Russia



Russia 100616

Basic Political Developments

• Yonhap: Russia yet to analyze results of int'l probe into ship sinking: envoy

• UN: UN official urges stronger business ties between Russia and Africa - “We want our friends, including from Russia, to come to Africa to do business to create wealth and jobs for the people,” said Kandeh Yumkella, the Director-General of the UN Industrial Development Organization (UNIDO), in a video address to participants attending a conference on relations between Russia and Africa in Moscow.

• Bloomberg: Medvedev Seeks Microsoft, Nokia Expertise in Building Russia

• Reuters: US: no secret deals with Russia on missile defense - Assistant Secretary of State Rose Gottemoeller was trying to assuage critics who say they fear the Obama administration made explicit or implicit concessions to the Kremlin that could limit the future development of U.S. missile defenses.

• Itar-Tass: Medvedev, Harper discuss G-20, G-8 Jun summits' agendas

• Itar-Tass: RF, Morocco FMs to discuss the situation around Gaza, the Iran issue, bilateral cooperation - The Ministers of Foreign Affairs of Russia and Morocco, Sergei Lavrov and Tayeb Fassi-Fihri, meet here on Wednesday to discuss the situation around Gaza, the Iran issue, as well as expansion of bilateral economic cooperation.

• PIB: Anand Sharma to Attend St. Petersburg International Economic Forum

• Financial Mirror: Russia amongst the largest foreign investors in Cyprus

• RIA: Lithuania declares justification of Soviet 'aggression' criminal offence

• Itar-Tass: Soyuz manned spaceship blasts off from Baikonur

• Bne/RIA: Russia gives Belarus 5 days to pay off $200 mln gas debt

• Georgian Daily: Russians, Ukrainians ‘Not Simply Fraternal Peoples But a Single People’ - Russian Ambassador in Kyiv

• RUSSIA-KYRGYZSTAN

- RIA: Russian foreign minister, UN chief discuss Kyrgyz unrest - “Russia voiced concern about civilian victims and also about the large number of refugees at the Kyrgyz-Uzbek border,” the statement said, adding that the phone conversation took place on Tuesday.

- 24.kg: Kyrgyzstan Security Council Secretary departs for Moscow

- 24.kg: Osh airport resumes flights to Novosibirsk and Ekaterinburg

- Itar-Tass: RF Emercon to send humanitarian supplies to Kyrgyzstan

- VOR: Russian Emergencies Ministry to fly more humanitarian aid to Kyrgyzstan

- Trud/Russia Today: “The south ofKyrgyzstan could secede” - Anti-Kirghiz unrest may erupt in Uzbekistan, and the south of Kyrgyzstan could secede from the north. This was discussed by an expert on Kyrgyzstan from the Ethnology and Anthropology Institute, RAS, Georgii Sitnyansky, in his interview with Trud.

- WSJ: Russia Rises While Kyrgyzstan Burns - The violence highlights Moscow's power in a country with an important U.S. military base.

• Interfax: Poll: Most Russians think Kyrgyzstan-style uprising impossible in Russia

• RIA: Police officer killed as gunmen seize weapons in Dagestan

• Itar-Tass: Unidentified gunners have fired at a police patrol and killed a policeman in Dagestan

• Georgian Daily: Kazan Tatars Launch Websites to Promote Modernist Islam

• RIA: Some 80 people die from drug abuse in Russia every day - minister

• VOR: Some 350 groups of drug dealers active in Russia

• Georgian Daily: Moscow Uses ‘Infamous’ Ship to Move Spent Nuclear Fuel - The “Serebryanka,” the news agency reports, has picked up “the first load of spent nuclear fuel from the run-down storage facility” near the Norwegian border without Russian officials informing Oslo in advance as they had pledged to do

• VOR: Interpol unable to help extradite Berezovsky, Zakayev

• Russia Profile: Rules of The Game - Russian Judges Are Warned to Avoid the Temptation to Act as Latter Day Robin Hoods When Ruling on Crimes by Rich Businessmen

• Russia Profile: Moving For Earnings - While The Government Simplifies Rules for Foreign Migrants, Most Russians Still Avoid Moving For Work

• Moscow Times: Supreme Court: Web Sites Can't Be Closed for Forum Posts

• Kommersant/Russia Today: The Supreme Court sided with the media - Internet publications are not responsible for their readers

• Justmeans: From Russia With Love: Exploring the Economic Future of One of the Worlds Largest Emerging Market Nations (Part 2 / 2)

• RFE/RL: Russian Group Protests Obligatory Military Service

• Reuters: PRESS DIGEST - Russia - June 16

- The government is considering providing credit to farmers to encourage them to buy surpluses of grain from state reserves.

- Russian tycoon Oleg Deripaska could lose a 2.99 billion rouble ($96.02 million) contract to build a sea terminal in the Russian port of Sochi port after the anti-monopoly watchdog declared the result of the tender illegal.

- Russia's Supreme Court has ruled that media web sites should not be held responsible for comments left by readers.

- The government plans to spend 19 billion roubles ($610.1 million) to encourage local scientists to take up work in private firms.

- Russia is planning the serial production of its new Severodvinsk class of nuclear-powered submarine after the prototype was launched on Tuesday, the daily reports.

- Russian President Dmitry Medvedev has proposed reducing the retirement age of state officials from 65 to 60 in a bid to inject new blood into the bureaucracy.

- The U.S. dollar has become the preferred currency for Russians to keep their savings, polls say.

- Gazprom (GAZP.MM) has warned it may reduce gas supplies to Belarus to force its neighbour to pay off a $192 million debt.

National Economic Trends

• Interfax: Dollar down sharply against ruble, euro slightly lower

• Itar-Tass: President Medvedev to hold conference on budgetary policy

• Sydney Morning Herald: The Russians are coming - to buy our dollars

• Bloomberg: Russia to Buy Canadian, Aussie Dollars for First Time (Update2)

• Moscow Times: IMF Ups GDP Growth Estimate to 4.25%

• Moscow Times: More Russians Saving in Dollars

• UralSib: Russia 2nd Half 2010: Surviving and Thriving

• AgriMarket: In 2010, Russia to produce nearly 90 mln tonnes of grains

Business, Energy or Environmental regulations or discussions

• Reuters: Russian markets -- Factors to Watch on June 16

• SMR: Russian stock market daily morning report (June 16, 2010, Wednesday)

• Oil export duties will lower by 14.8% from July 1.

• Mosenergo reported by IAS for 1Q 2010.

• Bloomberg: Gazprom, Rosneft, Polyus Gold: Russian Stock-Market Preview

• Russia Today: Russian market appeals to the west

• Moscow Times: RusAl, Guinea Strike Deal

• Troika: UC RUSAL reaches amicable agreement with Guinea

• Reuters: UPDATE 1-X5 Retail may issue bonds worth $500 mln

• Bne: Probusinessbank to launch a Russia-based IPO road show in next fortnight

• Reuters: Intralot enters Russian betting market via Kelicom

Activity in the Oil and Gas sector (including regulatory)

• Moscow Times: East Siberian Oil Export Duty to Resume - Deputy Prime Minister Igor Sechin and Finance Minister Alexei Kudrin have agreed to reintroduce the export duty for East Siberian oil fields from July 1 to help fund the country's budget deficit.

• Bloomberg: Ukraine Mulls Gas Project With Gazprom, Vows Secure Supplies

• TNK-BP Performs Well Interventions to Boost Output at Sorochinskneft Fields

Gazprom

• Energy Intel: Novatek, Gazprom Move Close to Breakthrough Gas Deal - A landmark deal may be signed this week that could break state-controlled Gazprom's monopoly over Russian gas exports by allowing independent gas firm Novatek to export gas too.

• iStockAnalyst: Marcel Piteiu on Moscow Talks - According to ZF.ro, the General Director of the natural gas[pic] producer Romgaz Medias, Marcel Piteiu, said that Gazprom would officially invite Romania to the South Stream project, as the Russian side "has all interests"."Memorandum signed with Gazprom in 2009 was extended for one year. Tomorrow (Tuesday) I go to Moscow, where the main subject is the South Stream, but I will also discuss the issue of gas deposits. I say that they will invite us to the South Stream. But it is a political decision ", said Piteiu at the Regional Forum of Energy FOREN 2010.

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Full Text Articles

Basic Political Developments

Yonhap: Russia yet to analyze results of int'l probe into ship sinking: envoy

2010/06/16 15:12 KST [pic]



By Yoo Jee-ho

SEOUL, June 16 (Yonhap) -- The top Russian diplomat in Seoul said Wednesday that Russian experts will require "two or three weeks more" before reaching their own conclusion about the probe results on the sunken South Korean warship.

   Konstantin Vnukov, the Russian ambassador to South Korea, said the Russian specialists were analyzing the information of the Seoul-led multinational probe into the sinking of the Cheonan. The Russian delegation wrapped up its weeklong visit to the South last Monday to review the findings of the multinational investigation that held North Korea responsible for the March 26 incident.

"Russian experts are carefully and thoroughly examining materials on the outcomes of the investigation," Vnukov said at the Korean Council on Foreign Relations as part of events to mark the 20th anniversary of diplomatic relations between Seoul and Moscow.

   "The Russian leadership finds it crucially important to establish the true cause of the sinking of the ship and to identify those responsible with full certainty."

   Calling the Russian analysis "very serious and very important," Vnukov said two or three additional weeks will be required.

Military officials here said that the Russian experts on submarines and torpedoes expressed their intent to fully respect the results of the probe. Vnukov said Russia has been "very much satisfied" cooperating with South Korea.

   "Our specialists could see everything, including the remaining parts of the torpedo," he said. "They're very qualified. I don't have any doubt that their conclusion will be very objective and very scientific."

   Vnukov said Russian President Dmitry Medvedev "finds it very important" that all interested parties exercise restraint and moderation "for the purposes of preventing further escalation of tension and maintaining peace, security and stability on the Korean Peninsula and in the region."

   "Russia is ready to continue addressing this problem in close cooperation with the Republic of Korea and other interested states, both in New York within the framework of the United Nations Security Council and between the capitals," the ambassador said.

   Seoul has referred the case to the Security Council, where member states this week began consulting on further steps. Russia, one of five veto-wielding permanent members, has so far been noncommittal in backing South Korea during its ongoing diplomatic push to punish North Korea. But Vnukov denied Moscow was an ally of Pyongyang.

   "We are not an ally of North Korea. It was during the Cold War period when we had special treaties," the diplomat said. "Now we have absolutely zero treaties signed with North Korea. Now our relationship with North Korea is very practical."

   jeeho@yna.co.kr

(END)

UN: UN official urges stronger business ties between Russia and Africa



15 June 2010 – A senior United Nations official today urged Russia to strengthen trade and investment ties with African countries and also appealed to the continent to seek opportunities for technology transfers from Russia.

“We want our friends, including from Russia, to come to Africa to do business to create wealth and jobs for the people,” said Kandeh Yumkella, the Director-General of the UN Industrial Development Organization (UNIDO), in a video address to participants attending a conference on relations between Russia and Africa in Moscow.

“This is about a new business relationship and a new business model of partnership, a win-win situation with both sides benefiting,” Mr. Yumkella told delegates to the International Parliamentary Conference on Russia and Africa, organized by the lower house of the Russian Parliament, the State Duma, with support from the foreign ministry and the Chamber of Commerce and Industry.

Mr. Yumkella said Africa was in need of partners ready to help the continent create wealth.

“I want to say to my African brothers and sisters who will be participating in the conference: Don’t come to Russia asking for aid, come to Russia to ask Russia to do business with you. Aid alone cannot change any nation. It is determination, competitiveness and technology transfer that can bring the necessary changes,” he added.

Mr. Yumkella said many African doctors, engineers and other professionals had in the past benefited from training in Russia, adding that he was glad to see Moscow working to strengthen that partnership again after almost two decades.

He, however, cautioned that for business to come to Africa, countries in the continent needed “good governance, clear, transparent political systems, and good policies so that investments will be safe.”

Russian officials had showed the country’s commitment to working with UNIDO on technology transfer and capacity-building projects, Mr. Yumkella said.

In May, UNIDO launched a project funded by Russia to help build the technical capacity of Sierra Leone’s fishing sector and apply cost-effective seafood processing technologies.

Russia is also funding UNIDO environmental and technology promotion projects in the Eurasian Economic Community, including on improving water quality and reducing negative regional and trans-boundary impact from industrial activities within the middle and lower Volga River basin.

Bloomberg: Medvedev Seeks Microsoft, Nokia Expertise in Building Russia



June 16, 2010, 1:34 AM EDT

By Yuriy Humber and Lucian Kim

June 16 (Bloomberg) -- Russian President Dmitry Medvedev takes his plea for foreign investment and technology directly to Microsoft Corp., Citigroup Inc. and Nokia Oyj as he hosts business leaders this week in his native St. Petersburg.

A year and a half after Prime Minister Vladimir Putin rejected Dell Inc. Chief Executive Officer Michael Dell’s offer to assist Russia’s computer industry at the World Economic Forum in Davos, Medvedev will ask investors to help build a Russian “Silicon Valley” to cut the country’s oil addiction.

“Medvedev is on a very serious marketing campaign right now,” said Jack Barbanel, managing director at Moscow-based Strategic Investment Group, which focuses on technology and healthcare in the former Soviet republics. “It’s a major change because previously Russia wasn’t doing much.”

Russia’s plans to attract economic development and the latest technology will be among the main themes of at the annual St. Petersburg International Economic Forum, Arkady Dvorkovich, Medvedev’s top economic adviser, told reporters yesterday. The forum starts tomorrow and runs through June 19.

During Putin’s eight-year presidency, Russia staked its economic development on energy, as crude oil prices jumped to a record $145 a barrel in July 2008, from an average of $30 in 2000.

Russia’s dependence on natural resources helped produce the steepest contraction among emerging markets last year, when the economy shrank a record 7.9 percent. China’s economy expanded 8.7 percent in the same period.

Russian ‘Silicon Valley’

Medvedev, Putin’s handpicked successor who took office in 2008, has turned modernization into a mantra repeated by cabinet ministers, homegrown billionaires and foreign investors. One of the first owners of an Apple Inc. iPhone in Russia, the 44-year- old president is basing Russia’s renewal on attracting money and expertise from the U.S. and Europe.

The centerpiece of Medvedev’s program is Skolkovo, a Moscow suburb where he plans to recreate California’s Silicon Valley. The government plans to spend 110.5 billion rubles ($3.5 billion) on the project through 2015, the newspaper Vedomosti reported last week, citing a draft of the 2011 federal budget.

“The direction of the country’s economy should be moved toward more value-added products, including high-tech,” billionaire Viktor Vekselberg told reporters June 8 in Moscow. Medvedev asked Vekselberg, who made his fortune in oil and aluminum, to oversee the project in March.

‘Top-Down Direction’

Nokia CEO Olli-Pekka Kallasvuo said June 3 that his company wants to be a founding member of the Skolkovo project. In April Medvedev named Craig Barrett, a former head of Intel Corp., as co-chairman of Skolkovo’s supervisory board.

“In the U.S. there is interest and willingness to test the waters, but we need to know more before committing resources,” said Charles Kupchan Eurasia Group, a New York-based political risk consultant. “We have yet to see from Moscow an appreciation that innovation comes from competition, not top- down direction.”

A “primitive and humiliating” reliance on raw materials, has tamed Russia’s ambitions, Medvedev said last year.

OAO Gazprom, Russia’s state-run natural gas monopoly, said in 2007 that it would become the world’s biggest company, with a market value of $1 trillion, as early as 2014. Gazprom’s market value is now a third of the $340 billion it peaked at two years ago, when the company trailed only Irving, Texas-based Exxon Mobil Corp. and Beijing-based PetroChina Co.

The top two companies retain their places, while Apple and Microsoft occupy third and fourth, followed by Industrial & Commercial Bank of China Ltd. and China Mobile Ltd.

“In 1990 Russian GDP was equal to China’s. Now it’s three to four times smaller,” Dmitri Trenin, director of the Carnegie Moscow Center, said last week. “It’s no big deal to see the tail of the U.S., but it is when you see China’s tail.”

Corruption, Red Tape

When a group of U.S. venture capitalists met with Medvedev last month, the Russian side was ready to acknowledge risks. Weak legal protections, corruption, red tape and Russia’s vulnerability to commodity price volatility hinder investment, according to a presentation by Anatoly Chubais, head of state- run Russian Nanotechnologies Corp.

“Expectations are high and we hope that in St. Petersburg we won’t just hear nice speeches but get a concrete package of measures,” Klaus Mangold, chief eastern Europe lobbyist for Germany’s BDI industry group, said in an interview. “Russia doesn’t have a problem recognizing its problems. It has a problem implementing solutions.”

--With assistance from Anastasia Ustinova in St. Petersburg and Ilya Khrennikov and Maria Levitov in Moscow. Editors: Patrick G. Henry, Willy Morris

To contact the reporters on this story: Yuriy Humber in Moscow at yhumber@; Lucian Kim in Moscow at lkim3@

To contact the editors responsible for this story: Amanda Jordan at ajordan11@; Willy Morris at wmorris@

Reuters: US: no secret deals with Russia on missile defense



4:29am IST

* Skeptical senator still wants to see negotiating record

* Cold War is over, but MAD doctrine lives

By Susan Cornwell

WASHINGTON, June 15 (Reuters) - There were no secret deals made with Moscow on missile defense or any other issue during negotiations on a new nuclear arms reduction treaty, the chief U.S. negotiator on the pact said on Tuesday.

Assistant Secretary of State Rose Gottemoeller was trying to assuage critics who say they fear the Obama administration made explicit or implicit concessions to the Kremlin that could limit the future development of U.S. missile defenses.

"Let me state unequivocally today on the record before this committee that there were no, I repeat no, backroom deals made in connection with the new START treaty; not on missile defense nor on any other issue," Gottemoeller told the Senate Foreign Relations Committee.

But Senator Jim DeMint, one of the treaty's skeptics, said he would continue to press for the transcript of the negotiations with the Russians to be released before the Senate votes on whether to approve the treaty.

President Barack Obama and Russian President Dmitry Medvedev signed the treaty in April, but Senate consent is required for the document to go into force.

The pact commits the two countries with 95 percent of the world's nuclear weapons to significant cuts in their strategic arsenals, although still leaving them with more than enough firepower to annihilate each other.

Senate Foreign Relations Committee Chairman John Kerry says he wants the panel to vote on the treaty before the August recess, so the full Senate can approve it later this year. The treaty needs a super-majority of 67 votes for Senate approval, so Obama, a Democrat, will need some Republican support.

COLD WAR OVER, 'MAD' DOCTRINE SURVIVES

The new START treaty does not contain limits on missile defense systems. But DeMint and other Republicans say they are worried by a unilateral Russian warning that if U.S. missile defense plans threaten its security, Moscow could take advantage of an exit clause and withdraw from the pact.

DeMint said the Russian warning -- which he paraphrased as "we (the U.S.) cannot develop anything that threatens their ability to destroy us" -- suggested the Cold War doctrine of "Mutual Assured Destruction," or "MAD," lived on in the new treaty.

The Pentagon's representative at the START talks, Ed Warner, testified Tuesday that the MAD doctrine did survive, but this was only because the United States and Russia still cannot shield themselves against all of each other's missiles.

The missile defense plans of the previous, Bush administration as well as the Obama administration were aimed at defending the United States against "limited attacks" by third countries like North Korea, Warner said.

But these systems were "nowhere near" being able to defend against the kind of volley that Russia could launch. So Washington and Moscow still depended on mutual deterrence, a situation which can be characterized as mutual assured destruction, Warner said.

"We're not there because we like it. We're there because it is just the way it is," Warner said.

(Editing by Cynthia Osterman)

Itar-Tass: Medvedev, Harper discuss G-20, G-8 Jun summits' agendas



16.06.2010, 00.08

MOSCOW, June 16 (Itar-Tass) - A telephone conversation between Russian President Dmitry Medvedev and Canadian Prime Minister Stephen Harper was held on Tuesday on the initiative of the Canadian side, the Kremlin press service reports.

During the conversation Harper told Medvedev his vision of the agendas of the forthcoming summits of the Group of Twenty (G-20) and the Group of Eight (G-8), due to be held within the last ten days of June.

When discussing G-20 activities, Medvedev and Harper touched upon problems concerning a global financial regulation and a reform of international financial institutions, and exchanged their estimates of the crisis in the Euro Area and measures to overcome it. Both sides pointed with satisfaction to the coincidence or proximity of their positions on those matters.

The President of Russia declared in support of Harper's initiatives which are being brought up for discussion at the G-8 summit in Toronto, specifically additional efforts towards reducing maternal and infant mortality rate in developing countries, and promote the development of mathematical education in African countries.

It was pointed out that the Russian side, for its part, is ready to present definite proposals on how to implement such efforts in practice.

Medvedev and Harper also discussed matters concerning interaction on some international problems of current concern.

Itar-Tass: RF, Morocco FMs to discuss the situation around Gaza, the Iran issue, bilateral cooperation



16.06.2010, 05.59

MOSCOW, June 16 (Itar-Tass) - The Ministers of Foreign Affairs of Russia and Morocco, Sergei Lavrov and Tayeb Fassi-Fihri, meet here on Wednesday to discuss the situation around Gaza, the Iran issue, as well as expansion of bilateral economic cooperation.

The Moroccan side has been traditionally playing an important role in the process of settling the Palestinian-Israeli conflict. The two Ministers are expected to exchange opinions about the situation around Gaza, the recent developments concerning the Freedom Flotilla, in particular, and also discuss ways to defusing the Palestinian-Israeli crisis.

The two Ministers are also to touch upon Iran's nuclear problem which is now actively discussed by the world community at all levels.

As regards bilateral partnership, Sergei Lavrov and Tayeb Fassi-Fihri will consider prospects for the development of cooperation in the field of fisheries. Recently the sides signed an intergovernmental agreement on terms for fisheries in the Atlantic portion of Morocco's exclusive economic zone. The Agreement provides for permanent stay of ten Russian large-tonnage fishing boats there.

Morocco is also interested in an increase in the scope of deliveries of Russian wheat and in the export of Moroccan citrus fruits and vegetables to the Russian Federation. Every year Morocco imports 2-3.5 million tonnes of grain. Last year the deliveries of Russian wheat to Morocco amounted to only 65,000 tonnes, whereas Russia exported over five million tonnes of wheat to Egypt.

Expert opinion is that on the whole Morocco is one of Russia's leading and promising trading partners in the region. A new term appeared in the world economy parlance recently, the "African Lions", which applies to a group of eight most dynamically developing African countries whose companies rapidly turn into powerful players in the global economy. The group comprises Algeria, Botswana, Egypt, Libya, Mauritius, Morocco, Tunisia, and South Africa.

By a number of economic indicators, they are comparable to the BRIC group of countries (Brazil, Russia, India, and China), which are recognized as leaders of the new global economy.

PIB: Anand Sharma to Attend St. Petersburg International Economic Forum



Wednesday, June 16, 2010[pic]

Shri Anand Sharma, Union Minister of Commerce and Industry, will be on a two-day visit to Russia from 18-19 June 2010. During the visit, he will be addressing the Plenary Session of the St. Petersburg International Economic Forum along with the Russian President Medvedev.

Shri Sharma will be accompanied by a high-level business delegation from the Confederation of Indian Industry (CII). During the course of his visit, Shri Sharma is expected to call on the Russian Prime Minister, Mr. Vladimir Putin, and have substantive bilateral meetings with Deputy Prime Minister, Mr. Sobyanin, Minister of Economic Development, Ms. Elvira Nabiullina and Minister of Industry and Trade, Mr.Viktor Khristenko. Shri Sharma’s visit to Russia follows a highly successful visit of Russian Prime Minister in March this year.

For the first time, St. Petersburg International Economic Forum will be convening an India-Russia Business Dialogue, signalling the growing economic engagement between the two countries. The bilateral trade between the two countries in 2009 stood at US $ 7.4 billion, registering a growth of 8% over the previous year and a target has been set at US $ 20 billion by 2015.

Financial Mirror: Russia amongst the largest foreign investors in Cyprus



June 16, 2010

Russia is amongst the largest foreign investors in Cyprus, Minister of Commerce, Industry and Tourism Antonis Paschalides has said.

Addressing Tuesday the Moscow Business Forum, in Russia, the Minister said that the value of Russian investments in Cyprus reached €2 billion in 2008, whereas the value of Cypriot investments in Russia during the same year was more than €1.5 billion.

These investments, he went on to add, are mainly in real estate and business activities, trade and repairs, financial intermediation, and manufacturing.

Referring to trade, he said that exports of Cyprus products to Russia during the period 2005-2008 represented an increase of 55%, despite the small decline in 2009 which is due to the recent economic crisis.

''Total imports from Russia are nearly double our exports'', he added.

As regards tourism, Paschalides said that in 2009 150.000 Russians visited Cyprus, while in the same year 49.000 Cypriots visited Russia.

''It is worth mentioning that a large number of Russians do not only visit Cyprus as tourists, but also use our island as a pleasant place to reside and be actively involved in various businesses'', he pointed out.

Paschalides said that Russian companies can benefit from the numerous tax advantages and other incentives to establish in Cyprus assembling or manufacturing operations for the supply of existing and newly emerging markets in the region.

The Minister noted that Cyprus has a favourable environment for all types of business, a stable economic environment, which offers confidence, safety and security, a modern and transparent legal framework, a liberal foreign investment policy, low company set-up and operating costs, simple administrative procedures, a wide network of agreements for the avoidance of double taxation and a low corporation tax at 10%, the lowest in the EU.

Referring to Cyprus' economy, he said that despite the global financial and economic crisis, Cyprus’ economy experienced a higher than the EU average growth rate in the last years, inflation is currently low and unemployment in 2010 is expected to be at a low 6.8%.

Average per capita income, in terms of purchasing power, corresponds to almost 95% of the EU average, he added.

He described services activities as the most dynamic and growing sector, which has surged since the mid-1990s, and now accounts for about 80% of the country’s Gross Domestic Product.

''The professional and business service sector has much to offer to Russian business people, a comprehensive range of services from accounting and banking to legal services, IT, business consulting, design, engineering, shipping and marketing, health care and education'', he pointed out.

The Minister said that the credibility Cyprus has earned among the international investment community is evident from its foreign direct investment track record.

Concluding he said that the value of Foreign Direct Investments in 2008 was €15.2 billion, continuing an upward trend.

RIA: Lithuania declares justification of Soviet 'aggression' criminal offence



06:46 16/06/2010

The Lithuanian parliament has approved amendments stipulating criminal penalties for those publicly justifying, denying or playing down international crimes, as well as crimes "committed by the U.S.S.R." and the Nazis against Lithuania, the parliament's press service has said.

A total of 68 lawmakers supported the amendments to the country's Criminal Code. Five MPs voted against the bill, and 32 abstained from voting.

In line with the amendments, those justifying or denying the "aggression by the U.S.S.R." and Nazi Germany against Lithuania, as well as cases of genocide of the Lithuanian people, "grave and especially grave crimes committed in 1990-1991 against Lithuania and its people," will face criminal prosecution.

Those violating the law will face a fine or a prison term if they justify, deny or play down the crimes "in an insulting way" or if such actions "result in the violation of public order."

Russia has long been at odds with the Baltic states of Lithuania, Estonia and Latvia, as well as Poland, over perceived attempts to rewrite the history of World War II and diminish the Soviet role in the defeat of Nazi Germany.

While Russia maintains that the Red Army liberated the Baltic states from German invaders, many residents of the republics put the two "occupations" on a par.

Lithuania became the first Soviet republic to declare its independence on in March 1990. Soviet leader Mikhail Gorbachev called the declaration "illegitimate and invalid" and sent Soviet tanks to the capital, Vilnius. Although the tanks withdrew after a few hours, Soviet troops were still stationed in Lithuania. More than 10 people were killed and many more were injured during protests that started when Soviet troops were trying to seize the television station in Vilnius in January 1991.

VILNIUS, June 16 (RIA Novosti)

Itar-Tass: Soyuz manned spaceship blasts off from Baikonur



16.06.2010, 02.42

BAIKONUR, Kazakhstan, June 16 (Itar-Tass) - A Russian manned spaceship Soyuz with a Russo-American crew on board blasted off from the Baikonur cosmodrome at 01:35, Moscow time, on Wednesday, an Itar-Tass correspondent reported from the scene of the event. This is a jubilee flight -- a 100th one -- under the International Space Station (ISS) programme.

The Soyuz TMA-19 is to deliver the ISS-24/25 crew -- Russian cosmonaut Fyodor Yurchikhin and NASA astronauts Douglas Willock and Shannon Walker -- to orbit for them to work there for about five months. The Soyuz spaceship is to dock with the ISS at 03:10, Moscow time, on June 18, said an official at Roscosmos (Federal Space Agency).

The ISS-24/25 crew, who will join Russian cosmonauts Alexander Skvortsov and Mikhail Korniyenko and American astronaut Tracy Caldwell-Dyson who have been working on board the ISS since the beginning of April, are to accomplish a lot of no easy tasks.

Bne/RIA: Russia gives Belarus 5 days to pay off $200 mln gas debt



bne/Ria Novosti

June 16, 2010

Russia is on the verge of cutting Belarus' gas supplies off again if it doesn't pay back its over due gas bill by the start of next week.

The row over gas between the two former friends is getting nasty. Minsk has reneged on a deal struck at the start of this year to pay $168 per thousand cubic meters in the first quarter of this year rising to $185 in the second quarter. Instead the Belarusian government has decided unilaterally to continue paying at last year's price of $150 since January 1.

A Russian official said Belarus "plucked this price out of thin air," reports Prime Tass. All these prices are still significantly less than what Russia's other gas clients pay; Ukraine paid a price of $236 per thousand cubic meters for its May gas deliveries.

Russian president Dmitry Medvedev warned Minsk on Tuesday that it has to pay back an outstanding $200m in five days. The Russian president didn't say what would happen then other than :"If this is not done, tough measures will have to be taken." In 2007 Russia briefly cut gas supplies to Belarus during a similar row over unpaid bills.

Now the row has been extended to exactly how much Belarus owes Russia. Earlier this week a Gazprom spokesman said Minsk owes $192m. Belarus immediately disputed the amount (and thus tacitly admitted that if should be paying $168 not $150) saying on Tuesday it owes $132.6m, according to the National Statistics Committee, which didn't explain the discrepancy between Gazprom's estimate and Minsk's.

Medvedev directed Gazprom CEO Alexei Miller to get in touch with the Belarusian authorities and urge them to pay off the debt as soon as possible. Medvedev said he discussed the debt with Belarusian President Alexander Lukashenko at a recent meeting.

Miller said under the current contract, the Russian state-run gas monopoly "has grounds to cut gas supplies to Belarus in proportion to its debt," adding that Gazprom has already sent two official letters to the Belarusian authorities. "We have received no clear answer as to when the debt will be paid off," he said.

Medvedev said Lukashenko had attributed the debt to his country's "difficult financial situation." This contradicts Finance Minister Andrei Kharkovets, who announced on Tuesday that Minsk was in talks with the IMF on a new standby programme for the autumn, but went out of his way to say that the state does not face financial problems.

"Frankly speaking, everyone is in a difficult situation today, and Gazprom also has plenty of problems," Medvedev said.

Lukashenko said in late May his country was ready to hand over its Beltransgaz pipeline operator and Mozyr oil refinery in exchange for domestic Russian prices for oil and gas, an offer rebuffed by the Kremlin.

Georgian Daily: Russians, Ukrainians ‘Not Simply Fraternal Peoples But a Single People’ - Russian Ambassador in Kyiv



June 16, 2010

Paul Goble

Staunton, June 15 – Russia’s ambassador in Kyiv says Russians and Ukrainians “are not simply fraternal peoples – [they] are a single people. With their own nuances, with their own special features but a single people,” a statement that reflects both Moscow’s happiness with the new Ukrainian leadership and longstanding Russian views on Slavic ethnogenesis.

In an interview in “Izvestiya v Ukraine” yesterday, Ambassador Mikhail Zurabov said that he has reached that conclusion on the basis of a long study of the demographic problems of Russia and particularly the famine in the early 1930s which resulted in the deaths of so many Russians and Ukrainians (.ua/?/articles/2010/06/14/163217-19).

Asked whether the election of Viktor Yanukovich had put an end to “discussions on historical questions,” Zurabov said that “everything that concerns the assessment of historical events which took place in our recent past is an internal affair of Ukraine.” But Moscow greets Yanukovich’s statement that the famine was “a common tragedy” of Russia and Ukraine.

“I have spent a great deal of time on the demographic problems of Russia and well know that the policy which was conducted in those years of course cannot be called humane,” Zurabov continued. All the transformation measures of that period carried out “in the interests of a particular model of social development” resulted in “enormous human losses.” 

Zurabov said that “Russia also suffered terribly from this,” and consequently, he said, he “does not consider that this tragedy was exclusively a Ukrainian one. It is a common tragedy.” “And we always have supported this point of view” because “famine was not a selective policy.” It was directed “not selectively” but at the entire people.

And that conclusion led the Russian representative to Ukraine to say that in his view, Russians and Ukrainians “are not simply fraternal peoples – we are a single people. With their own nuances and with their own special features, but a single people [‘narod’],” one of the strongest statements yet by a Russian official on the links between Ukraine and Russia.

On the one hand, this represents little more than an indication of Moscow’s pleasure with Kyiv’s new approach. But on the other, and despite the fact that Zurabov was careful to use the Russian word “narod” rather than “natsiya,” much as the Soviets did with “Sovetsky narod,” Zurabov’s comments highlight Moscow’s views on the origins of the Slavic nations.

While Western specialists on the ethnogenesis of the Russians, Ukrainians and Belarusians generally argue that the three emerged at roughly the same time from East Slavic tribes but consolidated differently because of the very different history of statehood in the three, many Russian writers take a different view.

Arguing that Kyiv is “the mother of Russian cities” because it was there that Vladimir accepted Orthodoxy, these Russian writers have argued that there was Russian ethnogenesis was the mainstream and that the Ukrainian and Belarusian nations were byproducts of this development rather than having independent roots.

Even though the available ethnogenetic evidence points in a different direction, that view lies behind the interpretation of many Russian historians and also of many Western specialists who rely on them. More importantly, it helps to explain why so many Russians find it difficult to view Ukrainians and Belarusians as separate nations. Zurabov appears to be one of them.

Meanwhile, a commentary in “Krymskoye vremya” yesterday both reflects and undercuts the argument that Zurabov made because it takes the existence of Russians and Ukrainians as separate nations seriously but then suggests that the way they are intertwined in Crimea particularly will either force the two states to cooperate -- or Ukraine to collapse.

In an essay provocatively entitled “Crimea as a Trojan Horse,” the newspaper’s commentator Aleksandr Mashchenko observes that both “Russian patriots” and “Ukrainian patriots” are wrong about Nikita Khrushchev’s decision to transfer Crimea from the RSFSR to the Ukrainian SSR in 1954 (content/troyanskii-krym).

The “Russian” patriots, he points out, regularly denounced the Soviet leader for what they say was “an illegal, voluntarist decision” which since 1991 has left “hundreds of thousands of Crimeans” citizens of Ukraine, “a state which is often hostile to their historical motherland Russia.”

“Ukrainian” patriots,” on the other hand, praise Khrushchev’s action as “a uniquely correct decision which in fact saved Crimea and the Crimeans” from disappearing as distinct entities, a fate that “Ukrainian patriots” are certain would have awaited all the residents of the peninsula.

Both are wrong, Mashchenko argues, because each refuses to recognize some key facts of history and life. The latter do not see that Crimea is part of Ukraine only in the same way that some of its other oblasts are, and the former refuse to recognize that Khrushchev’s gift of Crimea to Ukraine was in fact “a Trojan horse” against the Ukrainians.

“It is no secret for anyone,” he continues, “that Ukrainian independence was the result of a palace coup inside the Soviet political elite and that the contemporary Ukrainian state was created not as a result of an internal spiritual movement but as a result of an historical accident.” Moreover, he says, “its borders were defined by Stalin and regarding Crimea, by Khrushchev.”

If Soviet leaders had not included within Ukraine the heavily Russian eastern district of Ukraine and Crimea, the “Krymskoye vremya” writer notes, “Ukraine would have a different president, a different prime minister, a different minister of education and so on and so forth.” Indeed, without its eastern parts, “Ukraine would have a principally different state policy.”

That has led some commentators, including Igor Radziyevsky in his May 27 article in “Ukrainskaya Pravda,” to argue that the only likely outcomes for Ukrainian development are either fragmentation or continued instability generated by tensions between the two nations along with close ties to the Russian Federation.

According to Radziyevsky, “the crisis [in this regard] will reach its apogee during the 2012 parliamentary elections” because “the opposition will not accept the official result and will accuse the powers that be of massive falsifications.” That will “paralyze” the country and Kyiv will be compelled to use force.

“The only thing that can save Ukraine from a terrible civil war and absolute collapse,” Radziyevsky suggested in his article, is “a division” along national lines, the borders of which will be “the two-color map of the electoral division [of Ukraine] in the presidential elections of 2010.”

If that were to happen, Mashchenko says, “Crime as a Russian enclave would turn out to be a slow-acting mine placed under Ukrainian statehood by Nikita Sergeyevich Khrushchev.” Or, he writes, “using the ancient phraseology which is always justified in the Tauride, a Trojan horse, given by Russia to its ambitious south-eastern neighbor.”

But even if Ukraine does not collapse, Khrushchev’s action in 1954 will play a role: “Having given Crimea, Khrushchev ‘tied’ Ukraine to Russia forever – or in any case as along as out peninsula will remain a part of Ukraine,” something he suggests “Russian patriots” should think about before they condemn the Soviet leader.

RUSSIA-KYRGYZSTAN

RIA: Russian foreign minister, UN chief discuss Kyrgyz unrest



12:43 16/06/2010

Russian Foreign Minister Sergei Lavrov and United Nations Secretary-General Ban Ki-Moon have discussed ongoing ethnic violence in southern Kyrgyzstan,  the Foreign Ministry said on Wednesday.

“Russia voiced concern about civilian victims and also about the large number of refugees at the Kyrgyz-Uzbek border,” the statement said, adding that the phone conversation took place on Tuesday.

Lavrov informed the UN chief about the efforts taken by Russia and the Collective Security Treaty Organization (CSTO) to stabilize the situation in the Central Asian state, the ministry said.

At least 179 people have been killed in the south of Kyrgyzstan in five days of ethnic violence between Kyrgyz and Uzbek groups.

MOSCOW, June 16 (RIA Novosti)

24.kg: Kyrgyzstan Security Council Secretary departs for Moscow

16/06-2010 10:34, Bishkek – News Agency “24.kg”

Today, on 16 June, Secretary of the Kyrgyz Security Council Alik Orozov departed for Moscow at the instruction of the President of transition period Roza Otunbaeva, press service of the Interim Government informs.

Security Council Secretary will discuss with leadership of the Russian Federation issues concerning shipments of humanitarian aid for Kyrgyzstan from the Collective Security Treaty Organization. The agreement on humanitarian aid was reached during last emergency meeting of the CSTO member countries.

Alik Orozov is expected to meet with Nikolai Patrushev, Russian Security Council Secretary and Russian Foreign Minister Sergey Lavrov.

URL:

24.kg: Osh airport resumes flights to Novosibirsk and Ekaterinburg



16/06-2010 10:46, Bishkek – News Agency “24.kg”, By Kanykei MANASOVA

The Osh airport resumes flights to Novosibirsk and Ekaterinburg (Russia), Denis Shpakov, a manager of the Avia traffic Company told the news agency 24.kg.

Reportedly, Avia traffic Company has made flights to Russia: Osh- Novosibirsk (on Fridays), Osh- Ekaterinburg (on Wednesday and Sunday). During tragic events we have provided humanitarian aid to the south regions of the country. That is why the company suspended flights to Russia.

URL:

Itar-Tass: RF Emercon to send humanitarian supplies to Kyrgyzstan



16.06.2010, 03.33

MOSCOW, June 16 (Itar-Tass) - The Russian Ministry for Emergencies (RME), acting on an instruction from RF President Dmitry Medvedev, will send humanitarian aid supplies to Kyrgyzstan.

An official at the RME information department has told Itar-Tass, "It is planned that three IL-76 transportation planes of the RME will take off from the Ramenskoye airfield near Moscow on Wednesday, heading for Bishkek".

These special planes will deliver almost 130 tonnes of humanitarian supplies from the stocks of the Rosreserv (Federal State Reserves Agency) to Kyrgyzstan. The supplies include 30 tonnes of sugar, about 54 tonnes of canned meat and 15 tonnes of canned fish, as well as 15 tonnes of blankets.

VOR: Russian Emergencies Ministry to fly more humanitarian aid to Kyrgyzstan



|Jun 16, 2010 09:33 Moscow Time |

This Wednesday three Russian Emergencies Ministry planes will fly in another consignment of humanitarian aid to Kyrgyzstan, basically foodstuffs.

All food stores have been destroyed and plundered in the republic’s second most populated regional centre Osh, so there is an acute shortage of foodstuffs there.  

Russia provides Kyrgyzstan with both humanitarian assistance and helps the republic to evacuate the injured from the areas, swept by unrest.   

Trud/Russia Today: “The south ofKyrgyzstan could secede”



Anti-Kirghiz unrest may erupt in Uzbekistan, and the south of Kyrgyzstan could secede from the north. This was discussed by an expert on Kyrgyzstan from the Ethnology and Anthropology Institute, RAS, Georgii Sitnyansky, in his interview with Trud.

Trud: What is the possibility of there being responsiveanti-Kirghiz clashes in Uzbekistan?

Georgii Sitnyansky: Very high, especially if they areinitiated by the refugees; moreover, the structure of these disturbances willnot be much different from the ones that were recently witnessed. Here,however, we should take into consideration the fact that the Islam Karimov regimeis much stronger than that of the Kyrgyz interim government. He could suppresscivil unrest, but judging from the experience of Kurmanbek Bakiyev, forcemethods don’t always work. The fact that Karimov is still not taking any actioncontinues to surprise me. This could all boil down to all the Uzbeks of Osh andJalalabad leaving Kyrgyzstan.

Read more

Trud: What motivates the lawbreakers? How do they justify to themselves, andthe society, the need to kill and drive out the Uzbeks?

Sitnyansky: They are afraid that the Uzbeks will constitutethe majority in the south. These fears had appeared three years ago. Populationcross-flow is also an important factor: the Kirghiz are moving from the southto the north of the country, and the Uzbek are moving south. This disrupts theethnic balance. Today, for the first time, the process was reversed: after theApril revolution, the Kirghiz in the north have ousted the southerners, and thesoutherners are driving out the Uzbek.

Trud: Could all of this result in an actual separation ofthe south and the north?

Sitnyansky: If the Kirghiz continue to drive out the Uzbek,then that’s not likely. But, if the Uzbeks are able to gather their strengthand take revenge, then it’s a possibility. But, even in the current situation,if the southern Kirghiz realize their strength, they could try and separate.The idea of Kyrgyz separatism has lived on since the 1990s. Southern Kirghizblame the north for capturing all the best, for being better-educated, richer,and for holding leadership positions. The north, in turn, blames the south fornationalism and underdevelopment. This is the stereotypical conflict betweenthe more-or-less civilized people of the nation.

Trud: How likely is it for the unrest to spillover to otherareas, and what are your predictions for the near future?

Sitnyansky: It is quite likely that tensions will continueto escalate and that the civil unrest will spill over to other regions of the country.This is already occurring in the Batken region. Then, we will have to seriouslyconsider involving international peacemaking forces.

Trud: What should be Russia’s position?

Sitnyansky: Russia needs to act carefully: if it decides to sendpeacekeepers alone, then it will be the one to blame for all the troubles. Ifit is decided to send peacemaking forces, then this should be done collectively-- within the framework of the OSCE or with the CIS forces.

Trud: Do you believe that some efforts were put intoigniting these events or that they had occurred spontaneously?

Sitnyansky: This does not look like a random occurrence, becauseeverything just happened to take place “at the right time” -- not long beforethe referendum of the new Constitution. Supporters of Bakiyev and drug lordshave an interest in the conflict. After the revolution, many people, who wereassociated with drug trafficking, were arrested. Now the criminals will try toresume their business by taking advantage of the civil unrest. I think that itis these two sides that used the conflict to achieve their goals.

Figures

5.3 million people -- Kyrgyzstan’s total population in 2009

70% of the population is ethnically Kirghiz

14.7% of the population is Uzbek

8.3% of the total population is ethnically Russian

15% -- is the percentage of population increase of ethicallyUzbek in Kyrgyzstan since 1999

Read the article on the newspaper's website (in Russian)

JUNE 16, 2010

WSJ: Russia Rises While Kyrgyzstan Burns



The violence highlights Moscow's power in a country with an important U.S. military base.

By JAMES KIRCHICK

Over the past week in Kyrgyzstan, riots between ethnic Kyrgyz and Uzbeks in the country's south have left nearly 200 people dead. Some 100,000 Uzbeks have poured into neighboring Uzbekistan. Dysentery has reportedly broken out in refugee camps along the border, which the Uzbek government closed despite a request from the United Nations to keep it open. And on Friday, Kyrgyzstan's interim President Roza Otunbayeva announced that her government had lost control over the southern half of the country.

Some are reporting that Ms. Otunbayeva initially asked for assistance—including rubber bullets—from the United States and was denied. What's certain is that she sent a letter to Russian President Dmitry Medvedev requesting immediate military intervention. Yet that support is unlikely to come as long as Russia and the central Asian dictatorships surrounding Kyrgyzstan continue to benefit from the country's instability.

Why would Russia gain from the deteriorating situation in Kyrgyzstan, which, along with the rest of the former Soviet Union, it considers part of its "zone of privileged interest"? The Kyrgyz plea for assistance highlights Moscow's growing power in a region where it has been waging a long battle against the United States for influence.

While it lacks the precious natural resources of its neighbors, Kyrgyzstan enjoys geostrategic importance as the only country in the world to host both Russian and American military bases. The latter installation—the Transit Center at Manas—is a major link in the supply chain for the American-led war effort in Afghanistan, and it has been a thorn in Moscow's side since its establishment in 2002.

Russia came close to getting its way with Manas early last year when the former president of Kyrgyzstan, Kurmanbek Bakiev, announced that he would evict the Americans shortly after he pocketed a $2 billion loan guarantee from Moscow. But Mr. Bakiev quickly reneged on that threat after the U.S. agreed to triple its rent to the Kyrgyz government for use of the facility. And so it came as little surprise when Russian media—hugely influential in Kyrgyzstan, where most of the population speaks Russian—began attacking Mr. Bakiev, reporting on the corruption and nepotism that had long plagued his administration but that the Kremlin had until then been content to ignore. On April 1, Russia dramatically increased tariffs on gas exports to Kyrgyzstan, which led to the deadly riots just days later that eventually forced Mr. Bakiev to flee the capital, Bishkek.

I traveled to Kyrgyzstan that month to cover the revolution's aftermath, and the general consensus among Kyrgyz was that Russia had played an instrumental role in overthrowing a despised dictator. President Otunbayeva encapsulated this sentiment when, the day after Mr. Bakiev's ouster, she said, "We are grateful to the Russian Federation, grateful to the Russian prime minister, for the support, significant support from the Russian Federation in recent days in exposing this nepotistic, criminal regime." Ever since Mr. Bakiev's downfall, Russia has been quietly pressing Kyrgyzstan's interim government to expel the U.S. from Manas, and Bishkek's desperate request for assistance will only solidify Moscow's leverage.

So far, Russia has shown no interest in alleviating the situation in southern Kyrgyzstan, and is operating under the calculus that the longer Kyrgyzstan burns, the more pliable its shaky government will become to Russian demands. On Monday, the Collective Security Treaty Organization, a sort of Russian-led NATO for former Soviet republics, ended an emergency session without a pledge to send any sort of peacekeeping force to quell the violence and assist with humanitarian relief. Russia has deployed only 300 troops to the country, solely for the purpose of guarding its military base. All this in spite of Mr. Medvedev's statement on Monday that the situation in Kyrgyzstan was "intolerable."

Also benefiting from the unrest are the region's dictators, who can point to the inability of Kyrgyzstan's government to maintain order as proof that the region is unsuitable for democracy. Compared to its neighbors, Kyrgyzstan has a relatively open political system with a vocal opposition, independent media and active civil society. Its 2005 "Tulip Revolution" brought Mr. Bakiev, who then held some promise as a liberal reformer, to power. It was an important democratic opening in one of the world's most illiberal regions.

Whereas its neighbors are consistently ranked "Not Free" by the human-rights watchdog group Freedom House, Kyrgyzstan has occasionally received a ranking of "Partly Free." Kyrgyzstan's tumultuous and mostly unsuccessful experiment with democracy—it has been preparing for a June 27 constitutional referendum, which is unlikely to proceed in light of the current chaos—has always been a threat to its authoritarian neighbors, who are no doubt celebrating the country's disorder.

From his exile in Belarus, Mr. Bakiev said that the interim government which replaced him is "absolutely not in control of the situation; they don't know what to do." In April, Kazakhstan's dictator, Nursultan Nazarbayev, characterized the overthrow of Mr. Bakiev as anything but an expression of popular discontent with corrupt, one-man rule. "It was not a revolution," he said. "It was complete banditry."

Islam Karimov, the leader of Uzbekistan, expressed similar sentiments: "There is a rather serious danger that what is going on today in Kyrgyzstan, these processes, will take on a permanent character," he warned. "There was an infectious precedent and it creates the illusion that it is very simple to overthrow any legal form of leadership or government."

With no end in sight to Kyrgyzstan's unrest, neither the Kremlin nor Central Asia's despots have reason to fear that the "infectious precedent" of democracy will spread.

Mr. Kirchick is writer at large with Radio Free Europe/Radio Liberty.

Interfax: Poll: Most Russians think Kyrgyzstan-style uprising impossible in Russia



Today at 09:45 | Interfax-Ukraine

Most Russians think a popular uprising similar to the one seen in Kyrgyzstan in April that led to the overthrow of President Kurmanbek Bakiyev would be impossible in Russia, an opinion poll suggests.

In the survey, carried out by the Levada Center on May 21-25, 68% of respondents ruled out the possibility of such an event happening, 21% expressed the opposite view and 11% were undecided.

Of those who did believe a popular uprising was possible in Russia, 27% said the reason for their belief was the Russian government "controls the situation in the country much better," 26% said "there is no such glaring poverty and unemployment in Russia as in Kyrgyzstan," and 14% argued that Russia "is a more civilized country with a parliamentary political culture."

Thirty-one percent could not explain why they did not think Russia could experience public unrest such as that in Kyrgyzstan.

The riots in Kyrgyzstan that erupted on April 6 left at least 82 people dead and resulted in Bakiyev being ousted and the opposition forming an interim government led by ex-Foreign Minister Roza Otunbayeva.

Bakiyev fled to the south of the country, and from there on to neighboring Kazakhstan, where he resigned as president. He has been living in Belarus since April 20.

Late on June 11, Kyrgyzstan witnessed a new wave of violence as clashes between ethnic Kyrgyz and Uzbeks broke out in the southern city of Osh and Jalal-Abad. According to the Health Ministry, the ethnic violence has claimed at least 176 lives and forced tens of thousands of people to flee.

Read more:

RIA: Police officer killed as gunmen seize weapons in Dagestan



08:55 16/06/2010

Unidentified assailants killed one police officer and injured another early on Wednesday in an attack in south Russia's Dagestan, a police spokesperson said.

The gunmen opened fire on a police patrol in the city of Derbent and then took the officers' weapons.

"One police officer died and another was wounded," the spokesperson said. "The criminals stole automatic weapons and a handgun from the law-enforcement officers."

Russia's North Caucasus, which includes the volatile republics of Chechnya, Dagestan and Ingushetia, sees frequent attacks by militants on police, federal troops and officials.

MAKHACHKALA, June 16 (RIA Novosti)

Itar-Tass: Unidentified gunners have fired at a police patrol and killed a policeman in Dagestan



16.06.2010, 03.18

MAKHACHKALA, June 16 (Itar-Tass) - Unidentified gunners have fired at a police patrol in the Dagestani city of Derbent and killed one policeman.

A source in the Interior Ministry press service for Dagestan has told Itar-Tass, "The incident occurred at 00:15, Moscow time, on Wednesday, on the street named after the 345th Small Arms Division".

The source said, "Unidentified gunners, riding in a car, shot several bursts of submachine-gun fire at a foot patrol of the point-duty police patrol service. As a result of the fire, one policeman died".

An Intercept operation plan has been declared in the city in a search for the attackers.

Georgian Daily: Kazan Tatars Launch Websites to Promote Modernist Islam



June 16, 2010

Paul Goble

Staunton, June 15 – Tatar Muslims, for more than a century distinguished by their commitment to modernist Islam, have launched two websites to promote that understanding of the faith both within their republic and across the Russian Federation, even as the Tatar media have increased coverage of Muslim affairs.

Last week, Rafik Mukhametshin, rector of the Russian Islamic University in Kazan, announced the launch of the first of these, a new Islamic Internet portal at islam-portal.ru/ to “propagandize the intellectual Islam of the Hanafi School that is traditional for Tatarstan (interfax-religion.ru/islam/?act=news&div=35979).

According to Mukhametshin, the site will focus on culture, science and education in the hopes of becoming “one of the leading places in the Muslim information space of the country.” He said the site would avoid politics, thereby setting itself apart from other sites which offer “a radical fundamentalist point of view.”

In addition, he continued, the site will seek to reach out to those “who are only beginning to become acquainted with Islam” by offering special courses, an electronic library featuring “the outstanding Tatar theologians of the past,” and the chance to interact with Muslim religious leaders and scholars.

Portions of the site are still “under construction,” but among the articles posted so far are ones bearing titles like “The Clocks of Mecca are the Largest in the World,” “The Legal Victory of a French Student in a Hijab,” and “The Period of Holy Months has Begun,” an indication that the site is working along the lines Mukhametshin describes.

The second Tatar Muslim site -- soyuzmusulmanok.ru/ -- is in some ways the more interesting. It has been launched by the Union of Muslim Women of Tatarstan and judging by the initial postings, the site is directed less at Muslim women in the villages than at their counterparts in the modern sector of cities. 

The site, Interfax notes, invites Muslim women to take part “in competitions of female spiritual beauty, designers of national dress and Islamic fashion, and in the delivery of homilies, an appeal reinforced by photographs of strikingly modern Muslim women on the index page of the new portal (interfax-religion.ru/islam/?act=news&div=35934).

Like the other site, the Soyuzmusulmanok.ru site seeks to reach not only the Tatars but also Muslims elsewhere in the Russian Federation and abroad as well. To that end, the site’s editors say that eventually the site will work “in three languages, Tatar, Russian and English,” although when that will happen remains open.

Meanwhile, two other developments in the Tatar electronic media this week are worthy of note. Today, Info-Islam announced that it is now disseminating its news in Tatar at tatar-islam.ru, and Tatar state television said that it is now featuring a regular program on Islam (islamrf.ru/news/russia/rusnews/13049/).

That weekly program called “Islam in Fact” will be hosted by the pro-rector of the Russian Islamic University Rustam Batrov, who also is head of the Council of Ulema of the Muslim Spiritual Directorate (MSD) of Tatarstan. That should guarantee that the program will also support the Modernist version of Islam.

Moreover, as the television station noted, the program will be available not only in Tatarstan but elsewhere as well because it will be distributed not only to various cable companies in the Russian Federation and abroad but also and perhaps especially important because it will be streamed live on the Internet.

These developments in the electronic media of Tatarstan suggest at least two things. On the one hand, moderate Muslims there may now feel themselves under some pressure from fundamentalist groups and are seeking to counter the influence of the latter via channels that younger people often turn to.

And on the other, such sites will help to promote the revival of the Tatar tradition of serving as intellectual leaders of the Muslim umma of Russia, a position that was unchallenged before 1917 and largely unquestioned in Soviet times but that has been undermined by changing demography.

But however that may be, these sites and the number of visitors they attract are likely to be an accurate barometer of the way in which Russia’s historically more moderate Muslims are fighting back against extremists and to demonstrate that the best defense against the latter is more knowledge about the former. 

RIA: Some 80 people die from drug abuse in Russia every day - minister



11:37 16/06/2010

Around 80 people die from drug abuse in Russia every day, the country's Interior Minister said on Wednesday.

During a radio interview, Rashid Nurgaliyev also cited figures that indicate the annual drugs death toll in Russia is approximately 30,000.

He also told the Militsyeiskaya Volna radio station that "over 550,000 people" were registered with health authorities as suffering from drug addiction last year.

"The growth rate of drug addiction threatens our nation," he said.

Nurgaliyev said that the large majority of drugs used in Russia come from Afghanistan.

He cited the low levels of social-economic development in the Central Asian region as one of the main factors in the trafficking of Afghan drugs to Russia and other countries.

Nurgaliyev's statement comes in the wake of the international anti-drugs forum "Afghan Drug Production: a Challenge to the International Community," which was held in Moscow on June 9-10.

The forum discussed ways of stopping drug traffic from Afghanistan.

Afghan drug production increased dramatically after the U.S.-led invasion that toppled the Taliban in 2001. Russia, which has suffered a steep rise in heroin consumption, has been one of the countries most affected by the increase.

MOSCOW, June 16 (RIA Novosti)

VOR: Some 350 groups of drug dealers active in Russia



|Jun 16, 2010 11:42 Moscow Time |

Drugs kill some 80 people in Russia every day, says the Interior Minister Rashid Nurgaliyev. He was speaking in a live interview with the Militseyskaya Volna, or Police Wave, radio station on Wednesday.

He admitted that the illegal drug traffic was a government problem, and that the drug addiction growth rates were a national threat. The Interior Minister pointed out that the imported, basically Afghan-made, drugs accounted for the lion’s share of all narcotics in the country. Almost the whole of heroin consumed in Russia is of Afghan origin.

According to Nurgaliyev’s estimates, some 350 organized crime groups are in charge of the delivery and marketing of narcotics in this country.

In the first four months of this year alone the law enforcement agencies found out about more than 81,000 crimes, related to illegal drug trafficking.  

Georgian Daily: Moscow Uses ‘Infamous’ Ship to Move Spent Nuclear Fuel



June 16, 2010

Moscow Uses ‘Infamous’ Ship to Move Spent Nuclear Fuel Even as It Announces Plans to Build More Nuclear Power Plants Abroad

Paul Goble

Staunton, June 15 – Russia’s Atomic Energy Corporation is using a refitted ship that became “infamous for dumping liquid radioactive waste from the Soviet ice-breaker fleet in the Barents Sea,” Barents Observer reports today, even as Moscow announces plans to dramatically expand its involvement in the construction of atomic power plants abroad.

The “Serebryanka,” the news agency reports, has picked up “the first load of spent nuclear fuel from the run-down storage facility” near the Norwegian border without Russian officials informing Oslo in advance as they had pledged to do (first-shipment-of-highly-radioactive-waste-from-border-area.4793260-116320.html)

Eldri Holo, an official at the Norwegian Radiation Protection Authority, told the news portal that “we expect to be informed about the dates for shipment of spent nuclear fuel.” But she added that the first she had heard about this move was from the news agency rather than from the Russians. 

After its unfortunate role in dumping nuclear waste into the Arctic was exposed, the “Serebryanka” was rebuilt “to carry containers with spent nuclear fuel from the Russian navy’s storage sites along the coast of the Kola Peninsula,” Barents Observer reports, although the removal of nuclear waste from near the Norwegian border was no slated to begin until 2012.

If the Russian ship has been upgraded, the storage site at Andreyev , 60 kilometers from the Norwegian border, apparently has not. Its facilities have fallen into such decay that Russian engineers had to put a floating crane to load the containers of spent nuclear fuel, a local news agency reports (news/archive/2010-06-11-19/).

That news agency reported, Barents Observer says, that “the loading operation was carried out jointly by personnel from Atom lot and Servo,” both of which “have experts on nuclear safety.” It added that “before the containers were loaded into [the] ‘Serebryanka,’ they were repacked onshore.

This report, which suggests that at least some of those involved in Russia’s nuclear energy area continue to operate in ways that recall the Soviet past, comes as Rosatom’s chief Sergey Kiriyenko has announced plans to expand his agency’s involvement in the construction of nuclear facilities through the world (vremya.ru/2010/99/8/255619.html).

Among the places where Russian nuclear power specialists are involved or seeking to become involved in the construction of nuclear power stations are Iran, Turkey, Taiwan, Vietnam, Argentina, Brazil, Venezuela, and Ukraine. In some cases, Russia will serve as a contract builder, but in others it will be a part owner.

Kiriyenko has said that Moscow is especially interested in the latter possibility and believes that the future is bright for such a program. “We consider that the market for atomic energy is a global market and not a market of an individual country,” the Rosatom chief said last week (versia.ru/articles/2010/jun/07/jadernaja_politika_rossii).

Because of Iran has relied on Russian assistance in building the reactors that Tehran appears to want to use to develop nuclear weapons, many governments around the world are concerned about the risks of such an expansion of Russian nuclear programs, all the more so because the states where such reactors are built could also misuse them.

The United States Department of State recently declared that “the expansion of Russia in the area of nuclear energy could involve the appearance of new danger zones in the world.” Moreover, the department said, “it can lead to a new arrangement of forces in Europe, Asia and Africa and thus put at risk the strategic interests of the United States.”

In a commentary on the “Novaya Versiya” portal, two Russian commentators suggest that “such a sharp American reaction is the result of the fact that Moscow has taken the initiative away from Washington not only in the constructi6on but also in the planning of nuclear power stations.”

However that may be, one can only hope that any future Russian involvement in the construction of atomic power plants abroad will be more focused than has been the case up to now on protecting the environment from the dangers of radiation and on ensuring that these plantswill not be used to develop nuclear weapons.  

VOR: Interpol unable to help extradite Berezovsky, Zakayev



|Jun 16, 2010 07:22 Moscow Time |

Interpol is unable to satisfy Russia’s request to extradite Boris Berezovsky and Ahmed Zakaev. The statement comes from Interpol Secretary General Ronald Noble in an interview with the ITAR TASS news agency. He said that a country where Berezovsky resides has a right to refuse in handing out that person to another country and that it might not be concerned with the facts the other side provides to proove the man is a criminal.

June 15, 2010

Russia Profile: Rules of The Game



By Tai Adelaja

Russia Profile

Russian Judges Are Warned to Avoid the Temptation to Act as Latter Day Robin Hoods When Ruling on Crimes by Rich Businessmen

In a little-noticed but momentous ruling last week, the Russian Supreme Court tried to clarify the main provisions of the recently-amended Article 108 of the Criminal Code, which bans the arrest of people suspected of committing economic crimes. The amendments to the Criminal Code, intended to liberalize the conduct of business in the country, were sponsored by President Dmitry Medvedev, who has vowed to combat the “legal nihilism” afflicting the country.

In April, an amended law, which prohibits the detention of suspects and defendants in many cases involving economic crimes, came into force. According to the law, business people accused of or suspected of crimes such as graft, fraud, embezzlement, willful damage to property and money laundering can no longer be detained or arrested if such crimes were committed while performing a “business activity.”

The law was drafted in response to the death of 37-year-old Hermitage Capital lawyer Sergei Magnitsky, who died in pretrial detention after purportedly not receiving sufficient medical help, The Moscow Times reported. A second suspect, 53-year-old businesswoman Vera Trifonova, also died in custody after also apparently not receiving medical care, the paper wrote.

However, since the law became effective in April, several courts have kept businessmen detained for economic crimes behind bars by simply refusing to acknowledge that the suspects were engaged in business activity, the Vedomosti business daily reported.

The paper cited instances of judges trying to sidestep the new law while arguing that the concept of business or entrepreneurial activity was loosely defined in the new law. In late April, the Moscow's Tverskoi District Court, for example, extended the detention of Alexander Volkov, director of Eurasia Logistics, who was accused of fraud and property laundering, saying his charges were criminal, not economic.

In one of the latest examples, last week the same Tverskoi District Court sanctioned the arrest of businessman Yuri Fink, who was freed on parole by the same court on April 13, Gazeta.ru reported. Prosecutors said he should be re-arrested as he could escape abroad before his case could come up for hearing on June 23. In a May 22 video message to president Medvedev, Fink alleged that raiders were trying to take over his business with the help of law-enforcement agents.

Last month, a group of State Duma deputies lodged a formal complaint with the Supreme Court that judges are failing to obey the Kremlin-backed law. The complaint also asked the court for information about how many businesspeople have been arrested for economic crimes and how many of them have asked to be freed and have been placed under house arrest after the law was enacted a month ago.

In a near-unanimous ruling Thursday, the Supreme Court judges said that, on the legal interpretation of “business activity,” courts must henceforth be guided by Clause 1 of Article 2 of the nation’s Civil Code. The Civil Code describes business activity as “an independent,” “risk-taking,” and “profit-making activity” which a duly registered person carries out either by using his property, the sale of goods or provision of services.

“If any entrepreneur, whose business is duly registered for the purpose of making a profit, commits a crime under the Penal Code, then new rules will apply,” Gazeta.ru quoted Supreme Court Chairman Vyacheslav Lebedev as saying. Lebedev said most of the problems associated with the implementation of the new law arose because the amendments were passed only two months ago and courts so far have little or no experience with it, Gazeta.ru reported.

Since the law was enacted two months ago, Lebedev said, 37 petitions have been filed asking courts to free those accused or suspected of economic crimes. So far, 16 requests have been granted while 21 were dismissed. Out of 44 applications asking for the extension of detention, only 29 were granted, he said.

Lebedev blamed investigators for sometimes failing to draw the attention of judges to the new amendments when seeking sanctions for arresting people suspected of committing economic crimes. In about 80 percent of cases prosecutors failed to alert the courts to the relevant provisions, leaving judges no choice but to rely on their own interpretation, he said.

One of the high-profile cases to have raised expectations after the law was passed is that of Mikhail Khodorkovsky and his business partner, Platon Lebedev. Khodorkovsky, the former CEO of the now defunct Yukos oil company, was arrested in 2003 along with Lebedev. Both men are serving eight-year prison terms after being convicted of fraud and tax evasion. They are now facing a second trial on fresh charges of embezzlement and money laundering, which could keep them in jail for another 20 years.

Last Month, the Khamovnichesky District Court in Moscow granted prosecutors requests to extend the detention of Khodorkovsky and Lebedev, who were accused of fraud and tax evasion under articles 160 and 174 of the Criminal Code. Khodorkovsky held a two-day hunger strike to protest the extension of his custody, which he said violated the April law. The Moscow City Court later upheld the decision of the Khamovnichesky District Court to leave Khodorkovsky and his business partner in custody until August 17, citing, among other things, that their crimes “do not belong to the sphere of business activity.”

Vyacheslav Lebedev said the main problem with the new law is the ambiguous interpretation of what constitutes a business activity. He said Thursday’s ruling will significantly reduce the number of people arrested for committing economic crimes. He declined, however, to comment on the Khodorkovsky-Lebedev case, citing legal ethics, Gazeta.ru reported.

 

In December, the Supreme Court ruled that the 2003 arrest of businessman Lebedev was illegal. The case was reviewed after a ruling by the European Court of Human Rights that found Lebedev's rights had been violated during his arrest and pre-trial detention, AFP reported.

In a curious appeal after the ruling on Thursday, the Russian Supreme Court Chairman urged Russian judges not to be guided in their decisions by the hatred of the rich by the poor, Gazeta.ru reported. The notion that, in addition to the spirit and the letter of the law, Russians’ pathological hatred for ill-gotten wealth can sometimes reflect on court decisions, should be a wakeup call for the oligarchs out there, experts say. 

June 15, 2010

Russia Profile: Moving For Earnings



By Svetlana Kononova

Special to Russia Profile

While The Government Simplifies Rules for Foreign Migrants, Most Russians Still Avoid Moving For Work

The population of Russia could decrease by 20 million people by 2025, leading to a dramatic reduction in the work force, experts say. This means that the country needs to attract between 15 and 35 million foreigners to compensate for the shortage of local workers. Despite the current bureaucratic procedure of obtaining work permits and the difficulties of adapting to a new life, foreign migrants tend to be more prepared to travel than the locals, who are usually not interested in moving for a job.

Recent surveys show that from ten to 15 million foreign migrants work in Russia. Only ten percent of them are registered with the Federal Migration Service -- the majority still work illegally without any rights or social guarantees. “In the first decade after the collapse of the Soviet Union many highly skilled, educated migrants from the former Soviet republics received a chance to move to Russia and build successful careers while new job markets were rapidly developing. Now most of them have completely assimilated into the country. However, the situation changed after the crisis in 1998,” said Anna Silina, the country director for Russia at the Ancor recruitment agency. “The gap in job opportunities and salaries between Russia and the former Soviet republics, especially Central Asian countries, has become very deep. As a result, many residents of these countries, including people with university degrees, were forced to do low-paid, unskilled work and live illegally in Russia to support themselves and their families financially. Unfortunately, this trend turned out to be long-term,” she added.

Nowadays the main migration flows to Russia are from the countries of the Commonwealth of Independent States (CIS), whose residents are usually fluent in Russian and do not consider Russia as “overseas.”

Russia’s top sources of cheap workers who are ready to do any unskilled job are Uzbekistan and Tajikistan, which are responsible for 52 percent and 22 percent of foreign migrants, respectively. Six percent of migrant laborers have moved to Russia from Moldova. They are also generally badly paid. Most migrants from Central Asian countries and Moldova work in the construction sector, manufacturing, cleaning, housing and public utilities. Thirteen percent of foreign migrants have Ukrainian citizenship, and seven percent have arrived from Belarus. Many people from these countries work in retail, hospitality and personal services. There is also a growing stream of immigrants from China and Vietnam, job market experts say. Migrants from these countries mostly work in factories and trade.

The most attractive destinations for foreign migrants are Moscow, the Moscow Region and St. Petersburg. The second most popular destinations for migrants are big manufacturing towns whose economies are slowly recovering from the crisis and need extra labor. Many migrants have worse employment terms and working conditions than their Russian colleagues because of their illegal status. “Many employers simply cannot be bothered and don’t want to spend the money to register foreign workers officially, although the law allows them to,” Silina said.

Aleksey Zakharov, the chief executive of the SuperJob.ru Internet portal, agreed. “In many cases it is cheaper for Russian employers to hire foreigners than Russians,” he said. However, the stereotype of foreigners as cheap, unskilled employees can be misleading. “Migration processes are characteristic for workers of all qualification levels,” Zakharov said. “While blue-collar workers move to Russia because it has a ‘healthier’ economy in comparison with other CIS countries and gives the opportunity for quite high earnings, top managers from around the world consider Russia a developing country where they can improve themselves and learn how to solve unconventional tasks.”

“Top managements is an international notion,” he added. “The higher the level of skills and qualifications a top manager has, the freer he is with his choices of geographical destinations and where to work.” “A recent trend is the huge interest that residents of developed countries such as the EU, the United States and Canada are showing in working in Russia,” Silina said. “The first explosion of such interest was notable after the Soviet Union collapsed, and now we can see a repeat of this situation. It might be caused by the difficult conditions on the world job marked because of the global economical crisis.”

While foreigners readily move to Russia for better salaries and job opportunities, Russians themselves have a much more conservative approach toward economic migration. Data from SuperJob.ru shows that only 17 percent of candidates are interested in job offers from companies located in other cities and regions, and more than a half of those are skilled laborers such as welders.

Just 12 percent of those who ready to move to other cities for work are interested in middle or top-level management. The others are lower-level white-collar workers.

Taking into account that people who use Internet sites like SuperJob to find work are usually more economically active, educated and skilled than the rest of the labor force, it is likely that even these paltry figures are inflated.

While the average American moves from seven to ten times during his lifetime, the average Russian moves only once, statistics show. A recent survey put current internal migration on the same level as it was in 19th century despite the growth in population. The main destination for internal migration has not changed since the 1990s: people move from rural areas and small towns to big cities. Most migrants are young people who leave home because of the gap in incomes and living standards between Moscow, St. Petersburg and one or two other big cities and the rest of Russia. They hope to improve their standard of living through employment or business activity.

However, big economic projects have a huge influence on internal migration patterns, experts say. Firstly, the job market growth is likely to continue in the nearest future in the Far East. Preparations for the 2012 Asia Pacific Economic Cooperation (APEC) summit in Vladivostok include road building and infrastructure projects that involve many internal migrants. “These projects could have a long-term influence on economic migration in Far East and Siberia,” Silina said.

Secondly, preparations for the 2014 Winter Olympic Games in Sochi in are also impacting internal labor migration in Russia. A wealth of new jobs in building and the hospitality sectors is attracting many skilled professionals from others parts of the country. It is expected that some foreign workers will be involved in the Sochi projects as well.

The future of labor migration in Russia depends on recent governmental initiatives to simplify registration rules for both internal and external migrants, and eventual legalization of foreign workers, experts believe. “If these programs and legal changes work successfully, the number of migrants could multiply,” Silina said. “However, in fact migration patterns are expected to stay the same in the next several years.”

Moscow Times: Supreme Court: Web Sites Can't Be Closed for Forum Posts



16 June 2010

By Natalya Krainova

Online media outlets can only be shut down for extremist comments left on their forums if they fail to comply with official requests to delete the comments, the Supreme Court ruled Tuesday, RIA-Novosti reported.

User posts on forums without moderation are to be treated the same way as live speeches on radio or television, for which the broadcasters cannot be held responsible, said Supreme Court deputy chief justice Vasily Nechayev.

The ruling only covers forums of web sites that are registered as media outlets.

Federal anti-extremist legislation allows courts to close media outlets that receive two warnings for extremist content, which includes promoting hatred based on ethnicity, social status and profession, as well as calling for the violent overthrow of the government.

Promoting extremism is punishable by up to three years in prison and up to five years if done through the mass media.

Prior to the Supreme Court's ruling, authorities had the option of shutting down online media outlets for comments on their forums, even if the comments were not endorsed by the editors.

Ura.ru, the biggest news web site in the Urals known for its critical coverage of local authorities, faced closure after receiving two warnings for extremism over forum comments in April 2009. Federal authorities have not pushed for its closure, and Ura.ru editors have called the situation a blackmail attempt by local officials.

In March 2009, Kemerovo prosecutors charged an opposition activist, Dmitry Solovyov, with hate speech for posting someone else’s critical comments about law enforcement officials on his blog.

In July 2008, the Syktyvkar City Court handed blogger Savva Terentyev a one-year suspended sentence for a controversial post saying police officers should be “burned at the stake” in city squares from time to time, “like in Auschwitz.”

Kommersant/Russia Today: The Supreme Court sided with the media



Internet publications are not responsible for their readers

Natalia Gorodetskaya

The Plenum of the Supreme Court of the Russian Federation had sided with the media, by adopting the resolution “On the Application of the Russian Courts of the Law ‘On Mass Media’”. The most controversial item of the resolution -- on the responsibility of Internet publications for the commentary, issued on forums -- was resolved in favor of the media. Chairman of Russia’s Union of Journalists, Mikhail Fedotov, who took part in preparing the document, described the ruling of the Plenum as a victory of the journalistic society.

Read more

The Plenum of the Supreme Court of the Russian Federation had unanimously adopted yesterday the resolution “On the Application of the Russian Courts of the Law ‘On Mass Media’”. With this resolution, as was explained to Kommersant by the speaker at the plenary session, Judge Vyacheslav Gorshkov, “the Supreme Court has for the first time in the 20 years of existence of the Law on Mass Media had specified to courts how it should be applied in specific situations”.

Yesterday, the Plenum of the Supreme Court had discussed the resolution for the second time. Kommersant reported on the meeting of the working group, during which the main topic of discussion was the question of at what point the Internet media outlets could be considered liable for extremist appeals or statements, on June 9. This issue was not clearly stipulated in the law, because 20 years ago such publications were practically inexistent. During the meeting of the working group, Roskomnadzor (Federal Service for Supervision of Communications, IT and Mass Communication) was, according to Kommersant’s sources, insisting on holding Internet media outlets responsible for the commentary, written by forum users, and suggested making the publications responsible for ensuring that all the readers’ messages “correspond to reality” (Kommersant reported on this on June 5).

However, the final version of the Supreme Court Plenum’s resolution specifies that “readers’ commentary is published on websites, registered as means of mass media, without preliminary editing” as material that is “transmitted live”. If, on the other hand, an authorized governmental body decides that these comments “abuse the freedom of mass media”, and addresses its concerns to the publication, then the online publication has the right to delete or edit them. Secretary of Russia’s Union of Journalists, Mikhail Fedotov, explained that if these measures are not taken, then “the supervisory agency could issue a warning”, and only then, in accordance with the law on media, present the question of the publisher’s liability before the court.

It is noteworthy that, in this case, the Supreme Court recommends the courts “determine as to whether or not the authorized state agency did, in fact, put forward a demand to remove the information from the forum, and if the demands were met”. In other words, if someone tries to file a lawsuit against an online publication, after discovering someone’s extremist appeals, for example, and the court learns that the supervisory body had not asked the publication to remove the text prior to appearing in court, then the Internet publication, as Judge Gorshkov confirmed to Kommersant, will not be held responsible for them. In this case, criminal and administrative responsibility will be held by the extremist reader. “The media will be protected. Registered online publications carry more responsibility, but they also have rights, and they are in a privileged position in this case,” said Mr. Gorshkov.

Deputy Prosecutor General of Russia, Sabir Kekhlerov, and Deputy Justice Minister Aleksandr Smirnov, who were present at the Plenum of the Supreme Court, did not comment on the document. They both noted patient and consistent work in the working group of not only law enforcement agency representatives, but also media representatives. As a result of this work, according to Smirnov, “all proposals were considered and included in the text of the resolution”.

“We did it!” exclaimed Mr. Fedotov. “We won!”

“We have defended the journalists’ right to protect the confidentiality of their sources, whose personal information is protected by the federal law. The name of a source could be disclosed only at the request of the court, made in connection to a lawsuit against the source,” he explained to Kommersant. “A non-judicial process for the resolution of informational disputes has been prescribed. And, it has been confirmed that any interference with the internal affairs of a publication is considered a violation of rights of journalists.” However, he gave the Supreme Court’s resolution “a solid four”, because according to him, a number of questions continue to exist that also need to be clarified, such as those “on the ability of Russia’s federal constituent entities to adopt laws on the economic support of media or on criminal responsibility for obstructing the work of journalists”.

Read the article on the newspaper's website (in Russian)

Justmeans: From Russia With Love: Exploring the Economic Future of One of the Worlds Largest Emerging Market Nations (Part 2 / 2)



Posted On: About 2 hours ago

With a substantial collection of untapped energy resources, abundant liquidity, sustainably low interest rates, and strengthening currency, Russia is positioned to lead world's emerging market nations over the next decade. This morning, the International Monetary Fund raised the 2010 Russian GDP growth forecast to 4.25 percent, while maintaining its inflation outlook of 6 percent. In Part 1, our exploration of Russia commenced with a brief discussion of the geographical constraints, financial risks, and economic indicators. In Part 2, the discussion will conclude with a review of the Russian banking system, diversification issues, financial risk, finance and investment recommendations.

Looking back to the onset of the recent global financial crisis, it is clear that the Kremlin's goal was to consolidate its banking system. Throughout the financial crisis, smaller, regional Russian banks made short-term, high-interest loans to desperate foreign and domestic enterprises. As the world begins to emerge from the financial crisis, many of the loans that were transferred to these small regional banks and the corresponding corporations are coming due. As small regional banks begin to repay central state loans, many of the larger state-owned Russian banks - particularly Sberbank and VTB - will enhance their market share. Currently, the Russian government is the single largest creditor to banks, with 12 percent of all bank liabilities held by the state (mostly short-term loans with 8.5 percent interest). This position is expected to grow in the short term.

While consolidation within the banking sector has helped stabilize the economy, the lack of infrastructure and rigorous stock market regulation remains a significant growth hurdle. Currently, many Russian companies are listed on foreign exchanges, primarily in London and, more recently, in Hong Kong. Over the last 20 years, market swings on Russian stock markets have been exacerbated by Russia's open capital account, which allows speculation and enables investors, corporations, and individuals to rapidly switch from rubles to Euros or US dollars as the price of oil and investor confidence fluctuates. The volatility within the Russian stock market has been further influenced by Russia's relatively small domestic investor base. In the short term, pension reform that permits investment in the domestic stock market should help Russia develop a larger local investor base, while enabling Russia to become less reliant on outside sources of capital. This transition has already been seen in other emerging market nations, including Poland, Brazil, Chile, Mexico and China.

Despite these positives, one cannot ignore the Russian economy's continued dependence on energy exports. While the state has used a variety of methods to encourage diversification, growth in non-energy based industries remains slow. Recently, to address these issues, the Russian government's commission on innovation approved the first project for the Skolkovo innovation city - a 900 million ruble business incubator designed by Almaz Capital Partners to develop cloud computing and other technologies. These types of investments are critical if the Russian economy is going to diversify sustainably. In addition, other changes are needed within the Russian economy. These changes include the establishment of laws which government securities markets, financial reform, as well as the perpetuation of ethical behavior in government and business. Within all emerging markets, an effective and independent bank regulator is needed to ensure the banking and financial systems are both secure and well-capitalized. While the state continues to maintain regulatory control, more independent controls are needed which will encourage transparent corporate lending practices as well as better accounting and reporting standards.

While economic evolution continues to influence Russian fortunes, the recent economic crisis had a significant impact on the Russian oligarchs. The Russian oligarchs are business entrepreneurs who started under Gorbachev during his period of market liberalization. During the 1990s, the oligarchs emerged as well-connected entrepreneurs who profited from participation in the market via connections to the corrupt, but democratically elected, government of Russia. Through the end of the 1990's the oligarchs became extremely unpopular, and were blamed for much of the turmoil that plagued the country following the collapse of the Soviet Union. Overall, the power of oligarchs diminished significantly after Vladimir Putin became president. During Putin's presidency, many oligarchs have come under fire for various illegal activities, particularly tax evasion. Many critics continue to speculate that these charges were politically motivated, although such claims remain unsupported. Throughout the recent global crisis, the Kremlin reduced the power of the oligarchs, leveraging the state's liquidity to gain control of oligarch run organizations. Many oligarchs, who were indebted once the global crisis hit, were told explicitly that they would receive access to state funding only once they made substantial personal capital contributions. In fact, Prime Minister Vladimir Putin called all major oligarchs to a meeting at the Kremlin during the beginning of the Russian financial crisis, demanding that they either helping immediately or forsaking any future help from the state. This stance enabled the Kremlin to further solidify its hold on domestic industry.

As we look to the future, it is clear that Russia's investment outlook is positive. As an emerging market, Russia has abundant liquidity, sustainably low interest rates, strong earnings growth as well as a strengthening currency. Infrastructure deficiencies continue to hamper development, particularly in town like Novyy Urengoy, Russia and hundreds of other industrial towns built during the Soviet to support Siberian resource extraction. While these towns have remained in operation for more than 30 years, working on the tundra is presenting new challenges for the Russia government, including an accumulation of buildings and manufacturing facilities that have cracked and collapsed under the sagging permafrost. This infrastructure must be replaced. In the short term, the state's ability to focus resources toward critical infrastructure projects while developing sustainable trade routes will help Russia attract foreign direct investment. Furthermore, state control will enable Russia to focus its financial resources more effectively towards key foreign policy goals. In the long term however, the presence of state control in many economic areas, specifically banking, as well as the lack of private capital, will increase the financial risk for foreign investors. Moreover, Russia continues to face a skilled labor shortage that must be addressed, as well as a number of daunting demographic challenges, including a low birthrate, increasing prevalence of HIV/AIDS, drug use, and low labor productivity. Currently, Russian labor productivity is only one-third of U.S. productivity, a figure that must be improved if Russia is to become competitive on the global stage.

In the next 5 years, the number of attractive long-term investment opportunities in Russia will rise. While the Russian market remains dominated by resource stocks with Gazprom, the world's leading natural-gas producer, accounting for roughly 25% of the MSCI Russia Index a stronger ruble and domestic cost pressures can be expected to cap earnings growth for these companies. This should help open the door for companies in manufacturing, consumer demand and infrastructure development sectors, while increasing the incidence of IPO's within the Russian market. For any investors, the most effective way to identify promising opportunities in Russia, as well as any other emerging market nations, is to focus on corporate fundamentals. Earnings growth, cash flow and earnings expectation levels must remain key considerations, regardless of performance on domestic or foreign exchanges.

RFE/RL: Russian Group Protests Obligatory Military Service



June 16, 2010

MOSCOW -- Ten opposition activists have staged a public protest in Moscow against mandatory military service, RFE/RL's Russian Service reports.

The activists, who are members of the opposition Yabloko party, gathered in front of the Defense Ministry. They displayed a large banner asking "How many more must die to stop compulsory service?" and chanted "Down with mandatory service, yes to contract service!"

The activists told RFE/RL that the large number of suicides by young conscripts in Russia in the last several months motivated them to protest.

Police approached the activists shortly after the demonstration began and asked them to move the protest to Gogol Boulevard, which they did.

Under Russian law, all men between 18 and 27 years are required to serve 12 months in the army.

The activists tried to submit a petition addressed to Defense Minister Anatoly Serdyukov urging him to introduce changes in the law under which the country's armed forces would be manned exclusively on a contract basis. The ministry refused to accept the petition.

Reuters: PRESS DIGEST - Russia - June 16



Wed Jun 16, 2010 7:58am GMT

MOSCOW June 16 (Reuters) - The 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.

KOMMERSANT

kommersant.ru

- The government is considering providing credit to farmers to encourage them to buy surpluses of grain from state reserves.

- Russian tycoon Oleg Deripaska could lose a 2.99 billion rouble ($96.02 million) contract to build a sea terminal in the Russian port of Sochi port after the anti-monopoly watchdog declared the result of the tender illegal.

VEDOMOSTI

vedomosti.ru

- Russia's Supreme Court has ruled that media web sites should not be held responsible for comments left by readers.

- The government plans to spend 19 billion roubles ($610.1 million) to encourage local scientists to take up work in private firms.

ROSSIISKAYA GAZETA

rg.ru

- Russia is planning the serial production of its new Severodvinsk class of nuclear-powered submarine after the prototype was launched on Tuesday, the daily reports.

NEZAVISISMAYAY GAZETA

ng.ru

- Russian President Dmitry Medvedev has proposed reducing the retirement age of state officials from 65 to 60 in a bid to inject new blood into the bureaucracy.

- The U.S. dollar has become the preferred currency for Russians to keep their savings, polls say.

VREMYA NOVOSTEI

vremya.ru

- Gazprom (GAZP.MM) has warned it may reduce gas supplies to Belarus to force its neighbour to pay off a $192 million debt.

National Economic Trends

June 16, 2010 10:27

Interfax: Dollar down sharply against ruble, euro slightly lower



MOSCOW. June 16 (Interfax) - The dollar declined sharply at the open of trading on the MICEX currency exchange on Wednesday and the ruble was slightly higher against the euro on the continuing rally in oil prices.

The dollar opened at 31.14-31.19 rubles/$1 in "tom" contracts, 16-20 kopecks below the close on Tuesday and roughly 30 kopecks below the official exchange rate.

The euro opened at 38.40-38.43 rubles/1 euro, 4-7 kopecks below the previous close and 10 kopecks below the Central Bank exchange rate.

The bicurrency basket ($0.55 and 0.45 euro) was near 34.42 rubles, about 14 kopecks below the close on Tuesday.

jh

Itar-Tass: President Medvedev to hold conference on budgetary policy



16.06.2010, 07.32

MOSCOW, June 16 (Itar-Tass) - President Dmitry Medvedev holds a conference here on Wednesday to discuss matters concerning budgetary policy.

This will refer, in particular, to the inclusion of expenditure, necessary for the implementation of presidential assignments, in the draft budget for 2011 and the 2012-2013 plan period, to the formation of a Road Fund, as well as the problems of financing innovative projects.

Presidential aide Arkady Dvorkovich, in response to a question about an amount of resources to be allocated for the activities of the commission on modernization and technological development of the Russian economy in 2011, said Tuesday that a final decision on the matter had not been made so far.

Dvorkovich pointed out, "Next year, we expect, an aggregate of up to10,000 million roubles will be allocated, on the whole, for the Commission's activities and, separately, 15,000 million roubles will be earmarked for the Skolkovo project. The money will be also used, in particular, in support of business projects that are being implemented there". "However, this is not a final sum; the budgetary process is evolving," he emphasized.

Sydney Morning Herald: The Russians are coming - to buy our dollars



June 16, 2010 - 3:44PM

Russia may add the Australian and Canadian dollars to its international reserves for the first time after fluctuations in the US dollar and euro.

''Adding the Australian dollar is being discussed,'' Alexei Ulyukayev, the central bank's first deputy chairman, said in an interview at an event hosted by Bloomberg in Moscow. ''There are pros and cons. We have added the Canadian dollar but haven't yet begun operations'' with the currency.

Russia's reserves are made up of 47 per cent US dollars, 41 per cent euros, 10 per cent British pounds and 2 per cent Japanese yen, Ulyukyaev said in November. That's a shift from 2006, when the central bank said it held 50 per cent of its reserves in US dollars, 40 per cent in euros and the remaining 10 per cent in yen and pounds. Russia's international reserves, the world's third biggest, reached $US458.2 billion on May 14.

President Dmitry Medvedev last year suggested Russia would reduce its use of the US dollar as a reserve currency after the greenback lost 34 per cent of its value against the euro in 2 1/2 years. The euro fell to a four-year low of $US1.1877 on June 7 and has dropped 22 per cent since November 25 on investor concern policy makers may fail to contain Europe's debt crisis.

The Canadian and Australian dollars have been among the best performers in the past 12 months as investors speculated a recovering global economy would increase demand for the countries' raw materials. The Canadian dollar has gained 10 per cent against the US currency and 23 per cent versus the euro during that period. The Australian dollar is up 8.6 per cent and 21 per cent, respectively.

The ruble has gained almost 11 per cent against the euro and 0.2 per cent versus the US dollar in the past 12 months.

Central Bank Chairman Sergey Ignatiev said May 27 that Russia hadn't changed the currency structure of its reserves after year-end figures showed Russia increased the portion held in dollars.

The US dollar may account for more than half of Russia's foreign currency reserves by the end of this year, Paris-based BNP Paribas estimated last month.

Bloomberg News

This story was found at:

Bloomberg: Russia to Buy Canadian, Aussie Dollars for First Time (Update2)



By Paul Abelsky and Maria Levitov

June 16 (Bloomberg) -- Russia may add the Australian and Canadian dollars to its international reserves for the first time after fluctuations in the U.S. dollar and euro.

“Adding the Australian dollar is being discussed,” Alexei Ulyukayev, the central bank’s first deputy chairman, said in an interview at an event hosted by Bloomberg in Moscow last night. “There are pros and cons. We have added the Canadian dollar but haven’t yet begun operations” with the currency.

U.S. dollars account for 47 percent of Russia’s reserves, while euros make up 41 percent, British pounds 10 percent and Japanese yen 2 percent, Ulyukyaev said in November. The central bank has reduced dollars from 50 percent in 2006, when euros accounted for 40 percent and the remaining 10 percent was in yen and pounds. Russia’s international reserves, the world’s third biggest, reached $458.2 billion on June 4.

President Dmitry Medvedev last year suggested Russia would reduce its use of the U.S. dollar as a reserve currency after the greenback lost 34 percent of its value against the euro in 2 ½ years. The euro fell to a four-year low of $1.1877 on June 7 and has dropped 22 percent since Nov. 25 on investor concern policy makers may fail to contain Europe’s debt crisis.

Push to Diversify

Russia’s push to diversify reserves “is more a result of their desire to do something in response to the extreme volatility of the dollar and the euro,” said Elena Matrosova, a Moscow-based economist at BDO International, the financial consultancy that lists the central bank among its clients. The Canadian or Australian dollar “can’t be truly called international reserve currencies because of their very limited liquidity,” she said.

The Australian dollar traded near the strongest level since mid-May, at 86.43 U.S. cents as of 6:40 a.m. in London.

The Canadian and Australian dollars have been among the best performers in the past 12 months as investors speculated a recovering global economy would increase demand for the countries’ raw materials. The Canadian dollar has gained 10 percent against the U.S. currency and 23 percent versus the euro during that period. The Australian dollar is up 8.6 percent and 21 percent, respectively.

Ruble Gains

Medvedev has pushed for the creation of regional reserve currencies and in July produced a prototype coin for a “world currency,” which he said was needed to stabilize the global economy.

Central Bank Chairman Sergey Ignatiev said May 27 that Russia hadn’t changed the currency structure of its reserves after year-end figures showed Bank Rossii increased the portion held in dollars.

The U.S. dollar may account for more than half of Russia’s foreign currency reserves by the end of this year, Paris-based BNP Paribas estimated last month.

The ruble has gained almost 11 percent against the euro and 0.2 percent versus the dollar in the past 12 months. The Russian currency strengthened for a fifth day against the greenback, climbing 0.7 percent to 31.1450 for its longest winning streak in two months.

Russia had a net capital inflow of about $3 billion in May after an inflow of between $3 billion and $4 billion in the previous month, said Ulyukayev.

“There was a small capital inflow of about $3 billion in May, according to preliminary calculations,” he said.

The Russian government forecasts no net capital inflow this year after outflows of $52.4 billion in 2009.

To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@.

Last Updated: June 16, 2010 02:58 EDT

Moscow Times: IMF Ups GDP Growth Estimate to 4.25%



16 June 2010

Reuters

The International Monetary Fund raised its 2010 GDP growth forecast for Russia to 4.25 percent, up from 4 percent, while maintaining its inflation outlook of 6 percent, the fund's Russia head, Paul Thomsen, said Tuesday.

"We think that for the time being, recovery will be led primarily by consumption," Thomsen told reporters, noting, however, that increased consumption was still "policy-supported" and reflected the recent 45 percent increase in pensions.

The IMF puts Russia's budget deficit this year at 5.9 percent of gross domestic product, slightly higher than the official estimate of 5.4 percent, a figure that was revised down earlier this month from 6.8 percent.

Earlier on Tuesday, Thomsen met Finance Minister Alexei Kudrin. He said it was "regrettable" that Kudrin allowed fiscal stimulus measures to expand this year, including a permanent increase in pensions to 4.5 percent of GDP.

"We had hoped the withdrawal of the fiscal stimulus would start this year, but unfortunately it did not. So there is more to do in the following years," Thomsen said.

He also warned that inflation could climb well beyond 6 percent and the ruble rapidly appreciate if the ministry did not focus on reforming public sector projects by making them financially viable.

"The very last share of this fiscal relaxation took the form of a permanent increase, so we do not think it is possible to scale back this last stimulus unless the government speeds up reforms in health care, pensions and social services."

The IMF also called for an end to constant revisions to the federal budget, a practice that it claims has taken Russia in the "wrong direction" by adding to demand during periods of rising inflation.

Russia revised its 2010 budget last month and one more revision is possible in the fall.

Moscow Times: More Russians Saving in Dollars



16 June 2010

Bloomberg

Russians’ preference for ruble-denominated savings declined last month for the first time this year as more people saved in dollars, a survey showed Tuesday.

The number of Russians saving in rubles fell to 88 percent in May from 92 percent the previous month, the state-run VTsIOM pollster said. Dollar-denominated savings rose to 11 percent from 7 percent in the same period, it said in an e-mailed statement.

The ruble has lost 3.6 percent against the dollar since the beginning of this year, while gaining 13.2 percent against the euro, Bloomberg data show. Russians kept 8 percent of their savings in euros in May, unchanged from the previous two months, according to VTsIOM.

VTsIOM interviewed 1,600 people in 42 regions for the survey last month. The margin of error was 3.4 percentage points.

UralSib: Russia 2nd Half 2010: Surviving and Thriving



UralSib

June 15, 2010

Domestic economy and corporate profits improving, but valuations reflect crisis conditions

RTS index target remains unchanged. We have revised some of our macro and valuation model assumptions, principally our oil price forecast. But while this has led to a number of changes in our list of top conviction stocks, our target for the RTS Index remains unchanged from our forecast of 1,950, set last December. This implies 42% upside to the index on 1 June. Our MICEX forecast has been slightly downgraded to 1,325, implying an upside of 26% on 1 June. The downgrade is due to the altered ruble-dollar forecast and the impact on the ruble-denominated share prices on MICEX.

Better second half ... Year-to-date, Russian equities have been a high-beta theme within the volatile global markets, performing better in the run-up to the mid-April global market peak and with greater volatility since. As global growth indicators strengthen and the domestic recovery story gains momentum in 2H10, Moscow's bourses are expected to move steadily upwards, with stocks and themes that are exposed to the domestic story leading the way.

... but nervous summer expected. Global equity markets have been very volatile due to the solvency threats in Europe and concerns that global growth may fall into a double-dip recovery pattern. But, while the pace of recovery has slowed, the growth achieved thus far is holding firm.

There is no evidence of a reversal. Our assumption is that while the summer months will remain volatile and investors nervous, the upward move in global markets is expected to resume in the autumn as the OECD forecast numbers become firmer. Against that backdrop, the best investment strategy in the summer is to establish a list of stocks to buy and to do so on days when global markets are weak.

Domestic is becoming best theme. The best investment themes in Russia over the medium to long term will be those associated with investment in infrastructure; the rebuilding of industries that have been neglected for the past 20 years, such as agriculture, food processing, and pharmaceuticals; emerging-state sponsored technology sectors, such as those in the new InnoGrads (technology cities); and those linked to the development and broadening of the domestic economy.

AgriMarket: In 2010, Russia to produce nearly 90 mln tonnes of grains



 06/16/2010 10:01  

The Ministry of Agriculture of the Russian Federation forecasts production of grains in the country at the level of nearly 90 mln tonnes in 2010, announced Elena Skrynnik, the Minister of Agriculture, on June 15.

According to her, the index increased by 15% compared to the previous results, including high carry-over stocks of the last year.

While talking about the spring sowing campaign, Elena Skrynnik noticed that agrarians finished spring sowing works in the Southern and North Caucasian Federal Districts, other districts also almost completed the campaign.

Business, Energy or Environmental regulations or discussions

2010-06-16 07:33

Reuters: Russian markets -- Factors to Watch on June 16



MOSCOW, June 16 (Reuters) - Here are events and news stories that could move Russian markets on Wednesday.

You can reach us on: +7 495 775 1242

STOCKS CALL (Contributions to moscow.newsroom@):

Nettrader: Today we are expecting the market to open in the positive territory with oil and gas sector firms and banks among leaders.

Troika Dialog: We are opening our prices this morning up 1.5-2.0 percent.

EVENTS (All times GMT):

MOSCOW- The World Bank presents its quarterly economic report on Russia.

MOSCOW - Oil-to-telecoms group Sistema to release first quarter results.

TOP STORIES IN RUSSIA AND THE CIS: TOP NEWS:

• RUSSIA GIVES BELARUS 5 DAYS TO PAY FOR GAS COMPANIES/MARKETS:

• MTS TO SELL UP TO $750 MLN EUROBOND

• RUSSIA MOSENERGO Q1 PROFIT RISES 20 PERCENT

• URALKALI STAKE SALE BOOSTS SHARES ECONOMY/POLITICS:

• RUSSIAN ROUBLE FLAT, OVERLOOKS STRONG OIL

• RUSSIA'S NET CAPITAL INFLOW $3 BILLION IN MAY ENERGY:

• RUSSIA TO REINSTALL E.SIBERIA OIL EXPORT DUTY

• RUSSIA TO CUT JULY OIL DUTY BY TO $248.8/T COMMODITIES:

• RUSSIA TO SELL 3 MLN T GRAIN STOCKS AT HOME

MARKETS CLOSE/LATEST:

RTS 1,405.5 +0.6 pct

MSCI Russia 748.0 +3.5 pct

MSCI Emerging Markets 943.5 +0.6 pct

Russia 30-year Eurobond yield: 5.412/5.374 pct

EMBI+ Russia 248 basis points over

Rouble/dollar 31.4471

Rouble/euro 38.1526

NYMEX crude $77.01 +$0.07

ICE Brent crude $77.25 +$0.15

For Russian company news, double click on

Treasury news Corporate debt

Russian stocks Russia country guide

All Russian news Scrolling stocks news

Emerging markets top news

Top deals European companies

Keywords: RUSSIA FACTORS/

|SMR: Russian stock market daily morning report (June 16, 2010, Wednesday) |

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By Veles Capital

 On Tuesday the Russian share market showed rather active growth winning back Monday we missed. Growth at the global exchange grounds and the oil price upping served as the main reasons for that. At the same time the news background was not positive: once again the rating of Greece has been lowered. In the evening the support to the market might have been provided by the output stats from the U.S. We should point out the shares of Sberbank (+5.25%), active growth of the oversold energy sector – FNC (+6.86%) and RusHydro (+4.16%) in particular, were the growth leaders. Activity also was indicated in the notes of Uralkaliy and Silvinit due to the recent deals and rumor on merger of the given companies. Rosneft (+3.23%) was climbing against the background of the situation with oil export duties.

Main news

Oil export duties will lower by 14.8% from July 1.

Oil export duty from Russia might be reduced from July 1 2010 by 14.8% versus the level of June and form 248.8 USD per ton, as follows from the calculations based on oil price monitoring from May 15 to June 14, 2010, provided by the Ministry of Finance of RF to Interfax. Note, from June 1 the oil export duty forms 292.1 USD per ton.

 

Mosenergo reported by IAS for 1Q 2010.

Sales of Mosenergo by the results of 1Q 2010 reached 50.7 bn RUR, which is 34% higher than the given estimate of the similar period of the previous year. Growth of sales was provided by upping of the effective output of the thermal energy, significant price growth at the free market of power energy and increase of power energy and capacity selling volume on behalf of the steam gas plants introduced within the recent years.

Bloomberg: Gazprom, Rosneft, Polyus Gold: Russian Stock-Market Preview



By Anna Shiryaevskaya

June 16 (Bloomberg) -- The following shares may have unusual price changes in Russian trading. Stock symbols are in parentheses and prices are from the previous close unless otherwise noted.

The 30-stock Micex Index rose 2.6 percent to 1,371.31. The dollar-denominated RTS Index gained 2.9 percent to 1,396.57.

OAO Gazprom (GAZP RX) may cut the supply of natural gas to Belarus in proportion to the country’s debt stemming from deliveries this year, Chief Executive Officer Alexei Miller said in a televised meeting with Russian President Dmitry Medvedev. Gazprom rose 2.1 percent to 159.66 rubles in Moscow.

OAO Rosneft (ROSN RX): Crude oil rose to a one-month high in New York as the euro gained against the dollar. Russia’s largest oil producer advanced 2.6 percent to 220.62 rubles.

OAO Polyus Gold (PLZL RX): Gold prices rose the most in a week on demand for an alternative investment to currencies as the dollar slumped and concern mounted that Europe’s sovereign- debt crisis will escalate. Russia’s biggest gold producer gained 1.5 percent to 1,503.87 rubles in Moscow.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@

Last Updated: June 15, 2010 22:00 EDT

Russia Today: Russian market appeals to the west



16 June, 2010, 11:02

The global economic crisis has forced companies to find new ways to secure their businesses. More European companies are turning to Russia and Russia is turning to the west.

Brussels is probably the best place to talk about internationalization. It seems every other citizen of this city is a native of a different country. So it’s no surprise one of the topics at the 15th Russia – EU forum was how to gain greater access to each other’s domestic markets, believes Alexander Rahr, Program Direcotr Russia/Eurasia DGAP

“The Russian market is much more open for western business than in the 90s because the laws according to which western companies can work are safer for the western companies. I think a huge problem has been removed in terms of property rights for western companies in Russia.”

A welcome change, which has benefited both sides as Russia has become the EU’s third biggest trading partner, says Igor Yurgens, vice-president of RSPP

“Definitely there are much more European companies represented in Russian federation, than us because we were busy with our domestic developments, but we gradually go out. So far its energy and oil and gas and this has to be changed and we will be changing this.”

However, even the traditional sectors where Russia has a strong presence, such as natural resources has potential for further growth. Wingas is a joint-venture set up by Russia’s gas giant Gazprom and Germany’s largest crude oil and gas producer Wintershall . Wingas CEO, Dr. Gerhard Koenig believes the European market has plenty of room for Russian companies.

“We also need in Europe more transit routes and that is why we’re investing in Nord Stream as well as on the on-shore side, we need storages in Europe, and also if you see the declining production, we need more imports and that is why there are opportunities.”

But it’s not only big Russian companies that operate in Europe. Small firms are also quite common. Being on two markets at once is a healthy form of diversification – with Russia generally being quite volatile, yet highly profitable, and Europe – the calmer market with less earning power.

Moscow Times: RusAl, Guinea Strike Deal



16 June 2010

United Company RusAl said Tuesday that it had agreed on a “strategic partnership” with Guinea and will maintain bauxite and alumina output, a year after the country ordered the company to return some assets.

CEO Oleg Deripaska met Prime Minister Jean-Marie Dore and acting President Brigadier General Sekouba Konate on a two-day visit to Guinea, the company said in a statement.

“We do not plan to decrease bauxite and alumina production at our Guinean facilities,” Deripaska said in the statement. “RusAl has long-term projects in Guinea that will be fully completed.”

The current tax and customs regimes for the Friguia plant will be maintained, while the two sides also agreed on the schedule and terms of development of the Dian Dian bauxite deposit, RusAl said. (Bloomberg)

Troika: UC RUSAL reaches amicable agreement with Guinea



Troika Dialog

16 June 2010

UC RUSAL yesterday announced that it had reached an agreement with the Guinean government following the managements visit to the country, including CEO Oleg Deripaska. The parties effectively confirmed their intentions to form a strategic partnership and reportedly agreed to extend the current tax regime for operating the Friguia complex and to the terms to develop the massive Dian_Dian project, as well as joint use of infrastructure with Guineas CBG, an independent bauxite supplier.

We consider Guinea to be a strategically important region for the bauxite_short UC RUSAL. The country accounts for a third of the worlds bauxite reserves, and the companys operations there (CBK and Friguia) represent around 40% of its bauxite production. Following the military coup and regime change in Guinea at end 2008, the new government formally challenged the results of Friguias 2006 privatization, threatening to seize the asset and demanding compensation of up to $1 bln, which resulted in acrimonious court proceedings between the parties. As such, the final harmonious agreement with Guinea should remove the markets concerns regarding the stability of UC RUSALs operations in the country.

Additionally, the company has been considering the large Dian_Dian project, which includes a bauxite mine and alumina refinery, with the feasibility studies completed and overall capex at around $6.0 bln, including $425 mln to develop the mine and related infrastructure, and $5.5 bln to push the alumina refinerys capacity to 5.1 mln tpy. After having invested $42 mln in the project, it was suspended in 2H08, and an agreement with creditors prohibits UC RUSAL from investing in any projects apart from BEMO Power Plant, though project funding is feasible. The company also considered cooperating with China Power Investments Corporation (CPI) to jointly develop Dian_Dian, but to no avail (at least so far).

We do not believe that UC RUSAL will be able to advance the project at this stage, but this could become a growth project of focus should we see pronounced market improvement.

This also highlights the companys significant embedded growth optionality, with a long list of development projects that are currently mothballed, but could be developed if the macro backdrop improves.

Mikhail Stiskin

Reuters: UPDATE 1-X5 Retail may issue bonds worth $500 mln

Wed, 16th Jun 2010 07:56

MOSCOW, June 16 (Reuters[pic]) - X5 Retail, Russia's largest supermarket chain by revenue, will register for bonds for around 15 billion roubles ($515.3 million) to diversify its sources of debt refinancing.

The company, just under 50 percent owned by billionaire Mikhail Fridman's Alfa Group, said in a statement its total debt amounted to $1.8 billion, with around 85 percent due in the short term.

'We see that conditions in Russia's debt markets are improving and we shall have an opportunity to consider a potential placement of bonds as another available instrument,' the company said in a statement.

($1=29.11 Rouble)

(Reporting by John Bowker; Editing by Hans Peters) Keywords: X5RETAIL TRADING/

(john.bowker@;+7 495 775 1242 Reuters Messaging: john.bowker.@)

Bne: Probusinessbank to launch a Russia-based IPO road show in next fortnight



bne

June 16, 2010

Russia's leading small- and medium-sized enterprise specialist bank says it could launch a road show ahead of an IPO on Russian exchanges in the next two weeks as part of an effort to boost its capitalisation, reports local press.

The bank has already hired Renaissance Capital Investment Company and Deutsche Bank to lead manage the placement.

The bank hopes to raise $200-300m with the placement that will increase the bank's capital by 16.8% and has already done the paper work with MICEX and RTS for the float, according to reports.

In early May the Bank of Russia registered additional issue of Probusinessbank for the placement by closed subscription in favor of Renaissance Securities (Cyprus) Limited and London branch of Deutsche Bank.

"We are considering different variants of additional capitalization of the bank. Participation of two investment banks allows us to be flexible in it," Mikhail Zavgorodniy, a Vice-President of the bank, said.

East Capital Financial Explorer Fund owes 19.93% of the bank and Renaissance Capital Financial Institutions Fund owns another 7.22%.

Reuters: Intralot enters Russian betting market via Kelicom



GREECE-INTRALOT/

ATHENS, June 16 (Reuters) - Greek lottery systems provider Intralot has entered Russia's betting market by acquiring a stake in Favorit, one of the country's leading sports wagering operators, for an undisclosed amount.

Intralot, which offers gaming platforms and operates sports betting and video lotto machines in 50 countries, said it bought 33 percent of Kelicom, which owns 74.9 percent of Favorit. The acquisition is subject to regulatory approval.

Intralot has been tapping into the liberalisation of world gaming markets through investments. It expects sales this year to grow significantly as several projects around the world start to pay off. Favorit holds a five-year licence to run sports betting activities in Russia's market, which is estimated to have a potential of over $2 billion, Intralot said.

"Through this acquisition, our already established presence in Russia will become even stronger. Intralot is now moving ahead and entering the emerging and highly promising Russian betting market," Intralot CEO Constantinos Antonopoulos said in a statement on Wednesday.

Intralot has been present in Russia's lottery market since 2007. (Reporting by George Georgiopoulos; Editing by Michael Shields)

Activity in the Oil and Gas sector (including regulatory)

Moscow Times: East Siberian Oil Export Duty to Resume



16 June 2010

Reuters

Deputy Prime Minister Igor Sechin and Finance Minister Alexei Kudrin have agreed to reintroduce the export duty for East Siberian oil fields from July 1 to help fund the country's budget deficit.

A source said the duty will be lower than the normal tariff on other oil fields, set at $248.8 per metric ton from July.

"There is a letter, signed by Kudrin and Sechin. The position is agreed. The government should issue the order tomorrow," he said, adding that the duty will be set at 45 percent of the price in excess of $50 per barrel.

According to Reuters calculations, the July export duty for the East Siberian fields will be set at about $70 per metric ton.

The reintroduction of the tariff for far-flung East Siberian oil comes after a lengthy tug-of-war between Sechin and Kudrin, who has said the tax break could drain 120 billion rubles ($4.12 billion) annually from state coffers.

For their part, companies say they need the tax break to develop new fields. Russia's largest crude producer, Rosneft, chaired by Sechin, had threatened to stop funding the Vankor oil field — the main driver of its output growth — should the government reintroduce the tax.

Russia abandoned the export duty for 13 East Siberian oil fields from Dec. 1 and added nine more fields in East Siberia in the middle of January to support oil companies, which were hit by falling oil prices.

TNK-BP, whose Verkhnechonskoye field lies in East Siberia, was another beneficiary of the zero export duty, along with Surgutneftegaz, Russia's fourth-largest oil producer, which owns the nearby Talakan deposit.

The economy, still firmly focused on energy despite pledges to diversify, plunged into a deep crisis in 2008 when the price for Urals crude, Russia's main export commodity, fell from $140 per barrel to just above $30.

Bloomberg: Ukraine Mulls Gas Project With Gazprom, Vows Secure Supplies



June 16 (Bloomberg) -- Ukraine is "potentially interested" in a joint project of state-run energy company NAK Naftogaz Ukrainy and OAO Gazprom that might include an exchange of assets, Prime Minister Mykola Azarov said.

Russian Prime Minister Vladimir Putin offered to merge the country's gas monopoly Gazprom with Naftogaz at a meeting with Azarov on April 30. Naftogaz moves about 80 percent of Russia's Europe-bound gas exports via its Soviet-era transportation network and Russia has sought control over it.

"Ukraine is interested in getting access to gas and oil reserves of Russia because we don't have such deposits and resources," Azarov said in an interview late yesterday in Luxembourg. "The Russian counterparts are interested in participating and running our gas transportation system and its modernization."

The idea "is being developed and pondered by the networks of Gazprom, Naftogaz and corresponding ministries," Azarov said, adding that a decision will be made "when we reach a mutually beneficial compromise."

Naftogaz, which currently pumps about 100 billion cubic meters of gas a year, is seeking to upgrade its pipelines. The system capacity totals 142 billion cubic meters of gas a year and the company wants Russia and the European Union to cooperate on upgrading the pipelines, which may cost as much as $4 billion, its chief executive officer said last month.

Russian Relations

Ukraine has focused on relations with Russia since President Viktor Yanukovych took office in February and formed a cabinet loyal to him in March. Two months ago in Kiev, Putin suggested forming a nuclear energy holding company between the two former Soviet Union republics after Russia agreed to cut gas prices for Ukraine by 30 percent through 2019.

The warming of ties came after Russia cut gas supplies to Ukraine in 2006 and 2009, when the country was governed by President Viktor Yushchenko, who took office on promises to join the North Atlantic Treaty Organization, or NATO. A dispute with Russia in January last year left more than 20 countries in Europe without gas for almost two weeks in freezing temperatures.

"There's no reason for the European consumers to fear any gas disruptions or situations similar to January 2009," Azarov said. "All we need to ensure is that Naftogaz is having an efficient management and with the stable leadership in the country, with the president and prime minister being one team, we shall definitely prevent any potential hiccup or disruption in gas supplies to Europe."

He also said Ukraine wants to have close relations with both the 27-nation European Union, which it borders to the west, and its eastern neighbors.

"We believe that building tighter links with eastern partners, including Russia, as well as other countries in the east and tighter relationships with the EU are two vector processes that we're to pursue, with the final objective of benefiting the Ukrainian economy."

--With assistance from Kateryna Choursina in Kiev. Editors: Bill Banker, Joe Link

TNK-BP Performs Well Interventions to Boost Output at Sorochinskneft Fields



June 15, 2010, Tuesday

TNK-BP’s Sorochinskneft oil and gas production unit performed well interventions on 7 wells in the Tokskoe field during May 2010 to equalize the injectivity profile, with an anticipated increase of around 14,000 tonnes of oil for 2010.

According to Andrey Mirgorodskiy, waterflood manager in Sorochinskneft’s field development section, the main objective of these interventions is to achieve an annual oil output level of 10 million tonnes.

In 2009, Sorochinskneft produced around 9.2 million tonnes of oil, which was 3.9% above plan and 6.2% more than in 2008.

Gazprom

|Energy Intel: Novatek, Gazprom Move Close to Breakthrough Gas Deal |

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|Copyright © 2010 Energy Intelligence Group, Inc.  (click for details) |

|Wednesday, June 16, 2010 |

Summary

A landmark deal may be signed this week that could break state-controlled Gazprom's monopoly over Russian gas exports by allowing independent gas firm Novatek to export gas too.

iStockAnalyst: Marcel Piteiu on Moscow Talks



Tuesday, June 15, 2010 3:52 PM

(Source: Info-Prod Research (Middle East))[pic]According to ZF.ro, the General Director of the natural gas[pic] producer Romgaz Medias, Marcel Piteiu, said that Gazprom would officially invite Romania to the South Stream project, as the Russian side "has all interests"."Memorandum signed with Gazprom in 2009 was extended for one year. Tomorrow (Tuesday) I go to Moscow, where the main subject is the South Stream, but I will also discuss the issue of gas deposits. I say that they will invite us to the South Stream. But it is a political decision ", said Piteiu at the Regional Forum of Energy FOREN 2010.

Originally published by Info-Prod Strategic Business Information.

(c) 2010 Info-Prod Research (Middle East). Provided by ProQuest LLC. All rights Reserved.

A service of YellowBrix, Inc.

June 16, 2010 12:02

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