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Basic Political Developments
• President of Finland Tarja Halonen will visit Russia on August 11, 2009, at Dmitry Medvedev's invitation.
• Russia, Turkey to Sign Bosphorus Bypass Oil Pipe Deal - Russia will sign an accord with Turkey on building a pipeline for sending Black Sea oil to the Mediterranean, bypassing congestion at the Bosphorus Straits as Bulgaria may back out of a similar project.
• Deals Planned for Putin’s Turkey Trip - Inter RAO and Gazprom will sign agreements on energy projects with Turkish companies, Energy Minister Sergei Shmatko said at a news conference Tuesday.
• Turkey to start feasibility of South Stream first seismic researches - "After seismic researches in the Black Sea, we will assess how feasible the South Stream project is," Yildiz told a joint press conference with his Russian counterpart Sergey Ivanovich Shmatko in Ankara.
• Russia Interested in Providing Resources for Samsun-Ceyhan Pipeline
• Putin to visit Turkey for energy talks - In talks yesterday ahead of the visit, the two countries’ energy ministers pledged to boost energy cooperation and said companies from both sides, among them Russian gas giant Gazprom, were close to signing agreements.
• ‘Putin may warn Turkey not to rely on energy in its EU relations’ - Fyodor Lukyanov, editor-in-chief of the Russia in Global Affairs quarterly, shared his remarks with Today's Zaman on a variety of hot topics in Turkish-Russian bilateral relations, including the standoff on oil and gas transportation, nuclear energy tenders and the changing course of relations in the new world order of modern international politics.
• Medvedev sends congratulations to Obama on his 48th birthday
• U.S. tracks unexpected Russian subs off east coast - The Pentagon is concerned by the unexpected presence of two Russian submarines in international waters off the U.S. coast, although a Russian official said the patrol was not unusual. "Even during the fleet's most difficult times in the mid-1990s, Russian submarines put to sea on active alert for patrols. This practice continues to this day," the official said.
• Russian Arctic jump angers Canadians - The proposed parachute operation -- described last week by a Russian general as a "peaceful" anniversary celebration of a landmark achievement by two Soviet scientists 60 years ago -- prompted an icy response from MacKay, who suggested Canada would scramble fighter jets to "meet" any Russian aircraft "approaching" Canada's airspace.
• Russia-Korea Joint Military Exercise to Take Place off Sakhalin Coast - Combined maneuvers with the participation of the Russian Border Guard Cruisers, air fleet and patrol vessel of the Korea National Maritime Police Agency will take place off Sakhalin coast. The Korean vessel has already arrived at the port of Korsakov, Sakhalin.
• Russian carrier deal will be renegotiated - India has agreed to Russia’s demand to re-negotiate a $1.6bn contract for an old aircraft carrier, a government minister said yesterday, in a deal that has become a thorny issue in relations.
• Negotiations on reasonable price for Admiral Gorshkov aircraft carrier approaching final agreement - Negotiations were on with Russia regarding the price of aircraft carrier Admiral Gorshkov and India was expecting to soon reach a "reasonable decision" on the issue, State Minister of Defence M M Pallam Raju said on Wednesday according to DD India.
• India Says Will Renegotiate Russian Carrier Deal - delays have pushed back the delivery to 2012. The 44,570-ton ship's price has since nearly doubled to $2.8 billion, causing anger in New Delhi which was unwilling to pay the extra money
• The South Ossetian parliament confirmed the candidacy of Vadim Brovtsev for the post of prime minister.
• South Ossetia closes border with Georgia - President of South Ossetia, Eduard Kokoity, announced the closure of the administrative border with Georgia from Tuesday midnight, forbidding any vehicles or passengers to cross over.
• Russia does not plan to reinforce troops in SOssetia, Abkhazia - “Presently it is not necessary to reinforce the current contingents, their numerical strength is specified in the bilateral agreements. We are not planning to build up our groupings soon,” Nogovitsyn said.
• Russia Vows ‘Appropriate’ Response to Any Georgian Aggression - Russia’s military will give an “appropriate response” to any Georgian aggression in the breakaway regions of South Ossetia and Abkhazia, Anatoly Nogovitsyn, deputy head of Russia’s General Staff, told reporters in Moscow today.
• West still arming Georgia, under other pretexts - “The combat potential of the Georgian armed forces is being restored and the supplies of weapons to Georgia continue, but not the way it was done before – under the disguise of the preparation of the Georgian armed forces according to NATO standards. The supplies of armaments and military equipment to Georgia now continue, but under another scheme,” Nogovitsyn noted.
• Russia praises EU role in Georgia - Russia says EU monitors have helped stabilise the situation in Georgia since last year's war, but has rejected any similar role for the US.
• Russia backs EU, not U.S., role in Georgia
• Lavrov irked by US Vice President Biden
• Russia's recognition of Abkhazia, S.Ossetia not planned – Lavrov
• Russia did not plan to recognize Abkhazia, S. Ossetia before Aug 2008 - Russia did not plan to recognize
• Abkhazia and South Ossetia as independent states before August 2008, but
• it had to do so following the conflict with Georgia to save the lives of
• the people living in those republics, said Russian Foreign Minister
• Sergei Lavrov.
• Georgia issue no longer impedes RF-West relations-Lavrov: The “Georgian issue” no longer impedes “our relations with the West,” Russian Foreign Minister Sergei Lavrov said in an interview to the Vesti news television channel on Wednesday on the eve of the first anniversary of the Georgian aggression against South Ossetia. According to him, the visit to Moscow by US President Barack Obama confirmed this.
• Chronology of Events: the South Ossetia Conflict of August 2008
• S. Ossetia still healing scars of war
• Russia and Georgia Battle Over Position in History - Each Pushes Its Version of Last Year's War for International Report; Moscow Puts Troops on Alert in Abkhazia and South Ossetia
• Putin’s Afghan War - By Yulia Latynina
• Egyptian Traders Co head detained in Russia wheat row
• TIMELINE-Egypt-Russia dispute over wheat
• German vessels ready for the Northern Sea Route - Three vessels from Beluga Group will this summer sail the Northern Sea Route from East to West, delivering equipment for a new heating and power plant in Surgut, Khanti-Mansi Autonomous Okrug on the way.
• GDP in CIS countries in I half of 2009 decreased by 9 %
• Faith or Politics? The Russian Patriarch Ends Ukraine Visit
• State Will Aid Victims Of Drought - Prime Minister Vladimir Putin said Tuesday that the regions that have suffered from the droughts this year could get up to 100 billion rubles ($3.2 billion) to cope with the consequences of the disaster, Interfax reported.
• Shakeup At Justice Ministry - President Dmitry Medvedev promoted Yury Kalinin, head of the Federal Prison Service, to deputy justice minister and appointed the Samara region’s top cop, Alexander Reimer, to the prison post, the Kremlin said Tuesday.
• Rights Group: Russian Criminals Used to Torture Other Inmates
• Russia begins new trial into murder of journalist Politkovskaya - The Moscow Military District Court opened on Wednesday a new trial of defendants in the 2006 murder of investigative journalist Anna Politkovskaya.
• Suspects in Politkovskaya case on trial again
• Medvedev tells Murmansk and Arkhangelsk governors to “straighten up” - Russia’s President Dmitry Medvedev is not pleased with the level of anti-crisis measures that have been taken in Murmansk and Arkhangelsk and has given the governors of these regions a clear signal to get a grip on the situation.
• Mother of all Buddhas in Moscow - The “Russia, India and Tibet” fest has kicked off in six Russian cities, including Moscow and St. Petersburg. The highlight of the event will be the long-awaited arrival of a delegation of Buddhist monks from Drepung Gomang Monastery, where more than 5,000 people from Tibet, Bhutan, Mongolia, Nepal and Russia study philosophy, Buddhism, astrology and medicine.
• Putin’s Popularity Not Oil Dependent - Vladimir Putin has been accused of undemocratic behavior, of staging unfair elections and of holding on to power like a dictator. But he can point to a strong basis for his legitimacy: He is unbeatably popular among his electorate.
• Russians Fully Back Medvedev and Putin - The Russian Federation’s governing duo continues to enjoy a high level of public support, according to a poll by the Yuri Levada Analytical Center. 72 per cent of respondents approve of Russian president Dmitry Medvedev’s performance, while 78 per cent are satisfied with the job of Russian prime minister Vladimir Putin.
• CSTO in Crisis as Moscow Secures Second Military Base in Kyrgyzstan
• Russia Seeks to Boost Ties with Tajikistan
• Russia's Obama: No, he can't, at least not now - Joaquim Crima, a 37-year-old native of Guinea Bissau who settled in southern Russia after earning a degree at a local university, is promising to battle corruption and bring development to his district on the Volga River.
• The Last Thief - An Attack on the “Godfather” of the Russian Underworld Signals More Trouble to Come
National Economic Trends
• Russia c.bank injects 28.5 bln roubles via repos
• Russia daily c.bank swap limit at 5 bln rbls
• Russia: Bond, Currency Preview
• Russian Services PMI Shrinks at Second-Slowest Pace in July
• PMI: Rate of decline in services activity remains modest in Jul
• Fitch Affirms Russia Long Term Currency Ratings; Outlook Negative
• Russia’s Rating May Be Cut on Downturn, Oil Prices, Fitch Says
• Russia to export 23 mln tonnes of grains
Business, Energy or Environmental regulations or discussions
• RusHydro Seeks Tariff Hike - RusHydro asked the government to increase the tariff at which the state-run company can sell electricity next year by 6 percent, Yevgeny Desyatov, head of sales, said Tuesday.
• Russia Rushydro ups '09 profit f'cast, stock soars
• RusAl Talking to Japan - United Company RusAl entered talks on fourth-quarter sales of aluminum to clients in Japan after the spot-market premium in the Asian country over London prices almost doubled this year, RusAl spokeswoman Vera Kurochkina said Tuesday.
• From Tower to Parking Lot - Billionaire Oleg Deripaska’s Basic Element agreed to build a temporary parking lot in Moskva-City on a site previously earmarked for the Russia Tower, Kommersant said.
• Uralkali Scraps Planned Potash Increase at Government Request
• Tyumen Airport Started Landing Airbus Aircraft
Activity in the Oil and Gas sector (including regulatory)
• Caspian pipeline consortium in January - July, 2009 increased oil export by 12.2 %
• Russia announces eastern gas program - The Russian Government has announced a project to develop the gas sector in Eastern Russia, as part of its long term plan to develop and unify gas production in the Far East.
• Global perspectives: Russia oil firm picks up stake in Europe - Russia’s LUKoil gained a foothold in the Netherlands, snatching a stake in Total’s 153,000 bpd Vlissingen refinery from under the nose of Valero, the largest U.S. refiner.
• KBR Awarded FEED Contract by VCNG for Eastern Siberia Oil Project - KBR will provide FEED services for a single new build, 140,000 barrels of oil per day facility, which will be tied back via a new 85-kilometer pipeline, to the existing East Siberian Pacific Ocean (ESPO) pipeline.
• Russians sign accords in Nicaragua, Venezuela
• TNK-BP To Build New Gas Processing Plant By 2012 - Russian joint venture TNK-BP Ltd. plans to construct a new gas processing facility, which will enable the company to utilize almost 100% of its associated gas by 2012, the company said Wednesday.
• Hungary MOL to resolve ZMB gas issue with Russneft this week – Hungarian fuels group MOL is currently in talks with a delegation of Russia's Russneft in Budapest. The parties may reach an agreement about the utilisation of associated gas at their jointly-owned oil field ZMB already this week, local business daily Világgazdaság reported on Wednesday.
• Vyksa pipe deliveries to Nord Stream reach 200,000 tonnes
• Murmanshelf Logistics established - Several companies have joint forces about the establishment of the Murmanshelf Logistics, a consortium intended to facilitate shipping and goods transport in connection with the Shtokman field development.
Gazprom
• South Stream Head Sacked - Sergei Korovin, deputy head of Gazprom’s foreign relations department, has been replaced by Pavel Oderov, who previously worked at Gazprom’s export unit, Interfax said, citing unidentified people.
• Construction of the linear gas pipeline portion Schuchie – Safakulevo (over 31 kilometers) has been completed last week. This is one of the objects included in the investment program of Gazprom aimed at gasification of all regions of the Russian Federation.
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Full Text Articles
Basic Political Developments
August 4, 2009
15:00
ANNOUNCEMENT.President of Finland Tarja Halonen will visit Russia on August 11, 2009, at Dmitry Medvedev's invitation.
The informal meeting between the two state leaders will take place in Sochi.
Russia, Turkey to Sign Bosphorus Bypass Oil Pipe Deal (Update1)
By Ali Berat Meric and Stephen Bierman
Aug. 4 (Bloomberg) -- Russia will sign an accord with Turkey on building a pipeline for sending Black Sea oil to the Mediterranean, bypassing congestion at the Bosphorus Straits as Bulgaria may back out of a similar project.
OAO Gazprom, Russia’s largest company, and Turkey’s Calik Holding AS will sign an accord to build a pipeline between the northeastern port of Samsun and a terminal at Ceyhan on Turkey’s Mediterranean coast, Russian Energy Minister Sergei Shmatko told reporters in Ankara today before a visit by Russian Prime Minister Vladimir Putin later this week.
Increased oil output from the Caspian region as Kazakhstan’s Kashagan field plans to begin output will add additional tanker shipments via the Black Sea. Tankers have been delayed as much as a month in passing through the Bosphorus Straits because of weather and seasonal conditions.
Bulgaria is examining canceling or delaying energy projects as its budget deficit widens, Deputy Prime Minister Simeon Djankov said in an interview with Bloomberg July 31. Russian pipeline operator OAO Transneft is leading a project to build a 1 billion-euro ($1.4 billion) oil link from the Bulgarian Black Sea port of Bourgas to the Greek port of Alexandroupolis on the Aegean Sea.
Gazprom Deputy Chief Executive Officer Alexander Medvedev in July last year said the company’s liquids arm Gazprom Neft, would be interested in joining the Samsun-Ceyhan pipeline project planned by Italy’s Eni SpA and Calik.
Gazprom Neft is also a partner in the Bourgas- Alexandroupolis project.
To contact the reporter on this story: Ali Berat Meric in Ankara at americ@Stephen Bierman in Moscow sbierman1@.
Last Updated: August 4, 2009 10:48 EDT
Deals Planned for Putin’s Turkey Trip
05 August 2009 Combined Reports
Inter RAO and Gazprom will sign agreements on energy projects with Turkish companies, Energy Minister Sergei Shmatko said at a news conference Tuesday.
Prime Minister Vladimir Putin is expected to visit Turkey on Thursday to work out details of several energy projects, including an invitation to take part in Moscow’s pipeline project, South Stream.
Turkish and Russian energy ministers said on Tuesday that numerous energy projects were waiting for the private sectors of each country.
Turkish Energy Minister Taner Yildiz said Turkish companies would sign agreements to cooperate with Russian firms in the oil, natural gas and power sectors.
Gazprom and Turkey’s Calik Holding will sign an accord to build a pipeline between the northeastern port of Samsun and a terminal at Ceyhan on Turkey’s Mediterranean coast, Shmatko said.
Increased oil output from the Caspian region as Kazakhstan’s Kashagan field plans to begin output will add additional tanker shipments via the Black Sea. Tankers have been delayed as much as a month in passing through the Bosphorus Straits because of weather and seasonal conditions.
Inter RAO, along with Atomstroiexport and Park Teknik were the sole bidders in a tender to build the nuclear power plant. Final approval of the deal has been delayed pending a price revision from the Turkish-Russian consortium.
The European Union and Turkey last month signed a transit deal for the Nabucco pipeline, which aims to reduce Europe’s energy dependence on Russia, introducing a new flow of gas from the Caspian and Middle East.
Putin is expected to promise that South Stream will be built quicker than Nabucco despite last month’s political fanfare and will seek to convince EU-candidate Turkey to allow Moscow’s 10 billion euro ($15 billion) project to carry gas from the Russian coast to Europe via Turkey’s Black Sea waters.
“These are rival projects, they’re not complementary. If one is successful, then the other should be postponed for 10 years. They are targeting the same customers, there is not enough resources and the funding is not there,” said Necdet Pamir, Turkish Committee member of the World Energy Council.
“And here, Russia needs Turkey to let the pipeline pass through its exclusive [territorial waters],” he said.
Turkish rejection of the project would force South Stream to go through the territorial waters of Ukraine, with which Russia has already experienced two gas feuds over the past three years.
Nabucco consortium members say their July accord has solved political problems and infighting that has slowed development of the pipeline, but Putin is likely to point out that the 31-bcm Nabucco has yet to secure any gas.
“Nabucco is a project for generations to come, we all know it has no gas at this time; South Stream has all the gas. For Nabucco, there are no upstream suppliers right now, it’s all lip service, and that is what Putin is likely to press,” independent energy analyst Haluk Direskeneli said.
(Reuters, Bloomberg)
Turkey to start feasibility of South Stream first seismic researches
Turkish energy minister said that the feasibility studies of the South Stream crude oil pipeline would be carried out after the seismic researches in Black Sea.
Wednesday, 05 August 2009 09:37
The Turkish energy minister said on Tuesday that the feasibility studies of the South Stream crude oil pipeline would be carried out after the seismic researches in the Black Sea.
Turkey's Energy & Natural Resources Minister Taner Yildiz said that the feasibility studies of the South Stream project would take place after seismic researches in the Black Sea.
"After seismic researches in the Black Sea, we will assess how feasible the South Stream project is," Yildiz told a joint press conference with his Russian counterpart Sergey Ivanovich Shmatko in Ankara.
Yildiz said that Turkey would then decide whether to participate in the project as a partner or only to give permission.
The South Stream project would partly replace the planned extension of Blue Stream from Turkey through Bulgaria and Serbia to Hungary and Austria, and is seen as rival to the planned Nabucco pipeline. The completion is due by 2015.
Also, Yildiz said two countries were cooperating in three main areas, including natural gas, oil and nuclear energy.
The Turkish minister said that there was a tender process for establishment of nuclear energy power plants and purchase of electricity to be generated in those plants, however the process had not been concluded yet.
"We will sign a protocol with Russia on use of nuclear energy for peaceful purposes," Yildiz said.
Also speaking in the press conference, Shmatko said that mutual confidence was a priority for such a comprehensive cooperation between the two countries.
"We can implement the bravest projects together," Shmatko also said.
Shmatko said that his country was interested in the Samsun-Ceyhan oil pipeline.
Samsun–Ceyhan pipeline is a crude oil pipeline between Black Sea oil terminal in Samsun and Mediterranean oil terminal in Ceyhan in Turkey. The aim of this project is to provide an alternative route for Russian and Kazakhstan;s oil and to ease the traffic burden of the Istanbul and Canakkale Straits.
Also, the Russian minister hoped Turkey and Russia could cooperate in the South Stream crude oil project, and Russia was ready for every type of cooperation and contact with Turkey.
Shmatko also said Russia expected a cooperation with Turkey in South Stream project in the possible shortest time.
Sources at the Turkey's Energy & Natural Resources Ministry said that Turkey and Russia would sign a protocol during Russian Prime Minister Vladimir Putin's visit to Turkey on Thursday on allowing Turkey to carry out seismic researches within the scope of the South Stream project.
Reuters
Russia Interested in Providing Resources for Samsun-Ceyhan Pipeline
Wednesday, 5 August 2009
The Turkish energy minister said on Tuesday that Russia was interested in providing resources for Samsun-Ceyhan crude oil pipeline.
Turkey's Energy and Natural Resources Minister Taner Yildiz held a joint press conference with his Russian counterpart Sergey Ivanovich Shmatko in the Turkish capital of Ankara, and said Russia was interested in providing oil and other resources for the Samsun-Ceyhan pipeline.
Samsun-Ceyhan pipeline is a crude oil pipeline between Black Sea oil terminal in Samsun and Mediterranean oil terminal in Ceyhan in Turkey. The aim of this project is to provide an alternative route for Russian and Kazakhstan's oil and to ease the traffic burden of the Istanbul and Canakkale Straits.
"We will sign a protocol to this end," Yildiz said before the Turkish-Russian Joint Economic Committee (JEC) meeting.
Yildiz said two countries would also sign a protocol on peaceful use of nuclear energy, and a memorandum of understanding between the Turkish Petroleum Corporation (TPAO) and Rosneft, the integrated petroleum company owned by the Russian government.
The Turkish minister said that feasibility works would be carried out for the South Stream Project which would transport Russian natural gas to the Black Sea, Bulgaria and further to Italy and Austria, and they would later assess a partnership in the project and the use of territorial waters.
The South Stream project would partly replace the planned extension of Blue Stream from Turkey through Bulgaria and Serbia to Hungary and Austria, and is seen as rival to the planned Nabucco pipeline. The completion is due by 2015.
Also, Shmatko said that some Turkish companies including Aksa, Calik, Tetas, and Russian companies such as Rosneft, Gazprom and Interrau would sign deals on electricity, natural gas and oil.
Wednesday, 5 August 2009
Putin to visit Turkey for energy talks
Web posted at: 8/5/2009 9:15:40
Source ::: AFP
Ankara: Russian Prime Minister Vladimir Putin will visit Ankara tomorrow for talks expected to focus on energy cooperation, at a time when Turkey is increasing its role in projects to carry gas and oil to Europe.
In talks yesterday ahead of the visit, the two countries’ energy ministers pledged to boost energy cooperation and said companies from both sides, among them Russian gas giant Gazprom, were close to signing agreements.
“We want to develop our traditional energy cooperation. We want concrete projects,” Sergei Shmatko of Russia said.
Situated between Europe and the vast oil and gas fields of the Caspian Sea and the Middle East, Turkey has emerged as a hub for pipelines to supply the energy-hungry West.
Last month, Ankara hosted the signing of an accord to build the Nabucco pipeline to carry Caspian gas via Turkey to Bulgaria, Romania, Hungary and Austria, bypassing Russia.
The project, scheduled to go online in 2014, aims to reduce European reliance on Russia and avoid a repetition of cut-offs that disrupted winter supplies and sparked accusations Moscow was using gas as a political weapon.
Turkey however has been careful not to antagonise Russia -- its top trading partner and main gas supplier -- and Prime Minister Recep Tayyip Erdogan has insisted that Russia should be one of Nabucco’s suppliers.
“This is a long-term proposal,” an aide to Erdogan said. “Russia’s participation in the project would not harm the aim of diversifying energy supply.”
In direct competition with Nabucco, Russia is pushing for its own project to pump gas to Europe -- South Stream -- and has invited Turkey to join, with an eye on using Turkish territorial waters in the Black Sea instead of Ukraine for the pipeline.
Turkish Energy Minister Taner Yildiz said yesterday it was too early to discuss whether or how Ankara would participate. Turkey is already directly linked to Russia through the Blue Stream gas pipeline, which runs under the Black Sea.
Hoping to attract Russian and Kazakh oil, Ankara is also promoting a pipeline from its Black Sea port of Samsun to Ceyhan on the Mediterranean coast. It already serves as a terminal in conduits pumping oil from Azerbaijan and Iraq.
The two sides are to sign a protocol during Putin’s visit expressing Russia’s possible interest as a supplier to the conduit, Yildiz said. Shmatko added that Turkish companies such as Calik Holdings and AKSA would soon sign agreements with Russia’s Gazprom, Inter Rao and Rosneft in the fields of gas, oil and power.
Putin’s energy agenda in Ankara is also likely to include a long-delayed project to build Turkey’s first nuclear power plant. Russia’s state firm Atomstroyexport was the only bidder in an auction in January, but the Turkish government has yet to decide whether to award it the project amid misgivings over the financial terms the company offered.
Russia has been mediating talks between Armenia and Azerbaijan over the Nagorny Karabakh dispute, the settlement of which is crucial for speeding up Ankara’s efforts to reconcile and establish diplomatic ties with Yerevan.
Russia’s military intervention in the former Soviet republic last year briefly strained relations with Turkey, which has close economic and political ties with Georgia, its northeastern neighbour.
Despite sometimes shaky political ties, economic exchange between the two countries has boomed since the fall of Communism: in 2008, their trade volume hit $37.8bn, making Russia Turkey’s number one trading partner.
Russia supplies about 60 percent of Turkey’s gas imports, and more than a million Russian holiday-makers boost Turkey’s vital tourism sector each year.
‘Putin may warn Turkey not to rely on energy in its EU relations’
As Russian Prime Minister Vladimir Putin prepares for his official visit to Turkey on Thursday, a Russian pundit has claimed that one of the main goals Putin has for this visit is to deliver a message to Turkey that its steps toward becoming an energy hub for Europe may not guarantee a stronger position in its quest to become a member of the European Union.
Fyodor Lukyanov, editor-in-chief of the Russia in Global Affairs quarterly, shared his remarks with Today's Zaman on a variety of hot topics in Turkish-Russian bilateral relations, including the standoff on oil and gas transportation, nuclear energy tenders and the changing course of relations in the new world order of modern international politics.
He pointed to the rising competition between the two countries on energy transportation, in which Turkey is attempting to position itself as an alternative, challenging Russia's dominant position as the main supplier for hungry European markets. According to Lukyanov, economy and politics are inseparable from each other in this competition. “Whenever the question of whether these alternative energy projects are economically feasible is raised, the political questions also start to resurface,” he noted. In this framework, Lukyanov notes, neither Nabucco nor South Stream is completely free from problems.
The defeat of the pro-Russian Socialist government in Bulgaria in the elections held in early July jeopardized Russia's plans for the South Stream pipeline, Lukyanov said, adding that Moscow's South Stream project also lacks support from the US and Europe.
Nabucco also has some unsolved issues threatening its success, including finding sufficient gas supplies to keep the pipeline filled.
“In the center of the struggle in this issue lies Turkey, and I reckon the best idea for Turkey is to see this situation in economic terms, rather than from a political perspective. Ankara's chances in its relations with the EU are on the rise thanks to its position at the crossroads of energy transportation routes. But I personally believe that Brussels will not change its policy to say ‘yes' to Turkey for economic issues while saying ‘no' for politics,” Lukyanov explained.
In the grand chessboard of the regional energy game, Lukyanov believes enmity is not the correct term to define the relations between Russia and Turkey. Russia is in favor of Turkey's staying an independent power in the region, he said, claiming that Putin will emphasize this belief during his visit. Russia is a strong proponent of Turkey's right to make its own decisions independently from any kind of foreign influence and in accordance with its own interests, Lukyanov underlined, saying, “Moscow wants to see Ankara as a long-term strategic partner.” Besides, Lukyanov said, Russians believe Turkey must avoid involvement in any political games with the EU, since these games will not end in Turkey's best interests.
Blue Stream-2 has a chance
Asked if there is any future for Blue Stream-2, a projected appendix to the current Blue Stream pipeline to deliver Russian gas to some Middle Eastern countries such as Israel, Lukyanov said the chances of success are quite high for this project since developing an existing pipeline is much easier than creating a new one. The integral question for Blue Stream-2 remains the guarantee of consumption in the market once delivery starts, as in all new projects, he noted, adding: “Energy pundits have varying expectations on this matter. Some are claiming that demand will climb rapidly in the near future while some others believe that it will continue to ebb. In addition to this uncertainty, the swift change in demand imposes political influence on the decision-making mechanism.”
To exemplify this, Lukyanov recalled what happened in the case of the Baku-Tbilisi-Ceyhan pipeline project. “In the 1990s,” he said, “the project was not able to attract the attention of the companies that primarily sought commercial benefits. Then the US engaged in the decision phase of the project and got it rolling. Looking at the success of the project now, we can easily see how appropriate the US stance was,” Lukyanov commented.
Nuclear power plant may stimulate bilateral relations
The Russian journalist also commented on the process of constructing Turkey's first nuclear energy plant and its possible implications on Turkish-Russian relations.
It has already been noted in a number of media reports that cooperation on nuclear energy is one of the issues Putin will bring to the discussion table with Turkish government officials.
A Russian-led consortium was the only bidder last year in a tender for the construction of Turkey's first nuclear energy power plant in Mersin, but its chances of winning the tender are still not certain, since the consortium's bid for the price of electricity per kilowatt-hour was too high.
Officials say Putin will likely sign a nuclear cooperation agreement with Turkey that aims to pave the way for the construction of a nuclear energy reactor. Speculation also suggests that a number of incentives will be deposited in Putin's briefcase in return for his removal of blocks to the path of building the nuclear reactor.
“For me, the failure to sign an agreement to allow the Russian-led consortium to build the power plant would have no negative effect on bilateral relations,” he said, claiming that Russia would go to great lengths to realize the project for their mutual interests. Lukyanov also asserted that construction of the nuclear power plant is important not only to allow Ru ssia to have a more prominent presence in the global nuclear energy market but also to trigger a higher potential in relations between the two nations. “For example, the nuclear power plant in Bushehr forms the core of Russian-Iranian relations,” Lukyanov asserted.
|05 August 2009, Wednesday |
YAŞAR NIYAZBAYEV MOSCOW
Medvedev sends congratulations to Obama on his 48th birthday
MOSCOW, August 5 (Itar-Tass) - Russian President Dmitry Medvedev on Tuesday sent congratulations to U.S. President Barack Obama in connection with his 48th birthday.
The message said, in particular: “I recall with warmth our conversations during your visit to Russia on July 6-7. Your bid for a sincere dialogue, concrete results, your readiness to make fundamental decisions have played an important role in our managing to hold our first full-scale summit with real success”.
“I believe the results of the Moscow meeting will make it possible to speak about prospects for establishing constructive cooperation between Russia and the USA on the basis of principles of mutual respect and regard for each other’s interests,” the message of congratulations stressed.
“Of course, we will have to work a lot on fixing and developing the reached agreements to see progress in bilateral relations externalise itself in real deeds. I am sure that this is what the citizens of our countries expect from us. I expect that we shall continue joint work in that pragmatic spirit,” Medvedev emphasized.
U.S. tracks unexpected Russian subs off east coast
WASHINGTON, August 5 (RIA Novosti) - The Pentagon is concerned by the unexpected presence of two Russian submarines in international waters off the U.S. coast, although a Russian official said the patrol was not unusual.
The NewYork Times reported late on Tuesday that the two submarines had been in the area for several days. The newspaper quoted Defense Department officials as saying one of the Akula-class vessels remained 320 kilometers (200 miles) off the coast, while the location of the second was not clear.
One of the submarines is an Akula II nuclear-powered attack submarine, considered the quietest and deadliest of all Russian nuclear-powered attack submarines.
A Pentagon spokesman acknowledged the report. "We have no comment about this. But we are aware of what is happening," he told RIA Novosti by telephone.
Defense Department officials expressed concern to the New York Times about the presence of the vessels due to the unexpected nature of their appearance, but were not worried about the U.S. military's ability to track them.
A U.S. military expert told the paper that it was probably 15 years since two submarines had carried out such a patrol.
That assessment was rejected by a high-ranking Russian Navy source, who told RIA Novosti that the submarines' presence near U.S. waters was not unusual as Russian vessels had never stopped patrolling the world's ocean.
"Even during the fleet's most difficult times in the mid-1990s, Russian submarines put to sea on active alert for patrols. This practice continues to this day," the official said.
The Russian Navy has been more active in recent years, increasing its presence on the world's oceans and carrying out exercises with foreign navies, including in Venezuela last December.
In mid-July the Russian Navy launched two missiles from submarines in the Arctic Ocean. The test was hailed by an intelligence source as a success as the United States had not known about the location of the submarines prior to the launch.
The source said that the launch area, covered by ice floe, was heavily patrolled by Russian attack submarines and the Americans were unable to detect the arrival of two strategic submarines before the launch.
Two Russian subs seen patrolling off US coast
Wed, 05 Aug 2009 04:48:38 GMT
Two Russian nuclear attack submarines have been patrolling off the eastern coast of the United States in a rare move that has alarmed the Pentagon.
One of the two submarines has remained in international waters just 200 miles (320 kilometers) off the coast of New York City, while the second sub left and moved south to make a port call in Cuba, the New York Times reported on Tuesday.
The US government and the military have so far refused to comment on the report.
However, the newspaper, citing Defense Department officials, who spoke on condition of anonymity, revealed that Washington is suspicious of Russia's motives behind such an unusual mission.
"Any time the Russian Navy does something so out of the ordinary it is cause for worry," a senior Defense Department official who has been monitoring reports on the submarines' activities said.
The Pentagon, meanwhile, expressed concern about the presence of the subs, but shrugged off the move as Russia just trying to 'show off'.
Defense Department officials declined to speculate on what weapons might be aboard the two submarines, classified as Akula Class nuclear-powered attack submarines, first deployed by the Soviet Navy in 1986.
Russian Arctic jump angers Canadians
Randy Boswell, Canwest News Service
Published: Wednesday, August 05, 2009
Russia is expressing confusion over critical comments made by Defence Minister Peter MacKay about a planned Russian paratrooper jump at the North Pole next spring, insisting that the mission should pose no problem since the top-of-the-world drop site is beyond the jurisdiction of any country.
The proposed parachute operation -- described last week by a Russian general as a "peaceful" anniversary celebration of a landmark achievement by two Soviet scientists 60 years ago -- prompted an icy response from MacKay, who suggested Canada would scramble fighter jets to "meet" any Russian aircraft "approaching" Canada's airspace.
"We're going to protect our sovereign territory," MacKay said Friday in Halifax, a day after a Russian embassy spokesman had downplayed the scheduled parachute mission as a "solely symbolic" event unrelated to disputed seabed boundaries in the Arctic Ocean.
"We're always going to meet any challenge to that territorial sovereignty," MacKay added, "and I can assure you any country that is approaching Canadian airspace, approaching Canadian territory, will be met by Canadians."
The embassy spokesman, Sergey Khudyakov, responded Tuesday to MacKay's comments by noting that "the idea of the paratrooper drop is related to the North Pole, that is international airspace."
He added in an e-mail to Canwest News Service that the pole is on the "high sea, far from territorial waters of any state."
Khudyakov concluded: "It is not quite clear why the plans to celebrate the anniversary could cause any concerns at all."
The paratrooper flashpoint comes at a time when both Canada and Russia have been sending mixed signals about the state of relations between the two countries over the Arctic, where undersea borders are being sorted out through scientific research and the UN Convention on the Law of the Sea.
Russia-Korea Joint Military Exercise to Take Place off Sakhalin Coast
10:38, 05.08.2009
VLADIVOSTOK. August 5. VOSTOK-MEDIA – Combined maneuvers with the participation of the Russian Border Guard Cruisers, air fleet and patrol vessel of the Korea National Maritime Police Agency will take place off Sakhalin coast. The Korean vessel has already arrived at the port of Korsakov, Sakhalin.
The South Korean delegation comprising 97 participants is led by the Head of the Eastern Regional Department of the Korea National Maritime Police Agency Kim Su-hen. According to the scenario of the military exercise the efforts of criminal groups to redistribute the spheres of influence at the Aniva bay became more frequent. What is more, they made an attempt to assault a Russian ship.
The parties will enhance co-operation of both Korean and Russian board guard forces in the course of the exercise, reported pravda.ru. The Russian side will be presented at the exercise by the ships “Aphalina” and “Bug”, three motor boats, Mi-8 helicopter, An-2 airplane and the Primorsky Krai border troops. The Korean side will be presented by a patrol vessel and landing troops.
Russian carrier deal will be renegotiated
Web posted at: 8/5/2009 8:0:58
Source ::: REUTERS
NEW DELHI: India has agreed to Russia’s demand to re-negotiate a $1.6bn contract for an old aircraft carrier, a government minister said yesterday, in a deal that has become a thorny issue in relations.
Under the deal signed in 2004, the Soviet-era Admiral Gorshkov would be refurbished and delivered to the Indian navy by 2008.
But delays have pushed back the delivery to 2012. The 44,570-tonne ship’s price has since nearly doubled to $2.8 bn, causing anger in New Delhi which was unwilling to pay the extra money.
But yesterday the government said it had no option but to restart price talks with Russia, as the navy urgently needed the carrier. “India is going to sit down with Russia to renegotiate the Gorshkov deal,” Pallam Raju, the junior defence minister, told reporters.
“Negotiations are going on regarding the increased price and I think we will reach a reasonable decision on that soon.” Analysts say the delays and repeated Russian demands to up the price underline growing unease between one of the world’s biggest arms buyers and its most trusted supplier.“This has been a point of considerable contention between India and Russia and it has cause enormous dismay here,” said Uday Bhaskar, director of the National Maritime Foundation, a defence think-tank.
Russia is also uneasy about India’s growing ties with the United States and its plans to buy more weapons from Washington, defence experts say.
India has emerged as one of the world’s biggest arms buyers, and is planning one of its biggest ever deals, a $10.4 bn deal to buy 126 fighter jets.
But most of its defence equipment is still made by Russia, India’s most tried and tested defence partner for decades. “The fact of the matter is India is a partner and any kind of impulsive decision will not be prudent or an option for India,” Bhaskar said.
Negotiations on reasonable price for Admiral Gorshkov aircraft carrier approaching final agreement
Minister says Indian Navy needs three aircraft carriers at any given time
06:00 GMT, August 5, 2009 Negotiations were on with Russia regarding the price of aircraft carrier Admiral Gorshkov and India was expecting to soon reach a "reasonable decision" on the issue, State Minister of Defence M M Pallam Raju said on Wednesday according to DD India.
"Negotiations are going on regarding the increased price and I think we will reach to a reasonable decision on that soon," Raju told reporters on the sidelines of a presentation to the Members of Parliament (MPs) on Territorial Army (TA).
The minister said that the Navy needed three aircraft carriers at any given time and government was going ahead to procure whatever was available.
"According to Navy's maritime preparedness plans, we are very clear that we need three aircraft carriers at any given time and I think Gorshkov is the thing we are pursuing", he added.
India Says Will Renegotiate Russian Carrier Deal
August 04, 2009
NEW DELHI (Reuters) -- India has agreed to Russia's demand to renegotiate a $1.6 billion contract for an old aircraft carrier, a government minister has said, in a deal that has become a thorny issue in relations.
Under the deal signed in 2004, the Soviet-era Admiral Gorshkov would be refurbished and delivered to the Indian navy by 2008.
But delays have pushed back the delivery to 2012. The 44,570-ton ship's price has since nearly doubled to $2.8 billion, causing anger in New Delhi which was unwilling to pay the extra money.
But on August 4 the government said it had no option but to restart price talks with Russia, as the navy urgently needed the carrier.
"India is going to sit down with Russia to renegotiate the Gorshkov deal," Pallam Raju, the junior defense minister, told reporters.
"Negotiations are going on regarding the increased price and I think we will reach a reasonable decision on that soon."
Analysts say the delays and repeated Russian demands to up the price underline growing unease between one of the world's biggest arms buyers and its most trusted supplier.
"This has been a point of considerable contention between India and Russia and it has caused enormous dismay here," said Uday Bhaskar, director of the National Maritime Foundation, a defense think-tank.
Russia is also uneasy about India's growing ties with the United States and its plans to buy more weapons from Washington, defense experts say.
India has emerged as one of the world's biggest arms buyers, and is planning one of its biggest ever deals, a $10.4 billion deal to buy 126 fighter jets.
But most of its defense equipment is still made by Russia, India's most tried and tested defense partner for decades.
"The fact of the matter is India is a partner and any kind of impulsive decision will not be prudent or an option for India," Bhaskar said.
The South Ossetian parliament confirmed the candidacy of Vadim Brovtsev for the post of prime minister.
На должность председателя правительства РЮО утвержден Вадим Бровцев
05.08.2009 - 12:55
• Новости
Парламент Республики Южная Осетия утвердил кандидатуру Вадима Бровцева на должность председателя Правительства РЮО.
Кандидатуру 40-летнего Вадима Бровцева на состоявшемся сегодня заседании Парламента представил Президент РЮО Эдуард Кокойты.
Из 27 присутствоваших на заседании депутатов за назначение Вадима Бровцева на должность премьер министра Республики проголосовали 24 парламентария, 3 –были против.
South Ossetia closes border with Georgia
05.08.2009 12:14 GMT+04:00
/ President of South Ossetia, Eduard Kokoity, announced the closure of the administrative border with Georgia from Tuesday midnight, forbidding any vehicles or passengers to cross over.
He explained the move by the necessity “to prevent further provocations from the Georgian side" and “to avoid the threat of the A/H1N1 flu”, as 12 Georgians are reported to have been infected.
Tensions in the border area between Georgia and South Ossetia were heightened days before the first anniversary of Georgia's brief war with Russia. While Georgia accused South Ossetia of shelling Georgian villages, South Ossetian authorities said the suburbs of its capital were attacked by Georgian mortars.
Russia not plan to reinforce troops in SOssetia, Abkhazia
MOSCOW, August 5 (Itar-Tass) -- The Russian Armed Forces General Staff does not plan to reinforce Russian troops in Abkhazia and South Ossetia, Deputy Chief of the General Staff Colonel General Anatoly Nogovitsyn told a press conference on Wednesday.
“Presently it is not necessary to reinforce the current contingents, their numerical strength is specified in the bilateral agreements. We are not planning to build up our groupings soon,” Nogovitsyn said.
Russia Vows ‘Appropriate’ Response to Any Georgian Aggression
By Torrey Clark
Aug. 5 (Bloomberg) -- Russia’s military will give an “appropriate response” to any Georgian aggression in the breakaway regions of South Ossetia and Abkhazia, Anatoly Nogovitsyn, deputy head of Russia’s General Staff, told reporters in Moscow today.
To contact the reporter on this story: Torrey Clark in Moscow at tclark8@
Last Updated: August 5, 2009 04:02 EDT
West still arming Georgia, under other pretexts-official
MOSCOW, August 5 (Itar-Tass) - The West continues to arm the Georgian army and restore its combat potential after the South Ossetian conflict, but under other pretexts, Deputy Chief of the General Staff of the Russian Armed Forces Colonel-General Anatoly Nogovitsyn said at a press conference on Wednesday.
“The combat potential of the Georgian armed forces is being restored and the supplies of weapons to Georgia continue, but not the way it was done before – under the disguise of the preparation of the Georgian armed forces according to NATO standards. The supplies of armaments and military equipment to Georgia now continue, but under another scheme,” Nogovitsyn noted.
Russia praises EU role in Georgia
Russia says EU monitors have helped stabilise the situation in Georgia since last year's war, but has rejected any similar role for the US.
Russian Foreign Minister Sergei Lavrov said the peace plan brokered by French President Nicolas Sarkozy "continues to be a most serious stabilising factor".
He accused Georgia of trying to "drag the Americans into Georgia" and put them up against the Russian military.
Russian troops ousted Georgian forces from South Ossetia nearly a year ago.
Mr Sarkozy, acting on behalf of the EU, brokered a ceasefire after five days of fighting in and around the breakaway territory, where separatists are backed by Russian troops.
Russia has beefed up its military presence in South Ossetia and Abkhazia - another breakaway region in Georgia - and has recognised both territories as independent.
The Georgia-South Ossetia boundary remains tense, with both sides accusing each other of cross-border shooting. Russia has heightened its forces' state of alert in South Ossetia.
The Georgian Deputy Foreign Minister, Giga Bokeria, said Russia was escalating the situation by its actions and rhetoric.
Russia criticises Biden
The 225 EU monitors are spending more time keeping watch along the boundary, but so far have been unable to find evidence for any of the claims of violations, the BBC's Tom Esslemont reports.
Speaking in a Russian television interview on Wednesday, Mr Lavrov said the Georgia conflict had had "no effect whatsoever" on the decisions reached during US President Barack Obama's visit to Moscow last month.
He said the position of Russia's Western partners towards Georgia had changed and "there are no longer emotional outbursts, they are just going through the motions, I would say".
But he criticised a recent interview that US Vice President Joe Biden gave to the Wall Street Journal, in which he described Russia as a weakened nation because of the economic crisis.
Mr Lavrov said that was "reminiscent of speeches by leading officials in the George Bush administration".
Mr Biden voiced support for Georgia on a recent visit to Tbilisi, but he resisted Georgian pressure to send US monitors to the region.
The EU has urged Russia and Georgia to show restraint as the anniversary of the war, on 7 August, approaches.
The EU Monitoring Mission in Georgia (EUMM) is the only organisation now monitoring the boundary line.
It has called for unrestricted access on both sides of the boundary. But Russian and Ossetian forces have not allowed EU personnel into South Ossetia to check the allegations of Georgian attacks.
Russia backs EU, not U.S., role in Georgia
Wed Aug 5, 2009 8:07am EDT
MOSCOW (Reuters) - Moscow welcomes the work of EU monitors in Georgia, deployed in the Caucasus state a year ago after the Russian invasion, but is opposed to the United States having a role, Foreign Minister Sergei Lavrov said on Wednesday.
In a brief war last August, Russia crushed Georgia's attempt to retake its rebel province of South Ossetia. Moscow has recognized the independence of South Ossetia and another rebel region of Abkhazia, taking them under its security umbrella.
Under a peace deal brokered by French President Nicolas Sarkozy, the European Union has sent 240 unarmed monitors to Georgia to oversee a fragile ceasefire. Georgia now wants the United States to join the monitoring.
"The presence of EU monitors on Georgian territories bordering South Ossetia and Abkhazia is an important stabilizing factor and we support such a presence," Lavrov told state-run television channel Vesti-24.
No one, except for Russia and Nicaragua, has so far recognized the independence of Abkhazia and South Ossetia. But Moscow, arguing that their separate status from Tbilisi must be recognized, has blocked access for monitors to both regions.
The monitors in turn complain that the lack of access restricts their ability to verify mutual accusations of blame for sporadic attacks on both sides of the de facto borders.
Russia sees the monitors as a force to prevent any concentration of Georgian forces in areas bordering South Ossetia and Abkhazia.
Georgia, keen to get Western support in its stand-off with Russia, asked the United States last month to join the EU monitoring mission -- although the EU itself has not made any such request to Washington.
Lavrov said the Georgian request was part of a plan to drag the United States into a confrontation.
"The idea is absolutely clear and we honestly told this to our U.S. colleagues," Lavrov said. "This is all about dragging Americans into Georgia and pitching them against the Russian military."
"After that, the Georgian masters of provocation... will try doing their traditional job," he added. "The risks of this are clear, Europe and the United States understand them."
Russia and the United States are now trying to "reset" their thorny relationship, which was worsened by the Georgia war in which Washington backed Tbilisi.
U.S. President Barack Obama, who visited Moscow in July, has said Washington will never recognize South Ossetia and Abkhazia. He dispatched Vice President Joe Biden to Tbilisi last month to reaffirm support for Georgia.
(Writing by Oleg Shchedrov)
Russian official irked by US Vice President Biden
(AP) – 9 minutes ago
MOSCOW — Russia's Foreign Minister Sergey Lavrov is criticizing U.S. Vice President Joe Biden's recent comments about Russia as a throwback to the rhetoric of the previous U.S. administration.
Lavrov says Biden's comments during an interview with The Wall Street Journal last month contradicted the positive results of President Barack Obama's visit to Moscow last month.
Biden said in the interview that Russia's economic difficulties would likely make the Kremlin more willing to cooperate with Washington on security issues. His description of Russia as a weakened nation hit a raw nerve in Moscow.
Lavrov told Russia's Vesti 24 television Wednesday that Biden's remarks sounded as if made by an official in George W. Bush's administration.
Russia's recognition of Abkhazia, S.Ossetia not planned – Lavrov
MOSCOW, August 5 (RIA Novosti) - Russia had no plan to recognize the independence of Abkhazia and South Ossetia when last August's conflict with Georgia over the latter began, the Russian foreign minister said.
Moscow recognized the independence of the two former Georgian republics after Russia and Georgia fought a five-day war last August. Most residents of both South Ossetia and Abkhazia have held Russian citizenship for several years.
"We were thinking first of all about saving people. But then it became clear that to save people it was not enough to stop the aggression and leave them within Georgia, since both republics are clearly under threat with such a president [Mikheil Saakashvili]," Sergei Lavrov said in an interview broadcast on the Vesti news channel on Wednesday.
Tensions have risen ahead of the August 8 anniversary of the start of the war, with Georgia and South Ossetia accusing each other of carrying out cross-border attacks.
South Ossetian President Eduard Kokoity announced the closure of the border with Georgia from midnight, citing the threat of swine flu. Reports say 12 Georgians have been infected with the A/H1N1 virus.
Georgian forces had attacked South Ossetia in an attempt to bring it back under central control. Since Russia's recognition of the two republics, Moscow and Tbilisi have had no diplomatic ties.
Russia did not plan to recognize Abkhazia, S. Ossetia before Aug 2008
MOSCOW. Aug 5 (Interfax) - Russia did not plan to recognize
Abkhazia and South Ossetia as independent states before August 2008, but
it had to do so following the conflict with Georgia to save the lives of
the people living in those republics, said Russian Foreign Minister
Sergei Lavrov.
Lavrov said in an interview to be broadcast soon on Vesti news
television channel, excerpts from which the channel published on its
website on Wednesday, that the Georgian authorities have still not
abandoned the idea to pursue the policy of aggression and provocation
against South Ossetia and Abkhazia.
Georgian President Mikheil Saakashvili "will be trying to knock the
situation off balance in any way," Lavrov said.
"Take, for instance, his call for the U.S. to join the EU mission.
First, this is simply incorrect, because the EU mission is acting there
under the Medvedev-Sarkozy accords. Second, this idea is absolutely
understandable, and we openly told our American partners about this. The
idea is to drag the Americans into Georgia and put American monitors
side-by-side with the Russian troops. And then the masters of
provocation - and Saakashvili has a lot of them - would do their usual
job," Lavrov said.
"Along with the presence of Russian troops under inter-governmental
agreements with South Ossetia and Abkhazia, the presence of EU monitors
in Georgian regions adjacent to South Ossetia and Abkhazia is an
important stabilizing factor, and we support such presence," he said.
Georgia issue no longer impedes RF-West relations-Lavrov
MOSCOW, August 5 (Itar-Tass) - The “Georgian issue” no longer impedes “our relations with the West,” Russian Foreign Minister Sergei Lavrov said in an interview to the Vesti news television channel on Wednesday on the eve of the first anniversary of the Georgian aggression against South Ossetia. According to him, the visit to Moscow by US President Barack Obama confirmed this.
Lavrov also said that the recognition by Russia of independence of Abkhazia and South Ossetia had not been planned, but it was necessary to save people there.
The minister admitted that “the information war continues,” but “this is the irreversible echo of the old thinking.” “What has happened cannot be turned back.” “The reality exists and it will not go anywhere.” Now this reality has stated to be openly recognised and this, in the view of Lavrov, “is an uneasy process for those who during the aggression against South Ossetia took not the side of truth, not the side of justice, not the side of public concern, after all, but sided with the bloc ideology policy.” Among them the Russian diplomacy head named NATO saying that “NATO as an organisation sided with those who denied the facts in every possible way, who absorbed lies sounded from Tbilisi and with those who behaved following the old pattern, the pattern of the Cold War.”
They, the RF foreign minister stressed, defended a man “who just let everybody down by committing unpardonable adventure that cost hundreds and hundreds of people their lives and became a tragedy for Georgia itself, for the Georgian nation whom were very much respect, and neither Saakashvili nor those who prompted him will be able to put us at odds with it.”
Lavrov also noted that Saakashvili “is not all Georgia” and far from all there share his policy of maintaining the “permanent tension” in Georgian-Russian relations.
Chronology of Events: the South Ossetia Conflict of August 2008
20:2704/08/2009
The situation in the Georgian-South Ossetian conflict zone rapidly deteriorated after Tskhinval and a number of other residential districts and villages in South Ossetia were attacked in the evening of August 1. Combat with the use of small arms, grenade launchers and mortars ensued in the conflict zone for several hours. It resulted in the first human losses and substantial destruction. South Ossetia began evacuating its citizens to North Ossetia. In the first two days after the shelling, 2,500 residents left their homes.
On August 2, South Ossetia was visited by the Georgian Minister for Reintegration Temur Yakobashvili. After meeting with representatives of the OSCE mission of observers, Commander of Georgia’s Defense Ministry Joint Headquarters of Peacekeeping Operations Mamuka Kurashvili and Commander of the Joint Peacekeeping Force (JPF) General Marat Kulakhmetov, he said that the Georgian authorities did not see an alternative to direct negotiations between Tbilisi and Tskhinval, and expressed readiness for holding talks without any preconditions. Yakobashvili said that Tbilisi will do all it can for reaching political settlement.
On August 3, Georgia continued to concentrate its troops along the border with South Ossetia. An artillery column consisting of one division of D-30 artillery units and two mortar batteries, which are part of the fourth mechanized infantry brigade of the Georgian Defense Ministry, came forward in the direction of Tskhinval from its military base in Gori.
The Russian Foreign Ministry announced that the threat of large-scale hostilities between Georgia and South Ossetia was becoming increasingly real.
According to the JPF Assistant Commander Vladimir Ivanov, the peacekeeping contingent had been put on high alert, surveillance at the peacekeeping forces’ check points had been intensified, and more observation posts had been set up.
In the early hours of August 6, eight jet aircraft flew over the conflict zone from the south (the town of Gori) to the north (the settlement of Dzhava). Georgia continued secretly concentrating artillery systems and Grad multiple rocket launchers in the direct vicinity of the South Ossetian borders. Army trucks with soldiers, APCs [armored personnel carriers], multiple launch rocket systems, and artillery weapons started moving from Kutaisi in the direction of Gori.
As a result, by the beginning of a large-scale military operation against Tskhinval, Georgia had concentrated an invading force consisting of up to 12,000 men. In total, Georgia had up to three infantry brigades, an artillery brigade, a separate tank battalion, and special purpose units of its defense and interior ministries.
Russian Foreign Ministry Special Envoy Yury Popov flew to the region. He prepared the ground for a meeting in Tskhinval between Yakobashvili and South Ossetian Deputy Prime Minister Boris Chochiyev. However, this meeting did not take place because of the resumed shelling of Tskhinval and other cities and villages on August 7.
At their meeting on August 7, Popov and Yakobashvili again discussed the prospect of a trilateral meeting. Later on, they separately went to South Ossetia. After meeting with the residents of Georgian villages, Yakobashvili returned to Tbilisi, while Popov remained at the Joint Headquarters of Peacekeepers.
In the meantime, Georgia deployed 27 Grad multiple-launch rocket systems near Gori. A column of military equipment passed in the direction of South Ossetia. Twenty trucks with soldiers, 20 Toyota jeeps with vans armed with mounted machine guns, three APCs, three multiple launchers, and three artillery weapons, moved from Kutaisi to Gori.
In the latter half of the day, Tskhinval and its suburbs were shelled by large caliber artillery weapons from the Georgian villages of Nikozi and Ergneti.
At 3.45 p.m., Georgian military observers left the Joint Headquarters of Peacekeepers and observation posts.
In the evening on the same day, Yakobshvili announced Georgia’s decision to unilaterally suspend fire in the conflict zone. He said that Georgia wanted to show to the Tskhival authorities the “lack of any point in the military confrontation.” He declared his intention to go to the conflict zone together with Russia’s Foreign Ministry Special Envoy Popov, and to try and sit at the negotiating table.
At 7.40 p.m. President Mikheil Saakashvili addressed his compatriots. He said that in the evening on Thursday he ordered all Georgian armed formations in the region not to return fire in the conflict region in Tskhinval. “I would like to address those who are now firing at Georgian policemen. I would like to say with full responsibility that several hours ago I made a very difficult decision – not to return the fire,” he emphasized.
At 10.35 p.m., that is, three hours after this statement, Georgia launched an offensive operation against South Ossetia.
Clashes and shelling by grenade launchers and mortars started at 11.15 p.m., and salvo mortar fire began half an hour later.
Cannon artillery joined at 0.20 a.m. on August 8. Starting at 1.20 a.m., Georgian troops started moving to the eastern part of Tskhinval against the background of artillery cannonade.
On the night of August 8, Commander of Georgia’s Defense Ministry Joint Headquarters of Peacekeeping Operations Mamuka Kurashvili told television company Rustavi-2, that Georgia decided to restore the constitutional order in the conflict zone.
In the morning, Georgian aviation bombed South Ossetia. Five Su-25 assault aircraft bombed the Tkverneti region. A column with humanitarian relief from North Ossetia was also bombed.
Also in the morning, Yakobashvili declared: “Tskhinval has almost been encircled by Georgian units but we do not want destruction and human losses, and thus again invite the separatist leaders to start direct talks on ceasefire and relaxation of tensions in the conflict zone.”
Georgian shelling at night damaged a number of buildings on the territory of the headquarters of the Russian peacekeepers in Tskhinval. The building of South Ossetian parliament was burned down, a complex of government buildings was destroyed, and multi-storey apartment and other buildings were burning downtown.
A column of Georgian tanks and infantry moved in the direction of Tskhinval. Despite resistance of South Ossetian troops, by the middle of the day the Georgian forces established control over Tskhinval and eight villages in South Ossetia.
The persisting direct threat to the lives of Russian citizens in South Ossetia compelled Russia to resort to its right to self-defense, and send additional forces for supporting Russian peacekeepers, as well as protecting civilians in the afternoon of August 8.
At 3 p.m. Russian President Dmitry Medvedev made a statement on the situation in South Ossetia on Russian television. He emphasized, in part, that in line with the Constitution and federal legislation he is obliged as Russia’s president to defend the lives and dignity of Russian citizens regardless of their place of residence. Under the circumstances, Russia had to launch an operation to enforce Georgia to peace, and protect its citizens in South Ossetia.
On August 9, additional units of the 58th army and airborne troops were brought into the conflict zone. Georgia reported about the bombing of its positions by Russian aircraft. Russian troops went into action on the Zara direction to unblock the road leading to Tskhinval from the north.
At 4 p.m. Moscow time, at the decision of the Supreme Commander of the Russian Armed Forces and in line with Russia’s Constitution, ships of the Russian Navy began patrolling the sea off Abkhazia’s coast near the conflict zone in South Ossetia. A relevant note was sent to Georgia.
Commander of the Ground Troops Army General Vladimir Boldyrev told journalists that battalions and tactical groups had completely liberated Tskhinval from Georgian troops, and started squeezing out Georgian units outside the zone of responsibility of peacekeepers.
The Georgian president convened an emergency meeting of the Security Council to declare that he had signed a decree on introducing martial law in the country. He said: “Georgia has been subject to Russia’s aggression.”
On August 10, Georgia’s Foreign Ministry forwarded a note to the Russian embassy whereby the Georgian president announced his order to cease hostilities and fire starting 5 a.m. on August 10, and his decision to withdraw Georgian troops from the conflict zone.
In an interview with CNN, Saakashvili declared that Georgian troops had been fully withdrawn from the conflict zone.
Russian warships patrolling the coast of unrecognized Republic of Abkhazia were attacked by four Georgian guided missile boats. They responded with precautionary shooting, and later on followed with artillery barrage. As a result of quick naval combat, one boat was sunk, and three others retreated towards Poti.
Humanitarian corridors for the withdrawal of refugees from South Ossetia were opened. By agreement of the sides, two corridors are in service: the northern one (for Ossetian refugees and wounded) and southern (for Georgians).
On August 11, President Dmitry Medvedev said during his meeting with Defense Minister Anatoly Serdyukov that Russia had largely completed its peace enforcement operation regarding Georgia in South Ossetia.
Russian peacekeepers and military conducted preventive measures in the area of the Georgian town of Senaki, where a military base is located, in order to prevent another aggression against South Ossetia.
The Novosti-Gruziya news agency reported that Russia and Georgia decided not to use aviation forces in the conflict zone. Commander of Russian Peacekeepers noted that this agreement did not extend to the Tskhinval region.
France presented a plan for the settlement of the conflict between Georgia and South Ossetia. Its main provisions were immediate ceasefire, medical aid to the wounded, and withdrawal of Georgian and Russian troops from the conflict zone.
On August 12, Supreme Commander of the Russian Armed Forces Dmitry Medvedev issued an order on completing the peace enforcement operation, which had achieved its goal.
Russia and France came to terms on six principles of settlement of the conflict in Georgia (the Medvedev-Sarkozy plan), including non-use of force, final cessation of all hostilities, and free access to humanitarian aid. Georgia was obliged to bring its troops to the site of their permanent deployment, while Russia was to return its troops to the line they occupied before the hostilities. Under the plan, Russian peacekeepers were to take additional security measures before the formation of relevant international mechanisms. The sixth principle dealt with the start of the international discussion of the future status of South Ossetia and Abkhazia, and ways of ensuring their security.
The Georgian authorities agreed to sign the document, but deleted the mention of the status from the sixth principle, having offered to discuss security issues alone.
On August 14, the leaders of the unrecognized republics of Abkhazia and South Ossetia signed the principles of settlement.
On August 15, Georgian President Mikheil Saakashvili signed the Medvedev-Sarkozy plan.
On August 16, Russian President Dmitry Medvedev signed the plan.
According to the Russian Defense Ministry, 18 Russian servicemen, including one officer, 17 sergeants and soldiers were killed in action during the conflict. Deputy Chief of Staff of the Russian Armed Forces Col.-Gen. Anatoly Nogovitsyn announced that 52 servicemen were wounded, including one general, two officers, and 49 sergeants and soldiers. Fourteen servicemen were reported missing.
According to the Russian Foreign Ministry, about 1,600 residents were killed as a result of hostilities in South Ossetia, and more than 30,000 refugees fled the republic.
S. Ossetia still healing scars of war
05 August, 2009, 08:18
South Ossetia is closing its border with Georgia as the authorities in the republic say they fear Tbilisi is preparing another attack similar to the one it launched a year ago.
Russian troops located in the region have also been put on high alert, following alleged provocations by Georgian troops.
Irina Parastayeva’s apartment block was among the first along the route the Georgian tanks took as they rolled into the city last August. Along with her daughter she spent three days sheltering in a basement with little to do but count the shots fired at the floors above, wondering if she’d live to tell the tale.
A year later, looking at the burnt out ruins of her flat, Irina knows only too well her life is still far from normal.
“The authorities have not started to restore the houses yet. But it probably takes longer than a year to do that, but they do promise that all the buildings will be restored. But I think a house is a fair price to pay for independence anyway,” Irina said.
According to South Ossetian authorities, nearly 70% of Tskhinval’s buildings were either damaged or destroyed in the fighting, leaving many families without homes. Even now, most of them still have no permanent roof over their head.
Given the scale of the devastation, rebuilding the essential infrastructure had to come first. It was only until several months ago that real reconstruction could begin.
“Preparations such as producing raw materials took a long time. But now we are starting to really restore the city. Electricity and gas have already been restored. The water supply will be fully restored soon,” commented Zurab Kabisov, head of the South Ossetian restoration committee.
Russia has allocated around $300 million in financial aid to help South Ossetia recover from Georgian aggression. Officials promise that, by next winter, Tskhinval will have a whole new look.
Many refugees from previous conflicts are now returning to the republic following Russia’s recognition of its independence from Georgia.
However, despite the efforts of the authorities and the citizens, it is clear there is still a long way to go.
AUGUST 5, 2009
Russia and Georgia Battle Over Position in History
Each Pushes Its Version of Last Year's War for International Report; Moscow Puts Troops on Alert in Abkhazia and South Ossetia
By MARC CHAMPION
A year after Russia fought a war with its former-Soviet neighbor Georgia, the argument over who was to blame for a conflict that at one point threatened to reignite the Cold War is raging again.
The five-day conflict left hundreds dead, Georgia's army crushed and two parts of its territory on the border with Russia -- Abkhazia and South Ossetia -- under Russian occupation. It also left the West struggling with how to respond to Russia's determination to assert a sphere of influence. But the core questions left by the war -- who was to blame, why it was fought and whether genocide was committed -- remain in dispute.
Underlining rising tensions around the war's anniversary and the danger of renewed conflict, Russian officials said Tuesday that their troops in Georgia's enclaves had been put on alert after alleged Georgian "provocations," which Georgian officials denied. Also Tuesday, Russia President Dmitry Medvedev discussed "lessons to be learned from the Georgia crisis that took place one year ago" in a telephone call with President Barack Obama, according to a Kremlin statement.
An international fact-finding mission, headed by a Swiss diplomat, has delayed its report on the war until the end of September, from the original due date of July 31. Pressure on the head of the commission, Swiss diplomat Heidi Tagliavini, who served in Chechnya, Bosnia and Moscow in the 1990s, and for four years until 2006 as the head of the United Nations observer mission in Abkhazia, is immense: Her conclusions could have lasting repercussions, diplomats and analysts say.
According to the mission's deputy chief, German diplomat Uwe Schramm, the report was delayed because reams of documents arrived from both sides at the last minute, and the mission wants to conduct "a full and responsible evaluation of all the material available."
All parties to the conflict are trying to entrench their version of what happened before the report comes out. On Thursday, the Georgian government is to present its view of events in a 40-page report on the war, which was reviewed by The Wall Street Journal. It sees the war as the final step in a Russian plan to de facto annex neighboring territories and halt Georgia's efforts to attach itself to the West.
Meanwhile, South Ossetia, the tiny Russian-backed enclave where most of the war was fought, on Saturday will open a genocide museum to highlight a key claim on which Russia based its massive military intervention.
At least three books in English alone on the Aug. 7-12 war have been published recently or soon will be. All three take a view of the war similar to that of the Georgian government.
"If you believe this war was fought by Russia to defend its sphere of influence and prevent Georgia from going West, then the policy conclusions you draw are very different from if you think it was self-induced by [Georgian President Mikheil] Saakashvili," says Ronald D. Asmus, a former U.S. diplomat and head of the German Marshall Fund office in Brussels, whose book on the conflict comes out later this year.
Mr. Asmus blames the West for doing nothing to prevent a war that many were predicting.
But Georgian officials acknowledge they have the bigger hill to climb, because only an unambiguous report blaming Moscow for the war could change the status quo for Abkhazia and South Ossetia. A report that fingered Georgia for starting the war, and Russia for overreacting -- the conventional wisdom in Western capitals -- would simply reinforce the facts on the ground, they say.
Western diplomats say the fact that, in the past year, only Nicaragua has followed Moscow in recognizing Abkhazia and South Ossetia as nations is a major diplomatic defeat for Russia. But according to Sergei Markov, a political analyst with close ties to the Kremlin, Russian officials aren't concerned. "If Abkhazia and South Ossetia are recognized by nobody but Russia, that's good for Russia. These countries will be tied to Russia, like northern Cyprus is to Turkey," he says.
The commission has peppered both sides with questions about the immediate period before Mr. Saakashvili ordered his forces to attack at 11:35 p.m. last Aug. 7, and also about the months before, when Russia already appeared to begin integrating the two territories, and afterward, when Georgian villages were terrorized and people forced to flee.
Russian officials continue to claim that Georgian forces were guilty of genocide, forcing Russian intervention. A special investigative committee of the Russian Prosecutor's Office has found that 162 South Ossetians died in the conflict. That is fewer than the 1,500 to 2,000 that Russia claimed in the first days of the war, but Moscow now says it has documents proving that Georgian intent was genocide, even if it was unable to carry out the plan.
Moscow has produced a key piece of evidence for Ms. Tagliavini, a document titled Order No. 2, allegedly issued by Georgian military commanders at 5:15 a.m. on Aug. 7, telling the soldiers they would be restoring "Georgian jurisdiction" in South Ossetia. If genuine, that would support Russia's accusation that the Georgian attack was decided early on, and not, as Mr. Saakashvili claims, as a late-night response to a Russian invasion. Shota Utiashvili, a senior Georgian interior ministry official, called the Russian document "a total fabrication."
Georgia has provided the commission with what it says are intercepts of telephone conversations between members of a South Ossetian militia from 2 a.m. to 4 a.m. on Aug. 8, in which they say Russian armor and troops had already passed through the 2.3-mile Roki tunnel that connects Russia with South Ossetia. One purported intercept, part of the report reviewed by the Journal, was timed at 2:20 a.m. The key passage goes like this:
Lagoev: Where are our big brothers?
Gaseev: They are coming, they just passed through the tunnel.
None of these documents or intercepts could be independently verified. If genuine, the intercepts would support Mr. Saakashvili's claim that he received intelligence at around 11 p.m. on Aug. 7 that a Russian column was approaching the entrance of the tunnel. He says it was in response to this news that he ordered his troops to move forward. Russian officials didn't return calls for comment.
Last year, however, Russian officials did acknowledge as genuine intercepted transcripts from 3 a.m. the previous night, Aug. 6, during which Ossetian soldiers talked about the tunnel being "full" with a Russian column. Moscow said the troops were part of a routine rotation, though under terms of their peacekeeping mission no troops were allowed to pass through the tunnel at night. Georgian officials say it was the arrival of the first column that forced them to pull troops into position on Aug. 7. The news at 11 p.m. that day of the second column, officials say, triggered war.
—Andrew Osborn contributed to this article.
Write to Marc Champion at marc.champion@
Putin’s Afghan War
05 August 2009 By Yulia Latynina
Events in South Ossetia are unfolding according to last year’s scenario. No sooner had U.S. Vice President Joe Biden announced that the United States would not provide arms to Georgia than South Ossetian leader Eduard Kokoity accused the United States of complicity in genocide against the Ossetian people and announced that Tskhinvali had come under fire from the Georgian village of Nikozi. Considering the fact that South Ossetian forces had already wiped Nikozi off the map, his statement sounded a bit strange.
The next day, a Georgian citizen died after stepping on a mine on the Georgian side of the border with the Akhalgorsk district. (Remember that before the Russia-Georgia war last August, the Akhalgorsk region belonged to Georgia, and after the war both Georgians and Ossetians began leaving the area.) President Kokoity announced that Georgia had intentionally blown up its own citizen as part of its policy of preventing Akhalgorsk refugees from returning home.
As part of the ongoing peace talks, Kokoity demanded that Georgia return the Trusovsky Gorge on the grounds that “many of our people” are there. Using that logic, Russia could demand the return of countless regions — including parts of the United States and Australia — since “many Russians were born there.”
This is all exactly like the Gleivits radio station incident, when in 1939 Germans dressed as Polish soldiers attacked their own radio station and then announced that the Poles were responsible.
Russia has fallen hostage to Kokoity’s whims. Under his rule, South Ossetia is rapidly becoming a ghost town. The republic’s nominal population of 70,000 is really only 15,000 today, according to the South Ossetian opposition. Kokoity plans to implement all of his peacekeeping plans with the help of the Russian military. And even if the Kremlin supports Kokoity, it is by no means proof that he has the situation under control at home. When Prime Minister Vladimir Putin demanded an account of what happened to the funds the Kremlin sent to South Ossetia to rebuild the republic, he could not give a coherent answer.
The problem is that it would be impossible to repeat last year’s scenario now. Last year, nobody in the world paid any attention to the fact that before the war had started, South Ossetian forces began shelling Georgian territory while declaring their readiness to launch a “counterstrike” against Georgian cities. Today, it is highly unlikely that Russia and South Ossetia will be able to convince the world that Georgians blew up a fellow citizen who was trying to return to the “prospering” region of Akhalgorsk, and all at the same time as that cursed West is rejecting Kokoity’s peaceful request that Georgia return the Trusovsky Gorge.
What’s more, if there will, in fact, be Round 2 of the Russia-Georgia war, nobody will believe that Kokoity had started the conflict. Everyone would conclude that it had been Putin’s decision.
Against the backdrop of an economic crisis, a gas war with Ukraine and a milk war with Belarus, a new war with Georgia would mean the same thing for Putin’s regime that the war in Afghanistan meant for the Soviet Union — the beginning of the end.
Yulia Latynina hosts a political talk show on Ekho Moskvy radio.
Egyptian Traders Co head detained in Russia wheat row
Wed Aug 5, 2009 6:12am GMT
CAIRO (Reuters) - The chairman of Egyptian Traders Co said on Wednesday he had been issued with an arrest order in a row over a Russian wheat shipment that was rejected by Egypt and ordered re-exported.
"An arrest order has been issued until the re-export LC (letter of credit) is cashed," Chairman Ashraf El Attal wrote in a brief e-mail sent by Blackberry to Reuters, adding that he would not be able to make further comment from now on.
Egypt suspended grain contracts with Egyptian Traders, a private firm, on June 7 after the prosecutor ordered a Russian wheat cargo re-exported in a row over quality and the authenticity of an import document. Egypt told the firm to repay $9.6 million to Egypt's state grain buyer.
TIMELINE-Egypt-Russia dispute over wheat
Aug 5 (Reuters) - The chairman of private firm Egyptian Traders Co said on Wednesday Egyptian authorities had issued an order for his arrest in a row over a Russian wheat shipment that was rejected by Egypt and ordered re-exported.
Egypt, the world's top wheat importer, has been in dispute with Egyptian Traders since mid-May over the quality of wheat cargoes brought to the country and the authenticity of an import document that the firm has said was valid.
Below is a timeline of events in the row:
July 21 - Ashraf El Attal, chairman of Egyptian Traders Co and president of the Grain and Feed Trade Association (GAFTA), says has resigned his GAFT post to eliminate doubts over the fairness of any arbitration [ID:nLL407446]
* Egypt's main government wheat buyer, the General Authority for Supply Commodities (GASC), makes its first purchase of Russian wheat since the row erupts, buying 60,000 tonnes [ID:nLL612282]
July 14 - Russian grain company Rosinteragroservis (RIAS) says it has started two arbitration cases at the London-based Grain and Feed Trade Association (GAFTA) against Egyptian Traders Co [ID:nLE369791]
July 9 - Egypt says Russia and France have agreed to inspect wheat shipments before exporting them to Egypt [ID:nL9470744]
June 24 - Egypt orders the re-export of a second Russian wheat shipment comprising 56,000 tonnes because it failed to meet contract terms [ID:nLO280184]
June 23 - Egypt announces new measures to improve inspection and quality control of imported wheat [ID:nLN889709]
June 11 - A legal adviser to Egypt's trade minister says prosecutor probing papers linked to Russian wheat shipment imported by Egyptian Traders for possible forgery.
* Cargo inspector SGS says a falsified SGS quality certificate has been used on the Russian wheat shipment imported by Egyptian Traders Co [ID:nLB813040]
* The chairman of Egyptian Traders Co says documents for the shipment were "definitely" valid [ID:nLB350509]
June 9 - Russian watchdog Rosselkhoznadzor says it agreed with Egypt that exported grain will be accompanied by state certificates not ones from surveyor firms [ID:nL9461541]
June 7 - Egypt's prosecutor orders 52,500-tonne Russian wheat shipment held since May 13 re-exported and tells Egyptian Traders Co to repay $9.6 million to main state wheat buyer, GASC
* Russia says only high quality wheat was sent to Egypt [ID:nL7200129]
* Cairo says it agreed with Moscow to take joint measures against sub-quality wheat suppliers. [ID:nL31035897]
May 31 - Egypt says it has no plans to stop importing Russian wheat or change quality specifications. [ID:nLV107413]
* Russian Grain Union calls Egypt seizures of wheat provocative. [ID:nLL90690]
May 13 - Egypt's state prosecutor orders seizure of all Russian wheat in the country for health checks after a complaint that spoiled wheat entered the country at Safaga port.
* Shipment of 52,500 tonnes of Russian wheat quarantined at Safaga port.
* Russian Grain Union says the move is an attempt to force Russian suppliers to sell at lower prices. [ID:nLD857742] (Compiled by Maha El Dahan and Edmund Blair, Editing by Peter Blackburn)
German vessels ready for the Northern Sea Route
2009-08-05
Three vessels from the German Beluga Group will this summer sail the Northern Sea Route from East to West. This is the first time since WWII that vessels under foreign flag travel this Arctic route.
The mission, which is to be made without icebreaker assistance has been planned for a long period. As BarentsObserver reported last year, the Beluga Group already then intended to conduct the sailing. However, the operation was postponed following lack of official approval from Russian authorities.
Now the operation is a fact, Maritime Bulletin reports. Three vessels from Beluga Group will this summer sail the Northern Sea Route from East to West, delivering equipment for a new heating and power plant in Surgut, Khanti-Mansi Autonomous Okrug on the way. The cargo, which includes two 270 tons generators and 44 constructions of 100 tons each, will be unloaded in the port of Novy, Yamalo-Nenets Autonomous Okrug, and then transported further on barges.
The Beluga Group's sailing along the Northern Sea Route comes amid a rapidly growing interest in Arctic shipping. Arctic warming and ice melting is making major parts of the area open for summertime shipping. That has made Russia heighten its focus on the Northern Sea Route. As reported by BarentsObserver, the country is currently in the process of approving a new law on shipping along the route.
The first of the vessels, the 12 744 dwt “Beluga Family” is planned to reach Novy on August 7. It will then continue to Murmansk and Rotterdam. The next vessel, the 13257 dwt “Beluga Fraternity”, is currently in the port of Vladivostok awaiting permission from Russian authorities to sail the Northern Sea Route. The third vessel will be the 12 669 dwt “Beluga Foresight”.
All of the vessels are of ice class and are designed for transport of heavy and large-scaled cargo.
According to Maritime Bulletin, the last foreign vessel to sail the Northern Sea Route in modern times was the German Kriegsmarine auxiliary cruiser “Komet”, which in August 1940 in a covert operation sailed from the Atlantic Ocean to the Pacific Ocean to attack British ships.
GDP in CIS countries in I half of 2009 decreased by 9 %
[11:07] 05.08.2009, "Kazakhstan Today"
|GDP in January - June, 2009 in comparison with the similar period of last year in the countries of the Commonwealth of |
|Independent States decreased by 9 %, "Kazakhstan Today" agency reports citing CIS Interstate Statistical Committee. |
|According to Statistical Committee, industrial manufacture in the CIS countries in January - June, 2009 has decreased by 15 %, |
|investments into fixed capital - by 15 %, and volume of transportation of cargoes by transport enterprises (excluding pipelines)|
|- by 20 %. |
|Retail goods turnover decreased by 4 % and the price indexes of manufacturer of industrial goods - by 5 %. Consumer price |
|indexes have grown by 13 %. |
Faith or Politics? The Russian Patriarch Ends Ukraine Visit
By James Marson / Kiev Tuesday, Aug. 04, 2009
He said he was in Ukraine on a pilgrimage to promote spiritual unity. But his critics say he was on a mission from the Kremlin to buttress Moscow's influence over its neighbor.
Patriarch Kirill, the leader of the Russian Orthodox Church, was greeted by a mixture of protests and celebrations during his 10-day visit to Kiev, known to Russians as the "mother of all Russian cities." The trip, which began on July 27, was Kirill's first to Ukraine since he took over the role of Patriarch after the death of Alexy II in December 2008. Kirill toured holy sites across the country, met with political leaders and gave an interview on national television, all with the insistence that his visit had no political agenda. But some observers are skeptical, saying the patriarch was actually in the country to throw spiritual weight behind the Kremlin's attempts to halt Ukraine's move toward Europe and keep it within Russia's sphere of influence. "We've seen more of a Russian state official than a religious figure," says Olexandr Paliy, a historian at the Institute of Foreign Policy at the Ukrainian Ministry of Foreign Affairs' Diplomatic Academy. "The Church is being used as an instrument in the Kremlin's game."
The religious histories of Ukraine and Russia are closely — and sometimes controversially — intertwined. After Prince Volodymyr of Kiev was baptized into Christianity in 988, leadership of the Church became a crucial instrument in winning primacy among the princes of the Rus people who inhabited much of the territory of modern-day Ukraine, Belarus and Russia. The consolidation and spread of Muscovy's regional power during the 14th century coincided with the Church leader's move to the principality. The patriarch's full title is Patriarch of Moscow and All of Rus, a constant reminder of how the Russian Orthodox Church's power extends beyond Russia's borders.
Following the collapse of the Soviet Union in 1991, an independent church, known as the Kiev Patriarchate, was formed in Ukraine alongside the Moscow Patriarchate. It remains canonically unrecognized, but surveys show it has a comparable number of followers to the Russian branch of the Church. Together, the members of both branches make Ukraine one of the most religious countries in Europe; more than 60% of Ukrainians have been brought up in the Orthodox faith.
Last year, pro-Western President Viktor Yushchenko irked the Russian Orthodox leadership with an unsuccessful attempt to unite both patriarchates in Ukraine into one independent church, without involvement from Moscow. Kirill, too, would like to see both branches united, but not in a way that would satisfy Yushchenko — last week, the patriarch called for members of the two churches to unite under his leadership.
Yushchenko has similarly annoyed Russian political leaders with his attempts to move Ukraine toward Western structures such as the European Union and NATO. Moscow has responded with a series of threats and cuts to gas supplies to try to keep Ukraine in check, along with appeals to the countries' historical and cultural links. The Church, which enjoys strong relations with the Kremlin, is in a unique position to lend support to Moscow's attempts to keep Ukraine close, given its claims to spiritual authority over Ukrainian territory. "Our historical past is here, and our future will to a large extent be decided here," said Kirill on Ukrainian national television on July 28. "By our, I mean all of us, people who belong to the one civilization of ancient Rus."
Kirill took a swipe at the West for its pursuit of material well-being, suggesting that the desire to fill "one's stomach and pocket" was a base motive for moving toward Europe — a thinly veiled criticism of Ukraine's attempts to integrate with the E.U. Many thousands turned out to cheer the patriarch on his tour of Ukraine, but comments like that one also brought hundreds into the streets in protest. Scuffles broke out in Kiev last week when a crowd of several hundred demonstrators chanted and held banners reading, "Go Away, Moscow Pope."
Nevertheless, some observers see Kirill as a less politicized figure than his predecessor. Alexy II, an infrequent visitor to Kiev, openly supported the Moscow-backed candidate Viktor Yanukovych in his 2004 presidential race against Yushchenko. "Kirill is developing a new approach to Russian-Ukrainian spiritual unity," says Andrei Zolotov, an expert on the Russian Orthodox Church who followed the patriarch on his visit. "He's saying that he's the patriarch not just of Russia but of Rus. He's trying to position himself as a supranational leader beyond state boundaries."
But Zolotov concedes that Kirill will have trouble convincing many in Ukraine that his mission is only spiritual. "The idea that independent Ukraine must have an independent Orthodox Church is at the core of the Ukrainian national idea formed in the past decade," he says. "It's a complicating factor that the patriarch lives in Moscow and has ties with the Kremlin." For now, Kirill's Ukrainian critics have their wish: the patriarch is heading back to Moscow on Wednesday, Aug. 5. But Zolotov says there has been talk in Kirill's entourage of making the trip an annual event — so he could soon be back, bringing yet more controversy with him.
State Will Aid Victims Of Drought
05 August 2009 The Moscow Times
Prime Minister Vladimir Putin said Tuesday that the regions that have suffered from the droughts this year could get up to 100 billion rubles ($3.2 billion) to cope with the consequences of the disaster, Interfax reported.
“I would like the Finance Ministry to consider giving loans to the regions that have suffered from the drought,” Putin said at a meeting in Orenburg with governors of regions affected by drought.
About 3.6 million hectares of arable land in the Volga federal district has been affected by drought. The Orenburg region was the worst hit, with 1.1 million hectares affected. The Agriculture Ministry has called the drought the worst in the last 10 years. Only 8 percent of farmers who suffered from the drought had their farms insured, Putin said. “Helping those first whose farms are insured would be fair,” he said.
Agriculture Minister Yelena Skrynnik, who came to Orenburg with Putin, said the government would provide three-year trade loans to farmers who have suffered from the drought. Farmers who got loans for one year would be allowed to extend their loans to three years with subsidized interest, Skrynnik said.
Skrynnik said the country could harvest 11 million tons of grain less than previously planned because of the drought this year. The Agriculture Ministry expects a harvest of about 85 million tons of grain.
Shakeup At Justice Ministry
05 August 2009The Moscow Times
President Dmitry Medvedev promoted Yury Kalinin, head of the Federal Prison Service, to deputy justice minister and appointed the Samara region’s top cop, Alexander Reimer, to the prison post, the Kremlin said Tuesday.
The shakeup in the Justice Ministry, headed by Medvedev’s close ally Alexander Konovalov, was preceded by the appointment of 32-year-old Yury Lyubimov as another deputy minister.
Political analysts had expected that Kalinin would be replaced from the job, which he has held since 1992, as Medvedev seeks to fill posts with allies.
Reimer may have been tapped by Konovalov, who had been the presidential envoy to the Volga Federal District, which includes the Samara region. Reimer will oversee new Justice Ministry initiatives related to prisons.
Underscoring the problems facing the system, human rights activist Lev Ponomaryov said Tuesday that hardened criminals were being used to torture inmates to extract confessions.
“There are about a dozen of these concentration camps … in which groups of the toughest criminals, people who are serving time for pedophilia, for rape and other crimes, get official permission to torture, to rape and sometimes even to kill,” Ponomaryov said, The Associated Press reported.
A spokesman for the prisons service denied the allegation, the AP reported.
Rights Group: Russian Criminals Used to Torture Other Inmates
Tuesday, August 04, 2009 [pic]
MOSCOW — One of Russia's most prominent human rights activists is accusing the Russian prison system of using hardened criminals to torture other inmates to extract confessions.
Lev Ponomaryov says his organization, For Human Rights, has received many letters from prisoners reporting abuse.
He told journalists Tuesday that some of the toughest criminals are ordered to torture, rape and sometimes kill other inmates.
A spokesman for the prison guard service denied the allegations. Spokesman Yevgeny Saurin said critics have failed to produce evidence to back up their claims.
Also Tuesday, President Dmitry Medvedev appointed a new director of the prison guard service. Human rights activists said they were eager to meet with him.
Russia begins new trial into murder of journalist Politkovskaya
MOSCOW, August 5 (RIA Novosti) - The Moscow Military District Court opened on Wednesday a new trial of defendants in the 2006 murder of investigative journalist Anna Politkovskaya.
The court acquitted in February Dzhabrail and Ibragim Makhmudov, brothers from Chechnya, and former police officer Sergei Khadzhikurbanov of involvement in the journalist's murder.
However, Russia's Supreme Court overturned last month the not-guilty verdicts and ordered a retrial.
Novaya Gazeta reporter Politkovskaya, who gained international recognition for her reports of atrocities against civilians in the troubled Caucasus republic of Chechnya, was gunned down in an elevator in her Moscow apartment building in October 2006, in what police described as a contract killing.
Suspects in Politkovskaya case on trial again
05 August, 2009, 08:49
New proceedings in the trial of the murder of Anna Politkovskaya are due to start on Wednesday. It has been almost three years since the Russian journalist was killed, but the case is still far from being closed.
A retrial has been ordered for the four men who were previously acquitted due to insufficient evidence.
Politkovskaya, who was an investigative journalist, wrote nearly 500 articles and could have potentially made an enemy with each one she published, which makes the case a hard one to solve.
As such, during the course of the official investigation, dozens of theories led police up a multitude of avenues, but to an equal amount of dead ends.
New lines of inquiry have been taken up, but none have led to the capture of the killer or identifying those who ordered the murder.
While Politkovskaya’s former colleagues continue their own search for evidence, they hope these latest proceedings will give the investigation a much needed boost, and lead to justice finally being served.
“We are far more interested in the so-called main case – where they are searching for the killer and the contractor. Ideally, we would like to see those people on the dock so that the jury could get the full picture, rather than its parts and fragments. Of course, the current suspects are linked to this murder, but they are not the main culprits,” believes Sergey Sokolov, deputy editor of the newspaper Novaya Gazeta which Politkovskaya worked for.
Anna Politkovskaya was shot dead in the entrance of her apartment building in October 2006. The following August four people were charged in connection with the killing, but they were acquitted in February of this year when the jury agreed with the defense’s claims of insufficient evidence.
The man alleged to have pulled the trigger has never been caught. It is believed that he has fled the country.
While the Supreme Court has agreed to hear an appeal from the prosecutor general’s office to overturn the acquittal verdict, the defense team expects little will come of it.
“We expect that at this hearing our opponents will make an appeal to return the case to the prosecutors. Many might think that this kind of development will lead to a new, more thorough investigation. But I don’t think so. They might unite the case with some other case to make things more complicated, or even adjourn it until things calm down,” said defense lawyer Murad Musayev.
The lawyer representing Politkovskaya’s family said it was not them who lodged the appeal, as they had expected the acquittal in light of the lack of evidence.
Medvedev tells Murmansk and Arkhangelsk governors to “straighten up”
2009-08-04
Russia’s President Dmitry Medvedev is not pleased with the level of anti-crisis measures that have been taken in Murmansk and Arkhangelsk and has given the governors of these regions a clear signal to get a grip on the situation.
In a discussion on unemployment with Minister for health and social development Tatyana Golikova, the president was informed that the Russian regions are handling the economic crisis “sufficiently well”, but that there still are problems in Murmansk, Arkhangelsk, Samara and Kaliningrad, Vedomosti.ru writes. According to the minister, these regions have still not implemented any anti-crisis programs, despite federal allocations to these goals.
As BarentsObserver reported, President Medvedev in June threatened to dismiss governors who fail to take measures against unemployment.
Deputy Governor on social issues in Arkhangelsk Oblast Yelena Kudryashova is surprised that her region has been put on the presidents black list: unemployment is decreasing and is only 2.8 percent. Officials in Murmansk say that the unemployment rate there is among the lowest in the district, but admits that there are some problems with finding work for former military personnel.
A source close to the presidential administration tells Vedomosti that the governors in the four mentioned regions are not threatened by dismissal, but that they have to show willingness to improve the situation.
Mother of all Buddhas in Moscow
05 August, 2009, 12:00
What unites Russia, India and Tibet? Among other things, an international festival bearing the same name.
The “Russia, India and Tibet” fest has kicked off in six Russian cities, including Moscow and St. Petersburg. The highlight of the event will be the long-awaited arrival of a delegation of Buddhist monks from Drepung Gomang Monastery, where more than 5,000 people from Tibet, Bhutan, Mongolia, Nepal and Russia study philosophy, Buddhism, astrology and medicine.
The monks will construct one of the key symbols of Buddhist religion – a mandala. Made from colored marble sand, it will be dedicated to White Tara, a Buddhist Goddess, also known as the Mother of all Buddhas, symbolizing purity and wisdom.
Moscow’s Roerich Museum will be the festival’s headquarters until August 30.
Putin’s Popularity Not Oil Dependent
05 August 2009
By Nikolaus von Twickel / The Moscow Times
Editor’s note: This is the first in a series of articles about the 10th anniversary of Vladimir Putin’s ascent to power.
Vladimir Putin has been accused of undemocratic behavior, of staging unfair elections and of holding on to power like a dictator. But he can point to a strong basis for his legitimacy: He is unbeatably popular among his electorate.
In fact, since Putin’s unexpected rise from little-known bureaucrat to prime minister in August 1999 and president a few months later, his popularity has rarely been rivaled by any other politician in the country. Only his protege and chosen presidential successor, Dmitry Medvedev, has come close to his sky-high figures.
Surveys from the Levada Center, an independent polling agency, show that Putin’s approval ratings shot from zero to more than 70 percent in 1999 and have never dropped below 40 percent for any prolonged period since then. Recent polls provide ample evidence that Putin’s popularity has not suffered from the economic downturn that has hit the country hard since last fall. In fact, the figures may serve as a crushing defeat to predictions that the crisis could bring down or weaken his reign.
Western media have been awash with reports since the crisis began that Putin had just been riding high on the country’s oil-driven economic boom and that now the time had come for the people to renege their informal contract with him — that the government could freely stifle democracy as long as the people could enjoy new cars, well-stocked supermarkets and cheap vacations in Egypt.
But despite the fact that millions of people have lost their jobs and the incomes of those still working have been significantly reduced through pay cuts and the ruble’s devaluation, approval of Putin, who as prime minister has taken the role of personally overseeing the economy, stood firm at 78 percent in July.
The idea of Putin as an oil-fueled leader contains a lot of wishful thinking, analysts said.
“It is true that the country’s economic well-being depends a lot on the oil price. But it is not always true that Putin’s popularity depends on the economy alone,” said Denis Volkov, a researcher with the Levada Center.
A Moscow Times comparison of approval ratings during Putin’s career and oil prices reveals that they do not always correlate.
Oil shot up during 1999, the year that Putin was appointed prime minister and moved into the Kremlin when President Boris Yeltsin resigned during his New Year’s address on Dec. 31.
But the second half of 1999 also saw the start of the second Chechen war, which coincided with the armed incursion of Chechen fighters into neighboring Dagestan in August and a series of deadly bombings in apartment buildings in Moscow and elsewhere in September.
“Putin introduced himself as a strong and uncompromising leader,” Volkov said.
Yet his approval ratings suffered a significant drop in August 2000, when the Kursk nuclear submarine sank and he initially refused to cut a vacation short. The oil price slumped only at the end of that year.
Another boost in popularity, unrelated to economic data, happened in October 2002, when special forces gassed Chechen terrorists who had taken hundreds of people hostage in Moscow’s Dubrovka Theater. The nation quite clearly rallied behind its leader in the time of crisis, despite the fact that more than 120 hostages died.
Putin suffered a backlash, however, after the Beslan hostage crisis in September 2004, when a botched rescue operation in the North Ossetian town left more than 330 dead, many of them women and children. Putin’s approval ratings dropped to 66 percent that month, according to Levada data.
The price of oil, meanwhile, began its march upward two years earlier, in 2002.
A correlation between Putin’s popularity and the oil boom only took a firm hold between mid-2005 and July 2008, when oil peaked at a historic $147 a barrel.
“Certainly the economic boom had a consolidating effect on Putin’s ratings,” Volkov said.
Still, Putin’s popularity skyrocketed to 88 percent in September 2008, when oil had fallen to below $100 and stock markets were collapsing. At the time, the country was dizzy in its success in the short war with Georgia, whose first anniversary on Aug. 8 strangely coincides almost exactly with the 10th anniversary of Putin’s first appointment as prime minister, on Aug. 9 1999.
Putin’s ratings have not dropped below 76 percent in the past year, despite the country’s worst economic downturn in more than a decade.
For Russians, politics traditionally takes precedence over the economy, said Olga Kryshtanovskaya, a sociologist with the Russian Academy of Sciences. “The political factor is far more important — and Putin is not just perceived as the one who is in power but as the one who controls the siloviki,” she said, referring to the powerful clan of military and security service officials in the government.
Russians also harbor a lasting desire for strongman leadership as opposed to multipolar democracy, said Yekaterina Yegorova, head of the political consulting firm Nikkolo M and a veteran insider of the country’s political scene. “The notion that you take to the streets when you can no longer afford to buy meat does not correspond to the Russian psychology,” she said.
Yegorova argued that a much broader “unspoken contract” exists between a majority of the population and the leadership. “They want a type of father figure — a strong leader who takes responsibility and who makes important decisions for their lives — and in exchange they accept living according to certain rules,” she said.
She also acknowledged that policies to divide the opposition and the cunning use of state-run media did a lot to prop up the current leadership, but she noted that under the Russian constitutional system any incumbent leader would be privileged. “The president will always stand at the center of attention,” she said.
But Yevgeny Gontmakher, the director of the center for social studies at the Russian Academy of Sciences’ Institute of Economics, warned that Putin’s popularity today was of a different kind than a couple of years ago.
In the past, people had rated Putin for his achievements, but now they rate him highly because they expect him to solve the crisis, he argued.
“People are waiting for a miracle — this is sort of an advance payment,” Gontmakher told The Moscow Times.
The problem is, he argued, that Putin was pretending to solve every problem himself instead of letting market institutions work.
Gontmakher referred to recent examples of Putin’s style of making personal appearances to solve workers’ or consumers’ problems.
In June, he traveled to the town of Pikalyovo and ordered tycoon Oleg Deripaska to pay wages and restart production at a plant there. In July, he made a surprise visit to a Moscow supermarket and berated managers for their pork prices.
“But Putin obviously cannot solve everything himself,” Gontmakher said. That makes the situation all the more risky for him now, as Putin’s popularity ratings would crumble quickly if it becomes clear that he’s not living up to expectations.
“Let’s see were we stand in the fall or by the end of the year,” he said.
Russians Fully Back Medvedev and Putin
August 05, 2009
(Angus Reid Global Monitor) - The Russian Federation’s governing duo continues to enjoy a high level of public support, according to a poll by the Yuri Levada Analytical Center. 72 per cent of respondents approve of Russian president Dmitry Medvedev’s performance, while 78 per cent are satisfied with the job of Russian prime minister Vladimir Putin.
Support for both politicians is up one point since June.
Russian voters renewed the State Duma in December 2007. United Russia (YR)—whose candidate list was headed by then president Putin—secured 64.1 per cent of the vote and 315 of the legislature’s 450 seats. On that same month, Putin endorsed Medvedev as a presidential candidate, and Medvedev said it would be of the "utmost importance" to have Putin as prime minister.
In March 2008, Medvedev easily won Russia’s presidential election with 70.28 per cent of the vote. In May, Medvedev was sworn in as president. His nomination of Putin as prime minister was confirmed by the State Duma in a 392-56 vote.
On Jul. 26, Medvedev discussed Russia’s image abroad, saying, "Our image needs to be comfortable for those who deal with us. We should not be prickly and hard to approach, but at the same time we should be able to give a firm response when circumstances call for it."
Polling Data
Do you approve or disapprove of Russian president Dmitry Medvedev’s performance?
| |Jul. 2009 |Jun. 2009 |May 2009 |
|Approve |72% |71% |72% |
|Disapprove |23% |27% |23% |
Do you approve or disapprove of Russian prime minister Vladimir Putin’s performance?
| |Jul. 2009 |Jun. 2009 |May 2009 |
|Approve |78% |79% |78% |
|Disapprove |19% |19% |18% |
Source: Yury Levada Analytical Center
Methodology: Interviews with 1,600 Russian adults, conducted from Jul. 17 to Jul. 20, 2009. No margin of error was provided.
CSTO in Crisis as Moscow Secures Second Military Base in Kyrgyzstan
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Publication: Eurasia Daily Monitor Volume: 6 Issue: 149
August 4, 2009 10:57 AM Age: 15 hrs
Category: Eurasia Daily Monitor, Home Page, Foreign Policy, Military/Security, Kyrgyzstan, Russia, Featured
By: Roger McDermott
On August 1 the Russian President Dmitry Medvedev and his recently re-elected Kyrgyz counterpart Kurmanbek Bakiyev announced that a new Russian military base will open later this year in Osh in southern Kyrgyzstan. Symbolically important from Moscow's perspective, since Osh once hosted a Soviet airbase, the message appeared to signal throughout Central Asia that Russia is the region's security guarantor. Bakiyev's re-election largely depended on the support of his Kremlin allies, and the recent basing announcement was portrayed in Moscow as a foreign policy success for Medvedev (ITAR-TASS, August 1). However, the agreement confirmed how vulnerable the weak Kyrgyz state has become to Russian diplomatic pressure, mainly as a consequence of the promise to supply $2 billion in loans to prop up its failing economy.
According to the memorandum of understanding (MoU) signed during the informal Collective Security Treaty (CSTO) Summit in Cholpon Ata the final agreement on the status and conditions of both Russian bases in Kyrgyzstan will be reached by November 1. The agreement will expire after 49 years, and can be extended at 25 year intervals thereafter. Unlike U.S. basing rights in relation to Manas, all Russian military personnel will have diplomatic immunity. Currently, Russian military cargo cannot be inspected by the Kyrgyz authorities; which allows the uninhibited transportation of highly sensitive prototype designs to the Russian naval testing facility in Issyk-Kul. In addition to the second base, placed under the aegis of the CSTO, there will also be a Russian-led training center open to military personnel from all CSTO member states. Initially it envisages the deployment of up to one Russian airborne (VDV) battalion, though Foreign Minister Sergei Lavrov suggested this might be expanded as the negotiations proceed. The MoU states that these details will be resolved at a bilateral level (RIA Novosti, Interfax, NTV, Xinhua, August 1).
The Russian base in Osh is planned as an element of the new CSTO Collective Operational Reaction Force (CORF), which was first announced in February, and agreed at the Moscow summit on June 14. However, Belarusian President Alyaksandr Lukashenka and his Uzbek counterpart Islam Karimov refused to sign the agreement to establish the new force. Prior to the informal CSTO summit in Cholpon Ata, Russian media speculated that Lukashenka and Karimov might finally agree to become signatories and drop any opposition to a second Russian base in Kyrgyzstan (Kommersant, Nezavisimaya Gazeta, July 29). Nonetheless, neither leader did so -consequently the new basing agreement remains strongly opposed by Tashkent. Indeed, as it emerged that it might prove impossible to secure such objectives these issues were quietly removed from the informal summit's agenda.
Russian National Security Strategy until 2020, approved by Medvedev on May 12, prioritizes the CSTO as "a key mechanism to counter regional military challenges and threats" (.ru). In this context, Moscow has intensified its efforts to enhance its military footprint in Central Asia, despite reservations within the CSTO over militarizing the region. Since the Russia-Georgia war in August 2008, Russian pressure has also increased on Dushanbe to permit the opening of an additional base at Ayni (EDM, November 18, 2008). Justification for a second facility in Kyrgyzstan has proven weak, ranging from expressing anxiety over possible local Islamic militant activity to "protecting Kyrgyz sovereignty." Medvedev explained: "We met yesterday and discussed the current situation in the CSTO, reviewed its future prospects, explored what we can do, talked about common problems, common plans and common steps. The CORF exercises will be held soon and we are preparing for them together" (kremlin.ru, August 1).
CSTO members have been surprised by the manner in which this latest Russian initiative was conducted. Uzbekistan's objections to the proposed base are rooted in skepticism over its contribution to security and the lack of consensus within the CSTO (EDM, July 28). The new Russian base in Osh will be in close proximity to the Uzbek border, yet remarkably Uzbek diplomats confirmed to Jamestown that Moscow did not consult with Tashkent on the issue. In effect, Russian diplomats merely told their Uzbek counterparts that Russia intends to open a new base. Moreover, with the memory of the Russia-Georgia war still fresh within the region, there are also fears about the precise rules of engagement of these forces. In the event of a crisis in the Ferghana Valley requiring a military response, the risk that Russian forces might pursue militants across the Uzbek border is certainly not allayed by Moscow ignoring the need for Uzbek consent on forming the CORF or opening a base close to its border.
On August 3 the Uzbek foreign ministry confirmed its official opposition to the new Russian base. Tashkent questioned the need for such a facility, and suggested that the initiative might well destabilize the region:
"The implementation of such projects in this rather complex and difficult-to-predict territory, where the borders of three Central Asian republics directly meet, may render an impetus for strengthening the processes in terms of militarization and arousing various nationalistic confrontations, as well as the actions of radical extremist forces that could lead to a serious destabilization of the situation in the greater region" (Uzbek Foreign Ministry Statement, RIA Novosti, August 3).
The Russian vision for the development of the CSTO, its pursuit of an enhanced military footprint in the region combined with its aggressive diplomacy, which pays little respect to protocol or the interests of its allies within the organization, has effectively thrown the whole multilateral project into crisis. Moreover, the speed at which these Russian plans are being implemented in the region partly reflects the belief in Moscow that the first year of Obama's presidency will provide a window of opportunity to recalibrate the regional security dynamics more heavily in its favor. On July 29 a Russian military delegation arrived in Almaty for negotiations on staging the first CORF exercises scheduled for August 19 to October 24 at Kazakhstan's Matybulak training range. CSTO leaders are expected to observe the active phase of the exercise, though it currently lacks any legal basis (Kommersant, July 31; Vremya Novostei, August 3).
Medvedev's plans to use the CSTO to undermine the influence of the U.S. and NATO within Central Asia will now be tested during the next three months, since failure to achieve agreement amongst all member states might precipitate a far deeper crisis.
Russia Seeks to Boost Ties with Tajikistan
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Publication: Eurasia Daily Monitor Volume: 6 Issue: 149
August 4, 2009 11:08 AM Age: 14 hrs
By: Sergei Blagov
Russian officials have reiterated their continued interest in deepening bilateral cooperation with Tajikistan, while the authorities in Dushanbe appeared to remain hesitant on some issues. On July 31 the Russian President, Dmitry Medvedev, traveled to Tajikistan, and used the opportunity to launch a major joint project. Medvedev and his Tajik counterpart, Emomali Rahmon, jointly inaugurated the Sangtuda-1 hydropower plant, which is due to generate some 12 percent of Tajikistan's electricity output.
Russia has participated in the construction of the 670 mega watt Sangtuda-1 which started in April 2005, but the project has suffered numerous delays. Russian energy executives had pledged to launch the first unit of Sangtuda-1 in March 2007, but this was rescheduled until the end of 2007, and then March 2009. Repeated delays of the Sangtuda-1 project have been an irritant in bilateral economic relations. Nonetheless, the Kremlin reiterated interest in continued energy cooperation with Tajikistan. On July 31, Medvedev announced that both sides were drafting new energy agreements, but refrained from elaborating any further details (Interfax, RIA-Novosti, July 31).
In addition to Sangtuda-1, Moscow pledged to invest some $2 billion in the Rogun hydropower project. In August 2007, Tajikistan announced the decision to annul a cooperation agreement with Russia's aluminum giant Rusal to build the $1.3 billion Rogun hydropower plant. Subsequently, the Russian government confirmed its interest in the Rogun project, yet little progress has been achieved so far.
Bilateral economic ties have experienced a revival in recent years. In 2008, trade between Russian and Tajikistan amounted to $1 billion or 30 percent up year-on-year, according to Russian statistics. However, in January-May 2009, bilateral commerce was 22 percent down year-on-year due to the adverse effects of the economic crisis (Interfax, RIA-Novosti, July 30). In recent years Moscow has been wary of Dushanbe's perceived intention to restrict the use of the Russian language. The issue was apparently addressed at the latest bilateral summit. After the meeting, Medvedev's aide Sergey Prihodko said that Russia had no concerns about the use of the Russian language in Tajikistan. Rahmon expressed his interest in the continued use of the Russian language, Prihodko said (Interfax, RIA-Novosti, July 31).
Moreover, in addition to energy and cultural considerations, Russia also has significant security interests in Tajikistan. In April 1999, Russia and Tajikistan signed a treaty on alliance and partnership. In June 2004, Russia agreed to write-off Tajikistan's outstanding debt in exchange for the control over the Okno (Window) space surveillance complex and $50 million in Tajik investments in the Sangtuda-1 project. During Vladimir Putin's visit to Dushanbe in October 2004, Russia formally took over the Okno complex. Located in the Tajik mountainous region near the border with China this has remained an important foreign-based installation for Russia. On July 31, Medvedev visited the Okno facility near Nurek and hailed the continued operation of the space surveillance complex (Interfax, RIA-Novosti, July 31).
Russia also maintains a strong military presence in Tajikistan. Russia had about 20,000 troops in the country comprised of the 201st Motor Rifle Division (MRD) and its Federal Security Service (FSB) border guards in Tajikistan. In October 2004, Russia secured the status of a permanent military base for the 201st MRD in Dushanbe. Moscow also secured a 49-year land lease deal for the space surveillance complex at Nurek at a symbolic $0.39 per year. From October 1, 2005, the 201st MRD was officially transformed into Russia's 201st base in Tajikistan. Russia now maintains garrisons in Dushanbe, Kurgan-Tebe and Kulyab.
Security and economic issues dominated the agenda of the latest high level meetings. On February 24 Medvedev met Rahmon at his Zavidovo residence outside Moscow. Although no particular agreements were announced after this meeting, Rahmon was widely thought to want better terms on security and energy deals, as a type of compensation for loyalty. Moreover, Rahmon was believed to want more money for the use of the Russian military facilities in Tajikistan. On July 30, the Kommersant business daily speculated that Rahmon was keen to extract Russian payments for the 201st base deployment. As international prices of Tajikistan's main exports, aluminum and cotton, remain low the Tajik authorities desperately need new cash inflows and require financial incentives from Russia, the daily wrote (Kommersant, July 30).
The issue of payment for the use of the Russian military facilities in Tajikistan was reportedly discussed at the latest bilateral summit. Medvedev and Rahmon ordered government officials to negotiate the terms and conditions for the 201st base, Prihodko announced. During their talks, both leaders did not discuss any details of bilateral military cooperation, he argued. (Interfax, RIA-Novosti, July 31). Therefore, no concrete agreements were concluded and consequently the issue will remain a matter for future bilateral negotiation.
Meanwhile, Moscow reiterated that its policy in Central Asia has a strong international dimension. On July 30, Medvedev attended a summit meeting with the leaders of Afghanistan, Pakistan and Tajikistan, and hailed it as a "new form of dialogue," aimed at boosting regional security, and maximizing Russian influence (Interfax, RIA-Novosti, July 30).
Russia's Obama: No, he can't, at least not now
By KARINA IOFFEE (AP) – 35 minutes ago
SREDNYAYA AKHTUBA, Russia — An African-born farmer is making an improbable run for office in Russia, inspired by President Barack Obama and undaunted by racial attitudes that have changed little in decades.
Joaquim Crima, a 37-year-old native of Guinea Bissau who settled in southern Russia after earning a degree at a local university, is promising to battle corruption and bring development to his district on the Volga River.
In Russia, a black man running for office is so unusual that Crima is being called "the Russian Obama."
"I like Obama as a person and as a politician because he proved to the world what everyone thought was impossible. I think I can learn some things from him," Crima said, sitting on his shady verandah in this town of 11,000, where he lives with his wife Anait, their 10-year-old son and an extended clan of ethnic Armenian relatives.
In truth, Crima's quest to become head of the Srednyaya Akhtuba district is highly unlikely, not least because he lacks the political capital and connections to make it happen. He faces the reality of being a black man in Russia, a country where racism and racial stereotypes are deeply ingrained.
"They are often taunted on the metro and in the market,'" said Lydia Troncale of the Moscow Protestant Chaplaincy, a nonprofit organization that works with African immigrants.
Crima gets along well with his fellow townspeople, but to play it safe he is accompanied almost everywhere by his muscular brother-in-law.
Last December, a black American exchange student was stabbed and badly wounded in Volgograd, the nearest large city, in what was believed to be a racially motivated attack.
Crima, who came to Russia in 1989 and holds a degree from Volgograd State Pedagogical University, believes he has what it takes to fix problems in his district, where some residents still lack potable water and use outhouses. Unpaved streets, where goats graze, turn to mud after a rain.
About 55,000 people live in the district's 18 villages and towns.
"The current district head has been in power for 10 years, but he hasn't done anything for people here," said Crima. "There are young families that need housing, who need opportunities. This town and Russia are ready for a change."
Crima wanted to come to the Soviet Union because it supported his West African homeland when it gained independence in 1974. He describes Russia as a "great power" and admires Prime Minister Vladimir Putin. He married a local woman, learned to speak fluent Russian and earned his citizenship.
He farms 50 acres (20 hectares) of land, growing watermelons and other melons, which he and his wife sell along the town's main road. He employs about 20 people to help.
But for many of Crima's neighbors, that's not enough.
"He hasn't lived all of our issues and he didn't grow up around us; he's not a kolkhoznik," said produce vendor Vladimir Kachenko, using the term for people who work on collective farms. "If I need help building a house, he can't help me get the required permits because he hasn't gone through it himself."
Still, many in town admire Crima's audacity. When he walks down the street in a crisp white shirt and tie, residents shake his hand and congratulate him on his decision to run.
"I haven't heard his platform, but he's a nice person," said Dennis Duma, 27. "I would change my party affiliation for him."
Privately, however, some laugh at what they see as Crima's naivety. A department store saleswoman who refused to give her name said she would not vote for him because she doesn't want to "live in Africa." Another said she would not vote for a Negro.
In Russia, such baldly racist sentiments are common. Crima himself put up billboards that read: "I will toil like a Negro" — a phrase Russians use to mean they will work hard.
The billboards were up for only a couple of days before being replaced by ads for the main pro-Kremlin party's candidate, Yuri Khrustov, a former teacher.
Crima is a member of Russia's main party, United Russia, but is running in the Oct. 11 election as an independent. There are five other candidates.
His candidacy is part of a standard tactic in Russia used to draw the protest vote and allow people to vent frustration while posing no threat to the government's favored candidate, said Anna Stepnova, editor of Delovoye Povolzhye, a newspaper in Volgograd.
Crima's campaign manager, Vladimir Kritsky, acknowledged that a victory for his client was close to impossible, but said the Kremlin has promised Crima a seat on the district council in 2011.
"He will be able to do a lot of good for the region," said Kritsky, a 33-year-old former special operations commander. "He's a very smart guy, he speaks five languages ... this is an experiment that the Kremlin will be interested in supporting."
There is deep dissatisfaction with the current head of the Srednyaya Akhtuba district, who locals say sold a lot of land to out-of-towners while purchasing a large villa and a plane for himself. The incumbent is not running for re-election.
Despite that, many in Srednyaya Akhtuba see no point in voting in elections they say are already predetermined.
"I've lost hope in our system and our people," said Taisya Kirilova, 64. "He can want to change things, but alone, he can't accomplish anything."
Crima shrugs off voters' cynicism.
"If local residents want a change, they need to vote for it," Crima said. "Plus, I like surprising people."
August 4, 2009
The Last Thief
By Albina Kovalyova
Russia Profile
An Attack on the “Godfather” of the Russian Underworld Signals More Trouble to Come
On June 28, one of Russia’s most respected and feared criminals was shot outside a Thai restaurant in northern Moscow. Vyacheslav Kirillovich Ivankov, also known as “Yaponchik” or “the Little Japanese” due to the squint of his eyes, was shot three times in the stomach by a sniper. He was rushed to hospital for emergency treatment, where he remains in a serious but stable condition. But speculation about the reasons behind the assassination attempt shows no sign of abating. Why was such a supposedly respected figure targeted? And is this the end of the road for the old criminal brotherhood he represents?
“People like him never become pensioners,” Andrei Konstantinov, a top investigative journalist and author of the book “the Bandits’ Russia,” told the news website GZT.ru. The 69-year-old Ivankov has a long history as an authority in the criminal world. He has gained a reputation for being one of the few remaining “vori v zakone” or “thieves in law,” who operate according to a particular code of honor.
Ivankov started his career working for Gennady Korkovi, a crime boss known as “the Mongol,” who led a gang specializing in extortion of underground millionaires and illegal businesses. In1982 he was caught transporting weapons, and was arrested and jailed. The next ten years were spent in “Zona,” or prison camp, in the Irkutsk Region of Siberia. It was during this stint in prison that Ivankov became a “thief in law” (another requirement of bandits’ honor is that one must serve jail time before being eligible to join the brotherhood).
While doing his time he repeatedly violated the prison regulations – one clause of the thieves’ code requires prisoners not to cooperate with the prison authorities. But in 1992 Ivankov was freed, four years early, after the intervention of a government minister and a high-ranking legal official.
Yaponchik then fled to the United States, ostensibly to take part in a film production by the Russian director Rolan Bykov. Although it is unclear what his involvement in the project actually was, the association with the director is not as ludicrous as it sounds. Ivankov has earned himself a reputation for being well educated and an interesting personality, and apart from his connection to Bykov, was seen in the company of Iosif Kobzon, a famous singer and songwriter, and at least one State Duma deputy. Other acquaintances included influential businessmen. “He is not an amiable character, but he is very interesting, and spent time in the company of leaned and intellectual people,” said one source who has met Ivankov.
In America, however, he did not give up his old habits. He was known for his involvement in the Russian mafia based in New York's Brighton Beach, and in 1995 he was arrested and tried for extorting several million dollars from a Russian-run investment advisory firm. In 2004 Ivankov was deported to Russia to stand trial for murders allegedly committed before his departure. He was acquitted the following year.
Since then he has kept a low profile, though he has been spotted in Russia from time to time. Mark Galeotti, academic chair at New York University’s Department of Global Affairs and an expert on the vori v zakone, believes that he is symbolic of the decline of the old criminals who have been pushed out by new entrepreneurial criminals. “We already see more and more people ignoring the old ways. When times were good and the economy was expanding and there was more than enough money splashing around for everyone, in a way people could refer to the code. Now times are hard, and you have a generation of criminals who are saying we don't really care – we have the men, we have the guns we have the money – that's what counts, rather than any old-fashion notion of authority, and being crowned in the gulags,” he said.
The “thieves in law” once dominated Russia's criminal underworld. Although the code of the “vori” predates the revolution, the golden age came during Stalin's regime, when they in effect came to control the inner workings of the Gulags. They are now a minority in the criminal world since the rise of new, unaligned bandits in the 1980’s and 90’s.
Galeotti explains that unlike modern gangs that rely on force, backup and business influence, the older generation of “thieves” – like Yanponchik - were powerful thanks to their reputation. “The vori v zakony were always about their own personal characteristics, rather than because they were gang leaders. They were also gang leaders, but that was almost a secondary function. One of the key points about vori was that they were the people who were regarded with respect generally,” he said.
The old “thieves’ law” regulated almost all areas of adherents’ lives and was strictly enforced. Thieves had to be modest about their acquired wealth; they could make a living only through criminal activity; they could not under any circumstance cooperate with the state or the police; and a thief could not steal from other thieves in the same way he could from other people. But the new generation of criminals that has emerged in Russia in the past two decades has broken some if not all of this code. Many, for example, have links to legitimate business as well as crime, and have some dealings with the authorities, which was absolutely prohibited under the “thieves’ law”.
Although Ivankov is known as a follower of the old code, he lived through the changes in the criminal world over the last thirty years. Galeotti believes that it is Ivankov's knowledge of both approaches that has gained him such a high level of respect in the contemporary underworld. “I think he bridges the gap between the old school vori and the modern criminals; he is very clearly of the former camp himself, but has shown that he can work with the other side,” he said.
Various sources claim that Ivankov’s status as the godfather of the Russian mafia was largely due to his loyalty to the old principles, and that this has often led other criminals to seek his advice - and even arbitration in disputes. In “the Bandits’ Russia,” Konstantinov argues that Ivankov was needed to unify the various feuding Moscow gangs against the threat of Asian groups arriving in the capital during the1990s.
In the current mystery surrounding the cause of Ivankov’s assassination attempt, more than one Russian paper has suggested his involvement in arbitrating disputes may have been his undoing. Gazeta.ru argued that he had been playing a similar diplomatic role between various criminal groups before he was shot. RIA Novosti reported that he had been residing outside of Russia recently, but “had continued to play the role of an arbiter in the Russian criminal community”.
Even though modern criminals disavow the old code and its vision of a brotherhood of thieves, they have – until now – been careful to avoid stepping on each others’ turf. That’s where the pundits see a role for universally trusted elders like Yaponchik. However, with the economic downturn and the recent banning of casinos in Moscow, they may now be feeling the pressure. Galeotti predicts an increase in turf wars between criminal rivals. “There is going to be more and more people scrambling for resources. There is going to be trouble in the second half of the year.”
National Economic Trends
Russia c.bank injects 28.5 bln roubles via repos
MOSCOW, Aug 5 (Reuters) - The Russian central bank injected 28.5 billion roubles ($912.3 million) of one-day funds into the banking system at a rate of 8.22 percent in its first auction of the day on Wednesday.
The minimum interest rate was set at 8.0 percent, and a maximum of 30 billion roubles had been on offer for the two repo auctions scheduled for the day.
Following are results of the latest auction, provided by the central bank on its Web site (cbr.ru):
Date Aug 5 Aug 4 Aug 4
Session 1st 2nd 1st
Amount (bln rbls) 28.52 0.43 22.53
Bids (bln rbls) 28.52 0.43 22 53
Average rate 8.22 8.71 8.26
NOTE - For details of central bank repo tenders click here .
($1=31.24 Rouble) Keywords: RUSSIA REPOS/FIRST
(Moscow Newsroom; +7495 775 1242; moscow.newsroom@)
Russia daily c.bank swap limit at 5 bln rbls
08.05.09, 03:34 AM EDT
MOSCOW, Aug 5 (Reuters) - Russia set the daily limit for currency swap operations with the central bank at 5 billion roubles ($160.1 million) on Wednesday, the same as in the previous trading session.
Limits on how much foreign currency banks can swap for roubles in the central bank were introduced from Oct. 20 in a bid to hinder currency speculators. Operations which do not involve the central bank are unaffected. ($1=31.24 Rouble) Keywords: RUSSIA SWAP/
(Moscow Newsroom, +7495 775 12 42, moscow.newsroom@)
Russia: Bond, Currency Preview
…
Russia: The Federal Service of State Statistics releases weekly data on consumer prices. In the year to July 27, inflation was 7.9 percent.
The government is due to sell 15 billion rubles ($483 million) of OFZ Federal Loan Bonds.
The ruble weakened 0.4 percent to 31.0740 per dollar.
The yield on the 6.9 percent government bond due in February 2036 rose 12 basis points to 11.66 percent.
To contact the reporter on this story: Beth Mellor in London bmellor@; John Kohutjkohut@.
Last Updated: August 4, 2009 20:00 EDT
Russian Services PMI Shrinks at Second-Slowest Pace in July
By Alex Nicholson
Aug. 5 (Bloomberg) -- An index of Russian service industries ranging from banks to mobile-phone retailers shrank at the second-slowest pace since the contraction began in October, VTB Capital said.
The Purchasing Managers’ Index fell to 48.5 from 49.7 in June, VTB Capital said in an e-mailed statement today. A reading below 50 indicates a contraction. The survey of 300 purchasing managers at service companies began in October 2001.
“Receipts of new business were down at a faster rate than in June, but activity fell only modestly as firms completed existing contracts,” the report said.
Retail sales declined an annual 6.5 percent in June, the most since September 1999, as high unemployment and falling incomes forced Russians to curb spending. Russia’s unemployment rate in June was 8.3 percent as the worst financial crisis since the 1998 debt default and ruble devaluation crushed demand and forced companies to shed staff.
The gauge of service industries recorded a record drop of 36.4 in December.
“A further sharp reduction in employment was registered,” the report said. “Job losses have been maintained for the past 10 months and the rate of reduction quickened slightly in July.”
The seasonally adjusted services PMI is a composite of five differently weighted indexes including business, employment and new, outstanding and future business, according to VTB.
To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@.
Last Updated: August 5, 2009 00:00 EDT
PMI: Rate of decline in services activity remains modest in Jul
MOSCOW, Aug 5 (PRIME-TASS) -- The rate of deterioration in Russian service sector business conditions at the start of the third quarter was weaker than the trend seen on average over the previous three quarters, London-based VTB Capital said in its latest survey of the sector released Wednesday.
Receipts of new business were down at a faster rate than in June, but activity fell only modestly as firms completed existing contracts, the bank said.
The seasonally adjusted headline Russian Services Purchasing Managers Index (PMI) fell further below the neutral threshold of 50.0 in July, signaling a faster overall contraction, but stood at 48.5, the second-highest level of the current 10-month period of decline. Readings above 50.0 signal an increase on the previous month, while readings below 50.0 signal a contraction.
The month-on-month fall in the headline index primarily reflected faster declines in new business and employment, as the activity component was little-changed from June, VTB Capital said.
“In July, the Russian Services PMI failed to break through the no-change 50 mark and stayed at 48.5, although this was still the second highest level in the last ten months. The lack of demand resulted in a decline of new orders, which was particularly evident in the Financial Intermediation subsector. However, the existing backlogs compensated for the negative trend and overall business activity remained little changed,” Svetlana Aslanova, an analyst at VTB Capital, commented on the survey.
Although new business fell at a sharper rate in July, business confidence in the service sector remained robust, VTB Capital said. More than half of the survey panel predicted growth of activity in their businesses over the next 12 months.
The Russian Services PMI is derived from a monthly survey of 300 purchasing executives in Russian services companies. It has been conducted since October 2001.
VTB Capital plc is a London-based subsidiary of Russia's second largest bank, government-controlled VTB Bank. VTB Capital was previously known as VTB Bank Europe.
Fitch Affirms Russia Long Term Currency Ratings; Outlook Negative
4 hours ago
(RTTNews) - Tuesday, Fitch Ratings affirmed Russia's long-term foreign and local currency Issuer Default Rating or IDR at 'BBB', with negative outlooks. At the same time, the firm affirmed the short-term foreign currency IDR at 'F3' and the Country Ceiling at 'BBB+'.
"The Russian economy and sovereign balance sheet have been severely affected by the global financial crisis and, despite signs of economic and financial stabilization since March, risks to creditworthiness remain on the downside," Edward Parker, Head of Emerging Europe in Fitch's Sovereigns team said.
The Russian economy contracted 10% year-on-year in the first half of this year, far worse performance than in other larger emerging markets. Moreover, foreign exchange reserves fell by US$200 billion over the past 12 months, Fitch said.
On the other hand, Fitch pointed out that public finances were Russia's sovereign rating strength. General government debt was only 8% of GDP at end-2008, well below the 'BBB' range 10-year median of 35%. Moreover, the country had US$184 billion in its Reserve Fund and National Wealth Fund, which provided a strong liquidity position to finance budget deficits.
At the same time, the firm said a fall in oil prices and anti-crisis measures would cause the federal budget to swing from a surplus of 4.1% of GDP in 2008 to a deficit of 8.5% in 2009 and 6% in 2010. "Even with a return to the eurobond market next year, this will cause the Reserve Fund to be depleted in 2010 and require significant fiscal consolidation over the medium-term", Fitch said.
Meanwhile, the firm forecasts Russia's GDP to contract 7% in 2009, before increasing 3.5% in 2010.
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Russia’s Rating May Be Cut on Downturn, Oil Prices, Fitch Says
August 04, 2009
By Paul Abelsky
Russia may have its debt rating cut by Fitch Ratings if the global slowdown worsens and oil prices slump, hampering the country’s ability to finance the budget deficit.
“The Russian economy and sovereign balance sheet have been severely affected by the global financial crisis and, despite signs of economic and financial stabilization since March, risks to creditworthiness remain on the downside,” Edward Parker, Fitch head of Emerging Europe Sovereigns, said in a report.
Fitch today affirmed Russia’s rating at BBB, the second- lowest investment grade, after cutting it in February for the first time since 1998 after falling oil prices contributed to dwindling foreign currency reserves and record capital flight. Russia’s gross domestic product contracted 10.1 percent in the first half, according to the Economy Ministry.
The economy of the world’s biggest energy exporter may slump 7 percent this year and gain 3.5 percent next year as companies rebuild inventories, oil prices recover and the government channels its stimulus package, Fitch said.
The government has sufficient foreign-currency reserves to plug the fiscal gap and oversee a counter-cyclical fiscal policy, the ratings agency said. The value of the stockpile climbed $4.3 billion to $402.4 billion in the week ended July 24. Russia will probably run a deficit of 8.5 percent of GDP in 2009 and 6 percent next year, Fitch said.
Budget Deficit
“A failure to narrow the budget deficit and a consequent rapid increase in government debt and depletion of the sovereign wealth funds could lead to downward pressure on the ratings in the medium term,” Fitch said in the report.
The government expects next year’s shortfall to reach 7.5 percent of GDP after running a deficit of as much as 9.3 percent in 2009. Russia quadrupled the amount it plans to raise next year to 613.6 billion rubles ($20 billion) in the government’s first international sale since defaulting on $40 billion of domestic debt more than a decade ago.
The country’s banking industry is also a “key credit weakness,” Fitch said. Russian lenders’ non-performing loans may reach 25 percent of the total by the end of this year, requiring $22 billion in recapitalization, according to the report.
Russia to export 23 mln tonnes of grains
08/05/2009 10:11
According to preliminary forecasts, in 2009, grain harvest in Russia will probably total 85 mln tonnes, as opposed to 108 mln tonnes in the previous year, declared Vladimir Putin, the Prime Minister of the Russian Federation, on August 4.
According to the head of the government, the volumes will completely satisfy the domestic requirements of the country.
In the current year, Russia plans to export nearly 23 mln tonnes of grains, added Elena Skrynnik, the Minister of Agriculture. Russia plans to keep leading positions in the world among other exporters of grains, added E.Skrynnik.
To date, Russia takes the 4-5 place among grain exporters in the world, but several years ago the country had to import grains, added V.Putin.
Business, Energy or Environmental regulations or discussions
RusHydro Seeks Tariff Hike
RusHydro asked the government to increase the tariff at which the state-run company can sell electricity next year by 6 percent, Yevgeny Desyatov, head of sales, said Tuesday.
The rise still won’t provide RusHydro with enough money to cover investments in new capacity. The so-called investment component is being decided on by various government agencies, he said. (Bloomberg)
UPDATE 1-Russia Rushydro ups '09 profit f'cast, stock soars
Tue Aug 4, 2009 9:53am EDT
* Almost doubles 2009 revenue forecast to 128.8 bln rbls
* Boosts EBITDA outlook to 51.1 bln rbls
* Moscow-traded stock rises more than 7 pct
(Adds details)
MOSCOW, Aug 4 (Reuters) - Russian hydro-electricity producer Rushydro (HYDR.MM: Quote, Profile, Research, Stock Buzz) almost doubled its 2009 revenue forecast and raised its outlook for core earnings, sending its stock up more than 6 percent.
Sergei Terebulin, Rushydro's head of corporate finance, said on Tuesday the company expected earnings before interest, tax, depreciation and amortisation (EBITDA) to reach 51.1 billion roubles ($1.64 billion) this year, up from an earlier forecast of 48.3 billion.
Terebulin, speaking on a conference call with analysts, said revenues for 2009 were expected to reach 128.8 billion roubles, compared with the company's previous forecast of 68.9 billion.
He did not give immediate explanation for the change.
Rushydro forecasts net profit at 30.2 billion roubles in 2009, Terebulin said. This would signal a swing from a net loss of 19.5 billion roubles in 2008, when revenues reached 107.7 billion roubles.
The improved outlook helped push the value of Rushydro's stock up 7.1 percent to 1.1300 roubles per share at 1349 GMT on Russia's MICEX exchange. The broader index was trading flat. (Reporting by Anastasia Lyrchikova, writing by Simon Shuster; editing by Mariam Karouny)
RusAl Talking to Japan
United Company RusAl entered talks on fourth-quarter sales of aluminum to clients in Japan after the spot-market premium in the Asian country over London prices almost doubled this year, RusAl spokeswoman Vera Kurochkina said Tuesday.
“Now, we are traditionally negotiating fourth-quarter deliveries with our Japanese clients,” she said.
The company halted some Japanese deliveries after agreeing in June to sell as much as 1 million tons of aluminum to Glencore International, Dow Jones reported June 16. (Bloomberg)
From Tower to Parking Lot
Billionaire Oleg Deripaska’s Basic Element agreed to build a temporary parking lot in Moskva-City on a site previously earmarked for the Russia Tower, Kommersant said.
Parking for 530 cars may occupy the space instead of a 118-story skyscraper that Shalva Chigirinsky failed to build because of the economic crisis, the newspaper reported Tuesday, citing a decision made by Mayor Yury Luzhkov on Aug. 1. (Bloomberg)
Uralkali Scraps Planned Potash Increase at Government Request
By Ilya Khrennikov
Aug. 5 (Bloomberg) -- OAO Uralkali, Russia’s largest potash producer by market value, agreed to a government request to scrap a planned 20 percent increase in domestic prices.
The company will keep prices at 3,955 rubles ($127) a metric ton this year for sales to Russian fertilizer producers, Alan Basiev, a spokesman for Uralkali in Moscow, said today in an e-mail.
Uralkali agreed to sell potash to Indian Potash Ltd. at $460 a ton in July.
To contact the reporter on this story: Ilya Khrennikov in Moscow ikhrennikov@
Last Updated: August 5, 2009 02:43 EDT
Tyumen Airport Started Landing Airbus Aircraft
04.08.2009 — News
The Federal Agency for Air Transport issued the Roshchino Tyumen airport a permission to land Airbus-319 and Airbus-320 aircraft. Out of foreign mid range aircraft Tyumen could only land Boeing-737 and Boeing-757 before.
The airport informed RusBusinessNews that UTair and Yamal air carriers use Boeing aircraft for scheduled services from Tyumen to Munich and Prague.
The first airbus to fly to Tyumen was Aeroflot's. The carrier will use this aircraft on the Moscow-Tyumen line. Moreover, the state owned carrier "Russia" flying from Saint Petersburg, also has Airbus in their fleet.
Activity in the Oil and Gas sector (including regulatory)
Caspian pipeline consortium in January - July, 2009 increased oil export by 12.2 %
[11:09] 05.08.2009, Kazakhstan Today
|Caspian Pipeline Consortium (CPC) in January - July, 2009 has increased export of oil from the terminal Southern Ozereyka-2 by |
|12.2 % in comparison with the similar period of last year, "Kazakhstan Today" agency reports citing CPC. |
|According to the company, 20 million 121.637 thousand tons of oil as compared to 17 million 936.645 thousand tons during the |
|similar period of 2008 have been transported through CPC system to Novorossisk port in January - July 2009. |
|2 million 948,994 thousand tons of oil was shipped in July, 2009 that is by 20.1 % more than in July, 2008 (2 million 454.873 |
|thousand tons). |
|Russia announces eastern gas program |
| |
|Wed, August 05, 2009 |
|The Russian Government has announced a project to develop the gas sector in Eastern Russia, as part of its long term plan to |
|develop and unify gas production in the Far East. |
|The project includes the construction of a system of gas pipelines to unite proposed gas production hubs in the Krasnoyarsk |
|Territory, the Irkutsk region, the Republic of Sakha (Yakutia), the Sakhalin region and the Kamchatka Territory. |
|The hubs are projected to produce approximately 150 Bcm of gas by 2020. |
4 August 2009
Global perspectives: Russia oil firm picks up stake in Europe
By Cris Whetton
Russia’s LUKoil gained a foothold in the Netherlands, snatching a stake in Total’s 153,000 bpd Vlissingen refinery from under the nose of Valero, the largest U.S. refiner.
The deal coincided with a state visit to the Netherlands by Russian President Dmitry Medvedev. The Putin regime encourages Russian companies to invest abroad as a way of increasing its foreign influence. The move was a major setback to Valero’s efforts to win a stake in Europe, where it has said it wished to buy refineries and take advantage of cross-Atlantic trading opportunities. Total, which has won positions in some of the most prized oil projects on former Soviet territory, hailed a new era in its relationship with LUKoil, 20% owned by U.S.-based ConocoPhillips. Total will retains a 55% stake in the refinery. Total said it had exercised pre-emptive rights to buy Dow’s stake in the refinery, Total Raffinaderij Nederland and sold it on to LUKoil. A Total spokesman declined to say why the company had engaged in the transaction. Most analysts see the deal as a way to secure cheaper crude for the refinery, with LUKoil in a position to guarantee crude supplies, even though these tend to be heavier, high sulphur crude grades.
Valero said a month before it had agreed to buy the 45% stake in Vlissingen from Dow Chemical Co., although it warned shareholders it was subject to right of first refusal by Total. Valero Chief Executive Bill Klesse had described the minority stake as an “exceptional entry point” into Europe. Following the announcement, Klesse said, “Although we are disappointed with the result, we will continue to seek opportunities to acquire high-quality assets at attractive prices.”
Dow Chemical, which has been raising cash through asset sales to help reduce debt accumulated from its purchase of Rohm & Haas, said Total’s move would not affect the amount or the timing of the transaction. LUKoil said it expected to pay around $725 million, matching the price Valero was expected to pay Dow.
The Dutch purchase was LUKoil’s first success after years of failed attempts to acquire downstream assets in northwest Europe, a key market for the crude from its fields in the Timan-Pechora province in Russia’s north.
Cris Whetton is InTech’s European correspondent.
KBR Awarded FEED Contract by VCNG for Eastern Siberia Oil Project
August 04, 2009 04:05 PM Eastern Daylight Time
HOUSTON--(BUSINESS WIRE)--KBR (NYSE:KBR) today announced that it has been awarded a contract by Verkhnechonskneftegas (VCNG) to provide front-end engineering and design (FEED) services for the VC FFD Project located in the Eastern Siberia region of Russia.
KBR will provide FEED services for a single new build, 140,000 barrels of oil per day facility, which will be tied back via a new 85-kilometer pipeline, to the existing East Siberian Pacific Ocean (ESPO) pipeline.
The VC oil & gas field is planned to produce a plateau production of 140-kbopd from 430 production wells, and there will be 215 water injection wells. The field development will involve total 645 wells distributed over 75 well pads. The reservoir is about 1700m depth and initial reservoir pressure is about 2,250 psia, with a reservoir temperature from 12C to 20C.
The project award marks the first contract between VCNG and KBR and builds upon the existing relationship between TNK-BP and Granherne, a KBR subsidiary. Work on the project is already underway.
“This award solidifies our relationship with both VCNG and TNK-BP, and is further evidence of KBR’s commitment to establishing our continuing presence in Russia,” said John Rose, President, KBR Upstream. “We look forward to executing this project and I am confident this will be a successful FEED for the Eastern Siberia program.”
KBR is a global engineering, construction and services company supporting the energy, hydrocarbon, government services and civil infrastructure sectors. The company offers a wide range of services through its Downstream, Government and Infrastructure, Services, Technology, Upstream and Ventures business segments. For more information, visit .
Russians sign accords in Nicaragua, Venezuela
Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Aug. 4 – The Nicaraguan government, following the lead of Venezuela, has signed an agreement allowing exploration by a Russian consortium.
"The concessions include the Caribbean and Pacific, both offshore and on land," said Francisco Lopez, president of the Nicaraguan Petroleum Enterprise. He said a technical board would be installed to analyze implementation of the agreement.
Russia’s Deputy Prime Minister Igor Sechin said the proposed exploration in Nicaragua would be carried out by the Russian National Oil Consortium, created on Oct. 8, 2008, and comprising Rosneft, Gazprom, Lukoil, TNK-BP, and Surgutneftegaz.
Sechin did not say how much Russia could invest in Nicaraguan exploration, saying only, "We must first carry out in-depth studies to calculate the investments.”
Nicaragua last September became the only country to join Russia in recognizing the independence of Abkhazia and South Ossetia from the small Caucasus state of Georgia.
A month earlier, Russian military forces had invaded Georgia, a former Soviet republic, and forced the shutdown of major international oil and gas pipeline operations.
Prior to his visit to Nicaragua, Sechin also met with Venezuelan President Hugo Chavez and signed a range of economic agreements including one between OAO Gazprom and Petroleos de Venezuela on a joint venture in oil and gas services.
The Venezuelan newspaper El Universal reported the joint firm will take over some gas compression plants formerly operated by Exterran Holdings Inc.
Earlier this year, according to El Universal, PDVSA nationalized nearly 50 gas units of Exterran after a new law gave the state-run firm control over the operation of several oil services, such as gas compression and gas injection, as well as transport of oil workers and equipment in Lake Maracaibo.
Contact Eric Watkins at hippalus@.
AUGUST 5, 2009, 3:05 A.M. ET
TNK-BP To Build New Gas Processing Plant By 2012
MOSCOW (Dow Jones)--BP PLC's (BP) Russian joint venture TNK-BP Ltd. plans to construct a new gas processing facility, which will enable the company to utilize almost 100% of its associated gas by 2012, the company said Wednesday.
Capacity at the new plant, which will be build in Russia's Orenburg region - one of TNK-BP's key production areas - will total 450 million cubic meters of gas a year, the company said.
The new plant will allow TNK-BP to bring the overall level of flared associated gas utilization up to almost 100% by 2012, a company spokeswoman said. TNK-BP is already in the process of revamping gas pipelines and gas compression stations as well as expanding TNK-BP's existing Zaikino gas processing plant in the Orenburg region.
The company said the new plant will cost "several hundred million dollars."
TNK-BP, owned on a 50-50 basis by BP and a group of Russian businessmen, is Russia's third biggest oil producer with a daily output of around 1.43 million barrels of crude a day.
Company Web site: tnk-
-By Jacob Gronholt-Pedersen, Dow Jones Newswires; +7 495 937 8445; jacob.pedersen@
Hungary MOL to resolve ZMB gas issue with Russneft this week – paper
Wednesday, August 5, 2009 08:45:00 AM
Hungarian fuels group MOL is currently in talks with a delegation of Russia's Russneft in Budapest. The parties may reach an agreement about the utilisation of associated gas at their jointly-owned oil field ZMB already this week, local business daily Világgazdaság reported on Wednesday.
The paper said the parties may find a solution to the pressing issue by the end of the week. MOL spokeswoman Dóra Somlyai has confirmed that there are talks between the two companies, adding that reconciliation is continuous.
Bloomberg learned that officials of the two companies are presently in Budapest.
On July 2 Russia's subsoil agency, Rosnedra, gave the Zapadno-Malobalykskoye LLC oil venture, held jointly (50-50%) by MOL and Russneft, six months to correct violations relating to its drilling plant and its use of so-called associated gas, threatening to revoke their permit if they fail to comply.
Tensions between MOL and the Russian government have increased since Moscow-based OAO Surgutneftegaz bought a 21.2% share in MOL from Austria's OMV in March. MOL called the move hostile and has still not allowed the Russian company to participate in corporate meetings.
MOL did not participate in a board meeting called by the ZMB project company for 20 July, where the parties would have tackled the issue of a new gas-fuelled power plant. MOL said it did not go to the BoD meeting as it had not been convened by the Chairman of the Board as it should have been.
The meeting was called to vote on investing in a new gas-fired power station that would not only provide the facility with electricity, but also allow making use of the so-called associated gas that is produced in conjunction with crude oil, rather than burning it off.
Investing in the 800 million-rouble (cc. USD 25.25 million), 16-megawatt plant is the group's “best option," considering the time constraints, Larisa Kalacheva, a spokeswoman for Russneft told Bloomberg in an e-mail in late July.
Vyksa pipe deliveries to Nord Stream reach 200,000 tonnes
Wednesday, 05 Aug 2009
The Russian steel and pipe producer United Metallurgical Company has announced that, since the commencement of deliveries in May this year its Novgorod based pipe producer Vyksa Steel Works has supplied more than 200,000 tonnes of large diameter pipes for the construction of the first line of the Nord Stream gas pipeline.
The pipes of 1,219mm diameter and with wall thicknesses of 30.9mm, 34.6mm and 41mm are manufactured from high quality steel of K70 strength class with external three layered anti corrosive coating and internal smooth coating.
As SteelOrbis previous reported up to November this year OMK subsidiary Vyksa is expected to deliver 262,600 tonnes of LD pipes, i.e 25% of the total orders for the pipeline project. The supply contract between OMK and Nord Stream AG was signed on November 6th 2007.
Mr Vladimir Kochetkov executive director of Vyksa said currently, OMK is participating in the tender for the supply of pipes for the construction of the second line of the Nord Stream gas pipeline. We expect to succeed and are ready in March 2010 to start the pipe production.
(Sourced from SteelOrbis)
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Murmanshelf Logistics established
2009-08-05
Several companies have joint forces about the establishment of the Murmanshelf Logistics, a consortium intended to facilitate shipping and goods transport in connection with the Shtokman field development.
Among the companies are Murmansk Shipping Company, Barents Logistics, Wilson Murmansk, the International Customs Terminal and Rambøll.
The new consortium will also seek to engage in the development of the Murmansk Transport Hub, a major infrastructure project with primary focus on new port, railway development in Murmansk, Murman.ru reports.
The consortium will also operate as part of Murmanshelf, a network on petroleum supply companies in the Murmansk region.
Gazprom
South Stream Head Sacked
Gazprom’s official in charge of talks for the proposed South Stream gas pipeline to Europe resigned, Interfax reported.
Sergei Korovin, deputy head of Gazprom’s foreign relations department, has been replaced by Pavel Oderov, who previously worked at Gazprom’s export unit, Interfax said, citing unidentified people. (Bloomberg)
Gazprom’s work
4 Августа 2009 (вторник)
Construction of the linear gas pipeline portion Schuchie – Safakulevo (over 31 kilometers) has been completed last week. This is one of the objects included in the investment program of Gazprom aimed at gasification of all regions of the Russian Federation.
Construction works at the site started in 2007. According to an agreement between Gazprom and the government of Kurgan Region, gas supplier was to construct a pipeline and the government was to prepare local households for the connection to a gas network.
End of works are scheduled for the end of August 2009.
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