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Basic Political Developments
• NDTV: Russian PM Vladimir Putin arrives in Delhi
o 2point6billion: Putin Touches Down in New Delhi
o UNI: Around $10 billion contracts to be signed during Vladimir Putin’s visit to India
o Bloomberg: Putin Visits India in Race With U.S. for Arms, Nuclear Deals
o Itar-Tass: Putin is leaving for India on a visit to meet Indian leadership
o BBC: Vladimir Putin set to visit India
o RIA: India allocates $2.3 bln for Admiral Gorshkov aircraft carrier upgrade
o Wall Street Journal: Russia Willing to Build More Nuclear Plants in India
o Russia Today: Russia and India – looking into new common perspectives
o AFP: Putin eyes multi-billion dollar deals with old ally India
o Reuters: RPT-Q+A-Top issues in India, Russia relations
• Itar-Tass: U.S. Secretary of State Hillary Clinton may visit Russia next week
• RIA: Clinton plans to visit Moscow for Mideast quartet meeting
• Ynet: Russian condemns east Jerusalem construction plan
• RIA: Russia concerned over Israeli housing plans for East Jerusalem
• RIA: Russian, Jordanian leaders to focus on Middle East during Moscow talks
• AFP: King Abdullah, Medvedev to discuss Mideast
• Itar-Tass: Medvedev, King of Jordan to meet to discuss joint projects
• Korea Herald: Russian Embassy insists arrest made in attack on Korean student
• Apa.az: Deputy foreign ministers of Caspian littoral states gather in Baku
• EurActiv: West worries about Russia turning to coal - European efforts to reduce greenhouse emissions could be undermined by Russian plans to dramatically increase energy production from coal, Western experts said in Brussels yesterday (9 March).
• Russia Today: NATO commander hints at possible use of Russian radars in missile shield - The US may advance its partnership with Russia by using one of its radars as part of its anti-ballistic shield in Europe, says James Stravridis, NATO’s Supreme Allied Commander for Europe. Stavridis said this cooperation could be made possible because of Obama’s decision to recall the Bush-era plans to locate an anti-missile defense shield in Eastern Europe.
• Mil.ru: Dmitry Medvedev took part in an expanded meeting of the Defence Ministry Board - Moscow, March 5, 2010 - The meeting summed up the results of the Defence Ministry’s work in 2009 and clarified its objectives for 2010.
• Itar-Tass: Russian army to get new Pantsir-S1 air defence system in 2010
• GSN: Russia Removes Nuclear Fuel From Sub - "The operation, which began in December 2009, went in accordance with the normative documents and in full compliance with the radiation safety regulations," said officials with Russia's Zvezdochka shipyard.
• Bellona: Battle to revise Russia radioactive waste bill continues as enviro groups are shut out of the dialogue
• Russia Today: Space crew being put through their paces
• BarentsObserver: Zubkov to lead Svalbard commission
• .ru: Prime Minister Vladimir Putin chairs a meeting on tax policy - “The tax service must set up the conditions so that law-abiding businesses are able to enjoy available preferences in full. It should help taxpayers make their payments correctly and on time instead of finding faults and prosecuting them for minor errors. Nevertheless, there should be some procedures.”
• RIA: Drug abuse major threat for Russia's security - drug watchdog - According to a statement issued by the drug watchdog on Wednesday, there are some 550,000 drug addicts officially registered in Russia, with unofficial estimates as high as 2.5 million accounting for almost 2% of Russia's 142-million population.
• Itar-Tass: Some 13 kg of cocaine seized at Pulkovo airport
• RIA: Russia has largest number of tycoons in Europe - Forbes
• Forbes: The Hard Man of Russia - Alisher B. Usmanov made his first fortune more than two decades ago making plastic bags--a commodity so scarce in the former Soviet Union that people washed and reused them. "It was a great time," says the 56-year-old Uzbekistan-born opportunist.
• BBC: Independent set for radical change under Russian owner - Russian billionaires don't usually shop at Poundland, but Alexander Lebedev is no ordinary oligarch.
• Expert Club: Shootings continue in Ekazhevo - It is thought that Sapraliev might again become an object of attack, as there are suspicions that during the above operation he cooperated with law enforcement bodies.
• Interfax: Madrasah teacher shot dead in Dagestan
• CPJ: Staff of Dagestani weekly on trial for extremism in Russia
• RFE/RL: Daghestan Police Ask Medvedev To Fire Top Investigator
• Boston Globe: From Chechnya, a cautionary tale - A recent CSIS report shows that the number of suicide bombings in the North Caucasus in 2009 nearly quadrupled compared to the previous year. Most of the attacks occurred in Chechnya. Ambushes, shootings, and roadside bombings are also on the increase across the region: last year, more than 900 people were killed here, almost double from the year before.
• Georgian Daily: Kaliningrad Protests Force Health Minister to Resign, Sparking Speculation about Boos’ Future
• RFE/RL: Tide Of Protest Engulfs More Russian Cities
• The Moscow Times: Human Cloning Ban Extended
• Itar-Tass: Duma to look into police actions in MKAD ringroad operation
• RIA: Police suspect arson in deadly Moscow nightclub fire
• RIA: Two killed as private helicopter crashes in Karelia
• Itar-Tass: Vladivostok starts trial of crime gang, attacking businessmen
• The Moscow Times: Kremlin Prepares to Unveil Its Silicon Valley
• Xinhua: What's barring Moscow, Washington from clinching new START deal?
• Russia Today: 11 March, 2010 in Russian Newspapers
o Vedomosti : One pipeline will suffice: The competing gas pipeline projects, Nabucco and South Stream, should be united for the sake of increasing the profits of all the participating parties – suggests Eni. Experts believe Gazprom will pay for this increase.
o Rossiyskaya Gazeta: B-52: We speak Russian: US Air Force pilots will be paid extra for knowing Russian and Chechen languages
• The Moscow Times: Today in Vedomosti
o CIS' Dependence on Russia Declines
o Israel Calls on UN Security Council to Adopt Tough Sanctions Against Iran
o Editorial: Environmentalists United in Opposition to Baikal Pulp and Paper Mill
National Economic Trends
• VTB Capital: Government considers 2011-13 budget - Prime Minister Vladimir Putin suggests postponing hike in social tax and implementing more tax incentives - positive for companies as economy still recovering from crisis
• The Moscow Times: Bill Would Strip State Corporations of Profits - The bill would require the state corporations to transfer most of their profits from 2009, 2010 and 2011 after their head offices finish the final accounting for each year, said Konstantin Shipunov, a deputy in the United Russia party, Interfax reported.
• Reuters: Russia cbank shifts rallying rouble's band-dealers
• Interfax: Banks have 576.6 bln rbs on CBR correspondent accounts on March 11
• Russia Profile: The Return of the Investor - Although Foreign Investment in Russia Dropped Considerably in 2009, Experts Predict Growth in the Near Future
• Russia Today: Russian economic rebound enters soft patch - The official measure of unemployment jumped to 9.2% in January, its highest level in a year. It's evidence that Russia's economy, which was being rescued by higher oil prices, is still weak in many areas.
Business, Energy or Environmental regulations or discussions
• Prime-Tass: Russia's Medvedev inks bill promoting associated gas use
• The Moscow Times: Decision to Fine IKEA Reversed
• VTB Capital: Inter RAO might get EdF representative in its BoD
• Bloomberg: Russian Railways May Hold IPO for TransTeleCom, Kommersant Says
• Interfax: RZD could sell TransTelecom stake in IPO, private subscription – newspaper
• Bloomberg: Moscow to Sell 10 Billion Rubles of Bonds at Auction (Update1)
• Bloomberg: Potanin Frees Norilsk Nickel, Prof-Media Shares, Vedomosti Says
• Bloomberg: Magnit February Sales Rise 28% to $531 Million on New Stores
• Reuters: UPDATE 1-Magnit Feb sales surge on new shops, cheap food
• Reuters: Renaissance Capital plans Eurobond roadshow –source
• Israelidiamond: Gokran to cut stocking from Alrosa
• Itar-Tass: Nissan to start producing Murano SUVs in Russia in early 2011
• Itar-Tass: AvtoVAZ Board of Directors adopts company’s development program till 2020
• BNE: Kremlin moves to rescue car industry
• MoneyShow: The Rich Kid on the BRIC Block - John Connor, manager of the Third Millennium Russia Fund, sees further up side from strong global growth, despite concerns about Kremlin meddling.
Activity in the Oil and Gas sector (including regulatory)
• Reuters: Russia to raise April oil export duty to $268-269/T
• VTB Capital: Zero export duty for East Siberia might be left for April
• Itar-Tass: ENI’s head calls for linking South Stream, Nabucco
• RIA: Gazprom's Italian partner proposes South Stream-Nabucco merger
• EurActiv: Italy’s Eni wants rival gas pipelines to collaborate
• The Moscow Times: Venezuela Approves Oil Joint Venture
• EnergyIntel: Rosneft Gets Sakhalin License
• Cbonds: Moody's affirms Rosneft's issuer rating at Baa1; BCA raised to the equivalent of Baa3
• Reuters: Conoco to maintain long-term Lukoil relationship-CEO
• Oil and Gas Eurasia: TNK-BP Plans Production Increase
• Interfax releases its annual Russia oil and gas report
Gazprom
• UpstreamOnline: 'Russia needs to revamp oil tax'
• The Moscow Times: Gazprom Neft’s Q4 Results Disappoint
• BarentsObserver: Gazprom discussed Shtokman timeline
• RusBizNews: Gazprom’s Hands Ever Deeper In State’s Coffers
• Bloomberg: Tullow Says Gazprom, Namcor to Help Develop Namibian Gas Field
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Full Text Articles
Basic Political Developments
NDTV: Russian PM Vladimir Putin arrives in Delhi
|NDTV Correspondent, Thursday March 11, 2010, New Delhi |
Russian Prime Minister Vladimir Putin will arrive in New Delhi today on a two-day visit during which the two sides are likely to conclude the long- delayed agreement on aircraft carrier Admiral Gorshkov and sign defence deals worth USD 4 billion.
Coming three months after Prime Minister Manmohan Singh's visit to Russia in December 2009, Putin's India trip has a wider agenda like taking bilateral technological and energy cooperation to a new level.
2point6billion: Putin Touches Down in New Delhi
Posted By On Thursday, March 11 @ 12:37 pm In Politics
Mar. 11 – Russian Prime Minister Vladimir Putin arrives in New Delhi today with an ambitious agenda scheduled for his two-day trip – expecting to authorize as many as 14 agreements worth more than US$10 billion.
The agreements will largely focus on defensive deals, including the completion of the Russian-made aircraft carrier Admiral Gorshkov and 29 MiG-29 fighter jets. Russia and India have enjoyed a longstanding partnership as they rank among the world’s largest arms exporters and importers, respectively.
During Prime Minister Putin’s visit, the two countries will also discuss India’s nuclear market, which Russia already has started to invest in. Russia is currently building two reactors at the Kudankulam nuclear power plant in southern Tamil Nadu.
India and Russia signed a nuclear-energy cooperation agreement this past December that will permit Russia’s state-owned nuclear company, Rosatom Corp., to negotiate new contracts in Kudankulam.
Putin is also expected to talk about bilateral trade relations during the visit as he tries to increase the current value of US$8 billion up to US$20 billion by 2015.
UNI: Around $10 billion contracts to be signed during Vladimir Putin’s visit to India
3/11/2010
About 15 agreements worth over 10 billion dollar are expected to be signed during Russian Prime Minister Vladimir Putin’s visit to India.
‘In the government’s estimate, the agreements to be signed are worth over 10 billion dollar,’ Putin’s spokesman Yury Ushakov told reporters here ahead of PM’s visit to India.
Putin will arrive in New Delhi today evening for his two-day working visit during which he will hold talks with Prime Minister Dr Manmohan Singh with bilateral cooperation high on the agenda. He will also call on President Pratibha Devisingh Patil and Congress President and UPA chairperson Sonia Gandhi Putin is visiting India as Russia’s Prime Minister for the first time. Earlier, he visited India four times as President. He last visited the country in 2007.
‘There is a list of 17 documents. Some of them are being finalized, but I think that 14-15 documents will be signed,’ Ushakov said.
He said the agreements to be signed include a nuclear cooperation agreement, including a Memorandum of Understanding (MoU) on the construction of new power units at the Koodankulam nuclear power plant, and an additional contract for the upgrade and retrofitting of the Admiral Gorshkov (INS Vikramaditya) aircraft carrier.
Military contracts will include a deal on delivery of MiG-29K/KUB carrier-based fighters.
Further agreements will include a fifth-generation fighter aircraft project and work on a multi-role transport aircraft (MTA).
Putin will also hold an online news conference for residents of Bangalore, Kolkata and Mumbai during his visit, Ushakov said.
‘The Prime Minister will speak about investment, nuclear energy, culture and Indian students training in Russia,’ he said.
The online news conference will involve representatives of the Indian public, including businessmen.
Sources said here during his visit, Putin will be looking to shore up defence and energy cooperation in talks with Dr Singh.
Meanwhile, Indian ambassador to Moscow, Prabhat Prakash Shukla told Interfax news agency that the two countries have agreed on new price for Admiral Gorshkov aircraft carrier and will soon sign agreements on final terms of its delivery.
Shukla said the negotiations between Russia and India on final price of repair and upgrading of the heavy aircraft carrier were over.
Problems with the Soviet-built Gorshkov carrier have been a regular thorn in generally solid bilateral ties.
A source close to state arms export monopoly Rosoboronexport told the English-language daily the Moscow Times that Putin would push India to sign a 2.3 billion dollar deal to finish carrier’s upgrades, which were originally expected to cost just 970 million dollar.
The initial 1.6 billion dollar contract, signed in 2004, would have seen the renovated carrier delivered to India in 2008 along with fighter jets that are now part of a separate contract.
After years of wrangling over delays, India agreed in 2008 to another 1.2 billion dollar in work on the carrier, with delivery pushed back to 2012.
The final price of 2.3 billion dollar is less than the 2.7 billion dollar total for renovations that Russia had been seeking.
UNI
Bloomberg: Putin Visits India in Race With U.S. for Arms, Nuclear Deals
By Lucian Kim and Bibhudatta Pradhan
March 11 (Bloomberg) -- Russian Prime Minister Vladimir Putin arrives in New Delhi tonight to fend off competition from the U.S. and Europe to supply arms and nuclear energy to India.
Putin is set to meet his Indian counterpart Manmohan Singh tomorrow to oversee the signing of more than $10 billion in deals, including a refurbished aircraft carrier, MiG-29 fighter jets and two nuclear reactors.
The Kremlin is counting on Cold War-era ties to keep India as its largest arms customer and a future partner in the nuclear industry. India’s improved ties with the U.S., crowned by a landmark nuclear deal, have emboldened the world’s second- fastest growing major economy to look further afield for weapons and energy sources.
“The competition to cooperate with India in defense and nuclear energy is stepping up,” said Fyodor Lukyanov, editor- in-chief of Russia in Global Affairs magazine. “India isn’t Venezuela or Iran, but a country respected by all, without any political limitations.”
India has tripled its defense budget over the last decade as it looks beyond a traditional military rivalry with Pakistan to counter China’s rising power. U.S., Israeli and European arms makers are encroaching on a market once dominated by the Soviet Union.
The Indian nuclear industry has likewise attracted foreign interest following the 2005 agreement with the U.S. that attached International Atomic Energy Agency safeguards to the South Asian country’s civilian nuclear facilities.
Gorshkov Carrier
“Putin’s visit serves to maintain high-level contacts between India and Russia and to address some unresolved issues, particularly on defense contracts,” said C. Uday Bhaskar, director of New Delhi-based National Maritime Foundation, a security and strategic research organization.
The biggest thorn in ties is Russia’s overhaul of the Admiral Gorshkov aircraft carrier, which has been beset by delays and cost overruns. President Dmitry Medvedev scolded shipbuilder OAO Sevmash in July, saying there would be “grave consequences” if delivery of the Soviet-made vessel was pushed back any further. The target date is now 2012.
An additional contract on the carrier will be signed during the visit, Putin’s deputy chief of staff Yury Ushakov told reporters in Moscow yesterday. A deal on the purchase of 29 MiG- 29 fighter jets to augment the 28 already ordered is also expected, he said.
Nuclear Reactors
The two countries will sign an agreement on increasing capacity at the Kudankulam nuclear power plant in southern Tamil Nadu state, where reactors are already under construction, according to Ushakov. Russia and India signed a nuclear-energy cooperation agreement when Singh visited Moscow in December.
Putin, who traveled to India four times during his eight- year presidency, will be making his first visit as prime minister. He’ll be accompanied by a delegation of defense contractors, chemical industry executives and government ministers.
Trade between the two nations totaled $7.5 billion last year, according to Russia’s Federal Customs Service. Russia aims to increase that figure to $20 billion in the next five years, according to Ushakov.
To contact the reporters on this story: Lucian Kim in New Delhi at lkim3@; Bibhudatta Pradhan in New Delhi at bpradhan@
Last Updated: March 11, 2010 00:07 EST
Itar-Tass: Putin is leaving for India on a visit to meet Indian leadership
11.03.2010, 03.28
MOSCOW, March 11 (Itar-Tass) - Russian Prime Minister Vladimir Putin will leave for India on Thursday evening. On Friday, he will meet his Indian counterpart Manmohan Singh for talks. Putin will also participate in an Internet conference with representatives of the Indian business circles, cultural workers and members of the club of listeners of the Voice of Russia radio from Mumbai, Calcutta and Bangalore.
“The Russian prime minister will start his working visit to India with a conversation with the Indian President Pratibha Patil,” Yuri Ushakov, the deputy chief of staff of the Russian government, told journalists.
“After that Putin will hold an Internet conference with representatives of Indian business circles, cultural workers and members of the club of listeners of the Voice of Russia radio station from Mumbai, Calcutta and Bangalore,” Ushakov went on to say.
“During this Internet session the Russian prime minister will answer various questions that are expected to cover a wide range of issues such as economy, atomic energy, investment cooperation, humanitarian ties, scientific and student exchanges,” Ushakov added.
“The Internet conference will be held on the basis of infrastructure created by the ’Sistema Shyam Teleservices Ltd’ (the major shareholder is AFK Sistema that has been operating in the Indian telecommunications market since September 2008),” Ushakov explained.
“This is the first large-scale cooperation project between Russian and Indian companies in the Indian telecommunications market with overall investments exceeding four billion dollars,” the deputy chief of the Russian government staff said.
After the Internet conference Prime Minister Putin will have a meeting with Sonya Gandhi, the president of the Indian National Congress party and the leader of the ruling United Progressive Alliance.
On Friday evening, Putin will hold negotiations with Indian Prime Minister Manmohan Singh.
“A wide range of issues linked to Russian-Indian cooperation is to be discussed, especially in trade and economic spheres,” Ushakov went on to say. He recalled that despite the world financial crisis, the Russian-Indian trade is preserving a positive dynamics and in 2009 its volume exceeded 7.5 billion dollars.
“Task has been set to increase it to 10 billion dollars by the end of 2010 and to 20 billion dollars by 2015,” he clarified.
“Special attention will be paid to interaction in the sphere of high technologies such as atomic energy, the defence industry and the production of telecommunications equipment,” Ushakov went on to say.
“Fourteen or fifteen agreements as well as contracts worth more than 10 billion dollars are expected to be signed as a result of the talks,” Ushakov noted.
They include a contract for delivering to India of 29 MiG-29K fighter jets as well as an additional contract for repairs and modernization of the Admiral Gorshkov heavy aircraft carrier.
“This contract is going to solve all the existing (price) disputes. As far as I can see we are close to reaching an agreement that will suit both sides,” Ushakov said, refusing to name the contract’s price.
Russia and India will conclude a Contract for the construction of two new units of the Kudankulam electric power station in addition to the two existing ones.
Ushakov said that some documents would be signed in the presence of the prime ministers of the two countries.
BBC: Vladimir Putin set to visit India
Russian Prime Minister Vladimir Putin is due in India for talks expected to focus on arms and energy contracts.
The two sides are due to sign two deals worth over $10bn in defence and civilian nuclear reactors and Russia will refit an aircraft carrier.
They will also try to boost bilateral trade, which is currently worth $8bn.
The two countries traditionally have had close links since Soviet times, with India remaining a top buyer of Russian weaponry.
However, the relationship faces new challenges, including competition from the West and the growing economic and military might of China.
Mr Putin's foreign policy aide Yuri Ushakov has told reporters that Russia expects the "signing of 14-15 agreements after the talks and contracts worth over $10bn" during the prime minister's two-day visit.
He said the two sides would hold talks on civilian nuclear energy, arms and production of telecom equipment.
The two sides also plan to sign agreements on retrofitting a Russian aircraft carrier, supply of additional 29 fighter aircraft and a deal to jointly develop transport aircraft.
Russia will build a number of nuclear reactors in energy-hungry India as well as increase atomic fuel exports to it.
Russia is among a number of countries seeking to expand their activities in India following its landmark nuclear deal with the US in 2005.
That accord ended India's nuclear isolation after it tested an atom bomb in 1974.
RIA: India allocates $2.3 bln for Admiral Gorshkov aircraft carrier upgrade
10:0211/03/2010
The Indian government's security committee has approved the allocation of $2.3 billion to retrofit the Admiral Gorshkov aircraft carrier (INS Vikramaditya), the IANS news agency reported Thursday.
The initial refit agreement of $750 million went up by an additional $1.5 billion. In line with the contract, the aircraft carrier will be handed over to India by 2012.
"The cabinet security committee has approved the Gorshkov's new price," the agency quoted an unnamed Indian defense official as saying.
Russian Prime Minister Vladimir Putin's two-day visit to India starts Thursday. He is expected to sign the additional contract for the Admiral Gorshkov upgrade.
The Admiral Gorshkov is a modified Kiev-class aircraft carrier, originally named Baku. The ship was laid down in 1978 at the Nikolayev South shipyard in Ukraine, launched in 1982, and commissioned with the Soviet Navy in 1987.
It was renamed after the collapse of the Soviet Union in 1991. In 1994, following a boiler room explosion, the Admiral Gorshkov sat in dock for a year for repairs. In 1995 it briefly returned to service and in 1996 was finally withdrawn and put up for sale.
The ship has a displacement capacity of 45,000 tons. It has a maximum speed of 32 knots and an endurance of 13,500 nautical miles (25,000 km) at a cruising speed of 18 knots.
India has a long history of defense relations with Moscow. The current cooperation program comprises about 200 joint projects, including the modernization of the Vikramaditya for the Indian Navy, the transfer of technology for the licensed assembly of T-90 tanks in India, the production of BrahMos missiles and the purchase of Smerch MLRS by India.
NEW DELHI, March 11 (RIA Novosti)
MARCH 11, 2010, 12:37 A.M. ET
Wall Street Journal: Russia Willing to Build More Nuclear Plants in India
By PRASENJIT BHATTACHARYA
NEW DELHI -- Russia is willing to build nuclear power plants of up to 15,000 megawatts over the next 10 years in India, the Russian ambassador to the South Asian nation said Wednesday.
"The talks on setting up nuclear plants in India are in their initial stage," Alexander Kadakin told Dow Jones Newswires on the sidelines of an India-Russia business event.
"We are prepared to start construction of nuclear plants in India, whenever India is prepared," he said.
Russian Prime Minister Vladimir Putin is arriving in India Thursday on an official visit, during which he is expected to sign deals on defense, energy and nuclear technology.
Mr. Kadakin added that Russia is willing to add another 4,000 MW to 6,000 MW capacity to the Kudankulam nuclear power plant, which it is building for India's monopoly nuclear power generator Nuclear Power Corporation of India Ltd.
He also said Russia has been allocated a site in the state of West Bengal, where it can build a nuclear power plant of up to 6,000 MW capacity.
Write to Prasenjit Bhattacharya at prasenjit.bhattacharya@
Russia Today: Russia and India – looking into new common perspectives
11 March, 2010, 08:37
In an attempt to double the multi-billion dollar trade between Russia and India, Prime Minister Putin is heading to New Delhi on Thursday.
While most trade between the two nations has traditionally been in the military sphere, other joint-business opportunities are springing up.
The Indian telecom market is one of the fastest growing in the world, with 500 million cellphone users. But an operator from Russia has turned it upside down, with aggressive pricing and innovative per-second tariffs. In just over a year, a joint venture between Russian company Sistema and India's Shyam Group has reached 3 million customers, and is growing at 15 per cent every month.
Sergey Cheremin, deputy chairman of Sistema, says that, to a point, aggressiveness is good. “As we are a newcomer and we are more aggressive – we have to be more aggressive than the existing players – and CDMA network allows us to spend less money on the same quality network,” Cheremin told RT. “So that gives us a possibility to play on prices and services.”
Despite this, much of the trade between Russia and India is in government to government contracts, particularly in the defense sector. Russia is India’s largest arms supplier and during his visit, Prime Minister Putin is expected to sign defense deals worth $4 billion to supply fighter planes to the Indian Navy, and to jointly develop a new-generation fighter aircraft.
Rajiv Sikri, former Indian deputy foreign minister, states that Russia has given a lot to India.
“We got from the Soviet Union and later from Russia, and we continue to get a lot of technology, transfer of technology, which is simply unavailable to us from other sources,” Sikri told RT. “And our people have very good experience of using Soviet equipment, and they’re very happy with it. It’s reliable.”
Russia is also a big partner in India’s nuclear power sector, helping build civilian nuclear power plants to feed its growing energy demands. Prime Minister Manmohan Singh is likely to ask Russia for nuclear reprocessing technology, which the US remains hesitant about transferring to India.
With this being Putin’s fifth visit to India in the last decade, it is clear that both sides will use the opportunity to reaffirm their partnership.
“If there is trust and confidence and understanding at the highest levels, then this filters down," Sikri claimed. “That’s why you have summit meetings between states, because you renew the friendships, the understandings, remove the misunderstandings [and] find new areas of cooperation.”
However, while bilateral trade is likely to touch $10 billion this year, it is nowhere near the potential given the size of both economies. Unlike India’s thriving, private-sector relationship with the US, the Indo-Russian relationship is almost entirely driven by the two governments.
And that is what Prime Ministers Putin and Singh will need to discuss: how to involve the private sector of their countries more in this partnership.
AFP: Putin eyes multi-billion dollar deals with old ally India
AFP
2010-03-10 21:40:00
|Russian Prime Minister Vladimir Putin heads to India Thursday to strengthen the close partnership Moscow and New Delhi have |
|enjoyed since the Soviet era with an estimated 10 billion dollars of new deals. |
|The highlight of the visit is set to be the signing of deals to sell Russian military hardware, including an accord on a |
|Soviet-era aircraft carrier whose troubled history had raised fears over the future strength of relations. |
|Other deals will include a contract to sell India 29 MiG fighter jets and an agreement to install additional nuclear power units|
|in the southern Indian state of Tamil Nadu, Putin's foreign policy aide Yury Ushakov told reporters. |
|"A preliminary estimate shows that the volume of the business deals in monetary value will top 10 billion dollars," Ushakov |
|said, estimating that at least 14 agreements would be signed. "We have an enormous interest in India." |
|The sale of the Admiral Gorshkov has been marred by a series of price disputes and delayed deliveries, compounding concerns in |
|Moscow that India could be tempted to end its dependence on Russian military equipment. |
|An Indian government source told AFP Putin was keen to use the trip to sort out all remaining sticking points related to the |
|vessel's sale. Ushakov pledged the new agreement would help the two countries put the dispute behind them. |
|"Judging by everything, we are approaching an agreement that will suit both sides," he said. |
|Russia supplies 70 percent of India's military hardware but New Delhi has in recent years also looked towards other military |
|suppliers including Israel and the United States. |
|Russian business daily Vedomosti reported earlier this month that officials had hoped to sign three military agreements worth |
|some four billion dollars. |
|These will be for the refurbishment of the Admiral Gorshkov, worth 2.35 billion dollars; a 1.2-billion-dollar contract to sell |
|India 29 MiG-29 carrier-based fighters; and a deal to jointly develop a transport aircraft, said the report. |
|Ushakov declined to give a breakdown of the 10-billion-dollar package. |
|An official with state aircraft holding United Aircraft Corporation (UAC) confirmed to AFP that UAC and India's HAL planned to |
|sign a deal to create a "new joint venture" to develop the transport aircraft. |
|Russia and India have already pledged to commit 300 million dollars each to the project. |
|The strong ties between Moscow and New Delhi date back to the 1950s after the death of Stalin. But India has in recent years |
|also taken care to balance this friendship with close ties to the United States. |
|Together with Brazil and China, Russia and India are part of the so-called BRIC grouping of major developing economies seeking |
|to promote a multipolar world economy not dominated by the United States. |
|At just over 7.5 billion dollars in 2009, trade turnover is miniscule and the two countries will aim to increase it to 20 |
|billion dollars by 2015. |
|Russia is already building two nuclear power units in the southern Indian state of Tamil Nadu and agreed to install four more |
|nuclear reactors there as part of an agreement signed during President Dmitry Medvedev's visit to India in 2008. |
|Putin, who last visited India as Russian president in 2007, is set to meet his counterpart Indian Prime Minister Manmohan Singh |
|and Indian President Pratibha Patil. This will be Putin's first trip to India in his current capacity. |
|Ushakov said Russia hoped tighter ties with India would help Russia diversify its hydrocarbons-based economy. |
|"Relations with India are also important with an eye to conducting reforms in the Russian economy, with an eye to securing a |
|quality technological breakthrough," he said. |
| |
Reuters: RPT-Q+A-Top issues in India, Russia relations
Thu Mar 11, 2010 6:43am IST
(Repeats story issued late on Wednesday, no change to text)
(For an interview about the visit, click on [ID:nLDE6290LT)
By Bappa Majumdar
NEW DELHI, March 10 (Reuters) - Russian Prime Minister Vladimir Putin arrives in New Delhi on Thursday to reaffirm ties with Moscow's Cold War ally, lining up billions of dollars in mainly defence deals to be signed during the two-day trip.
As India begins to lean more on the United States for a global role, Moscow fears losing not only influence over New Delhi but the bulk of its $100 billion defence market as well.
Here are some of the main issues between the two countries.
DEFENCE
Russia, India's close economic and political partner since Soviet days, is one of the world's major arms exporters. It monopolised India's defence market for decades, providing about 70 percent of the country's military equipment.
But New Delhi, one of the world's biggest arms importers, has in recent years sought to diversify its arsenal, awarding contracts to U.S. and Israeli firms.
Still, Moscow is not seen leaving India's arms market any time soon, thanks to billions of dollars in maintenance contracts India has to award for the Russian planes, tanks, ships and missile systems that form the bulk of its arsenal.
The two sides are also jointly developing the latest fighter jets and missiles. Putin is expected to sign deals worth more than $10 billion, mainly in defence and for nuclear reactors.
Moscow hopes that Putin's visit will also provide a boost for the Russian-made MiG-35 which is up against five other top global firms bidding for an $11 billion contract for 126 fighter jets.
GEOPOLITICS Despite India's growing ties with the United States, Russia remains a trusted ally. For Moscow, New Delhi's expanding role in Asia is vital for its ties with China and Afghanistan. Russia and India seek a greater role in stabilising the region because both share security interests emanating from violence in Afghanistan. While the Afghan violence is not an immediate problem for Russia, it is wary of religious radicalism -- often funded by a growing narcotics trade -- overhauling Central Asian countries and reaching its borders.
Afghanistan has a more direct effect on India's security given New Delhi's rivalry with U.S. ally Pakistan.
Russia backs India's rise in Asia because it sees Beijing as a threat particularly in the eastern Siberian region, where Chinese migrants are infiltrating into its territory. Russia fears China may try to shift its eastern borders towards Moscow.
ENERGY AND TRADE
India lacks sufficient domestic energy resources and imports much of its growing requirements, mostly from the Middle East, while looking towards countries such as Russia for overseas exploration and production of crude oil and natural gas.
India's state-run Oil and Natural Gas Corporation (ONGC.BO) has already invested $2.7 billion in Russia's Sakhalin oil and gas projects. ONGC has acquired the Russian firm Imperial Energy for about $2 billion and is seeking access to more Russian oilfields. India also wants to use Russian influence over some Central Asia countries to secure energy supplies.
In India's nuclear market, valued at $150 billion in coming decades, the Russians, along with the French, enjoy an edge over the United States. State-backed Russian firms are building four nuclear reactors in India and are vying for more contracts.
Putin will also try to boost bilateral trade, currently pegged at $8 billion, to $20 billion by 2015. India wants Russia to relax strict visa rules to help make inroads into Russia's IT, engineering, tourism and financial services sectors.
(Editing by Krittivas Mukherjee and Paul Tait)
Itar-Tass: U.S. Secretary of State Hillary Clinton may visit Russia next week
10.03.2010, 23.46
WASHINGTON, March 10 (Itar-Tass) -- U.S. Secretary of State Hillary Clinton plans to visit Moscow next week, Assistant Secretary. Bureau of Public Affairs. Philip Crowley said on Wednesday.
Crowley said he had no official announcement on the trip, but confirmed that Clinton planned to be in Moscow next week in connection with a meeting of the Middle East Quartet (Russia, the United States, the United Nations, and the European Union), which has been announced by Russian Foreign Minister Sergei Lavrov.
He said at a regular briefing that Clinton’s foreign travel plans had not been endorsed yet and did not rule out that in addition to Moscow the secretary of state might also visit other capitals.
Lavrov said on Tuesday that he planned to have bilateral talks with Clinton during her stay in Moscow for a ministerial meeting of the Middle East Quartet.
The talks will be held in “March 18 or 19”, the minister said.
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RIA: Clinton plans to visit Moscow for Mideast quartet meeting
02:3911/03/2010
The U.S. State Department has confirmed that Secretary of State Hilary Clinton is going to attend the upcoming Mideast quartet meeting in Moscow, which will take place amid growing tensions in the region.
The meeting of the Quartet of international mediators in Israeli-Palestinian peace talks, which comprises Russia, the United States, the European Union and the United Nations, will be held in Moscow on March 19.
"I think she's planned to be - I don't have a formal trip announcement to make, but she's planning to be in Moscow next week for the Quartet meeting, as was announced by Foreign Minister Lavrov," the U.S. State Department spokesman, Philip J. Crowley, said during a press briefing on Wednesday.
Earlier this week, Russian Foreign Minister Sergei Lavrov told journalists he intended to hold bilateral talks with representatives of all Quartet members, including the U.S. secretary of state, during the meeting in Moscow. He said the agenda of the talks, along with the Middle East settlement, would also include other issues.
UN Secretary General Ban Ki-moon is also expected to attend the Quartet meeting.
The Middle East peace process made progress earlier this month, when the Palestinian authorities agreed to hold indirect peace talks with Israel mediated by the United States after a 14-month break.
However, Israeli government's plans to build 1,600 new housing units in East Jerusalem, announced on Tuesday, have posed a new threat to the Israeli-Palestinian peace process. The move was condemned by the Palestinian, U.S. authorities and the European Union.
Settlement construction in the West Bank and East Jerusalem, both occupied by Israel since the 1967 Arab-Israeli War, has been the main obstacle to reviving peace talks, stalled since an Israeli attack on the Gaza Strip in December 2008.
Israel launched an attack on the Palestinian enclave in a bid to put an end to the firing of homemade rockets at southern Israel by Palestinian militants based in Gaza. The conflict left 1,300 Palestinians and 13 Israelis dead.
Under the internationally agreed roadmap for Middle East peace, Israel is obliged to freeze all settlement construction activity, and remove unauthorized outposts built since 2001 from the Palestinian territories.
MOSCOW, March 11 (RIA Novosti)
Ynet: Russian condemns east Jerusalem construction plan
|Published: |03.11.10, 09:38 / Israel News |
Russia has condemned the Israeli Interior Ministry's approval to build 1,600 additional housing units in east Jerusalem, referring to it as "unacceptable".
The Russian Foreign Ministry said in a statement, "We do not accept these acts by Israel. They contradict the acceptable foundations of international rules and predetermine the outcomes of the negotiations, which will determine the results of the permanent solution, in Jerusalem as well." (AFP)
RIA: Russia concerned over Israeli housing plans for East Jerusalem
11:0911/03/2010
Russia has voiced concerns about Israeli plans to build 1,600 homes for Jewish settlers in East Jerusalem, fearing they may damage peace efforts ahead of the Mideast Quartet's meeting in Moscow, the Foreign Ministry said on Thursday.
"We consider such measures unacceptable. They flout internationally acknowledged reconciliation proceedings," the ministry said.
"We can't allow a new chance to go ahead with the reconciliation process to be lost," it added.
The meeting of the Quartet of international mediators in Israeli-Palestinian peace talks will be held in Moscow on March 19.
The Israeli government announced the new housing project on Tuesday, just as the Middle East peace talks had finally spluttered into life after a 15-month break.
The announcement drew cutting criticism from the EU foreign affairs chief, Catherine Ashton, who called on the Israeli authorities to "fulfill all their commitments and obligations vis-a-vis the peace process and to refrain from unilateral decisions and actions that may jeopardize the final status negotiations."
Jewish settlements on Palestinian territories are one of the main obstacles to continued peace talks with Israel.
Israel declared Jerusalem to be its territory after the 1948 Arab-Israeli War. But according to rules of international law, these territories are considered occupied. Under the internationally agreed roadmap for Middle East peace, Israel is obliged to freeze all settlement construction activity since 2001 in the Palestinian territories.
Israel is also set to build 112 housing units in the West Bank.
MOSCOW, March 11 (RIA Novosti)
RIA: Russian, Jordanian leaders to focus on Middle East during Moscow talks
01:4511/03/2010
Russian President Dmitry Medvedev and King Abdullah II of Jordan will focus on the Middle East settlement and the post-election situation in Iraq along with bilateral trade and economic relations during talks in Moscow on Thursday.
King Abdullah II of Jordan, who arrived in Russia on Wednesday morning for an official two-day visit, held talks on bilateral business relations with Russian Prime Minister Vladimir Putin later in the day.
"The situation in the Middle East peace process will certainly become a central issue during the upcoming talks in Kremlin," the presidential press service said in a statement.
"Russia and Jordan take as a premise that in the situation when a dangerous pause in Palestinian-Israeli talks has protracted for more than a year, it is important to not allow the destabilization in the region and to find a way towards the resumption of a full-fledged dialogue between the sides," the statement said.
The Palestinian national authorities recently agreed to hold indirect talks with Israel mediated by the United States after a 15-month break.
Meanwhile, the Israeli government announced plans to build 1,600 new housing units in East Jerusalem, the move, condemned by the Palestinian, U.S. authorities and the European Union.
A meeting of the Quartet of international mediators in Israeli-Palestinian peace talks, which comprises Russia, the United States, the European Union and the United Nations, will be held in Moscow on March 19.
The Russian and Jordanian leaders are also expected to discuss the prospects for stabilizing the situation in Iran, where parliamentary elections tool place on March 7.
The agenda of the talks also includes bilateral military cooperation and joint projects in hi-tech and tourism spheres, as well as in the sphere of peaceful uses of atomic energy.
This is the 10th visit of King Abdullah II to Russia since he had been enthroned in January of 1999.
Last time King Abdullah II visited Russia in 2008, when he met with President Medvedev.
MOSCOW, March 11 (RIA Novosti)
AFP: King Abdullah, Medvedev to discuss Mideast
Posted: 11 March 2010 1314 hrs
MOSCOW: Jordan's King Abdullah II will discuss arms contracts and the Middle East peace process with Russia's President Dmitry Medvedev Thursday, news agencies reported.
"The situation in the Middle East will become one of the key issues to be discussed in the Kremlin," Medvedev's press service said ahead of the talks with Abdullah, who arrived in Moscow Wednesday.
"The two sides will consider the situation as the Palestinian and Israeli leaders agreed on indirect talks and the League of Arab States decided to support this kind of contacts for four months," the press service said.
Those talks looked increasingly in jeopardy Thursday, amid mounting anger in the Arab world over Israeli plans to build more settler homes in the occupied territories.
Jordan "shows interest in buying Russia's air defence systems of all ranges, anti-tank missile complexes, armored vehicles, Ka-52 helicopters and guns," the source said.
Jordan would also like Russia to upgrade the Soviet-made military hardware it owns, the source added.
Abdullah, who has visited Russia nine times over the last seven years, on Wednesday held talks with Russian Prime Minister Vladimir Putin, praising Russia's role in the Middle East.
Russian foreign ministry spokesman Andrei Nesterenko said recently that new cooperation possibilities between Russia and Jordan had emerged, in areas including nuclear energy.
- AFP/sc
Itar-Tass: Medvedev, King of Jordan to meet to discuss joint projects
11.03.2010, 05.58
MOSCOW, March 11 (Itar-Tass) - High technologies, culture and military – technological cooperation will dominate talks between Russian President Dmitry Medvedev and King Abdullah II of Jordan to be held on Thursday, the Kremlin press service reports.
A high-ranking Kremlin source told Itar-Tass that Abdullah II was visiting Russia for the tenth time and was going to meet Russian President Dmitry Medvedev for the third time. The Russian and Jordanian leaders first met in Astana in July 2008 during the celebrations of the 10th anniversary of the capital of Kazakhstan. A month later the King of Jordan arrived in the Russian Black Sea resort town of Sochi to visit President Medvedev.
The Thursday meeting in the Kremlin is to dwell on prospects for development of multi-dimensional bilateral cooperation.
“Despite the impact of the world financial crisis, Russia’s trade with Jordan in 2009 is still standing at 400 million dollars. The forthcoming talks are designed to give additional impetus to trade and economic ties, including in the military and technological sphere, and advance joint projects in such areas as peaceful use of atomic energy, high technologies, tourism and other areas of bilateral cooperation,” the Kremlin source said.
The sides are also expected to discuss how to deepen their bilateral ties further. The governments of the two countries will sign a program of scientific and cultural cooperation for the years 2010-2012.
The situation in the Middle East will certainly become one of the central subjects during the upcoming talks in the Kremlin.
“Russia and Jordan proceed from the fact that in conditions when the dangerous pause in the Palestinian-Israeli talks has been lasting for more than a year, it’s important to prevent the destabilization of the region and find the way to restore a fully-fledged dialogue between the parties,” the Kremlin source emphasized.
“In this context, the sides will consider patterns according to which the situation in the region could unfold given the fact that the Palestinian and Israeli leaders have already agreed to indirect talks and the League of Arab States has supported the resumption of talks in the aforesaid format for four months,” the source went on to say.
Amman has positively assessed the Russian proposal to hold a ministerial meeting of international brokers for the Middle East settlement in Moscow on March 19, 2010.
The Kremlin believes that similar approaches to urgent regional and global agenda provide a solid foundation for the Russian-Jordanian interaction.
Besides, the leaders of the two countries traditionally exchange views on the situation in Iraq.
“They are planning to discuss stabilization prospects in this country in the light of parliamentary elections that were held in this country on March 7, 2010. Dependent on their results, new legislative and executive bodies will be formed,” the Kremlin source went on to say.
He added that Moscow and Amman come out for a single, democratic and sovereign Iraq that could become a vital factor of stability in the region.
High-level bilateral contracts between the two countries have become regular in recent years what is making the Russian-Jordanian ties even stronger.
The 48-year-old Jordanian monarch who has been at his country’s helm for 11 years is the one who meets Russian Prime Minister Vladimir Putin more often than any other politician in the Middle East.
The Kremlin source recalled that Putin had paid a visit to Jordan in 2007. King Abdullah II then met Putin himself, an unprecedented thing for Jordan.
During their talks last Wednesday, on March 10, Putin and Abdullah II said they hoped for further strengthening of relations both in politics and economy.
Korea Herald: Russian Embassy insists arrest made in attack on Korean student
Thursday, March 11, 110
The Russian Embassy in Seoul insisted Thursday that police in Moscow arrested two suspects in a recent attack on a South Korean student, even after police officials in the Russian capital denied the alleged arrest, according to Yonhap News.
Russian Ambassador Konstantin Vnukov told Seoul's foreign ministry Tuesday that Moscow police took into custody two suspects in Sunday's stabbing attack that left a 29-year-old Korean student seriously injured. Vnukov made the remark after being called in to the ministry to hear complaints over a recent rise in attacks on Koreans in Russia.
On Wednesday, however, police officials in Moscow quickly denied the envoy's claim in a meeting with Korean diplomats, according to Seoul's foreign ministry.
"At that meeting, the Russian police noted no suspects have been arrested but that they have made montages of two suspects and that they are confident of imminent arrests," Seoul's foreign ministry said.
The ministry did not offer any explanation for the contradiction to the Russian ambassador's earlier claims. Some flatly said Vnukov was caught lying.
Still, the Russian Embassy stuck to its claim that arrests have been made and the suspects are under questioning.
Apa.az: Deputy foreign ministers of Caspian littoral states gather in Baku
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[ 11 Mar 2010 13:09 ] [pic]
Baku. Lachin Sultanova – APA. Deputy foreign ministers of the Caspian littoral states gathered in Baku to discuss a draft agreement on interaction for security on the Caspian Sea via border, customs and interior offices, APA reports.
Minister of Foreign Affairs of Azerbaijan Elmar Mammadyarov said Azerbaijan attached special importance to the bilateral and multilateral relations on the basis of international law to struggle terrorism, organized crime, illicit drug and arm trafficking in the Caspian region. “The Caspian region has a special significance in whole region and in this context, the Caspian littoral states have common interests like establishment of reliable and secure communication, improvement of investment environment and exploration of energy resources”.
The minister said the draft agreement should cover interaction issues related to then border, customs, internal affairs, emergency situations, transport agencies and maritime administration. “We hope that final text of the draft agreement will be drawn up at the meeting and the document will be adopted as a legal basis for further cooperation of the Caspian littoral states in the field of security”.
EurActiv: West worries about Russia turning to coal
Published: 10 March 2010 | Updated: 11 March 2010
European efforts to reduce greenhouse emissions could be undermined by Russian plans to dramatically increase energy production from coal, Western experts said in Brussels yesterday (9 March).
Background
Russian Prime Minister Vladimir Putin recently said that for his country to continue exporting gas while satisfying growing domestic demand, it must turn to other fuels such as coal or nuclear energy.
Consequently, a new Russian energy strategy foresees coal consumption rising from 130 million tons per year now to 300 million in 2020.
Moreover, if Russia reduces subsidies for natural gas on its internal market, coal would emerge as a competitive fuel option, boosting production to meet increased demand.
Russia does not appear to be worried by the CO2 reduction goals. Russian emissions have already fallen dramatically as a result of the collapse of much of the country's heavy industry in the 1990s. In 2007, emissions were already 34% below 1990 levels. Therefore Russia could increase its CO2 emissions by 9% between now and 2020 and still meet the target.
Recently, Putin ordered Russian companies to dramatically decrease gas flaring (EurActiv 17/11/09). However, the move was seen as designed to cash in on the billions of roubles of gas wasted in flaring, instead of addressing the climate change challenge.
To be able to honour its gas export contracts, Russia has to turn to coal, said Kevin Rosner, senior fellow at the US Institute for the Analysis of Global Security.
Rosner presented his research, entitled 'Russian coal: Europe's new energy challenge' and sponsored by the German Marshall Fund of the United States, at a public event hosted by the Friedrich Ebert Foundation. Several experts and officials took part in the debate, held under Chatham House rules.
Russia has established an image for itself as an oil and gas giant, yet the country has gigantic coal reserves, second only to the USA, the research paper says. Rosner argues that the overarching aim of the analysis is to ensure that when those coal reserves are used, they have the smallest possible impact on the world's climate.
Other speakers pointed out that coal is produced in 26 Russia regions and its development is seen as a "factor of stability".
"Nobody dares to shut down a coal mine," as one speaker put it.
The Russian coal industry is also less centralised than the oil and gas sector and has to a large extent been privatised.
But Russian coal is of poor quality and its burning into the atmosphere is not a good option, speakers said.
"Russia coal is not competitive for example and has been displaced by Australian and South African coal in the UK, because its sulphur content is too high, and also its moisture content. That's why the shale gas people say, 'the coal is there, the gas is there, the coal is not good for export, then take the gas from it, and leave the coal underground,'" Rosner said during the debate.
Shale gas, the miracle solution?
Shale gas, produced from layers of sedimentary rock that are difficult to tap with conventional technology, was recently developed in the USA and made the country self-sufficient in gas, even bringing down world prices. Experts note that shale gas can be produced at coal basins and could be the miracle solution for Russia as well. However, speakers lamented that Russia had not formulated clear ideas about extracting shale gas.
Development of shale gas is set to rise by 71% between 2007 and 2030, the International Energy Agency said. In recent statements, Gazprom officials have shown disdain for shale gas and cited the possible negative environmental impact of developing such technologies.
Speakers said that developing shale gas was even more important for Ukraine, a country which has no gas resources but is rich in coal. Ukraine, like some EU countries such as Poland, could become less dependent on Russian gas by developing its own production, they said.
However, technological problems linked to shale gas extraction would represent an obstacle, it emerged during the discussion. Also, as Rosner's paper indicates, Western strategies for sharing technology with Russia are conditional on the country liberalising its domestic energy market and its commitment to cutting greenhouse emissions.
Positions
Kevin Rosner said that a recent World Bank report on energy efficiency in Russia advised the country not to develop new power generation capacities, but to concentrate on energy efficiency.
"In a nutshell, what the report tells us, is that there is a third way that Russia can bolster its power-generating capacity and maintain its strength as an energy giant, without new generating capacities. What it has to do is burn the stuff that it has better and to use it in smarter ways," Rosner said.
"Also, the report says that the greater efficiency, both in terms of return of investment and in terms of cost, are not in the power-generating sector, but downstream, on the consumer sector," he added.
Russia Today: NATO commander hints at possible use of Russian radars in missile shield
10 March, 2010, 13:52
The US may advance its partnership with Russia by using one of its radars as part of its anti-ballistic shield in Europe, says James Stravridis, NATO’s Supreme Allied Commander for Europe.
Stavridis said this cooperation could be made possible because of Obama’s decision to recall the Bush-era plans to locate an anti-missile defense shield in Eastern Europe.
US-Russia negotiations over a replacement for the START 1 treaty have been delayed due to hurdles in reaching full agreement, with missile defense plans being a particular sticking point.
Russia, concerned over Romania’s decision to host part of US anti-missile defense system in February, has stated that Washington’s missile plans would have to figure in the new treaty.
The chances of Russia joining the new missile defense system are great from Russia’s point of view, but unfortunately on the Americans’ behalf there is not much chance the offer will be taken up, believes independent political analyst Vladimir Kozin.
“I’m figuring out this notion simply by looking at the new ballistic missile defense review, released and signed on February 1, 2010 by US Defense Secretary Robert Gates. On page 34, to my surprise, I have found a sentence telling that Russia’s ideas to offer radars with their fine data are nice, but American radars cannot be dependable upon Russian data,” Kozin said.
In the light of American missile defence ambitions in Europe, Russia’s Foreign Minister Sergey Lavrov recently stated that a deal set to be signed by Russia and the US on a strategic arms reduction would cover these plans as well.
The signing of the deal however has been delayed even further after the White House said it didn’t see April’s non-proliferation summit in Washington as a deadline.
Strategic Arms Reduction Treaty was initially signed by the US and then-USSR in 1991 and expired December, 5. Both sides have been holding intensive negotiations on hammering out a new version of the deal but the final singing moment has been numerously delayed.
03.5.2010
Mil.ru: Dmitry Medvedev took part in an expanded meeting of the Defence Ministry Board
Moscow, March 5, 2010 - The meeting summed up the results of the Defence Ministry’s work in 2009 and clarified its objectives for 2010.
In his remarks at the meeting, the President gave an assessment of work undertaken so far to develop Russia’s Armed Forces. Russia has now achieved its goal of establishing combat capable forces with the number of servicemen now standing at one million. Equipment is being modernised gradually throughout the Armed Forces. The Government has been set the task of increasing the rate at which arms and equipment are upgraded by 9-11 percent a year, which will bring the share of new arms and equipment in the Armed Forces to 70 percent by 2020. Work is also underway on providing the Armed Forces with automated control centres and information systems.
Mr Medvedev said that priorities for the Defence Ministry include raising the prestige of serving in the Armed Forces, improving training, and ensuring better social support for veterans, servicemen and their families. The Defence Ministry also has a lot of work to prepare for the upcoming celebrations of the 65th anniversary of victory over Nazism.
The President said that he plans to attend the main events at the Vostok-2010 strategic military exercises.
On the subject of Russia’s defence policy, Mr Medvedev said that Russia has no need to increase its nuclear deterrent capability, yet the possession of nuclear weapons remains a determining condition for Russia to be able to pursue independent policies aimed at maintaining peace and preventing military conflicts.
The President also noted that talks with the USA are now very close to reaching agreement on a new START treaty. Full-scale contacts with NATO have also resumed.
During a break in the meeting Dmitry Medvedev met with military districts and naval fleets commanders. Defence Minister Anatoly Serdyukov and Armed Forces Chief of Staff Gen. Nikolai Makarov also took part in the meeting.
Speech at Expanded Meeting of the Defence Ministry Board
PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Comrades, as the Defence Minister said just now, we are here to sum up the results of the Ministry’s work over the last year and discuss our plans. I want to say a few words on some general issues.
A month ago, I approved the Russian Federation’s new military doctrine, which is now being studied closely both here and abroad. I also approved the Principles of State Nuclear Deterrence Policy until 2020. On the basis of these two documents we can draw several important conclusions.
First, we have no need today to continue increasing our nuclear deterrence capabilities, yet the possession of nuclear weapons remains a determining factor in Russia’s ability to pursue an independent policy directed at protecting its sovereignty, maintaining peace, preventing military conflict, and also helping to settle post-conflict situations.
Last year, we adopted amendments to the Law on Defence. These amendments provide the legal grounds for the Russian Federation to use its Armed Forces to protect its citizens beyond our borders. We should remember too that there are conflict potential and unsettled problems close to our borders. This unquestionably creates a potential threat to our national security.
But we are continuing our active efforts to cement the positive trends in international politics today. Over a relatively short time our intensive talks with the United States of America have brought us close to a new strategic offensive arms treaty, which will see both sides make cuts to their stockpiles of these weapons. After going through a somewhat rough patch, full-scale contacts between Russia and NATO have also resumed.
The reaction to Russia’s European Security Treaty initiative serves in many ways as a barometer of our relations with the USA and NATO. The defining issue here is our partners’ willingness to give a legally binding form to the principle of indivisible security in Europe. Active discussion is underway on this document. It is my conviction that the treaty we propose would give us precisely the instrument we need to be able to prevent various regional conflicts, above all on the European continent, including conflicts similar to the Georgian-Ossetian conflict.
Unfortunately, far from all countries and politicians have learned the lessons from what happened in August 2008. Unfortunately, Georgia continues to build up its military potential with the military support from outside. Taking this into account, and also the complicated social and economic situation in the Caucasus, I decided to establish the North Caucasus Federal District. Among other things, this makes its possible to coordinate the military and security forces there more effectively.
Colleagues, the main aim of our efforts to modernise the Armed Forces is to create modern forces equipped with the latest arms. In September 2008 I approved the respective modernisation programme. Last year we put the organisational foundations into place, keeping to the tight deadlines that we set and without going over our planned spending. Our Armed Forces now comprise one million servicemen. Overall, the Defence Ministry has reached its objectives of establishing combat-ready Armed Forces, as was confirmed by the Autumn-2009 military exercises.
As you know, I was present during the active stage of these exercises and saw the evidence that overall preparedness, coordination between the newly reorganised units and operations planning was all of rather high level. This does not mean that we have solved all our problems, but the overall impression was positive, especially when you think that it had been a very long time since we held military exercises of that level. These kinds of exercises need to become part of regular practice. Our Armed Forces simply cannot exist without them.
Officer training remains an essential task to work on. The Armed Forces need top-class specialists familiar with modern technology and deeply motivated by the military profession they have chosen. We need to develop our military education system, improve its material base, which has deteriorated over the last years, and support teachers who are experienced and devoted to their work. Sergeants need to be a particular focus for our attention. Sergeants need to have the training to enable them to step in and replace officers at the primary level if the circumstances call for it.
We need to raise responsibility of officials at all levels for developing the personnel reserve, building it up with promising and professional officers and organising additional training for them specific to the appointments awaiting them. It is good to see that appointments to the main command posts are coming mostly now from the personnel reserve. This policy should continue.
We still have much complicated and important work to do on providing the Armed Forces with new arms. As we agreed, we are working in stages. Last year, we stabilised the situation with arms and military equipment, carrying out the state defence procurement programme as planned despite the financial crisis, though not without encountering some problems on the way. Promising research and development work is underway – the kind of work we need to be able to modernise our arms and equipment.
At the same time, the system for carrying out defence procurement orders is still not working effectively enough. We still have work to do in this respect. Things are still moving too slowly. This year we will complete the drafting work on the new defence procurement programme for 2011-2020. I set the Government the task of increasing the rate at which arms and military equipment are upgraded by 9-11 percent a year on average, which will make it possible to increase the share of modern equipment to 70 percent by 2020. This work must be backed up by full and timely funding.
As for this year, I outlined our immediate tasks in the Address [to the Federal Assembly], in which I named the specific weapons systems and types that must be delivered in priority to the Armed Forces. No changes are planned in this respect. Obsolete arms need to be decommissioned. Planning work is underway on this in accordance with the federal targeted programme for 2011-2015 and until 2020. As I have already said in the past, we need to take the necessary measures to ensure proper use, storage and conservation of missiles, ammunition, explosives and all types of military equipment in general. Events last year highlighted the problems that we still have in this area.
Another issue is that of providing the Armed Forces with automated control centres and information systems. This also covers the work to move over to digital communications systems by 2012. This is another of the tasks I set in my Address. The Zapad-2009 military exercises tested a system of automated mobile control centres. This is just the start of our work. We need to step up the pace in this area because the situation with communications is still far from ideal.
One of the main tasks in 2010 will be work to raise general purpose forces’ combat readiness within the framework of their new organisational and personnel structure. The main focus here should be on establishing and training combined forces groups and also maintaining and developing the nuclear deterrence forces, in accordance, of course, with the thresholds set on strategic offensive weapons. The main training event this year will be the Vostok-2010 military exercises. I will plan my schedule so as to be able to attend the main events during these exercises.
Another of our priorities is to raise the prestige of service in the Armed Forces and improve social support for veterans, servicemen and their families. I stress in this respect that the state will fulfil in their entirety its obligations towards current and retired servicemen. There will be no changes to the budget allocated for this, and nothing will change our plans in this respect. The Government has clear instructions to provide all servicemen in need with permanent housing by the end of this year, and with service housing by 2012. Work is progressing quite well on this and I will be keeping it under my supervision.
We need to implement in full our commitments to raise servicemen’s wages, including through the transition to the new payment system starting from 2012, and we also need to guarantee implementation of the Security Council’s decisions to raise retired servicemen’s pensions. We must not forget those who have left the Armed Forces.
You all know Order 400, which provides incentives for military work and has produced good results. I think that in introducing the new wage payment system we should keep the bonus option. I expect the Defence Ministry to present me with proposals on this matter, so that we can organise a system of bonuses and incentives alongside the actual wage system.
We also need to pay special attention to the 65th anniversary of victory celebrations. This is a special event, an event of particular importance. The Defence Ministry has a lot of work before it in this respect. I expect that all of this work will be implemented as planned, including the military science’s contribution to defending the truth about the events of that period (and not just the science), and affirming a fair and unbiased view of our country’s leading role in vanquishing Nazism.
In conclusion, I want to say once again that modernising our Armed Forces requires us to work effectively, consistently, in coordinated fashion, carry out our plans, not hesitate and continue moving forward.
Thank you.
Itar-Tass: Russian army to get new Pantsir-S1 air defence system in 2010
10.03.2010, 20.04
MOSCOW, March 10 (Itar-Tass) -- Supplies of Russia’s newest Pantsir-S1 air defence systems to the army will begin in 2010, Defence Ministry spokeswoman Irina Kovalchuk said on Wednesday.
She said Defence Minister Anatoly Serdyukov had made the announcement during his working trip to Tula earlier in the day.
“During the trip, the minister visited the Shcheglovsky Val plant where he was taken on a tour of an exhibition of new arms and military hardware made by Tula’s defence enterprises, specifically those made by the Instrument-Making Design Bureau, the Strela Research and Production Association, and the Tula Machine-Building Plant,” Kovalchuk said.
“The minister gave special attention to the Pantsir-S1 air defence system. According to Anatoly Serdyukov, supplies of the system to the army will begin this year. Currently, ten such systems are being prepared for participation in the VE-Day parade in Red Square,” she said.
GSN: Russia Removes Nuclear Fuel From Sub
Wednesday, March 10, 2010
Russia has finished removing spent nuclear fuel from a decommissioned Borisoglebsk K-496 submarine, Interfax reported yesterday (see GSN, March 2).
"The operation, which began in December 2009, went in accordance with the normative documents and in full compliance with the radiation safety regulations," said officials with Russia's Zvezdochka shipyard.
Canada provided financial support for the fuel removal, and the United States backed dismantling the submarine's missile and rocket silos.
The submarine was decommissioned in 2008, after funding proved insufficient for the vessel's refurbishment (Interfax, March 9).
Bellona: Battle to revise Russia radioactive waste bill continues as enviro groups are shut out of the dialogue
NEW YORK – Powerful environmental groups in Russia have stepped forward to say they have been shut out of a process to revise a new bill on radioactive waste management in Russia, saying their suggestions to improve the bill have been ignored, representatives of Greenpece Russia and Ecodefence told Bellona Web Tuesday. Charles Digges, 10/03-2010
There is no set date for the second reading of the controversial bill – and three readings are required for it to be adopted as law – but the environmental community has all but been cut out of the process of adding necessary improvements to make it safe, Russian environmental groups said Tuesday, said Vladimir Slivyak, co-chairman of Ecodefence.
Slivyak said in an email interview with Bellona Web that according to the Duma’s environmental committee, no information about when the second reading may take place will be available until after March 17th, something Slivyak attributed in an email interview as the Duma wanting “to wait for public attention to calm down a bit.”
At issue is a new law on dealing with radioactive waste in Russia that was passed in January by Russia’s lower house of Parliament, the Duma, in its first reading. Environmentalists, while acknowledging that there are precious few laws regulating the handling of radioactive waste in Russia, say the new law could give the nuclear industry nearly unchecked license to carry on with unsafe waste disposal practices.
Yesterday Russia’s state nuclear corporation Rosatom presented its second draft of the bill “On Management of Radioactive Waste” during an “expert round table” in Moscow. Prior to the convening of the roundtable, environmentalists issued a statement saying the bill is “convenient for Rosatom, but dangerous for the Russian people.”
After the bill’s first reading in the Duma, more than 30 environmental organisations from Regions across Russia, including Bellona, participated in a protest post card drive to Duma deputies.
February’s mail brought more than 500 signed letters, including ones from people who had sustained injuries and illnesses from Russia’s nuclear industry, urging the Duma not to adopt the bill in the form in which Rosatom has presented it.
On Wednesday, Slivyak said the public outcry continues, with some dozen protest postcards arriving at the Duma daily.
EU anti-nuke support
Protest against Russia’s larger issues of imported spent nuclear fuel and staggering radioactive waste imports were also raised today by the European Union.
European Commission Energy Commissioner Gunther Oettinger today said in an interview with the Financial Times Deutschland, as quoted by the EU Observer, that Brussels is against member states exporting their nuclear waste to countries outside the EU or to store it in joint sites.
"It is the duty of national politicians to do their homework," he said as quoted in the EU Observer. Oettinger warned against common storage sites, as well as exporting the radioactive material outside the EU, for instance Russia.
The Financial Times Deutschland reported in February that many Wester EU Member States intended to ship high-level nuclear waste to Eastern European ones for storage – an option viewed by its proponents as being cheap.
Oettinger's however poured cold water on such a plan saying that special waste exports for economic reasons was “scandalous and dangerous. He added that shipping such waste beyond EU borders was also out of the question, as the EU has no way to inspect such sites.
Yet Rosatom has two deals, one with the German-Dutch nuclear consortium Urenco, and France’ Eurodif division of Areva to accept depleted uranium hexafluoride – a by-product of uranium enrichment also known as uranium tails – for reprocessing. However, according to date reported by Ecodefence, less than 10 percent of this waste is ever returned to its countries of origin.
February meetings included – and flushed – enviro input
But Oettinger’s support of keeping Russia and Eastern Bloc countries free of foreign nuclear waste did little to aide environmental discussions on the ground in Moscow.
Indeed, that environmentalists suggestions would be cast aside was something of a surprise. Through last month, a special working group of various Rosatom departments, Duma deputies and environmentalists met several times to go over the structure of the bill and deal with the hail of criticism its first iteration brought about.
When the bill passed its first reading on January 28th, – three are required for its adoption –environmentalists noted that, if adopted as law, it would, in fact, be Russia’s only law on dealing with the management of radioactive waste, and only the third law dealing with the operation of nuclear industry sites to begin with. But they also argued that passing the current law in the state in which it was presented would have been as big a risk to Russia’s environmental health as was the Russian law on protection of the environment — a 2001 document that de facto sanctioned imports of foreign-generated nuclear waste for reprocessing in Russia.
During February’s meetings with officials, however, environmentalists and citizens’ principle contentions with the new bill remained unheard by Duma deputies or nuclear industry representatives. Further, said representatives of Ecodefence and Greenpeace Russia – who had participated actively in February’s discussions – they were not even invited to take part in the roundtable discussion of the new Rosatom produced bill.
Rosatom officials, reached by Bellona Web on Wednesday, refused to comment on why they had turned away the environmental groups from the roundtable discussion, saying only, “we are satisfied with the way the bill in its current form.”
Bill to manage radwaste needed – but not this one
Greenpeace Russia and Ecodefence readily support the notion of a bill to regulate the management of radioactive waste in Russia, but oppose its current form for a number of reasons, saying that it “will bring disproportionately more harm than good because it is aimed at the creation of favourable economic conditions for Rostatom, often at the expense of environmental safety.”
In a joint release to Bellona Web, Ecodefence and Greenpeace identified five key issues that make the current reworking of the bill untenable for the purposes of radioactive safety in Russia.
First, the new legislation legalises the currently illegal practice of injecting liquid radioactive waste into the ground. By pursuing profits, Rosatom plans to undertake actions that will spread radioactive substances in Russia’s water tables. Alternative to this do exist, namely solidifying the liquid waste and burying it.
Second, the bill, and the process that created it in its current form, sets a precedent for totally ignoring public opinion regarding the sites where radioactive waste would be stored – though local populations are the ones who will be forced to live with it for thousands of years. Russia’s regional governors, who are appointed by the Kremlin, are unlikely to refuse proposed radioactive waste repository projects – and their agreement is all that is required in the new legislation.
Third, the bill in its current iteration encompasses both waste that is piling up prior to its adoption, as well as that which will build up after it is signed into law. In accordance with announcements made by the authors of the bill, the state – that is the Russia taxpayer – is responsible for this waste. This waste includes not only what has built up before the bill’s adoption and what continues to build up afterwards, but radioactive waste that has accumulated at commercial reactors. The principle contained in the bill of giving Russian nuclear power plants a clean slate will cost the Russian taxpayer billions in additional taxes.
Fourth, the bill’s developers’ assertion in discussing new radioactive waste that will build up after the bill’s adoption say that the legislation fortifies the financial responsibility of the waste’s producers. However, the language of the bill contains a so-called “principle of multiple financing sources” for radioactive waste disposal. In practice, this means that one of these financing sources will sooner rather than later become the Russia federal budget. There are already dozens of outright and furtive schemes for state subsidisation of the nuclear industry.
For instance, Rosatom has secured the release of property tax to be paid for temporary radioactive waste storage sites. Within the framework of the current bill, Rosatom has already secured property-tax-free repositories for radioactive waste.
Lastly, the current bill contains no regulation dealing with situations of change of ownership of the radioactive waste. Essentially, this means that if over the course of a few years Rosatom decides to change its name, then it can repeat its focus on relieving itself of the responsibility of all radioactive waste that has accrued previous to that prospective name change.
“Environmental organisations demand, as before, to change the bill,” said Slivyak, “to forbid the injection of liquid radioactive waste into the ground, to take into account public opinion when selecting sites for possible repositories for their nuclear waste, to exclude the various budgets of various levels to dispose of the waste from nuclear energy.”
Russia Today: Space crew being put through their paces
11 March, 2010, 11:00
The main and backup flight crews for the next expedition to the International Space Station are undergoing their final exams before being cleared to undertake their orbital mission.
Russians Aleksandr Skvortsov and Mikhail Korniyenko and American Tracy Caldwell Dyson are slated to become the next people to travel to the ISS in April.
On Thursday, they are taking tests at Star City near Moscow, to show how well they have studied during the several months of intensive space training. They will have to deal with simulated emergencies on the models of the ISS and the Soyuz spacecraft, in order to demonstrate technical and first aid skills.
Skvortsov has a military background. He graduated from a military academy and is an air defense specialist. While training to be a cosmonaut, he also became a certified pilot. Skvortsov was recently promoted to colonel.
Korniyenko is an aviation engineer and worked for Russia’s leading space producer, Energia. He also served in the police for some time.
Caldwell has a PhD in chemistry. She is also the only member in the crew to have previous space experience. In August 2007, she spent 12 days in space onboard the Space Shuttle Endeavour, as it delivered new equipment to the ISS. Interestingly, she married in November last year, while undergoing her space training course.
Expedition 23 is to be launched on April 4. The three crew members will join Oleg Kotov, Soichi Noguchi and Timothy Creamer, who have been working on the space station since December last year.
Meanwhile Maksim Suraev and Jeff Williams, the two other spacemen currently onboard the ISS, are to return to Earth next week. The Soyuz TMA-16 capsule is scheduled to undock from the station on March 18 and land in Kazakhstan several hours later.
BarentsObserver: Zubkov to lead Svalbard commission
2010-03-10
Russia’s First Deputy Prime Minister Viktor Zubkov is appointed new Head of the Governmental Commission for Russian presence on Svalbard.
Zubkov takes over the post after another First Deputy Prime Minister, Igor Shuvalov, news agency RIA Novosti reports.
The appointment of Mr. Zubkov as Head of the commission can imply an enhanced Russian focus towards Svalbard. The Russian Federation Council concluded at a round table conference in April 2009 that the archipelago is of unquestionable strategic importance for Russia and gives the country great opportunities for presence in the Western parts of the Arctic.
Production of sea food, scientific research, tourism and petroleum exploration are among the field of activities that Russia want to develop on Svalbard.
- As long as Russia kept a high level of activity on Svalbard, out presence there was never questioned, said Gennady Oleynik, Head of the Federation Council’s Committee for the North and Indigenous Peoples at the conference. – Such questions were only raised when we cut back our activities at the same time as Norway enhanced its presence on the island, he added.
Murmansk Oblast Governor Dmitry Dmitriyenko and Arkhangelsk Oblast Governor Ilya Mikhailchuk are members of the Governmental Commission for Russian presence on Svalbard, together with several high ranking politicians and officials, the Government's web page reads.
Norway has sovereignty over the Svalbard Archipelago in line with Paris Treaty of 1920. However, also the other signatory countries are entitled to engage in industrial activities in the area, but then only in accordance with Norwegian law.
About 500 Russians and Ukrainians now live and work in the settlement of Barentsburg. The Norwegian authorities on the islands are based in the nearby town of Longyearbyen.
10 March 19:24
.ru: Prime Minister Vladimir Putin chairs a meeting on tax policy
“The tax service must set up the conditions so that law-abiding businesses are able to enjoy available preferences in full. It should help taxpayers make their payments correctly and on time instead of finding faults and prosecuting them for minor errors. Nevertheless, there should be some procedures.”
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Vladimir Putin's opening address:
Ladies and gentlemen,
Today, we will continue our work on next year's draft federal budget. Let's start with our top priority: tax policy guidelines. I think you will agree with me that we must consider this issue very thoroughly, weighing every step carefully. We must understand the medium- and long-term consequences of our decisions.
First of all, the tax service should perform its basic function, collecting taxes.
At the same time, it is necessary to consider the need for incentives for growth. Incentives for innovation and an innovation economy are extremely important for us right now. So we will assess once again how effective our previous decisions regarding privileges and preferences have been.
As we now understand very well, merely putting particular incentives in place does not suffice. We must also implement and manage these incentives effectively.
In practice, the tax service must set up the conditions so that law-abiding businesses are able to enjoy available preferences in full. It should help taxpayers make their payments correctly and on time instead of finding faults and prosecuting them for minor errors. Nevertheless, there should be some procedures.
The burden on payrolls will increase next year. This will certainly be the most acute problem in the near future. As you know, we have decided to increase mandatory social insurance payments. Otherwise, it would have been impossible to achieve financial stability in the pension system while raising the older generation's living standards at the same time.
However, we have put off a tax increase due to the economic crisis. This year premiums will remain frozen at 26%. We must find resources so we can increase the financial burden gradually over the course of next year.
Moreover, we have innovative businesses that even a small increase in taxes could force to cut back on development. We are willing to keep their premiums at 14%, which is practically what they pay now. We should also re-examine the official list of industries eligible for this privilege. On the whole, we should pay the most attention to high-tech industries, with their unique products.
Another challenge for the coming year is to continue to develop new amortisation mechanisms appropriate for the current economic situation.
Companies switching to new energy-saving equipment will be entitled to more incentives, and may even be exempted from property taxation for three years.
It is clear to all that these steps will free up significant resources for businesses to develop, and that the most active businesses in introducing cutting-edge technology will gain most.
We also have a system of patents for small businesses. The entrepreneurs who purchase patents at fixed prices will be free to do business with a minimal level of accounting standards and other administrative burdens and barriers.
This fiscal arrangement is the most convenient for business, and so deserves to be expanded.
Last but not least, educational, research, cultural and healthcare non-profit organisations should be exempted from the profit tax, which will give them considerably more leeway to do their jobs. And in future, we may transfer some budget-funded contracts to NGOs. Experience has proved that this measure encourages competition to provide public services and improves such services.
I ask the Finance Ministry to prepare relevant amendments to the Tax Code and submit them to the government.
Moreover, commercial educational and healthcare organisations should be exempted from the profit tax for eight years or longer.
Please prepare a relevant draft and also submit it to the government. I think this would be a fair arrangement that would improve public education and healthcare.
Another proposal is for profit tax exemptions on the sale of securities that are owned for five years or longer and are not traded in established markets.
We will discuss this, too. Now let us get down to our agenda.
RIA: Drug abuse major threat for Russia's security - drug watchdog
07:5511/03/2010
Drug addiction, which has spread significantly across Russia over the past decade, poses a serious threat to the country's security, Russia's Federal Drug Control Service has said.
According to a statement issued by the drug watchdog on Wednesday, there are some 550,000 drug addicts officially registered in Russia, with unofficial estimates as high as 2.5 million accounting for almost 2% of Russia's 142-million population.
The statement said the number of drug addicts in Russia has risen "sharply" over the past 10 years, and the number of drug-related crimes has increased significantly.
"Taking into consideration the demographic crisis, which has hit almost all country's regions, further increase in numbers of drug addicts should be considered a major threat to the security of the Russian Federation," it said.
According to the Federal Drug Control Service, almost 75,000 Russians annually try drugs for the first time, with the annual death toll reaching 30,000.
Some 238,000 drug-related crimes were registered in Russia in 2009, which is 2.5% more than in 2008. Some 46 tons of drugs were seized across the country last year.
Russia is battling a rise in the flow of heroin from Afghanistan into its North Caucasus region. Afghanistan produces more than 90% of the world's opium, the main raw material for heroin and a major source of revenue for the Taliban-led insurgency in the country.
MOSCOW, March 11 (RIA Novosti)
Itar-Tass: Some 13 kg of cocaine seized at Pulkovo airport
11.03.2010, 09.58
ST. PETERSBURG, March 11 (Itar-Tass) -- Almost 13 kilograms of cocaine have been confiscated from a citizen of Latvia in St. Petersburg’s airport Pulkovo.
“The foreigner was detained on Wednesday by transport police officers. He arrived from the Dominican Republic,” a law enforcer specified. A total of 12.98 kilograms of cocaine were found in his luggage.
Law enforcers believe that that the foreigner is a drug currier. His accomplices in illegal drug trafficking are being established.
RIA: Russia has largest number of tycoons in Europe - Forbes
04:5611/03/2010
Russia has the largest number of billionaires among the European countries, Forbes magazine has said.
According to the Forbes' annual list of word's richest people published on Wednesday, the number of billionaires in Russia has risen to 62 from 32 last year.
The list of Russian billionaires widened due to 28 returnees who had fallen off last year's list amid a meltdown in commodities, Forbes said.
Over 2008, a total of 55 rich Russians were excluded from the prestigious list due to the economic crisis.
Vladimir Lisin, the owner of the Russian steel giant Novolipetsk Steel, is Russia's richest person with a fortune of $15.8 billion, according to Forbes. The tycoon occupies the 32nd position in the magazine's list of world's richest people.
Mikhail Prokhorov, the president of Onexim Group who topped last year's rankings, is second in the 2010 list of richest Russians with an estimated wealth of $13.4 billion. TNK-BP interim CEO Mikhail Fridman is Russia's third richest person, with a $12.7- billion wealth.
RusAL CEO and owner Oleg Deripaska, who topped the 2008 list of richest Russians, fell from the Forbes' Top 10 Richest Billionaires to the 164th position in this year's list, with an estimated wealth of $10.7 billion.
Deputy Chief of Forbes' Global Wealth Group Luisa Kroll told RIA Novosti she was surprised with the result of the Forbes' research, which showed representatives of the Russian business elite successfully fighting the consequences of the global recession.
NEW YORK, March 11 (RIA Novosti)
Billionaires List
Forbes: The Hard Man of Russia
Anita Raghavan, 03.29.10, 12:00 AM ET
Alisher B. Usmanov made his first fortune more than two decades ago making plastic bags--a commodity so scarce in the former Soviet Union that people washed and reused them. "It was a great time," says the 56-year-old Uzbekistan-born opportunist. He proudly displays a yellow bag sporting a butterfly with the Soviet and American flags on each wing to mark the 1988 visit of former President Ronald Reagan with Mikhail Gorbachev.
Since then Usmanov has morphed into a metals mogul and can now claim to be the biggest Russian investor in the Internet. From polymers to iron to social media? Not such a stretch when you consider each business satisfied a consumer-driven need of the moment: a sudden explosion of products on store shelves; construction materials for the building boom; new outlets for networking. Now he is looking West for opportunities, particularly to America, a land he describes as "technological country number one." A year ago he got a call from Yuri Milner, chief executive of the Russian venture fund Digital Sky Technologies, in which Usmanov's 35% stake is the largest. "Do you know this company Facebook?" Usmanov recalls Milner asking, mentioning that DST had a chance to grab a piece of it. "No," Usmanov deadpanned. "[But] my nephews know it."
The co-owner of Metalloinvest, the biggest producer of iron ore in Russia and one of the country's largest steelmakers, Usmanov is sitting down over tea and Russian pastries in a guesthouse, one of three buildings on his 30-acre estate in the Moscow suburb of Rublyovka. Fellow townspeople include some of Russia's biggest power brokers, including the biggest of them all, Prime Minister Vladimir Putin. A modest wooden exterior masks a room with rich Oriental carpets, a gilded chandelier and a dining table that seems to have the proportions of a bowling lane. Usmanov urged Milner to jump at the chance to buy into Mark Zuckerberg's creation. "[If] you have the possibility to invest in a company with big upside potential before its public placement," he says, shuttling between Russian and heavily accented English, "it's great for making money."
Something Usmanov and his fellow Russians are doing pretty well these days. A little over a year ago the oligarchs were flat on their financial fannies, hit by a crash in commodity prices that forced highfliers like Oleg Deripaska to seek government help to cover debt service at his steel company, UC Rusal. All told, the Kremlin forked over $11 billion to bail out the moguls in 2008, plus $10 billion last year to save some of the biggest employers (a number, like Metalloinvest, got the state to guarantee $1 billion in loans). After hiring investment bankers in 2008 to help sell Metalloinvest shares to the public for the first time, Usmanov had to shelve his plans. (He now says the company is preparing for an initial offering, perhaps later this year.) At the depth of the crisis his 5% stake in Norilsk Nickel, bought in 2008 for $2.5 billion, was worth a fifth of that. But thanks to some pickup in commodity prices, his fortune--along with those of 28 Russian billionaires who had dropped off the FORBES list of the world's richest people in 2009--got a big lift this year. Usmanov, whose net worth fell to $1.6 billion last year, is back to $7.2 billion, making him the fourteenth-wealthiest Russian.
Usmanov--dubbed "the hard man of Russia"--has always been something of a round peg in a square system. Born in the village of Chust in what was then the Uzbek Republic, he yearned for a bigger life. He applied to the Moscow State Institute of International Relations, where the clever and the well-connected gathered. Usmanov failed to make the quota for students from his Soviet Republic on his first go, but a year later he succeeded and studied international law. There he linked up again with Irina Viner, whom he'd met years earlier at a gym in Tashkent. Viner, who went on to train many Russian Olympic medal winners in rhythmic gymnastics, was coaching; Usmanov, an accomplished fencer, was practicing. Their marriage in 1992 caused quite a stir: He is Muslim, and she is Jewish.
By then Usmanov already had a big dustup behind him. In 1980 he and a friend were convicted of fraud and embezzlement (allegedly shaking down an Army officer), and sentenced to eight years. He served six. Years later the Uzbek supreme court ruled that the case against him had been trumped up.
Out of jail, Usmanov fell into the plastics business. Holed up with a broken leg in a hotel in the late 1980s, he had as a roommate an engineer for a petrochemicals company. Usmanov read a book the man left behind and discovered that with one ton of polymer he could make 30,000 to 36,000 plastic bags. That ton cost 437 rubles; a bag typically retailed for a ruble. The economics were irresistible. Usmanov borrowed an unspecified amount of money to make use of a factory (still "Soviet property," he says) at night. Soon he was undercutting rivals by selling bags for 60 kopecks.
As Russia began shaking off seven decades of communism, budding capitalists started buying prized assets the state was jettisoning at fire-sale prices. Usmanov held back. Instead, in 1994 he started an investment holding company, Interfin, one of the first to trade on the Russian stock market, to acquire assets. Four years later, Usmanov says, he was invited by Rem I. Vyakhirev, then the chairman of Gazprom, to join Gazprominvestholding, which owned a grab bag of companies. Russia was in the throes of financial crisis, and a number of companies were repaying their debts to Gazprom by pledging assets. It was Usmanov's job to restructure them.
Gazprom pushed Usmanov in a new direction. Between 1998 and 2000 Gazprom received shares in Oskol Electrometallurgical Plant and Lebedinsky Mining & Processing Plant as payment of debt and created a new entity, Gazmetal. Usmanov bought Gazmetal shares in the open market, acquiring the company--and its metals business--in 2002. Four years later Usmanov and his partner's various assets were consolidated into a company called Metalloinvest.
Metals mogul though he is, Usmanov is more of a numbers guy, who has prospered by buying greatly undervalued assets. He says he started buying into steelmaker Corus in May 2003 "at its lowest point, when everybody decided it was bankrupt." He sold his holdings a year or so later and netted a profit of roughly $500 million. The price at which he sold his stake was 30% less than the acquisition price Indian steelmaker Tata paid for Corus three years later, he says.
But Usmanov has had trouble buying respect, especially in the U.K. In August 2007, when he and a partner bought a 14.6% stake in English Premier League football club Arsenal, Gunners fans welcomed the new boss with banners declaring, "Love Arsenal--Hate Usmanov" and "Sod Off Jabba" (a rude dismissal, and a reference to the portly crime lord in the Star Wars movies). He doesn't have a board seat, and his idea of raising money for the club through a rights issue was nixed last summer. More vexing: All that publicity dredged up stories about his doing time in Uzbekistan. He learned "to be a man" in jail because "the price you have to pay for your words and actions is extremely high there," he says ruefully. It still rankles him.
Usmanov insists the Brits don't have a problem with him. Yet his last-minute purchase of the art collection of Mstislav Rostropovich, the late cello virtuoso, on the eve of a Sotheby's sale for $100 million caught the London art community by surprise. His recent plans to build a Roman-style pool house at his $77 million historic-registry-listed Regency home, Beechwood, had preservationists in a snit. Citing the possibility of a "dangerous precedent," Michael Hammerson, planning spokesman for the Highgate Society, told the Evening Standard, "We will be alert to see if it is one of these ghastly mock-classical designs which seem all the rage around the heath with people who seem to believe that big money automatically means good design sense."
Cyberspace has been far more hospitable. Usmanov has long had a fascination with technology. His first foray into that world, a bid in 1999 to invest in a Web exchange to trade metals, was a flop. "It was wrong for us," Usmanov concedes. "It was the dot-com bubble, and it didn't work out." But it didn't keep him out forever. In December 2006 he invested in Gazeta.ru, an Internet newspaper, and a year and a half later he bought a 50% stake in a holding company that owns two blogging sites, Russia and America .
Last May DST paid $200 million to buy high-valuation preferred shares in Facebook, which equate to just shy of 2%, pegging the company's worth at $10 billion. In an unusual twist to the deal, DST also pledged to kick in another $100 million to buy out employee-owned common stock--typically shunned by venture fund investors because the shares rarely carry voting rights--at a lower valuation. The fund owns just a smidge over 5% of Facebook. Last year DST plowed in most of the $180 million invested by a group of venture funds in Zynga, a small but fast-growing company whose interactive online games like FarmVille, PetVille and Mafia Wars are all the rage on Facebook.
While insisting that Yuri Milner calls the shots at DST, Usmanov isn't shy about sharing his views of what the Web will look like. Stand-alone social networks will be less attractive than integrated companies providing search services and various sources of content. "If Google doesn't make a mistake, it will be number one," he opines, conceding that he could be tempted to buy a search company. "Some combination of Facebook with a search engine could be a viable rival."
He is also hedging his bets with some slightly more traditional media. In 2006 he bought the 140,000-circulation Kommersant, a daily (except Sundays) broadsheet, from the partner of Boris Berezovsky, an oligarch who lives as an exile in London. He recalls telling Damian Kudriavtsev, who runs Kommersant Publishing, "Every newspaper is going into crisis. You need to go into the Internet." The company derives roughly 6% of its revenue from its Web activities. "If anything," says Kudriavtsev, "the crisis has reinforced his belief in new media."
Russian President Dmitry Medvedev, who served as chairman of the board at Gazprom when Usmanov was working there, has championed the Web as key to a modern state. So is Usmanov's infatuation with the Internet politically motivated? Usmanov scoffs at the idea. Of course, he wouldn't turn aside the tax cuts the government is mulling for high-tech companies. Still, he says, "I can tell you looking straight into your eyes that if we succeed and our leadership considers it a smart political move, I would be very glad."
You can easily find several photos of the prime minister among the chandeliers and Italian marble at Metalloinvest's Moscow headquarters. "I am proud that I know Putin, and the fact that everybody does not like him is not Putin's problem," says Usmanov. He stretches for a historical comparison: "I don't think the world loved Truman after Nagasaki."
BBC: Independent set for radical change under Russian owner
By Richard Anderson
Business reporter, BBC News
Russian billionaires don't usually shop at Poundland, but Alexander Lebedev is no ordinary oligarch.
Unlike many of his contemporaries, the former KGB agent, born into a life of privilege and prosperity, prefers to shun the ostentatious trappings of the super-rich.
Instead, Mr Lebedev prefers to indulge what his friends describe as a passion for free speech. Others say he is simply a ruthless businessman with a keen eye for a bargain.
Either way, he bought the Evening Standard newspaper for £1 last year, and is currently negotiating with Independent News and Media (INM) to buy the Independent and Independent on Sunday.
A deal appears imminent, and the rumoured price? One pound - the cost of one copy of the daily newspaper.
Hobson's choice
But whether this represents a bargain is a moot point.
The two titles "have been running at a loss for a very long time and you could argue that they have never been profitable," says Tim Luckhurst, Professor of Journalism at the University of Kent and a former editor of the Scotsman newspaper.
“ It is not inconceivable that a free Independent could do very well ”
Tim Luckhurst, Professor of Journalism, University of Kent
In September last year, a spokesman for Denis O'Brien, a major shareholder in INM, estimated the titles had lost the group almost £200m since the mid-1990s.
In fact, the only reason why they have not been closed already, Professor Luckhurst suggests, is because this option is even more costly.
INM has a five-year, £35m contract with Trinity Mirror group to print the papers. Buying out the contract would, he says, cost "slightly more" than continuing to print them.
Falling revenue
The fundamental problem with the Independent and Independent on Sunday is, quite simply, not enough people read them.
A newspaper needs readers to buy papers and attract advertisers. The Indy falls short on both counts.
In January, the daily paper's circulation was 186,000, significantly less than the Guardian's 302,000, the Times' 508,000 and the Telegraph's 691,000.
The Sunday paper falls equally short.
This historic problem meant the papers were hit particularly hard by the falls in advertising revenue the industry has suffered in recent years.
According to Alfonso Marone, media partner at Value Partners Group, newspaper advertising revenue fell from £4bn to £2.7bn between 2006 and 2009. During the downturn, he says, it fell by 30% to 40%.
Add to this the gradual decline in newspaper readership as more and more customers go online in search of free news, throw in some pretty hefty pension obligations and it's easy to see why buyers have not been queuing up to buy the two papers.
"The Independent is an underperforming asset in an underperforming market," Mr Marone concludes.
Slashing costs
So what can Mr Lebedev do to turn the papers around?
First and foremost, he could invest heavily, something INM was not in a position to do. He could invest to improve the papers' online offerings, to attract more well-known and well-respected columnists, and to bolster marketing and advertising campaigns.
“ Mr Murdoch is the most famous, but there is not a single serious online media business that is not looking at charging for content [in some form] ”
George Brock, Professor and head of Journalism, City University London
Indeed the media rumour mill has been working overtime in recent weeks, throwing out names such Jeremy Paxman, presenter of BBC's Newsnight, and Greg Dyke, the former director-general of the BBC, as possible candidates to run the re-launched papers
Second, he could slash the cost of the paper.
All these measures could help to boost circulation, particularly as the other broadsheets could not possibly afford to match big price cuts.
Mr Marone also says the paper would benefit greatly from operating in the same stable as the London Evening Standard. This free title could be used to help entice advertisers, he says, while operating out of the same offices in Kensington, London, would mean sharing resources and reducing costs.
Limited access
But the most intriguing option would be to give both titles away for free.
Professor Luckhurst says this is the way Mr Lebedev would like to go: "To offer Britain's first quality free national newspaper."
Mr Lebedev has already made the Standard freely available, boosting circulation from 250,000 to 600,000 in the process, Professor Luckhurst says.
DAILY BROADSHEET CIRCULATION
• The Telegraph, 691,000, down 11.8%
• The Times, 508,250, down 17.7%
• The Guardian, 302,285, down 15.8%
• The Independent, 185,815, down 13.8% Source: ABC. January circulation, year-on-year percentage falls.
And there are precedents for successful free papers, he argues, such as City AM and Metro in England and national titles in Spain.
Sacrifices would have to be made, however. Logistics alone mean that any free national newspaper would only realistically be made available in big cities - rural communities would have to go without.
Indeed Professor Luckhurst suggests the reason a deal has not yet been agreed is due to difficulties in negotiating distribution contracts.
But, he says, "it is not inconceivable that a free Independent could do very well."
Mr Marone agrees, arguing that "there is a market for a free national newspaper".
At a time when newspapers are considering charging for online content, having given it away for free for years, such a move could even be well-timed.
Last year, Rupert Murdoch announced that News Corp, which owns the Times and Sun newspapers, would start charging for online content.
"Mr Murdoch is the most famous, but there is not a single serious online media business that is not looking at charging for content [in some form]," says George Brock, Professor and head of Journalism at City University London.
For those unwilling to pay, a free Independent may seem like a very attractive proposition.
Winning friends
And if doesn't work out? If a free Independent does not become profitable? Then all may not be lost.
Much will depend on Mr Lebedev's championing of the ideals of free speech.
Or perhaps on his desire for power and influence in his adopted home - the direct dial that owning a national newspaper provides to the Establishment.
As Professor Luckhurst says, history is littered with examples of "rich proprietors able to subsidise [a newspaper] to win a seat at the top table."
Just how much Mr Lebedev is willing to spend to gain influence with this elite group is key.
As Professor Brock says: "Even very rich businessmen don't like throwing money away without seeing some kind of return."
Expert Club: Shootings continue in Ekazhevo
11/03/2010 10:31
At night of March 10th unknown persons opened fire from grenade launchers at a house owned by the head of administration of the village Ekazhevo of the Nazran district in Ingushetia (Russia) Khavaja Sapraliev. There were no casualties. Search for criminals is under way.
This incident is linked with a large-scale operation that was held in the village of Ekazhevo on March 2 and 3, during which 6 militants were killed, including one of the leaders of the insurgency Said Buryatsky, and 16 people were detained.
It is thought that Sapraliev might again become an object of attack, as there are suspicions that during the above operation he cooperated with law enforcement bodies.
10 March 2010, 11:31
Interfax: Madrasah teacher shot dead in Dagestan
Makhachkala, March 10, Interfax - The body of a madrasah teacher with gunshot wounds has been found in his home in the village of Yasnaya Polyana in the Kizlyar District of Dagestan, a local police source told Interfax on Wednesday.
The circumstances of the murder have yet to be clarified, and a criminal case has been opened to this end, he said.
Earlier, in January, Deputy General Director of the Kizlyar Electromechanical Plant Ahmed Ibragimov was killed in Dagestan. Ht was engaged in public and religious activities and was deputy imam at a mosque in Kizlyar.
On May 2009, Deputy Mufti Ahmed Tagayev from the Muslim Spiritual Board of Dagestan was killed in Makhachkala. He was one of the main ideologists of the opposition to religious extremism among Muslims.
On November 2008, an attack was made against the Dagestan mufti's advisor, Sultan Sultanmagomedov, and his driver. Both sustained shrapnel wounds from the explosion. Urmagomed Gajimagomedov, a servant from a local mosque and a vocal opponent of extremists, was killed in October 2007.
There are up to one hundred of subvertionists and around 1,500 Wahabis in Dagestan.
CPJ: Staff of Dagestani weekly on trial for extremism in Russia
New York, March 10, 2010—The Committee to Protect Journalists expressed concern today at the continued criminal prosecution of five journalists with the Dagestani independent weekly Chernovik.
Editor-in-Chief Nadira Isayeva and reporters Magomed Magomedov, Artur Mamayev, Timur Mustafayev, and Biyakai Magomedov are charged with incitement of hatred and demeaning the honor of law enforcement officials as a “social group” in several stories published in Chernovik in 2008. Under Article 282 of Russia’s criminal code, the four reporters face up to two years in prison if convicted; Isayeva faces up to five years as editor of the publication, CPJ research shows.
“We call on the Leninsky District Court to fully acquit Nadira Isayeva, Magomed Magomedov, Artur Mamayev, Timur Mustafayev, and Biyakai Magomedov,” CPJ Europe and Central Asia Program Coordinator Nina Ognianova said. “Authorities, including those in law enforcement, must learn to tolerate the scrutiny that comes with public office.”
Dagestani prosecutors charged Isayeva in August 2008 with making public calls to extremism and incitement of hatred stemming from an article called "Terrorists Number One" published that July. It quoted a late guerilla leader who had fought in Dagestan and Chechnya against federal forces during the Second Chechen War and accused regional authorities of corruption and enslaving themselves to the Kremlin. Authorities charged that the article “publicly justifies terrorism,” according to an August 6, 2008, press release by Russia’s Prosecutor General’s Office.
Chernovik is often critical of regional police and the Federal Security Service. Isayeva and her colleagues have contended that antiterrorist operations carried out by the two agencies fueled the rise of militant Islam in the region.
In the 19 months since the initial charge was leveled against Isayeva, Dagestani authorities have raided the homes of Chernovik journalists, looking for “extremist” materials. They have tried to close down the paper for allegedly carrying “extremist statements” and indicted the four other Chernovik journalists in connection with a total of 10 articles published in the weekly, according to CPJ’s research. The trial of the five journalists began in January, without a plaintiff present, Isayeva told CPJ.
The contents of the Chernovik articles in question have been subjected to analyses by psychological and linguistic experts appointed by the prosecution and employed by state institutions. Isayeva told CPJ that she and her colleagues will appeal for independent, outside analyses of the paper’s contents.
According to a May 2009 statement by the independent Moscow-based organization Sova, which specializes in monitoring acts of nationalism and xenophobia in Russia, Chernovik’s materials do not carry calls to extremism.
RFE/RL: Daghestan Police Ask Medvedev To Fire Top Investigator
Thursday, March 11, 2010
By RFE/RL [pic]
The independent trade union of Interior Ministry and prosecutor's office employees in Daghestan has addressed a written request to Russian President Dmitry Medvedev to fire Aleksandr Bastrykin, head of the Investigative Committee of the federal Prosecutor-General's Office.
The independent trade union of Interior Ministry and prosecutor's office employees in Daghestan has addressed a written request to Russian President Dmitry Medvedev and to Federation Council Chairman Sergei Mironov to fire Aleksandr Bastrykin, head of the Investigative Committee of the federal Prosecutor-General's Office.
Their rationale for that demand, as explained by the union's chairman, Magomed Shamilov, to Caucasus Knot, was the proposal Bastrykin floated last week at a meeting of top prosecutor's office staff that Medvedev attended, to create a database containing the fingerprints of the entire North Caucasus population.
Russian human rights activists immediately condemned that proposal as discriminatory; Chechen Republic human rights ombudsman Nurdi Nukhadjiyev termed it anticonstitutional and a violation of citizens' rights. But Chechen Republic head Ramzan Kadyrov said it was "normal."
The Daghestan police and prosecutor's office staffers implied that they too consider the proposal discriminatory. Union Chairman Shamilov pointed out that "we are citizens of Russia just like Bastrykin," and as such deserve respect. A senior Makhachkala police officer argued that Bastrykin's proposal risks fuelling ethnic tensions.
In their joint letter to Medvedev and Mironov, the officers elaborate on that point, arguing that Bastrykin's attitude and statements suggest that he is prone to equate certain ethnic groups, primarily those from the North Caucasus, with "criminals, bandits, and extremists."
Nizam Radjabov, the spokesman for the Daghestan prosecutor's office, has declined to comment on his colleagues' initiative.
Copyright (c) RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
Boston Globe: From Chechnya, a cautionary tale
By Anna Badkhen | March 11, 2010
GROZNY, Russia
ON A recent afternoon in Chechnya’s capital I indulged in a delightful lunch of dumplings and salad at a snazzy corner bistro called Café Paris. Pop songs crooned from a flat-screen TV; outside, beneath a travertine mosque that presides over the city like a giant pink cloud, a group of young women in knee-high designer boots giggled in the February sun. It required mind-bending effort to conjure up the memory of this street corner the last time I saw it, five years ago: a crumbling wreckage of strafed apartment blocks jutting out of a bomb-blasted road. That time, I had been told to watch out for mines and snipers.
At first glance, Chechnya is a dream come true for any country fighting a prolonged war against Islamic rebels. After 15 years of bloodshed that killed between 130,000 and 300,000 people, Russia declared the war over last April and withdrew most of its troops. Physically, the reconstruction has been meteoric. Much of the Connecticut-sized republic bears no outward sign that there was ever a war. There’s even a sushi bar down the street from Café Paris.
“Look how fast we have recovered,’’ Adam, the café’s owner, told me. “Not like the other countries, Iraq and Afghanistan.’’
But scratch the surface, and Chechnya becomes a cautionary tale, particularly for the US odyssey in Iraq, now almost in its seventh year. A deadly insurgency, which the Kremlin has pronounced all but defeated, perseveres in the mountains that have sheltered rebels for centuries, and is spilling out beyond Chechnya’s borders into other republics of Russia’s North Caucasus.
The circumstances that fuel the insurgency are familiar to American troops and diplomats stationed in Iraq: a weak, nascent kleptocracy; staggering unemployment; revenge that is easily harvested by the enduring Islamic fundamentalism. Unable to keep the rebels in check, the government — with the tacit support of the Kremlin — carries out arbitrary abductions and summary executions.
After Sunday’s election in Iraq, top American commanders said the performance of Iraqi security forces demonstrated that the country is on track to the level of stability and peace needed to withdraw American combat troops by Sept. 1. (That at least 38 people were killed in bombings and artillery attacks in Baghdad suggests that the commanders’ bar for what is considered stability and peace — or good performance of Iraqi forces — is rather low.) As Washington gears up for the pullout it might serve it well to look at Chechnya as an example of one way violence can continue to bleed a former counterinsurgency battlefield long after the war is officially over.
The back history of the conflict in Chechnya — nearly 300 years of relentless opposition to the oppressive Russian rule — is radically different from that of Iraq. But the efforts by Washington and by the Kremlin to extricate themselves from their respective wars follow an uncomfortably similar pattern: Prop up a relatively amenable government and hand over to it the responsibility to quash rebellion; pour money into reconstruction projects, ignoring the ensuing corruption and graft; tolerate human rights violations in the name of relative political stability; accept occasional flare-ups of an Islamic rebellion; and declare — or, in the case of the United States, strive to declare — the end of major military operations.
In Chechnya, “the model failed,’’ according to Sarah Mendelson, director of the Human Rights and Security Initiative at the Center for Strategic and International Studies in Washington. The end of the war here has given way to a smoldering, self-perpetuating conflict that is quietly ravaging the region like an underground peat fire.
A recent CSIS report shows that the number of suicide bombings in the North Caucasus in 2009 nearly quadrupled compared to the previous year. Most of the attacks occurred in Chechnya. Ambushes, shootings, and roadside bombings are also on the increase across the region: last year, more than 900 people were killed here, almost double from the year before.
Of course, bloodshed in Chechnya is less dramatic in scope than the bombings and shootings that are claiming lives today in Iraq. But Chechnya’s population is smaller by almost 30 times. And this war is older. Think Iraq 2019.
On the other side of the dark spectrum of violence lies what Human Rights Watch has called “a culture of impunity for abuse.’’ The abduction and killing last July of Natalia Estemirova, the Chechen activist, was one of 86 abductions documented in one-third of Chechnya in the first nine months of last year by the Russian human rights group Memorial. Like Estemirova, many of these “disappeared’’ later turned up dead. Russian and international activists blame paramilitary forces loyal to Chechnya’s pro-Kremlin President Ramzan Kadyrov, who has portrayed some of the victims as separatists killed in battle and touted their killings as examples of his counterinsurgency successes.
In the suburbs of Grozny last month, I met the relatives of two young men whom Kadyrov’s forces had abducted last summer in separate incidents. Both had been taken in front of their loved ones.
The mangled body of one, a 21-year-old construction worker from Argun, was returned to his mother three months later. Chechen authorities told the woman that the evidence that her son had been a rebel fighter was the howl of a wolf — a symbol of the Chechen resistance — he had used as his cellphone ring tone.
The other man, a legally blind greenhouse worker from Shali, has been missing since August. His family presumes him dead.
That night I visited a large farmhouse in Samashki, a onetime rebel stronghold an hour west of Grozny. My host was a Chechen businessman in his late fifties whose father had fought a guerrilla war against the Soviets in the 1930s and ’40s. My companion was born in exile. He had no fondness of the Russians or of Chechnya’s new government. We drank tea at a long table and talked about the way insurgencies around the world draw on the sympathies of people who feel mistreated by their leaders, and who are looking for protection elsewhere, or for revenge. It was close to midnight.
Is the war in Chechnya over?, I asked
The man pushed away his teacup.
“There is no shooting war.’’ His eyes bore through me. “But every day there is violence. Except today it goes on at specific addresses.’’
Anna Badkhen has reported extensively from Chechnya since 2001. Her book about war and food will be published in October.
Georgian Daily: Kaliningrad Protests Force Health Minister to Resign, Sparking Speculation about Boos’ Future
March 10, 2010
Paul Goble
Yesterday, Elena Lyuikova, the Kaliningrad health minister, retired “at her own request,” according to Russian media, but because local political activists had staged 63 demonstrations over the last 18 months calling for her resignation, they see it as a major victory by them and the people of that region over the oblast government.
And while the Patriots of Russia party reacted by saying that they hoped Lyuikova’s departure would leading the Kaliningrad government to reverse course on its policy of closing medical facilities, others in that non-contiguous part of the Russian Federation and further afield are already speculating about the impact of this on the wave of demonstrations there.
On the one hand, some are implying that by making this concession, along with other steps to restrict the size of future protests, the government of Gyorgy Boos may have insured its own survival. But others suggest this action will only further embolden protesters who have called for the ouster not only of Boos but of Vladimir Putin (svpressa.ru/society/article/22272/).
But regardless of which side in this debate proves correct with regard to the situation in Kaliningrad itself, the notion that public demonstrations have forced the government to make a concession -- whether that is the whole story or not -- will certainly energize the opposition and may cause the Russian powers that be to take more draconian actions against it.
As they had 62 times before, members of the Patriots of Russia five days ago, picketed the Kaliningrad government building to demand the reopening of hospitals for sailors, veterans and pregnant women and the replacement of the oblast minister of health whom they had come to call “the minister of burial of health” (annews.ru/news/detail.php?ID=216576).
Lyuikova had infuriated Kaliningrad residents in general and the members of the Patriots of Russia Party in particular not only by the cutbacks in medical services her ministry oversaw but also and perhaps especially by her repeated declarations on regional television about “the successes of medicine” in the oblast under her watch.
While Mikhail Chesalin, the head of the regional section of the Patriots of Russia Party, said he was pleased that Lyuikova was gone, he told the media that “the picketers cannot be completely satisfied” until regional officials ensure that their other demands are met, implicitly suggesting that his group will seek to hold them responsible as well.
A Grani.ru commentary posted online today suggests that Kaliningrad Governor Boos could be the next to lose his position “as a result of the protests,” given that the regional leader has appeared unable to cope with growing protests there in which participants are also calling for Putin’s ouster (grani.ru/Politics/Russia/Regions/m.175726.html).
Things may come to a head quickly, with a series of Moscow officials travelling to Kaliningrad to consider what should be done and protest organizers, including Justice Movement leader Konstantin Doroshok, planning to stage another and larger rally in the oblast capital on March 20.
The anti-government protesters want to hold the demonstration in the center of the city, but the powers that be there have refused, offering instead, the airport or a stadium, suggestions that protest leaders say are “unjust” and that come on top of declarations by the leaders of Moscow parties in the Duma for their members not to take part in such “extra-systemic” acts.
Such organization efforts and appeals from Moscow party leaders have not worked all that well in recent days, and consequently, although there is every indication that Moscow and Kaliningrad will continue to count on them, a clash between the demonstrators and the powers that be cannot be excluded (ng.ru/regions/2010-03-10/100_kaliningrad.html).
And such clashes, if they take place, or their absence if Moscow cracks down or sacrifices more officials in Kaliningrad will just like the voluntary “retirement” of Lyuikova cast a far larger shadow on Russia’s political future, not only in the regions where elections are in the offing but in Moscow where the configuration of power could dramatically change.
RFE/RL: Tide Of Protest Engulfs More Russian Cities
March 10, 2010
By Claire Bigg
Like millions of Russians, Tatyana had been bracing for the annual hike in utility tariffs that comes with the new year.
But her bill for January exceeded her worst nightmares. It had jumped 25 percent from the previous month, eating up as much as two-thirds of her salary.
"I have great difficulties in paying for my flat," she says. "Salaries here are low and tariffs for utilities are very high. I grew up in Soviet times, and we didn't have such problems. I'm really scared for my children."
Tatyana, a 50-year-old preschool teacher in the central Russian city of Penza, must now spend 5,000 rubles ($168) per month on water, gas, and electricity. This leaves her with just 2,300 rubles ($77) to feed her two teenage children and her husband, an invalid whose health problems prevent him from working.
Panicked, Tatyana decided to take to the street. She joined a rally in Penza organized by the opposition this past weekend to protest worsening living conditions and call for the ouster of local leaders.
"I'm in a hopeless situation," says Tatyana, who was afraid to give her last name. "I can't bear it anymore. I need to do something about it and that's why I went to the protest. I saw that people had already been driven to despair."
Nervous authorities in Penza did their best to deter residents from attending the rally, offering free entrance to the local zoo, free city excursions, and public lectures on how to cut utility costs.
But to no avail. An estimated 2,000 protesters massed on March 7 in Penza's city center. The demonstration was peaceful but pointed: local residents are fed up with their sinking living standards, and ready to speak out about it.
Nationwide Rallies
The Penza rally was the latest in a string of street demonstrations that have rocked Russia in recent weeks. In places as varied as Samara, Irkutsk, and Archangelsk, disgruntled residents have been joining forces to protest low pay, mounting unemployment, police abuse, and what increasing numbers of Russians see as a corrupt government on both the local and federal level.
The largest demonstration, held last month in the Baltic city of Kaliningrad, drew as many as 10,000 people.
The demonstration will be repeated on a nationwide scale when Kaliningrad becomes one of at least 15 cities to stage coordinated protests on March 20.
And the protest is not limited to banners and slogans shouted on cold city squares; some prominent Russians, too, are voicing their resentment at the regime built by Vladimir Putin over the past decade.
"The rich are becoming even richer, the poor even poorer. Corruption is total, everyone is stealing," veteran rock star Yury Shevchuk told his fans at a March 7 concert in Moscow. "The system has built a brutal, cruel, and inhumane government in our country. People are suffering, not only in prisons and camps, but in orphanages and hospitals as well."
The recent protests are a notable shift from the public passivity of the early and mid-2000s, when the country was enjoying an unprecedented wave of stability and economic prosperity.
Political analyst Dmitry Oreshkin says much of the roiling discontent now is due to the economic crisis, which has hit Russia particularly hard after almost a decade of oil-fueled growth.
"Unemployment is on the rise, prices are soaring, livings standards are worsening," he says. "Television tells us tales that we are rising from our knees, but this no longer reassures people."
Nervous Kremlin?
Curiously, authorities are allowing the opposition rallies and police so far have largely refrained from arresting or beating protesters.
Oreshkin says Russia's political leaders understand that using force to stem such a wave of discontent could turn against them.
"Authorities are rational enough not to follow the Chinese path," he says. "They would happily break the arms of protesters, but when these protesters number 1,500 or even 10,000, it's better to find a compromise with them. This signals an evolution of society's political culture, a very slow evolution that is taking place with the change in generation."
The Kremlin's reaction to the season of protests has been muted, but betrays concern.
President Dmitry Medvedev sent his envoy to Kaliningrad following the February rally, and a Kremlin advisor for the region, Oleg Matveychev, resigned under pressure following the protests.
Medvedev also fired the chief of police in Tomsk following a public outcry over the murder of a local journalist by police.
The demonstrations are also notable for uniting the country's usually fractious political opposition.
Communists and other marginal political parties have been responsible for organizing many of the rallies, and the sight of Russia's opposition forces standing side by side after years of infighting likely adds to the Kremlin's uneasiness.
'Authorities Need Not Worry'
But analysts say the protests bear no real threat to the political system.
"It has been able to quench the protests," says sociologist Aleksei Grazhdankin, the deputy head of Russia's independent Levada polling center. "Besides, there is currently no political force that could lead these rallies and transform them from separate local outbursts into a massive protest. So authorities need not worry."
In fact, despite growing coverage of the rallies in the Russian and international press, studies by the Levada center show that the number of political protests have not increased significantly since the mid-2000s.
Grazhdankin says Medvedev and his mentor, Prime Minister Vladimir Putin, remain hugely popular despite a slump in polls following the economic crisis. The current wave of protests, he says, is nothing more than a seasonal phenomenon.
"People always display their discontent more actively in spring," he says. "But if we compare the current situation with data from previous years, there is no real increase."
There is no doubt that anger is mounting in Russia over enduring hardship and corruption. Many are desperate for change. But even among the thousands of Russians who took to the streets in recent months, far from all believe the protests will lead to genuine improvements.
"Keep the local government or change it? I think someone else will arrive and nothing will change," says Tatyana in Penza. "I've long given up hope that things will get better."
RFE/RL's Russian Service contributed to this report
The Moscow Times: Human Cloning Ban Extended
11 March 2010
The State Duma has renewed a temporary ban on human cloning in Russia, Interfax reported Wednesday.
The bill, approved in a third and final reading Wednesday, sets a ban on cloning until a federal law can be enacted to regulate the cloning of humans, the report said.
The bill allows the cloning of nonhuman cells, like flowers, for scientific purposes.
The previous ban was implemented in 2002 but expired in June 2007.
Deputy Health and Social Development Minister Yury Voronin has warned that the absence of a ban might make Russia a destination for foreign scientists eager to conduct human cloning experiments.
Itar-Tass: Duma to look into police actions in MKAD ringroad operation
11.03.2010, 10.20
MOSCOW, March 11 (Itar-Tass) - The committee on transport under the State Duma lower house of the Russian parliament intends to look on Thursday into police actions during an operation on the MKAD ring road to detain criminals.
The committee will also review the high-profile car crash on Gagarin Square involving LUKOIL vice-president Anatoly Barkov.
Taking part in the Thursday session will be Moscow road police chief Sergei Kazantsev, chairman of the house committee Sergei Shishkaryov told Itar-Tass.
Lawmakers have already expressed their opinions of the incident in which police created "a live shield" with several vehicles they had commandeered.
First deputy chairman of the committee on security Mikhail Grishankov said the Duma had sent an inquiry to the prosecutor general and the interior minister regarding the March 5 operation on the MKAD ring road.
"The first data we have point to an unprecedented case when road police used a "live shield" made of the people sitting in their cars," Grishankov said.
He said he was bewildered over why police had not put their cars close by or in front of the civilians' vehicles.
The Investigations Committee of the Prosecutor General's Office (SKP) opened a criminal case against the police officers over the life shield incident under the Criminal Code article on "abuse of office powers," SKP spokesman Vladimir Markin said.
Moscow police chief Vladimir Kolokoltsev relieved commander of the 1st road police regiment Alexander Kozlov of his duties, whose subordinates were involved in the incident, citing "Kozlov's failure to ensure legitimate actions by his subordinates, and a lack of proper control over the operation, which resulted in negative consequences."
During the operation on the MKAD ring road early in the morning of March 5, police tried to stop the car of suspected wrongdoers by blocking traffic with several vehicles belonging to civilians. Three cars were damaged.
Police used their service vehicles in similar operations before, but this time they had no such opportunity and tried to accomplish it with civilians' property. They underestimated the possible consequences, and put civilians in danger, road police officials said.
Moscow police chief Vladimir Kolokoltsev apologized to the car owners who vehicles were damaged.
But the spokeswoman for Moscow road police denied "the live shield" incident.
Russian lawmakers will also review the February 25 car crash on Gagarin Square, in which two women doctors - Vera Sidelnikova and Olga Alexandrina - were killed. The crash involved a LUKOIL top manager.
RIA: Police suspect arson in deadly Moscow nightclub fire
09:0111/03/2010
Police investigating Tuesday's deadly fire in a downtown Moscow nightclub are looking into the possibility that the blaze was started deliberately, investigators said Thursday.
One person, apparently a security guard, was killed as flames consumed over 1,000 sq. meters of the three-storey Opera nightclub, causing its roof to collapse.
Officials said the nightclub was closed for 30 days in December due to a poor fire safety record.
President Dmitry Medvedev ordered nationwide fire safety checks after a fire late last year killed over 150 people at a nightclub in the west Urals city of Perm.
MOSCOW, March 11 (RIA Novosti)
RIA: Two killed as private helicopter crashes in Karelia
08:5011/03/2010
Two people were killed as a private helicopter crashed in Russia's northern republic of Karelia, a law enforcement source told RIA Novosti on Thursday.
"At 8:30 p.m. [on Wednesday], a private Robinson R44 helicopter crashed, falling onto the ice of Lake Onega. The pilot and passenger died," the source said.
An investigation is underway.
MOSCOW, March 11 (RIA Novosti)
Itar-Tass: Vladivostok starts trial of crime gang, attacking businessmen
11.03.2010, 09.11
VLADIVOSTOK, March 11 (Itar-Tass) - A trial of a crime mob which attacked businessmen, including foreigners, started in Vladivostok on Thursday. Preliminary hearings are being held at the Pacific Fleet military court.
Two mobsters are in the dock: former serviceman Dzhavatkhan Salmanov and former police officer Eduard Zassety. They are charged under several articles, including a murder, an attempt at murder, armed hold-ups, illegal storage of weapons and other crimes, Itar-Tass learnt at the court secretariat.
The investigation claims that the two accused are members of a crime family, guilty of attacks on businessmen in Vladivostok, including on three Chinese citizens last March 6. As a result, one Chinese died, while two others were seriously wounded. This crime precisely was the reason for busting the gang.
The suspects were tracked down already on March 14, but their detention had hitches: several mobsters barricaded themselves in an apartment of a house in a densely populated area of Vladivostok. A fierce shootout started with police commandos during an onslaught, and a fire flared up at the apartment. Three suspects were killed as a result of the operation.
According to head of the 304th military investigation division of the Russian Pacific Fleet Oleg Makarenko, it was also established that gangsters were adherents of radical Islam: law enforcers seized great quantities of literature and video clips with lectures by various leaders of this movement. They also seized weapons, brought to Vladivostok from North Caucasus.
The Moscow Times: Kremlin Prepares to Unveil Its Silicon Valley
11 March 2010
By Valery Kodachigov, Natalya Kostenko, Bela Lyauv and Maxim Tovakaido / Vedomosti
In 10 days, President Dmitry Medvedev will indicate where the future Russian Silicon Valley will be created, and one of the early favorites is the area near the business school Skolkovo.
Among the possibilities for the Center for Research and Development, as it will be called, are Tomsk, Novosibirsk, St. Petersburg, Obninsk, Dubna and an area near the business school Skolkovo along Novorizhskoye Shosse and Leningradskoye Shosse, presidential aide Arkady Dvorkovich said yesterday.
Rusnano head Anatoly Chubais will be charged with developing the project, and the president will likely announce the details of the project when he meets with Chubais on March 22, Dvorkovich said.
The president will consider several criteria in making the choice: infrastructure development, size of the territory, proximity to educational centers and attractiveness for business, Dvorkovich told Vedomosti. That the land belongs to the federal government would simplify the process, but it is not a decisive criterion.
The development of a business plan and the issue of financing will be worked out by a managing company that the president has ordered to be created, Dvorkovich added.
The federal budget is ready to spend money on developing nonprofit projects and scientific infrastructure. The other facilities, including social facilities, will be built using co-financing. "Construction may start next year, but probably only in the second half," he said.
The list is very long, only Chukotka and Yakutia do not meet the criteria, one government official joked. Nearly every area named complies with the criteria stated.
A source close to the government said the discussions on obtaining land will be carried out with private landowners. Four projects were considered: Rublyovo-Arkhangelskoye (430 hectares on Novorizhskoye Shosse that are owned by Mikhail Shishkhanov and Sberbank); A 101 (13,000 hectares near Kaluzhskoye Shosse, owned by Vadim Moshkovich); Konstantinovo (more than 1,000 hectares near Kashirskoye Shosse, owned by Yevrasia); and the land near Skolkovo.
The project requires hundreds of hectares of land, and the center should be world-class, a source in a federal agency said. Both sources said the most likely candidate was the land near Skolkovo, the owners of which they declined to name.
The land near Skolkovo could cost $20 million to $25 million per hectare, according to an estimate by Ilya Terentyev, CEO of Zemer Group.
Konstantin Rykov, a member of the State Duma's Science Committee, told Infox.ru that the United Russia party had opened talks on the Silicon Valley project with Japanese construction company International Dome House, which makes cheap houses from Styrofoam. The company could build a "city of the future" in Russia.
A former Moscow region official said a similar center had been built in Dubna about two years ago. "Offices, factory space and conference centers were built on a huge plot of land, and about $1 billion was invested in it. It's not clear why they have to start a new project," he said. The land in Skolkovo belongs to a federal official, who has long lobbied for this project along with Vladimir Yevtushenkov's holding company Sistema.
Skolkovskoye Shosse is one of the shortest highways, and now it is one of the most elite areas of the Moscow region, said Yevgeny Ivanov, managing director of Zagorod. Deputy Prime Minister Igor Shuvalov and former Mayor Gavriil Popov both live in Skolkovo, a Moscow realtor said.
Members of the United Russia party and two officials in the presidential administration said there was a 90 percent chance that construction of the innovative city will be in the Moscow region, probably near Zelenograd: It's close to Sheremetyevo Airport, the new Moscow-St. Petersburg highway and the Moscow Institute of Electronic Technology.
Making Zelenograd a center for the Silicon Valley would be logical — the city was created as a center for innovative development, a source in Sistema said. The idea to build the center in Zelenograd, which has been lobbied by Yevtushenkov, was rejected, a Kremlin official said.
The Skolkovo option is advantageous from the location point of view, but there are no scientists there, an official taking part in the discussions said. Not only is the location important but so is who will lead the project. Chubais is charged with choosing a candidate, another source in the presidential administration said. "Otherwise it will be the Silicon Gulag."
Xinhua: What's barring Moscow, Washington from clinching new START deal?
2010-03-11 05:32:49 by Xinhua writers Hai Yang, Lu Jingli
MOSCOW, March 10 (Xinhua) -- Russian Foreign Minister Sergei Lavrov said on Tuesday that a new Russia-U.S. treaty on nuclear arms reduction could be signed within two or three weeks.
However, White House spokesman Robert Gibbs said the same day that Washington did not intend to "rush the negotiations."
These different sayings have indicated that the signing of a replacement document for the Strategic Arms Reduction Treaty ( START-1) might still be up in the air.
So what's actually barring the two sides from reaching a deal?
Russia and the United States have been working on a successor to the 1991 START-1 that expired on Dec. 5, 2009.
An outline of the new pact, agreed by Russian President Dmitry Medvedev and his U.S. counterpart Barack Obama, includes slashing nuclear warheads to 1,500-1,675 and delivery vehicles to 500-1,000.
Since May 19 last year, ten rounds of negotiations have been conducted between the two sides. Despite a media highlight, a definitive date for the signing of the new treaty remains undetermined.
According to Russian media, divergences between Moscow and Washington lie in four aspects: number of reductions, delivery vehicles, verification and the linkage between nuclear arsenal cut and missile defense.
Based on recent assurances from the Russian side, analysts said the majority of divergences have probably been solved.
Russia has repeatedly said that the two sides are coming close to reaching a new deal. On Jan. 24, Medvedev said the new arms treaty with the United States was "95 percent coordinated."
On Feb. 24 in a telephone conversation with Obama, Medvedev " stressed the importance of concluding the negotiations in a short term to prepare this document, which is critical to strategic security and stability, for signing as soon as possible."
On March 5 at a meeting with Defense Ministry officials, Medvedev said Russia "managed to come very close to a new nuclear arms reduction treaty that will further cut relevant arms in a relatively short period of time through intensive talks with the United States."
However, on Tuesday White House spokesman Gibbs said: "We are certainly hopeful that that can be done in short order," but "we' re not looking to rush the negotiations in order to ... have a signing ceremony prior to" the Nuclear Security Summit slated for April 12-13 in Washington.
One lingering stumbling block may be the issues concerning missile defense, said analysts.
Russian media have cited sources as saying that Moscow suggested to exchange relevant information in letters, which shall also be included in the new treaty to become legally binding. Washington may not want such inclusion, but would rather take it as a political responsibility.
Russia's top diplomat Lavrov reiterated on Tuesday that the new arms control deal would link strategic offensive and defensive weapons, which was agreed by Medvedev and Obama during their last April's meeting.
"This link will undoubtedly be reflected. It will be documented in a legally binding form," he said.
Therefore it is quite practical to determine the relationship between strategic offensive and defensive weapons, said analysts.
Meanwhile Russia still awaits confirmation and further explanation from the United States concerning its plans to deploy elements of a missile shield in East Europe.
Obama last September scrapped plans for a radar in the Czech Republic and 10 missile interceptors in Poland pursued by his predecessor as a so-called protection against possible missile threats from "rogue states."
In February, however, Romania and Bulgaria angered Moscow by announcing that they were ready to be part of the revamped U.S. missile defense system.
Yet in all, the divergences over the missile defense issue shall not prevent the two sides from reaching the new START deal, as signing the new pact reflected the political will of both countries' leaders, said analysts.
For Obama, inking the deal would indicate the correctness of his policy to "reset" U.S.-Russian relations, as well as his capability to reach agreements with Russia.
For Medvedev, the deal would be the most important one for him to sign since taking office.
Therefore, the new treaty will eventually come to place, said analysts. But only time can tell when that's going to happen, they added.
|Editor: Mu Xuequan |
Russia Today: 11 March, 2010 in Russian Newspapers
Vedomosti : One pipeline will suffice
The competing gas pipeline projects, Nabucco and South Stream, should be united for the sake of increasing the profits of all the participating parties – suggests Eni. Experts believe Gazprom will pay for this increase.
Ekaterina Kravchenko, Polina Khimshiashvili
Paolo Scaroni, CEO of the Italian concern Eni (Gazprom’s partner in the South Stream project), suggested combining the rival gas pipeline projects South Stream and Nabucco. He believes that this is a strategic union. “We would reduce… operational costs and increase overall returns,” Bloomberg quotes Scaroni.
The objective of the two projects is to supply South and Central Europe with gas. South Stream (participants: Gazprom and Eni) is expected to annually transfer up to 63 billion cubic meters of Russia’s gas through the Black Sea; Nabucco (German RWE, Austrian OMV, Hungary’s MOL, Romania’s Transgaz, Bulgaria’s Bulgargaz, and Turkey’s Botas) – up to 31 billion cubic meters of Caspian gas through Turkey.
Rossiyskaya Gazeta: B-52: We speak Russian
US Air Force pilots will be paid extra for knowing Russian and Chechen languages
Sergey Merinov
Pilots, technicians, and other employees of the U.S. Air Force are eligible for a monthly salary increase of up to $1,000 if they learn a foreign language. One of the critical languages is Russian.
This was announced to the Airforce Times by Lt. Col. Paul Valenzuela, who is in charge of the language and regional studies training programs at the U.S. Air Force. Previously, only those who were obliged to speak a foreign language due to the nature of their job were paid extra. Now, any airman may qualify for the extra allowance.
The U.S. Air Force provides training and administers a proficiency exam. It consists of three parts: listening comprehension, reading, and speaking. In order to qualify for the extra allowance, one must to receive satisfactory scores in two of the three parts, after which the money will follow – on average, $500 per month, depending on the language and proficiency level. And, if one happens to have a good knowledge of two languages, he will receive the maximum monthly allowance sum of $1,000. It is necessary to take the exam once every year to certify one’s knowledge.
The Moscow Times: Today in Vedomosti
Issue 4347. Last Updated: 03/11/2010
CIS' Dependence on Russia Declines
By Olga Kuvshinova
The CIS countries’ dependence on Russia is becoming a myth and stereotype.
Israel Calls on UN Security Council to Adopt Tough Sanctions Against Iran
By Polina Khimshiashvili
Israel calls on the UN Security Council to adopt tough sanctions against Iran and does not rule out a military strike against its opponent’s nuclear sites.
Editorial: Environmentalists United in Opposition to Baikal Pulp and Paper Mill
Vedomosti
Many major Russian country-wide and regional environmental organizations joined together yesterday to prevent the launch of the Baikal Pulp and Paper Mill (BPPM) and pollution of the unique lake.
National Economic Trends
VTB Capital: Government considers 2011-13 budget
VTB Capital
March 11, 2010
Prime Minister Vladimir Putin suggests postponing hike in social tax and implementing more tax incentives - positive for companies as economy still recovering from crisis
News: According to Interfax and Kommersant, during yesterday's government meeting to discuss the parameters of the 2011-13 budget, Prime Minister Vladimir Putin suggested that reserves be found to allow a more flexible approach to a rise in the tax burden in 2011. In particular, Putin referred to the social insurance rate, which is currently at 26% and scheduled to rise to 34% in 2011 (the alternative, suggested by MinFin, sees the rate at 32%). Putin asked the government to consider providing tax incentives for innovative enterprises and those that use energy-efficient technologies. He further suggested granting eight-year corporate income tax holidays for private educational and healthcare companies.
Our View: While the initiatives will certainly be received positively by the business community, several questions remain: the government has not yet defined what an innovative or energy-efficient business is, and the proposed tax incentives would either have to be covered by higher planned budget revenues or result in expenditure cuts on other budget items.
There remain significant differences in opinion within the government on both revenues and expenses, and this has resulted in the discussion being postponed until mid-April 2010. By then, the government might have finished discussing the proposed amendments to the 2010 budget, which could hint at whether we shall see higher planned budget revenues or lower expenditures.
We welcome the initiative to postpone the hike in social tax, as taxes on the wage bill might be harmful while the economy is still recovering from the crisis.
The Moscow Times: Bill Would Strip State Corporations of Profits
11 March 2010
The Moscow Times
The State Duma will consider a bill that will require Vneshekonombank and the Deposit Insurance Agency to transfer 75 percent of their profits into the federal budget, a Duma deputy said Wednesday.
The bill would require the state corporations to transfer most of their profits from 2009, 2010 and 2011 after their head offices finish the final accounting for each year, said Konstantin Shipunov, a deputy in the United Russia party, Interfax reported.
The legislation aims to help curb the growing federal budget deficit, which reached 5.9 percent of gross domestic product in 2009. Finance Minister Alexei Kudrin said last month that 2010's deficit would stay within 7 percent.
The government has been straining to find ways to narrow the deficit: It plans to raise $2.4 billion dollars this year in a sell-off of stakes in some state-owned companies and has floated the idea of raising the gas extraction tax to prop up flagging tax revenues.
The legislation would require changes to the laws that govern the operations of the two state corporations. Currently, VEB's supervisory council and the Deposit Insurance Agency's board of directors decide what to do with their profits, and by law, VEB's profits must be invested in the bank's funds.
In a commentary on the law, deputies said "significant funds have been distributed by means of state support" and the actions undertaken by VEB, the Deposit Insurance Company and the Central Bank to support the banking system have "clearly reflected very positively on [their] profits." The deputies added that, through their subordinated loans to refinance bank debt, VEB had a profit margin of 1 percent to 7 percent.
VEB's net profits in 2009 stood at 22.8 billion rubles, while the Deposit Insurance Agency earned 14 billion rubles.
2010-03-11 08:27
Reuters: Russia cbank shifts rallying rouble's band-dealers
MOSCOW, March 11 (Reuters) - Russia's central bank on Thursday let the rouble scale fresh peaks against a euro-dollar basket by shifting its floating trading band by another 5 kopecks -- the 14th such move since mid-February, dealers said.
In line with the previous moves, the central bank shifted the band to 34.30-37.30 roubles from 34.35-37.35 after $700 million of interventions, dealers said.
"It looks like it moved away (from the previous bid)," said Andrey Ostrovsky, dealer at Promsvyazbank.
By 0805 GMT the rouble had firmed as far 34.32 against the basket, according to Reuters data.
(Reporting by Andrey Ostroukh; Writing by Toni Vorobyova; Editing by Dmitry Sergeyev) Keywords: RUSSIA ROUBLE/BAND (antonina.vorobyova@; Tel: +7495 7751242, Reuters Messaging: antonina.vorobyova.@)
March 11, 2010 09:15
Interfax: Banks have 576.6 bln rbs on CBR correspondent accounts on March 11
MOSCOW. March 11 (Interfax) - Russian banks have 576.6 billion rubles on correspondent accounts in the Central Bank as of March 11 including 414.7 billion rubles for Moscow banks.
The balance on March 10 was 589.5 billion rublesand 452.6 billion rubles, respectively.
Banks had 626.8 billion rubles on deposit accounts in the Central Bank on March 11 against 510.0 billion rubles on previous day.
March 10, 2010
Russia Profile: The Return of the Investor
By Svetlana Kononova
Special to Russia Profile
Although Foreign Investment in Russia Dropped Considerably in 2009, Experts Predict Growth in the Near Future
Recent data from the Federal State Statistics Service shows that in 2009, foreign investment in Russia dropped by 21 percent to $82 billion. Also, since last year, direct foreign investment has fallen by 41 percent to $16 billion, the federal service reports. As a result of the global financial downturn, which dealt a heavy blow to Russia’s economy, foreign investors withdrew billions of dollars from the country. But will they ever come back?
Despite the dire figures, analysts still believe that Russia’s economy could recover in the next couple of years. “The dramatic capital outflow in the first quarter of 2009 has had a huge impact on the index of the whole year,” said Alexander Osin, the chief economist at Finam Management, “but since the country’s economy slowly recovered in the remaining three quarters of 2009, some investment has partially been returned to Russia. Nonetheless, due to the overall recession of investment, especially in the manufacturing industry, it was not possible to fully make up for the capital drain that took place at the beginning of 2009.”
Yevgeny Balatsky, the editor in chief of the Capital of the Country online magazine, pointed out the main reasons behind the capital outflow: “The reasons why foreign investment has decreased are to do with the global financial crisis,” he said. “The investors’ confidence has fallen. Many of them are waiting for more predictable market conditions elsewhere. Russia is probably not the most attractive destination for foreign investment. Moreover, many economic indicators, including Russia’s GDP, have decreased dramatically during the crisis, which makes Russia a high risk place for foreign investors.”
Official statistics show that last year, Russia’s largest foreign investors were Cyprus, the Netherlands, Luxembourg and Britain. The most popular segments of Russia’s economy were wholesale and retail trade, mining operations, transport and real estate. “Foreign investors still bet on ‘fast money’ in Russia, although it may be more sensible to turn their capital flows to long-term investment projects with low risks,” Osin said. He believes that in the past year, investment in wholesale trade and the financial sector showed the best dynamics.
But Balatsky said that there are many more areas in Russia’s economy that are potentially attractive to foreign investors. “Our research shows that investors are interested in the woodworking industry, the manufacturing of construction materials, the food processing industry, building logistics centers and scouting for natural resources,” he added. “Thus foreign investors show interest in the regions of Russia where they could develop these businesses. Moreover, the Tula Region and the Khabarovsk Territory seem to be attractive destinations because they are developing the innovation sector, which might be of interest to foreign investors.”
Competition on the global financial market has intensified following the financial crisis, and Russia’s main rivals for foreign investment are the other BRIC countries whose economies are developing quickly. For example, China was less affected by capital outflow and managed to preserve most of its foreign investment during the “crunch.” Experts predict that Russia’s economy will grow by some four to six percent this year, while India’s will grow by seven and China’s – by nine. Investors in all BRIC countries are expected to benefit from a boom in consumption caused by the burgeoning middle class.
Nowadays Russia lies at the bottom of the Doing Business 2010 rankings of countries with advantageous investment conditions, positioned 120th out of 183. In comparison, Belarus comes 58th, and Kazakhstan is 63rd. In some sectors, such as the difficulty of obtaining building permits, Russia is the second worst in the world.
In an effort to make the investment climate in the country more attractive, Russia’s President Dmitry Medvedev recently confirmed plans to simplify the visa regime for foreigners investing in Russia. The new procedure will make it easier for foreigners involved in projects contributing to science and high technology to obtain a visa. Earlier Prime Minister Vladimir Putin called for equal conditions for Russian and foreign investors in energy projects, and announced that investments in transportation infrastructure, telecoms and digital television are the most welcomed. The Sochi 2014 Olympics open up many possibilities for investors in all of these spheres, he said.
So, what are the prospects for foreign investment? “The volume of foreign investment will probably increase in 2010,” Balatsky said. “In fact, as soon as the financial crisis has passed global investors will look for new areas to apply their funds. Russia will probably be in their sphere of interest.” Balatsky speculated that it will take two or three years to achieve a significant growth in investment, and Osin predicted growth as well. “The amount of foreign investment in Russia will probably be around $90 billion to $120 billion in 2010,” he said. “In the last three quarters of 2009 the flow of foreign investment grew faster than other economic indicators, such as GDP. I expect that this year these rates of growth will be equal.”
Russia Today: Russian economic rebound enters soft patch
11 March, 2010, 09:37
Rising unemployment and weak business activity means Russia's economic recovery is running out of steam, with forecasts being pared back as economists wait for signs of traction.
The official measure of unemployment jumped to 9.2% in January, its highest level in a year. It's evidence that Russia's economy, which was being rescued by higher oil prices, is still weak in many areas.
Retail – with people tending to save rather than spend.
Banking – with consumer lending falling in January for the 12th month in a row.
And Manufacturing – which expanded in February but at a slower than the month before.
After shrinking 8.7% in 2009, Ksenia Yudaeva, Head of Macroeconomic Research at Sberbank still thinks the economy will grow this year.
“Our forecast that GDP will grow 3.8%. Normally the lending situation is a lagging variable toward GDP growth and industrial production growth. So we expect that credit will start growing in the second half of the year.”
There are a range of forecasts for Russian GDP growth this year, but even the more optimistic are being pared back in the wake of the latest data. Renaissance Capital cut its forecast for GDP to 7.9%, with Chief Economist Aleksey Moiseev concerned about recent retail services data.
“A couple of indicators have been quite worrying suggesting that economic momentum has indeed been slowing down. And of those I need to particularly point out retail services to the population.”
Externally, much still depends on China, the fastest growing economy – and the key customer for all commodity exporting countries.
Business, Energy or Environmental regulations or discussions
Prime-Tass: Russia's Medvedev inks bill promoting associated gas use
MOSCOW, Mar 10 (PRIME-TASS) -- Russian President Dmitry Medvedev has signed into law a bill seeking to promote the use of associated gas for electric power production, the president's press service said Wednesday.
The law gives associated gas-fueled power plants, including gas turbine plants, priority access to the wholesale power market.
The law is scheduled to take effect 183 days after it is officially published.
In recent years, the government has sought to promote the utilization of associated gas and cracked down on its flaring.
End
10.03.2010 12:13
The Moscow Times: Decision to Fine IKEA Reversed
11 March 2010
The Moscow Times
The Federal Anti-Monopoly Service reversed a decision by its Moscow division last fall to fine retailer IKEA for violating laws on competition, the watchdog said Wednesday on its web site.
IKEA MOS, one of IKEA's Russian units, was accused of violating monopoly laws after an investigation found that the company had urged tenants of its Mega malls to choose from a list of “recommended” insurers.
Such a fine could have been equivalent to 1 percent to 15 percent of the company's annual turnover, according to the Administrative Code, putting the total at more than 2.25 billion rubles ($76 million).
The decision to cancel the fine was passed after the watchdog's central office looked into the request after a complaint by IKEA and determined that the law the retailer was accused of violating went into force after the actions in question took place, relieving the company of liability.
VTB Capital: Inter RAO might get EdF representative in its BoD
VTB Capital
March 11, 2010
positive - might indicate EdF will acquire equity stake in the company - transferring FSK's and RusHydro's shares in gencos to Inter RAO is still on the agenda
News: EdF representative Mark Budie has been named as a possible candidate for Inter RAO's BoD, Kommersant writes this morning (the BoD is to be reshuffled at the AGM in June 2010). Among other possible candidates, in addition to the current members, are Head of the Bank for Development (VEB) Vladimir Dmitriev, Deputy Head of Rosatom Aleksander Lokshin and two Gazprom representatives (CEO of Gazpromenergoholding (Gazprom's electricity arm) Denis Fedorov and Denis Shacky, the Deputy Head of Gazprom Energy Company).
The paper also writes, citing unnamed sources, that current Chairman Igor Sechin is likely keep his position. There is also a chance that ex-CEO Evgeny Dod will stay in the BoD, and the company confirmed it was interested in his experience.
On a separate note, Dod (who is now CEO of RusHydro) confirmed that RusHydro's and FSK's stake would be transferred to Inter RAO in exchange for Inter RAO's shares. He added that RusHydro would likely sell those shares in the future.
Our View: We think the possible appearance of an EdF representative in Inter RAO's BoD might help bring international experience to the company and improve corporate governance. It could also be a sign that EdF might acquire an equity stake in the company, given that it has in the past expressed an interest in getting the stake and recently set up a joint venture with the company. Moreover, VEB, which plans to buy a blocking stake in Inter RAO this year, might sell it to EdF in the future.
The confirmation of Inter RAO getting RusHydro's and FSK's stakes in the gencos also supports the investment case of the company delivering on its M&A strategy.
Bloomberg: Russian Railways May Hold IPO for TransTeleCom, Kommersant Says
By Anna Shiryaevskaya
March 11 (Bloomberg) -- OAO Russian Railways may hold an initial public offering for shares in its ZAO TransTeleCom telecommunications unit, Kommersant reported.
State-run Russian Railways is also considering selling all or part of unit via a private placement, the Moscow-based newspaper reported today, citing one company official and two investment bankers, none of which were identified.
TransTeleCom may be valued at about $1 billion, Kommersant said, citing OAO Gazprombank head of research Andrei Bogdanov.
To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@
Last Updated: March 11, 2010 00:32 EST
March 11, 2010 10:44
Interfax: RZD could sell TransTelecom stake in IPO, private subscription – newspaper
MOSCOW. March 11 (Interfax) - Russian Railways (RZD) (RTS: RZHD) has sent proposals to investment banks regarding the sale of shares in its wholly owned TransTelecom in an IPO or by private subscription, the Kommersant newspaper said, quoting unspecified sources.
The paper did not say how much of the company might be sold or how much RZD planned to raise with the sale.
TransTelecom has figured on a list of companies in which RZD could sell stakes in order to finance its investments.
RZD chief Vladimir Yakunin said at the end of February that the company had asked the Russian Federal Property Agency to look at plans to sell shares in up to 30 subsidiaries in 2010-2012.
Russian Prime Minister Vladimir Putin at the end of February publicly backed plans to fund RZD's investments with share sale in the rail monopoly's subsidiaries.
One of Kommersant's sources said TransTelecom might be sold to a strategic investor. The Sistema (RTS: AFKS) holding expressed an interest in TransTelecom less than a month ago and the parties held consultations with the RZD-owned KIT Finance (RTS: CITB) investment bank, but no decisions were reached, the paper said.
CJSC TransTelecom provides services to the corporate sector and households besides RZD itself. It has more than 53,000 kilometers of fiber-optic line with speed of up to 190 Gbit/second. Total sales revenue was 11.8 billion rubles, including 9.98 billion rubles from communications, in H1 2009.
Pr
Bloomberg: Moscow to Sell 10 Billion Rubles of Bonds at Auction (Update1)
By Denis Maternovsky
March 10 (Bloomberg) -- The city of Moscow plans to sell 10 billion rubles ($337 million) of bonds due in 2022 in an auction on March 17, the debt committee of the Russian capital’s administration said today on its Web site.
The city plans to “use the favourable market conditions” to sell its longest-maturity ruble bonds, Sergei Pakhomov, chairman of the state debt committee said today in a telephone interview. The bonds may be priced to yield between 8.2 percent and 8.25 percent, he said.
Moscow sold 20 billion rubles of bonds due 2017 by auction on March 3 at a yield of 8 percent, the lowest in almost two years. The city seeks to sell 35 billion rubles of debt in the second quarter with the next auction to be held in April, according to Pakhomov.
Moscow debt is rated Baa1 by Moody’s Investors Service, three levels above non-investment grade, and one rank lower at BBB by Standard & Poor’s, the same as Russia’s sovereign credit rating. The city plans to borrow 144.9 billion rubles in 2010.
To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@
Last Updated: March 10, 2010 07:22 EST
Bloomberg: Potanin Frees Norilsk Nickel, Prof-Media Shares, Vedomosti Says
By Stephen Bierman
March 10 (Bloomberg) -- Russian billionaire Vladimir Potanin freed some of his shares in OAO GMK Norilsk Nickel and Prof-Media that were held by VTB Group as collateral after reaching a debt accord, Vedomosti reported.
The recent increase in Norilsk’s share price allowed Potanin’s Interros Holding Co. to reduce the stake pledged to VTB to 14 percent from 16.7 percent, the Moscow-based newspaper reported today. Interros also freed 95 percent of Prof-Media, Vedomosti said.
To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@.
Last Updated: March 10, 2010 00:58 EST
Bloomberg: Magnit February Sales Rise 28% to $531 Million on New Stores
By Maria Ermakova
March 11 (Bloomberg) -- OAO Magnit, Russia’s second-largest food retailer, said sales rose 28 percent last month from the same period last year to 15.7 billion rubles ($531 million) as it opened new stores.
Magnit expanded its network by 24 outlets last month, boosting its total to 3,271, the company said by e-mail today.
To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@
Last Updated: March 11, 2010 00:30 EST
2010-03-11 06:42
Reuters: UPDATE 1-Magnit Feb sales surge on new shops, cheap food
MOSCOW, March 10 (Reuters) - Russian retailer Magnit saw sales surge 28 percent in February, year-on-year, boosted by new store openings and continued appetite for its low-cost groceries in the wake of a recession.
The pace of sales growth was broadly in line with that seen in January and in 2009 -- when consumers downgraded their shopping habits in favour of low-cost stores as Russia's economy weathered its deepest annual contraction in 15 years.
February's sales totalled 15.7 billion roubles, the company said in a statement on Thursday. In dollar terms, the value of sales jumped 51.5 percent to $519.6 million, reflecting the appreciation of the Russian currency.
Magnit, which operates Russia's biggest chain of discount shops and hypermarkets, has fared better than its more upmarket rivals. Earlier this week, Seventh Continent, whose supermarkets cater to relatively well-heeled Muscovites, said it sales rose just 12 percent in January in rouble terms.
Magnit's sales growth has also been boosted by active expansion -- its selling space in square metres grew 28 percent in February compared to a year earlier. Last month alone, it opened 24 new shops, taking the total number to 3,271.
Magnit did not provide like-for-like figures that exclude results of new stores, as it only reports them on a quarterly basis.
(Writing by Toni Vorobyova; editing by Dmitry Sergeyev and Hans Peters) Keywords: MAGNIT/ (antonina.vorobyova@; Tel: +7495 7751242, Reuters Messaging: antonina.vorobyova.@)
Reuters: Renaissance Capital plans Eurobond roadshow –source
4:11am EST
MOSCOW, March 11 (Reuters) - Russian bank Renaissance Capital plans to start a Eurobond roadshow on March 15, the latest Russian borrower looking to benefit from favourable market conditions.
"The roadshow will start next week, likely on Monday," a banking source told Reuters on Thursday.
Renaissance Capital bank, a retail lending arm of Renaissance group which also includes Russia's major investment bank, picked it together with Citibank to arrange the deal.
Russian borrowers including state-controlled VTB , Russia's No.2 lender, have raised $2.6 billion in recent weeks in the Eurobond market.
Analysts said yields could fall further thanks to strong commodity prices and rising risk appetite among investors.
More borrowers including Russian Railways [ID:nLDE61P1QE] and state-run Russian Agriculture bank [ID:nLDE6290VY] were expected to tap the Eurobond market in coming weeks. (Reporting by Oksana Kobzeva; Writing by Dmitry Sergeyev; Editing by Dan Lalor)
Israelidiamond: Gokran to cut stocking from Alrosa
[pic]11.03.10, 10:46 / World [pic]
Russia’s diamond stockpile agency, Gokhran, will not be purchasing as much Alrosa rough this year as had been expected and budgeted for, according to a brief statement by the Gokhran head, Vladimir Rybkin.
Rybkin told the Moscow-based industry journal, Rough&Polished, that the Rb30 billion ($1 billion) sum budgeted for 2010 is unlikely to be spent, but some state purchasing and stockpiling of rough will continue.
According to the Gokhran head, Alrosa will not be able to do without Gokhran entirely.
"I think that this year the company will not yet be able to do (without state stockpiling), though probably it will not need the whole amount of help envisaged for it - about 30 billion rubles," he said.
Asked if Gokhran plans to sell out of its stocks this year, Rybkin said no. "Gokhran is not an independent participant of the diamond market and our task is to fill in the national budget to the extent established by the decisions of the Russian Federation Government. As for diamonds bought in 2008-2009, we shall not sell them during this or the following year. It is a great amount since we never bought in such quantities, and we have to do a long work to sort and evaluate them. They will probably reach the market in 2012 or 2013."
The statement implies that the pricing of Alrosa's sales to Gokhran during the crisis period was done without sorting and valuing.
Asked about the value of the current diamond stockpile, Rybkin said "the stocks held by Gokhran are a state secret and this information cannot be published, but it is possible to say that in the past three years they increased approximately by 30 billion rubles. Indeed, because we bought the diamonds at prices which existed on the market in the painful period, since then their value has increased. If we consider the result based on the total of two years (2008-2009) the growth is just a bit less than 5%. But the essence of those transactions was not to obtain profit but to support Alrosa."
Ararat Evoyan, head of the Russian Diamond Manufacturers Association, confirmed that last year's Alrosa diamond sales to Gokhran were arranged without sorting or valuation.
"A big amount of diamonds hasn’t been sorted or valued." He estimates that, before last year's additions to stockpile, what remained in Gokhran was "very large and very small size diamonds”.
Evoyan predicts that Alrosa may be able to avoid sales to Gokhran this year. "“Currently it is a lot more convenient to sell diamonds on the market rather than to Gokhran. The market doesn’t examine the diamonds too carefully, and there are companies ready to buy at higher prices. Also, Alrosa has contracts, and they are more likely to stick to the contracts rather than selling to the state. So I believe Alrosa can do without Gokhran at all this year”.
In his forward assessment of the market for diamonds, Rybkin said: "I hope that starting already from the second half of this year its upward movement will become irreversible and by the beginning of 2012 diamond prices will be established at the 2007 level."
Itar-Tass: Nissan to start producing Murano SUVs in Russia in early 2011
11.03.2010, 00.46
MOSCOW, March 10 (Itar-Tass) -- Japan’s major car maker Nissan will start producing the Murano sport utility vehicles (SUVs) at its Russia-located plant near St. Petersburg at the beginning of 2011, Managing Director of Nissan Manufacturing Rus Fujio Hosaka told a news conference on Wednesday.
This will be already the third Nissan model, which will be assembled in Russia, the Prime Tass economic news agency said. Currently, the St. Petersburg plant produces Nissan Teana and Nissan X-Trail models.
The plant of the Nissan company, which opened in the Kamenka industrial zone in June 2009, became the third car assembling facility in St. Petersburg, the economic news agency reaffirmed.
Investments in the project reached 200 million U.S. dollars. When the plant reaches its designated capacity, it will produce 50,000 cars a year, Prime Tass said.
The plant will gradually step up its industrial output in compliance with the market needs, the economic news agency said.
Touching upon details of the Murano SUV project, Hosaka said that the company’s specialists plan to improve such car parts, as a bumper, a seat module, and an exhaust system.
Director General of the Nissan Motor Rus Francois Goupil de Bouille, in turn, said that this year Nissan plans to increase sales of all models in Russia to 70,000 cars, as compared to 62,434 vehicles in 2009.
In his words, Russia is such a promising market for Nissan, as the United States and China.
According to Nissan forecast, Russia’s market of new cars will reach 1.6 million units in 2010, he said.
Apart from the Nissan plant, two foreign car assembling facilities are operating in the city, Prime Tass said, adding, “Those are plants of Japan’ s Toyota company and the United States’ General Motors (GM).”
The above-mentioned plants produce six models of foreign brand cars in St. Petersburg.
Itar-Tass: AvtoVAZ Board of Directors adopts company’s development program till 2020
11.03.2010, 00.34
SAMARA, March 10 (Itar-Tass) -- The Board of Directors of Russia’s major car maker AvtoVAZ adopted the company’s development program (business plan) in the period up to 2020, the AvtoVAZ press service told Itar-Tass summing up the results of Wednesday’s meeting of the Board.
The business plan should be considered by relevant ministries and agencies, and by the Russian government in March 2010, the press service said.
AvtoVAZ will invest about three billion euros in the implementation of the program until 2020, the Prime Tass economic news agency quoted the company’s press service.
The business plan was worked out in close cooperation with AvtoVAZ major shareholding companies – the Renault-Nissan alliance and the Russian Technologies State Corporation, Prime Tass cited words of AvtoVAZ President Igor Komarov.
Global management consulting firm Boston Consulting was the consultant for the business plan, Prime Tass said.
Komarov recalled that the mapping out of the business plan was one of banks’ terms for rescheduling the company’s debt.
The business plan envisage that AvtoVAZ will double it’s allowances for investments and technical upgrading in 2020, Komarov said, adding, “By the year under review, the company’s annual car production is expected to exceed one million cars, including 70 percent of Lada brand vehicles.”
When the Russian government adopts the program, the company will draft necessary agreements, which are envisaged by a memorandum of intent of the company’s shareholders that was signed in France in November 2009, the press service said.
Besides, the Board of Directors made a decision to hold a meeting of AvtoVAZ shareholders on June 24, 2010.
AvtoVAZ is Russia’s major car manufacturer, also known as VAZ, Volzhsky Auto Plant, and better known to the world as Lada, was set up in the late 1960s in collaboration with Italy’s Fiat. It is 25 percent owned by French giant Renault.
It produces nearly one million cars a year, including the Kalina, Lada110 and the Niva off-road vehicles. However, the original Fiat-24-based vehicle, the VAZ-2102 and its derivatives, remain the models most associated with its Lada brand.
The VAZ factory is one of the biggest in the world, with over 144 kilometres of production lines, and is unique in that most of the components for the cars are made in-house.
The original Lada was a basic car, lacking in most luxuries expected in cars of its time and was patterned after the Fiat 124. Ladas were available in several Western countries during the 1970s and 1980s, including Canada, the United Kingdom, France, Belgium, Luxembourg, and the Netherlands, though trade sanctions banned their export to the United States. Sales to Italy were forbidden by the agreement between the Soviet government and Fiat, to protect Fiat from cheap imports in its home market.
BNE: Kremlin moves to rescue car industry
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Ben Aris in Moscow
March 11, 2010
Russian Prime Minister Vladimir Putin appeared on telly at the start of March to call on Russians to buy a Russian-made car as the Kremlin's rescue plan for the beleaguered sector goes into high gear.
"I would like to take the opportunity to urge our citizens – if you plan to buy a new car, don't delay the purchase," Putin said during a meeting of the government's presidium.
He went on to say that the government would pay up to RUB50,000 ($1,500) for any car made before 1999 if its owner bought a new Russian-made car at one of just under 1,600 dealerships. The state will also subsidise interest payments for car loans offered by just over 100 banks. Putin said that the state has put aside a total of RUB10bn ($300m) to finance the scheme this year.
Russia launched its own version of a "cash for clunkers" scheme on March 8, promising to spend $6bn on subsidising Russian-made car sales as part of a $60bn rescue package over the next 10 years that is supposed to put the struggling sector back on its feet. Putin said he hopes the incentives will lead to the sale of an extra 200,000 cars.
The subsidy scheme could run through to 2013, a source at the Industry and Trade Ministry told Prime Tass in early March. However, Putin was careful to say in his televised comments that it was not certain the scheme would be repeated next year.
Similar schemes in the US and Europe have been highly successful as punters took the opportunity to trade in their old jalopies for a new car at bargain prices. In Russia the scheme has added importance, as not only will the scheme give the ailing sector (and the economy as a whole) a badly needed shot in the arm, but there is a political dimension as well; 1.4m people work in the industry – almost the entire local economy of state-owned Avtovaz's home town of Togliatti depends on the factory – and the Kremlin is terrified of the political unrest that could follow the large scale closure of car plants.
The Kremlin is about to adopt a new strategy designed to prevent the sector collapsing. The government will gift the sector just under half of the RUB55bn ($1.8bn) that it needs to get through this year with more money in the following years through to 2014. In all, the state says the sector needs a total of RUB630bn over the next 10 years to transform itself and be able to compete with international manufacturers head to head.
Most of the money will go into research and development, as Avtovaz's best-seller (known as the Zhiguli in Russian) is still little more than a rip off of the Fiat 124 that was on Italian roads over 40 years ago. Russian carmakers invest only about 1% of earnings into R&D versus the 4-5% foreign companies invest, according to the draft car strategy that was leaked to the local press.
Russian automotive companies need to invest at least RUB44bn a year to catch up with western carmakers, the report concludes. In all, Russia needs to invest a total of RUB1.8 trillion through to 2020 to modernise the sector, a source at the Industry and Trade Ministry told Prime Tass at the start of March. The government will provide a bit less than half this money, with the rest raised from foreign investors.
And that is just the car companies. The component making sector is largely missing, labour productivity is 50-70% lower than the Japanese (Russian workers take as many days to make a car as Japanese do in the same number of hours, according to one report) and the factories' equipment is outdated and worn out.
Car market
The Russian automotive sector was probably harder hit than any other sector by the recent crisis. The Russian makers of the Lada and Volga saloons had to close down their factories for weeks at a time as sales dropped off a cliff in the early part of 2009. Even the Russian-based foreign manufacturers that had flocked to cities like St Petersburg and Kaluga in recent years saw their sales tumble as demand fell over two-thirds.
The crisis in the automotive industry has come as a bitter blow. Russia briefly became the largest car market in Europe when the number of cars sold – both domestic and international brands – narrowly over took Germany to top 1.65m units over the first six months of 2008. However, when the economy came to a screeching halt in September 2008 sales simply stopped and this year experts expect Russia to sell a total of 1.4m for the entire year.
Russian carmakers were already in trouble. Lacking money and burdened by bad management, Avtovaz was struggling to meet the challenge of the flood of imports and the increasing tide of international brands that have been produced locally; the sales of foreign cars (both imports and locally-produced international names) also overtook Russian brands in the middle of 2008. Avtovaz's cars are cheaper than the foreign brands, but the advent of car loans in recent years has brought the foreign cars into range for the average Russian; given the choice, Russian consumers will always buy foreign if they can afford it.
In addition to dropping cash on the sector, the government has been pressuring French-Japanese joint venture Renault–Nissan to contribute more to fixing up Avtovaz. Renault bought a 25%-plus-one-share stake in the Russian carmaker and Putin threatened the company the state would dilute its stake if the company didn't become more active at the end of last year.
President and CEO of Renault–Nissan Carlos Ghosn told state-owned TV channel Russia Today that the alliance is ready to consider increasing its stake in Russian carmaker Avtovaz the day before Putin launched the cash for clunkers scheme so clearly the Kremlin is continuing to strong arm the company. "We think 25% is a very good stake for starting long-term cooperation," Ghosn said. "Now if the Russian government wants us go further, we will consider this opportunity," he said, adding that he hoped to increase Avtrovaz's share on the market from the current 33% to 40% over the next 10 years.
On the flip side, GAZ, the maker of the Volga – Russia's "other" car – and owned by oligarch Oleg Deripaska, said at the start of March it wants to form an alliance with an unnamed foreign car marker. A third Russian carmaker, Sollers, has already formed a partnership with Italy's Fiat.
At the same time, the state has moved to head off car worker protests as the rescue of Avtovaz has come with the inevitable layoffs. Exactly how many car workers will lose their job is unclear, but the company said in December it would sack just over 71,000 people at the start of this year.
Part of Putin's rescue package includes RUB4bn from the budget to provide employment for out-of-work car workers, which will given to the Samara region, where the company's plant is located. However, these schemes will generate a few thousand extra jobs at best. The Kremlin is playing a difficult game while it waits for its rescue plan to bear fruit.
|Global Q & A | 3/11/2010 12:01:00 AM |
|MoneyShow: The Rich Kid on the BRIC Block |
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John Connor, manager of the Third Millennium Russia Fund, sees further up side from strong global growth, despite concerns about Kremlin meddling.
Q. Do you still believe in a cyclical recovery worldwide?
A. I look real close at China, and I don't see a bubble. China is replacing dirty generating plants and steel plants, and that's been good for Russian exports. They're producing 15% to 25% a year more of rolled steel and flat steel for automobiles. They're going to be building more highways than we have in the interstate system. And then, of course, the steel for high rises. So China's really a great market for Russia, and then there's the rest of South and East Asia, and Latin America, for that matter. So, I think it's looking very strong for Russian exports.
Q. How is Russia doing right now and what's the outlook for the economy and the stock market?
A. Let's start with the pluses. The BRIC countries (Brazil, Russia, India, and China—Editor) are half the market capitalization in the emerging world, and among the BRIC countries, Russia has the highest per-capita income. About 25% [of the population] is middle class, and it's moving towards 50% within a reasonable future. So, a lot of my themes are based on a burgeoning middle class and some of my best stocks are consumer stocks. The price of oil has recovered smartly, and at these prices Russia's trade balance is positive, their fiscal [balance] is probably slightly positive, and growth is probably about 4% a year. That's less than the other BRIC countries, but it's more than you're going to see here in the US. The minus is that the Russian economy is not showing the innovation and dynamism that I would like to see. Everybody looks to the top for direction: Russian kids want a good government job—that's their idea of a career plan. So, small and medium enterprises are not developing as rapidly as one would hope.
Q. The Russian economy is virtually stagnant. You have high unemployment, depressed consumer spending, and yet a stock market that's doubled over the last year. Are you concerned that Russia seems to have a lot of developed-country problems but a market that's been performing like an emerging market?
A. Our fund was up 150% over the last 12 months, but it had gone down 70% in August-September of 2008. So, if you're at 100 and you go down 70% to 30, and you go back up to 60 or 80, you're still not back to 100 yet.
Q. And you don't think the Russian economy is stalling?
A. No. It's not growing as fast as it should, but it's not stalling.
Q. Why did Russia suffer more than other markets during the crash?
A. There's not as much domestic support for the stock market as there should be. You just don't see the sort of long-term money that we see in a mature economy, like life insurance, pension funds, mutual funds. So, you get very heavy foreign participation, where the foreigners rush in and the foreigners rush out.
Q. Are you concerned about another rush for the door, if the business climate takes another turn for the worse?
A. The Russians have no sense of PR. When Prime Minister [Vladimir] Putin took a swipe at the head of Mechel Steel (NYSE: MTL) a while back or when the Russian partners in TNK-BP (Moscow: TNBP) did not act in an appropriate manner, foreigners got very nervous. They think, oh my God, it's going to be another Yukos (the Russian oil company seized in a politically motivated tax evasion case in 2004—Editor). But [the Russian oligarchs, including former Yukos chairman Mikhail Khodorkovsky,] were flouting the laws, starting with the tax laws. There's no real desire on the part of the Kremlin to take over companies and go back to the central planning days. In fact, Italy and France have more public ownership than Russia.
Q. What do you expect from Russian stocks over the next six months or a year?
A. I would expect some nice appreciation. And the [earnings] multiple is still lower than the other BRIC countries—it's 9.4x vs. the BRIC average of 13x, and of course China is much higher than that.
Q. What sectors look good right now?
A. The consumer sector, the fertilizer and steel sectors look good. I'm feeling very good about Novatek (Moscow: NOTK) and the gas sector, and I'm feeling a little better about Gazprom (OTC: OGZPY.PK). They're beginning to look more and more like a real business. I like TNK-BP the best right now. They pay a fantastic dividend, and they've promised to do more for public shareholders. The float is very small, but if they have a [listing] in London, which I think they're going to do, that would be very useful.
Thank you. —Igor Greenwald
John T. Connor, Jr.
Founder and Portfolio Manager
Third Millennium Russia Fund
Web site:
Activity in the Oil and Gas sector (including regulatory)
Reuters: Russia to raise April oil export duty to $268-269/T
Thu Mar 11, 2010 8:41am GMT
MOSCOW, March 11 (Reuters) - Russia is likely to increase its oil export duty in April to between $268 and $269 per tonne from $253.6 currently to mirror a rise in oil prices, according to Finance Ministry figures and Reuters calculations.
The export duty, a major factor in the financial results of Russia's oil companies, is based on monitoring of international prices for Russia's benchmark Urals crude blend URL-E.
The April duty will be based on prices from Feb. 15 to March 14.
Finance Ministry official Alexander Sakovich said on Thursday the average price of Urals between Feb. 15 and March 10 was $75.37 per barrel, slightly lower than the current level.
"If the price stays at a level of $76-78 until the end of the monitoring period, the final average price of the barrel could total $75.43-75.63," he told Reuters.
Reuters calculations, based on custom tariff regulations and the average oil price estimate, show the April crude oil export duty is thus likely to be set at $268-269 per tonne.
Export duties on light refined products, such as gasoline and gas oil, are likely to total $193-194 per tonne, up from the current level of $183.2 per tonne.
On heavy refined products, such as fuel oil, the April tariff will be set at around $104, compared with $98.7 per tonne in March. (Reporting by Vladimir Soldatkin; editing by Jon Boyle)
VTB Capital: Zero export duty for East Siberia might be left for April
VTB Capital
March 11, 2010
draft regulation to be sent to the government by 15 March - negotiations about changing the current holidays might take longer
News: According to Kommersant, the zero export duty for East Siberian fields might be left in place for April. The draft regulation about the export duty for April is to be sent to the government by 15 March. Yesterday, the Ministry of Finance meeting about the export duty for East Siberia did not take place, as Deputy Prime Minister Igor Sechin could not attend. Kommersant speculates that the government has two scenarios: to set a zero export duty for certain fields (currently there are 22, but the list might be shortened) and to set a preferential export duty rate for East Siberian fields (40-50% of the normal rate).
Our view: We believe that the current mechanism, with zero export duties for East Siberian fields approved on a monthly basis, is likely to be left in place. We also tend to believe that given the existing views within the industry, the state would leave East Siberian tax holidays in place until a new profit-based taxation for Russia's oil industry has been enacted. This means Rosneft could enjoy the current tax breaks for another 1-2 years. As a possible compromise between the government and the Ministry of Finance, we could see certain fields (Talakan and Verkhnechonsk) excluded from the list, or the zero duty being replaced by a reduced rate. Both alternatives, however, would face serious opposition from the oil majors involved (Rosneft, TNK-BP and Surgutneftegaz).
Itar-Tass: ENI’s head calls for linking South Stream, Nabucco
10.03.2010, 20.33
ROME, March 10 (Itar-Tass) -- ENI’s Chief Executive Officer Paolo Scoroni has called for linking two future European gas pipelines – South Stream and Nabucco.
“If only all partners decided to link the two, we would reduce operating costs and increase efficiency,” he said.
At a time when demand for gas is growing, Europe should increase investments in infrastructures to ensure gas supplies from “new sources” – like Turkmenistan, Kazakhstan and Africa, the head of Italy’s energy company said.
“We must have a united strategy,” he concluded.
The ENI is Russian Gazprom’s major partner in the South Stream project.
RIA: Gazprom's Italian partner proposes South Stream-Nabucco merger
11:3811/03/2010
MOSCOW, March 11 (RIA Novosti) - Italy's Eni SpA, which is Gazprom's partner in the Kremlin-backed South Stream gas pipeline project, proposed uniting it with its Nabucco rival to boost overall revenues, a Russian business paper reported on Thursday.
Vedomosti quoted Eni CEO Paolo Scaroni as saying at a Cambridge Energy Research Associates conference in Houston on Wednesday that if all the partners decided to merge the two pipelines for part of the route, "we would reduce investments, operational costs and increase overall returns."
Both South Stream and Nabucco aim to supply natural gas to Southern and Central Europe. The South Stream project is designed to deliver up to 63 billion cubic meters of Central Asian and Russian natural gas under the Black Sea while Nabucco is intended to pump 31 billion cu m of natural gas from the Caspian region via Turkey, the paper said.
Russian experts, however, are skeptical about the prospects of merging the two pipelines as Nabucco was originally designed to cut Europe's dependence on Russian natural gas deliveries, the paper said.
"Russia will hardly agree to such a merger as Nabucco is lobbied not only by the EU but also by the U.S.," the paper quoted Dosym Satpayev, director of the consulting firm Risk Assessment Group, as saying.
A Gazprom representative declined to comment on the information while an Eni spokesman was unable to explain the merits of the proposal, adding that explanations could appear on March 12 when the Italian company is to present a strategy of its development in 2010-2013, the paper said.
EurActiv: Italy’s Eni wants rival gas pipelines to collaborate
Published: 11 March 2010
South Stream and Nabucco, the two competing gas pipeline projects supported by Russia and the EU respectively, should combine efforts in a joint cost-cutting drive, according to Eni, an Italian oil company with a stake in South Stream.
Background
South Stream is a planned natural gas pipeline bypassing Ukraine, running under the Black Sea to Bulgaria, with one branch going to Greece and Italy, and another one to Romania, Serbia, Hungary, Slovenia and Austria. Russia recently announced that it would more than double its planned capacity from 31 billion cubic metres per year (bcm/y) to 63 bcm/y (EurActiv 18/05/09 and 25/05/09).
Another pipeline in the project phase, Nabucco, does not enjoy the favour of Russian state monopoly Gazprom. It widely resembles South Stream, but is intended to diversify the EU's supply countries, bringing gas to Europe from the Caucasus and the Middle East to a gas hub in Austria, via Turkey, Bulgaria and Romania.
The Nabucco consortium comprises leading European energy companies: OMV of Austria, MOL of Hungary, RWE of Germany, Bulgargaz of Bulgaria, Transgaz of Romania and Botas of Turkey. But three consortium members - OMV, MOL and Bulgargaz - have already signed up to Gazprom's South Stream pipeline, raising questions about conflicts of interest, or indeed their commitment to Nabucco.
French company Electricité de France (EDF) recently signed a memorandum of understanding with Russia's Gazprom regarding its possible participation in the South Stream gas pipeline (EurActiv 29/01/10).
Paolo Scaroni, chief executive officer of Eni SpA, said the move to combine the planned pipelines was "what bankers call a strategic fit," Bloomberg reported Scaroni as saying at a Cambridge Energy Research Associates conference in Houston.
"Should all partners decide to merge the two pipelines for part of the route, we would reduce investments, operational costs and increase overall returns," he added.
Europe should promote spending on infrastructure to deliver natural gas to consumers from new sources of fuel in Africa, Turkmenistan and Kazakhstan, Scaroni said.
Europe may need to import an extra 180 billion cubic metres of natural gas annually by 2020, stretching available supplies as China, India and Pacific member states of the Organisation for Economic Development and Cooperation seek more natural gas, the Eni chief executive added. In comparison, Russia currently provides about 300 billion cubic feet of gas to Europe annually.
Discoveries of shale gas in the US have freed up supplies for the rest of the world, Scaroni said. New sources of gas from Africa, Turkmenistan and Kazakhstan would help satisfy demand in Europe if pipeline connections could transport the gas to key markets, he added.
If the two pipelines were to "partly merge" as Scaroni suggested, it appears that the stakeholders would need to chose either Romania or Serbia for a large section of the new pipe.
Asked by EurActiv to comment, the European Commission chose not to react at this stage. The Nabucco consortium spokesperson was unavailable for comment.
The Moscow Times: Venezuela Approves Oil Joint Venture
11 March 2010
Bloomberg
CARACAS, Venezuela — Venezuela’s national legislature approved the creation of a joint venture between state energy company Petroleos de Venezuela and National Oil Consortium to pump as much as 450,000 barrels of crude a day.
The group will pay a $1 billion signing bonus and get a 40 percent stake in the venture, which will drill the Junin 6 block of Venezuela’s Orinoco Belt, the legislature said. The Orinoco is Venezuela’s richest oil province, with more than a trillion barrels in place.
PDVSA, as the Venezuelan company is known, previously agreed to terms with the owners of National Oil Consortium, Gazprom, Rosneft, Surgutneftegaz, TNK-BP and LUKoil.
The legislature separately gave new rights to a joint venture between PDVSA and Belarussian firm Belarusneft. The venture can now drill gas that is not associated with crude oil, it said.
|EnergyIntel: Rosneft Gets Sakhalin License |
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|Copyright © 2010 Energy Intelligence Group, Inc. (click for details) |
|Thursday, March 11, 2010 |
Summary
Russia's state-controlled Rosneft has been awarded an exploration and production license for an area offshore Sakhalin Island on the Pacific coast. Analysts, however, say the country's largest oil producer is unlikely to start the field's development soon...
10.03.2010 - Moody's Investors Service
Cbonds: Moody's affirms Rosneft's issuer rating at Baa1; BCA raised to the equivalent of Baa3
Moscow, March 09, 2010 -- Moody's Investors Service has raised the
Baseline Credit Assessment (BCA) of OJSC Oil Company Rosneft ("Rosneft")
to the equivalent of Baa3 from Ba1. However, under Moody's methodology,
this does not affect Rosneft's assigned issuer rating, given the already
assumed high level of support as a state-controlled Russian company,
which is affirmed at Baa1 with a stable outlook.
Moody's considers Rosneft as a government-related issuer (GRI) and thus
its Baa1 rating reflects the following combination of factors:
- A BCA -- which measures the company's fundamental credit strength
excluding any government support -- of 10 (expressed on a scale of 1 to
21, in which a BCA of 10 corresponds to a Baa3 rating)
- The Baa1 local currency rating of the Russian government
- Medium dependence
- High support
Moody's decision to raise Rosneft's stand-alone profile as reflected by
its BCA to Baa3 primarily reflects the company's strengthened financial
profile in part due to its stronger liquidity position, with liquidity
and refinancing pressure having been eased by the recently signed US$15
billion loan with the China Development Bank. The higher BCA also factors
in: (i) the successful integration of the downstream assets acquired from
Yukos in 2007, (ii) Rosneft's strong operational performance including
the successful launch of the major Vankor project, which is set to drive
the company's production growth in the medium term, (iii) its improved
capitalisation structure and debt portfolio profile, largely due to the
signing of the Chinese loan, (iv) robust cash flow generation and debt
protection metrics, as well as (v) major improvements in transparency and
the level of disclosure.
The BCA and thus the assigned rating is also supported by (i) Rosneft's
strong performance on the reinvestment risk factors, including the
reserves replacement ratio and finding and development costs, (ii) its
vast resource base in Russia and (iii) its strong production growth
outlook.
The stable outlook reflects the limited upward pressure on the final Baa1
rating, which is currently on a par with the sovereign rating of the
Russian Federation. Moody's expects Rosneft to continue to focus on
further improvements to operational efficiency, implementation of key
projects and de-leveraging. To maintain its BCA at the current level,
Moody's expects Rosneft to generate retained cash flow to net debt over
30%, adhere to leverage of below 35% and maintain strong liquidity.
An upgrade of Rosneft's rating would most likely occur in the event of an
upgrade of the sovereign rating, if this is supported by the company's
strong performance on a standalone level, illustrated by continued
de-leveraging with retained cash flow to net debt consistently exceeding
40%, leverage of below 30%, and Net Debt/EBITDA of below 1.0x.
Any indication of a weakening in Rosneft's credit metrics -- with RCF /
net debt falling consistently below the thirties, or leverage heading
towards or above 40% -- would exert downward pressure on the company's
rating, as would any failure to adhere to its de-leveraging targets. A
downgrade of the sovereign rating of the Russian Federation would result
in a downgrade of Rosneft's rating.
Moody's last rating action on Rosneft was on 4 July 2007, when it
upgraded the issuer rating to Baa1 from Baa2, following the company's
acquisition of Yukos's downstream assets.
Reuters: Conoco to maintain long-term Lukoil relationship-CEO
Wed Mar 10, 2010 3:57am IST
HOUSTON, March 9 (Reuters) - The chief executive of ConocoPhillips (COP.N) said on Tuesday that his company plans to maintain its partnership with Russian oil major Lukoil (LKOH.MM) .
"We have a strategic relationship with Lukoil," Jim Mulva, Conoco's CEO told Reuters Insider. "We will maintain a long-term relationship with Lukoil."
Conoco plans to sell $10 billion in assets and analysts have speculated it will sell its 20 percent stake in Lukoil.
11.03.2010
Oil and Gas Eurasia: TNK-BP Plans Production Increase
TNK-BP plans to increase oil and gas production by 1-3 percent for the next three years, the company’s Chief Operating Office Bill Schrader said, according to ONAKO-Media. Schader said the share of gas in the company’s overall production volume would grow from the current 12 percent to 30 percent in the next 10 years. Specifically, he said production from the Rospan International fields could grow 400 percent.
Rospan plans to produce 3 billion cubic meters of gas in 2011, with a subsequent increase to 9.9 billion cubic meters by 2016. Rospan International is developing deep gas deposits in the Novo Urengoy and East Urengoy gas condensate fields and in the Yamal Nenets autonomous district. These reserves are estimated to be 950 billion cubic meters of gas and 180 million tons of gas condensate.
TNK-BP forecasts its hydrocarbon production will grow 2.5 percent in 2010.
Copyright 2010, Russian Energy Ministry Statistics Department. All rights reserved.
Interfax releases its annual Russia oil and gas report
Leading Russian news agency Interfax has just released it annual look at the Russian oil sector.
With oil prices back above $80 Russia’s oil business is in business again. And with several new pipelines due to come online this year, plus a Kremlin-sponsored push to open up the as yet untapped oil resources of Eastern Siberia, this promises to be an exciting year for the Russian hydrocarbon sector.
“Russia’s oil sector in 2009-2010” is the most extensive look at the oil sector. It covers the developments of the sector in the last year and identifies the trends in each of the subcategories of the oil sector through this year. It also includes in depth analysis of the leading companies in the sector, including their financials and production projections making it one of the most authorities guides to the sector available.
The cost of the report is €450 but bne readers can claim at 15% discount if they quote the code: bneInterfaxOil2010
To order your copy or for more enquiries please contact:
Henry Pettit
Business Development
Interfax Europe
Tel: +44 (0)207 256 3913
hpettit@interfax.co.uk
Gazprom
UpstreamOnline: 'Russia needs to revamp oil tax'
Russia should move to a profit-based tax regime to help oil companies realise new projects essential to future output growth in the world's biggest crude producer, a senior official at Gazprom Neft said.
News wires 10 March 2010 14:09 GMT
Gazprom Neft, Russia's fifth-largest crude producer, has earmarked $3.9 billion for investments this year and is in talks to secure a $1 billion syndicated loan to refinance debt, chief financial officer Vadim Yakovlev told Reuters in an interview.
"The existing tax system for development of new fields is effectively prohibitive," Yakovlev said in comments cleared for publication today. "A fundamentally new system is needed; a tax on profit at this or that project."
Gazprom Neft, the oil arm of energy giant Gazprom , expects oil and gas output to rise 1.6% in 2010 to 407.6 million barrels of oil equivalent due to the acquisition of new assets, Yakovlev said.
Russia, the world's largest oil producer as Saudi Arabia persists with Opec-led output cuts, expects to boost crude oil output to between 4.19 billion and 4.22 billion barrels in 2030 from last year's 3.89 billion barrels.
To meet this target, Russia must replace depleted West Siberian deposits with expensive new developments further east.
Russia's government has introduced a series of measures, including a zero export duty on East Siberian deposits, to ease the tax burden and help oil companies overcome the economic crisis, which eroded fuel demand and ate into company profits.
But Yakovlev said the government should do more than introduce one-off measures to stimulate output at greenfield developments. Profit-based tax, he said, was one such solution.
"The (new) system would be self-tuned as the tax would depend on the economics of a given project," he said.
Yakovlev also voiced support for a unified lower export duty. State revenues could be compensated by an increased mineral extraction tax.
"For new assets, there is a need for an extra output tax, which should be the main tax for the greenfields, while a unified export duty is kept unchanged," he said.
He added that an Energy Ministry working group had calculated taxes from revenues should be lowered to around 40% to 45% percent from the existing 60%.
Gazprom Neft is targeting 50% growth in investments in 2010, excluding acquisitions, to $3.9 billion, said Yakovlev.
He said the company had appointed banks to arrange a $1 billion syndicated loan, the first for a Russian company this year.
"The $1 billion loan will be used to refinance our credit portfolio, including the Vneshekonombank credit line that pays Libor plus 5%," he said.
"The current market allows us to get financing on better terms than this."
Yakovlev denied Gazprom Neft had any immediate plans for a secondary share placement on domestic or international markets. "It's an option that we are looking at, but we don't have such a need at the moment," he said.
Yakovlev also said Gazprom Neft expected to increase its ownership of oil company Sibir Energy to 75% in the first half of this year. It already has a controlling stake.
After the transaction, the Moscow government would own the other 25% of Sibir Energy, he said.
Sibir has Shell as a partner in the development of the Salym field in Siberia.
Gazprom Neft also controls Serbian oil monopoly NIS.
"This year, we plan to increase oil output (at NIS) by no less than 10%," Yakovlev said. "Investments will total €547 million by the end of 2011."
Published: 10 March 2010 14:09 GMT | Last updated: 10 March 2010 14:14 GMT
The Moscow Times: Gazprom Neft’s Q4 Results Disappoint
11 March 2010
By Anatoly Medetsky
Gazprom Neft on Wednesday posted a smaller fourth-quarter profit than analysts had expected, largely because of reasons unrelated to production.
The oil arm of gas giant Gazprom earned a net income of $861 million, it said in a statement, shy of analyst estimates of $955 million in an earlier Bloomberg poll.
Its shares slid 3.2 percent by the end of the day in Moscow, compared with the MICEX's broader oil and gas index, which declined by only 0.6 percent.
Gazprom Neft said in the statement, however, that its shares gained more value over 2009 than the average for integrated oil companies, rising by 161 percent to 163.64 rubles, compared with average growth of 118 percent.
Chief financial officer Vadim Yakovlev said in an interview to Reuters that the company would recommend offering 20 percent of its 2009 adjusted profit of $2.77 billion for dividends.
The company's declining organic output should have dampened interest in the stock, said Alexei Kokin, an analyst at investment company Metropol. At one point toward the end of the year, though, investors thought Gazprom would issue a secondary public offering for the subsidiary's stock, which might have driven the price up, he said.
“It caused certain enthusiasm,” Kokin said, adding that the purchase of London-listed oil producer Sibir Energy, which has stakes in such lucrative assets as the Moscow Refinery and another oil company, Salym Petroleum Development, may also have played a role in the stronger-than-average appreciation.
Gazprom Neft said the fourth-quarter profit, if cleared of losses and revenues from asset sales, came to $638 million, compared with a net loss of $543 million a year earlier, when oil prices reached critically low levels.
The company's full-year profit, if adjusted for one-offs, decreased 41 percent to $2.8 billion, it said.
As nonoperating losses in the fourth quarter, Gazprom Neft recorded the sale of assets in the remote Chukotka Peninsula and the difference between the book value and fair market value of Salym Petroleum Development.
Gazprom Neft gained the shares when it took over Sibir Energy, which holds 50 percent of Salym.
Even so, Gazprom Neft said it gained paper profit in another aspect of the Sibir deal. The oil producer said the market value of the Moscow Refinery was higher than the refinery's book value.
Gazprom Neft plans to invest $3.9 billion this year, mostly in exploration and production, which would be an increase of about 50 percent from last year, the company said in a presentation on its web site.
BarentsObserver: Gazprom discussed Shtokman timeline
2010-03-10
The development of the first phase of the Shtokman project was on the agenda when Gazprom Deputy Aleksandr Ananenkov today met with owner representatives of the Shtokman Development AG.
The meeting, which took place in the Moscow headquarters of Gazprom, discussed preparations for the development of the project, and especially issues related to time schedules in the project’s first development phase, a press release from the company reads.
The company in early February announced that the project launch will be postponed from 2014 to 2016 and that a final investment decision will be made only in 2011, and not in 2010 as earlier planned.
However, as reported by BarentsObserver this week, representatives of project partner Total maintain that the project is on schedule after all. That was also stated earlier by Gazprom Deputy Aleksandr Medvedev.
RusBizNews: Gazprom’s Hands Ever Deeper In State’s Coffers
10.03.2010 — Analysis
In March 2010 the Russian Government will be considering a plan for integrated development of hydrocarbon deposits in the Yamal Peninsula drafted by the regional administration and JSC Gazprom. The gas monopoly insists on tax concessions without which the development would take many years. Experts see no need in this suggesting that the investment programme be reviewed. The lack of transparency of Gazprom left no other option than to doubt the efficiency of the country's main company for the RusBusinessNews observer too.
The programme for the development of fields in the Yamal Peninsula and adjacent offshore areas until 2035 which should be officially approved in the first quarter this year is so far raising more questions than giving answers. The Yamal-Nenets Autonomous Okrug administration preferred not to comment on it, possibly due to being hardly familiar with it. Gazprom representatives reduce their comments to general figures: the amount of investment by 2035 will reach 180 billion dollars and gas production will amount to 350 billion cubic metres per year.
The large Bovanenkovo field will be developed first, its reserves amount to 4.9 trillion cubic metres. Gazprom is planning to spend about 12 billion dollars on the development of this field and further 90 billion on the construction of new transport system Bovanenkovo-Ukhta (5-6 lines about 1,100 kilometres long) and further to Pochinki. Having made the decision in 2006 to invest in the development of Bovanenkovo field Gazprom built into the project the in-house rate of return standard of 13.5%. In the beginning of 2010 the company representatives have suddenly started talking about the threat of a drop in this indicator down to 7.5% which is what made the monopoly resort to asking the Government for support.
Gazprom is rather vague when talking about the essence of their proposals to the State: Vasiliy Savchenko, the Deputy Manager of the Department for Forecasting the Integrated Development of the holding's capacities, only stresses that they are talking about a set of tax and customs measures aimed at the acceleration of the development of the Yamal Peninsula. According to him without the support from the Government Gazprom may develop just one field, Bovanenkovo, as the development of Kharasavey, Kruzenshtern, and South Tambey fields with reserves amounting to 3.3 trillion cubic metres will be "difficult".
Alexei Belogoryev, the Manager of Expert Analysis Department on Fuel and Energy Complex at the Energy Strategy Institute, does not understand the logic of the monopoly. The mineral extraction tax (MET) rate at 147 roubles for 1,000 cubic metres has not changed for over four years, if we take inflation into account, it has even dropped, the company's revenues grew from 60 billion dollars in 2006 to 100 billion in the financially hard 2009, and in 2010 it will grow further to 116-118 billion dollars. Gazprom's net profit also has grown significantly whilst technological conditions for the development of the fields have not changed much. This is why Gazprom's demands to reduce the MET rate to zero are in no way connected to the internal economy of the project.
Mr Belogoryev reckons that "The real cause is in the unmanageable investment load which Gazprom had to sign up to under pressure from the Government. As well as Yamal, this includes fields in the East Siberian and the Far East, Shtokman field, construction of export pipelines to Europe and China etc. Carrying these considerable investment obligations Gazprom is trying to share them, be it just partially, with the Government which initiated many of the mentioned projects. This is the position which in all likelihood is reflected in the company's proposals regarding Yamal".
Mikhail Korchemkin, the Director General of the East European Gas Analysis, a consulting company, does not see any grounds to give Gazprom tax concessions either. According to him, tens of billions of dollars can be saved by not building the Bovanenkovo-Ukhta pipeline. The Yamal gas, the expert reckons, should be channelled to Yamburg which would require just a short link.
Vasiliy Savchenko informed RusBusinessNews that initially it was planned to send gas here from Bovanenkovo field but that the route had to be changed at the request of the YaNAO administration. The Okrug authorities said that the line to Yamburg will disturb water flows creating serious environmental and economic problems for the peninsula's indigenous population. Moreover, piping hydrocarbons from Bovanenkovo to Yamburg will make independent gas producers very unhappy as there will be no room in the pipe left for their gas.
Mikhail Korchemkin disputes the monopoly's representative's arguments. He thinks that by the time of commissioning of Bovanenkovo field (2012) there will be enough room in the pipe due to the decline in production in the Nadym-Yamburg-Urengoy region. There are available transport capacities even now as the sales and production volumes of gas are significantly lower than in 2007. The experts explain the decision to build the new transport corridor to Ukhta by the desire of middlemen and subcontractors of the Russian gas monopoly to lay their hands on serious money.
Andrey Belogoryev suggests not to count on the transport capacities becoming available in the Nadym-Pur-Taz region due to declining production at traditional fields. Calculations made in 2004 by VNIPIgazodobycha Ltd show that the current pipeline system will be capable to take only 90 billion cubic metres of gas from the peninsula in 2010s. This is quite enough for the initial stages of the development of Bovanenkovo field but serious problems can develop later on: the total production volumes in Yamal will reach according to various predictions 250-350 billion cubic metres. This is what led to the idea of the construction of the new line to Ukhta with the capacity of 140 billion cubic metres per year.
The expert reckons that we must not forget the significant wear of main assets of the Unified Gas Supply System (UGSS) which today exceeds 56%. A quarter of main pipelines in Russia have been in use for a term exceeding their nominal lifecycle (33 years). One of the key consequences of this is the reduction of technically available UGSS capacity. The main reduction is recorded precisely at the output of the Nadym-Pur-Taz region from where it is impossible to pump more than 550 billion cubic metres annually. The expert is convinced that is the gas transportation infrastructure is not renovated it will lead to the delays in the Yamal project. Investments needed for the modernization of the gas transportation infrastructure are comparable in size to the cost of the construction of the new Bovanenkovo-Ukhta route.
Gazprom, however, has managed to discredit even these reasonable arguments. Experts are concerned with the excessive costs of the construction of the gas pipeline. Even if we take into account the total length of the linear part of the main lines of 12-15 thousand kilometres the cost of the construction of one kilometre amounts to 6 million dollars. Gazprom does not plan this kind of costs even for the construction of the Dzhubga-Lazarevskoe-Sochi gas pipeline almost all of which will be laying on the seabed. According to Alexei Miller, the Head of the company, the cost of one kilometre will not exceed 2.7 million dollars. Experts think this insanely expensive: according to the data provided by Mikhail Korchemkin, laying one kilometre of pipeline on the seabed cost the proprietors of Langeled 1.6 million dollars, of the Trans Adriatic pipeline - 2.2 million. Furthermore, the conditions of the construction and pipe diameter of these projects do not speak for Gazprom at all.
Gazprom's calculations cause mistrust also due to the fact that PeterGasEngineering Ltd in 2008 valued one kilometre of the Sochi gas pipeline at 0.8 million dollars. The Bovanenkovo-Ukhta gas pipeline cannot cost more simply because most of it will be on dry land. Experts' rough estimates show that the development of a gas field in the West Siberia with the production levels of 10 billion cubic metres annually costs about 0.5 to 1 million dollars and the construction of one kilometre of a linear part of the main gas pipeline (taking into account the costs of compressor stations) amounts to about a million dollars.
The development of Yamal is made difficult by its specific relief. According to Vera Yakutseni, the Chief Specialist of FSUE Russian Oil Science and Research Geological Exploration Institute, Bovanenkovo field will in time submerge as the surface is sinking. The geological conditions in the meantime are virtually the same as in Yamburg, and so is the quality of gas. This is why the increase in the price of the project, taking into account the difficulties of the development, may amount to about 20%. Experts estimate the cost price of gas from Bovanenkovo field at a broad range of figures - 20 to 70 dollars per 1000 cubic metres. Gazprom does not publicise their production cost data. Vasiliy Savchenko only says that the Yamal gas will be significantly more expensive, about 50% more than gas from Nadym-Pur-Taz region.
Back in early 2000s, CJSC ERTA-consult experts predicted that through the increasing production costs Gazprom will be unable to fund the development of new fields using only their own money. The consultants tied the involvement of investors to improvements in the transparency of projects and elimination of inefficient spending of the gas monopoly.
Gazprom, however, went another way deciding to lay off its non-transparent spending onto the whole of the Russian people. This year industrial enterprises will be paying more for gas: in YaNAO - by 50%, in the Sverdlovsk Oblast - 42%, in the Kurgan Oblast - 38%. Counting fuel price increases for private individuals average prices in Russia have gone up 46%. Starting in April people will be paying further 15% more.
Vladimir Terletski
Bloomberg: Tullow Says Gazprom, Namcor to Help Develop Namibian Gas Field
By Eduard Gismatullin
March 10 (Bloomberg) -- Tullow Oil Plc, the U.K. explorer with the most drilling licenses in Africa, said OAO Gazprom may join its Namibian Kudu project.
Tullow may sell Gazprom, Russia’s state-owned gas monopoly, and Namibia’s state-owned oil company, Namcor, part of its 70 percent interest in the Kudu gas field to advance the project, Chief Operating Officer Paul McDade said today. It will retain a 30 percent stake in the venture and be the project operator, he said.
Namibia depends on electricity imports from South Africa for about half its needs. The Kudu gas-to-power project would help meet growing demand for electricity from the nation’s mining industry. In June, OAO Gazprombank, the lending arm of Gazprom, and Namcor agreed to examine financing to build a $1.2 billion power station.
“Commercialization of our assets is very important,” McDade said. “That’s looking potentially successful.”
The partners may sell excess electricity to South Africa, he said.
To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@
Last Updated: March 10, 2010 04:04 EST
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