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Basic Political Developments
• Interfax: U.S. under secretary of state to visit Moscow to prepare Obama-Medvedev meeting - U.S. Under Secretary of State for Arms Control and International Security Affairs Ellen Tauscher will visit Moscow on Tuesday, U.S. Assistant Secretary of State Philip Crowley said at a news briefing on Monday.
• VOR: Russia, MERCOSUR sign cooperation agreement - The document, signed by the Federation Council speaker Sergei Mironov and the MERCOSUR Parliament speaker Jose Juan Batista Pampuro, will help promote inter-parliamentary cooperation and mutually advantageous ties between the Russian Federation and South America’s biggest trade and economic alliance.
• Itar-Tass: Medvedev to visit Severodvinsk to see the launch of new submarine
• VOR: Russian 4th generation submarine to be launched
• Barentsobserver: New nuclear submarine to be launched today
• VOR: Rossiya icebreaker heading home
• VOR: New ISS crew to fly Tuesday night
• Pravda: Soviet Ballistic Missiles Appeared as Bulky Uncontrollable Monsters
• Oilprice: Resource Starved China Looking to Capital Starved Russia - The transborder commerce in this region helped China surpass Germany to become Russia’s largest trading partner early last year, with $39.5 billion in goods and services passing between the two countries in 2009.
• Panarmenian: Armenian President to be on visit to Saint Petersburg on June 17-19 - From June 17 to 19, Saint Petersburg will be hosting the 15th International Economic Forum, which brings together leaders of many countries. Besides, Serzh Sargsyan will participate in events dedicated to the 300th anniversary of the Armenian community of Saint Petersburg.
• RIA: French company to sign deal with Russia's Tomsk Region at Expo 2010 - Viktor Kress, the governor of Russia's Tomsk Region, is expected to sign on Tuesday a memorandum on cooperation with the French company Veolia Water at the Expo 2010 international exhibition in China, a regional official said.
• Ammon News: Russian private sector expresses interest in Jordan's investment projects
• Focus Taiwan: First lady returns home from tour to Russia
• .cy: Address by the Minister of Commerce, Industry and Tourism Mr Antonis Paschalides at the Moscow Business Forum: "Cyprus-an international business and professional centre", in Moscow
• : Russia - Europe: Cooperation without Frontiers: Matchmaking Forum of the Moscow Entrepreneurs Association 7 June 2010, Moscow
• RUSSIA-KYRGYZSTAN
o Itar-Tass: No victims among Russian citizens are reported in Kyrgyzstan
o 24.kg: Interim gov’t asks Russia to ensure security of strategic sites in Kyrgyzstan
o Reuters: Moscow-led bloc may try to quell Kyrgyz clashes
o Moscow Times: Moscow Faces Test in Kyrgyz Violence - By Nikolaus von Twickel
• Itar-Tass: FSB foils 240 militants in 2010 – director
• RIA: Large-scale terrorist attacks averted in Russia - FSB
• Itar-Tass: FSB officer wounded in Kabardino-Balkaria
• RIA: Policeman killed in attack on checkpoint in Russia's Dagestan
• RIA: Resident of Chechnya surrenders WWII explosives to police
• Kremlin: Trip to Chechnya - Dmitry Medvedev met with President of Chechnya Ramzan Kadyrov, held a meeting on the republic’s social and economic development, and visited a number of infrastructure sites in Grozny.
• Kommersant: Dmitry Medvedev proposed to reduce the length of stay in government service
• RIA: First international youth economic forum opens in St. Petersburg
• Moscow News: New boss for south of Moscow - Georgy Smoleyevsky has been appointed as prefect of the southern administrative district of Moscow following the dismissal of Yury Bulanov late last month.
• Moscow Times: All Eyes on Luzhkov and Rakhimov - So far this year, new governors have been appointed to almost one-fourth of all Russian regions. Of the 20 governors appointed, practically none are “outsiders” in the fullest sense of the word. As a rule, they are members of the local political establishment: deputy governors and mayors.
• Moscow News: Lukashenko begs for a crust - “I went for supper and thought there would be at least a slice of bread,” Lukashenko grumbled as Putin tried to talk about their shared sporting interests, polit.ru reported.
• Charter97: Was Lukashenka denied “slice of bread” in Moscow? (Video)
• Vedomosti/Russia Today: Clouds over Skolkovo - The first project for the innovation city in Skolkovo has been approved: it is planned to invest 900 million rubles into the “cloud” incubator, which was proposed by Almaz Capital Partners. Valery Kodachigov, Natalia Kostenko
• RIA: First project approved for Russian 'Silicon Valley' - paper
• Ottawa Citizen: Harlequin targets Russia for romance novels
• Justmeans: From Russia With Love: Exploring the Economic Future of One of the World's Largest Emerging Market Nations (Part 1 / 2)
National Economic Trends
• Reuters: Rouble flat as euro zone worries hurt high-yield assets
• Reuters: Russian bank balances fall to 841.9 bln rbls
• UralSib: Metal and ore prices push PPI growth above expectations
• Israeli Diamond: Diamond Market Optimism May Reduce Gokhran’s Budget
• Bank of Finland: 4 out 10: Putin's 10-year economic programme scrutinized
Business, Energy or Environmental regulations or discussions
• Reuters: Russian markets -- Factors to Watch on June 15
• Bloomberg: Norilsk, Rosneft, Uralkali: Russian Stock-Market Preview
• Bloomberg: Silvinit Rises on Report of Stake Sale to Russian Billionaire
• DJ Uralkali's New Owners May Attempt Merger With Norilsk – Report
• FT: Rybolovlev sells 53% Uralkali stake to three Russian tycoons
• Reuters: Svyazinvest may get C.Telegraph without tender-paper
• Moscow Times: Metals Duties, Prices Linked
• DJ: Audi To Cease Production In Russia Later This Year –Vedomosti
• Reuters: Ssangyong inks auto export deal with Russia Sollers
• Moscow Times: AvtoVAZ Will Transfer or Cut 10% of Work Force
• Bloomberg: SocGen Aims for 2012 Net Around EU6 Billion on CIB, Russia
• RBC: Pharmacy Chain 36.6 launches flotation
Activity in the Oil and Gas sector (including regulatory)
• Interfax: Export duty on Russian crude could plummet $43 to $248-8/tonne on July 1
• RBC: Ukraine hopes to produce gas in Russia - If Gazprom and Naftogaz of Ukraine form a joint venture, Ukraine expects to produce at least 30bn cubic meters of natural gas on Russia's territory, Ukraine's Fuel and Energy Minister Yury Boyko announced today.
• Reuters: Poland needs gas deal with Russia to avoid gas cuts
• Oil and Gas Eurasia: Russia Increases forecast for 2010 Gas Exports By 8.1 Percent
• Reuters: China pipeline ready for Russian oil –agency
• Moscow Times: Environment Minister Trutnev Wants Drilling Checks
• Izvestiya/Russia Today: A drilling addiction - Officials will examine Russia’s oil platforms
• Moscow Times: Total Looks for Big Stake in Yamal Gas Field
Gazprom
• Reuters: Economy Minister Adriean Videanu could meet Gazprom CEO Alexei Miller on June 16 in Moscow to discuss Romania's possible participation in the South Stream project, Miller said last week.
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Full Text Articles
Basic Political Developments
June 15, 2010 10:36
Interfax: U.S. under secretary of state to visit Moscow to prepare Obama-Medvedev meeting
WASHINGTON. June 15 (Interfax) - U.S. Under Secretary of State for Arms Control and International Security Affairs Ellen Tauscher will visit Moscow on Tuesday, U.S. Assistant Secretary of State Philip Crowley said at a news briefing on Monday.
"Under Secretary of State for Arms Control and International Security Ellen Tauscher and Deputy Foreign Minister Sergei Ryabkov will be co-chairing this week the Arms Control and International Security Working Group," Crowley said.
"You'll recall last year President Obama and President Medvedev established a bilateral presidential commission to improve cooperation between the governments of Russia and the United States across a range of issues," he said.
"Secretary Tauscher will be in Moscow starting tomorrow to co-chair this working group as they prepare for the June 24 meeting between President Obama and President Medvedev here in Washington," Crowley said.
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VOR: Russia, MERCOSUR sign cooperation agreement
|Jun 15, 2010 09:54 Moscow Time |
The Russian Parliament’s upper house, the Council of the Federation, and the Parliament of the South American common market, MERCOSUR, have signed an agreement on cooperation.
The document, signed by the Federation Council speaker Sergei Mironov and the MERCOSUR Parliament speaker Jose Juan Batista Pampuro, will help promote inter-parliamentary cooperation and mutually advantageous ties between the Russian Federation and South America’s biggest trade and economic alliance.
Mironov pointed out in a speech that work to that end would also go on as part of direct bilateral parliamentary contacts with each of the MERCOSUR member-states.
The South American common market comprises Argentina, Brazil, Paraguay and Uruguay. Venezuela is about to join the alliance. Argentina is the current chair-country of MERCOSUR. The alliance’s trade and economic activities cover almost 60% of Latin America’s territory, with a population exceeding 250 million.
Itar-Tass: Medvedev to visit Severodvinsk to see the launch of new submarine
15.06.2010, 07.51
MOSCOW, June 15 (Itar-Tass) - Russian President Dmitry Medvedev, who is the commander-in-chief of the Russian armed forces, will on Tuesday attend a ceremony of launching the Severodvinsk nuclear submarine in the dockyard of the Sevmash defence plant in the town of Severodvinsk. Medvedev’s first visit to Severodvinsk was in 2009.
The Severodvisnk is a multipurpose nuclear submarine of the fourth generation designed by the Malakhit design bureau in St. Petersburg.
The submarine’s construction began in 1993. Experts working at the Sevmash dockyard explain why it took so long to finish the job. There are several reasons such as economic hardships, a fundamentally new architecture of the hull and modern weapons.
VOR: Russian 4th generation submarine to be launched
Jun 15, 2010 07:50 Moscow Time
A submarine of the new generation will be launched today in the city of Severodvinsk in the north of Russia. President and Supreme Commander in Chief Dmitriy Medvedev will take part in the ceremony.
The construction of the submarine started back in 1993. The fact that it took so much time to finish is explained by economic difficulties and the submarine’s new complicated construction and armaments. The submarine, named “Severodvinsk”, is a vehicle of the fourth generation that has no analog in the world. It is expected to be passed to the Russian navy in the next year, and after that six other such vehicles are planned to be built.
Barentsobserver: New nuclear submarine to be launched today
2010-06-15
Russia’s newest nuclear powered multipurpose attack submarine the Graney (Yasen) class “Severodvinsk” will be launched from the Sevmash shipyard today. Present at the launch is President Dmitry Medvedev.
“Severomorsk” is the first of Russia’s new fourth generation nuclear submarines. The launch ceremony was originally scheduled for May 7, but was postponed because of technical reasons, a source in the United Shipbuilding Corporation told RIA Novosti.
Construction of “Severomorsk” started in 1993, but was halted, mainly because of financial setbacks. The submarine is planned to be delivered to the Russian Navy in 2011.
VOR: Rossiya icebreaker heading home
|Jun 15, 2010 09:43 Moscow Time |
The nuclear-powered icebreaker Rossiya is heading back to Murmansk bringing home a team of scientists of the Russian research Station North Pole 37 from the pack ice of the Arctic Ocean about 550 miles northeast of Barrow, Alaska.
The ship’s progress is being hindered by thick ice, which keeps her speed down to a crawling 2 knots.
VOR: New ISS crew to fly Tuesday night
|Jun 15, 2010 09:23 Moscow Time |
Russian cosmonaut Yury Yurchihin and U.S. astronauts Douglas Wheelock and Shannon Walker will blast off from the Baikonur space center tonight as the crew for the next half year stint on board the International Space Center, RIA Novosti reports from Kazakhstan. They will join Russian cosmonauts Alexander Skvortsov and Mikhail Korniyenko, and U.S. astronaut Tracy Caldwell Dyson, restoring the station to its full complement of six crew members.
Pravda: Soviet Ballistic Missiles Appeared as Bulky Uncontrollable Monsters
15.06.2010
Sixty years ago, the first Soviet ballistic missile R-1, analogue of V-2 designed by the team of Sergey Korolyov, entered the Russian Army service. The country that did not have a chance to recover from the horrible war began the era of the rocket and space equipment development. It was the time when Makhmud Rafikov was appointed cameraman at Centrnauchfilm film studio. Now, when the term of his “non-disclosure” agreement has expired, he told Izvestia about the details of his secret job.
In the beginning, missiles could not fly and generally were very uncontrollable. When they learnt how to fly, they did not always land where they were supposed to land. It often created risky situations for cameramen who had to point their lenses at them from Earth. Makhmud remembered that once an undershoot occurred and the missile that was launched 150 kilometers from the bunker exploded only a couple of kilometers from the place of the shoot. One of the crew members told the general who got out of the bunker: you are safe there behind the concrete walls, while we are risking taking the air at -20°C. In very firm words the general recommended that the crew disappeared. Makhmud told him they were sent by Korolyov. The general went back into the bunker, leaving the freezing crew members in the dark. Finally his aide emerged from the bunker and said that Korolyov stated that he could get rid of the general but not the crew. Korolyov believed that if the result was not on film, it meant it did not exist. Experiments last seconds, but the film can be watched over and over again. It was very important that cameramen were always near the testers.
Since rocket engineers had to have the image of their work from above, it was decided to conduct a shoot of the launching range from a plane. Makhmud said he colleagues were not very eager to do it. One of the crew members had a breakdown when he saw the consequences of the nuclear explosion on Earth. Rafikov agreed to shoot and filmed launching of missiles and tests of nuclear and, later, hydrogen bombs. Korolyov and Kurchatov greatly appreciated these shots because they could clearly see the results of the engineers’ work.
What were the distances between the places of explosion and the shoot location?
“It varied depending upon the power of the explosion. For nuclear blasts it was eight, five, sometimes three kilometers. The distance was higher with hydrogen blast, about 25 kilometers.”
Not everything went smoothly.
“Once, a test of an experimental nuclear warhead was scheduled near the city of Semipalatinsk. Five cameramen were getting ready for the shoot. There were 10, 9, 8 second before the explosion. On second 6 we turned the cameras on. Suddenly we heard a click, but instead of the expected powerful mushroom we saw some toadstool with a long leg and a tiny cap. So, the explosion was flawed. We turned the cameras off. Kurchatov came along with Valentin Polyakov who was responsible for all the logistics during tests. We were given another task. Since the attempt failed, and the explosion pretty much did not happen, we had to fly on a helicopter and closely approach the tower where the charge was installed and shoot a close-up of this under-exploded charge. “But you have to know that it may explode any moment,” Polyakov warned. Usually a helicopter crew has four people in it, but this time only one pilot was left not to risk too many lives. We flew right up to the tower, froze in about 50 meters away and shot the charge from four sides as directed. I wanted to take more shots closer, but the pilot was only cursing, saying he had a wife, kids, and wanted to live. So we took off. The pilot was awarded the title of the Hero of the Soviet Union. Later he came up to me in a canteen and introduced me to his commander. The commander said: “I would put you forward to a decoration, too, but I can’t since you are not a military person.”
A few days later another test was to be shot. This time Rafikov was better prepared.
“The nuclear bomb explosion was arranged at the height of approximately two kilometers. I was flying at four-five kilometers. It was low ceiling conditions. Usually it is completely dark underneath – the ground, and this time everything was white – clouds beneath, the sun shining above. And then came the blast, above the clouds. The shock wave traveled in all directions and down, and the cap of the “mushroom” turned into something unusual. It was hard to understand if it was the cap or not, there was a gigantic white circle on the bottom resembling a washbasin with the reflection of blue skies on its rim. It was a beautiful sight. But people on the ground could not see it because it was obstructed with this white circle. The scientists were specifically interested in this phase. I knew what they wanted and was shooting close-ups.”
In the beginning it seemed that everything was fine. Makhmud’s son was born, and he went to Semipalatinsk to shoot another test. There he felt something strange was happening to him. He developed unusual appetite. After a big breakfast he could barely wait until lunch at noon, and by the end of the lunch shift he was at a table again. It lasted for two weeks. In Moscow he lost his appetite for two weeks. His mother cooked his favorite meals but he could not eat even a small piece. He was running a high temperature. He was hospitalized and stayed in the hospital for a month. He lost much weight, was weak, but the doctors could not diagnose him. Makhmud was guessing he was affected by radiation but could not tell it to doctors because he signed a non-disclosure agreement.
He was transferred to a specialized clinic where he was diagnosed and treated for radiation sickness. He was offered disability benefits which he refused: “I had a young beautiful wife and a little son, I was young, I could not be considered disabled!” The film studio found a compromise, and Rafik continued working, while the studio director was instructed not to let him close to the topics of nuclear power.
Oilprice: Resource Starved China Looking to Capital Starved Russia
Written by David Caploe PhD Tuesday, 15 June 2010 00:26
The Kimkan open pit mine in Siberia is a muddy square mile surrounded by birch and cedar forests so vast they seem to stretch to the ends of the earth.
As with many places in Siberia, it is nearly impossible to drive here. Yet just under the surface, Russian geologists say, lies enough iron ore to build hundreds of millions of cars.
That is why Chinese government officials and business executives are interested, despite a decades-old legacy of bilateral distrust along this stretch of Russia-China borderland.
This year, a delegation from the Industrial and Commercial Bank of China made its way to Kimkan by helicopter to gaze at the bulldozers peeling back topsoil and to chat with the mine foreman, Viktor M. Ryabov, who explained the scale of the underground riches.
“I’m standing on a billion tons of iron ore,” Mr. Ryabov said he told the Chinese visitors.
They were impressed, he recalled. “They said, ‘Hurry up; we’re ready.”
The encounter was emblematic of a business frenzy in this foreboding region, as Russian companies clamor to sign deals over Siberian resources — including iron, coal and timber - to sell into the insatiable Chinese market.
Russian oil, too, is an increasingly sought-after commodity passing through Siberia to China.
For resource-starved China, overland supply of Russian metals and oil is an important diversification away from seaborne shipments.
The transborder commerce in this region helped China surpass Germany to become Russia’s largest trading partner early last year, with $39.5 billion in goods and services passing between the two countries in 2009.
Last year the Russian Far East was the only region in Russia for which investment grew, rather than contracting.
As a further sign of Russia-China interdependence, the two nations’ presidents, Dmitri A. Medvedev and Hu Jintao, met in Tashkent, Uzbekistan, for a conference of their regional security alliance, the Shanghai Cooperation Organization.
All this has been shaking up the grim reputation of places whose names — Siberia and Manchuria — in the past were synonymous with exiles, prisoners and interminable swamps, according to this article in the New York Times.
“Russia and China make a perfect couple,” Kingsmill Bond, the chief strategist at the Moscow investment bank Troika Dialog, wrote in a research report.
“Russia has resources that China needs, while Russia needs capital and China has excess savings.”
The Chinese bank whose delegation stood on the lip of the Kimkan pit is in advanced negotiations for a $400 million loan to enable the developer, the Petropavlovsk mining company, to begin excavating ore.
The reserves Mr. Ryabov spoke of are in Kimkan and a sister mine to the north, and would require 100 years or so to extract.
Petropavlovsk, whose shares trade on the London Stock Exchange, plans to transport ore directly south from the Kimkan mine by train to Chinese steel mills that now import iron ore from as far away as Brazil.
Mine managers say they will have no trouble beating the Brazilians on price - although pricing of commodities may prove one of the sticking points in this emerging transborder trade, some analysts predict.
Skeptics of further economic development between the countries also point to deep mistrust dating to border skirmishes fought on Damansky Island in the Ussuri River in 1969 that put the Soviet Union in a defensive crouch along the border and froze all development for decades.
It was not until 1987 that Aleksandr A. Vinnikov, then the local communist party chief and now the governor of the Jewish Autonomous Region, a province in Siberia with a peculiar history, persuaded Moscow to allow a ferry crossing at a riverside village on the Amur.
Mr. Vinnikov has today become a staunch supporter of the biggest modern trade venture across the Amur — a planned railway bridge at Nizhneleninskoye village that is intended primarily to carry Kimkan iron ore to Chinese mills.
The bridge, whose construction is to be paid for by Petropavlovsk and the two governments, is another emblem of the new prospects in the region, as well as the deep freeze that came before.
It would become the lone year-round border crossing along a 2,038-mile stretch of the Russian-Chinese frontier — stretching from Grodekovo, near Vladivostok, and Zabaikalsk, near Lake Baikal.
For comparison, the United States’ border with Mexico spans 1,969 miles and has 42 border crossings.
The bigger cross-border event now planned, though, could be the trans-Siberian oil pipeline, which is being laid through the region’s dense forest, or taiga, and is scheduled to reach China in 2012 and begin carrying a million barrels a day.
By then, about a quarter of Russia’s crude will be exported to Asia, including fuel from Exxon Mobil and Royal Dutch Shell developments on Sakhalin Island.
Completion of the pipeline would free up Siberian railroad capacity now used by tanker wagons carrying 400,000 barrels of oil a day to China, enabling more goods of other types to be shipped.
Already, the Russian government is floating a grand plan for an overland freight service along the trans-Siberian railway from China to Europe.
For China, oil now transported overland from Central Asia today, via a pipeline from Kazakhstan, and planned to flow from Russia in two years, is meant to further a policy goal: diversifying petroleum supplies now heavily dependent on the Middle East and shipments through the Malacca Straits chokepoint between the Malay Peninsula and Indonesia.
Chinese companies, meanwhile, are renting vast swaths of agricultural land in the Russian Far East left fallow by the shrinking population of ethnic Russians, and are encouraging Chinese migrants to work there as seasonal laborers.
Chinese companies have rented 850,000 acres so far.
Still, mining and petroleum will form the backbone of the trade, as long as China’s economy remains strong in the face of softening demand in Europe - and as long as the trading partners can strike mutually satisfying deals on pricing of oil, natural gas and iron ore.
The Chinese are pressing for discounts from world prices because of the remoteness of the border region.
They argue that the Russian commodities should be cheap because of their abundance
and because without China as a near and ready buyer, the vast reserves in eastern Siberia would be far less valuable.
The Russians, on the other hand, argue that without their commodities, buyers in northeast China would have to pay much higher prices to suppliers from farther away.
Indeed, pricing disputes have for a year delayed a natural gas pipeline deal between China and the Russian company Gazprom.
And price haggling could slow down deals even for highly fungible commodities like iron ore.
Steel mills in Manchuria now pay about $170 a ton for iron, according to the Petropavlosk company, while the Kimkan mine will be able to produce at about $80 a ton.
“They’re not going to give us the whole difference,” Martin Smith, a mining engineer with Petropavlovsk, acknowledged in an interview.
Still, on the Russian side, the China trade holds the promise of a new era of prosperity, compared with the modest incomes of fishing, agriculture and the military industry that came before.
The autonomous region was controversially created by Stalin in 1934 as a Jewish homeland in Siberia. By the mid-1980s it was clear that the area’s economic base as Jewish agrarian communes had no future. Many of the area’s Jews emigrated to Israel. Of the estimated population of about 185,000 people, only about 4,300 now identify themselves as Jewish on census forms.
There are nearly as many migrant Chinese laborers — about 3,500 — working on leased soybean fields.
Petropavlovsk is cooperating with the Russian government on a program to attract ethnic Russians from former Soviet countries, including mining engineers from Kazakhstan, and has filled 14 vacancies this way already.
The Russians have long harbored fears that broadening economic contact with China would lead to a wave of Chinese immigrants taking over the sparsely populated Far East.
But for mining companies the benefits of border trade typically outweigh concerns about who might end up living on these vast, largely empty lands.
Aleksey Y. Karskanov, who directs a Petropavlovsk-operated gold mine near the border, bounced along a red dirt road in a jeep giving a tour of the gigantic rock pit he oversees, which yields four tons of gold a year.
He buys Chinese mining machinery and uses Chinese truck drivers under contract.
“China is our neighbor,” he said. “If we have something our neighbor wants, why not sell it to our neighbor?”
By. David Caploe PhD
Panarmenian: Armenian President to be on visit to Saint Petersburg on June 17-19
June 14, 2010 - 18:57 AMT [pic]13:57 GMT
- Armenian President Serzh Sargsyan will be on a visit to Saint Petersburg on June 17-19, diplomatic sources told Details of the visit are not reported.
From June 17 to 19, Saint Petersburg will be hosting the 15th International Economic Forum, which brings together leaders of many countries.
Besides, Serzh Sargsyan will participate in events dedicated to the 300th anniversary of the Armenian community of Saint Petersburg.
RIA: French company to sign deal with Russia's Tomsk Region at Expo 2010
03:06 15/06/2010
Viktor Kress, the governor of Russia's Tomsk Region, is expected to sign on Tuesday a memorandum on cooperation with the French company Veolia Water at the Expo 2010 international exhibition in China, a regional official said.
"The memorandum does not stipulate financial figures and is rather an agreement of intentions. The French company has already stated of its desire to be in Tomsk," the official said.
Veolia Water, a leader among world operators in the sphere of water supply and disposal. The company said earlier it would like to manage Tomsk's public water utilities.
A delegation from the Tomsk Region headed by Governor Kress arrived at the exhibition on June 13 for a three-day presentation of the region at the Expo 2010.
The 2010 World Expo is held in Shanghai from May 1 to October 31, 2010. Up to 70 million people are expected to visit the city for the event, which has seen investment of up to $4 billion.
Russia constructed a pavilion at the exhibition for the first time in 30 years. The sun-shaped pavilion comprises 12 white-and-gold towers symbolizing the 12 months of the year, and occupies an area of 6,000 square meters.
It showcases Russia's recent scientific and economic development and offers a diverse cultural program.
TOMSK, June 15 (RIA Novosti)
Ammon News: Russian private sector expresses interest in Jordan's investment projects
2010-06-14
AMMAN - President of the Jordan Chamber of Commerce Senator Nael Kabariti said Russian businessmen are interested in strategic projects that will be implemented by Jordan in the energy, railways and water desalination fields.
Kabariti said in a press statement following his participation in the 9th meeting of the Arab-Russian Business Council held in Moscow last week, that Jordan's private sector is keen to boost trade, economic and investment relations with its Russian counterpart.
He urged both sides to work towards boosting trade exchange, set up joint investment projects and promote economic, trade and investment relations.
While in Moscow, Kabariti met with President of the Russian Chamber of Industry and Commerce Yevgeny Primakov and discussed cooperation among businessmen from both countries as well as ways of forging closer economic and trade ties.
Jordan's exports to Russia stood at $15.3 million last year while imports amounted to $349 million.
*Petra
Focus Taiwan: First lady returns home from tour to Russia
2010/06/15 11:13:01
|Taipei, June 15 (CNA) First lady Chow Mei-ching returned to Taiwan Tuesday after concluding a tour to Russia during which she |
|served as the honorary director of Taiwan's renowned Cloud Gate Dance Theatre. |
| |
|She said "Thanks. Well done everyone, " upon arriving at Taiwan Taoyuan International Airport. |
| |
|Chow arrived in Russia June 9 to lead the dance troupe, which performed "Whisper of Flowers" at the 2010 Chekhov International |
|Theatre Festival June 10-13. |
| |
|It was the fourth time the troupe was invited to perform at the famous festival and the second time Chow has served as Cloud |
|Gate's honorary director on an overseas performance engagement. |
| |
|She previously assumed the role early this year when the troupe performed in the United States and Canada in late January and |
|early February. |
| |
|During her stay in Moscow, Chow toured Red Square and the Kremlin and visited the Russian State Children's Library, at which she|
|told a story to Russian children. (By Bien Chin-feng and Elizabeth Hsu) enditem/ls |
| |
.cy: Address by the Minister of Commerce, Industry and Tourism Mr Antonis Paschalides at the Moscow Business Forum: "Cyprus-an international business and professional centre", in Moscow
15/06/2010
I am very pleased to be here in Moscow, a great capital city and a vital commercial and economic centre of the Russian Federation, and address this Forum of distinguished decision-makers and business people.
First and foremost I would like to congratulate everyone involved in the organization of this Forum.
I wish to reaffirm the excellent historically friendly relations between Russia and Cyprus which are constantly broadening. They are based on long standing links across a range of historical and contemporary trade, cultural and economic ties. Our countries have many shared practices and common values that can shape the way we work. We remain committed to strengthening these ties, making them even stronger in the future.
The presence here of so many leading economic representatives and business people shows, I believe, how committed our countries are to making this relationship successful.
Despite the global financial and economic crisis, Cyprus’ economy experienced a higher than the EU average growth rate in the last years, inflation is currently low and unemployment in 2010 is expected to be at a low 6.8%. Average per capita income, in terms of purchasing power, corresponds to almost 95% of the EU average.
I mention these figures to show you the strengths of the vibrant economy of Cyprus, a place where business can be conducted without red tapes, high taxes and unhelpful attitudes.
What makes Cyprus a leading international centre of business excellence, a place in which to invest, a country to trade with and a place that foreign enterprises can use as their hub to the Eastern Mediterranean region?
Strategically located at the crossroads of three continents and serving as a springboard for European products and investments in the lucrative Middle East, Asian and African markets, Cyprus has a favourable environment for all types of business, a stable economic environment which offers confidence, safety and security, a modern and transparent legal framework, a liberal foreign investment policy, low company set-up and operating costs, simple administrative procedures, a wide network of agreements for the avoidance of double taxation and a low corporation tax at 10%, the lowest in the EU.
The service sector plays a critical role in Cyprus’ economy. Services activities are the most dynamic and growing sector, which has surged since the mid-1990s, and now accounts for about 80% of the country’s Gross Domestic Product. Cyprus has a clear strength in the area of financial services as the "Financial and Services Gateway" in the region, facilitating the exchange of ideas. Cyprus offers high quality – value for money consultancy services and support for professionals worldwide. Given the above, many companies have chosen Cyprus as a jurisdiction for establishing an international holding company.
The professional and business service sector has much to offer to Russian business people, a comprehensive range of services from accounting and banking to legal services, IT, business consulting, design, engineering, shipping and marketing, health care and education. These, in conjunction with the competitive fees charged and the professional attitude of Cypriot service providers, account for the transformation of the island into a highly reputable international and reliable business centre.
The credibility Cyprus has earned among the international investment community is evident from its foreign direct investment track record. The value of Foreign Direct Investments in 2008 was €15.2 billion, continuing an upward trend. The attraction of direct investments constitutes a major goal of our Government's policy. What Cyprus has to offer is one of the best and most productive investment climates anywhere in the world, with a liberal Foreign Direct Investment regime for both EU and non-EU nationals, allowing up to 100% foreign participation in most sectors of the economy.
In this respect, I wish to mention as an example a recent huge investment from Qatar in Cyprus, which represents a vote of confidence in the Cyprus economy.
Russia is amongst the largest foreign investors in Cyprus. The value of Russian investments in Cyprus reached €2 billion in 2008, whereas the value of Cypriot investments in Russia during the same year was more than €1.5 billion. These investments are mainly in real estate and business activities, trade and repairs, financial intermediation, and manufacturing. We are pleased that trade between our two countries is at a satisfactory level. Exports of Cyprus products to Russia during the period 2005-2008 represented an increase of 55%, despite the small decline in 2009 which is due to the recent economic crisis. The main products include pharmaceutical, citrus fruit, and fish products. Total imports from Russia are nearly double our exports; the main products are barley, wood products and animal fodder.
Our island is an internationally renowned tourist centre, a place of destination for about two and a half million tourists a year. In 2009 150.000 Russians visited Cyprus, while in the same year 49.000 Cypriots visited Russia.
It is worth mentioning that a large number of Russians do not only visit Cyprus as tourists, but also use our island as a pleasant place to reside and be actively involved in various businesses.
Russian companies can benefit from the numerous tax advantages and other incentives to establish in Cyprus assembling or manufacturing operations for the supply of existing and newly emerging markets in the region. Cyprus is an ideal platform for companies from Russia and international companies engaged in trade and marketing, serving the Middle East, Europe Asia and Africa. As a knowledge-based economy, Cyprus offers some of the most advanced infrastructure and a well educated talent pool. We invite businesses seeking to invest in Cyprus in knowledge activities to take advantage of this talent, at very competitive terms. Priority investment sectors include financial intermediary institutions, R&D, medical and educational services, ICT, professional and maritime services and energy.
Cyprus is a small, but important market in the financial sector. It reaches out to offshore financial centres and emerging markets in its vicinity. We offer significant benefits and a lot of niche opportunities to investors. That is why our island is attracting so many international companies.
What I have mentioned above is just a snapshot of the real business opportunities that Cyprus’ dynamic, growing economy offers Russian companies. These opportunities could be explored and exploited in a fruitful co-operation with Cypriot business people in successful business ventures. Today’s Forum provides the opportunity to discuss all these issues, as well as our business ambitions for the future. Let me assure you that companies from Russia will be more than welcome to explore Cyprus and discover the advantages that it can offer. I also hope that Cypriot companies have the aspiration, contacts and the chance to operate and profit in Russia. These will undoubtedly help in creating jobs, business, and wealth in both our countries.
: Russia - Europe: Cooperation without Frontiers: Matchmaking Forum of the Moscow Entrepreneurs Association 7 June 2010, Moscow
Press Release - 15.06.2010
The Forum-2010 is making part of the MEA Long-Term Integrated Business Partnerships Programme for Russian industrial companies, which in addition to an annual brokerage event in Moscow on a broader number of industrial sectors includes, inter alia organizing and holding Russia-Europe matchmaking events in selected Russian regions focused on their local economic and entrepreneurship development priorities.
The purpose of the forum was to facilitate establishing business cooperation among Russian and European companies, especially SMEs, to attract foreign direct investment and modern technologies into Russia ().
Partners of the MEA – «Foundation for Contributing to Development of Small Forms of Enterprises in the Science and Technical Spheres», «Russian Agency for Small and Medium Business Support» and «Russian Technology Transfer Network» as well as about 60 European business support organizations in 27 countries.
The Forum was opened by Mr. Andrey Podenok, President, Moscow Entrepreneurs Association; Mr. Mr. Mikhail Kopeikin, Management Board Member of State Corporation "Bank for Development and Foreign Economic Affairs (Vnesheconombank)" – "Vnesheconombank" Deputy Chairman; Mrs. Nadezhda Karisalova, Vice-President, "VTB24" Bank; Mr. Victor Ermakov, General Director, Russian Agency for support of Small & Medium Business; Mr. Victor Sedov, President, The U.S. – Russia Centre for Entrepreneurship; Mr. Leonid Sovtsov, Deputy General Director, Fund to Contributing for Development of Small Enterprises in the Science and Technology Spheare; Mr. Yuri Alferov, «Russian technology Transfer Network», Obninsk, Kaluga region; Mr. Bojan Jankovic, Deputy Director, Serbian Investment & Export Promotion Agency; Ms. Johanna PALMÉR, Director, External Relations, Chamber of Commerce and Industry of Eastern Sweden; Mr. Francesco Cappello, Innovation Technology & Internationalisation Services Responsible Consorzio Catania Ricerche - University of Catania, Italy; Mr. Andrei Akopov, Chairman, Forum Organizing Committee.
135 Russian SMEs and 111 companies from 19 countries (Austria, Belgium, Croatia, Czech Republic, Estonia, Germany, Greece, Hungary, Italy, Kazakhstan, Latvia, Poland, Romania, Serbia, Slovakia, Swede, Switzerland, Turkey and UK, Швейцарии) registered to participate in the forum. Total number of scheduled meetings was - 469. An important number of "out-of-schedule" meetings were also held.
In parallel to bilateral negotiations among companies a seminar for Russian regional officials and business support organizations was held. Speakers from Austria, Gernamy, Hungary, Italy, Serbia, Sweden and the UK shared their expertise and experience in regional development, attraction of foreign direct investment, export promotion and technology trasfer with representatives from Republic of Tatarstan, Moscow, Kursk, Vladimir, Ivanovo, Bryansk, Belgorod, Kaluga and Lipetsk regions.
RUSSIA-KYRGYZSTAN
Itar-Tass: No victims among Russian citizens are reported in Kyrgyzstan
15.06.2010, 11.18
BISHKEK, June 15 (Itar-Tass) -- Russia’s citizens are not reported to be victims over the disorders in southern Kyrgyzstan, the First Secretary of Russia’s Embassy in Bishkek, Alexander Saranchin, said on Tuesday.
“There are rumours that some Russian citizens were victims in the disorders, and we are checking this information,” he said. “As yet, the rumours have not proven to be true.”
An evacuation of Russian citizens from the conflict zone has not been organised and is not planned, Saranchin said.
“From there /from Osh/ only foreign students are being evacuated,” he explained.
Russia’s general consulate in Osh has been working normally. Its security has been improved, though, he said. The families of the staff are outside the region, as “they left for holidays a few days ago.”
24.kg: Interim gov’t asks Russia to ensure security of strategic sites in Kyrgyzstan
15/06-2010 10:16, Bishkek – News Agency “24.kg”, By Daniyar KARIMOV
The interim government of Kyrgyzstan asks Russian to ensure security of strategic sites in Kyrgyzstan, including dams, Emilbek Kaptagayev, the interim government of Kyrgyzstan representative has stated on Tuesday.
Kaptagayev said “deconstructive powers”, initiated developments in the south of Kyrgyzstan, may organize sabotage on strategic sites of the republic – including Toktogul reservoir that would threat to security of the whole region.
“We are ready to receive help for security of these sites, he continued, besides, the interim government should solve the conflict and stabilize the situation in the country”, he said.
“We should find the answer under own steam, Kaptagayev stated, moreover, at the moment the key point is to prevent new unrests in what place soever in Kyrgyzstan”.
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Reuters: Moscow-led bloc may try to quell Kyrgyz clashes
4:28am IST
By Hulkar Isamova
OSH, Kyrgyzstan (Reuters) - A group of ex-Soviet states on Monday proposed sending helicopters and equipment to help Kyrgyzstan's government stop ethnic violence that has killed at least 124 people, and suggested troops could follow.
The Collective Security Treaty Organization (CSTO) met in Moscow to discuss how to halt rioting and clashes that have left parts of two cities in southern Kyrgyzstan in ruins and sent tens of thousands of Uzbeks fleeing for the border.
The threat of full-blown civil war has tested the capacity of the grouping, dominated by Russia but strained by rivalries, to deal with a disaster in one of its member states.
Reporting to Russian President Dmitry Medvedev, CSTO Secretary-General Nikolai Bordyuzha said national security chiefs from the seven-nation bloc hammered out a proposal to help Kyrgyz authorities.
"They have enough forces today but they do not have enough equipment, helicopters, ground transport ... even fuel," Bordyuzha said, according to Russian news agencies.
He said the proposal, to be submitted to the bloc's heads of state, included help bringing those responsible for violence to justice, but said nothing about sending in troops.
Earlier, Bordyuzha said the CSTO had a peacekeeping contingent and rapid-reaction forces but cautioned that "one should think it over well before using these means".
Medvedev hinted at more aggressive measures, saying he might call an emergency summit of the CSTO "if the situation worsens".
"The atmosphere in Kyrgyzstan is intolerable; people have died and bloodshed continues, mass disorder on ethnic grounds," he said. "This is extremely dangerous for this region."
According to Russian news agencies, he said he had told Kyrgyzstan's interim leader Roza Otunbayeva that "everything must be done to stop actions -- within the law, but harshly".
The interim government appealed to Russia at the weekend to send in troops. Moscow said it would consult with the CSTO, which includes Kyrgyzstan and Uzbekistan as well as Russia, Belarus, Armenia, Kazakhstan and Tajikistan.
RIFLES AND MACHETES
The clashes between Kyrgyz and Uzbek residents in the cities of Osh and Jalalabad began late on Thursday and escalated over the weekend. Witnesses said gangs with automatic rifles, iron bars and machetes set fire to houses and shot fleeing residents.
It was the worst ethnic violence in southern Kyrgyzstan since 1990, when Soviet leader Mikhail Gorbachev sent troops into Osh after hundreds of people were killed in a dispute that started over land ownership.
The turmoil has fuelled concern in Russia, the United States and neighbour China. Washington uses an air base at Manas in the north of the ex-Soviet state, about 300 km (190 miles) from Osh, to supply forces in Afghanistan. Russia also has an air base.
The White House said U.S. officials had been in close contact with their Russian counterparts about the situation. The U.S. base was unaffected by the turmoil in the south.
Analysts say that if southern Kyrgyzstan, part of the Fergana Valley shared with Uzbekistan and Tajikistan, descends into chaos, it could foster militant Islamism financed by drugs.
Kyrgyzstan's interim government, which assumed power after president Kurmanbek Bakiyev was overthrown in April, has accused supporters of the ousted leader of stoking ethnic conflict -- an allegation Bakiyev denied in a statement on Sunday.
Speaking on Monday in Belarus, where he fled, Bakiyev called on the CSTO to send in troops and urged "brotherly" Kyrgyz and Uzbeks to make peace, saying the leaders who had replaced him were incapable of restoring order.
Kyrgyz news agency Akipress reported Bakiyev's son Maxim had been detained in Britain after landing at an airport there.
The interim government, which plans a constitutional referendum on June 26 and new elections in October, said on Monday that authorities in Jalalabad had arrested a "well-known person" on suspicion of fomenting the riots.
Kubatbek Baibolov, commandant in Jalalabad, said the unrest was "nothing other than an attempt by Bakiyev's supporters and relatives to seize power".
"GENOCIDE"
Thousands of ethnic Uzbeks have fled to the nearby border with Uzbekistan or sought refuge in local villages to escape the deadly fighting. Many said they were being targeted by Kyrgyz gangs in a "genocide" backed by local police and troops.
"Crowds of Kyrgyz are roaming around. They set our homes on fire and kill Uzbeks right in their houses," ethnic Uzbek Muhammed Askerov, a Jalalabad businessman, told Reuters by telephone from an undisclosed village.
Some ethnic Kyrgyz blame the bloodshed on Uzbeks or criminal gangs vying for influence in the region.
"The people who are talking about genocide are the same people who started this war," Khimiya Suyerkulova, an ethnic Kyrgyz U.N. volunteer living in Osh, said by telephone.
"We have relatives who are Uzbeks. We have friends. We live in the same houses," she said. She added that aid sacks of flour and potatoes had been delivered to feed residents who had feared starvation, as shops had been burned to the ground.
Azimbek Beknazarov, deputy head of Kyrgyzstan's interim government, said the situation in Jalalabad had stabilised on Monday afternoon after the mediation of Kyrgyz and Uzbek elders.
"There are no more crowds in the streets. We have resolved it by our popular methods," he said by telephone from Jalalabad.
But he said many houses were still on fire.
Uzbeks who fled Jalalabad accused authorities of complicity.
"Their slogan is 'Kyrgyzstan for the Kyrgyz' and officials and police act hand-in-glove with them," Askerov said. "But our ancestors were born here. Where should we go?"
Kyrgyzstan and Uzbekistan intertwine in the Fergana Valley. Uzbeks make up 14.5 percent of Kyrgyzstan's population, but the groups are roughly equal in the Osh and Jalalabad regions.
U.N. Secretary-General Ban Ki-moon ordered a special envoy to the Kyrgyz capital Bishkek, his office said in a statement.
(Additional reporting by Olga Dzyubenko and Dmitry Solovyov in Bishkek, Robin Paxton in Almaty and John Bowker in Moscow, writing by Robin Paxton, Dmitry Solovyov and Steve Gutterman; editing by Andrew Roche)
Moscow Times: Moscow Faces Test in Kyrgyz Violence
15 June 2010
By Nikolaus von Twickel
The Russia-led Collective Security Treaty Organization held urgent talks Monday on how to deal with an outbreak of ethnic violence in member state Kyrgyzstan that has killed at least 124 people and injured more than 1,500.
The violence could prove a key test for the military alliance, which has been described as Moscow’s answer to NATO’s eastern expansion but has not seen any action since its inception in 2002.
The CSTO, as the grouping is known, said it might send helicopters, trucks and other equipment to Kyrgyzstan to help Kyrgyz law enforcement agencies.
“They have enough strength today, but they do not have enough equipment, helicopters, ground transportation, logistics and even fuel,” CSTO Secretary-General Nikolai Bordyuzha said, Interfax reported.
He said this was the main measure approved at Monday’s talks and, if approved, would restore order.
He also said the CSTO was ready to help identify the organizers of the violence and bring them to justice.
The CSTO comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Uzbekistan and Tajikistan.
Interim Kyrgyz President Roza Otunbayeva appealed to President Dmitry Medvedev over the weekend for help to end the unrest in her country’s southern provinces of Jalal-Abad and Osh, where ethnic strife has happened before.
But Russia only sent a few hundred paratroopers to protect its soldiers stationed at its airbase in Kant.
Medvedev told Otunbayeva in a telephone conversation Sunday that it was important to quickly end the conflict, the Kremlin said in a statement.
Medvedev also announced Monday’s consultations among the security chiefs of the CSTO.
In 1990, Soviet troops were sent to Osh after hundreds were killed in clashes over land rights between Kyrgyz and Uzbeks.
Uzbeks make up a quarter of the population in Jalal-Abad and half of the population in Osh, while they represent just 15 percent of the country’s overall population.
Clashes erupted in the two provinces Friday, killing at least 124 people and injuring more than 1,500 others by Monday, the Kyrgyz Health Ministry said. But the death toll could be much higher. An unidentified Uzbek community leader said about 700 people were killed during clashes in the city of Jalal-Abad alone, Interfax reported.
Some 100,000 ethnic Uzbek refugees were massing at the border with Uzbekistan, The Associated Press reported.
Otunbayeva suggested that the violence was instigated by forces loyal to ousted President Kurmanbek Bakiyev to disrupt a June 27 referendum on a new Kyrgyz constitution.
“Their desire to regain power is desperate and stops at nothing,” she said.
Bakiyev denied the charges Monday. “They put all the blame on me and on my family. We have to stop putting the blame on others,” he told reporters from self-exile in Minsk, Interfax reported.
He urged the CSTO to send troops into Kyrgyzstan.
Bordyuzha, the CSTO secretary-general, said that while the CSTO had troops and peacekeepers at its disposal, any decision would have to be made after “careful consideration” with all member states.
Bakiyev was overthrown by an angry mob in April and later accused Moscow of supporting the protesters against him, a charge rejected by the Russian leadership.
Human rights groups called on the United Nations to help the authorities prevent further interethnic conflict. "This should be on the urgent agenda of the UN Security Council," Human Rights Watch said in a statement.
Analysts said the situation in Kyrgyzstan might prove a test case for the CSTO.
“If the CSTO cannot act in this situation, there will be serious questions about its long-run purpose,” said Svante Cornell, a research director at the Central Asia-Caucasus Institute in Stockholm.
The CSTO’s charter stipulates that participants abstain from force against one another and that aggression against one member counts as aggression against all.
The Kremlin has been adamant that no CSTO forces should be deployed in Kyrgyzstan because the organization should not interfere in members’ internal affairs.
Alexei Vlasov, director of the Post-Soviet Studies Center at Moscow State University, said the organization’s charter does not provide a legal basis for peacekeeping troops among its members.
“For this, they need a UN mandate, and that will take very long to get,” he told The Moscow Times.
Vlasov said countries like Belarus and Armenia had very little interest in sending troops to Central Asia.
The CSTO has been beset with differing political goals among its members recently, with both Belarus and Uzbekistan declining to participate in a rapid-reaction force.
Belarus only joined last fall after months of delay because of a customs dispute with Moscow.
The Kremlin is also reluctant to send its own soldiers into a conflict zone, Vlasov said. “They will think twice before taking the risk of letting Russian soldiers die there,” he said.
While peacekeepers could do a good job in Kyrgyzstan once minimal stability was reached, further work would be extremely tough because there are no clear-cut lines between ethnic Uzbeks and Kyrgyz, said Vladimir Zharikhin, an analyst with the Commonwealth of Independent States Institute, a Moscow-based think tank. “This would be a formidable task keeping them apart,” he said.
Cornell said collective action by the CSTO was sensitive because the interethnic strife was pitting two member states, Uzbekistan and Kyrgyzstan, against each other.
“The biggest surprise is how quiet Uzbekistan has been,” he said.
Uzbek authorities have said little about the violence.
Itar-Tass: FSB foils 240 militants in 2010 – director
15.06.2010, 11.30
MOSCOW, June 15 (Itar-Tass) - Director of the Federal Security Service Alexander Bortnikov said federal forces have intercepted the sabotage by 11 senior militants, and 240 gunmen and their abettors since the beginning of this year.
"A group of gunmen numbering ten, led by Saudi citizen Yasir, has been destroyed in Chechnya's Vedeno district. Yasir was an emissary of international terrorist organizations in the North Caucasus," Bortnikov underlined at a meeting of the National Antiterrorist Committee on Tuesday.
Last week, federal forces detained one of the odious militants (Ali) Taziyev, nicknamed "Magas." "In all, the authorities intercepted the sabotage by 11 gang leaders, as well as more than 240 gunmen and their active abettors since the beginning of this year," the FSB chief said.
"The FSB's active events help constrict the militants' actions. I wish to underline that the work yields positive results when we feel real support on the part of the local population.
"Continuing the active and uncompromising struggle against terrorist and gunmen, it is necessary to carry out purposeful work to dismantle the infrastructure of terrorism, eliminate the causes and conditions contributing to the radicalization of certain groups of the population who abet terrorists," Bornikov stressed.
In the past two months, secret services have foiled terrorists' plans to carry out a number of high-profile attacks.
RIA: Large-scale terrorist attacks averted in Russia - FSB
11:51 15/06/2010
MOSCOW, June 15 (RIA Novosti) - Law enforcement officers have averted a number of large-scale attacks in Russia over the past two months, the head of Russia's Federal Security Service (FSB) said Tuesday.
"In the past two months, special services and law enforcement agencies frustrated terrorists' plans to commit a number of large-scale terrorist acts," Alexander Bortnikov, who also heads the National Anti-Terrorism Committee, said at a committee meeting.
"People who took part in organizing and perpetrating the terrorist attacks in the Moscow metro and at the railroad station in the town of Derbent were established promptly. Timely measures prevented their further criminal activity," Bortnikov said.
The attack on the Moscow subway occurred on March 29 when two suicide bombers blew themselves up during the morning rush hour at the Lubyanka and Park Kultury metro stations, killing 40 people and injuring over 100.
One person was killed and eight injured after a bomb placed in a litter bin exploded at Derbent train station in the Russian North Caucasus republic of Dagestan on the evening of May 7.
Bortnikov also said the activity of 11 gang leaders in the North Caucasus has been stopped since early 2010.
Sporadic terrorist attacks and militant clashes are common in Russia's mainly Muslim North Caucasus republics, especially Chechnya, Dagestan and Ingushetia.
The Kremlin has pledged to wage "a ruthless fight" against militant groups but also acknowledged a need to tackle unemployment, organized crime, clan rivalry and corruption as causes of the ongoing violence in the region.
Russia has been fighting militants in the North Caucasus for over a decade, including two separatist wars in Chechnya.
Itar-Tass: FSB officer wounded in Kabardino-Balkaria
15.06.2010, 11.06
NALCHIK, June 15 (Itar-Tass) -- An officer of the office of the Federal Security Service (FSB) in Kabardino-Balkaria has been wounded by an explosion in Nalchik, its capital, a representative of the investigation department of the Investigation Committee under the Russian Prosecutor’s Office told Itar-Tass on Monday.
“A radio-controlled home-produced explosive device, made on the basis of a F-1 grenade, was set off at 08.30, Moscow time, when the FSB officer was opening the door of his garage in a garage cooperative, situated in the Kalinin Street, the Alexandrovka residential area,” the representative of the investigation department said. The FSB officer was taken to hospital with shrapnel wounds of the legs.
A special investigating group is working at the scene of the incident. Criminal proceedings were instituted under the articles “Attempt on the life of an officer of law enforcement agencies,” “Illegal use of explosives” and “Illegal production of explosive devices.”
RIA: Policeman killed in attack on checkpoint in Russia's Dagestan
07:45 15/06/2010
A policeman was killed after in an attack on a police checkpoint in Russia's North Caucasus republic of Dagestan, a spokesman for the local police said on Tuesday.
He said that shortly after the midnight on Tuesday, unknown suspects opened fire on a police checkpoint located in the south of the republic's capital, Makhachkala.
An officer on duty was wounded and died later of sustained injuries on his way to a hospital.
The spokesman added that the search for assailants is currently underway.
Militant violence is common in Russia's mainly Muslim North Caucasus republics, especially Chechnya, Dagestan and Ingushetia.
The Kremlin has pledged to wage "a ruthless fight" against militant groups but also acknowledged a need to tackle unemployment, organized crime, clan rivalry and corruption as causes of the ongoing violence in the region.
MAKHACHKALA, June 15 (RIA Novosti)
RIA: Resident of Chechnya surrenders WWII explosives to police
09:27 15/06/2010
MOSCOW, June 15 (RIA Novosti) - A resident of Chechnya surrendered 120 kg of TNT, grenades and rounds of ammunition to police, a source in the southern Russian republic told RIA Novosti.
"An unemployed resident of the Nadterechnoye village voluntarily surrendered to police a 150-mm shell, three grenades, 50 rounds of ammunition of various calibers as well as 120 kg of TNT dating back to the World War II," the source said.
An investigation is underway.
Sporadic terrorist attacks and militant clashes are common in Russia's mainly Muslim North Caucasus republics, especially Chechnya, Dagestan and Ingushetia.
The Kremlin has pledged to wage "a ruthless fight" against militant groups but also acknowledged a need to tackle unemployment, organized crime, clan rivalry and corruption as causes of the ongoing violence in the region.
Russia has been fighting militants in the North Caucasus for over a decade, including two separatist wars in Chechnya.
Kremlin: Trip to Chechnya
June 14, 2010, 17:00
Dmitry Medvedev met with President of Chechnya Ramzan Kadyrov, held a meeting on the republic’s social and economic development, and visited a number of infrastructure sites in Grozny.
At the meeting President Medvedev placed particular emphasis on Chechnya’s economic advancement, specifically mentioning support for local manufacturers and improvement of social and other infrastructure. Security in the republic was also a subject of discussion.
Taking part in the meeting were Deputy Prime Minister and Presidential Plenipotentiary Envoy to the North Caucasus Federal District Alexander Khloponin, First Deputy Chief of Staff of the Presidential Executive Office Vladislav Surkov, Director of the Federal Security Service Alexander Bortnikov, President of Chechnya Ramzan Kadyrov, and members of the republic’s government.
During his visit to the republic Mr Medvedev also visited the mosque named in honour of Chechnya’s first president, Akhmat Kadyrov, in central Grozny. Earlier in the day the President visited the village of Tsentoroy, where he laid flowers at Akhmat Kadyrov’s grave.
The President also visited the Republican Clinical Hospital of Emergency Medicine which was completely renovated last year and fitted with modern equipment.
Dmitry Medvedev completed his trip with a tour of Grozny’s Severny Airport, which recently received international airport status.
Kommersant: Dmitry Medvedev proposed to reduce the length of stay in government service
GOOGLE TRANSLATION
Russian President Dmitry Medvedev has suggested the State Duma deputies to amend the federal law on the civil service regarding the age of civil servants. The bill establishes a limit of stay in the civil service in 60 years with possibility of extension by the employer up to 65 years.
Russian President Dmitry Medvedev proposed to the Duma a bill to amend the maximum period of stay in public service, the press service of the Kremlin. According to innovation, this period of 60 years.
Note that now the state civil office can take up to 65 years. However on reaching the age of 60 employees service contract with him to renew a fixed period - from one to five years. In fact, with this forced change in the contract there are many problems. So the bill and sets a new maximum length of stay in government service for 60 years. However, the document stipulates that the official who has reached the age limit, according to his wish life could be increased by the employer up to 65 years. In this case the federal law on civil service as amended, intended to eliminate redundancy and streamline the rules of stay in the civil service.
RIA: First international youth economic forum opens in St. Petersburg
04:59 15/06/2010
The first International Youth Economic Forum will open in Russia's second largest city of St. Petersburg on June 15, uniting some 200 young businessmen from different states.
The organizers of the forum said the young businessmen, age between 18 and 30, will be mainly discussing new ways of developing international business relations under current economic conditions.
The other aim of the forum, the organizers added, is to involve the youth in the social, economic and political life of their countries and to determine future leaders.
The youth forum precedes the 14th International Economic Forum (PIEF) in St. Petersburg, which runs between June 17 and 19.
The slogan of this-year forum is "Laying the foundation for the future" and discussion will focus on the problems faced by emerging economies.
Some 600 journalists applied for this event's accreditation and organizers say over 1,000 hotel rooms were reserved for the eminent politicians and businessmen expected to attend the event.
MOSCOW, June 15 (RIA Novosti)
Moscow News: New boss for south of Moscow
Source Andy Potts at 15/06/2010
Georgy Smoleyevsky has been appointed as prefect of the southern administrative district of Moscow following the dismissal of Yury Bulanov late last month.
Bulanov’s tenure generated controversy, particularly over the rapid deterioration of restoration work at the Tsaritsyno palace and the destruction of a historic dacha which was once home to writers Ivan Bunin and Benedict Yerofeyev.
Smoleyevsky has been involved in the city government in various positions over the past decade.
Moscow Times: All Eyes on Luzhkov and Rakhimov
15 June 2010
By Nikolai Petrov
With the reappointment of Nizhny Novgorod Governor Valery Shantsev and the appointment of long-time Sakha Prime Minister Yegor Borisov as governor of that region, President Dmitry Medvedev has now appointed 42 governors, or more than half of Russia’s total. Only a few are new, “Medvedev-style” governors, and of those, almost all were appointed last year. But this year, Medvedev has done something new and unexpected by occasionally selecting lesser-known candidates for gubernatorial posts. Some observers hold that by appointing “underdog” candidates — such as new heads for Komi, Volgograd and Yamal-Nenets — the president ensures greater loyalty from them.
The accepted wisdom is that appointed officials are most loyal to the person who has put them in office. But every governor has multiple loyalties.
So far this year, new governors have been appointed to almost one-fourth of all Russian regions. Of the 20 governors appointed, practically none are “outsiders” in the fullest sense of the word. As a rule, they are members of the local political establishment: deputy governors and mayors.
As the most difficult phase of the economic crisis has ended, so has the practice of appointing “carpet bagger” governors — politicians who were brought into a region without having any prior ties there. Such appointments accounted for two-thirds of all gubernatorial placements made during the height of the crisis. Once the crisis passed into a less critical phase, the Kremlin was free to appoint governors who were more experienced or skillful, and not only loyal. Is there some obvious logic behind changing governors? On the surface, it would seem not. The length of time served has little bearing, and none of the strong regional bosses except, perhaps, Kemerovo Governor Aman Tuleyev, has been reappointed. (Tuleyev’s meritorious actions following the mining accident in Mezhdurechensk in May testify to the wisdom of his reappointment.) But none of the governors appointed during Vladimir Putin’s presidency have been replaced, except for those who clearly fell short of the mark.
This year’s round of appointments has seen the dismissal of the remaining gubernatorial heavyweights. After Sverdlovsk Governor Eduard Rossel left late last year, he was followed by Tatarstan President Mintimer Shaimiyev, Khanty-Mansiisk Governor Alexander Filippenko and Rostov Governor Vladimir Chub. Of those, only Shaimiyev managed to leave a successor behind.
Next in line for possible retirement are the two remaining heavyweights — Moscow Mayor Yury Luzhkov and Bashkortostan President Murtaza Rakhimov. Kalmykia President Kirsan Ilyumzhinov’s term in office expires at the same time this fall, and for that reason he can be grouped with the other two leaders. The fight over all three posts has broken out in earnest, and judging from the intensity of the struggle, as well as by the political calendar, those battles are now in their final phase. Regarding Rakhimov, at stake are probably only his terms of surrender. Now that Bashkortostan’s legislature has said appointing a leader from outside the region would be a humiliating move, precisely that option is likely to be implemented. As for Luzhkov, who is now actively demonstrating his importance and usefulness for all to see, the identity of the new mayor is not especially important because the power and pull traditionally associated with his post has already been substantially reduced. For Ilyumzhinov, who appears likely to lose his duties as chairman of the World Chess Federation, it is probably of only symbolic significance that he will retain his post as Kalmykia’s president.
Nikolai Petrov is a scholar in residence at the Carnegie Moscow Center.
Moscow News: Lukashenko begs for a crust
Source Andy Potts at 15/06/2010
Belarussian president Alexander Lukashenko came to his meeting with Vladimir Putin pleading hunger and complaining that his Russian counterpart Dmitry Medvedev hadn’t fed him.
“I went for supper and thought there would be at least a slice of bread,” Lukashenko grumbled as Putin tried to talk about their shared sporting interests, polit.ru reported.
The visiting politician only began to calm down once it was clear that there was more than discussion on the menu at Novo-Ogarevo.
Charter97: Was Lukashenka denied “slice of bread” in Moscow? (Video)
12.06.2010
Even from the laconic official report about the meeting of Medvedev and Lukashenka on June 11 in the evening it is clear that disagreements between Russia and Belarus remain.
On June 11 Alyaksandr Lukashenka held talks with Dmitry Medvedev, Prime Minister Vladimir Putin, and also visited the All-Russian Electromechanics Research Institute
It is not informed about the results of the negotiations officially. Only the verbatim record of the beginning of the meeting of Lukashenka with Putin is disseminated by the press-service of the government of Russia.
V.V. Putin: Mr. Lukashenka! While you were having supper with Mr. Medvedev, I’ve managed…
A.G. Lukashenka: Supper?! I’ve arrived; I thought you would give me at least a slice of bread…
V.V. Putin: I have swum, visited a gym.
A.G. Lukashenka: I have been swimming too, but before the meeting with Mr. Medvedev. But do not give the runaround, you owe me a supper!
V.V. Putin: Oh come on.
A.G. Lukashenka: Or you do not eat so late, don’t you?
V.V. Putin: I eat at any time of day.
A.G. Lukashenka: I’m joking.
In the beginning of the meeting Dmitry Medvedev offered Lukashenka “to talk about the things that hinder us… and whether we have unmanageable contradictions or they cold be resolved by us”. And what is hindering is: Minsk had offered Moscow to share benefits from export of Russian oil and oil products, which are transported through Belarus to the third countries. As it follows from the draft answer by Vladimir Putin to Belarusian Prime Minister Syarhei Sidorski received by a Russian business newspaper “Marker”, Russia does not like this idea at all.
The reaction of the Russian Finance Ministry was harsh and unambiguous: the export duty for oil “could not be an item for distribution between the budgets of the sides at all”, but should be received by the Russian treasury in full.
The Ministry of the Economic Development of Russia added caustic remarks. As the agency of Elvira Nabiullina believes, the Belarusians offered Russia in fact “equal approach of economic entities to natural resources”. And the two concrete schemes of taking export duties with the following carve-up between the budgets of Russia and Belarus offered by the Belarusian Prime Minister Sidorski, was simply characterized by the Ministry of the Economic Development as contradicting to the Russian laws.
The Energy Ministry naturally has supported the colleagues.
As “Marker” has found out, right on the next day after Syarhei Sidorski passed his proposals to the Russian government, on April 8, Vice Premiere Igor Sechin received from his Belarusian colleague Vice Premiere Uladzimir Syamashka and an invitation to visit Belarus “for resolving the unsettled issues”. But Belarusians failed to entice Sechin to separate negotiations – Igor Sechin refused to come to Minsk.
Then Putin gave is answer. Though Putin’s answer to Sidorski maintains polite wording, it is hard to get away from a thought that its authors could hardly control their irritation by actions of the Belarusian side.
“As far as you know,’’ the letter reads, “the issues of oil deliveries to Belarus are regulated by the intergovernmental Protocol signed on January 27, 2010 which is in force till December 31, 2010. In this connection we find it excessive to prepare analogous documents in this sphere”.
“The variants that have been offered by you,” the text continues, “do not satisfy the Russian side on the reasons enumerated in the letter of Russian President D. Medvedev March 12, 2010 addressed to Alyaksandr Lukashenka”.
So there is no wonder that the official communiqué on the results of the yesterday’s meeting of Medvedev and Lukashenka is terse and reserved. The agreement between the sides on the issue of oil income is still a long way off.
Vedomosti/Russia Today: Clouds over Skolkovo
The first project for the innovation city in Skolkovo has been approved: it is planned to invest 900 million rubles into the “cloud” incubator, which was proposed by Almaz Capital Partners. Valery Kodachigov, Natalia Kostenko
Presidential Aide Arkady Dvorkovich told Vedomosti that the presidium of the Modernization Commission, of which he is the secretary, held a preliminary discussion on Wednesday on the innovative projects for the innovation city in Skolkovo. In total, 50 applications were made, while only four were discussed.
Read more
“Only one is almost approved,” said Dvorkovoch. “It is the proposal of the Almaz Capital foundation to establish business-incubators in the sphere of ‘cloud’ programming.” Dvorkovich considers “cloud” programming to be a rapidly growing trend: “The initiators of the project have some serious ideas about how it could be made innovative. Independent experts have convinced us in its promising outlook”.
The developers of the project (Vedomosti has a copy of the presentation) plan to develop three areas: in addition to “cloud” computing, it will be computer-aided speech recognition and the process of transfer of 3-D images through the Internet. The work will be financed by a seed fund in the amount of $30-35 million (about 900 million rubles). Developers hope that half will be provided by the state, and the other half will come from the Almaz Seed fund. The fund will be composed of Almaz Capital and private investors, some of whom will be the Managing Partner of Almaz Capital Aleksandr Galitsky and the General Director of Parallels, Sergey Belousov. The share of financing, which will come from the founders of Almaz Speed, was not indicated in the presentation. The developers of the “cloud” incubator are also hoping to attract third-party investments into the seed fund in the amount of up to $5 million. Within the next 7-9 years, 6-7 companies will be established with the total shared capital of $0.5-1 billion, indicates the presentation.
“Cloud computing”
“Cloud computing” -- are technologies that make is possible to carry out sophisticated mathematical operations through the Internet, powered by dozens and hundreds of thousands of computers around the world. An example of “cloud computing” is the SETI project, the goal of which is to locate extraterrestrial life and which began in the United States in 1995: it uses Internet-connected computers to analyze radio telescope data.
Galitsky refused to comment, and Belousov was unavailable. The European Bank for Reconstruction and Development (EBRD, one of the shareholders of Almaz Capital) supports the “cloud” project, but it is too early to discuss any details, says EBRD Spokesman, Richard Wallis.
The investment scheme, which has been approved by the presidential commission, is atypical for business incubators, says Aleksandr Chachava of Leta Group: if an incubator is being created for governmental needs or if it serves a dual purpose, then the project and the infrastructure is fully, or almost fully, funded by the government; and if we are talking about commercial innovations, the government generally does not invest anything -- state support is provided in form of tax breaks and customs privileges, liberalization of legislation, etc., but 50% of a state share in a venture project -- is nonsense, says Chachava.
The West already has some serious groundwork in the sphere of “cloud” technologies, it is economically inadvisable for Russia to start from zero, says Ruslan Zaedinov, deputy general director of the systems integrator Krok, especially if it is a $30 million project, which is divided into three areas; this is a very small budget: the investments of IBM or HP in similar projects amount to billions of dollars. Zaedinov considers it wiser to use the existing solutions and adapt them in Skolkovo to the needs of the Russian consumers, and use open-source software as a base -- then the Almaz Capital investment project will be attractive to the developers.
Read the article on the newspaper's website
RIA: First project approved for Russian 'Silicon Valley' - paper
10:30 15/06/2010
The first innovation project for Russia's new high-tech research hub near Moscow has been approved by Skolkovo's modernization committee, a Russian business daily quoted a presidential aide as saying on Tuesday.
Arkady Dvorkovich told Vedomosti daily that the project, supported by the Almaz Capital fund, was based on cloud computing, an Internet-based technology that allows complex mathematical calculations to be performed using hundreds of thousands of computers around the world.
One of the examples of cloud computing is a project initiated by the U.S.-based Search for Extra-Terrestrial Intelligence (SETI) in 1995 that uses a network of personal computers to process data from radar telescopes looking for signs of life in outer space.
Dvorkovich has high hopes for the project. "The authors of the project have serious ideas how to make it innovative. The independent experts have convinced us of its potential," Vedomosti quoted the presidential aide as saying.
The paper said the project, along with cloud technologies, includes computer-based speech recognition and sending 3D-pictures via Internet.
The project is estimated of 900 million rubles ($29 million), half of which Vedomosti said would come from the government and the remainder from the private Almaz Seed fund.
In February 2010, President Dmitry Medvedev announced the establishment of a modern powerful center for research and development, which the media quickly dubbed Russia's Silicon Valley after the Northern Californian region that has served as a model for such centers in the United States and around the world.
Skolkovo is being built from scratch 20 km outside of Moscow. Research at the center will focus on five priority spheres: energy, information technologies, communication, biomedical research and nuclear technologies.
Russia considers the development of the high-tech and innovation sector a top priority, pledging billions of dollars to finance the sphere.
MOSCOW, June 15 (RIA Novosti)
Ottawa Citizen: Harlequin targets Russia for romance novels
By Tim Shufelt, Financial Post June 15, 2010 12:00 AM
There are all kinds of things you apparently can't do with love: can't buy it, can't hurry it, and can't stop fallin' in it. But you can turn it into a viable export commodity.
That may make for a terrible pop song, but it's a model that works for Canada's Harlequin Enterprises Ltd., a global leader in romance literature for women.
The Torstar Corp. subsidiary is continuing with its lofty international expansion plans with an announcement that it will soon offer titles in Russia.
Harlequin has signed a licensing deal with a Russian publishing house to begin printing books in the Russian language.
The deal will include the publisher's racier romance titles that are certain to make Mother Russia blush with their steamy plots and chiselled book-cover models.
And there is no reason to believe that the romance genre won't succeed in a country that is increasingly embracing the lowbrow, much to the dismay of Russian intellectual elite, said Aurel Brown, a professor of international relations and political science at the University of Toronto's Trinity College.
"Sometimes the intelligentsia in Russia is shocked by this because they take an exalted view. Romance is Tolstoy's War and Peace," Braun said, noting the possibility of a government opposing the introduction of Harlequin.
"What has been happening is that Russia has been taking an increasing detour away from democracy. So will there be an official reaction that they will claim this is somehow going to pollute Russian culture?" he said. "Will the government in Russia allow the people to freely make bad literary judgments?"
Publisher Izdatelstvo Centrepolygraph (ZAO) plans to release in Russia more than 170 titles in the first year in hardcover, paperback and mass-market paperback formats. ZAO would become Harlequin's largest licensee in both number of titles and income, but it will represent a small market for the publisher, at least initially.
"Russia is a difficult market for publishers," said Stephen Miles, Harlequin's executive vice-president of overseas operations. "Everyone has sort of got a toe in the water there, but no one's got a good foothold. This gets our toe in the water."
Keeping an eye on emerging markets is a key component to the company's international plans, Miles said.
Harlequin now has offices in 19 countries and publishes romance titles in 32 languages.
Since 2008, the publisher has expanded to India, signed licensing deals in Malaysia, Vietnam, the Philippines and Thailand, and acquired full ownership of its German operation.
Last spring Harlequin launched a business in Turkey, a market that underlines the need for cultural and religious sensitivity, Miles said, noting that the Muslim country is definitely not the right market for lustier books like Naughty Bits.
"We have a sort of a wholesome line. It doesn't have any premarital sex. It doesn't have any swearing. It's very pure, no kissing even," he said.
© Copyright (c) The Ottawa Citizen
Justmeans: From Russia With Love: Exploring the Economic Future of One of the World's Largest Emerging Market Nations (Part 1 / 2)
Posted On: About 3 hours ago
With a substantial collection of untapped energy resources, abundant liquidity, sustainably low interest rates, and strengthening currency, Russia continues to be a force among the world's emerging markets nations. The World Bank expect Russia's economy to grow by 4.5% this year, and sees Russian economic growth as one of the main drivers of economy recovery in Europe and Central Asia. Yet despite positive projections for the future, it is hard to ignore the contraction that the Russian economy experienced during the worldwide recession. While other emerging market nations such as India and China grew throughout the global slowdown, Russia's economy suffered as oil prices fell and demand decreased. This drop resulted in a massive outflow in capital, destroyed investor confidence, and jeopardized future foreign investment. After a decade of strong growth, Russia's GDP sank 7.9% in 2009, its worst decline on record. Without question, part of this decline can be attributed to the country's highly energy-focused economy which leaves the Russian economy vulnerable to credit and commodity market fluctuations. Additionally, many of the Russian oligarchs, who had borrowed heavily from foreign banks, were forced to sell as stock prices fell. Their withdrawal further devastated the Russian equity market. For many investors, Russia's inability to cope with instability in global financial markets, as well as the severity of the decline, was alarming. Recent deals, such as Gazprom's proposed union with French utility EDF regarding the South Stream gas pipeline project, have helped increased investor confidence. Unfortunately, many questions remain regarding the short term and long term opportunities available to Russian investors, both domestic and foreign. In this two part report, I will attempt to address & demystify conceptions regarding Russian investment. Is Russia truly read to stand with China, Brazil, and India, as one of the four great emerging market nations? Has the Russian government diversified enough to attract foreign investment? What are the social, economic, and geographical issues impacting Russian trade and development? Does short or long-term investment in the Russian market make economic sense? Finally, for both corporate and individual investors, what are the best ways to invest within the Russian market while minimizing financial risk?
As a nation, Russia is blessed geologically and geographically. Currently, Russia holds the world's largest proven natural gas reserves, second-largest proven coal reserves, third-largest known and recoverable uranium reserves and eighth-largest proven oil reserves. Because of this, Russia stands at the center of a group of smaller economies including Ukraine, Belarus, Armenia, Bulgaria, Latvia and Lithuania, who rely on access to Russian resources for their own GDP growth. During the global recession, as oil prices fell and exploration slowed, many of these smaller partners suffered. As the global economy begins to recover, leaders in the surrounding states continue to look toward Russia to lead the resurgence. Yet, despite having one of the most attractive resource basis in the world, one of the greatest challenges Russia currently faces can be directly attributed to its own geography. With vast territory, a fragmented population, and poorly developed internal transportation networks, critical infrastructure is needed to ensure that businesses have access to key resources while having the capacity to quickly move extracted resources to foreign markets. Unfortunately, must of the critical infrastructure needed to support domestic and foreign trade is lacking. While Russia is moving to address a number of these issues with solutions such as the proposed natural gas pipeline to Greece, these deficiencies continue to be major deterrents for foreign businesses. Furthermore, self imposed limitations on foreign investment as well as rigorous governmental authorization continue to create capacity bottlenecks while deterring foreign investment. Unfortunately, many of these stresses are further amplified by the harsh climate and inefficient wealth distribution mechanisms that increase social friction in certain areas. While Russia seems focused on becoming a global leader, unless the Russian government can find ways to address these deficiencies while decreasing the reliance on state driven economic development, the pace of growth within this critical emerging market will continue to remain constrained.
Still, despite geographical and infrastructure related issues, there are many signs that Russia's economy is turning. Russia's sovereign credit quality is high, with a 7% debt-to-GDP ratio projected for 2010. In comparison, the sovereign debt-to-GDP in other emerging markets as well as developed nations ranges from 15% for Australia to 227% for Japan. Additionally, like other emerging markets, Russia continues to maintain large foreign reserves and is expected to have a current account surplus. This surplus gives the government monetary and fiscal flexibility to address opportunities as well as create opportunities for foreign investors. This spring, Russian inflation reached a historically low level. Inflation has continued to drop year over year, and Prime Minister Vladimir Putin recently pronounced that inflation could be as low as 6.5% this year. Under these financial conditions, the ruble, which lost considerable strength during the 2008-2009 oil price declines, can be expected to appreciate while sovereign yields remain low and balance sheets for Russian households and corporations strengthen.
While inflationary pressures ease, questions surrounding foreign direct investment and government intervention still remain. As the start of the 2008 global recession, emerging markets were the first places that foreign investors withdrew capital from. Prior to 2008, investor frustration had risen significant due to the Kremlin's repeated meddling in foreign affairs, as well as Russia's August 2008 intervention in Georgia. In response to government intervention, as well as the worsening global economic climate, net capital outflows reached a record $130 billion in 2008, followed by $39 billion in the first quarter of 2009. Investors scrambled to sell Russian assets, using the returns to buy dollars, francs, yen or gold. To counteract the effects of capital outflows, the Central Bank of Russia (CBR) intervened. The Kremlin used its massive reserves of dollars and Euros to purchase rubles on the open market, opted to proactively manage the inevitable decline of its currency as well as the entire economy. This intervention appears to have bought the Ruble enough time to allow natural market forces to create enough real demand to support it. Moreover, this intervention, while not unusual, has alarmed some investors who look to the Kremlin's actions as benchmarks of future activity.
Be sure to check back tomorrow for the conclusion of this discuss on the Russian. Part 2 will include a review of the Russian banking system, diversification threats, market risks, social & labor issues, as well as short and long-term investment recommendations.
National Economic Trends
2010-06-15 08:55
Reuters: Rouble flat as euro zone worries hurt high-yield assets
MOSCOW, June 15 (Reuters) - The Russian rouble was flat against its basket in early trade on Tuesday as renewed worries about the euro zone dampened demand for high-yielding currencies, but it firmed against the euro.
After a three-day weekend in Russia the rouble was pricing in external developments and, by 0710 GMT, was down 2 kopecks to 34.57 versus the euro-dollar basket, holding at levels seen throughout last week.
Along with other high-yielding assets the currency came under pressure after Moody's decision to cut Greek credit ratings to junk status on Monday.
Uncertainty about the implications of the euro zone's fiscal woes triggered profit taking on the euro and commodity currencies, such as the Australian dollar and S.African rand.
The rouble's main benchmark, oil prices, were relatively firm at around $75 per barrel, although this was not enough to offset the demand for foreign currencies in Russia.
"European problems prevail for now. But the rouble is doing better than other (commodity) currencies," said Alexei Borichev, dealer at ING bank in Moscow.
Impending domestic tax payments may offer some support for the currency in the coming days as Russia's exporters will convert part of their dollar and euro revenues to meet tax liabilities. However, they will likely wait for a lower, and thus more appealing, rouble exchange rate, dealers say.
The first monthly tax -- social insurance payments -- is due by Tuesday and could total 210-230 billion roubles ($6.64-7.27 billion), according to Trust bank estimates. However, dealers say companies already have enough roubles to meet this levy.
"There is no exporters' selling (of foreign currencies) now while buying (of dollars and euros) goes on," said Borichev at ING.
Against the euro, the rouble was down 19 kopecks at a two-week low of 38.34 but gained 11 kopecks to 31.48 per dollar.
(Reporting by Andrey Ostroukh; Editing by Susan Fenton) ($1=31.65 Rouble) Keywords: RUSSIA ROUBLE/
(andrey.ostroukh@, +7 495 775 12 42)
2010-06-15 06:33
Reuters: Russian bank balances fall to 841.9 bln rbls
MOSCOW, June 15 (Reuters) - Banks' balances in their correspondent accounts at the Russian central bank fell to 841.9 billion roubles on Tuesday from 845.7 billion roubles in the previous session, the central bank said.
All figures are in billions of roubles
BALANCES June 15 June 11
Total 841.9 845.7
Moscow region 689.8 677.9
Banks' deposits at
the central bank 937.9 860.2
NOTE - Correspondent account balances are an indicator of Russian banks' liquidity. Keywords: RUSSIA BALANCES/ (Moscow Newsroom, +7495 775 1242, moscow.newsroom@)
UralSib: Metal and ore prices push PPI growth above expectations
UralSib
June 15, 2010
PPI up 2.7% MoM ... In May 2010, producer prices in Russia increased 2.7% MoM, significantly above our own (0.9% MoM) and consensus (1.4% MoM) expectations. The most significant contribution to PPI growth came from the metals sector, as wholesale prices for iron ore, coal and steel recorded double-digit monthly growth. This data helps to explain growing concerns over ‘unjustified’ price hikes in metallurgy voiced last month by the government, namely Prime Minister Vladimir Putin. Also, with PPI growth running at high rates, we believe it is difficult to expect a sustainable trend for lower consumer inflation in Russia.
- as domestic metal and coal prices soar. Rosstat reported that the resource sector made the largest contribution to PPI growth last month, followed by the manufacturing sector. In the utilities sector, however, producer prices in May went down 0.1% MoM. The most significant increases in wholesale prices were registered in iron ore (up 22.6% MoM), coking coal (up 20.6% MoM), steel slabs (up 16.5% MoM) and coal (up 9.1% MoM).
We forecast lower PPI and higher CPI by year-end. We retain a cautious view on future inflation trends in Russia and expect the PPI growth rate to slow by the end of 2010 to 13.8% YoY from 19.1% YoY in May 2010. However, we also forecast a gradual acceleration in the CPI rate from 6% YoY in April-May to 7.5% YoY by December 2010.
Israeli Diamond: Diamond Market Optimism May Reduce Gokhran’s Budget
[pic]15.06.10, 09:47 / World [pic]
The recent rebound experienced by the diamond markets may affect the budget of Russia's State Precious Metals and Gemstones Repository, Gokhran.
According to Diamond World, Gokhran was to be allotted some $1.4 billion in funds to purchase precious metals and gemstones, which it intended to spend $150 million on manufactured diamonds and $1 billion on rough diamonds, including $870 million to buy diamonds from Moscow's diamond power house, Alrosa.
The $1.4 billion budget is now likely to be around $700 million, the report added: last year Gokhran had helped Alrosa by buying around $1.1 billion worth of diamonds when markets low in the economic slowdown. This year, Alrosa is optimistic of selling its entire stock in the open market, unless the economy takes a dip again.
Bank of Finland: 4 out 10: Putin's 10-year economic programme scrutinized
Bank of Finland
June 13, 2010
A conference held last week in Moscow reviewed the accomplishments of the economic programme launched in 2000 at the start of Putin's first presidential term. The programme's most famous drafters include former economy minister German Gref and finance minister Alexei Kudrin. They said that about 40 % of the goals of the decade-long programme had been met. In the plus column, Russia's state finances were put in order and the large foreign debt retired. The ambitious goal of doubling GDP was actually achieved (if calculated as GDP per capita measured in dollars). Much of the progress in these areas, however, can be attributed to soaring world oil and gas prices.
On the down side, attention was called to the lack of progress in diversifying Russia's production structure, raising competitiveness and reform of state administration. Even less headway has been achieved in institutional re-forms such as judicial independence, development of civil society and guaranteeing property rights. Gref attributed part of the failure to inattention to reforming the power structure.
Business, Energy or Environmental regulations or discussions
Reuters: Russian markets -- Factors to Watch on June 15
Tue Jun 15, 2010 6:04am GMT
MOSCOW June 15 (Reuters) - Here are events and news stories
that could move Russian markets on Tuesday.
You can reach us on: +7 495 775 1242
STOCKS CALL (Contributions to moscow.newsroom@):
Uralsib: "Over the short-term at least, investor appetite
for risk is back and the global market mood is likely to remain
buoyed with China growth optimism."
Renaissance Capital: "We view the new owners (of Uralkali
(URKAq.L) (URKA.MM)) as financial investors ... We maintain our
'buy' rating based on fundamental upside potential, but consider
the stock risky and volatile until the new owners clarify their
strategic plans."
EVENTS [RU-DIA] (All times GMT):
MOSCOW- Kremlin economic aide Arkady Dvorkovich to give news
briefing ahead of the St Petersburg economic forum, 0930
MOSCOW- Russian Prime Minister Vladimir Putin's spokesman,
Dmitry Peskov, to give a briefing
MOSCOW- The International Monetary Fund briefing on results
of its routine mission to Russia
IN THE PAPERS [PRESS/RU]:
Novatek (NOTK.MM) board of directors will meet on Tuesday to
discuss the Yamal LNG project, Kommersant business daily
reports.
Telecoms giant Svyazinvest may get the 29 percent government
stake in Moscow's Central Telegraph (CNTL.MM) in exchange for an
additional share issue in favour of the state, Vedomosti writes.
TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]:
TOP NEWS:
Moscow-led force may act to quell Kyrgyz clashes[ID:nLDE65D0TX]
Kerimov buys 25 pct Uralkali stake [ID:nLDE65D08K]
COMPANIES/MARKETS:
AvtoVAZ raises Russian car sales forecast [ID:nLDE65A11E]
MMK beats Q1 net profit forecast [ID:nLDE65A07O]
Ssangyong inks auto export deal with Sollers [ID:nTOE65E02A]
ECONOMY/POLITICS:
Gorbachev says Russia needs freedom to succeed [ID:nLDE65A196]
Ex-YUKOS lawyer warns Russia forum guests [ID:nLDE65A1UX]
Rouble ends week down on risk aversion [ID:nLDE65A1LK]
ENERGY:
China pipeline ready for Russian oil -agency [ID:nTOE65D06A]
Total wins Putin support for Qatar in Russia [ID:nLDE65A18A]
Bulgaria likely to abandon trans-Balkan pipeline[ID:nLDE65A13F]
MARKETS CLOSE/LATEST:
RTS 1,357.08 +0.02 pct
MSCI Russia .MIRU00000PUS 722.95 +0.05 pct
MSCI Emerging Markets .MSCIEF 930.68 +0.04 pct
Russia 30-year EurobondRU011428878= yield: 5.455/5.416 pct
EMBI+ Russia 11EMJ 254 basis points over
Rouble/dollar RUBUTSTN=MCX 31.5900
Rouble/euro EURRUBTN=MCX 38.1526
NYMEX crude CLc1 $75.17 +$0.07
ICE Brent crude LCOc1 $75.32 +$0.12
For Russian company news, double click on [E-RU]
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Russian stocks [.ME] Russia country guide RUSSIA
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Emerging markets top news [TOP/EMRG]
Top deals [TOP/DEALS] European companies [TOP/EQE]
Bloomberg: Norilsk, Rosneft, Uralkali: Russian Stock-Market Preview
June 15 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow.
The 30-stock Micex Index fell 0.3 percent to 1,336.09 at the close in Moscow on June 11. The dollar-denominated RTS Index declined 0.2 percent to 1,356.79 on June 11.
OAO GMK Norilsk Nickel (GMKN RX): Copper rose 7.5 cents, or 2.6 percent, to $2.979 a pound as the dollar's decline spurred demand for commodities. Norilsk Nickel, Russia's largest miner, fell 0.1 percent to 5,003.05 rubles on the Micex Stock Exchange.
OAO Rosneft (ROSN RX): Crude oil for July delivery rose as much as $2.05, or 2.8 percent, to $75.83 a barrel on speculation economic growth will accelerate after European industrial production increased more than forecast in April. Rosneft, Russia's largest oil producer, dropped 0.6 percent to 214.98 rubles on the Micex Stock Exchange.
OAO Surgutneftegaz (SNGS RX): Hungary's government will start negotiations with the Russian oil producer about its 21.2 percent stake in Mol Nyrt., Hungary's largest refiner, Reuters reported, citing Hungarian National Development Minister Tamas Fellegi. Surgutneftegaz gained 1.3 percent to 29.22 rubles on the Micex Stock Exchange.
OAO Uralkali (URKA RX): Billionaire owner Dmitry Rybolovlev disposed of 53.2 percent of Uralkali to Kaliha Finance Ltd., Aerellia Investments Ltd. and Becounioco Holdings Ltd., according to a statement. The buyers paid $23 for each depositary receipt, according to Interfax, which valued the company at $9.8 billion. Uralkali, Russia's second-largest potash producer, added 2.2 percent to 119.03 rubles on the Micex Stock Exchange.
--Editor: Glenn J. Kalinoski
Bloomberg: Silvinit Rises on Report of Stake Sale to Russian Billionaire
Tuesday, June 15, 2010
June 15 (Bloomberg) -- OAO Silvinit headed for its highest close in two weeks after Vedomosti reported that Russian billionaire Suleiman Kerimov acquired a 20 percent stake from shareholder Dmitry Rybolovlev, citing people familiar with the matter.
Russia's largest potash producer gained 1.9 percent to 18,005.78 rubles at 11:11 a.m. in Moscow, heading for its highest level since June 3. The stock earlier traded for as much as 18,2777 rubles.
Kerimov, along with fellow Russian billionaires Alexander Nesis and Filaret Galchev, also bought 53.2 percent of OAO Uralkali, the country's second largest potash producer, for about $5.3 billion from Rybolovlev.
"Nesis and Galchev are purely financial investors, as there are no synergies between Uralkali and any of their businesses," Georgy Ivanin, a senior analyst at Alfa Bank, said in an e-mailed report today. "We therefore expect them to sell a controlling stake in Uralkali to a strategic investor in the medium term. The buyer could be a specially created state-owned company that could consolidate Uralkali and Silvinit under one umbrella to create a global leader on the potash market."
--Editors: Linda Shen, Alexander Nicholson.
DJ Uralkali's New Owners May Attempt Merger With Norilsk – Report
Posted on: Tue, 15 Jun 2010 03:22:20 EDT
Symbols: URLKF
MOSCOW, Jun 15, 2010 (Dow Jones Commodities News via Comtex) --
The new owners of Russian fertilizer producer OAO Uralkali (URKA.RS) may attempt to merge the company with metals giant OAO Norilsk Nickel (GMKN.RS), business daily Vedomosti reports Tuesday, citing a person familiar with one of the owners.
Uralkali said Monday that a consortium owned by Suleiman Kerimov, Alexander Nesis and Filaret Galchev had bought a 53% stake in the company from Dmitry Rybolovlev's Madura Holding. The paper also cites the co-owner of another commodities company, which the paper doesn't name, saying "it would be illogical" for Kerimov to limit himself to the acquisition of Uralkali.
"It's possible the eventual outcome will be the creation of a big company make up of Uralkali, Norilsk, a perhaps, aluminum giant United Co. Rusal PLC (0486.HK)" the person says.
Vedomosti also cites another person familiar with Kerimov, saying the tycoon has agreed to pay Rybolovlev around $500 million for his 20% stake in (SILV.RS), another Russian fertilizer company.
Kerimov owns 27% of Russia's largest gold miner OAO Polyus Gold (PLZL.RS), and Alexander Nesis owns 24% of OAO Polymetal (PMTL.RS), the country's largest producer of silver.
Newspaper website: vedomosti.ru
(END) Dow Jones Newswires
06-15-10 0322ET
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FT: Rybolovlev sells 53% Uralkali stake to three Russian tycoons
By Catherine Belton in Moscow
Published: June 15 2010 03:00 | Last updated: June 15 2010 03:00
Dmitry Rybolovlev, the Russian potash tycoon, has sold a controlling stake in his London-traded Uralkali fertiliser company to three other Russian billionaires for an undisclosed amount.
The deal raises fresh questions about corporate governance and transparency in Russian blue chips but could mark a first step in a consolidation of the fertiliser sector.
Uralkali said yesterday that Mr Rybolovlev had disposed of a 53.2 per cent stake, held by his Cyprus-based investment vehicle, Madura, to three other investment vehicles: Kaliha Finance, Aerellia Investments and Becounioco Holdings.
The company - whose export arm accounts for 30 per cent of global potash sales - said these vehicles were beneficially owned by Suleiman Kerimov, the metals tycoon, Alexander Nesis, another metals tycoon, and Filaret Galchev, a cement magnate, respectively.
Mr Kerimov's company took a 25 per cent stake in Uralkali, it said. Mr Rybolovlev is to retain a 12.4 per cent stake.
While people who said they were familiar with the matter claimed the share transfers valued the company at $10bn - a premium to its current market capitalisation of about $8bn - people close to Mr Kerimov declined to comment on or confirm the sale price.
Depositary receipts in Uralkali traded on the London Stock Exchange closed more than 5 per cent up at $19.93, a five-week high, amid hopes that the sale could lift political risks seen to be surrounding Mr Rybolovlev's ownership of the company.
Mr Rybolovlev had been singled out in 2008 by Igor Sechin, the powerful deputy prime minister, over his handling of a mine explosion two years earlier and threatened with billions of dollars in fines. But this threat had seemed to dissipate some months ago - and some investors said their overall reaction to the deal was ultimately muted because of the total lack of transparency.
"The structure of the deal is designed specifically to avoid any disclosure or a buy-out of minority investors," said Steven Dashevsky, a founder of the Russian special situations funds, which invests in Russian stocks. "We have a situation where one shareholder . . . is now being replaced by an odd-looking consortium with questionable corporate governance."
Not one of the new shareholders has acquired a stake worth more than 30 per cent, leaving them free from requirements to disclose the value of the transaction or to buy out minority shareholders.
"They have taken over a proper public company which holds 10 per cent of the global market for a critical commodity and we don't know what their strategy is, what there shareholder agreement is, or their specific holdings," said Mr Dashevsky. "This should be disclosed to all shareholders, but it isn't going to be."
Analysts said the deal could be just the first step in a broader transaction that could end in a consolidation of the state's diverse holdings in Russia's fragmented fertiliser industry as it attempts to build a national champion.
"This could be just the first step," said Chris Weafer, at Uralsib Capital investment bank in Moscow. "The state has not yet come up with a clear strategy on how it wants to develop its holdings in the fertiliser sector . . . It wants to streamline strategic sectors and make them more globally competitive."
Others have suggested it could be a defensive move by Mr Rybolovlev as he fights divorce proceedings in a Geneva court. Uralkali, however, has said the company is protected from the divorce proceedings.
Another expert suggested the lack of transparency in the deal - and the nondisclosure of the sale price - could leave insiders with room for a great deal of upside should the stakes be sold on later as part of a broader deal.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.
2010-06-15 08:55
Reuters: Svyazinvest may get C.Telegraph without tender-paper
MOSCOW, June 15 (Reuters) - Telecoms giant Svyazinvest may get the 29 percent government stake in Moscow's Central Telegraph in exchange for issuing new shares to the government, a business daily reported on Tuesday.
Russia's state property management agency said this month it would auction the stake in the top-5 Moscow Internet provider on July 13, and Svyazinvest said it intended to take part.
State-controlled Svyazinvest, which already has 51 percent of voting shares in Central Telegraph, is currently undergoing a major restructuring intended to increase its efficiency and boost its share of the broadband market.
Vedomosti said Russia's Communications Minister Igor Shchyogolev suggested that the government's stake in Central Telegraph should be handed over to Svyazinvest without the tender, along with stakes in three other telecoms operators.
In return, Svyazinvest would issue additional shares in favour of the state, Vedomosti wrote.
Svyazinvest currently has 38.25 percent of Central Telegraph's share capital, and the government's stake is equal to 21.78 percent of the company's issued shares.
(Reporting by Maria Kiselyova; Editing by Louise Heavens) Keywords: SVYAZINVEST/ (maria.kiselyova@, +7 495 775 12 42, Reuters Messaging: maria.kiselyova.@)
Moscow Times: Metals Duties, Prices Linked
15 June 2010
The government has approved customs amendments to link export duties on metals to market prices, in line with taxes on oil, Vedomosti reported Friday.
The charges, which will rise and fall in line with market prices, are likely to apply to metals including copper, nickel and aluminum, and may be extended to fertilizers, Vedomosti said, citing a source at the Economic Development Ministry. Export duties on gas will remain flat, it said.
(Bloomberg)
DJ: Audi To Cease Production In Russia Later This Year –Vedomosti
DOW JONES NEWSWIRES
Audi AG (NSU.XE) will stop assembling cars in Russia this year, business daily Vedomosti quotes a local representative of the German luxury auto maker as saying in Tuesday's edition.
Assembly of some models began last fall in the Kaluga region of western Russia, at a factory owned and run by Audi's parent, Volkswagen AG (VOW.XE). Initial work involved Audi A4 and A5 sedans and the Q5 sport-utility vehicle, with the A6 and Q7 added in January. But Audi officials had warned they wouldn't move to full assembly of vehicles and that the preliminary work was done only to fulfill employment obligations to the local government.
The Audi Russia representative couldn't say exactly when the assembly work will end, Vedomosti says, but an employee at the Kaluga plant said it will most likely be in three months.
The plant and all workers are now assembling other models, including Volkswagens and those of VW's Czech subsidiary, Skoda, the Audi representative said. Volkswagen recently began preparing production of a new sedan, the Polo, designed specifically for emerging markets, with plans for Kaluga to churn out 10,000 cars this year and 30,000 in 2011. The output of Audis from Kaluga hasn't been disclosed.
Newspaper website: vedomosti.ru
-Dow Jones Newswires; 212-416-2900
Reuters: Ssangyong inks auto export deal with Russia Sollers
1:00am EDT
SEOUL, June 15 (Reuters) - South Korea's Ssangyong Motor (003620.KS: Quote, Profile, Research, Stock Buzz) said on Tuesday it had agreed to supply Russian carmaker Sollers (SVAV.MM: Quote, Profile, Research, Stock Buzz) about 160,000 cars in a knock-down export deal through 2017.
Under the contract Ssangyong is set to export sports utility vehicle parts that will be assembled at Sollers' far eastern factory in Vladivostok, Ssangyong said in a statement.
The deal is part of the effort to revive the SUV maker, now in a sale process under court-led restructuring.
Six bidders have been shortlisted in the early phase of Ssangyong's sale, worth an estimated up to $500 million, including France's Renault SA (RENA.PA: Quote, Profile, Research, Stock Buzz) and India's Mahindra & Mahindra (MAHM.BO: Quote, Profile, Research, Stock Buzz). (Reporting by Rhee So-eui; Editing by Jonathan Hopfner)
Moscow Times: AvtoVAZ Will Transfer or Cut 10% of Work Force
15 June 2010
Combined Reports
AvtoVAZ plans to cut 10 percent of its work force, as it disposes of nonautomotive activities, chief executive Igor Komarov said Friday.
“The cuts will be achieved by the end of next year through asset spinoffs and optimizing production,” Komarov said in an interview in Paris.
AvtoVAZ and Renault, which owns 10 percent in the Russian carmaker, are trimming costs as they prepare to assemble new models on a shared production line in Tolyatti. The 7,000 job cuts follow the Russian carmaker’s reduction of its work force to 70,000 from 102,000 a year ago.
Workers at AvtoVAZ employed in activities that aren’t essential to the company’s strategy — including social and other support services — are being progressively transferred outside the company to new Russian state-backed employers.
The transfers account for the “vast majority” of the 7,000 planned job cuts, with the rest achieved through retirements and without compulsory firings, Renault spokeswoman Axelle de Ladonchamps said.
AvtoVAZ, Renault and Nissan have urged the Russian government to abolish customs exemptions that allow foreign makers of auto parts to escape import duties, said Christian Esteve, Renault’s top executive in Russia, who sits on the AvtoVAZ board.
“Local suppliers don’t currently have the technology to produce modern parts,” Esteve said. “If you want the local supplier base to develop, you have to protect it.”
The three carmakers want local parts makers to supply 74 percent of the components for new models to be introduced under the Renault and Nissan brands and AvtoVAZ’s Lada brand starting in 2012, Esteve said. That requires an end to the duty exemptions, “among other things,” he added.
They also want Russia to repeal a decree that allows foreign carmakers to avoid duties of about 35 percent, undermining the incentive to invest in the local supply chain, Esteve said. “We’re still negotiating over this.”
Renault’s Russian assembly lines currently draw on local suppliers for 51 percent of their components, excluding engines and gearboxes, Esteve said — about twice the average among foreign carmakers.
Government-sponsored incentives lifted the market share of AvtoVAZ, Renault and Nissan to 38 percent in the first five months from 30 percent last year, CEO Komarov said. The companies said they are targeting a combined share of 40 percent for 2015.
AvtoVAZ is expecting total Russian car sales to rise to 1.7 million in 2010, up from a previous forecast of 1.6 million, because of the government sponsored cash-for-clunkers program.
Komarov said the so-called cash-for-clunkers program — which awards 50,000 rubles ($1,600) to car owners willing to trade in 10-year-old locally produced vehicles for new models — had invigorated the market after a dismal 2009.
"In the current economic climate, the scrappage scheme has given consumers the confidence to spend money," he said.
Komarov's new forecast came just six weeks after he predicted that 1.6 million cars would be sold this year, although both figures are still some way below the near 3 million sold in the boom year of 2008.
(Reuters, Bloomberg)
Bloomberg: SocGen Aims for 2012 Net Around EU6 Billion on CIB, Russia
June 15, 2010, 2:16 AM EDT
By David Whitehouse
June 15 (Bloomberg) -- Societe Generale SA said it’s aiming for net income of around 6 billion euros ($7.3 billion) in 2012, driven by growth at its corporate and investment bank and in Russia.
The bank is seeking net income of between 2.3 billion and 2.8 billion euros at its corporate and investment bank in 2012, it said today in an emailed statement. Societe Generale said that it expects Russia to be the largest foreign contributor to international retail earnings in 2015.
Chief Executive Officer Frederic Oudea, who took over two years ago after a record trading loss shook the bank, will lay out his strategy today starting 10:00 a.m. in Paris. The bank’s current target for 2010 net income is 3 billion euros.
Second-quarter activity in equities has been mixed, the bank said today, hurt by reduced risk appetite. The bank confirmed that risky assets will generate losses of between 700 million euros and 1 billion euros in 2010.
To contact the editor responsible for this story: David Whitehouse at dwhitehouse1@
RBC: Pharmacy Chain 36.6 launches flotation
RBC, 15.06.2010, Moscow 11:27:16.Pharmacy Chain 36.6 will launch the flotation of its additional share issue for a total nominal value of RUB 6.4m (approx. USD 203m) today, the Russian cosmetics and medicine retail chain stated in official documents. According to the company, it will place 10m securities with a par value of RUB 0.64 (approx. USD 0.02) each. The offering price has been set at RUB 93 (approx. USD 2.95) per share, including for those shareholders who can exercise a preemptive right to purchase shares. The company, therefore, expects to raise RUB 930m (approx. USD 29.57m) from the flotation.
Pharmacy Chain 36.6's share capital currently consists of 95m shares with a par value of RUB 0.64 (approx. USD 0.02) each. As a result of the additional share issue, the company's share capital will increase 10.53 percent to RUB 67.2m (approx. USD 2.13m).
Activity in the Oil and Gas sector (including regulatory)
June 15, 2010 11:08
Interfax: Export duty on Russian crude could plummet $43 to $248-8/tonne on July 1
MOSCOW. June 15 (Interfax) - The export duty on Russian crude oil could plummet to $248.8/tonne on July 1, from $292.1 at present.
Alexander Sakovich, the Finance Ministry official in charge of customs payments, told Interfax that Russian crude averaged at $71.28356 a barrel in the observation period May 15-June 14, inclusive, so the maximum duty on that basis would be $248.8155/tonne.
The duty on light petroleum products might be $179.9/tonne on July 1, down from $209.1 at present, and that on dark products - $96/tonne, down from $112.7.
Sakovich said the export duty on East Siberian oil, currently zero, could be $69.9 a tonne on July 1, unless the government approves Finance Ministry proposals on the procedure for determining duties in oil produced in the region.
Deputy Finance Minister Sergei Shatalov told reporters on Tuesday that Russia may introduce a discounted export duty on oil produced at Eastern Siberian deposits based on a coefficient of 0.45 and a cut-off price of $50 per barrel. He said the Finance and Energy ministries had approved a proposal to introduce the discounted duty on July 1, and planned to submit their coordinated proposal to the government before the middle of June to enable the monthly government decree on oil export duties to be amended on time. At present, a zero export duty applies to oil produced at 22 East Siberian fields.
The Finance Ministry's Sakovich said Tuesday that a decision on a duty for the East Siberian fields had not yet been reached.
Pr
RBC: Ukraine hopes to produce gas in Russia
RBC, 15.06.2010, Kiev 10:58:13.If Gazprom and Naftogaz of Ukraine form a joint venture, Ukraine expects to produce at least 30bn cubic meters of natural gas on Russia's territory, Ukraine's Fuel and Energy Minister Yury Boyko announced today.
"We would like at least 30bn cubic meters of gas to be supplied to Ukraine from our own assets in Russia, and we should be able to regulate the price for the gas," he stated. In Boyko's opinion, any country would want to support its producers and people by ensuring low prices for energy resources. "We will strive to attain that," he said.
The minister indicated that Ukraine could provide Gazprom with access to the exports part of Ukraine's gas transporting system. He also noted that Ukraine hoped to have controlling stakes in joint companies with Russia in the energy sphere. When asked about Energoatom and Naftogaz, Boyko announced that the situation with these two companies must comply with common practice: if a joint venture operates on the territory of Ukraine, the company representing the state's interests must have a 50-percent stake plus one share in the joint venture.
Reuters: Poland needs gas deal with Russia to avoid gas cuts
Tue Jun 15, 2010 6:16am GMT
* Gas cuts possible in October
* Damages for Poland may top those of floods
WARSAW June 15 (Reuters) - Poland needs to sign a natural gas deal with Russia in coming months to avoid supply cuts as early as October, an economy ministry official was quoted as saying on Tuesday.
Poland has struck a deal with Russia for 10 billion cubic metres (bcm) of gas a year until 2037, but the final signing of the deal has been delayed.
Maciej Kaliski, who heads the oil and gas department in the ministry, said the damages resulting from such a supply cut could exceed those of a recent flood.
"If the documents are not signed in coming months we can have problems with supplies in October," Kaliski told Rzeczpospolita daily. "Financial consequences for the economy could be worse than those of the recent floods."
The European Union's largest ex-communist economy relies heavily on Russian gas as it imports about two-thirds of its annual needs of 14 bcm.
The new deal, which also regulates issues regarding transit of Russian gas through Poland via the Yamal pipeline, raised concerns of the European Commission, which fears it breaches EU rules on third party access to the pipeline.
Poland was hit hard by floods in May and June that killed more than 20 people, and early estimates put the damages at up to 2 billion euros. (Reporting by Patryk Wasilewski)
15.06.2010
Oil and Gas Eurasia: Russia Increases forecast for 2010 Gas Exports By 8.1 Percent
The Russian government has increased its forecast for 2010 gas exports by 8.1 percent to 205.7 billion cubic meters of gas , up from its initial figure of 190.3 billion cubic meters of gas. the new numbers are included in an explanatory note to the law on the federal budget, which was approved by the government and submitted to parliament.
According to the note, exports beyond the CIS will fall 3.8 percent to 135.6 billion cubic meters of gas, down from 141 billion cubic meters of gas, while exports to CIS nations will jump 42.1 percent to 70.1 billion cubic meters of gas, up from 49.3 billion cubic meters. the price of gas for non CIS countries is $314.2 per 1,000 cubic meters, up 12.9 percent over the previous year's price of $278.2 per 1,000 cubic meters. CIS countries will pay $209.7, up from $180 in 2009, an increase of 16.5 percent.
Copyright 2010, Oil and Gas Information Agency. All rights reserved.
Reuters: China pipeline ready for Russian oil –agency
Mon, Jun 14 2010
BEIJING, June 14 (Reuters) - China is ready to receive Russian crude oil after completing the construction of a 927-km crude oil pipeline to the border city of Mohe in the northeast, official news agency Xinhua reported on Monday.
The project is part of Russia's Eastern Siberia-Pacific Ocean pipeline and is expected to start delivering oil to to refineries in Daqing in China's Heilongjiang province in October this year, the report said.
The pipeline will eventually supply China with 15 million tonnes of crude oil a year.
(Reporting by David Stanway, Editing by William Hardy)
Moscow Times: Environment Minister Trutnev Wants Drilling Checks
15 June 2010
Combined Reports
Russia's environmental watchdog has opened a series of probes into off-shore drilling projects in the wake of the oil spill in the Gulf of Mexico, Natural Resources and Environment Minister Yury Trutnev said Friday.
"I think they have begun checks already," Trutnev said of the Federal Inspection Service for Natural Resources Use.
"But I think the question is bigger than just checks — we need to analyze international practice of reacting to such situations. We studied legislation, and it seems that international agreement practice exists for pollution from sea ships but not from platforms," he said, adding that such massive accidents require a new instrument of international cooperation.
For his part, Gazprom chief executive Alexei Miller said he has spoken with top oil and gas companies about the need for a full investigation into the causes of BP’s drilling accident in the Gulf of Mexico, the London-based Times said Friday.
Miller said it was important to discover the cause of the April 20 explosion because of the increasing importance of off-shore drilling, according to the Times.
(MT, Bloomberg)
Izvestiya/Russia Today: A drilling addiction
Officials will examine Russia’s oil platforms
Evgeny Arsyukhin
Rosprirodnadzor began examining oil platforms on the Russian shelf. The goal is to prevent another catastrophe, similar to one which happened in April in the Gulf of Mexico. The inspections will not affect the rate of development of offshore deposits, say experts. The costs, which may be incurred by companies, will be too high in comparison to the gains. But, it is a good opportunity to “report” to the global community: we respond to challenges, and operations are going well.
Read more
Minister of Natural Resources, Yury Trutnev, told journalists about the inspections -- judging by what he said, it turns out that his ministry had initiated the idea.
“The instructions have already been given to Rosprirodnadzor. I think that Rosprirodnadzor has already begun inspections,” said the minister. “Marine pollution from oil platforms is not described in the international law; it is also unclear as to what should be done with the economic consequences of oil spills.”
At the same time, Trutnev does not deny the fact that the work of Russia’s supervisory agencies should be linked with some international “sponsors” in this topical and very sensitive issue. After the accident, new tools for international cooperation will be created, says the minister. Inspections will allow Russia to become a part of this trend, add experts.
In Russia, “deep water” oil is being extracted from the Caspian (Lukoil and Rosneft) and in Sakhalin (Rosneft and Gazprom), there are also plans to start drilling the Shtokman field in the Barents Sea. The companies, themselves, have not yet commented on the inspections.
“Additional control should not be a problem for the oil business,” says Dmitry Aleksandrov from Univer Capital.
With the least favorable development of events for the oil industry, says the expert (if it is decided to intensify safety regulations, and oblige companies to use new technological exploitation schemes), the businesses will face non-recurring costs for the purchase of more “durable” equipment; but in as soon as two years’ time, the expenses will be dissolved in the general accounting of their projects.
“The oil business sector could only be affected by imposed restrictions on the development of a certain area of a shelf,” says Aleksandrov, but no such threat exists.
Russian companies have grown accustomed to being faced with stringent demands, says Anatoly Dmitrievsky, director of the Oil and Gas Institute, RAS. In the Gulf of Mexico, oil companies are allowed to dump drilling mud into the water, and this is justified: in warm water, dirt is quickly absorbed by microorganisms. Even the spilled oil, argues Dmitrievsky, clumped into pieces, will be reprocessed by microbes. But in Russia’s northern waters, these processes are inhibited by dozens of times; therefore, according to the national regulations, all drilling cutting waste is to be removed.
The government will not interfere with the work of such companies as Gazprom or Rosneft; meanwhile, the Lukoil platform in the Caspian was opened by Vladimir Putin himself, recalls Aleksandrov, which also says a lot.
In general, as paradoxical as it may sound, accidents help the oil business sector to acknowledge its responsibility before the society, says the expert. In the spring of 1989, when the Exxon Mobil tanker had exploded, the company paid $5 billion in damages. After the BP incident, oil companies will be even more careful.
Moscow Times: Total Looks for Big Stake in Yamal Gas Field
15 June 2010
By Anatoly Medetsky
Total is looking to win a major stake in the Yamal liquefied natural gas project, chief executive Christophe de Margerie said Friday, signaling unabated foreign appetite to invest in Russia despite a dip in the country's exports of the fuel.
The French oil and gas producer is seeking 20 percent to 25 percent in the plan to develop a large Yamal field, owned by private Russian gas producer Novatek, and to build a plant to liquefy the gas for shipment by tankers, de Margerie told reporters after meeting Prime Minister Vladimir Putin in Paris.
If the bid is successful, it would be Total's fourth investment in Russia's inhospitable Arctic — and a new show of confidence that demand and prices for LNG will rebound from the current lows. A Gazprom-led joint venture with Total and Norway's StatoilHydro recently pushed back their effort to tap the giant Shtokman field off Russia's Arctic coast.
Putin indicated that he would welcome Total's greater presence in the country.
“You have now been working with three Russian partners, and for a long time,” he told de Margerie at the start of their meeting. “And there's a chance to expand your operations in Russia.
“I won't speak about Shtokman now. The project is really grandiose, but there are others, for example gas liquefaction and just the production of hydrocarbons.”
Novatek owns 51 percent of Yamal LNG, the company that holds the license for the Yuzhno-Tambeiskoye field. The deposit has reserves of at least 1.2 trillion cubic meters of gas, or enough for Russia to export to Europe at last year's rate for nearly eight years.
Gazprom, Russia's gas export monopoly, has a 19 percent interest in Novatek, while Putin's longtime acquaintance Gennady Timchenko increased his Novatek stake to almost 21 percent in March.
De Margerie lauded Putin's support during the meeting, using language that raised questions about the Frenchman's take on President Dmitry Medvedev's authority.
“Our policy in your country, Mr. Prime Minister, is infinitely clear,” de Margerie said, according to a transcript of the meeting posted on the Cabinet's web site. “We may have many partners but one master, one boss. One, not two.
“Thus, as long as you support me and as long as you support Total, we will do good things.”
Russia has had two rulers since Medvedev won presidential elections in 2008 and vowed to govern the country in tandem with Putin.
Total spokeswoman Penelope Semavoine was in a meeting and unavailable for comment Monday afternoon. Putin's spokesman, Dmitry Peskov, referred an inquiry about how people should interpret the statement to de Margerie.
“It doesn't appear to be the main thing” about the meeting, Peskov said.
Qatar Petroleum may join Yamal LNG as another foreign partner, de Margerie said after he passed a message from the company to Putin during their closed-door talks. The message from the government of Qatar, the world's largest LNG exporter, said the country wanted in on the project. Putin said he was “totally in favor” of the proposal, de Margerie said, Reuters reported.
Peskov said the government would not comment on any commercially sensitive talks. A phone call to Novatek's press service went unanswered Monday evening, as most businesses were closed for a state holiday.
Neither Novatek nor Total identified the price tag for Yamal LNG. Energy industry consultants Wood Mackenzie said the costs would soar and that the prospects of any work on the field were too distant to put a concrete figure on the outlays.
“We judge it to be a relatively speculative development at this time,” said Frank Harris, head of global LNG consulting at the firm. “However, in summary we would expect it to be a challenging and expensive development given its physical location and the nature of the environment in the Yamal Peninsula.”
A key issue will be the project's ability to recoup costs after shale gas production surged in the United States last year, putting downward pressure on conventional gas, he said, adding that the drop in prices caused the Shtokman delay.
This could also potentially take a toll on Yamal if Gazprom and its potential partners are unable to market the output in the United States, Harris said.
“Yamal is … a lot of LNG to find a home for in the European market, particularly as the economics of supplying the gas into Europe via pipeline could be more attractive than via LNG,” he said. “That said, a number of very capable LNG players are showing interest in the project, indicating that they clearly believe a commercial solution is workable.”
De Margerie told Putin at the start of their meeting that he wanted no more delays on Shtokman.
“We will possibly need your help … to put pressure on all the project's partners,” he said.
Gazprom
2010-06-15 07:24
Reuters: Romania - Factors to Watch on June 15’
SOUTH STREAM
Economy Minister Adriean Videanu could meet Gazprom CEO Alexei Miller on June 16 in Moscow to discuss Romania's possible participation in the South Stream project, Miller said last week.
Marcel Piteiu, head of Romania's state-owned gas company Romgaz, said he believes Romania will be invited to join South Stream.
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