mutual interest of Ukrainian and Russian businesses. The strengthening of interregional cooperation and particularly cross-border one accords with the "deep contacts, aspirations and interests of the Russian and Ukrainian peoples," the FC Speaker maintains.The Russian guest will be also offered a diverse cultural program, including familiarization with the House Museum of Academician Sergei Korolyov, the founder of practical cosmonautics, in Zhitomir and a tour of the literary memorial museum of famous poetess Lesya Ukrainka in the city of Novograd-Volynsky.Russia to share military technology with Cuba 30, 2011 10:30 Moscow TimeRussia will share munitions production technology with Cuba.According to the Russian Industry and Trade Ministry, Russia will supply a military facility not far from Havana with a line to produce cartridges for the Kalashnikov assault rifle.Russia hopes to get contracts for overhauling the entire cartridge production in Cuba.RBKRussia to help Cuba with production of rifle ammunition06:34 30/11/2011MOSCOW, November 30 (RIA Novosti)Russia and Cuba are planning to sign a contract on building an assembly line for production of ammunition for Kalashnikov assault rifles, Kommersant business daily reported on Wednesday.According to a source in the Russian Ministry of Industry and Trade, cited by Kommersant, an assembly line for 7.62-mm rounds used in Kalashnikov assault rifles and other Russian-made rifles will be built at Cuba’s Comandante Ernesto Che Guevara military plant.The source said that Russia’s arms exporter Rosoboronexport had already prepared a contract, which includes the license and technology transfer.The official did not specify the value of the contract but said Russia was hoping to receive a contract in the future on a complete overhaul of rifle ammunition production facilities in Cuba, which were built in 1970s-1980s with the help of Soviet specialists.A Rosoboronexport source has confirmed the planned contract with Cuba but refused to provide more details on the subject, Kommersant said.Although the Cuban leadership has repeatedly said it has no intention of resuming military cooperation with Russia after the surprise closure of the Russian electronic listening post in Lourdes in 2001, bilateral military ties seem to have been improving since 2008.Chief of the Russian General Staff Gen. Nikolai Makarov said during his visit to Cuba in 2009 that modernization of the Soviet-made military equipment and training of Cuban military personnel will be the focus of Russian-Cuban military cooperation in the future.Russia denies allegations over Indian T-90 tank contract 30/11/2011NEW DELHI, November 30 (RIA Novosti)Moscow is puzzled over Indian media rumors claiming that Russia refuses to fulfill a decade-old contract on licensed production of T-90S main battle tanks in India, a Russian defense industry source said.“The Russian side is timely and completely fulfilling all agreements with India on the licensed production of T-90 tanks, including the delivery of all necessary components and the transfer of technical documentation,” the source said on Tuesday.India’s Business Standard said on November 28 that the licensed production of T-90 tanks was “hamstrung by Moscow’s obstruction in transferring technology and the Russian-built assemblies needed even for the India-built tanks.”“It is difficult to say why these allegations have emerged,” the Russian source said, adding that all controversial issues on the arms contracts with India are promptly resolved by the Russian-Indian intergovernmental commission on military-technical cooperation.Russian diplomatic sources in India believe that the media rumors reflect the attempts by the Indian side to shift the responsibility for its own inability to manage the production of sophisticated military equipment.India ordered 310 T-90s in 2001 following delays in the manufacturing of the indigenous Arjun main battle tank and Pakistan's decision to purchase the T-80 from Ukraine. A contract was also signed for the licensed production of another 1,000 T-90s.Initial disagreements with Russia over transfer of technology were resolved at the end of 2008, according to official statements on both sides.Only 150 T-90S have been built so far at the Heavy Vehicle Factory (HVF) in Avadi, Chennai.According to other publications in the Indian media, a slow rate of production has been caused by the failure of some Indian sub-contractors to fulfill their obligations under the contract.03:28?30/11/2011ALL NEWSMedvedev makes entry in Twitter about radar commissioning, November 30 (Itar-Tass) — Russian President Dmitry Medvedev has made an entry in his microblog in the Twitter social network about the commissioning of the Voronezh-DM-class radar as part of the missile warning system in Kaliningrad Region. "The radar in Kaliningrad has been made operational," the entry reads.The radar went on duty earlier than planned on Tuesday following Medvedev's statement in connection with the situation concerning the US ABM system in Europe. The President also assigned the Defence Ministry to decide on the remaining outstanding matters relating to the functioning of this radar.Radars of this series are Russian-made factory-assembled over-the-horizon, long-range warning facilities. They feature a short deployment time at new location and a smaller crew compared with radars of previous generations, as well as redeployment opportunities in case of necessity.In addition, Voronezh-DM functions in decimal waveband, which provides for higher accuracy. Its energy consumption is lower by 40 percent, and it utilizes less equipment than previous models. The range of Voronezh-dm reaches 6,000 kilometers.At present, similar facilities are on experimental and combat duty in Armavir and the Leningrad region (village of Lekhtusi). In 2012, another Vornozeh-DM radar will be commissioned in the Irkutsk region.The Kaliningrad radar was built to improve the missile warning system in Russia's northeastern air/space direction and covers the western sector, which was monitored by the stations in Mukachyovo and Baranovichi in Soviet times.02:56?30/11/2011ALL NEWSDiesel sub to join Vladivostok-based submarine force, November 30 (Itar-Tass) — The diesel-powered submarine Ust-Kamchatsk joins the Vladivostok-based submarine force of Russia's Pacific Fleet (PF) on Wednesday. This submarine cruiser is to moor at the PF main base here on Wednesday after a long passage from the Large Command of Forces in Russia's north-east. The sub's permanent station will be in Ullis (Ulysses) Bay, the press service of the Eastern Military District reports.The Ust-Kamchatsk is the first submarine from among a submarine squadron that will arrive at the PF main base within the scope of reforming of submarine forces in Vladivostok and the Kamchatka Peninsula. The Kamchatka-based subnariners will be immediately provided with housing: the fleet command has seen to it that they will be given new apartments in the recently built houses in the area of Snegovoi (snowy) gully in Vladivostok, as well as tied accommodation near the submarines' permanent station in Ulysses Bay.09:49?30/11/2011ALL NEWSDM public procurement system to be more transparent, November 30 (Itar-Tass) — The pricing and public procurement system at the Russian Defence Ministry will become more transparent from year to year, First Deputy Prime Minister Igor Shuvalov said at a meeting with the workers of the Dalpribor plant in Vladivostok on Wednesday.“The ministry has to learn to buy, and manufacturers - to justify their prices. Money will not be transferred to the Defence Ministry for no reason, it will have to prove and show why it needs this or that amount. Nobody will be able to hide behind secrecy,” the first deputy prime minister said.“We have itemise in the country’s budget more than 3 trillion roubles for the state defence order and armaments modernisation program, representatives of other sectors - education, health – have even criticised the government for this,” said Shuvalov. “The president and prime minister have repeatedly emphasised that we have to deal with rearmament. The funds transfer has been started to the production facilities, but the process is complicated.”The Dalpribor plant specialises in the production of hydro-acoustic equipment. The state order for the Defence Ministry accounts for nearly 90 percent of all its orders. In addition, the company manufactures civilian products - LED technology. In the future it is planned to open the production of wind generators here.??November 30, 2011 10:23Phobos failure mirrors problems in space industry – cosmonaut. Nov 30 (Interfax-AVN) - A shortage of skilled personnel is one of the main problems facing the Russian space industry, said Russian cosmonaut, Hero of the Soviet Union Georgy Grechko."What is our main trouble? The [federal space agency] Roscosmos chief spoke about it recently, although it is an open secret for specialists: the staff employed are either over 60 or under 30. There is no intermediate age group," he told Interfax-AVN in a comment on the Russian space industry's failures in 2011."A generation was lost for the space industry, when it was struggling to survive," Grechko said."People, most of them young, energetic and talented, would seek higher earnings in other places. The space industry could not offer them any decent salary. Incidentally, even now salaries are not high enough in the space industry, and they are sometimes below the average federal or regional levels," he said.Concerning the failure of the Phobos-Grunt mission, he said, "We last launched such a sophisticated system some 25 years ago. Think what the 25 years mean for the space industry. A shift of generations occurred," Grechko said.No continuity was observed in the industry, he also said.At one point, the Soviet Union would launch spacecraft to Mars and Venus at a pace of one per two years. A more busy schedule is unfeasible, given the astronomical conditions and the mutual location of the planets and the Sun, he said. "Experience would be accumulated and know-how tested. But then a gap of 25 years followed. By the way, the United States, Europe and even India intensified the exploration of the planets and achieved impressive successes then. We are starting these interplanetary automatic missions virtually from scratch in terms of the modern technological level," Grechko said.sd jv(Our editorial staff can be reached at eng.editors@interfax.ru)Azerbaijani MPs to observe elections in Russia 30 November 2011 07:09 GMT | 8:09 Local TimeOn 4 December, elections will be held for the State Duma of the Federal Assembly of Russian Federation.A group of MPs of the Azerbaijani Parliament will visit Moscow and Saint Petersburg to observe the elections. Chairman of the Agrarian Policy Committee Eldar Ibrahimov and MP Azay Guliyev, will monitor elections from OSCE PA while MPs Sabir Hajiyev and Elkhan Suleymanov from the PACE. Other parliamentarians Elton Mammadov, Mirkazim Kazimov, Arastun Javadov and Rufat Guliyev will join the process from the Interparliamentary Assembly of CIS while Elmira Akhundova and Fuad Muradov, from the observation group of the CIS Executive Committee.The MPs will be present in constituencies and observe the process of elections.The visit will end on 5 December.Gun.Az11:33?30/11/2011ALL NEWSLugovoy found injured party in Litvinenko murder case November 30 (Itar-Tass) —— A State Duma deputy Andrei Lugovoy was found an injured party in the murder case of the former Federal Security Service officer Alexander Litvinenko in London and an attempted murder of Dmitry Kovtun, spokesman for the Investigative Committee Vladimir Markin told Itar-Tass on Wednesday.Meanwhile, Lugovoy refused to comment on the issue to Itar-Tass. “I leave it without any comments,” he said.British legal authorities accused a State Duma deputy Andrei Lugovoy of participation in Alexander Litvinenko’s poisoning in 2006.After the murder of the former FSB officer the Russian Prosecutor General’s Office launched an investigation in the murder case of Alexander Litvinenko and an attempted murder of Dmitry Kovtun. The Prosecutor General’s Office has conducted an investigation into the details of the murder of the former FSB officer that proved that “Litvinenko died of radioactive nuclide poisoning and Kovtun, who met with Litvinenko in London in October 2006, was found to have the disease caused by radioactive nuclide poisoning.”The criminal case was opened under Article 105 Part 2 for murder and Article 105 Part 2 and Article 30 Part 3 for an attempted murder of two and more people.Lugovoy was a witness in this criminal case.11:20?30/11/2011ALL NEWSInvestigators proved Lugovoy got poisoned with polonium, November 30 (Itar-Tass) —— The investigators proved that Andrei Lugovoy was poisoned with polonium during his communication with the former Federal Security Service officer Alexander Litvinenko in London, spokesman of the Investigative Committee Vladimir Markin told Itar-Tass on Wednesday.“The investigation proved a Russian citizen Andrei Lugovoy got poisoned with polonium-210 during his communication with Alexander Litvinenko in London in October-November 2006,” he said.Police open case into attempted murder of Lugovoi - source 30/11/2011MOSCOW, November 30 (RIA Novosti)Russian investigators have opened a criminal case into a murder attempt against Andrei Lugovoi, the former KGB bodyguard who was accused of poisoning Russian security service defector Alexander Litvinenko in 2006 in London, a police source said on Wednesday.“The decision about opening the case has been recently made,” the source said.No official comment is available. Lugovoi has declined to comment on the issue.Litvinenko, a former KGB officer and outspoken critic of then-president Vladimir Putin, died in November 2006 in a London hospital after being poisoned with the radioactive substance polonium-210.British investigators have until now accused Lugovoi of the murder and demanded his extradition, sparking a major diplomatic row between the two countries.Russia has rejected British requests to extradite Lugovoi, citing its Constitution, which does not permit the extradition of Russian nationals. The row led to a drastic deterioration in bilateral relations. Lugovoi has denied all the charges.Experts believe that Lugovoi, who gained immunity from prosecution after joining Russia's right-wing LDPR party, could have concocted the story about a murder attempt against him.“Any information about a murder attempt on a politician ahead of the polls inevitably benefits him politically,” Alexei Mukhin, the head of the Center for Political Information said. “I have no doubt that the information about his murder attempt and the case opened into it is a thoroughly planned PR campaign.”Swine-Fever Outbreaks Found in 2 Regions, Russian Watchdog Says Yuliya Fedorinova - Nov 30, 2011 8:39 AM GMT+0100 Outbreaks of African swine fever in boars were registered in Russia’s Volgograd and Tver regions, the country’s veterinary service said in an e-mailed statement today. The disease has been found in wild animals and some farms in areas including the central Kursk and Voronezh regions, the southern regions of Rostov and Krasnodar and the northern Murmansk and Leningrad regions, according to statements this year from Rosselkhoznadzor, as the service is known. African swine fever is a viral disease which is lethal for pigs and harmless to people, according to the United Nation’s Food and Agriculture Organization. To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@ To contact the editor responsible for this story: John Viljoen at jviljoen@ 13:05?30/11/2011ALL NEWSAssociation of Russian fans to defend fans’ rights with all available means, November 30 (Itar-Tass) —— The national association of football fans is going to defend the rights of football fans within the framework of the existing legislation with all available means.The association’s press-service issued a special statement to this effect, obtained by Itar-Tass, over the incident involving a player of the Krasnodar soccer club, Spartak Gogniyev. The international trade union of footballers on Tuesday made public a video recording of the incident that occurred in a 30th round match of the national youth championship between Grozny’s Terek and Krasnodar clubs. The match was interrupted by a mass fight on the pitch and on the sidelines. In the 73rd minute the chief referee, Alexei Amelin, halted play, and then inspector Alexei Rumyantsev ruled that continuing the game would be impossible. Gogniyev, who was in the focus of the incident, was beaten up by the fans. The video shows the moment when the player was leaving the field and the beginning of the fight on the running lanes.The fans’ association said it was shocked by the video recording of the player being beaten up.“We believe that such incidents are a factor that by no means contributes to the popularity of football in our country, Besides, among the football fans it is a custom to address issues where verbal arguments work no longer in a fair manner – one on one. It was disgusting to sea one man being attacked by an assorted crowd, including police,” the statement said.The fans’ association is going to make public all such incidents in relation to soccer fans, too, and to take the cases to court.“It is not our business to make legal evaluations of such affairs. But, regrettably, we have to state that such attacks against soccer fans happen regularly. The public tends to pay no attention to them, because soccer fans are seen as the main destructive force in the world of soccer. We do hope that the video recording of the incident in Grozny will make the sports community not only to pay attention and react to instances of violence against players and representatives of clubs, but also take a fresh look at the abuse of the rights of fans.Gogniyev said that the video showing his beating was of no interest to him.The association of fans promised that it would not be a humble defendant, but campaign for the rights of people on the stands within the framework of the existing legislation by all available means.PRESS DIGEST - Russia - Nov 30 Nov 30, 2011 8:25am GMTThe following are some of the leading stories in Russia's newspapers on Wednesday. Reuters has not verified these stories and does not vouch for their accuracy.VEDOMOSTIvedomosti.ru- Mosmetrostroi, a company controlled by Russia's richest state official Vladimir Kogan, has won more than a 30 percent share in a 258 billion rouble ($8.26 billion) project from Moscow city authorities to expand the metro network by 2014.- The leader of the political party "Patriots of Russia" Gennady Semigin says in an interview ahead of parliamentary elections on Sunday that his party relies on medium-sized businesses who do not "look towards the West".KOMMERSANTkommersant.ru- Leaders of some opposition parties were warned by Moscow police against carryingout illegal demonstrations on Dec. 4, when Russia holds its parliamentary elections, the daily says, adding that only pro-Kremlin movements have received permission to hold rallies in the capital.- Russia is introducing new diplomatic positions at its embassies abroad which will be aimed at attracting foreign scientists and useful technologies for the modernisation of Russia's economy.- Almost 51,500 police and security officials will be on duty during the Dec. 4 parliamentary elections.NEZAVISIMAYA GAZETAng.ru- Vladimir Putin's election programme for the presidential election will be presented in January and will differ from United Russia's because he seems to be unhappy with the success of the ruling party, the daily says.ROSSIISKAYA GAZETArg.ru- A group of lawmakers have asked prosecutors to check the legality of independent election observer Golos' activities, which they say may interfere in the parliamentary election campaign and attempt to influence the results of the voting on Dec. 4.RBK Dailyrbcdaily.ru- Russia's Lukoil is apparently in talks with U.S. major ExxonMobil on buying its share in the Western Qurna-1 project to become Shells' partner in the development of the Iranian oilfield.- Geotech Oil Services Holding, co-owned by oil trader Gennady Timchenko, is about to closing a deal on a merger with two oilfield services giants Integra and Schumberger, head of Geotech Nikolai Levitsky says in an interview.MOSKOVSKY KOMSOMOLETSmk.ru- Sophie Loren's purse, which was presented to the governor of Russia's Kusbass coal mining region Aman Tuleev in October is said to have been sold at a local charity auction for 7 million roubles, the daily says, adding the money will be spent on medical supplies for local children.Russian Press at a Glance, Wednesday, November 30, 2011 30/11/2011POLITICSThe State Duma elections will be monitored by at least 649 foreign observers, nearly half of whom will come from the Organization for Security and Cooperation in Europe and the Council of Europe. (The Moscow Times, Izvestia)Russian political experts predict an inevitable split of Europe into a “core” and “periphery.” (Izvestia)ECONOMY & BUSINESSReported cases of economic crime have declined in Russia over the last two years against the background of recovery from the 2009 financial crisis, according to a PricewaterhouseCoopers biannual survey. (The Moscow Times)If Russia avoids crises and conflicts in the next 20 years it could become a leading economy in Europe by 2030, believes Jim O’Neill, the Chairman of Goldman Sachs Asset Management and the author of the so-called BRIC concept. (Vedomosti) A new scandal is brewing in Russia’s air transportation industry. Russia’s air transport agency, Rosaviatsia, has revoked Transaero’s permits for flights to Rome, Milan and Venice that were issued in October. (Kommersant)Facebook may hold an IPO as early as in spring 2012. The company could be valued at $100 billion (Kommersant, Vedomosti)The Rostik's restaurant franchising group opened its first ecology-friendly food market, the EcoBazaar, near Moscow. The company plans to open seven to nine more EcoBazaars over the next five years. (Vedomosti, The Moscow Times)Russia's largest nickel maker Norilsk Nickel has shown interest in the development of copper deposits in Zambia. (Izvestia) WORLDSouth Ossetia’s Supreme Court has declared null and void the outcome of the November 27 runoff presidential elections because of violations. Supporters of opposition candidate Alla Dzhioyeva, who claimed a victory in a Sunday runoff election, still hope to battle for the reversal of the court’s decision. (Vedomosti, Moscow News)? More than 190 countries are meeting in Durban, South Africa, this week to try to agree what to do after the first stage of the Kyoto Protocol expires next year. Russia says it will not sign up to a second stage unless big emerging nations do it as well. (Moscow News)DEFENSERussia and Cuba are planning to sign a contract on construction of an assembly line for production of ammunition for Kalashnikov assault rifles. (Kommersant)An early warning radar has been put into operation in Russia’s exclave of Kaliningrad. Russian President Dmitry Medvedev said its launch was intended to demonstrate Russia’s “readiness for an adequate response to the threats posed by [NATO’s] European missile defense network to our strategic nuclear forces.” (Izvestia, Rossiiskaya Gazeta)SOCIETYThe daughter of Soviet dictator Joseph Stalin, who lived in the United States under the name of Lana Peters since the 1970s and died on November 22 of colon cancer at the age of 85, never felt at home either in the Soviet Union or the United States. (Rossiiskaya Gazeta, Moscow News)CRIMERussia’s Investigative Committee head Alexander Bastrykin sent letters to the head of the presidential human rights council and the federal ombudsman asking for assistance in pressing further charges against an American couple convicted in the United States in the death of a boy adopted from Chelyabinsk after a Moscow court rejected a petition to arrest Michael and Nanette Craver in absentia. (The Moscow Times, Izvestia)Russian businessman Viktor Baturin, the brother-in-law of former Moscow mayor Yury Luzhkov, has been charged with attempted fraud. Investigators say he demanded payment of 10.8 million rubles ($344,000) from his billionaire sister's company Inteko under a fake promissory note. (Kommersant)For more details on all the news in Russia today, visit our website at path will Russia take after the 2012 election? 30, 2011Yevgeny ShestakovFollowing the 2012 elections, there are any number of routes that Russia’s future development might take in the next five to eight years. Working out what these might be and coming up with an optimal model for development was the task of the Valdai International Club at its recent annual meeting in Kaluga. Political scientists and experts from 14 countries gathered to predict Russia’s future path.First, five scenarios were discussed ranging from a future hard-line authoritarian regime to a democratic revolution, accompanied by a total change of the ruling elite. In between these extremes were intermediate variants reflecting the directions the country might take under certain conditions. These included: liberal-democratic reforms; authoritarian modernisation; and an inertia model, based on preservation of the status quo and a form of stagnation. None of the proposed models, the participants concluded, was realistic. The authoritarian modernisation path, though slightly closer to reality than the other scenarios, still failed to take into account many of the factors characteristic of Russia today. Instead, a sixth scenario emerged that takes account of the most obvious trends reflecting the general direction of society. It is basically about gradual accumulation of forces for future change, which will take place simultaneously with a restructuring of society. Sergei Karaganov, head of the Foreign and Defence Policy Council, who chairs the Valdai Club meetings, described that path as an “incremental development” model. Some of the more fiercely anti-establishment participants in the forum tried to convince their colleagues that a revolution was inevitable. But this possibility was dismissed by the Russian participants and virtually all the foreign members. That is not to say that attempts to rock the boat will not be made by either the right or the left of the Russian political spectrum.Why do most of the political analysts gathered in Kaluga see the “incremental” model as the most realistic? Because this path guarantees Russia domestic stability and predictable external relations. All the other scenarios proposed for discussion were hypothetical: they might materialise only in the event of unforeseen global events on a scale that could change the course of world history.The West’s hopes of rapid modernisation after the elections are unlikely to be met, according to experts. They believe Russia will enter a period of stagnation with a positive trend – whereby the country, historically based on a besieged-fortress mentality, will have no need for mobilisation, either peaceful or military. The outside world, given the anticipated chaos in international relations, would not pose any obvious threats. The experts believe that this situation will give Moscow breathing space.The second most probable scenario – “authoritarian modernisation” – far from running counter to the “incremental” scenario, actually corresponds to it in many ways and may become its driving force. Both models envisage rapid economic development with high levels of political stagnation.In the “incremental” model, the political elite seeks to maintain the current rate of development and tries to defuse popular discontent through social programmes. Meanwhile, “authoritarian modernisation” implies selective economic and political reforms, carefully controlled by the ruling elite.Will the outside world permit Russia to implement the “incremental” scenario? On the one hand, in the coming years the West will be preoccupied with its systemic crisis and may simply have no time for Russia. On the other, Europe may become impatient with what it considers to be a slow evolution, with inevitable elements of stagnation. If so, will it try to isolate Russia? In this model of development, Russia may not fit into Europe’s idealistic perceptions. Whatever domestic policy strategy the Russian leadership chooses after the presidential elections, the foreign policy rapprochement with Asia will continue. There is no question of a pointed freezing of relations with the EU, but diversification of international links will be a Russian priority for the next five years. As one participant in the discussion said: “Orientation on Asia is not a choice of civilisation but a necessity that will enable Russia to maintain a worthy place in world politics.”Linking Asia to EuropeIn 2012, Russia will, for the first time, host an Apec (Asia-Pacific Economic Co-operation) summit in Vladivostok. As its temporary president, Moscow has suggested that the region’s countries discuss, along with food security and innovation, a programme for the development of transport and logistics to link Asia to Europe and the US. Russia is interested in becoming a key transit country, tapping the potential of Siberia and the Far East. The Valdai Club’s forthcoming report on the challenges facing Russia and Asia suggests the agencies in Moscow be transferred to Irkutsk, east of the Urals, creating a new economic capital there.Moscow is prepared for closer links with Europe, but does not see a reciprocal attitude from Europe, which is fencing itself off from Russia through visas and prohibitive barriers to Russian business. The dialogue between Moscow and the EU shows signs of weariness, with both sides unwilling to admit they need a pause in mutual relations. How long that pause will last – six months, a year, several years – depends on when Europe stops seeing Russia as a junior partner and demonstrates the willingness and ability to launch co-operation programmes. So far, Russia-EU summits have had the same, constantly shrinking agenda. In contrast, Asia is looking for closer links with Russia and is ready to treat it as an equal partner, hoping for economic benefits. The middle-class massesA Chinese political scientist at the Valdai Club meeting asked what role China will play in modernising Russia. Moscow does not yet have a clear answer to that question. But it is worth noting that Prime Minister Vladimir Putin’s first foreign visit after becoming a presidential candidate was to China.Paraphrasing Archimedes’ dictum, “Give me a place to stand on and I will move the Earth,” one could say that sociologists see the middle classes as a force capable of moving Russia in the next five to seven years. According to a focus group study presented to the Valdai Club by Mikhail Dmitriyev, head of the Strategic Development Centre, by 2018 the middle class will account for 60pc of adults in cities and 45pc in the country as a whole. The trend towards rising incomes and the potential demographic situation were factored in. According to these calculations, by 2018, the left-wing electorate will be in the minority, greatly reducing the risk of left-wing populists winning power. Sociologists claim that, according to their surveys, the middle class today is interested in politics but is not yet an independent political force. It expects the state to deliver clear and immutable rules for doing business, but does not want government interference in the affairs of the business community. The path Russia takes will depend on whether the future middle class rallies under the banners of a party, and, very importantly, what its cultural level and ethnic composition will be.But the head of the Russkiy Mir fund, Vyacheslav Nikonov, says developing even the most plausible scenarios for Russia’s development makes no sense, and traps the participants in an “old-fashioned intellectual model”. The discussion needs to focus on concrete projects that determine the future of the state: the budget, prospects for re-industrialisation and innovation. These are the key parameters that will determine how Russia develops, who its partners will be, and what configuration of the political system will emerge. Yevgeny Shestakov is editor of the international desk at Rossiyskaya Gazeta.Russia's silent election campaign Golosov, 29th November 2011 Russia goes to the polls on Sunday for parliamentary elections, yet Grigorii Golosov has failed to notice much of a campaign. Rather than presenting a case in a traditional electoral manner, it seems the authorities have settled on a different formula: mobilising state-dependent citizens and denying voters a relevant alternative. About the authorGrigorii Golosov is Professor of Political Science, Project Director, Center for Democracy and Human Rights Helix, St. Petersburg My telephone rang.? I picked up the received to hear a tired female voice ask for my wife.? She was out, so I asked if I could give her a message. The voice explained the call was from the Council of Veterans.? This is a civic organisation patronised by the government, which is mainly concerned with the distribution of various benefits from the municipal budget to the elderly. As my wife is nowhere near pensionable age, I was quite intrigued.? The voice carried on. ‘If you have small children, we can let you have tickets for the circus.? Free.’?Everything immediately became clear.? Were my wife to go and collect some tickets, she would also be given some ‘United Russia’ campaign material, together with a firm assurance that this was the party which had made the distribution of the free tickets possible.? Then, of course, there would be a pressing recommendation to turn out at the election .... and to vote for ‘United Russia’.This is just a small example of how the electorate has been organised so that ‘United Russia’ receives the majority vote in Sunday’s parliamentary elections. Opinion polls [9]have shown that the popularity of the government party has been declining, at least since the beginning of 2010.? It still has the support of most of the population, but during that time the level of its support has dropped by approximately 10% (now 40-45% of the total number of respondents), and that number is still on the wane. In these conditions, support for ‘United Russia’ comes chiefly from those voters who will turn out because they have been specially mobilised, rather than from political conviction.Mobilising the voters?Specially mobilised voters fall into several categories. The one factor they all have in common is dependence on the state – either because they want some kind of benefit from the authorities or because the authorities have the power to influence their behaviour at the ballot box.? To list some of them:the military – in Russia, a significant category, many of whom vote at specially established military units.? Even where this is not the case, the military commanders organise them to turn out at elections and are able to ensure that they vote for ‘United Russia’ and no one else;patients in hospital, of whom the overwhelming majority are government supporters;public bodies such as the Council of Veterans and Social Services take care of pensioner voting -? the pensioners receive financial assistance from the state and presents, a basket of various food items, for instance;schools play an important part in mobilising voters. Campaigning in educational institutions is forbidden by law, but for ‘United Russia’ this ban has long since been ignored.? Teachers constantly remind parents of the need to vote: they talk about it at the parents’ evenings, they ring the parents at home and discuss the subject in class with the children. In higher education institutions, a lot of effort is put into mobilising the students, who are compelled to apply for absentee voting certificates where they live and vote at specially set up polling stations;public sector employees are an obvious target group for special mobilisation, but recently this practice has been extended to the private sector as well.? Employers have been demanding [10] that their employees vote for ‘United Russia’, often making it clear that if they don’t, they are likely to lose their bonus. Some employers even expect their staff to photograph their completed ballot paper on their mobile phone.This system for mobilising the voters has been refined over many years and is now quite sophisticated.? According to analysts, some 30-40% of Russian voters come to the polling station for reasons that are not political. They have been mobilised to vote for ‘United Russia’, and most do, though more often than not the authorities are not in a position to monitor their behaviour. The demand to see photo evidence of voting, for example, can be got round by photographing the completed ballot paper and then spoiling it.?The important thing to bear in mind is that most of these voters do not turn out specially to vote for ‘United Russia’. On the whole they don’t regard the election as an election: they see their participation in it as part of a special contract.Politically motivated voters?For the majority of Russian voters, however, political considerations are important, and with these voters too something has to be done. There are two possibilities: the best is if they turn out and vote for ‘United Russia’; less attractive, but also quite acceptable, is a no-show.? Both these possibilities are predicated on the special configuration of the Russian party system, which the authorities have been developing doggedly over the past decade.‘Polls have shown that there is growing irritation with government corruption, their arrogance and inability to carry out the simplest managerial function in a way that is acceptable. However, for this irritation to be converted into a new mode of electoral behaviour, there would have to be acceptable alternatives.’?The contract between the Russian political regime and the population has always been based on the unspoken understanding that the authorities guarantee an appreciable rise in living standards and don’t interfere in people’s private lives. In return the populace limits any influence it could have on politics to periodically turning out to vote for Putin, Medvedev and their party. A significant section of the population considers that this contract is currently not being fulfilled, or not completely.? Polls have shown that there is growing irritation with government corruption, their arrogance and inability to carry out the simplest managerial function in a way that is acceptable. However, for this irritation to be converted into a new mode of electoral behaviour, there would have to be acceptable alternatives.?An unconvincing alternative?The intricacies of the Russian party system mean that for most people there are no such alternatives.? As far back as the 90s, opposition politics were to a certain extent discredited by the singular institutional arrangements which Boris Yeltsin’s advisers set up after his defeat of parliament in 1993.? Real power in Russia lies with the executive, which has always kept its door closed to the opposition parties. Parliament has no chance of influencing any managerial decisions, nor any obvious power to control them. The limitations extend even to its legislative functions because in many cases laws are made by presidential decree or orders from other officials. This is the origin of the argument endlessly repeated by official propaganda, which many find quite convincing: ‘The government is the only institution that functions: if anything positive happens, then it’s down to them. The opposition does nothing but criticise.? Well, you try and do something, then you can criticise.’ The fact that the rules of the game make it impossible for opposition parties to do anything at all is, naturally, left unsaid.?It might be thought that the opposition’s ability to criticise would be reason enough to support it at the ballot box. Unfortunately, the “legal” opposition (those that have been registered) can hardly execute such an ability, because all the 6 official opposition parties are under the control of the executive.? Firstly, it is no secret (though never officially admitted) that these parties may only accept large private donations with the permission of the Presidential Administration. Secondly, the Administration controls the list of candidates put forward by these parties.? There is a large (and growing) blacklist of politicians, whose inclusion on party lists would invoke immediate sanctions. Thirdly, even slightly critical comments can be easily re-classified as “extremism and/or stirring up hatred towards individual social groups” under Russian legislation.?‘The fact that [the opposition] are niche parties intentionally leaves a significant part of the electorate without an acceptable choice. Some politically motivated voters, having considered all their options, conclude that ‘United Russia’ represents the least evil and vote for it.’With no chance to conduct an aggressive campaign based on biting criticism of the government, the opposition parties lose the possibility of appealing to the electorate as a whole and, therefore, of counting on their support. Instead, the strongest of them appeal to narrow target groups whom they justly regard as loyal and, consequently, a guarantee of some kind of representation. Russia’s largest opposition party is the Communist Party [11] (CPRF): social and protectionist sentiments are very common throughout Russia, so this party could have a good chance of rousing the voters.? But this remains uncalled for. The CPRF electioneering is archaic and shot through with ideological values which are of no interest whatsoever to most of the electorate.? The long-time leader, Gennady Zyuganov, evokes a strong feeling of rejection in many people and is an anachronism.? But the ideology and the leader are both essential to the CPRF in its struggle to hold on to its nucleus of voters and the party has no ambition to go beyond this nucleus, because it’s quite clear that any such attempt would immediately be stamped on by the government.?The Russian opposition parties are thus unconvincing to voters for two reasons.? Firstly, it’s not clear that they are actually in opposition: many voters quite justifiably consider them stool pigeons.? Secondly, the fact that they are niche parties intentionally leaves a significant part of the electorate without an acceptable choice. Some politically motivated voters, having considered all their options, conclude that ‘United Russia’ represents the least evil and vote for it.? Others simply refuse to turn up at the polling station.This is why the main defining feature of the current election campaign is its silence. The government makes enormous efforts to bring specially mobilised voters to the polls, but is not particularly concerned to involve other categories of the population at all. Party campaigning is lacklustre and attracts little attention. Party leaders’ appearances on TV – the main political instrument in today’s Russia – are unnoticed.? The only public space seething with political passion is the internet. The opinions of ‘United Russia’ most prevalent in blogs and social networks are extremely critical.But the circle of politicised internet users in Russia is a narrow one. It may have started influencing voter behaviour, but this influence should certainly not be over-estimated.? The Russian government has good enough grounds to be confident that the political machine it has built up while in power will not let it down. And if it should do so, then the election results can always be ‘adjusted’.??Putin's next marquee moment: Russia's presidency Fred Weir | Published Wed, Nov 30 2011 12:01 am It looks to be shaping up as one of history's greatest political comebacks.Vladimir Putin, a successful two-term president who stepped aside four years ago in deference to the Russian Constitution, will almost certainly return to the Kremlin in presidential polls next March, propelled by popular demand that even his hapless successor, Dmitry Medvedev, admits is an unstoppable force.Mr. Putin, whom Forbes Magazine recently listed as the "world's second most-powerful person," appears to be at the height of his game, poised to lead his country out of its long post-Soviet malaise and into its rightful place in the modern world.Many Russians are delighted, and some say it's a triumph of Russian-style democracy. Putin is coming back thanks to "a political model based on constant confidence [in his leadership]," says Dmitry Orlov, director of the independent Agency for Political and Economic Communication in Moscow. "The purpose of the system is to develop Russia's institutions of political and economic authority ... the course will now be for modernization."But some prominent critics argue that Putin isn't "returning" to supreme power because he never actually relinquished it. They say his power is based on a stage-managed electoral system, a straitjacketed media, and a Kremlin-promoted public perception that there is no alternative to his leadership.They say Putin's decision at a conference of the ruling United Russia party in September to terminate his "tandem" leadership with Mr. Medvedev and retake the mantle of presidency was simply a moment of truth, in which the country's reversion to its authoritarian traditions over the past decade became suddenly obvious.Putin's comeback has thrown a new and potentially ominous light on all other Russian political developments, including the upcoming elections to the State Duma, the lower house of parliament, which are slated for Dec. 4. If Russia is no longer even nominally on the path to some version of a post-Soviet democracy, critics ask, then where might it be headed under what must now be seen as the open-ended leadership of Putin?"The tradition of one-man rule is typical for Russia, and it has hardly ever stopped" except for very brief periods of experimentation, says Roy Medvedev, one of Russia's best-known historians."The structure of power we have today looks much more like a monarchy than a democratic regime.... [In his first two terms as president], Putin restored Russian state power, stabilized its institutions, and raised Russian prestige on the world stage. He had become, in effect, the national leader before he ever agreed to share power with Medvedev," he says.All compasses point to PutinSince first coming to power nearly 12 years ago, Putin has constructed a system of authority that bears little resemblance to that described in Russia's 1993 Constitution, and looks more like Russia's traditional setup of autocratic one-man rule. For centuries the country has been run by a sprawling state bureaucracy that answered to a single figure -- a czar or a general secretary -- who stood above the political fray, and even the law.Though Putin has alternated between the posts of president and prime minister over the years, he has increasingly grown into the role that many of his supporters describe as "national leader," or that indispensable man-at-the-top toward whom all bureaucratic compasses point.The national leader may hold any state position, or none at all, but no Russian will doubt his absolute authority. Joseph Stalin, who ruled the USSR from roughly 1928 until his death in 1953, never held a government post. Though the Soviet Union had several prime ministers and presidents during the Stalin era, few can even remember their names today."Stalin was once asked by his mother to explain what his job was," says Mr. Medvedev, the historian. "He thought about it, and then answered, 'well, I'm a sort of czar'.... Putin's system today looks like a kind of cross between an absolute monarchy and the Stalin regime."Uniting fractious elitesEven his detractors admit that Putin is energetic, intelligent, articulate, and even-tempered, all characteristics that originally helped him unite Russia's fractious elites, marginalize the super-wealthy oligarchs who had infested the Kremlin during the rule of former president Boris Yeltsin, and reverse the country's social and economic decline following the disastrous decade of the 1990s.But some fear that the familiar drawbacks of one-man rule could come roaring back to haunt Russia as Putin, with his absolute power assured and his contacts with the outside world mediated by a self-interested inner-court circle, settles into the Kremlin for what may likely be another 12 years of unchallenged rule."I fail to understand [Putin] anymore.... He is losing contact with reality," says Gleb Pavlovsky, who was a key adviser and political strategist to Putin during his first two terms as president, but resigned after a still murky inner-Kremlin spat earlier this year."In the past he was a team player; he wasn't so narcissistic, and didn't consider himself to be a genius," Mr. Pavlovsky says. "Now his sense of humor is gone. He talks down to people. He thinks he knows what you're going to say even before you open your mouth, and whatever part of what you say that he doesn't get doesn't matter to him.... He seems to believe that his great success over the past 10 years means that he understands Russia and the world better than anybody else."Putin's early success was based partly on the favorable comparison between him and the doddering Mr. Yeltsin, whom he replaced. He also benefited from soaring global oil prices – hydrocarbon exports account for about 60 percent of Russian state revenues – which enabled him to buy social peace and elite solidarity by spreading the wealth around."It's a bit of a paradox that Putin is returning at a moment when the system he built is going into decline," says Liliya Shevtsova, author of an in-depth analysis of Putin's political comeback in the October issue of the Washinton-based journal Foreign Affairs. . "The pinnacle of his system was before 2008, the years of the oil eldorado, when Putin was on top, with lots of resources to work with and massive public popularity," she says. "Now, the economy is stagnating, his popularity is sagging, and people are increasingly frustrated.... The Putin consensus is unraveling before our eyes. Today people don't compare Putin with Yeltsin, they compare him with the early Putin, and find him wanting. Now people don't hope for a better life, they just hope to survive."It's a totally different atmosphere," she says.According to a recent survey carried out by Moscow State University's political science department, and reported by the independent Russian news agency RBK, Putin's stratospheric public approval ratings of 70 percent and more during his early years have fallen to just 44 percent in October."Our latest data suggests that people are getting tired of the authorities," says Alexei Grazhdankin, deputy director of the independent Levada Center public opinion agency in Moscow.Public opinion polling is a notoriously dodgy science, especially in Russia, experts point out. Ordinary Russians may vent their fury at mid-level bureaucrats to pollsters, but are usually loathe to criticize the top leader.Catcalls for PutinYet in one tiny sign that things may be changing below the radar screen, Putin faced an unprecedented chorus of catcalls when he appeared last week at a Moscow martial arts match and attempted to give an improptu speech. Many videos of the event have been posted on YouTube, one of which has since garnered well over 2 million hits.But that does not translate into any immediate threat to Putin, Mr. Grazhdankin adds."The system in Russia is embodied in the figure of Putin. TV depicts him as the hero who takes all into his hands, the one who cares for, protects, and aids the average Russian... Our youth know nothing but Putin as the one and only," he says."There is a general perception that if Putin were to leave, there would be chaos."World | Wed, Nov 30 2011 12:01 amRussia sees Europe as a “patient”: 30 November, 2011, 08:43Edited: 30 November, 2011, 08:45 Evgeny ShestakovPolitical scientists predict Europe’s disintegration into a center and periphery.While Russia is decisively moving toward Asia, China is making its way to Europe. The Higher School of Economics has hosted a round-table discussion titled: “Europe after the European Union: What’s Next?”. Such formulation of the question had initially assumed the presence of Eurosceptics among the participants. ????The report, compiled by the head of the European Integration Department at the MGIMO, Olga Butorina, left no stone unturned in the assessment of prospects for EU integration. In short, things in the Old World are looking grim: from economy – financial forecasters predict the euro will not survive until Christmas, to politics – where national egoism is preventing the EU leaders from making coordinated decisions. ?There is no sense in reiterating the numerous arguments, showing the European Union’s inability to, under the current leadership, overcome the crisis within the framework of the existing integration models. Experts predict that, at the current rate of development, the national debt of most EU member states will amount to 200-250% of the GDP in the next 20-25 years. And social problems – unemployment, pension fund deficits – will put another nail in the coffin of the so-called “European idea”, which has not been able to overcome the Europeans’ national egoism. ??Round table participants see the future of Europe in the “reincarnation” of the European Union, but with new unifying content. Meanwhile, the old European idea has, according to experts, “completely failed”.In this situation, does Russia need to hold on to the patient, who is “more likely to die than live”? Moscow has announced its readiness to provide assistance to the Old World, but with one exception – it will not be issued directly, but through the International Monetary Fund. At the same time, without giving up its European identity, Russia plans to create more dynamic relations with the Asian countries. ?While we are taking quantum leaps East, away from the weakening Europe, China is expanding its presence in the West. China’s Central Bank is considering a possible increase of the euro share in its foreign exchange reserves. Beijing is not excluding the possibility of purchasing Eurobonds in the event they are issued, with “certain assurances” from the EU leadership. The Chinese are not yet publically talking about investing in the rescue of the Eurozone, but they are making diplomatic statements, addressed to the European Union, about the desire “to assist one-another”. ???Why are problems, experienced by the EU, worry Russia but not China? Perhaps, the reason is historic memory. Opinion polls show: many Russians continue seeing Europe as an economic competitor – a hostile force, united under the NATO bloc. But the Chinese have a different perception of the Old World. ??Strategically, the weakening of the EU meets the interests of both Russia and China. But our conclusions, drawn from this situation, differ. Moscow, while seeing its main economic partner grow weaker, looks to Asia with hope – whereas, Beijing sees the problems in Europe as a chance to lift its own economy. The guarantees that China will get from the EU in the event of its purchase of the Eurobonds have not been publically disclosed. But one could assume that technologies and a share in some of the Old World’s most innovative enterprises will be part of these guarantees. China, just like Russia, is interested in modernization. It sees investments in Europe as a step, providing an impetus to its own economy. The obvious weakness and “inability” of the current EU leaders are seen in Russia as in insurmountable problem, and in China – as an opportunity to negotiate about future preferences. ???At the round-table discussion, most experts agreed about the inevitability of a gradual collapse of the Eurozone with a possible emergence of two, or even several, currencies, formation of a progressive European center with an economically underdeveloped periphery. Such development of events turns Russia and China into competitors in the struggle for the potential riches of the EU – technologies, real estate, enterprises. In this struggle, Russia has an advantage – the country’s geographic location and a shared cultural identity with Europe. It is important not to waste resources: the shift toward the already-formed Asian markets, which have long been divided, is a long process without any guaranteed outcomes. Meanwhile, Europe, which remains Moscow’s main trade partner, looks like a much more attractive platform for long-term investments. The only remaining question is whether or not members of the European Union, some of whom continue holding on to the negative “historic memory” of Russia, will agree to accept our money and what guarantees the EU will present as “insurance” for the provided assistance. Or, Europe could prefer having the “historically neutral” China as its creditor, rather than its closest neighbor. ???The great game is to avoid war in Iran 30, 2011Dmitry BabichNo other sphere of Russia’s foreign policy is subject to such wide-ranging scrutiny as Moscow’s policy towards Iran. Conservative American analysts in think-tanks such as the Heritage Foundation often view Russia as a tacit ally of Iran, turning a blind eye to its dangerous nuclear programme and ignoring the Iranian regime’s aggressive form of Islamist fundamentalism.Israeli government officials, when visiting Moscow, persistently point to the divergence of Russia’s national interests with those of Iran, citing Russia’s own troubles with Islamist fundamentalism in the North Caucasus and, earlier, in Central Asia and Afghanistan. Obviously pursuing their country’s national interest, those Israeli officials believe in the possibility of a return to the very cold peace that existed between the Soviet Union and Iran in the Eighties, when Moscow was very wary of the effect of Ayatollah Khomeini’s teachings on its Muslim minorities. So what is the Russian authorities’ attitude now? And where does Russia’s national interest in the Iranian question lie? The truth is that the Kremlin has been sending out a whole array of signals on the issue, some of which are contradictory. On the one hand, Russia stopped selling or transiting any kind of weapons to Iran, fulfilling UN resolution 1929, which was adopted in June 2010. This meant cancelling the contract to ship S-300 surface-to-air missiles to Iran, which could have helped the Iranians to challenge Israel’s superiority in the air. On the other hand, Russia finished the construction of the nuclear power station in Bushehr. Where is the logic? Actually, the logic is very simple: Russia is concerned about Iran’s nuclear programme. It has no sympathy for Islamist fundamentalism but, considering Iran is right next to Russia’s border and to the borders of Azerbaijan, a former Soviet republic with a several million-strong Azeri minority in Iran, it is extremely keen to avoid a war breaking out on its doorstep. It is not too difficult to guess in which direction the Azeri minority would flee from Iran in the event of it being turned into a war zone. Azeris are already the biggest Muslim minority in Russia.Hence Russia’s strong desire to see Iran at peace with other countries and to have a peaceful nuclear programme. Incidentally, the Nuclear Non-Proliferation Treaty (NPT), of which Iran is a signatory, obliges nuclear powers to help non-nuclear countries to develop the peaceful use of atomic energy. The balancing act between Iran and the West, which Russia has to perform, however, is becoming more and more difficult. It should be said that Iran has shown remarkable restraint in its reaction to a number of regional wars in which Russia has been a party in recent years. Unlike certain Western circles, Iran never provided help to anti-Russian mudjaheddin in Afghanistan or to the Chechen rebels, and it stayed largely neutral in the conflict between Armenia and Azerbaijan, despite an obvious temptation to show solidarity with its ?Muslim brothers.Tehran’s restraint in Russia- related issues is ever more laudable, since Iran historically has had little positive sentiment about Russia. Modern Azerbaijan had for centuries been a part of the Iranian empire, and Georgia was in its zone of influence until the Russian tsars wrestled the territories away from Iran in the early 19th century. In his childhood, Ayatollah Khomeini was a witness to the joint Soviet-British occupation of Iran in 1941. But despite the troubled history, Iran’s rhetoric on Russia is in most cases less critical than that of some members of the EU . The recent Western interventions in Iraq, and even more recently in Libya, make Russia suspicious of what lies behind Western hostility towards Iran. Iranian restraint in Afghanistan and the Caucasus makes Russians somewhat sceptical about the information on Iran’s support for extremists in the Middle East – a region which is becoming more and more distanced and estranged from Russia. Hence Russia’s unwillingness to see Iran condemned and punished by the West according to the Iraqi or Libyan scenario. Dmitry Babich is a political analyst at RIA Novosti. Iskanders are not on Transdniester’s horizon: 30 November, 2011, 08:36Edited: 30 November, 2011, 08:42 Svetlana Gamova Moscow has not responded to Tiraspol’s call to deploy missile defense systems in the region, similar to those of the US.Moldova’s Foreign Affairs Ministry is concerned about Russia’s actions, which are not conducive to the development of relations between the two countries. The announcement was made as a result of the opening of the State Duma election polls in Transdniester, despite Chisinau’s objections. The situation was exacerbated by Tiraspol’s proposal to Moscow – to allocate Russia’s military capabilities, comparable to the US missile defense in Europe, on the territory of the unrecognized republic. ?????“We welcome Russia’s readiness for a symmetrical response to the actions that are being conducted by a number of Western states.” Transdniester’s Foreign Affairs Minister, Vladimir Yastrebchak, told Nezavisimaya Gazeta (NG). “If the Russian Federation finds the need to allocate its military capabilities, intended to counter the US missile defense in Europe, on Dniester – then we are ready to not only offer our territory, but also the Mayak (Beacon) Radar Complex, which is currently being used by the All-Russia State Television and Radio Broadcasting Company as a rebroadcasting station”. The possibility of allocation of any Russian military equipment and weapons, including the Iskander missile systems, was discussed by the President of Transdniester, Igor Smirnov, in a February, 2010 interview with NG. According to Smirnov, the regional leadership had then made the proposal to Moscow. Now, when it comes to Russia’s security, Transdniester is ready to become the springboard for Russia’s national defense – for which, essentially, independence from Moldova has been maintained for the last 20 years. The region considers itself part of the Russian territory. Meanwhile, as was noted by Vladimir Yastrebchak, Moscow had not issued such requests to Tiraspol. ???????In Chisinau, all statements regarding missile defense systems – which the US plans to deploy, among other states, in the neighboring Romania – are referred to as Tiraspol’s election campaign games. This announcement was made to NG by the Honorable Chairman of the Democratic Party of Moldova, Dumitru Diacov. He noted that “Russia has a number of obligations before the OSCE in general and Moldova in particular to withdraw troops and weapons from Transdniester”. Either way, the question of whether or not missile defense, similar to the system that is to be allocated in Romania, should be deployed in Transdniester needs to be addressed with Chisinau, said the Moldovan politician. “The fact that these talks are currently ongoing in Tiraspol is linked to the elections [Transdniester is scheduled to hold a presidential election on December 11 – NG].” ???Director of the Public Policy Institute in Chisinau, Arcadie Barbarosie, shares this opinion. “I don’t think Russia would agree to accept the offer. It’s a gamble that could complicate Moscow’s relations with Brussels, and not to mention Chisinau.” Editor-in-Chief of the Independent Military Review, Viktor Litovkin, commented on the situation as follows: “It is unlikely that Russia will allocate counter elements to the US missile defense system, which is expected to be deployed in Romania, on the Transdniestrian territory. Building an early warning radar station there makes no sense. It’s too close to Bucharest. Besides, no one knows how the situation will unravel in the future – risking such an expensive station, as shown by the experience in Ukraine (Beregovo and Nikolayevka) and Latvia (Skrunda), is devoid of common sense. It is a similar situation with the Iskander strategic and tactical missile systems. Selling them to an unrecognized republic is impossible, while deployment of a Russian military base on its territory will result in a global scandal. No one would dare doing that – neither does it make sense militarily. All of the counter-defense problems can be easily resolved from the Russian territory.” ??As for the December 4 State Duma elections, which have excited the Moldovan Foreign Affairs Ministry just as much, if not more, that the missile defense issue, the possibility of participation in these elections of the Russian citizens, residing in Moldova, was discussed by Russia’s Foreign Affairs Minister, Sergey Lavrov, during his visit to Chisinau on November 22. He promised that everything will be done in accordance with the Moldovan law. However, Russian Embassy in Moldova announced the opening of polling stations, including on the left bank of the Dniester River, against the wishes of Chisinau, which does not control the area. Russia’s Ambassador to Moldova, Valery Kuzmin, explained this decision with Russia’s obligation to “give its citizens the right to vote”. Nevertheless, this is not a Russian territory. Moreover, it is in the midst of its own regional elections, which Moscow is trying to “cut out” based on its own patterns and in accordance with its own interests. Meanwhile, interests of the Transdniestrian voter who will, incidentally, elect the State Duma deputies as well as a president of the unrecognized Transdniestrian republic, are not being taken into consideration. And if they are, then for informational purposes only. ??????????A Very Scary Movie Premiere of a New Documentary Highlights Continued Sensitivity Over the Khodorkovsky Affair By Dan Peleschuk Russia Profile 11/29/2011 Leading up to the Russian premiere of a highly-anticipated documentary about jailed tycoon Mikhail Khodorkovsky, theaters across the country have refused to screen the film. And earlier this year, the film’s final version was stolen before its world premiere. These incidents suggest that some don’t want the film to be seen, and point to the continued sensitivity of the Khodorkovsky affair.Directed by German filmmaker Cyril Tuschi, “Khodorkovsky” chronicles the rise and fall of the man who went from being Russia’s most successful, forward-thinking businessman to public enemy number one under then-President Vladimir Putin. The film was shot between 2005 and 2011 in several cities across the world, and features a number of interviews with high-profile individuals connected either to Khodorkovsky or to his former oil empire, Yukos. But while the film is set to premiere in Moscow on December 1, it remains mired in controversy. One by one, cinema networks across Russia have declined to screen the film and have failed to explain why. After Moskino, a theater network owned by the Moscow city government, became the first to refuse the film, a chain reaction followed, according to Olga Papernaya, the art director of the film’s promotion company in Russia. This resulted in a total of 19 venues refusing to screen the documentary. While Tuschi had originally planned for the film to be shown at theaters in Moscow, St. Petersburg and Novosibirsk, only two venues have thus far agreed to host it: the Eldar cinema and the Fotoloft gallery at Winzavod, both in Moscow. "When we acquired the rights to the film in September of 2011, we held discussions with many theaters and chains, and got several preliminary agreements for release," Papernaya told Kommersant recently. "But when the time came to sign an agreement, we ran up against refusals. They are all oral refusals, so we can only guess what is really behind it."Earlier this year, the film’s final version was stolen from the production company’s office in Berlin before its world premiere at the Berlin Film Festival in February. German authorities claimed the break-in was professionally orchestrated, and although successful, Tuschi had several other copies of the final cut. Nevertheless, the director expressed concern over the incident: "It's like being in a bad thriller," he told the German daily Süddeutsche Zeitung shortly after the incident. "Someone is trying to scare me and I must admit that they are succeeding."The various messages sent since the film’s original showing are clear: “keep away from viewers’ eyes.” But it remains unclear who’s sending them. While it is obvious that today’s regime has a bone to pick with Khodorkovsky, there are few signs that it feels severely threatened by him. After all, the jailed oligarch continues to make sporadic appearances in the media – just not on state television – and the Kremlin witnessed little backlash when Khodorkovsky was sentenced to a second term in prison earlier this year.Experts said there’s a strong likelihood that, besides state-sponsored pressure, self-censorship is at play in this case. According to Masha Lipman, an expert in the society and regions program at Moscow’s Carnegie Center, many of the theaters have likely chosen to remain “safe” by not screening the film. “This is, of course, an act of disloyalty to show such a documentary,” she said. “And you never know what kind of consequences you might inflict on yourself – maybe nothing, maybe something. Some people are more cautious and circumspect than others.”But the film may prove to be less dangerous than the Kremlin or its loyalists think. According to film critics, the documentary portrays Khodorkovsky and the Yukos affair in a relatively balanced – if even bland and unoriginal – light. In a review published in February in The Hollywood Reporter, Neil Young wrote that the film “lack[s] anything incendiary or revelatory content-wise,” while Lauren Wissot, writing on November 28 in Slant Magazine, even chided Tuschi for what she said was the director’s “na?veté when it comes to post-Soviet politics,” claiming he falls short of providing a fresh, incisive perspective on the matter.So why all the fuss? Lipman said the documentary is coming up against greater resistance because film is generally a more powerful and emotive medium. “An image is always different,” she said. “One hour of Khodorkovsky’s face might cause more sympathy than books or articles can.”November 29, 2011, 6:54 PM ETKhodorkovsky: A Movie Review And Interview With The Filmmaker Samuel RubenfeldMemo to business leaders in Russia: Don’t cross Vladimir Putin.Mikhail Khodorkovsky, the former head of Yukos and?the subject of the new documentary “Khodorkovsky,” did just that. Khodorkovsky, once the richest man in Russia,?will sit in a jail cell until 2016 due to two separate convictions his backers say are trumped-up charges stemming from a political dispute with Putin.German filmmaker Cyril Tuschi directed the film, which Corruption Currents saw at a special press screening on Nov. 3. He began with painting a picture of the Wild West landscape of post-Soviet Russia. Graft ruled, and it still does: The World Justice Project’s 2011 Rule of Law Index (pdf) warned of a lack of checks and balances in Russian government, leading to “an institutional environment characterized by corruption, impunity and political interference.”Such was the case of Khodorkovsky, according to the film, which features the first interview?with the man since his detention.Under Boris Yeltsin, state assets were sold in the 1990s at a fire sale to insiders; one man interviewed in the film said that was the only way to keep Russians as owners because in the Soviet socialist society “no one had capital.” Khodorkovsky bought Yukos for $300 million, while its value was speculated to be in the billions.While leading Yukos, Khodorkovsky eventually began to campaign for transparency, courting foreign investors for Yukos and funding opposition political parties. It led him in 2003 to challenge Putin at a public meeting at the Kremlin about official corruption in Russia, something the premier had specifically instructed the oligarchs not to question.Months later, he was arrested on charges of tax evasion. He was convicted, and then placed on trial again on charges of money laundering, and found guilty once more.In the film, former colleagues of Khodorkovsky’s said he unnecessarily bit the bullet and said he could have avoided jail had he simply left the country. Others say the oligarch got what he deserved.But Khodorkovsky’s story is still controversial: The film’s distributor said last week its run in Russia has been severely limited: Only one theater in the outskirts of Moscow has agreed to show it, while others cancelled, citing “financial constraints.”“This is a film that all Muscovites are talking about. They were going to be hugely popular screenings, and the only explanation for the cancellation is pressure from above, said Olga Papernaya, the film’s distributor and art director, in a statement.The film, showing for two weeks, opens Wednesday at Film Forum in New York.Below is a short Q/A with Tuschi on the film. It has been lightly edited for clarity:Tell me about the obstacles you faced in making the film.My main obstacle was my lack of Russian; I learned it only with the project. Also, my lack of documentary experience and my lack of knowing how the Russian world functions on every level. The topic of Khodorkovsky was very unfashionable in 2006 in Russia. The ego of Russia was high: Most billionaires lived in Moscow at the time…Nobody wanted to speak about it because they thought he was a loser who lost a big game, or they were afraid that if they talk about Khodorkovsky they would lose business opportunities. It was really tough in the first year to get people to speak in front of the camera, and at all.How do you believe justice for Khodorkovsky was handled? This is a very simple question: The second trial [Ed note: in which he was convicted of money laundering], even to non-lawyers and non-Russia specialists, was stupid…and not making any sense in any regard.The second trial doesn’t make sense. I was just asking myself, sitting in the court for days, “Why didn’t they work out a bit better-looking trial, or accusation? Why was it on the first page so obvious that the whole accusation didn’t work out, not only in comparison to the first trial but in general?” I think I have the solution: To show someone they created a silly trial, and show that they don’t even take quality measures in constructing the trial.What was it like to interview Khodorkovsky? What was your impression of his body language? How did he handle himself?I never thought I would see him or talk to him, and I was very much impressed that he was keeping up his stamina. He was straightforward, very calm. That’s why I was asking him during the interview if he meditates, because he was so calm and so focused; he was answering my questions as if he if knew the questions before. He didn’t.What’s your take on the response from Russian theaters, and why don’t you think they’re not screening it?I’m very surprised that they are so open-speaking about it. They don’t screen it out of self-censorship. I don’t think…that the Kremlin said, “Don’t do it.” I think the cinema owners fear state revenge if they would do it. [What kind of revenge?] Very simple. Tax inspections. Not enough fire doors, so you get a fine of a million or something silly like that. But maybe it’s just inherited in their genes the authoritarian character.Not in everybody. I’m very happy people are changing, and the air is changing in the last 72 hours. It changed a lot. [What happened in the last 72 hours?] Something’s happening, and it’s not only the film. The film’s only triggering something that’s already in the air. All the…approval for Putin is going down. People are criticizing and laughing at Putin on live TV, and this wouldn’t have happened before. Something is changing and I’m curious what will happen.Reporter Says RusAl Behind Visa Loss November 2011By Nikolaus von TwickelAn Australian-American journalist and self-declared doyen of the country’s foreign press corps has been barred entry into Russia in what he says is revenge from Oleg Deripaska’s RusAl for his "aggressive reporting" on the aluminum giant.John Helmer, who had lived in Moscow since 1989 and briefly worked as a Moscow Times reporter in the early 1990s, said RusAl has hounded him for two years because he rejected an offer for cash payments in exchange for favorable articles.RusAl denied Helmer’s allegations. “RusAl has nothing to do with this,” company spokeswoman Yekaterina Godlevskaya said in an e-mail. Helmer said he was forced to leave the country in September 2010 when the Foreign Ministry rejected an application to renew his one-year correspondent’s visa.But his expulsion only became public when national media reported about it last week.He said the only explanation he has managed to get from a ministry official was that he had violated the rules for foreign correspondents."No rule and no evidence were cited — not to me, and not to my newspaper," said Helmer, who was accredited with Business Day, a South African daily, and also writes for industry publications specializing in mining and metals.He said a subsequent attempt to obtain a private visa failed when the Federal Migration Service refused to issue an invitation at the request of his Russian wife, and a migration official told her that her husband "writes bad about our country."Both the Foreign Ministry and the migration service did not respond to repeated requests for comment over the course of about a week.In Skype and e-mail conversations with The Moscow Times, Helmer suggested that his case had been fabricated by United Company RusAl as punishment for his reporting in the run-up to the world's largest aluminum producer’s IPO in Hong Kong in January 2010. “This is the first time a journalist is being expelled at the demand of a Russian company,” he said.Helmer said he was in Britain but refused to give a more exact location for fear of his own safety.He said he believed that his expulsion was the culmination of a more than 12-month standoff with RusAl representatives that included indirect threats to kill him. “My life was threatened more than once,” he said.Helmer said his problems began in the fall of 2009 when he was approached by German Tkachenko, a former public relations executive of Siberian Aluminum, a predecessor of RusAl. Helmer said Tkachenko — a former Federation Council senator who runs ProSports Management, a company that consults and manages football players — told him during two meetings in Moscow that “Deripaska wants bygones to be bygones” and offered him money for writing favorably. "There was to be one payment if I didn't report on RusAl at all during its listing attempt in Hong Kong; a second, bigger payment if I reported positively about RusAl," Helmer said.The listing decision was controversial because RusAl was highly indebted. The IPO did raise more than $2.2 billion, but shares dived 11 percent on debut. On Tuesday they closed at 5.52 Hong Kong dollars (70 cents), almost half the offering price of 10 HKD. Helmer said he did not accept the offer but went on to report, among other things, about new taxes threatening the company’s bauxite mines in West African Guinea and that Deripaska and a son of Moammar Gadhafi had negotiated the possible sale of a 10 percent stake in RusAl to Libya.He said Tkachenko was “furious at the new reporting” and made threatening remarks.Tkachenko declined to comment for this article.Sergei Babichenko, a spokesman for Deripaska, said he could not comment on the accusations because he had never heard of them.Helmer said he received an e-mail from the Australian Embassy on Dec. 20, 2009, warning that his personal security was in danger. (He published the e-mail on his web site.)A day later, he said, a man claiming to be from the Federal Security Service, or FSB, came to his Moscow office and tried to take photographs. He wasn't allowed onto the premises but returned with two other men on Dec. 28. When they were not let in, the three waited in a car parked outside his office apartment.Helmer called the police, who detained the men. He said the men carried air guns, a blueprint of his house and forged Interior Ministry and FSB badges. “They told police that their orders were to use weapons to hurt me but not to kill me,” he said.He said the men claimed they had been engaged by a private security company called Alfa-Inform on behalf of Deripaska. As proof, Helmer published a copy of a report that he said was found in their car. The report —?on Alfa-Inform letterhead and with “RusAl” mentioned at the top — contains a brief account of his private life and his photo.Hours after the arrests, a lawyer for Alfa-Inform appeared and the men were freed. In January 2010, police closed the case. Helmer then challenged this decision and won a city court order in summer 2010 that the investigation be reopened.That, however, never happened. That fall, Helmer's visa problem “miraculously appeared," his lawyer Oleg Kuznetsov said by telephone.Kuznetsov said Helmer’s wife has sued the Federal Migration Service for its refusal to issue an invitation for her husband. After being delayed eight months, a court hearing was set for last week, only to be postponed to December because the judge suddenly went on vacation, the lawyer said.A woman who picked up the phone at Alfa-Inform last Friday said company officials would call back if they decided to comment. They had not replied by Tuesday.Helmer has both Australian and U.S. citizenship, and spokespeople for both countries' embassies declined to comment on the matter.The three arrests outside his office apartment did, however, make it into a U.S. Embassy cable published by WikiLeaks earlier this year. The February 2010 report says that in a conversation with embassy staff, a RusAl official, Sergei Chestnoi, said: "what Helmer needs is a psychiatrist."Helmer claims to be the country’s longest continuously serving foreign correspondent and “the sole reporter to Africa of Russian news" and is perhaps best known for his prolific blog “Dances With Bears” at? , where he publishes lengthy stories almost daily, usually accompanied by wildly photoshopped images. Last week, he ran a photo of media tycoon Alexander Lebedev in a morning coat standing next to "banana king" Vladimir Kekhman portrayed as a striptease dancer. The article claimed under the headline "Tarts and Toffs" that Lebedev's British daily The Independent had "tarted up" Kekhman's business by reporting about his hire of two Bolshoi dancers for St. Petersburg's Mikhailovsky Theater.Helmer is not the only journalist to complain about RusAl. In November 2009, Vedomosti accused RusAl of bombarding reporters with threatening phone calls and e-mails after it published an article that revealed that the company had posted a $5.98 billion net loss for 2008. The paper’s then-editor Yelizaveta Osetinskaya said at the time that RusAl was employing “information terror” to force it to reveal its source and prevent it from writing about the company again. Earlier that year, the company threatened legal action against The Moscow Times, after it quoted a RusAl miner in an April 2009 article as saying spending cuts forced workers to cut corners on safety.Helmer is also not the first correspondent to be banned from the country. Luke Harding from London’s The Guardian experienced similar troubles in November last year, when the Foreign Ministry refused to renew his visa. After the British Embassy intervened he was given a six-month extension, only to be deported by border guards on arrival at Moscow’s Domodedovo Airport in February. Harding, who is now based in London, published a book earlier this fall about his time in Russia. In “The Mafia State” he accuses the FSB of harassing him and his family for no apparent reason.Former Moscow Times reporter Thomas de Waal was refused a visa in 2006 when he wanted to present a book that he wrote about the Karabakh conflict. Other cases include two Czech TV correspondents whose visas were not renewed and Moldovan reporter Natalya Morar, who has been banned since December 2007 after authoring muckraking reports about corruption in the Kremlin in the New Times magazine.While Helmer said he believed that he was the first journalist to be expelled at the demand of a Russian company, other foreigners have faced visa problems amid commercial disputes here. William Browder, a dual U.S.-British citizen and head of the Hermitage Capital investment fund, was refused entry in 2005 after he criticized Gazprom, and BP CEO Bob Dudley, a U.S. citizen, hurriedly left the country in 2008 when, as head of TNK-BP, he locked horns with Russian shareholders and his visa was not renewed.Read more: The Moscow Times Eurasia or EuRussia? SHIRIYEVz.shiriyev@29 November 2011, TuesdayLast Sunday put an end to the speculation over whether Vladimir Putin will return to the helm, as he was nominated as the United Russia Party’s presidential candidate in the March 2012 elections. ? Putin has announced his motto as “never look back.” This news led to further speculation about his “Eurasian Union” idea: Is it a genuine alternative to EU policy in the former Soviet Union, or a PR move that will be forgotten after the elections? The issue now is not the content and direction of Moscow’s strategy or the extent to which it feels it can and must pursue this “Eurasian Union” quest, but rather what mistakes the EU has made. What provoked this projected institutionalization of Russia’s geopolitical resurgence? In order to answer this question, the EU must “look back” at its own actions.First of all, at the EU’s Eastern Partnership Warsaw Summit on Sept. 30, where Belarus did not have high-level representation, the EU began to criticize the Belarusian government, which prompted its delegation to leave the summit. At this point, Georgian President Mikheil Saakashvili told EU leaders that it is essential that the EU does not lose control over the negotiations with Minsk and does not allow Russia to control Belarus. Actually, this public criticism by the EU led to the total and hopeless isolation of Minsk, which prompted the Belarusian government to seek to leverage a new partnership with Moscow. The EU launched its isolation policy following Belarus’ presidential elections at the end of 2010, which saw a serious crackdown by security forces against the opposition. This isolation included sanctions from the EU and the United States, and was one of the many causes of the serious financial crisis Belarus is now in.Secondly, last month a Swiss-brokered proposal to end Georgia’s block on Russia’s accession to the World Trade Organization (WTO) came through. From the US or the EU’s perspective, this deal could help normalize Moscow-Tbilisi relations. More significantly, if it sees the steps Tbilisi is willing to take under pressure from Washington, Russia will be less obstructive with regard to the US’s plans for a radar system in Eastern Europe. In order to encourage Tbilisi to yield, the EU referenced the European Parliament’s Nov. 17 resolution on Georgia, which used the term “occupation,” and thereby clearly demonstrated European support for Georgia.In my recent talks with Ghia Nodia, a professor at Georgia’s Ilia State University, he gave a key insight into this issue: “When it comes to the conflict with Russia and the related issues of Abkhazia and South Ossetia, Georgia cannot achieve any qualitative breakthrough in the foreseeable future. The current situation, at least, gives no hope for that. But it is crucial for Georgia to retain international support and to ensure that the Georgian version of events is shared by major international players.” In this context, it seems difficult to argue that Georgia’s compromise on the WTO issue could act as a catalyst for the normalization of Moscow-Tbilisi relations, especially given that the European Parliament has now twice called for Russia to end its occupation of Georgian territory.These two developments hastened international recognition of Russia’s geopolitical ambitions, but there have been other indicators, which the EU should be able to identify with hindsight. First, the presidents of Russia, Kazakhstan and Belarus signed a Declaration of Intent in Moscow on Nov. 18 that could see the Eurasian Economic Community (EurAsEC) become fully operational within five years; this is seen as the first step to making the Eurasian Union a reality. That the first move has been to create an economic coalition (as opposed to a political bloc) is undeniably a clever strategy. Belarus, totally isolated by the EU, has taken a role in the creation of EurAsEC, demonstrating the negative perceptions of EU policy in Minsk. Following EurAsEC, the next step was a new natural gas agreement between Russia and Belarus.Kazakhstan is more ambivalent about this general strategy, particularly with respect to the politicization of what initially seemed to be an economic initiative. In my discussion with Kazbek Issayev, adviser to the director of the Kazakhstan Institute for Strategic Studies, he expressed his view that “Kazakhstan is aiming to build Eurasian integration based primarily on economic pragmatism. In this context, Kazakh policy on the creation of a Eurasian Union is determined exclusively by national economic interests.” It is possible that many of the post-Soviet countries perceive the steps described above as threats; nobody wants a return of the USSR. Right now, it is not clear what the future will be for this initiative, and Putin’s new “never look back” motto makes it all the more difficult to identify the precise trajectory of this strategy.The second development involves Moscow’s response to the US anti-missile shield plan. Many believe that after resolving the WTO veto issue with Georgia, US-Moscow relations could continue on the basis of the reset policy. During a United Russia Party congress, President Dmitry Medvedev signaled a warning that Russia will target US anti-missile sites in Europe and withdraw from the New Strategic Arms Reduction Treaty (New START) if the US does not cancel its plans to deploy an anti-missile shield in European countries. He also ordered army leaders to prepare to deploy a mobile weapons system to the Kaliningrad enclave in the Baltic Sea near Lithuania and Poland. This will upset Polish and Lithuanian security, and gives rise to the crucial question of whether this will be the end of the US-Russia “reset.” Will “resetting the reset” usher in Moscow’s new geopolitical ambitions?A 2005 remark by Dov Lynch, an expert on the region, resonates strongly in the context of the current situation: “Russia makes you an offer you can’t refuse, while the EU makes you an offer you can’t understand.” The Eurasian Union cannot become a political entity as the EU has because the motivation behind its establishment is so different. However, at the same time, the EU’s bureaucratic system is failing to offer timely and compelling opportunities for further integration. Visa liberalization and other concrete steps are slow-moving, and it is an open question whether all EU countries will accept such steps.“Lenders of Last Resort”: Sino-Russian Rivalry in Belarus?: 30 November 2011As 2011 draws to a close, the Lukashenka regime has averted economic and political collapse.? To be sure, the economy is still in a fragile state: the ruble has suffered three major devaluations since May; inflation has soared to 90 percent; external debt is at over half of GDP; and growth continues to slow. But all this may not matter much because Belarus now has two “lenders of last resort” – Russia and China.The agreements that Belarus signed with Russia last week resemble those signed with China in late September. Moscow and Beijing have carved out prized assets for their state champions in return for bailout loans. Both involve top-down agreements worth billions of dollars and lack Western-style conditionality.While the recent deals have salvaged Belarus’s economy, they could pit Chinese against Russian interests. Could Belarus become an object of Sino-Russian rivalry? The evidence so far cuts both ways.?Sino-Russian Relations: Consensus and ConflictOne could argue that China and Russia are not rivals at all. Their bilateral trade has grown by some 20 percent a year over the past decade, with no big trade deficit on either side. Trade was boosted by a $25 bn oil treaty in 2009. Just like Belarus, Russia, is playing into China’s outward investment strategy. For example, the?Baltic Pearl River project near St. Petersburg has attracted $1.3 bn in FDI from Chinese firms.?China and Russia also share a political legacy: both seek to enhance their roles in the global economy through “neo-mercantilist” strategies, while controlling strategic sectors of the economy and public life at home. As balancers in the post-Cold War order, both frequently act to counter EU and US interests. Just last week, they used UN Security Council seats to water down a resolution on Iran’s nuclear program.??However, the positive facets of Sino-Russian ties only go so far. A report released by the Center for European Reform last week illustrates how rapidly China has entered the post-Soviet “backyard” in search of oil and gas resources, particularly in Turkmenistan and Kazakhstan. Russia is concerned that this energy hunt may lead China to lay claim to parts of Siberia in future.The two states are beginning to see less eye-to-eye in diplomacy as well. China has been wary of US-Russian rapprochement on nuclear warheads and missile defense and reluctant to welcome India and Iran into the SCO. Russia, for its part, is far more interested in promoting regional economic integration through its own Eurasian Economic Union than the SCO. In this context, it is concerned that Chinese traders might make use of its nascent customs union with Kazakhstan and Belarus to evade tariff barriers.Belarus as a Source of TensionIn October, President Lukashenka published an article in the Russian media to voice his support for the Eurasian Economic Union. This followed an earlier article by Prime Minister Vladimir Putin advocating a new supranational integration unit in the CIS area. Lukashenka was clearly laying the groundwork for his Moscow visit last week. But he may also have aimed to dispel apprehensions about China’s growing role in Belarus.After China inked several deals in Minsk in late September, Putin stated publicly, via his spokesman, that Russia does not enjoy such far-reaching agreements with Belarus in spite of the customs union. An op-ed in Kommersant?claimed that Russian officials agree “off the record” that China “could spoil Moscow’s game”. This echoed reactions to China’s last major visit to Belarus in March 2010, when Gazeta.ru claimed that Lukashenka was “demonstrating his independence from Russia by taking money from China.”Notably, the state-run news agency Xinhua and the Party-owned People’s Daily in China took note of Moscow’s alarm, republishing translations of the Kommersant article and Putin’s statements. The media noted that China was simply trumping Russia’s efforts in Belarus by offering support on more generous, less predatory terms.As might be expected, the recent deals between Minsk and Moscow received widespread and negative press in the Chinese media, which branded Russia’s promotion of the Eurasian Economic Union as an attempt to reestablish Soviet-era influence over neighboring states.Even beyond rhetoric, there is some case to be made that Belarus is becoming the object of geostrategic rivalry. China’s rapid forays into Belarus, first of all, seem to make little economic sense, since the country is landlocked, with few natural resources and a small consumer market. China accounted for less than five percent of Belarus’s total trade last year, while Russia accounted for over half. On the other hand, from a geostrategic vantage point, China may indeed be looking to support a state located close to a rival power, as it has done with Pakistan and Sri Lanka around India.However, as I have argued elsewhere, China’s motives in Belarus are better understood in the context of Beijing’s “Go Global” strategy. The machinery producer Sinomach (CMEC), the main Chinese company investing in Belarus, signed $22 bn worth of overseas deals last year, spanning Ukraine, Russia, Iran, and other states in the region. Several Chinese contractors now rank among the top ten in the world, and are eager to expand their activity into Eastern Europe.Rather than geostrategic rivalry, Belarus is more likely to serve as an example from a game?theory textbook. If China and Russia seek to outcompete one another for Belarusian assets, they may both lose out. The optimal outcome is for both to settle on a little less to avoid the risk of getting nothing at all.With 180 enterprises listed for privatization over the next few years, there are plenty of spoils to divide. China is more interested in machinery and infrastructure, while Russia is more interested in oil and gas. There are few areas, most notably power generation and the chemical industry, where the two sides might clash.Even if push comes to shove, it is likely that the Chinese would back away. Statistics indicate that, as Chinese overseas investment matures, it is increasingly searching out safer, less politically charged markets.Iacob Koch-Weser, contributing writer(This is the third article of a three-part series. Previous posts are "China Helps an Ailing Autocracy" and "Chinese FDI in Belarus: Investing in a Backwater")National Economic TrendsReport Sees Economic Crime Decline November 2011By Howard AmosPwCReported cases of?economic crime have declined in?Russia over the?last two years against the?background of?recovery from?the 2009 financial crisis, according to?a PricewaterhouseCoopers biannual survey released Tuesday.Of?the 126 respondents, 37 percent said they had been a?victim of?economic crime in?Russia over the?last 12 months. That was 3 percent higher than the?global average of?34 percent, but a?big decrease from?2009, when the?figure for?Russia was 71 percent. Who the Fraudsters ArePortrait? of typical Russian fraudster (% of cases)Male (81%) Possesses higher education (65%) Between 31 and 40 years old (50%) From senior management (31%) From middle management (42%) Joined the company 3-5 years ago (39%)Source: PwCJohn Wilkinson, a?partner at?PwC, said the?decline in?the number of?economic crimes was not necessarily linked to?a drop in?the willingness of?organizations to?report incidents, but a?reflection of?an absolute reduction. "In 2009, in?the depths of?the economic crisis, there were additional motives for?management to?misrepresent figures and?for individuals to?want to?[illegitimately] obtain bonuses or other benefits because of?a shortfall in?the cash that they had," he said.Irina Novikova, PwC director for?accounting investigations, fraud risks and?controls, said the?drop could be the?consequence of?a reduction in?the rate of?detection. She also linked this to?the fallout from?the 2009 crisis when many companies reacted by?firing back-room staff, including control officers and?accounting staff — making fraud and?other transgressions more likely to?go undetected. Almost one-third of?respondents said they had suffered more than 10 instances of?economic crime in?the preceding year. And?losses were substantial: 22 percent of?participants who had witnessed a?transgression said they had suffered a?case where losses were more than $5 million. Seven percent reported damages between $100 million and?$1 billion.Problems were much more common in?larger organizations. Fifty-eight percent of?companies that employ more than 5,000 people reported fraud, compared with 20 percent in?organizations with less than 1,000 workers. As in?surveys from?previous years, bribery and?corruption accounted for?a much higher percentage of?economic crime observed by?respondents in?Russia (40 percent) than for?the rest of?the world (24 percent). But the?Russian figure showed an?8 percent drop from?2009, when corruption accounted for?48 percent. This decline contradicts other international measures of?corruption in?Russia that show an?increase. Transparency International placed Russia 146th in?its 2009 corruption perception index; in?2010 the?country ranked 154th. Wilkinson told The?Moscow Times that an?increase in?the number of?respondents to?the anonymous PwC survey showed a?growing willingness to?discuss the?issue and?was an?indicator of?greater transparency. For?the first survey in?2003, not a?single participant admitted to?an incidence of?economic crime, meaning that the?survey was obligated to?report a zero percent rate for?Russia.Those invited to?take part in?the survey included about 3,000 executives from?the country's top 1,000 companies, including multinational ventures. 126 individuals replied, up from?87 in?2009. Respondents to?the 2011 survey were not optimistic about the?future — 73 percent said their organization will continue to?be highly vulnerable to?economic crime.Read more: The Moscow Times Sharp drop in economic crime in Russia, says survey 30, 2011A biannual survey of economic crime records a steep drop for Russian in 2011. 37% of Russian companies in Russia were hit by economic crime in 2011, according to the the sixth Global Economic Crime Survey from PricewaterhouseCoopers (PwC). The figure marks a steep drop down from 71% in 2009 and 59% in 2007, and draws nearer to global average of 34%, the BRIC average of 31% and Central and Eastern Europe average of 30%.The report said the drop was partly due to more small and medium enterprises being included which report fraud less.40% of respondents said they faced problems connectec with bribery and corruption in 2011, 13% said they refrained new market or business opportunity due to corruption risks.Nabiullina upgrades 2011 GDP growth projections from 4.1% to 4.2% 30, 2011According to Minister of Economic Development Elvira Nabiullina, this year the GDP growth rate should reach 4.2% instead of the previous 4.1% target. In the meantime, she reiterated that investment growth will reach 6% and will remain single-digit in the coming years, partially reflecting the government?s inability to provide more financing for investment projects.We are not surprised by the upgrade in the 2011 GDP growth rate forecast. While the 1H11 growth was a modest 3.7% y/y, the global turmoil pushed households to increase spending in September-October, boosting retail trade growth to 8-9% vs. 5-6% in previous months and resulting in 4.3% y/y GDP growth for 10M11. We have recently mentioned in our comments that this trend is making our 3% growth forecast for 4Q11 too pessimistic and implies that the annual growth rate should be slightly above our initial 3.8% projections. Thus, it is not a surprise that the government also sees arguments for a small upgrade in the official growth target.Meanwhile, in the absence of any mention of state investments declared by the minister yesterday, we are skeptical about the ability of the private sector to generate recovery. The strength of the recent capital outflow, which may reach 5% of GDP this year, implies that investments from the real sector are likely to remain modest in coming years, limiting the upside potential for growth. We thus take this year?s better than expected GDP growth as a one-off event and continue to expect a slowdown to 2.6% next year.Growth must be green 29, 2011Artem ZagorodnovRussia could create millions of jobs by investing in clean-energy technology and insulating buildings.The head of the United Nations Industrial Development Organisation (Unido) gives Russia some tips on sustainability. Russia beyond the Heahlines: What is Unido’s main focus in developing countries??We focus on a niche area of industrial development – pollution management and green industries. In today’s context of climate change and resource efficiency in an overpopulated world, these areas are important to help provide solutions to increasing production and consumption. While market forces are important, industrialisation does not occur by accident. From Singapore to the EU, it’s been determined by the leaders. We want governments to mobilise their private sectors to engage in a green transformation.?RBTH: How do you envisage this green transformation will take place ?K.Y.: Experts call it a third industrialisation based on green growth. Strong public-private partnerships in green industries are needed, where the state hedges some investment risk while allowing market forces to operate. RBTH: How are Unido’s plans being realised in Russia?K.Y.: We’re pushing a number of projects in Russia focused on green energy and cleanup production. These include a centre for the disposal of hazardous consumer products and industrial waste in the Republic of Tatarstan, and a $1.5m (?960,000) project to improve water quality and reduce the impact of industrial activities in the middle and lower Volga basin. We’re also promoting the production of energy-efficient refrigeration and air-conditioning systems via technology transfer.RBTH: What specific green technology suggestions would you like to see in Russia?If Russian authorities were to adopt new municipal building codes and use public money to build new insulation, they could create millions of jobs. Mayors – like Michael Bloomberg of New York City – will tell you one of their biggest challenges was figuring out how to keep skyscrapers hot and cool. They’ve been thinking about incentives for owners and tenants to be energy efficient. We’re pitching these ideas to wealthy Russians as new business opportunities. The message I brought to the Nevsky Ecological Congress in St Petersburg this year was that Russia has always been a leader in science, but there has not been enough mobilisation for it to lead the green revolution. Russian scientists who can lead this research are out there.RBTH: What long-term challenges does Russia face in the context of green growth?K.Y.: When Russia went through rapid industrialisation, sustainability was not an issue. There are now places where accumulated pollution has killed ecosystems, and contaminated heavy-metal production sites where pollution is seeping into waterways. But technologies to clean up these problems do exist.How do you promote energy efficiency while stimulating economic growth?K.Y.: Japan and Denmark have shown you can grow GDP continuously while cutting energy use – the new government in Denmark is pitching green technologies as a way to stimulate economic growth. But I don’t think this mentality has gained a foothold in Russia yet. The government has set up an energy-efficiency programme, and I have heard people ask: “What for? We have lots of energy!” The answer is that there is a high demand for that energy – what you don’t waste, you can sell to other countries. Business, Energy or Environmental regulations or discussionsTelecoms Posting Monthly Gain as Futures Rise: Russia Overnight Leon Lazaroff and Halia Pavliva - Nov 30, 2011 4:49 AM GMT+0100OAO Mobile TeleSystems (MBT), Russia’s largest mobile operator, and competitor VimpelCom Ltd. (VIP) are headed for a second straight monthly advance on prospects usage of digital services will increase next year. U.S.-traded shares of Mobile TeleSystems, known as MTS, jumped 4.1 percent in New York yesterday and are up 14 percent this month, while VimpelCom climbed 0.1 percent, extending the November advance to 3.6 percent. The Bloomberg Russia-US 14 Index of Russian companies traded in the U.S. is down 4 percent for the month after adding 0.4 percent to 95.41 yesterday. Russian telecom company earnings may jump 13 percent next year as the country’s middle class uses more digital services on hand-held devices, said Chris Osborne, chief executive officer of Troika Dialog USA, a unit of Russia’s oldest investment bank. Mobile TeleSystems trades at 11 times analysts’ earnings estimates, compared with 23 times for Bharti Airtel Ltd. (BHARTI), India’s largest mobile-phone operator, and 13 for Mexico City- based America Movil SAB (AMXL), data compiled by Bloomberg show. “MTS has been a big underperformer and a cheap stock for a long time,” said Osborne in a phone interview in New York yesterday. “Yet on overall multiples and growth, there are many telecoms trading at a premium to MTS but don’t have the same growth profile. As more people enter the middle class, you’ll get more minutes of usage and more people using digital, and that’s what drives growth.” Futures expiring in December on Russia’s dollar- denominated RTS index rose 1 percent to 147,795 by 2:50 p.m. in New York yesterday. The measure in Moscow has dropped 5.3 percent this month, while the ruble-denominated Micex index lost 2.9 percent. The RTS Volatility Index, which measures expected swings in the index futures, dropped for the second time in three days, falling 2 percent to 49.51 points. Bank Downgrades The Market Vectors Russia ETF (RSX), a U.S.-traded fund that holds Russian shares, was little changed at 29.33, while the Bank of New York Mellon Russia ADR Index rose for a second day, gaining 1.9 percent to 800.33. The Hong Kong-traded shares of United Co. Rusal, the world’s largest aluminum producer, lost 0.9 percent to HK$5.47 as of 11:17 a.m. local time. The MSCI Asia Pacific Index declined 0.6 percent after Standard & Poor’s reduced credit ratings for lenders from Bank of America Corp. to Citigroup Inc. S&P cut Bank of America, Citigroup Inc. and Goldman Sachs Group Inc.’s long-term credit grades to A- from A after the ratings firm revised criteria for dozens of the largest global lenders. S&P made the same cut to Morgan Stanley and Bank of America’s Merrill Lynch unit. MTS Outlook MTS’ American depositary receipts advanced to $16.27 by the close of trading in New York, leading gainers on the Bloomberg Russia-US 14, while VimpelCom, a telecom provider formed last year after shareholders Telenor ASA (TEL) and Alfa Group combined their Russian and Ukrainian wireless holdings, rose to $11.38. Fitch Ratings cut MTS’ outlook to “stable” from “positive” yesterday, citing risks associated with holding company AFK Sistema, which has a 51.2 percent stake in the mobile-phone operator. “On a stand-alone basis, MTS’s credit profile continues to conform to low investment grade,” Fitch’s analysts led by Moscow-based Nikolai Lukashevich wrote in an e- mailed report. MTS stock in Moscow slid 1.6 percent to 205.48 rubles, or the equivalent of $6.57. One ADR represents two ordinary shares. Sberbank Earnings OAO Sberbank, Russia’s biggest lender, rose 2.1 percent to $10.77 in New York, ahead of reporting third-quarter earnings results in Moscow today. Sberbank is expected to report third- quarter net income of 74.6 billion rubles ($2.4 billion) under international accounting standards, according to nine analysts in a Bloomberg survey. Sberbank shares on the Micex fell 0.5 percent to 82.60 rubles, or equivalent of $2.64. Bank of America Corp., Goldman Sachs Group Inc. and Citigroup Inc. had long-term credit grades reduced to A- from A by Standard & Poor’s after the ratings firm revised criteria for dozens of the largest global lenders. S&P made the same cut to Morgan Stanley and Bank of America’s Merrill Lynch unit. JPMorgan Chase & Co. was reduced one level to A from A+. Yandex NV, operator of Russia’s most popular Internet search engine, gained 2.6 percent to $21.54, the highest level since Nov. 18, as Renaissance Capital analysts David Ferguson and Anastasia Demidova in Moscow said that the company’s market share has stabilized at above 60 percent after plunging in August and September, according to LiveInternet data. Oil Prices Oil rose for a third day in New York after U.S. consumer confidence climbed by the most in more than eight years, boosting the outlook for energy demand in the world’s biggest economy. Reports Iranian protesters broke into and vandalized the British Embassy’s compound in Tehran also bolstered prices for Russia’s biggest export earner. Crude for January delivery dropped 0.5 percent to $99.25 a barrel on the New York Mercantile Exchange in after-hours trading following a three-day, 3.8 percent jump. Brent oil for January settlement added 1.7 percent to $110.82 on the London- based ICE Futures Europe exchange. Urals crude, Russia’s chief export blend, climbed 1.9 percent to $110.84. Oil and natural gas contribute about 17 percent of Russia’s economy. The Micex has lost 14 percent in 2011 and trades at 5.1 times analysts’ earnings estimates for member companies. That compares with the 20 percent slide for Brazil’s Bovespa (IBOV) index, which trades at 10 times estimated earnings, according to data compiled by Bloomberg. The Shanghai Composite Index (SHCOMP) trades at 11 times, and the BSE India Sensitive Index (SENSEX) has a ratio of 14. To contact the reporters on this story: Leon Lazaroff in New York at llazaroff@, or Halia Pavliva in New York at hpavliva@ To contact the editor responsible for this story: David Papadopoulos at papadopoulos@ UPDATE 1-Sberbank's Q3 net profit $2.55 bln, beats forecast Nov 30, 2011 12:03pm IST* Posts Q3 net profit of 79.6 bln rbs vs 75.7 bln forecast* Says loans picked up in volume and quality* Net margin increased in both Q2 and Q3* Shares down 0.25 pct, in line with market (Adds company comment, detail, share price)MOSCOW, Nov 30 (Reuters) - Russian state lender Sberbank said on Wednesday its third-quarter net profit increased 76 percent to 79.7 billion roubles ($2.55 billion), beating analyst forecasts, on the back of a growing loan portfolio and margins.Analysts had expected an increase in third-quarter profit to 75.7 billion roubles, up from 45.3 billion roubles a year ago.The company said demand for loans picked up throughout the first nine months of the year, with the overall portfolio up 18.1 percent year-on-year in the January-September period."The group is also benefiting from an increasing share of retail loans which are growing faster than corporate ones," the company said in a statement.Loans are also increasing in quality, the bank said, due to an improving Russian economy and tougher risk management.It added that net interest margin had increased slightly in both the second and third quarters, driven by interest-earning assets and lower costs.Sberbank shares were trading 0.25 percent lower at 0611 GMT, in line with the overall Moscow market MICEX. The bank's shares are down 21 percent in 2011, almost wiping out a 24.5 percent gain the previous year.Russia wants to sell a 7.6 percent stake in Sberbank on public markets, but postponed the offering earlier this year due to turbulent market conditions.The deal, which would reduce the state's controlling stake to a fraction over 50 percent, would raise around $4.5 billion at current profit in the first nine months rose to 255.8 billion roubles, up from 109.6 billion roubles in 2010.Earlier on Wednesday, Kommersant newspaper reported that Sberbank is in negotiations to buy SLB bank, oil giant Lukoil's banking subsidiary in Switzerland. ($1 = 31.2327 Russian roubles) (Reporting by John Bowker and Andrey Ostroukh; Editing by Lidia Kelly)Sberbank May Buy Lukoil’s Swiss Banking Unit, Kommersant Says Stephen Bierman - Nov 30, 2011 5:56 AM GMT+0100 OAO Sberbank, Russia’s largest bank, is in talks with OAO Lukoil to buy the Russian oil producer’s Swiss bank, SLB Commercial Bank AG, Kommersant said, citing unidentified bankers. The transaction would require the approval of Swiss regulators, Kommersant said. To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@. To contact the editor responsible for this story: Will Kennedy at wkennedy3@. VTB Capital Said to Hire Credit Suisse Bankers for MENA Equities Zahra Hankir and Jason Corcoran - Nov 30, 2011 6:28 AM GMT+0100 VTB Capital Plc, the investment banking unit of Russia’s second-largest lender, may hire four Credit Suisse Group AG (CSGN) bankers based in Dubai to form an equities team in the Middle East and North Africa, two people familiar with the matter said. Karim Nsouli, head of MENA sales trading at Credit Suisse, may lead the unit, one of the people said, declining to be identified because the matter hasn’t been made public. Ali Salaam, co-head of MENA equities at Credit Suisse, may also join VTB Capital in Dubai, the person said. A spokesman for VTB Capital in Moscow, who didn’t want to be identified citing company policy, declined to comment. A spokeswoman at Credit Suisse in Dubai couldn’t immediately be reached for comment. To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@; Jason Corcoran in Moscow at jcorcoran13@ To contact the editor responsible for this story: Claudia Maedler at cmaedler@ Raiffeisen Russia’s Monin Says Funds at Parent May Rise: Voices Agnes Lovasz and Maria Ermakova - Nov 29, 2011 7:12 PM GMT+0100 Sergey Monin, chief executive of Moscow-based ZAO Raiffeisenbank, comments on his bank providing liquidity to its parent, Austria’s Raiffeisen AG, and government plans to allow foreigners to trade Russian state bonds. He spoke today in an interview at a Russian banking conference in London. On Raiffeisen’s Russian unit’s lending to its parent: “Our deposits with the parent company have increased. But that’s pure liquidity management where we chose between the ruble interest rate and deposits on the local market and the interest rates implied by swap operations. It is more profitable to place free liquidity through FX swaps and then deposit it to the parent bank. “It will increase in case the ruble appreciates further. In this case the share of foreign currency deposits will grow.” He said he’s unaware of any reprimand by Russia’s central bank in reaction to these transactions. On Russia opening its OFZ government bond market to foreigners: “There is no major participation of foreign investors in the bond market in general. The share of foreign investors is minor. The opening of the OFZ market -- I don’t really see it will significantly increase foreign investor demand. When the ruble becomes a serious foreign-exchange investment, the OFZ may become an instrument that foreign investors will use.” To contact the reporters on this story: Agnes Lovasz in London at alovasz@; Maria Ermakova in London at mermakova@ To contact the editors responsible for this story: Balazs Penz at bpenz@; Colin Keatinge at ckeatinge@ Rostelecom reiterates London listing plans , 30.11.2011, Moscow 12:00:11.State-controlled telecommunications operator Rostelecom has confirmed its intention to hold a listing on the London Stock Exchange in December 2011, the company's CEO Alexander Provotorov told reporters. ??????"We are planning to enter the stock exchange before the end of the year, but final approvals are still pending," he said, adding that the operator could float its stake in 2012, without elaborating on its size. ??????According to RBC's sources, the operator is expected to seek a London listing in the second half of December. Severstal to spin off gold producing unit , 30.11.2011, London 12:03:50.Severstal intends to spin off its gold producing subsidiary Nord Gold by the end of January 2012, the Russian steelmaker announced today.??????Severstal is expected to swap 100 of its own shares or global depositary receipts (GDRs) for 186 shares or GDRs of Nord Gold. UPDATE 2-Severstal to spin off gold unit, eyes IPO EST* Russia's largest steelmaker to split Nord Gold* Could list Nord Gold global depositary receipts in London* Follows postponed $1.5 billion IPO in February* Nord Gold set up in 2007By Megan Davies and Polina DevittMOSCOW, Nov 30 (Reuters) - Russian steelmaker Severstal is set to spin off its Nord Gold unit and could list the standalone business in London, it said on Wednesday, less than a year after it was forced to pull a planned $1.5 billion public offering.Severstal, which aims to complete the separation by late January 2012, said the swap and potential listing of global depositary receipts would allow Nord Gold and Severstal to focus on their core areas of activity, raise the profile of the gold unit and allow it direct access to funding.Severstal had planned to float the gold unit earlier this year, using cash raised to pay off debt owed to the parent company and to fund further growth. It cancelled the offering in February, blaming poor market conditions that meant it felt investors would be underpaying for Nord Gold assets.Nord Gold was set up in 2007 and has since spent more than $1 billion buying mines in West Africa and Kazakhstan, building a group with expected 2011 output of up to 840,000 ounces, rivalling Randgold and Russian peer Polymetal .Under the deal, Severstal investors will be able to swap their paper for shares in Nord Gold currently held by a Severstal subsidiary. If Severstal shareholders take up the offer and more than 5 percent of the gold unit's share capital ends up in the hands of minority investors, Nord Gold will apply to list global depositary receipts in London.Any shares not acquired by minority investors will be bought up by Rayglow, owned by Severstal's controlling shareholder, Alexei Mordashov.Severstal shares were down 2.8 percent at 432.6 roubles at 0850 GMT, with the European basic resources sector down 2.2 percent.Alexei Kulichenko, chief financial officier of Severstal, said on Wednesday that if conditions for the listing were not met immediately, it could still happen at a later date."It will be of course done in due course, in accordance with Nord Gold's strategy, which can be discussed with them separately," he told reporters on a conference call.Severstal said the exchange would see 100 Severstal shares swapped for 186 Nordgold shares, after a planned two-for-one reverse stock split of Nordgold shares.Kulichenko said Nord Gold debt to Severstal would be repaid, but there was no other cash component of the split, as the Russian steelmaker was no longer fretting over leverage."We see much stronger performance of Severstal to date, so we feel comforable and we don't see the urgent need of the deleveraging," he said.Nord Gold for its part has signalled it would continue monitoring acquisition opportunities even without a London listing.It has said it is pressing ahead with $300 million of capital expenditure this year including $130 million on exploration, and is continuing to eye opportunities, principally assets of a similar size to its two main exploration projects -- Bissa in Burkina Faso and Gross in Russia -- meaning projects with a potential resource base of 2 million to 6 million ounces.Severstal: Spin-off of gold assets in the offing 30, 2011BoD to consider spin-off of NordGold. Kommersant reported that Severstal?s (SVST LI ? Buy) BoD will consider spinning off the com- pany?s gold assets into a separate company at the next board meet- ing on 6 December. The spin-off will then be submitted for approval at the EGM; shareholders who vote against the spin-off will be able to sell Severstal shares to the company in the buy-back. We view the news as very positive development for the stock.NordGold ? Russia?s 3rd largest gold producer. Nord Gold is Russia?s third-largest gold producer and is expected to produce 800 koz of gold in 2011. We expect that NordGold will generate EBITDA of about $550 mln, or 15% of Severstal?s 2011E EBITDA. Severstal failed to place NordGold shares on the LSE in 1Q11 and the spin-off of the gold assets is the most likely sce- nario for NordGold.Value-accretive for Severstal minorities. The spin-off of NordGold assets will be a positive catalyst for the stock in the short term, as Severstal?s shareholders may get shares in Nord Gold for free after the spin-off of the gold division from the company. This could unlock additional value of around $1-$1.5 bln, or 8-12% of Severstal?s current market capitalization thanks to the premium included in the valuation of gold companies. Moreover, the price of the buy-back will be set at around the six-month average trailing price on MICEX of RUB451/share (at a premium of 1% to yesterday?s closing price of RUB445/share), which should set the floor for the market share price, supporting the stock. We reiterate our positive view on the company.CEDC Says Welcomes Russian Standard Buying Stake in Company Piotr Skolimowski - Nov 29, 2011 4:39 PM GMT+0100 Central European Distribution Corp. (CEDC), the vodka producer that owns the Zubrowka and Parliament brands, welcomes the purchase of a 9.9 percent stake in the company by Russian Standard, Chief Executive Officer William Carey said in an e-mailed statement to Bloomberg today. To contact the reporter on this story: Piotr Skolimowski in Warsaw at pskolimowski@ To contact the editor responsible for this story: Gavin Serkin at gserkin@ Tuesday, November 29, 2011 This Russian Business Isn’t Up to Standard : 1?Vote,?10.00?/?10This isn’t a rumor about a Russian billionaire buying a piece of Central European Distribution (CEDC), but an actual filing with the Securities & Exchange Commission.Yesterday, November 28, Russian Standard Corporation and its chairman Roustam Tariko filed with the SEC, stating that they had acquired a 9.9% stake in Central European Distribution. The stake of 7.2 million shares was acquired between November 15 and 21 at an average price per share of $3.52. The SEC filing calls this a strategic investment. The stock is up 26% today, as of 2:30 p.m. New York time, to $4.28, a 22% gain over Tariko’s average purchase price.Tariko, a billionaire with a fortune estimated at $1.9 billion by Forbes, founded Russian Standard, a leading consumer group in Russia. (He also owns the Miss Russia beauty pageant.) In August, Mark Kaufman, a business consultant for the wines and spirits industry and the founder of the Whitehall Group, an importer and distributor of wines and spirits in Russia, disclosed a 9.6% stake in Central European Distribution. Kaufman, born in Moscow, sold the Whitehall Group to Central European Distribution in 2011.I think it’s fair to say that Central European Distribution is in play. Kaufman is co-chairman of the LVMH Moet-Hennessy Louis Vuitton (LVMUY in New York or MC.FP in Paris) advisory board for Russia. Tariko’s Russian Standard Vodka is one of the top premium vodka brands in Russia.Now the question is, do you want to stick around to see how this plays out (and how long that might take) or take the recent gains and move on? Central European Distribution is a member of my Jubak Picks 50 portfolio, where the stock is down 77% since I bought it on December 30, 2008. The stock is, however, up 47% from its November 10 low of $2.93.I’m inclined to sell and take my profits (and losses) here. (By the rules of my Jubak Picks 50 long-term portfolio, I can only buy and sell once a year, at the end of the year. So in that online portfolio, I have to hold until the next revision in January 2012.) Let me tell you why I’d like to sell now, so you can make up your own mind.It helps if you think of Central European Distribution as two companies—both troubled, but one much more troubled than the other. The Polish company is troubled by slow volume growth—forecast at just 3% in 2012 by Credit Suisse—and some cannibalization as some of the company’s new brands ate into sales of existing brands. That resulted in a charge of $88 million from impaired goodwill in the third quarter of 2011.But the Russian company is struggling not only with slow volume growth—forecast at just 2% in Russia—but price erosion too, as higher taxes in Russia put pressure on customers and forced Central European Distribution to cut prices, slicing into company margins. The Russian part of the company also took a much bigger hit—$459 million—for impaired goodwill in the third quarter.It looks like turning around the Polish part of the business is well within management’s capabilities. Poland is likely to escape a recession in 2012, and to continue to be one of the fastest growing economies in Europe. That should support prices and slow growth in volumes.In Russia, the problems are, in my estimation, beyond current management. The Russian consumer feels very strapped now, and is likely to feel even more so in 2012. Taxes slapped onto the vodka by the government will also make it hard to produce any volume growth at all without price cuts. In Russia, the company needs more distribution and more market share.The company as a whole faces another big problem in 2013, when it will need to pay about $1.2 billion in senior notes. (It looks like the company has the cash to meet its needs before then.) Moody’s Investors Service downgraded the company’s credit rating after third-quarter results reported November 4.Management has lowered its estimates for six straight quarters now, and I think its guidance will be high again for the fourth quarter (which ends in December.) For example, the company told analysts it expects an EBIT (earnings before interest and taxes) margin of 20% in the fourth quarter—that’s significantly above the 10% EBIT margin for the first nine months of the year. So there’s definitely a strong possibility of another negative surprise when the company reports those results. (The company missed analyst estimates by 11 cents for the third quarter.)Central European Distribution (NSDQ:CEDC) Data as of Nov 29 2011, 05:20 PM ESTFull NSDQ:CEDC ResearchLastChange% Change$4.39+0.99+29.12%VolumeHighLow8M$4.89$3.6452-Week High52-Week Low$28.08$2.75Quotes delayed at least 20 mins.On a fundamental basis, I have trouble seeing this as more than a $3 stock.If you want to hold on in hopes that somebody will acquire the company, just try to stay reasonable in your expectations. The stock already trades at a premium to its closest Russian peer, Synergy (SYNG.RU in Moscow.)Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund, may or may not now own positions in any stock mentioned in this post. The fund did own shares in Central European Distribution and LVMH Moet-Hennessy Louis Vuitton as of the end of September. For a full list of the stocks in the fund as of the end of September, see the fund’s portfolio here.MRSK Holding gears up for additional share offering , 30.11.2011, Moscow 11:19:17.Russian electric power grid operator MRSK Holding (officially known as IDGC Holding) intends to hold an additional issue of 5.4bn ordinary shares at RUB 3.08 (approx. USD 0.1) per share by open subscription , which could potentially net the company over RUB 16.7bn (approx. USD 535.4m).??????The additional issue was registered by the Federal Financial Markets Service on November 10, 2011.??????According to earlier reports, the government, which owns a 53.69% stake in the MRSK Holding, plans to funnel RUB 5.44bn (approx. USD 173.7m) into upgrading the company's cable network in St. Petersburg and preventing above-standard losses in the North Caucasian power grid. November 30, 2011 09:24Rusal, RusHydro draft 10-year electricity contracts for Khakassia. Nov 30 (Interfax) - Rusal has virtually reached agreement on new long-term contracts for electricity supplies from RusHydro (RTS: HYDR) and is holding similar talks with SUEK, but needs to include extra conditions because of existing regulations on the energy market."We are already prepared for cooperation with RusHydro. The question is what to do with wholesale market regulations [with regard market compensation for tariff and competitive selection price differences]. The agreement includes supporting terms linked to market regulation amendments," Rusal Deputy General Director Vadim Geraskin told Interfax. The government at the beginning of the year confirmed resolution No. 1172, which instructed consumers in the second price zone (Siberia), which have free agreements for capacity with inexpensive hydro-generation, to return to the market the difference between capacity price, established through competitive selection, and the price of the free agreement (because the agreement price is a commercial secret, the regulators took the Federal Tariff Service tariff for HPP).Rusal, which accounted for 30% of electricity consumption in Siberia in 2010, mostly has long-term agreements with hydro power plants - Irkutskenergo (RTS: IRGZ) and Krasnoyarsk HPP (RTS: KRSG). These agreements were signed in 2009 for 8-10 years and bound to aluminum prices on the LME.Two sources familiar with the talks told Interfax that the companies are discussing long-term contracts for electricity supplies to the Sayanogorsk and Khakassia aluminum smelters. The terms of the contracts have long been discussed, but a final agreement was reached recently for a 10-year standard period. The price of the contracts, sources say, as with Rusal agreements with Irkutskenergo and Krasnoyarsk HPP are bound to aluminum quotes on the LME. Both sources were unable to say when these agreements would come into force, but one said this could happen in mid-2012 when the 1172 resolution stipulation, whereby consumers with free agreements on the supply of electricity and capacity have to cover the difference in the competitively selected price and the HPP tariff, is no longer in force."Yes, agreements have been concluded for 10 years, but with supporting conditions on their coming into force," RusHydro told Interfax. The contracts will fix upper and lower price limits, "one [price] component is tied to the price of aluminum on the LME," the generating company said.Rusal and RusHydro are already partners in the Boguchansk Aluminum Smelter and Boguchansk HPP projects. "Such an agreement [on electricity supplies] exists for Boguchansk Aluminum Smelter. The partnership agreement with RusHydro included the cost of electricity for this plant," Geraskin said. "The price is fixed for the entire period of the agreement."Sibenergy, or Siberian Generating Company (consolidates the energy assets of SUEK, Kuzbassenergo (RTS: KZBE) and Eniseiskaya TGK (TGK-13) (RTS: TGKM) shareholders) could become another electricity supplier for Rusal on a long-term basis. "Talks are being held with SUEK and various other companies in the interests of the Novokuznetsk Aluminum Smelter," Geraskin said, without giving any details about the talks. The aluminum company is interested in increasing the share of long-term direct contracts from the current 50% of consumption to 80%-85%, he said. "Throughout the world the practice is to conclude contracts for 20 years with a mechanism to extend for another 20 years, otherwise it is impossible to plan the introduction of new capacity for aluminum production. This is the most efficient model, it is used around the world and has proved its viability so we will continue to move in that direction," Geraskin said.The complete interview can be viewed on the Finmarket website at: (Our editorial staff can be reached at eng.editors@interfax.ru)Russian tycoon seeks $2 bln loan to buy Freight One-sources, Nov 29 2011MOSCOW, Nov 29 (Reuters) - A transport unit of Russian tycoon Vladimir Lisin is in talks with Russia's Sberbank and foreign counterparts about a $2 billion loan to buy control of Russian Railways unit Freight One, sources close to the deal told Reuters on Tuesday. Lisin, Russia's richest man with a $24 billion fortune, won an auction to buy 75 percent minus two shares in $4 billion valued Freight One via his transport unit Universal Cargo Logistics Holding (UCLH) in October. One source said that Deutsche Bank, JP Morgan, Morgan Stanley, Citi and Merrill Lynch are now in talks about taking part in a syndicated loan to UCLH. Another source said that another option being considered is to raise the funds from Sberbank as well as a syndicated loan. (Reporting by Gleb Stolyarov, Oksana Kobzeva, Polina Devitt; Writing by Andrey Ostroukh; Editing by John Bowker) Deripaska files suit against Potanin in Swiss court 30/11/2011MOSCOW, November 30 (RIA Novosti) – Oleg Deripaska, the head of Russian aluminum giant RusAl and a core shareholder in Norilsk Nickel, has filed suit in a Swiss court against another Norilsk shareholder, Vladimir Potanin, concerning possible money laundering during Norilsk's buyback program, Deripaska told Swiss ECO magazine late on Tuesday."This is not the first time that Mr. Deripaska has made statements concerning Norilsk Nickel in various courts," a spokesman for Potanin's Interros holding, Andrei Kirpichnikov, told RIA Novosti."I see no sense in commenting on such demarches. People choose their own business style and form their reputation on their own. We can only regret that businessmen put these kinds of personal ambitions ahead of the reputation of Russian business and the country as a whole." RusAl estimated Norilsk's losses from the buyback at more than $1 billion. The suit in Federal Criminal Court of Switzerland also names former board member of Hyposwiss Private Bank Zurich Hans Bodmer for his alleged role in the laundering scheme. RusAl and Interros, which holds over 30 percent in Norilsk, have been locked in a struggle for control of the metals giant for more than a year. RusAl says the Norilsk board has become dominated by officials linked with Interros.To resolve the conflict, Norilsk initiated a $4.5 billion buyback program this January and scheduled for completion in February, although the buyback only ended in March due to court proceedings under a lawsuit filed by RusAl. RusAl said the program would distort the company's ownership structure.Deripaska told the magazine he believed money laundering took place in Switzerland with the help of Hyposwiss bank. He said he had also filed with Swiss banking regulator FINMA asking it to examine the bank's actions.Activity in the Oil and Gas sector (including regulatory)Med Crude-Urals strong as Shell, Total win tenders Nov 29, 2011 6:36pm GMT* Talk of a VLCC to Asia * Kirkuk also benefits from Urals' strength * Urals at premium over Brent for 1 month in Med LONDON, Nov 29 (Reuters) - Oil majors Shell and Totalwon a lion's share of tenders by Russian oil producers forDecember, paying a hefty premium for the Urals grade and helpingit stay at a premium to benchmark Brent for the longest periodon record. Shell won six cargoes from Rosneft. Total won one cargo fromRosneft and one from Surgut, traders said. Surgut also sold two cargoes to trader Talmay, and onetrader said some of those volumes could ultimately end up inAsia. All tenders were for cargoes for delivery from the Baltic. "There is talk again in the market that a VLCC (very largecrude carrier) is being put together to be sent to Asia," onetrader said. Rosneft placed its cargoes at a premium of 50 cents to datedBrent, while Surgut sold its cargoes at around plus 30 cents,traders said. Traders said there was very little availability ofalternative sour grades, which would likely support Urals'values and its premium to Brent in the days and even weeks tocome. Urals typically trades at a discount to Brent but switchedto a premium a month ago on Oct 28 in the Mediterranean andalmost 20 days ago in the Baltic, the longest runs on record inboth regions. The grade was boosted by good refining margins, relativelyshort Urals export volumes, poor availability of alternativegrades and fears that the European Union will ban Iranian oil. Traders said Iraqi Kirkuk was trading at a premium of 50cents to official selling prices, which will translate into adiscount to Brent of around 80-90 cents. Algeria's Sonatrach was heard releasing December officialselling prices for Saharan Blend at plus 70 cents to datedBrent, down from a premium of $1.75 in the previous month. OPEC oil output has risen in November to a three-year highdue to increased supplies from Angola and a further recovery inLibya's production, a Reuters survey found on Tuesday. L5E7MT3IS (Reporting by Dmitry Zhdannikov and Gleb Gorodyankin)Slavneftegaz to Build $1.9 Billion Oil Refinery, Kommersant Says Stephen Bierman - Nov 30, 2011 6:00 AM GMT+0100 OOO Slavneftegaz plans to build a $1.9 billion oil refinery with a capacity of 3.7 million metric tons a year in Russia’s Bryansk region, Kommersant said citing Vyacheslav Dubinnikov, general director of the Moscow-based company. It is not clear how construction of the plant, planned for 2015, will be financed or where it will get crude feedstock, Kommersant said. To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@. To contact the editor responsible for this story: Will Kennedy at wkennedy3@. Lukoil seeks foray into another Iraqi oil project , 30.11.2011, Moscow 10:47:16.Lukoil may team up with Shell and purchase ExxonMobil's stake in the Iraqi West Qurna-1 oil field before the end of 2011, RBC Daily reported, citing an oil industry source.??????The Russian oil major could receive a 37.5% equity stake in West Qurna-1, which contains 8.7bn barrels of oil reserves. Shell, which currently owns a 15% working interest in the project, is expected to raise its stake to 37.5%, while Iraqi state oil producer North Oil Company will retain its 25% stake.??????Lukoil currently operates another large Iraqi oil field, West Qurna-2, with reserves equal to 12.9bn barrels. Lukoil, Shell May Buy Exxon Stake in West Qurna-1, RBC Reports Anna Shiryaevskaya - Nov 30, 2011 9:46 AM GMT+0100 OAO Lukoil is in talks to buy 37.5 percent of the West Qurna-1 field in Iraq from Exxon Mobil Corp. (XOM), RBC Daily reported today, citing unidentified people. The deal may be completed by the end of the year, the newspaper said. Royal Dutch Shell Plc (RDSA) may buy the rest of the U.S. oil producer’s 60 percent interest in the project, increasing its own stake to 37.5 percent, the daily said. Lukoil’s press service and Shell’s Moscow press service declined to comment when called by Bloomberg News. Exxon Mobil didn’t immediately reply to requests for comment. To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@ To contact the editor responsible for this story: Will Kennedy at wkennedy3@ Lukoil: Eyeing part of ExxonMobil's share in Iraqi West Qurna-1 project 30, 2011Stake could be as large as 37.5%. It has been reported that Lukoil (LKOH RX ? Buy) is likely to buy a 37.5% stake in the West Qurna-1 project, which will come out of ExxonMobil's 60% stake, based on a technical service contract (TSC) with the Iraqi government. The price has not been disclosed, but the $1.8 bln advance payment for uni- dentified international E&P assets, which Lukoil reported in 1H11, could be related to this deal. Shell, which owns 15% in the project, could add a further 22.5% to its stake, so that it and Lukoil would jointly control 75% in the project, with the remaining 25% held by a state-owned Iraqi company.Lukoil could help Iraqi government if Exxon?s backs out. Exxon-?Mobil has reportedly been in conflict with the Iraqi government since?it signed production-sharing agreements (PSAs) with the government?of Iraq?s autonomous region of Kurdistan. It could decide to pull out of?West Qurna-1 altogether in favor of the high-risk but potentially high-return Kurdistan projects, while Lukoil and Shell would step in and help Iraq keep the project going. Lukoil may also have to increase its share in the ExxonMobil-led water injection project for several major fields in southern Iraq. The West Qurna-1 TSC is similar to Lukoil?s West Qurna-2 in that the operator is required to boost output to a certain level and is entitled to a small service fee on the added output and reasonable compensation for costs.Closer to the ultimate prize - a PSA in Iraq. The value of a TSC to the operator critically depends on its ability to raise produc- tion to the required level as soon as possible and at the lowest cost. West Qurna-1 pays a service fee of $1.9/bbl for incremental output of 2 mln bpd. We estimate after-tax net service fees to the operator at just $1 bln/year during the 20-year plateau. Given the risks, we doubt that the whole project is worth more than $5-7 bln, valuing Lukoil?s share at $1.9-2.6 bln. But we believe that Lukoil is seeking access to more profitable projects in Iraq, such as PSAs, which will be on offer in the fourth licensing round early in 2012. Its entry into West Qurna-1 may improve its chances in winning this prize. We have a Buy recommendation on Lukoil.Lukoil 'oil strike' in Timan-Pechora giant Lukoil has reportedly made a major oil discovery in Komi republic in the Timan-Pechora region. Steve Marshall & News reports ?30 November 2011 08:44 GMT Exploration drilling at the Vostochno-Lanbeshorsky field indicates a resource potential of up to 200 million barrels, the company’s vice president Leonid Fedun was reported as saying by Oil., cited by Barents Observer. The Russian privately-owned oil company has several producing assets in the oil-rich Timan-Pechora region, including the Yuzhno-Khilchuyu field being developed in partnership with US supermajor ConocoPhillips. However, output from the latter field has fallen short of expectations since coming on stream in 2008. Fedun said recently that Lukoil is set to increase its production in 2012 after several years of decline, with domestic output seen rising by 2% and overseas output by 5%. The company is reported to have slipped to third place in the Russian producer rankings behind state-owned Rosneft and TNK-BP, based on production figures for this year. Published:?30 November 2011 08:44 GMT ?|?Last updated:?72 minutes ago 'Trans-Caspian pipeline not to be realized until Russia, Iran stop resistance' 30 November 2011 07:21 GMT | 8:21 Local TimeNews.Az interviews Andreas Heinrich, a researcher at the University of Bremen's Centre for East European Studies.How may the Nord Stream project change situation at European energy market?The opening of the Nord Stream pipeline will not dramatically change the situation on the European energy markets. For example, it will not lead to an immediate increase in imports of Russian natural gas as most long-term delivery contracts stay unchanged. However, European markets will be less affected by conflicts with transit countries for Russian gas in the future.Will this project help to ensure stable gas transit to Europe without any problems like it was during Russian-Ukrainian energy crisis a few years ago?The Nord Stream pipeline will indeed increase the European supply security as it completely avoids transit countries. However, the pipeline is not replacing the existing pipeline infrastructure for Russian gas (such as the Yamal-Europe pipeline through Belarus to Poland and Germany or the Brotherhood pipeline through Ukraine to the European Union); it is merely a complementary pipeline project. Thus, supply interruptions are still possible (either due to conflicts between Russia and its transit countries or due to technical problems with the aging pipeline infrastructure) but the consequences of such events will be less severe for customers in Western Europe.An uncertain situation still continues with the Nabucco project. The consortium representatives talk about some obligation from the Azeri side but there is not visible progress yet in realization process.I do not expect to see any progress in that matter anytime soon.Russia and Iran are against any energy project across the Caspian Sea. Some Russian experts even don’t exclude military invasion to Turkmenistan if this country will agree with Trans-Caspian pipeline. How would you comment on situation and do you believe in this project?In my opinion a Trans-Caspian pipeline has no chance to be realized as long as the resistance of Russia and Iran cannot be overcome. I do not feel competent to speculate about Iran’s motives and rational on that issue. However, Russia is neither interested in giving Turkmenistan another export option for its natural gas because Russia relies on imports of Turkmen gas for its own gas balance; nor does it want to give the Nabucco project a leg up by placing Turkmenistan in the position to become a potential gas supplier for it. The Nabucco pipeline project would be competing with Russia’s own South stream pipeline for European markets.F.H.News.AzGas in Russia More Costly Than in U.S. 30 November 2011BloombergIndustrial users in?Russia, the?world's biggest natural gas producer, are paying more for?the fuel than U.S. consumers as Prime Minister Vladimir Putin's government raises prices to?improve Gazprom's profitability.Russian industrial users will pay about $2.84 per million British thermal units for?gas this year, according to?Bloomberg calculations based on?Gazprom data. That compares with $2.83 per million Btu for?the next-day contract at?Henry Hub in?Louisiana, the?U.S. benchmark.Russia, which sits on?the world's biggest gas reserves, is gradually increasing domestic rates to?match oil-linked prices in?Europe, Gazprom's biggest market by?revenue. The?domestic market is the?producer's largest by?volume. U.S. prices fell 26 percent over the?past year as increased production from?shale deposits boosted supply."It feels like the?end of?an era where cheap gas was a?foundation of?the old system," said Kingsmill Bond, an?analyst for?Citigroup in?Moscow. "The domestic price is now arguably artificially high not artificially low, and?that will surely over time put more pressure on?Gazprom to?be run more effectively."Natural gas prices for?Russian industrial users will average $107 per thousand cubic meters next year, Gazprom chief executive Alexei Miller said Nov. 25. That's about $3 per million Btu.Read more: The Moscow Times GazpromThe local JV partner in Russia's South Stream project claims that the gas pipeline is definitely set to cross Slovenia - 29.11.2011The local JV partner in Russia's South Stream project claims that the gas pipeline is definitely set to cross Slovenia, IntelliNews reports, citing Slovenian daily Dnevnik. "The project is entering its final and most important business decision-making phase. Our Russian partners are completing the consolidated (joint) feasibility study and as we understand, definite decisions as to the further development of the project are to be made shortly," representatives of Plinovodi, which signed a joint venture agreement on South Stream with Gazprom, told . Plinovodi sent its feasibility study on technical solutions and possible pipeline routes in Slovenia to Gazprom, which then joined all the documents submitted also by other countries to make a collective, consolidated study. According to reports in Dnevnik, Gazprom has already completed the consolidated feasibility study for the gas pipeline project, as well as made the decision regarding Slovenia's participation. Source: bne Gazprom’s new Arctic oil rig arrived to Murmansk Yesterday night, Gazprom’s new “Arkticheskaya” jack-up offshore drilling rig moored at Shipyard No. 35 in Murmansk for completion. The drilling unit has undergone all acceptance trials during the transition from the Zvezdochka shipyard in Severodvinsk, and will be handed over to the customer Gazflot in December, Portnews writes.The rig will be completed at Shipyard No. 35 in Murmansk, which is the same yard that completed the Prirazlomnoye oil platform, which was transported to its designated place in the Pechora Sea in August.The platform has been under construction at Zvezdochka shipyard in Severodvinsk since the early 1990s. Problems with financing led to a halt in the project, but in 2006 construction was speeded up again. The rig has undergone testing in the White Sea this summer and autumn.This is the first oil rig to be built at the naval shipyard Zvezdochka.The rig is designed for operations in Arctic waters and will be used primarily in the Pechora Sea. It has an 88 meter long and 66 meter wide platform and can house 90 workers. Maximum drilling depth is 6.500 meters.Text: Trude PettersenLOANS: Gazprom signs US$800m club$800m-club/1617829.article29 November 2011 November 29, 2011 (RLPC) - Russian energy group Gazprom has signed an US$800m, five-year unsecured club loan. Bank of Tokyo-Mitsubishi UFJ, UniCredit Bank Austria, Mizuho Corporate Bank Nederland, Sumitomo Mitsui Finance Dublin and ZAO Sumitomo Mitsui Rus Bank acted as mandated lead arrangers, bookrunners and original lenders. Bank of Tokyo-Mitsubishi UFJ acted as sole co-ordinator and facility agent.Estonia Needs to Nationalize Gazprom-Owned Gas Grid, Report Says 29, 2011, 7:26 AM ESTBy Ott Ummelas Nov. 29 (Bloomberg) -- Estonia needs to nationalize AS Eesti Gaas’s natural-gas transmission network to create a functioning energy market, according to a report by Poeyry Oyj, a Finnish consulting company.The country should decide on and perhaps implement the splitting of Eesti Gaas’s sales and transmission units by 2015, nationalizing the grid and building a regional or local liquefied natural gas terminal, according to the report, commissioned by power grid operator Elering AS. A supply contract with Russia’s OAO Gazprom is due for renewal then.“The development of the natural-gas market and expansion of gas consumption will probably occur only if the transmission grid belongs to the Republic of Estonia,” Poeyry said. “The state can only ensure effective energy markets through two simultaneously functioning levers: working regulations and ownership of the system operator for the main grid.”Estonia’s ruling Reform Party published plans in October last year for gas unbundling to reduce dependence on Gazprom, Eesti Gaas’s biggest owner and the sole supplier of gas to Estonia, Latvia and Lithuania. The Baltic nations, which have uneasy political relations with Russia, are seeking EU support for building an LNG terminal in the region, citing higher gas prices than in western Europe and supply risks.The Economy Ministry has drafted a bill to separate ownership of gas sales and transmission by 2015. Last year, Lithuania announced a similar plan at Lietuvos Dujos AB, bringing criticism from Gazprom and from Germany’s E.ON AG, which also has a stake in Eesti Gaas.The Baltic nations asked the European Commission this month to help decide whether a regional liquefied natural gas terminal is needed and where it might be built, after failing to agree on a location.A regional terminal for the Baltic nations and possibly Finland would cost 375 million euros ($504 million), Estonian Economy Minister Juhan Parts said in September, citing the Poeyry report before it was published.--Editors: Alan Purkiss, James KrausTo contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@To contact the editor responsible for this story: Balazs Penz at bpenz@12:32?30/11/2011ALL NEWSGazprom delegation arrives in Sri Lanka to look at gas field development possibilities DELHI, November 30 (Itar-Tass) —— A delegation of four technical experts from Russia’s national gas utility Gazprom on Tuesday arrived in Sri Lanka to study a possible development of oil and gas fields in that country.According to Sri Lankan Minister of Petroleum Industries Susil Premajayantha, a group of specialists from the Indian oil company Cairn will join in next week.In early October, a natural gas field was discovered at Sri Lanka’s north-western coast. The field rests in the Gulf of Manar at a depth of 4,300 meters below sea level.Talks on the development of this field were held in the framework of the recent Moscow summit of the Shanghai Cooperation Organization (SCO).Gazprom Alert: Russia-Belarus Gas Deal 30, 2011As expected, on Friday Russia and Belarus signed a series of agreements on gas supply. Belarus was given a substantial discount to current formula prices, and will now get a West Siberian price plus costs, or $165.6/mcm in 2012 vs. the current $286/mcm. For the following two years the price will rise with Russian domestic prices after which time, according to PM Vladimir Putin in statements to the press, prices will go to parity (more on that below). Gazprom buys the remaining 50% of Beltransgas for $2.5bn, with agreements setting out the minimum margins that company will earn as well as the transit fees. Belarus commits to taking 22.5-23bcmpa in the next three years, similar to past consumption levels. While the pricing discounts were larger than we were originally anticipating, this is an important strategic gain for Gazprom, in our view.Price below our recent expectations: The $165.6/mcm price was below our recent expectations of netback parity with European exports, which would today be in the range of $230/mcm vs. the $400/mcm nominally set out in the previous contract, the current $286/mcm, and the c$265/mcm we have been assuming in our model for next year. Relative to that last number, this agreement suggests a 2012 revenue stream about $2bn below our numbers for Gazprom. Some of that will be compensated for by a c$16/mcm margin Beltransgas will be allowed to earn on sales of Russian gas, which itself will at least partly compensate for the cost of acquiring the company and will push the integrated price received by Gazprom to c$182/mcm. Going forward, the underlying price will rise by 15% each July for the next three years per the schedule recently approved by the Russian tariff back parity beyond 2014?: The ?parity? statement by Putin on Friday afternoon wasn?t clarified in the press reports, but we presume it means parity with European exports. Assuming that is true, then our long-term pricing assumptions for Belarus will remain unchanged, as we have long assumed that all export countries go to European netback parity in the near future, typically in 2013. Our long-term parity assumption of $171/mcm is based on a relatively conservative oil price of $80/bbl Brent. Should oil prices be materially higher than that in, say, 2015, then we would expect Belarus to negotiate some continuation of a discount to parity, although prices themselves should continue to climb.Beltransgas acquisition ? adding pressure on Ukraine: The Beltransgas acquisition appears unlikely to give Gazprom a large return on its investment in the company, but has significant, unquantifiable strategic value, in our view. Gazprom will now have absolute control over a transit route to Europe that, with a bit of modification and a small extension, could theoretically reach several countries that could heretofore only be reached via the Ukrainian pipeline system, including Slovakia. Combined with the growing capacity of Nord Stream, this decreases Gazprom?s dependence on Ukrainian transit, lowering that country?s bargaining power in its own discussions with Russia and Gazprom on gas pricing.Where does this leave Ukraine?: Russia?s negotiations with Ukraine on 2012 pricing are ongoing, with 50% larger sales volumes and even larger transit volumes at stake. We think Ukraine is highly unlikely to agree to sell its entire gas transport system to Gazprom (we consider it a near impossibility, politically speaking), and appears highly reluctant to join the Russia ? Belarus ? Kazakhstan customs union. Therefore, we expect Ukraine will not be able to negotiate a price break nearly as great as that received by Belarus, and the Belorussian deal appears to impair somewhat Ukraine?s negotiation position. We still think the most likely outcome is the sale of a minority stake in the Ukrainian gas transport and storage system, with a European party stepping in as another large shareholder and acting as a mediator between the Russian and Ukrainian sides. ................
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