Russia - WikiLeaks
Russia 101027
Basic Political Developments
• Nov 4: National Unity Day public holiday in Russia
o Nov 5: Day-off for public holiday, working day moved to November 13
• Saakashvili ready for dialogue with Russia - Russia “has occupied Georgian territory,” nevertheless, we should start a dialogue with Russia, Georgian President Mikheil Saakashvili told TV5 Monde French TV Channel, according to RBK.ru. Saakashvili is in Montreux, Switzerland for the 13th Francophonie summit.
• Yanukovych forms expert council on Ukraine-Russia relations - Presidential chief-of-staff Serhiy Lyovochkin has already been appointed to head the council, which will act as a consultative body responsible for formulating suggestions on how to tackle problems in Ukrainian-Russian cooperation and supporting Kyiv's work within the interstate commission.
o Putin to lead government delegation to Ukraine - The Russian delegation includes Russian First Deputy Prime Minister Igor Shuvalov, Minister for Regional Development Viktor Basargin, Transport Minister Igor Levitin, Minister of Education and Science Andrei Fursenko, Energy Minister Sergei Shmatko, as well as representatives of other ministries and business community. Five intergovernmental cooperation agreements and five commercial deals are expected to be signed during the Russian ministers' visit to Kiev, Zurabov said.
o Russia, Ukraine to discuss new approaches on gas market - Russian-Ukrainian gas relations will be high on the agenda of the meeting of the intergovernmental committee for economic cooperation that will be co-chaired by the two countries’ prime ministers Vladimir Putin and Nikolai Azarov.
• Medvedev receives Sargsian and Aliyev in Astrakhan - The Russian leader Dmitry Medvedev is receiving his Armenian and Azerbaijani counterparts Serge Sargsian and Ilham Aliyev for talks in the city of Astrakhan, in the Volga River delta today.
o Azerbaijani President Ilham Aliyev pays working visit to Russia - Prime Minister Artur Rasizadeh, head of the Presidential Administration Ramiz Mehdiyev and Baku Mayor Hajibala Abutalibov saw the President off at Heydar Aliyev International airport.
Azerbaijan leader to participate in tripartite meeting on Karabakh - According to diplomatic sources, during a brief visit to Astrakhan Ilham Aliyev will participate in a ceremony to unveil the monument to his late father – Azerbaijani national leader Geidar Aliyev.
o Medvedev to hold Karabakh talks with Aliyev, Sarksyan - Ankara closely follows such tripartite meetings, as any positive sign which may come from the meetings will be welcomed in the Turkish capital, which hopes that concrete progress in the Nagorno-Karabakh dispute between Armenia and Azerbaijan will enable Turkey to pass a so-called threshold in order to move ahead in its ongoing efforts to normalize ties with its estranged neighbor Armenia.
o Astrakhan to host tripartite meeting of Presidents
• Putin might visit Tajikistan - Russian Prime Minister Vladimir Putin should soon come to Tajikistan to discuss Russian-Tajik military-political and economic co-operation, Avesta.tj reported October 26, citing “informed sources.” The Putin visit, should it occur, would be part of a Shanghai Co-operation Organisation prime ministers’ summit, Avesta.tj reported. The Tajik presidential administration denied knowing anything about a Putin visit.
• Polish government approves deal with Russia on increased gas supplies - "The conclusion of the agreement results from the necessity of providing Poland with additional natural gas supplies and increasing the country's energy security," the statement said.
• Russian FM in Poland - Sergei Lavrov, Russia’s foreign minister, is to meet with his opposite number Radoslaw Sikorski as well as President Bronislaw Komorowski during his two-day visit to Poland.
o MFA Spokesman Andrei Nesterenko Interview to RIA Novosti regarding Foreign Minister Sergey Lavrov’s Working Visit to the Republic of Poland
• Poland acquires five more Mi-17 helicopters - Polish Ministry of Defence has purchased five Mi-17 helicopters, Russian Rosoboroneksport, state enterprise acting as the sole Russian state intermediary agency for export and import of military and dual-purpose products announced yesterday in Paris.
• Russian Foreign Minister To Attend 5th East Asia Summit In Hanoi
• Regional organizations boost UN effectiveness – Lavrov: Russian Foreign Minister Sergei Lavrov feels that the effectiveness of the UN largely depends on boosting cooperation with regional organizations, such as the Collective Security Treaty Organization and/or the Shanghai Cooperation Organization.
• War games in full swing in Chelyabinsk - The war games have been going on since October 25th with the participation of more than 1700 servicemen and about 270 military vehicles from Russia, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan and Belarus.
• Russian General Staff chief to attend EU Military Committee meeting - "During the meeting, the chief of the Russian General Staff will deliver a speech on reforming the Russian Armed Forces and an opportunity to expand cooperation with EU member countries on maintaining peace and providing security on the European continent," the ministry's press service said.
• Russia wants troop limit in new NATO states: report - Russia is demanding that any new cooperation deal with NATO include limits on the number of troops posted in the alliance's new member states in central Europe, a leading Russian daily reported on Wednesday.
o Russia seeks restrictions on NATO military contingents - paper: Kommersant said that the request was laid out in a draft cooperation deal that Russian Foreign Ministry Sergei Lavrov handed over to NATO Secretary General Anders Fogh Rasmussen in December 2009. The deal, which is still under discussion, was not made public, under a mutual agreement. "We want the level of predictability in military activity on the territories of the countries recently admitted to NATO to be higher than it is now," Deputy Foreign Minister Sergei Ryabkov told the paper.
o Russia to ask NATO impose ban on substantial military units placement in newly accessed member states
• NATO Chief Sees 'New Start' With Russia - In an interview with the British-based "Financial Times" newspaper, Rasmussen says he believes Russian President Dmitry Medvedev's expected attendance at the defense alliance's annual summit next month in Lisbon will improve NATO's relations with Moscow that were strained over Russia's 2008 war with Georgia.
o Nato hopes to rebuild ties with Moscow - “The summit will represent a new start in the relationship between Nato and Russia,” said Mr Fogh Rasmussen. “It will be a very substantive Nato-Russia summit and definitely the most important event for [bilateral] co-operation since the Rome summit of 2002, when we established the Nato-Russia council.”
• Exclusive: Afghanistan: Russia steps in to help Nato - The Independent has learnt that Moscow is engaged in training the Afghan army and counter-narcotics troops and has agreed in principle to supply Nato with helicopters for use in Afghanistan.
o Russia and Nato plan joint initiative in Afghanistan - Russian forces could return to Afghanistan for the first time since they were forced out by mujahideen fighters in 1989, under a joint initiative with Nato.
• Russia against politicizing nuclear energy use for peaceful purposes - Russia is opposed to politicizing the right to the use of nuclear energy for peaceful purposes. This kind of stand on the issue whips up tension in international relations, says Deputy Russian Foreign Minister Sergei Ryabkov in an interview with the VIP-Premier magazine.
• IAEA head hails Russia's efforts in nuclear medicine
• Russia ready for row as Stockholm seizes trade mission
o German businessman hurts Russia's reputation in the West - Scandalous Sedelmayer case took a very unfavorable turn for Russia. Russia was unable to appeal the seizure of the government property imposed on October 11 by Swedish judicial authorities. We are talking about the building of the Russian trade mission in the town of Lidingö near the Swedish capital.
• Chechen leader Kadyrov to deliver speech in Russian parliament - Chechen leader Ramzan Kadyrov will address the Russian parliament's upper house on Wednesday, the Federation Council's spokesman said.
• Polish appeals court drops case of Chechen separatist activist - Akhmed Zakayev was detained in Poland last month on a Russian warrant but then released the same day after a Warsaw court rejected the Russian-issued warrant. The 51-year-old returned to Britain, where he is living in exile. Prosecutors, however, appealed the decision to free Zakayev.
• Russia's Deputy Prosecutor Calls For Vetting All North Caucasus Police
• European Reports Paint Grim Picture of Kadyrov’s Chechnya – by Valery Dzutsev
• Arab jihadists emerge in Caucasus war - In recent months, Jordanian newspapers and Web sites have reported the death of several Jordanians fighting in Chechnya.
• Drawing the Line - Is Saakashivli’s Move to Abolish Georgian Visas for the Citizens of Certain Russian Republics a Way to Provoke Moscow to Take Heedless Action? By Justin Lyle
• Kremlin Shuffles Army - President Dmitry Medvedev has sacked three army generals and appointed a number of other top brass to new positions, the Kremlin said on its web site Tuesday, without providing reasons for the reshuffle.
• Next Bulava missile launch scheduled for Oct. 29
• Progress cargo ship to be blasted off from Baikonur to ISS
• Russia may invest $5 million in national operating system - paper: The Russian government may allocate 161 million rubles ($5.28 million) in 2011 for the development of a national operating system in a bid to reduce the country's dependence on Microsoft, a Russian business daily said on Wednesday.
• Moscow police prosecute world's biggest spammer - Moscow police have filed a criminal case against businessman Igor Gusev, listed as the world's biggest spammer. His company Despmedia has been sending spam e-mails advertising fake pharmaceutical products to users in the United States, Canada and other countries through a partner program , the Kommersant newspaper reported.
o Noticed less spam lately? - Yesterday, police officials in Russia here announced a criminal investigation of a suspected spam kingpin, Igor Gusev. They said he had probably fled the country.
Serial spammer: Russian Viagra baron may face jail
o Russia Seeks Arrest of World’s Biggest Spammer, Kommersant Says
• Sobyanin Keeps Luzhkov's Team – for Now - The most significant addition to the lineup of nine deputies is Anastasia Rakova, a member of Sobyanin's team from the time when he served as governor of the Tyumen region in the early 2000s.
• Baturina’s Lawsuits Rejected - Moscow’s Presnensky District Court on Tuesday refused to consider two defamation lawsuits filed by billionaire Yelena Baturina’s Inteko company against NTV television for September reports that linked her and her husband, former Mayor Yury Luzhkov, to corruption, Interfax reported.
• Russian mafia boss killed in Sochi - A Russian mafia boss was shot dead on Tuesday in the Black Sea resort of Sochi, site of the 2014 Winter Olympics. Real estate owner Eduard "Karas" Kakosyan, 31, was gunned down near a gas station in the centre of town a month after another mafia chief and friend was shot and wounded, Interfax reported.
• Choc shock as cops raid Moscow factory - Police raided the underground confectionary manufacturer in Solnechnogorsk, just outside Moscow, after a tip-off about illegal immigrants working their without proper papers.
• Lost generation: Russia tops youth crime table - Ranked by the World Health Organization as having the highest rate of youth crime in Europe, Russia is faced with the tough task of rehabilitating its young people and improving the statistics.
• Russian Press at a Glance, Wednesday, October 27, 2010
o Russian President Dmitry Medvedev has said that the country should pay more attention to household energy efficiency and promised to deal with governors responsible for delaying the installation of modern utility metering equipment. Promoting energy efficiency is one of the priorities of Medvedev's modernization program.
o Almost no Luzhkov-era officials were dismissed as new Mayor Sergei Sobyanin appointed his government on Tuesday. Analysts view the lineup as a temporary measure to mask the gradual replacement of the old guard, which Sobyanin has described as "not up-to-date."
o Transparency International placed Russia 154th out of 178 countries in its 2010 Corruption Perceptions Index. Despite President Dmitry Medvedev's promise to tackle corruption, Russia has slipped eight positions down from last year's rating.
o Experts have expressed doubts that data collected during the all-Russian census will represent the real situation in the country. Public polls show that more than one third of Russians did not take part.
o The Memorial rights group appealed to the authorities on Tuesday about a Dagestani journalist who has received anonymous death threats and been harassed by law enforcement agencies after writing a report about police torture.
o Russia wants NATO to impose a ban on the deployment of major combatant forces on the territories of new NATO member states, according to a draft cooperation deal being discussed by Russian and U.S. officials.
o The Russian government may allocate a total of 161 million rubles ($5.28 million) in 2011 for the development of a national operating system in a bid to reduce the country's dependence on Microsoft.
o Russian Prime Minister Vladimir Putin has urged Russian businessmen to invest in the development of Siberia.
o The Russian government may replace Exxon Mobil as the operator of the Sakhalin-1 oil and gas project after it raised spending from $42.8 billion to $95.3 billion for the period until 2055. According to media reports, Russian Energy giant Gazprom has expressed its readiness to join the project.
o One of the co-owners of Metalloinvest, the largest iron ore holding in the Commonwealth of Independent States, may sell his share of the company for around $4 billion.
• Meeting of the Commission for Modernisation and Technological Development of Russia’s Economy - However, work carried out in this field remains insufficient. Recalling that a law on energy conservation and energy efficiency was passed almost a year ago, President Medvedev outlined a number of organisational problems that citizens, private companies and the public sector still face.
• Medvedev Pushes for Efficiency - President Dmitry Medvedev said Tuesday that the country needs to start thinking seriously about energy efficiency in the housing sector and promised that he would deal with governors who are "irresponsible" in delaying installation of modern utility metering equipment.
National Economic Trends
• CBR announces preliminary September statistics
• Combined profits in banking sector totaled 367 bln rubles in 9 mths – Melikyan
• Russian Money Supply Growth to Fuel Inflation, Citigroup Says
• Assessing Moscow’s Management of the Crisis - By Anders Aslund
• Warning Signals - The Complex Challenge of Attracting Foreign Investment Cannot Be Resolved by Simply Privatizing Key State Assets
Business, Energy or Environmental regulations or discussions
• Russia’s Micex Falls 2nd Day; Sberbank, Norilsk, Gazprom Decline
• RusAl first half net profit up $97 mln to $1.365 bln after reassessment
• Domestic market underpins outlook for Russian steelmakers
• MMK revisits plans for development of the Prioskolskoye iron ore deposit
• Russia's RusHydro power output down 16% on year in Jan-Sep
• Polymetal's Nesis Says Ukraine Next Target for Expansion: Video
• HAL, UAC & Rosoboronexport in JV to co-produce Multirole Transport Aircraft
• Polyus Gold suspends reverse takeover by KazakhGold
• TransContainer to begin road show
• CHERKIZOVO GROUP BEGINS CONSTRUCTION OF A GREENFIELD PORK FARM IN THE LIPETSK REGION
• PODGORICA, Montenegro — Montenegro regained 29 percent ownership in the nation’s biggest aluminum smelter, which is majority owned by Oleg Deripaska, enabling the government to have one representative on the managing board with the right to veto some of the company’s decisions. (AP)
• Siberian Coal Energy Company, also known as SUEK, signed up on Tuesday for a loan backed by export revenue, now increased to $900 million, almost 30 percent more than it initially sought. (Bloomberg)
• The government may sell as much as 15 percent of Russian Railways shares in an initial public offering after 2013, Interfax reported Tuesday, citing company chief executive Vladimir Yakunin. (Bloomberg)
Activity in the Oil and Gas sector (including regulatory)
• Russian gas exports up 13.3% in 9 mths - Econ Ministry
• Rosneft Raises Crude Output Target as Quarterly Net Doubles
• UPDATE 1- Rosneft Q3 net more than doubles, beats forecast
• TNK-BP, Ukraine To Cooperate In Gas Exploration
• TNK-BP Third-Quarter Net Rises on Inventories, Ruble (Update1)
• Higher output and prices push up TNK-BP sales
• LUKOIL says to invest $100 mln in Turkey in near-term
• LUKoil Output May Drop
• Sakhalin-1 Operator May Be Changed
• Audit Chamber warns Exxon Neftegas over Sakhalin-1 spending
Gazprom
• Gaz-System, Europol Gaz Sign Deal on Yamal Pipeline Management
• Gazprom Neft Launches Field - Russia's fifth largest crude oil producer, Gazprom Neft, has launched commercial production at its Ravninnoye field in the Yamal-Nenets region, in line with plans outlined earlier to boost oil output and offset current declines at mature West Siberian fields.
------------------------------------------------------------------------------------------
Full Text Articles
Basic Political Developments
Nov 4: National Unity Day public holiday in Russia
Nov 5: Day-off for public holiday, working day moved to November 13
Saakashvili ready for dialogue with Russia
Russia “has occupied Georgian territory,” nevertheless, we should start a dialogue with Russia, Georgian President Mikheil Saakashvili told TV5 Monde French TV Channel, according to RBK.ru. Saakashvili is in Montreux, Switzerland for the 13th Francophonie summit.
“We are ready for a dialogue, for talks without preconditions. We should resolve all problems through direct contacts. We are pragmatic, thus we realize that it is very dangerous to have a hostile neighbor. We should maintain dialogue with Russia. It is the first step. It should be followed by the second step which is necessary for changing the situation,” Saakashvili said.
TODAY, 12:34
Aysor.am
October 27, 2010 11:58
Yanukovych forms expert council on Ukraine-Russia relations
KYIV. Oct 27 (Interfax) - Ukrainian President Viktor Yanukovych signed a decree on October 26 establishing a council of experts in charge of promoting Russian-Ukrainian relations, the presidential press service said on Wednesday.
Presidential chief-of-staff Serhiy Lyovochkin has already been appointed to head the council, which will act as a consultative body responsible for formulating suggestions on how to tackle problems in Ukrainian-Russian cooperation and supporting Kyiv's work within the interstate commission.
tm dp
Putin to lead government delegation to Ukraine
02:37 27/10/2010
A delegation of Russian ministers led by Prime Minister Vladimir Putin will visit Ukraine on Wednesday to discuss a wide range of bilateral issues, including energy cooperation, with Ukrainian top officials, the prime minister's spokesman said.
During the visit, Putin will meet with Ukrainian President Viktor Yanukovych and Prime Minister Mykola Azarov, and take part in a meeting of the Russian-Ukrainian economic cooperation committee, Dmitry Peskov said.
The talks are expected to focus on cooperation between Moscow and Kiev in the trade, economic, energy, transport, scientific, agricultural, aviation and space spheres. Russian-Ukrainian interregional cooperation is also on the agenda, Peskov said.
Several cooperation agreements are planned to be signed following the talks. The Russian and Ukrainian prime ministers will give a joint news conference summing up the results of their meeting.
The Russian delegation includes Russian First Deputy Prime Minister Igor Shuvalov, Minister for Regional Development Viktor Basargin, Transport Minister Igor Levitin, Minister of Education and Science Andrei Fursenko, Energy Minister Sergei Shmatko, as well as representatives of other ministries and business community.
Gas issue
Russian Ambassador to Ukraine Mikhail Zurabov said energy cooperation between the courtiers will be "certainly discussed in details" during the talks.
According to Putin's spokesman, Russian gas supplies to Ukraine may be discussed during the meeting of the intergovernmental economic cooperation committee.
"It is quite possible that this topic will be addressed if the Ukrainian side raises it," he said, adding that Moscow was not planning to discuss the price Ukraine pays for Russian gas.
Ukrainian First Deputy Prime Minister Andryi Kluyev said on Tuesday that the Ukrainian side was going to address the gas price issue during the talks.
Ukraine's national energy company Naftogaz receives a 30-percent discount for Russian gas in exchange for the Ukrainian government's agreement to extend the lease on a Russian naval base in the Crimea until at least 2042, which was reached in April.
However, Azarov told RIA Novosti the price for Russian gas should reflect "changed realities."
Shmatko said in mid-October that Russia was considering Ukraine's proposal that the gas pricing formula should be changed.
Azarov ruled out on Tuesday a possibility of merging Russian energy giant Gazprom and Ukraine's gas monopoly Naftogaz proposed by Putin in May and strongly criticized by the Ukrainian opposition.
Zurabov said Russian and Ukrainian officials will discuss "prospects for modernizing the Ukrainian gas transportation system, the development of the entire pipeline system, and the use of Ukraine's transit capabilities."
Russian officials, including Putin, have said that Russia maintains its interest in modernizing Ukraine's gas transportation system, while continuing the construction of the South Stream pipeline intended to pump Russian gas to Europe under the Black Sea bypassing Ukraine.
Ukraine has repeatedly called on Moscow to quit its pipeline construction plans, saying that investments in Ukrainian pipes would be much more beneficial.
Expected agreements
Five intergovernmental cooperation agreements and five commercial deals are expected to be signed during the Russian ministers' visit to Kiev, Zurabov said.
Azarov said agreements on the creation of joint aircraft construction and nuclear enterprises were among the deals planned to be signed.
Russia's United Aircraft Corporation and Ukraine's Antonov have agreed to set up a joint venture in October to produce Antonov aircraft.
Russia and Ukrainian companies Atomenergomash and Turboatom are also in talks on the creation of a joint nuclear venture.
Russian energy producer TVEL and Ukrainian company Nuclear Fuel are planning to sign an agreement on the construction of a nuclear power plant in Ukraine.
Kluyev said on Tuesday that Russia and Ukraine may sign a new agreement on Russian oil transit soon.
"We are close to signing these agreements; negotiations are underway," he said.
The agreements are aimed to regulate guarantees and obligations on changes to oil transport tariffs through Ukrainian territory, which rose by 30 percent in January 2010, the Ukrainian first deputy premier said.
In 2009, the Russian and Ukrainian pipeline companies Transneft and Ukrtransnafta signed two agreements on the transportation of 1.5 million tons of Russian oil per quarter to two Ukrainian oil refineries in 2010 and the transfer of at least 15 million tons of oil a year through the Druzhba pipeline network.
MOSCOW, October 27 (RIA Novosti)
Russia, Ukraine to discuss new approaches on gas market
27.10.2010, 08.41
KIEV, October 27 (Itar-Tass) - Russian-Ukrainian gas relations will be high on the agenda of the meeting of the intergovernmental committee for economic cooperation that will be co-chaired by the two countries’ prime ministers Vladimir Putin and Nikolai Azarov.
At the talks Ukraine wants to raise issues related to the agreement on Russian gas supplies of January 2009 and to discuss “new approaches to the work on the gas market in the Ukraine-Russia-EU format,” the Ukrainian prime minister’s spokesman, Vitaly Lukyanenko, told Itar-Tass.
The countries prepared eleven documents for signing, but how many will be signed will be known only after the meeting, he said.
According to Ukraine’s Fuel and Energy Ministry, state-run company Nuclear Fuel and Russia’s nuclear fuel producer Tvel are expected to sign an agreement on the construction of a nuclear fuel production plant in Ukraine. Another joint project in the nuclear power sector is Russia’s participation in the construction of the third and fourth nuclear power units of the Khmelnitsky nuclear power plant.
Ukraine’s Industrial Policy Ministry said the state-owned aircraft building corporation Antonov and Russia’s United Aircraft Corporation are expected to sign an agreement on creating a joint venture.
After the committee’s meeting Russia and Ukraine plan to sign intergovernmental agreements on interregional and border cooperation and on cooperation in air and sea rescue works in the Black Sea and the Sea of Azov.
According to Ukraine’s state statistics committee, over the eight months bilateral trade increased by 81.1 percent to 21.3 billion dollars as against the same period in 2009.
Ukraine’s export to Russia increased by 70.3 percent to exceed 8 billion dollars. The import from Russia grew by 88.9 percent to 13.1 billion dollars. At the same time a negative balance of Ukraine’s trade increased by more than two-fold.
Medvedev receives Sargsian and Aliyev in Astrakhan
Oct 27, 2010 09:38 Moscow Time
The Russian leader Dmitry Medvedev is receiving his Armenian and Azerbaijani counterparts Serge Sargsian and Ilham Aliyev for talks in the city of Astrakhan, in the Volga River delta today.
The three are due to focus on a settlement in Nagorno-Karabakh.
The conflict, the most devastating one in terms of consequences in the CIS, flared up in February 1988, when the Nagorno-Karabakh autonomous region said it was going to withdraw from Azerbaijan and join Armenia, and later proclaimed independence.
This provoked an open armed standoff in the region in the middle of the 1990s. The parties to the conflict lost up to 25,000 in killed.
Russia has been a main mediator in a conflict settlement.
Moscow suggested setting up a Minsk Group of 12 countries that oversee the ongoing negotiating process.
Azerbaijani President Ilham Aliyev pays working visit to Russia
[ 27 Oct 2010 11:22 ] [pic]
Baku – APA. Azerbaijani President Ilham Aliyev has left for Russia for a working visit, President’s press service told APA.
Prime Minister Artur Rasizadeh, head of the Presidential Administration Ramiz Mehdiyev and Baku Mayor Hajibala Abutalibov saw the President off at Heydar Aliyev International airport.
Azerbaijani President will hold a meeting with Russian and Armenian presidents. Azerbaijani President is also expected to participate in the ceremony for unveiling Heydar Aliyev’s monument in Astrakhan.
| | |
Azerbaijan leader to participate in tripartite meeting on Karabakh
27.10.2010, 10.11
BAKU, October 27 (Itar-Tass) - Ilham Aliyev will participate in a tripartite meeting of the presidents of Azerbaijan, Armenia and Russia in order to promote the Nagorno Karabakh peace process in Astrakhan. Russian President Dmitry Medvedev initiated the meeting, diplomatic sources in Baku said.
The presidents of three countries will meet in this format for the sixth time, three meetings were held this year – January in Sochi, June in St. Petersburg.
Local analysts believe that a forthcoming tripartite meeting should intensify the peace process that slowed down this year against the previous year. Alongside, experts in Baku consider it natural that Russia assumed again a mediating role, because the country has good relations with Azerbaijan and Armenia. Anyway, Azerbaijan was always sure that Russia as the closest neighbor has more opportunities to influence the Nagorno Karabakh peace process.
The negotiations of the three presidents will be based on the so-called Meindorf Declaration, which they signed in Moscow in November 2008. The declaration outlined the main settlement principles. Russia is not ruled out to urge the parties to the conflict to keep in effect the ceasefire treaty on the confrontation line, as the treaty has been violated often recently.
According to diplomatic sources, during a brief visit to Astrakhan Ilham Aliyev will participate in a ceremony to unveil the monument to his late father – Azerbaijani national leader Geidar Aliyev.
The Azerbaijani president is expected to leave Astrakhan for an official visit to Ukraine.
Medvedev to hold Karabakh talks with Aliyev, Sarksyan
| |
Russian President Dmitry Medvedev will host the presidents of Armenia and Azerbaijan today at a trilateral meeting in the Russian city of Astrakhan for talks focused on the prospects of reaching a settlement on the Nagorno-Karabakh dispute, a territorial dispute between Baku and Yerevan.
According to a statement by Moscow, the trilateral meeting between Medvedev, Armenia’s Serzh Sarksyan and Azerbaijan’s Ilham Aliyev will take place at the initiative of the Russian president. Along with France and the United States, Russia is one of the three co-chairs of the Minsk Group of the Organization for Security and Cooperation in Europe (OSCE), which has striven to resolve the Nagorno-Karabakh conflict for more than 17 years.
In January of this year, Medvedev played host to the two leaders during talks on the Nagorno-Karabakh settlement. The January meeting at the Krasnaya Polyana ski resort near Sochi was the fifth between Sarksyan and Aliyev to be hosted by the Russian leader. After the first one in November 2008, Moscow, Yerevan and Baku signed a joint declaration that reiterated support and approval for the peace efforts conducted as part of the OSCE Minsk Group process and called for abstaining from the use of force in settling the protracted Nagorno-Karabakh process.
Ankara closely follows such tripartite meetings, as any positive sign which may come from the meetings will be welcomed in the Turkish capital, which hopes that concrete progress in the Nagorno-Karabakh dispute between Armenia and Azerbaijan will enable Turkey to pass a so-called threshold in order to move ahead in its ongoing efforts to normalize ties with its estranged neighbor Armenia.
Astrakhan to host tripartite meeting of Presidents
10:30 27/10/2010
Russian city of Astrakhan will host today the tripartite of the Presidents of the Republic of Armenia, Russian Federation and the Republic of Azerbaijan. According to the official message the parties are supposed to continue the negotiations over the peaceful resolution of the Nagorno-Karabakh conflict.
Russian President Dmitry Medvedev, who took the initiative to invite the tripartite meeting, arrived in Astrakhan on Tuesday.
It’s worth reminding that according to a release by the Defense Ministry of the Artsakh Republic (Nagorno Karabakh), Harut Ashot Grigoryan, 20, a temporary military soldier, was killed by Azerbaijani armed forces at 4:45 p.m. on October 26.
Azerbaijani party carried out a diversion act just after the Presidents’ Saint Petersburg meeting on June 18. In the aftermath of the diversion both parties recorded casualties.
|27 October 2010, Wednesday |
Putin might visit Tajikistan
By Stan Rogers
2010-10-26
DUSHANBE – Russian Prime Minister Vladimir Putin should soon come to Tajikistan to discuss Russian-Tajik military-political and economic co-operation, Avesta.tj reported October 26, citing “informed sources.”
Matters for discussion reportedly include a Russian lease on the Ayni airbase and conditions for transferring Tajik-Afghan border posts to Russian border guards as early as the spring of 2011.
The Putin visit, should it occur, would be part of a Shanghai Co-operation Organisation prime ministers’ summit, Avesta.tj reported. The Tajik presidential administration denied knowing anything about a Putin visit.
Polish government approves deal with Russia on increased gas supplies
04:27 27/10/2010
The Polish government has approved an agreement with Russia on the increase of Russian gas supply to Poland, the government's press service said.
"The Cabinet has agreed to sign the document," the press service said in a statement.
"The conclusion of the agreement results from the necessity of providing Poland with additional natural gas supplies and increasing the country's energy security," the statement said.
The deal, under which Russia will increase its gas supplies to Poland via the Yamal-Europe pipeline by 2 billion cubic meters annually, is expected to be signed later this week.
The agreement, reached on October 17 in Moscow, is valid through 2022.
In January, Polish state gas monopoly PGNiG signed a contract with Russian energy giant Gazprom increasing Russian gas supplies to Poland to up to 10.2 billon cubic meters a year.
WARSAW, October 27 (RIA Novosti)
Russian FM in Poland
27.10.2010 09:59
Sergei Lavrov, Russia’s foreign minister, is to meet with his opposite number Radoslaw Sikorski as well as President Bronislaw Komorowski during his two-day visit to Poland.
The visit comes ahead of Russian president Dmitry Medvedev’s official arrival to Poland on 6 December.
The heads of diplomacy are to meet during the sixth convention of the Strategic Committee on Polish-Russian Co-operation, which is attended by both foreign ministers as well as other government ministers from the two countries.
After the convention, Lavrov is expected to meet with President Bronislaw Komorowski to discuss matters regarding Medvedev’s visit to Poland.
Head of the Polish Ministry of Foreign Affairs’ Eastern Department, Jaroslaw Bratkiewicz told Polish Radio that the heads of diplomacy are to tackle three thematic blocs as to Polish-Russian collaboration: economic and energy co-operation, cultural issues and cross-border assistance, especially with regards to the Kaliningrad enclave.
Speaking to Polish Radio on Wednesday morning, Radoslaw Sikorski said that “There is a lot to discuss, especially since [Poland and Russia] are coming out of a bad period in relations.” (jb)
MFA Spokesman Andrei Nesterenko Interview to RIA Novosti regarding Foreign Minister Sergey Lavrov’s Working Visit to the Republic of Poland
1478-26-10-2010
Question: Russian Foreign Minister Sergey Lavrov will pay a working visit to Poland this week. What is the program of the visit?
Answer: On October 28, Russian Foreign Minister Sergey Lavrov will be in Warsaw on a working visit, where he together with his Polish counterpart Radoslaw Sikorski will hold a meeting of the Russian-Polish Cooperation Strategy Committee, chaired by the heads of the foreign affairs agencies of the two countries. Lavrov is also scheduled to meet with President of the Republic of Poland Bronislaw Komorowski.
Question: What can be said about the format of the upcoming event? What issues are on the agenda?
Answer: The current VI meeting of the Strategic Committee (the previous one took place in Moscow in May 2009) will be held in an enlarged format involving representatives of the relevant Russian and Polish agencies, as well as the main focal points for bilateral cooperation mechanisms. The main objective is to conduct a comprehensive analysis of the state of Russian-Polish relations, including existing problematic issues, and to identify measures to further enhance bilateral cooperation.
Along with the topical issues of cooperation in economy, energy and transport an important place in the upcoming debate will be occupied by the issues of strengthening ties in science, culture and tourism and intensifying youth exchanges and contacts between civil societies in Russia and Poland. Considerable attention will also be paid to topics of interregional cooperation. In this regard, representatives of the Kaliningrad Region and St. Petersburg, as well as the Polish regions which maintain the most extensive links with the regions of Russia are invited to the meeting. Panelists will include representatives of the upper chambers of the parliaments of the two countries.
Question: What are the approaches of the Russian side to further development of bilateral cooperation with Poland? How could you describe the current state of Russian-Polish relations in the political, economic and cultural fields?
Answer: In the context of the development of bilateral relations with Poland we believe that it is fundamentally important to consolidate the existing positive trends, to “reset” Russian-Polish cooperation in all fields on the basis of mutual respect and due consideration for the interests of each other, and to continue a frank and engaged dialogue between Moscow and Warsaw. We are focused on a coherent and systematic work to implement the agreements reached during the meetings between the Presidents of Russia and Poland, Dmitry Medvedev and Bronislaw Komorowski, and between the Heads of Government of the two countries, Vladimir Putin and Donald Tusk.
We note with satisfaction that, as a result of the “reset” in the basic mechanisms of bilateral cooperation, they currently operate in a stable mode, and new ones are being created. In particular, last year saw the successful launch of the Forum of Regions, established under the auspices of the upper houses of the parliaments of Russia and Poland.
We are satisfied with the activities of the Intergovernmental Commission on Economic Cooperation (the Russian co-chair is Transport Minister Igor Levitin). During January-August this year, bilateral trade totaled 13.3 billion dollars, which is almost one and a half times the level for the same period in 2009. In spite of this, we believe it is time to put Russian-Polish trade and economic ties on a path of innovative development, including in the context of the Partnership for Modernization initiative in relations between Russia and the European Union and the possibilities of its practical filling with projects in the Russian-Polish format.
A significant role in Russian-Polish cooperation is traditionally played by cultural and humanitarian contacts. We note with satisfaction the steady development of ties in this domain. Conducted on a regular basis, joint cultural events and various festivals invariably have wide public resonance in both countries. We intend to continue to facilitate in every way the intensification of humanitarian exchanges. We support initiatives to expand them through the enlistment of more young people and students of the two countries, including the addition of a youth segment to the Russian-Polish Public Dialogue Forum.
We attach great importance in the dialogue with Warsaw to supporting the development of interregional contacts. With regard to the Kaliningrad Region we aim to ensure the speedy conclusion of a Russian-Polish intergovernmental agreement on local border traffic procedures. In this regard Foreign Ministers Lavrov and Sikorski have come up with a joint initiative to extend the scope of a future agreement to the entire territory of the Kaliningrad Region and the neighboring areas of Poland. We hope that through joint efforts and with the active support of the Interior Ministers of both countries we will be able to solve this problem by adjusting the current European Community regulation that restricts the border area to a 30-km zone. The relevant coordinating work is continuing with the European Commission and the member countries of the European Union.
Question: Will any aspects of international politics be raised during the talks between the Russian and Polish foreign ministers?
Answer: In a separate meeting in Warsaw, Lavrov and Sikorski will continue to exchange views on the nodal aspects of the international agenda, including in the context of the upcoming Russia-NATO, OSCE, and Russia-EU summits in the next few weeks, as well as the Polish presidency of the European Union in 2011, on the questions of strengthening global stability and promoting the initiative of the President of Russia for concluding a European Security Treaty.
Question: How are historical issues in relations between the two countries being considered at this stage?
Answer: The Russian side has invariably held that the ambiguous pages of the joint historical past should not be negatively projected onto the present and the future of our relations, much less burden them. In this context, such a mechanism of bilateral cooperation as the Group for Difficult Issues arising from the history of Russian-Polish relations (co-chaired by Rector of MGIMO University Academician Anatoly Torkunov and former Polish foreign minister Adam Rotfeld) has proved its effectiveness. We are focused on constructive cooperation with the Polish partners to implement the agreement between Putin and Tusk on the establishment of parallel memorial centers in Russia and Poland under the aegis of the Ministries of Culture of the two countries. We hope that by joint efforts we will be able to transfer historical problems onto a purely scientific, moral and ethical plane.
October 26, 2010
Poland acquires five more Mi-17 helicopters
2010-10-27
Polish Ministry of Defence has purchased five Mi-17 helicopters, Russian Rosoboroneksport, state enterprise acting as the sole Russian state intermediary agency for export and import of military and dual-purpose products announced yesterday in Paris.
The value of the transaction has not been revealed.
Russia is said to positively evaluate this purchase, as so far Polish Ministry of Defence has acquired Russian military helicopters on the secondary market, reports.
October 27, 2010 14:50 PM
Russian Foreign Minister To Attend 5th East Asia Summit In Hanoi
MOSCOW, Oct 27 (Bernama) -- Russian Foreign Minister Sergei Lavrov will attend the fifth East Asia Summit (EAS) in Hanoi on October 30 as a special guest, Russian news agency, Itar-Tass, quoted the Russian Foreign Ministry as saying on Tuesday.
This year, the East Asia Summit in Hanoi is expected to take on added importance with the inclusion of Russia and the United States as members of the East Asia summit dialogue process.
"Joining the EAS forum, Russia is committed to promote peace, stability and economic cooperation in the Asia Pacific region, to help shape a better security and cooperation architecture here," the ministry said.
The East Asia Summit (EAS) is a forum held annually by leader of 16 countries in the East Asian region, including Asean countries and Australia, India, China, New Zealand, South Korea, and Japan. EAS meetings are held after annual ASEAN leaders' summits. The first East Asia Summit was held in Kuala Lumpur on December 14, 2005.
Regional organizations boost UN effectiveness – Lavrov
Oct 27, 2010 11:50 Moscow Time
Russian Foreign Minister Sergei Lavrov feels that the effectiveness of the UN largely depends on boosting cooperation with regional organizations, such as the Collective Security Treaty Organization and/or the Shanghai Cooperation Organization.
These contribute in real terms to fighting terrorism, drug trafficking and organized crime, Russia’s topmost diplomat points out in an interview with the Rossiyskaya Gazeta daily.
He said that the two organizations signed a declaration on cooperation earlier this year.
Lavrov also pointed out that the United Nations, just as any international institution, is in need of continuous reforming to consolidate its unity.
On prospects for extending the Security Council, the Foreign Minister said that Russia was prepared to support a decision to that end that would gain sweeping support of UN member-states.
War games in full swing in Chelyabinsk
|Oct 27, 2010 10:41 Moscow Time |
Military exercises of the Collective Security Treaty Organization are in full swing in the Chelyabinsk Region to the east of the Ural mountains.
Military contingents of the joint rapid reaction force are neutralizing “insurgents” as part of a joint drill known as “Cooperation-2010”.
The war games have been going on since October 25th with the participation of more than 1700 servicemen and about 270 military vehicles from Russia, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan and Belarus.
Russian General Staff chief to attend EU Military Committee meeting
06:30 27/10/2010
The chief of the Russian General Staff, Army Gen. Nikolai Makarov, will take part in a meeting of the European Union Military Committee at Chiefs of Defense level in Brussels on Wednesday, the Russian Defense Ministry said.
"During the meeting, the chief of the Russian General Staff will deliver a speech on reforming the Russian Armed Forces and an opportunity to expand cooperation with EU member countries on maintaining peace and providing security on the European continent," the ministry's press service said.
After the meeting, Makarov is expected to return to Moscow, the statement said.
MOSCOW, October 27 (RIA Novosti)
Russia wants troop limit in new NATO states: report
Wed Oct 27, 2010 3:41am EDT
MOSCOW (Reuters) - Russia is demanding that any new cooperation deal with NATO include limits on the number of troops posted in the alliance's new member states in central Europe, a leading Russian daily reported on Wednesday.
Russian President Dmitry Medvedev is to attend NATO's annual summit next month in a bid to revive ties. Russia has said it wants assurances about a proposed U.S. missile shield in Europe, while NATO says it wants more cooperation on Afghanistan.
But Moscow also has demanded a ban on the deployment of "significant military forces" in the states that joined NATO since the end of the Cold War, the Kommersant daily reported, citing Deputy Foreign Minister Sergei Ryabkov.
The demand was contained in a draft Russia-NATO cooperation agreement that Russian Foreign Minister Sergei Lavrov handed to NATO Secretary-General Anders Fogh Rasmussen in December, the report said.
"We want to secure a situation in which the level of predictability of military activities in countries that recently joined NATO be higher than it is now," Ryabkov was quoted as saying.
The proposal would likely spark opposition in former Eastern Bloc countries in central Europe, including Poland and the Czech Republic, which joined NATO in part as a guarantee against Russian domination.
Russia's envoy to NATO Dmitry Rogozin told the newspaper that Moscow wanted the troop limits as a way to make non-aggression agreements already secured on a political level legally binding.
But NATO has been cool on the proposition, in part because of the vagueness of the term "significant forces," the report said.
"Lavrov proposed we sign the legally binding agreement you are referring to. But it is difficult right now to say what will become of it," Kommersant quoted an unnamed NATO official as saying. "Countries must have the right to self defense."
NATO head Rasmussen is expected to visit Moscow before the NATO summit on November 19-20 in Lisbon, which Medvedev will attend, the report said.
(Writing by Conor Humphries; Editing by Michael Roddy)
Russia seeks restrictions on NATO military contingents - paper
11:38 27/10/2010
Russia wants NATO to impose a ban on the deployment of "substantive combatant forces" on the territories of the alliance's new member states, a Russian business daily said on Wednesday.
Kommersant said that the request was laid out in a draft cooperation deal that Russian Foreign Ministry Sergei Lavrov handed over to NATO Secretary General Anders Fogh Rasmussen in December 2009. The deal, which is still under discussion, was not made public, under a mutual agreement.
"We want the level of predictability in military activity on the territories of the countries recently admitted to NATO to be higher than it is now," Deputy Foreign Minister Sergei Ryabkov told the paper.
The new member states in question are the eight former Warsaw Pact countries that were admitted to NATO in 1999 and 2004.
"After the fall of the Soviet Union and the disestablishment of the Warsaw Pact, they [the new members of the alliance] joined the military bloc, which retained all the functions it had when the Soviet Union still existed," Ryabkov said.
"Moreover, NATO armed forces are being upgraded, which means that the situation to the west of us has changed. If there is no military threat, let us create specific military guarantees," Ryabkov said.
Russia has retained staunch opposition to NATO plans to deploy anti-missile defense systems in the territories of a number of the new member states, claiming that their positioning close to Russia's borders would be a security threat.
A source from NATO headquarters, who confirmed the existence of the treaty, said the main obstacle to its conclusion was that the term "substantive combat forces" has never been clearly defined.
While Russia considers the NATO forces deployed on a rotational base in Bulgaria and Romania substantial, for example, Washington does not.
Moscow's proposed agreement seeks to create a legal definition of the term.
The treaty will be discussed during Rasmussen's planned visit to Russia on November 5 after the NATO summit in Lisbon, the paper said.
MOSCOW, October 27 (RIA Novosti)
Russia to ask NATO impose ban on substantial military units placement in newly accessed member states
27 October 2010 | 09:50 | FOCUS News Agency
Home / World
Moscow. Russia will ask NATO impose a ban on the placement of military units on the territory of newly accessed countries, Russian Kommersant writes. Using the term substantial military units Russia envisages military units that may be used for offensive military actions.
According to Kommersant the draft agreement has been already filed in Brussels.
The newspaper quotes Russian Deputy Foreign Minister Sergey Ryabkov, who said that Russia’s proposal envisages restrictions on the temporary placement of substantial military units on the territory of countries that joined NATO during the last enlargement of the Alliance.
Russia's Ambassador to NATO Dmitry Rogozin explained the term ‘substantial military units’ as such consisting of more than 41 tanks, 188 armored machines, 90 ordnances of 100mm caliber, and more than 24 military aircrafts or 24 military helicopters.
According to Russia the measure will secure maximum trust between NATO and Russia.
NATO Chief Sees 'New Start' With Russia
October 27, 2010
Secretary-General Anders Fogh Rasmussen says he's hopeful that NATO is moving close to what he calls a "new start" in relations with Russia -- including cooperation in connection with the Afghan conflict and possibly missile defense.
In an interview with the British-based "Financial Times" newspaper, Rasmussen says he believes Russian President Dmitry Medvedev's expected attendance at the defense alliance's annual summit next month in Lisbon will improve NATO's relations with Moscow that were strained over Russia's 2008 war with Georgia.
Rasmussen said the Lisbon summit could be the most important for cooperation with Russia since the 2002 Rome summit, when the NATO-Russia Council was established.
Rasmussen said one of the central issues at the summit would be whether NATO and Russia could begin cooperating on the creation of a missile-defense shield to protect against potential threats from a nation like Iran.
He also said the Lisbon summit could lead to Russia increasing its cooperation with NATO-led forces who are fighting Taliban and Al-Qaeda militants in Afghanistan.
compiled from Reuters and RFE/RL reports
Nato hopes to rebuild ties with Moscow
By James Blitz in Brussels and Daniel Dombey in Washington
Published: October 26 2010 18:32 | Last updated: October 26 2010 18:32
Nato believes it is on the verge of a “reset” in its often fraught relationship with Russia, and is taking steps towards collaboration on a missile defence system while boosting co-operation over the war in Afghanistan, the alliance’s top diplomat has told the Financial Times.
As Nato prepares for its annual summit in Lisbon next month, Anders Fogh Rasmussen, the alliance’s secretary-general, said a decision by Dmitry Medvedev, president, to attend the meeting would boost the Nato-Russia relationship, which was severely damaged by Moscow’s 2008 invasion of Georgia.
“The summit will represent a new start in the relationship between Nato and Russia,” said Mr Fogh Rasmussen. “It will be a very substantive Nato-Russia summit and definitely the most important event for [bilateral] co-operation since the Rome summit of 2002, when we established the Nato-Russia council.”
Mr Fogh Rasmussen said one of the central issues at the summit would be whether Nato and Russia could begin co-operating on the creation of a missile defence shield, which has long been championed by the US. While such a shield in Europe is being built and financed by the US, Washington hopes its allies will support the creation of a Nato-wide command and control system that would improve its coverage and capability.
Moscow has said in the past that it regards Bush-era plans for such a shield – which would be aimed at defending Nato countries against an Iranian attack – as a threat to its own security. But Mr Rasmussen believes Moscow’s objections have softened and that the Nato-wide missile defence system could one day link up to Russian radars to give all participating countries better protection.
“I would expect a decision on missile co-operation to be one of the most important outcomes of the Nato-Russia summit,” he said.
“Co-operation between Russia and Nato on missile defence will provide us with a very strong framework to develop a true Euro-Atlantic security architecture with one security roof. Militarily, it makes sense because co-operation between Nato and Russia will make the whole system more effective and give more coverage.”
Mr Rasmussen said the summit could see Nato and Russia deepening co-operation on Afghanistan. Nato officials say the US and Russia are working on a package that could see Moscow providing more than 20 helicopters to Afghan security forces. Nato is also exploring whether Russia will allow the alliance to ship more goods – including weapons – across its own territory to Nato forces in Afghanistan.
For the US, closer ties between Nato and Russia would be a significant step.
Barack Obama, US president, has cultivated a relationship with Mr Medvedev, with whom he negotiated personally on the Start nuclear arms control treaty. But the fate of the treaty is uncertain.
Although it has passed the committee stage in the US Senate, it has yet to be ratified by the full body – and Russia has made clear it will not ratify the treaty unless the US does so.
Exclusive: Afghanistan: Russia steps in to help Nato
By Kim Sengupta in Brussels
Wednesday, 27 October 2010
Russia has agreed to return to the war in Afghanistan at the request of the Western states which helped the mujahedin to drive its forces out of the country 21 years ago.
The Independent has learnt that Moscow is engaged in training the Afghan army and counter-narcotics troops and has agreed in principle to supply Nato with helicopters for use in Afghanistan.
A number of aircraft have already been sold to Poland, a member of the US-led coalition, for use in the conflict. Now Nato is in talks with the Russians over direct supplies of more helicopters, training the pilots, and allowing arms and ammunition to be transported through Russian territory as an alternative to a Pakistani route which has come under repeated Taliban attack.
A groundbreaking agreement with Russia on the issue is likely to be announced at the Nato summit next month in Lisbon, which is due to be attended by President Dmitry Medvedev.
In return for help in Afghanistan Moscow is seeking what it terms as more co-operation from Nato. President Barack Obama has already scrapped missile-defence shields in Poland and the Czech Republic, proposals for which had led to prolonged protests from Moscow, and Nato has agreed that Russia will be consulted on the replacement system.
Moscow would also like Nato to accept a fait accompli over Georgia, where Russian troops remain in South Ossetia and Abkhazia after the war of two years ago. American and European officials maintain that the occupation of a member state's sovereign territory is not a matter for compromise.
The helicopters are needed for the use of Afghan forces which Isaf (International Security and Assistance Force) is training to take over security as part of the West's exit strategy from the war.
It was the supply of American Stinger missiles by US and British intelligence to Afghan rebels, enabling them to shoot down Russian helicopters, which changed the course of the Soviet war in Afghanistan and helped to hasten the collapse of the Communist government in Moscow.
That war, with its acts of brutality committed by both sides, has left bitter memories among many in the country, and the news that the Russian military is playing a part in the war is likely to be exploited by the Taliban.
The former Cold War enemies have been drawn together by the common threat of Islamist terrorism, some of it directly spawned from Western aid to jihadists in the 1980s.
Moscow is also concerned about a flow of heroin through central Asia to its cities from Afghanistan. And it urgently wishes to reassert its influence in the region.
The Nato secretary-general, Anders Fogh Rasmussen, asked for helicopters during a visit to Moscow last year. "Russia has reflected on that and there are now bilateral talks between Russia and the United States on such helicopters," Mr Rasmussen said on Monday in Brussels. He added that he "would not exclude that we could facilitate that process within the Nato-Russia Council", a body which acts as a discussion forum with Moscow.
Russian and Western defence sources told The Independent that Moscow has provided five Mi-17 military helicopters to Poland for Afghanistan, with the first two to be delivered by the end of the year.
Afghan military officers are already being trained in a number of Russian defence institutes, according to the Russian deputy foreign minister Aleksander Grushko. Mr Grushko underlined that Moscow wanted a binding mutual restraint agreement with Nato and an agreement to delink the Georgia crisis from an arms treaty. He added: "We are ready to co-operate with Nato, because we think we are doing a common job."
Anatoly Serdyukov, who became the first Russian defence minister to visit the Pentagon where he met the US Defence Secretary, Robert Gates, last month, said that Russia was willing to sell or lease Mi-17s for use by Afghan forces, and will countenance similar deals with Nato member countries.
"It is a matter of several dozen Mi-17s that Nato will purchase from us," Mr Serdyukov said.
"I hope that Western peacemaking troops will not withdraw before they have fulfilled their mission. We are watching things in Afghanistan very closely and we are exchanging our experience with the Americans. Russia is ready to pass on to America the experience gained by our veterans of the war in Afghanistan.
"Withdrawal of the [Western] troops would naturally affect the situation in central Asia, we currently cannot even imagine how. For this reason we want to help the West, among other things with helicopters, whose delivery we are now discussing."
Securing new supply routes for Nato forces in Afghanistan – which now number more than Russian troops during their war – has become urgent for the West with attacks on convoys in Pakistan by insurgents, some of which, claim Western officials, are instigated by members of the Pakistani military and intelligence service.
Russia allows some movements of supplies along its territory, but restricts the types of weaponry being moved. Nato would like this removed. According to defence sources, Moscow has indicated that it may agree to this after carrying out security checks along the route, which starts at the all-weather Latvian port of Riga and arrives in Afghanistan through Russia, and the former Soviet territories of Kazakhstan and Uzbekistan.
Russia's changing role
July 1979 Operation Cyclone launched by the CIA, using US and Saudi money and help of the Pakistani military regime to start arming the mujaheddin.
December 1979 Soviet intervention at request of Afghan government. Moscow falls out with President Hafizullah Amin, his palace in Kabul is attacked and he is killed.
March 1980 to April 1985 Soviet forces begin offensives, especially near the Pakistani and Iranian borders. US and British supply Stinger missiles enabling mujaheddin to shoot down Russian helicopters. New Soviet General Secretary Mikhail Gorbachev increases troop levels to 110,000.
April 1985 to January 1987 Russian exit strategy based on training up Afghan security forces to take on insurgency. Rebels are still aided by the West.
January 1987 to February 1989 Soviet forces withdraw from Afghanistan with loss of 14,427.
Russia and Nato plan joint initiative in Afghanistan
Russian forces could return to Afghanistan for the first time since they were forced out by mujahideen fighters in 1989, under a joint initiative with Nato.
By Damien McElroy in Brussels
Published: 12:25AM BST 27 Oct 2010
A Nato summit next month will be attended by Russia's president, Dmitry Medvedev, to discuss the plans. Nato officials said Russia had agreed to sell helicopters to Afghanistan and provide training.
Moscow will allow Nato forces to withdraw equipment from Afghanistan overland for the first time, in proposals expected to be agreed in Lisbon.
"The summit can mark a new start in the relationship between Nato and Russia," said Anders Fogh Rasmussen, the Nato secretary-general.
"We will hopefully agree on a broad range of areas in which we can develop practical co-operation on Afghanistan, counter-terrorism, counter-narcotics."
He also said that British and US troops would remain on Afghanistan's front lines for years under an open-ended agreement to be signed at the summit. Hamid Karzai, the Afghan president, has demanded that his forces take over the fight against the Taliban by 2014.
While his call has been embraced by Western leaders, including Prime Minister David Cameron who set a five-year deadline on the Army's combat role, Mr Rasmussen said troops would not be withdrawn immediately.
Under a blueprint drawn up by Gen David Petraeus, Nato commander in Afghanistan, foreign troops would "thin out" but not leave disputed territory.
Russia against politicizing nuclear energy use for peaceful purposes
Oct 27, 2010 10:18 Moscow Time
Russia is opposed to politicizing the right to the use of nuclear energy for peaceful purposes.
This kind of stand on the issue whips up tension in international relations, says Deputy Russian Foreign Minister Sergei Ryabkov in an interview with the VIP-Premier magazine.
He pointed out that a number of Non-Aligned Movement member-states are concerned about the double standards in the area.
This is the reason why some Latin American nations support Iran’s position on the nuclear problem, Ryabkov said.
IAEA head hails Russia's efforts in nuclear medicine
00:48 27/10/2010
The head of the International Atomic Energy Agency praised on Tuesday Russia's achievements in fighting cancer using nuclear technology and said the IAEA will continue cooperating with Russian experts in the sphere.
In an interview with Russia 24 TV channel, Yukiya Amano, who visited the Russian Federal Medical-Biological Agency earlier in the day, said Russian authorities paid much attention to the development of advanced nuclear technologies used in the medical sphere.
Russia also takes a great interest in cooperation with the IAEA on the issue, he said, adding that this cooperation would continue.
More that 60 countries have been seeking to develop atomic energy, and 30 countries who already have nuclear technology would like to extend its use, Amano said.
The IAEA can help those countries in creating a reliable nuclear infrastructure, and Russia, which has a "systematic" approach to nuclear technology, may play a "very important role" in this process, he added.
Earlier this week, Amano, who is paying his first visit to Russia, met with the head of Russian state-run nuclear corporation Rosatom and a number of Russian top officials, including Prime Minister Vladimir Putin.
MOSCOW, October 27 (RIA Novosti)
Russia ready for row as Stockholm seizes trade mission
by Evgeniya Chaykovskaya at 27/10/2010 11:00
Russia and Sweden are heading for a diplomatic row over the seizure of a trade mission near Stockholm.
A Swedish court has ordered the six-storey building in Lidingo to be handed to the bailiffs in a bid to settle a claim from a German businessman who claims he was ripped off in Russia’s wild rush to capitalism.
Franz Sedelmeier claims he was swindled of about 5 million Euros during his efforts to establish a joint-venture in 1990s St. Petersburg.
But Russia is pleading diplomatic immunity and arguing that the Sedelmeier’s case has yet to be properly resolved by a court.
Protecting their assets
Stockholm also stands accused of pulling a clandestine stunt to keep track of the German’s activities in Sweden, RIA Novosti reported.
Viktor Khrekov, press spokesman for the presidential property management team, said the decision had been issued under a special decree “used in Sweden for individuals that the state is afraid may hide and withdraw their funds abroad”.
“This state building has a diplomatic immunity according to international norms,” Khrekov added. “Moreover, it cannot be seized also because the legal procedures are ongoing.
“The battle goes on in the legal field, and the president’s property management administration will use every opportunity to protect the interests of Russian Federation,” Khrekov said, adding that Sedelmeier’s claims were “illegitimate”.
Normally trade missions are seen as part of the country’s diplomatic corpus and have diplomatic immunity. Sedelmeier, however, claims that the building in Stockholm is used as commercial property and that office space there is available for rent.
Sedelmeier’s claim
Like many investors who braved the Wild East of 1990s Russian commerce, Sedelmeier got his fingers burned.
He invested in a joint venture with Russian police in 1991 in St. Petersburg, but the building provided to the stock capital by the police was then passed to the government, and Sedelmeier demanded building renovation expenses were refunded.
A Stockholm court ruled on the seizure of Russian property in Sweden worth “about $4,730,608, including expenses and interest that might be covered after seizing the property.”
Russia appealed this decision, but on Oct. 22 Stockholm court ruled that the decision for Sedelmeier is valid and must be executed. Krekov is sure that this decision was based on a 1998 International arbitration court decision
The court in Stockholm ruled that Russia owed the businessman $2.35 million in 1998. Russia did not comply with the decision, and Sedelmeier started looking for Russian property to use as payment.
At the same time Russia has more than five counter-lawsuits against Sedelmeier pending in several German courts “regarding compensation for damage, inflicted by Sedelmeier during his so-called “investment activity” in Russia,” Khrekov told Kommersant, adding that there are justified claims for nearly 70 million euros.
The Russian trade mission and Russian embassy in Sweden are not commenting on the issue.
German businessman hurts Russia's reputation in the West
27.10.2010
Scandalous Sedelmayer case took a very unfavorable turn for Russia. Russia was unable to appeal the seizure of the government property imposed on October 11 by Swedish judicial authorities. We are talking about the building of the Russian trade mission in the town of Lidingö near the Swedish capital.
According to the plaintiff, in 1991 he founded the business in St. Petersburg. The company of Franz Sedelmayer, SGC International, and St. Petersburg police department established a JV (joint venture). This is not surprising: government agencies were allowed to do business then. Moreover, the police offered a mansion on Kamenny Island, the residence of its department, as capital stock for the deal.
Sedelmayer had rented the building for 25 years, had invested 2.35 million Euros in its repair, turning the once dilapidated mansion into a modern conference center, as well as a place to train security forces.
According to German media, in 1994, the activities of his company were declared illegal, and along with the company Sedelmayer was dispossessed of the mansion - his new owner was the "Russian president's administration." Later it was turned into a federal residence under the name "K-4."
The Russian authorities explained the reason why he was not compensated for the costs by the fact that the Kamenny Island did not provide supporting documents, and allegedly renounced the estate. The security service of Sedelmayer withstood a three-month siege of the police before the mansion "surrendered." Sedelmayer was denied entry into Russia.
According to the newspaper Sueddeutsche Zeitutg, Sedelmayer was told that the mansion was expropriated and will be used as a government residence on the phone by Vladimir Putin (he was then in charge of the St. Petersburg mayor's office for contacts with foreign businessmen), who allegedly advised him to go to court.
According to Sedelmayer, "Mr. Putin visited me on the Kamenny Island. Together we have organized special unit "Grad," designed to provide security at Goodwill Games. He helped us, helped with the legal registration of our complaints.
After the Swiss company Noga, Sedelmayer tried to seek compensation through the sale of Russian property abroad. It was no accident that the titles of several publications, writing about this shameful fact were of this nature: "Russia has grown the second leg" and "Russia has lost legacy of KGB."
According to Sedelmayer, his wife was phoned by some officials in Moscow, warning her of "dire consequences" if her husband does not abandon the claim. However, the threats have not worked, and in 1998 Stockholm arbitration court ruled that the German businessman Franz Sedelmayer has won the right to compensation of 2.35 million Euros. Russia has not paid it on the grounds that the property transferred to Sedelmayer was not the city but federal property. Now, taking into account the interest, the required amount has grown to five million Euros. In addition, as written by German newspaper, the businessman expects to collect from Russia tens of millions of Euros "for the missed opportunities and benefits," as his invested funds were not working for him, and he spent considerable time in courts.
In an interview with German media Sedelmayer stated that he chose to do this because he had no other choice. All he expects from Russia is payment of the debts. "If Vladimir Putin, my old friend from St. Petersburg, had settled the case through the repayment of debts, then all these troubles could have be avoided," he said.
In 2001 the Berlin Court of Appeal decided that Sedelmayer may recover any property on the territory of the Russian Federal Republic. Sedelmayer tried by the court to arrest the Russian property in Germany, including models of satellites Space Agency during the international aerospace show, exhibits of the Russian pavilion at the Hannover International Exhibition and the Russian TU-204-300 on the International Space Exhibition ILA in 2006 in Berlin. However, the police officers who came to reattach this property were simply not let in by the security.
In March of 2008, German court ruled that Sedelmayer had the right to receive compensation from the sale by auction of Russian state property located in Cologne.
The Wall Street Journal quotes Sedelmayer:"For the first time in modern history, Russia has paid compensation awarded to a private lender."
In an interview with Deutsche Welle, Franz Sedelmayer stated that the building (which costs up to $40 million) was confiscated and is under the control of a temporary administrator appointed by the court. The administrator made sure that the building is used by its current tenants, and rental income (29 thousand dollars per month) is received by the German businessman. However, German media wrote that after this Court issued another decision, not allowing him to receive such income. The German businessman rejoiced too early. According to the German edition of Deutsche Welle, a complex of buildings in Cologne was "burdened"- leased out for 25 years to the Russian Federal State Unitary Enterprise "Goszagransobstvennost" subordinated to the Russian President Administration. In other words, it was possible to buy the complex, but not use it until the lease expires.
Nevertheless, some media, in particular, The Wall Street Journal, wrote that a compromise solution has been found. Allegedly, the Russian side expressed its willingness to voluntarily pay Franz Sedelmayer a part of the amount. In reality, the victim businessman received only one million dollars.
In September of 2009 Sedelmayer was trying to sell the building of the Russian Center for Science and Culture (Russian House) in Berlin that he fought for over three years. But the German courts have decided that it was protected by the state immunity as it was used by Russia for the government activity.
After the failure with the Russian real estate in Germany, Sedelmayer tried to get in through court in Sweden. But the battle is not over yet. Russian President Administration intends to file another appeal against the decision to arrest the property in the Swedish Supreme Court. Russia's ambassador to Sweden Igor Neverov expressed hope that the court will "objectively approach the issue in full conformity with the international law."
In addition, the Russian side intends to go into a counterattack. According to the spokesperson of the Office of Presidential Affairs Victor Hrekov, "Currently, counter claims have been filed in various courts regarding the questionable investment of Sedelmayer in Russia, the total value of claims exceeds 70 million Euros".
As of now, the prospects of winning this case by Russia are very vague. Nobody disputes the fact that the judicial power in the West, including Germany and Sweden, has no dominance over the executive branch. However, the Swedish situation is quite different than the German. It has to do not only with the fact that the decision to recover compensation for the benefit of Sedelmayer was made by international commercial arbitration based in Stockholm. We should not forget that unlike Germany, dependent on Russian gas, Sweden practically does not depend on raw material supplies from Russia.
According to Sedelmayer, Russia is unlikely to make a positive decision on the grounds, as in Cologne case, that the building has diplomatic immunity. Such a position is not without logic, since the trade mission is usually equated with an Embassy in its status, and its leaders are equal to the diplomatic corps. However, Sedelmayer has a different opinion, as the building is, in his words, "used for commercial purposes".
In this regard, the businessman does not rule out that in order to receive compensation another property of Russia may be arrested. Earlier, Swedish media reported that restaurants and catering facilities are located at the specified address.
Sedelmayer himself expressed the hope that this story will help to change minds of many of those who believe Russia's leaders talking about the fight against corruption, who would invest in Russia, or have any business transactions with it. He expects that the decision in his case can be helped with the fact that the international court in The Hague recently recognized the possibility of the trial of the Yukos case, ruling that Russia had violated the Energy Charter. According to Sedelmayer, Russia in both cases tried to pretend that its international treaties do not exist.
Well-known German political scientist Alexander Rahr spoke about the impact of this case in an interview to Pravda.ru: "This case is very damaging to the image of Russia, which, in fact, has let the beginning of this case get out of control. Look at the fact alone that German court issued a positive verdict for Sedelmayer-owned Russian building in Cologne. In Germany this case is much discussed and it proves once again that Russia still has a very high level of corruption. And I do not understand why Moscow could not settle with this man who suffered such a huge loss in Russia."
And really, would it be easier for Russia to settle the case without publicity? German media wrote that a detective novel could be written on the case, and that the most important thing in this story is not money, but "proof that no Sedelmayer could do anything without Russia's consent".
The amount originally requested by Sedelmayer does not mean anything for a rich country like Russia. Good reputation is much more appreciated in the West, and Russia has now clearly marred it. There is no reason to be surprised that foreign business after all this will look at profitable projects in Russia with caution.
SergeiBalmasov
Pravda.Ru
Chechen leader Kadyrov to deliver speech in Russian parliament
05:21 27/10/2010
Chechen leader Ramzan Kadyrov will address the Russian parliament's upper house on Wednesday, the Federation Council's spokesman said.
Kadyrov will deliver his speech in the parliament as part of Days of the Chechen Republic in the upper house.
The Chechen parliament spokesman, Dukuvakha Abdurakhmanov, will also address Russian parliamentarians.
The Kremlin has claimed to have brought stability to Chechnya, which saw two brutal separatist wars in the 1990s and early 2000s, but an audacious militant attack on the Chechen parliament in Grozny earlier this month prompted fears that the Islamist underground had been rejuvenated.
The once war-torn republic has seen relative calm in recent years under Kadyrov, a former militant turned Kremlin ally whom critics have accused of cultivating a personality cult and involvement in human rights abuses.
MOSCOW, October 27 (RIA Novosti)
Polish appeals court drops case of Chechen separatist activist
The Associated Press
Oct 26, 2010 13:31:45 PM
WARSAW, Poland - A Polish appeals court has closed its case on a Chechen separatist leader wanted in Russia.
Akhmed Zakayev was detained in Poland last month on a Russian warrant but then released the same day after a Warsaw court rejected the Russian-issued warrant. The 51-year-old returned to Britain, where he is living in exile.
Prosecutors, however, appealed the decision to free Zakayev.
The Appeals Court in Warsaw dismissed the appeal on Tuesday and said it closed the case altogether.
Russia wants the 51-year-old Zakayev on terrorism, murder and kidnapping charges related to Chechnya's separatist wars of the 1990s. Moscow has so far been unsuccessful in getting any country to extradite him. Britain and Denmark have also rejected extradition requests.
Russia's Deputy Prosecutor Calls For Vetting All North Caucasus Police
On October 25, Russia's Deputy Prosecutor Ivan Sydoruk lambasted law enforcement, military, and security personnel in the North Caucasus, affirming that unprofessionalism, inefficiency, and corruption within their ranks is playing into the hands of the Islamic insurgency.
Tuesday, October 26, 2010
By RFE/RL
Addressing a Federation Council committee on October 25, Russia's Deputy Prosecutor General Ivan Sydoruk lambasted law enforcement, military, and security personnel in the North Caucasus, affirming that unprofessionalism, inefficiency, and corruption within their ranks is playing into the hands of the Islamic insurgency.
Sydoruk claimed that the lion's share of the weaponry currently in the hands of the Islamic militants came from Russian military bases in the region. He said the sniper's rifle used in the June 2008 assassination of Daghestan's Interior Minister Lieutenant General Adilgirey Magomedtagirov was taken from a weapons store at a Russian military base and returned after the killing.
Sydoruk recalled that the sabotage attack in July on the Baksan hydro-electric power station in Kabardino-Balkaria succeeded primarily because the police guards at the facility were asleep. Additionally, Sydoruk said that police in North Ossetia failed to search the bomb-laden car that exploded on September 9 in Vladikavkaz, killing 19 people. (Two men have been arrested and admitted to their role in the Baksan raid, Regnum news reported on October 26).
Sydoruk further advocated sacking all North Caucasus police personnel within the framework of the ongoing reorganization of the federal police force. Officers would then be individually vetted and a decision taken whether to offer them a new contract. This, Sydurok argued, is the only way to rid the police of "cowards and traitors." Such a proposal is likely to elicit howls of protest and outrage from Chechen Republic head Ramzan Kadyrov. Earlier this year, Kadyrov was angered by a proposal to reduce the Chechen police force -- which currently numbers around 17,000 -- by 20 percent.
Sydoruk identified several additional factors conducive to the spread of "extremism" in the North Caucasus, namely, unemployment (currently at 51 percent in Ingushetia and 41 percent in Chechnya) and the "ideological vacuum" created by the official Muslim clergy's inability to offer an attractive alternative to the Salafi ideology professed by the insurgency.
Copyright (c) RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
European Reports Paint Grim Picture of Kadyrov’s Chechnya
October 27, 2010
Valery Dzutsev
On October 19, the European Parliament began to discuss a joint motion for a resolution on the situation in the North Caucasus. The deputies expressed their concern about the unabated violence and human rights abuses by government forces in the region.
The Europeans stressed the absence of rule of law and security in the region –noting among other things, for instance, that there are a growing number of vanished residents of the North Caucasus republics who have apparently been abducted in other Russian regions. The European Parliament was also struck by the continuation of violent attacks in Chechnya, such as the recent attack on the Chechen parliament building in Grozny on October 19 (europarl.europa.eu, October 19). The parliament was brazenly attacked by four insurgents and three people, including two policemen, died in the attack while 17 others were injured. It took Chechen government forces more than an hour to suppress the intruders, two of whom were deemed to be suicide bombers (RIA Novosti, October 21).
Ramzan Kadyrov’s autocratic rule in Chechnya was until recently seen by the Kremlin –and, to some extent, even by many independent observers– as “the lesser of evils.” Bearing in mind the two devastating wars and massive breaches of human rights this republic experienced, the Kremlin’s bet on Kadyrov seems to have paid off. However, the latest attacks –on the Chechen parliament and a raid by insurgents in late August on Kadyrov’s home village of Tsentoroi (aka Khosi-Yurt) –exposed Kadyrov’s vulnerability and deceptiveness of the quietude in Chechnya.
In June 2010, Britain’s All-Party Parliamentary Human Rights Group led by the well-known expert on Chechnya, Lord Frank Judd, and the MP, Jo Swinson, published a harsh assessment of Kadyrov’s Chechnya based on their fact-finding mission to the republic in February 2010 (). For the first time in many years, they warned that the poor security situation in Chechnya was not simply an internal Russian affair, but something that should concern the international community. In particular, the reputable delegation reached an important and far-reaching conclusion, stating: “The international community’s reluctance to get involved already explains, at least in part, why a secular separatist conflict has mutated into a pan-regional radical Islamic struggle. With no one else willing to talk to Chechens, let alone stand up for them, it is not surprising that many of them are tempted by virtually the only alternative on offer, religious fanatics” ().
The Lord Judd/MP Swinson report highlighted the profound climate of impunity in the North Caucasus. The delegates’ conclusion was that the ordinary Chechen had no recourse to any mechanism, whether political or judicial, to hold President Kadyrov’s administration to account. “The result of the current judicial system was that there appeared to be virtually blanket impunity for Federal and Chechen security officials,” the report stated, adding “And even though victims and their families were able to take their cases to the European Court of Human Rights, ECHR judgments had so far not resulted in a single prosecution of an individual for serious human rights violations within Chechnya or Russia.”
According to the mission’s assessment, there was a certain window of opportunity for the international community to convince the Russian government to rein in Kadyrov, as there was growing concern even among officials in Moscow about the enforced Islamization and covert separatist trends that Kadyrov’s regime displayed. Even more importantly, Moscow realized it was dependent on Kadyrov’s behavior and was ready to take steps to amend this situation. The report argued that the unresolved conflict in Chechnya had spread across the North Caucasus –initially to Ingushetia and Dagestan, but now also to Kabardino-Balkaria.
Even the most successful part of Ramzan Kadyrov’s rule in Chechnya –the rapid reconstruction of the ravaged republic– may have a darker side. The British parliamentary delegation referred to some of its interlocutors as saying that too much of the reconstruction funds were spent on the elite in Chechnya, while unemployment was rampant and ordinary people had few opportunities. As an example of such contrasts, the delegates visited the big apartment complex being built near the “Heart of Chechnya” Mosque that included a helipad on the top of one of the towers. Besides, state officials allegedly were in the habit of expropriating lucrative pieces of land from ordinary people.
The members of the delegation heard allegations that “during counter-terrorism operations, relatives of suspected rebels were often detained, until the end of the operation, or then even tortured and/or disappeared,” and that rebel suspects’ houses were routinely burned down by the government. They noted that “President Kadyrov and his officials were actively encouraging such action to be taken, with public pronouncements that not only Wahhabis should be destroyed, but their relatives also.”
The largely bleak picture of the modern Chechnya, despite its outward appearance of prosperity, is complemented by a lack of information and severe limits on the operations of NGO’s. According to the British parliamentarians’ report, there was a strong divide between the “official” NGO’s and the independent ones. The “official” NGO’s could criticize only the federal government, while only independent NGO’s like the Memorial human rights center could bring up important issues even when it concerned Ramzan Kadyrov himself. The climate of fear in Chechnya forced the activities of the independent NGO groups almost “underground.”
The Lord Judd/MP Swenson’s mission noted revealing official statistics in regard to the impunity enjoyed by state agencies. In 2008, 14 cases involving the abduction of 23 persons were opened, while in 2009 the figures rose to 39 abduction cases, involving 43 persons. Civilians in Chechnya lodged about 100 complaints about security services’ actions in 2008 and 87 complaints in 2009. None of the complaints resulted in criminal prosecution, while there had been three cases of security servicemen being convicted for their crimes in 2007. The figures obliquely indicate the paradoxical trend of a growing number of rights violations and a corresponding decrease in the number of complaints by civilians and criminal prosecutions of government servicemen.
The emerging consensus is that the spread of militant Islam in the North Caucasus can be and should be tamed by addressing the real needs of the people. If the West consciously turns a blind eye to the processes, the locals are likely to rely on Islamic militancy in increasing numbers. This outcome would be not only contrary to the West’s interests, but also to a great extent contradict Russia’s own long-term well-being.
Source:
Arab jihadists emerge in Caucasus war
Published: Oct. 26, 2010 at 3:08 PM
AMMAN, Jordan, Oct. 26 (UPI) -- As Islamic militants escalate their war against the Russians in Dagestan, Ingushetia and other Caucasian republics, there is evidence that Arab jihadists, particularly Jordanians, are playing a leading role, as they did in the Chechen wars.
In recent months, Jordanian newspapers and Web sites have reported the death of several Jordanians fighting in Chechnya.
But it is the growing links between the Islamist fighters in the Caucasus and influential clerics in the Hashemite Kingdom and its environs who preach global jihad that are probably more important.
The well-known Jordanian jihadist ideologue Sheik Abu Mohammed al-Maqdisi has gathered a following among the Caucasian Islamists, even corresponding with Arabic-speaking commanders who want to shift the conflict from a nationalist struggle into part of the global jihad.
Maqdisi is a powerful influence in Arab jihadist circles and since 2009 "has become an active promoter and propagandist of the jihadist movement in the North Caucasus," says Murad Batal al-Shishani of the Jamestown Foundation, a Washington think tank that tracks global terrorism.
Maqdisi achieved notoriety as the spiritual mentor of the ferocious al-Qaida leader in Iraq, Abu Musab al-Zaraqwi.
Zarqawi, a Jordanian Sunni who fought in Afghanistan, forged al-Qaida in Iraq into the most bloodthirsty jihadist organization fighting the Americans after the 2003 invasion. His forces slaughtered hundreds of people, including rival Shiites, until he was killed in a U.S. airstrike June 7, 2006.
His ruthless ferocity made him a hero among Jordanian Islamists and inspired several major plots in the kingdom. These included a thwarted 2004 chemical attack on Jordan's Intelligence Directorate in Amman.
These activists are "a new generation of Salafi-jihadists in the region who can be described as neo-Zarqawists," al-Shishani noted in a recent analysis.
"These young militants consider themselves the inheritors of Abu Musab al-Zarqawi's legacy in the Levant."
Many have gone to Afghanistan and Pakistan to fight, among them Humam Khalil Abu-Mulal al-Balawi, the suicide bomber who set off his device inside a CIA base in Afghanistan in December 2009, killing seven CIA personnel.
Most of these activists are centered on the cities of Zarqa, Zarqawi's hometown east of Amman, and Irbid in northern Jordan.
Anas Khalil Khadir, a 24-year-old Jordanian reported to have been killed in Chechnya in early June, was from Zarqa. He abandoned his medical engineering studies at university there to go to Chechnya.
A few days after Khadir's death was reported, newspapers announced the death of another Jordanian in Chechnya. They said Yasser Ammara, described as "a prominent Jordanian-born warlord," was one of nine militants killed fighting Russian forces in the forested mountains of the Vedeno region. He had been in Chechnya since 2000.
In recent months, jihadist Web sites and Internet forums have increasingly focused on the escalating conflict across the Caucasus, several years after the Russians crushed insurgents in the Second Chechen war.
The revival of jihadist interest in the region "comes in the context of two strategies that al-Qaida and affiliates Salfist-jihadist groups are implementing: seeking safe havens and creating a grassroots jihad that will sustain them," al-Shishani wrote in a recent analysis.
Arab jihadists, mostly veterans of the 1979-89 war against the Soviet army in Afghanistan, have played a prominent role in the North Caucasus since 1995 when the First Chechen War broke out.
They fought under the leadership of separatist leader Dzhokar Dudayev, killed like Zarqawi in a missile strike in 1996.
The most prominent of these Arabs was a commander known as Emir Khattab, an Afghan veteran whose real name was believed to be Omar Ibn al-Khattab. He was reputed to have been born in Saudi Arabia to a Jordanian father and a Circassian mother. At age 16, he went to Afghanistan to fight the Soviets in Afghanistan, where he met Osama bin Laden. He is also believed to have fought in Tajikistan and Bosnia.
In Chechnya, he came one of the jihadists' most successful combat commanders and was wounded several times leading his own private army of Arabs, Turks and other foreign fighters.
He was killed by Russia's Federal Security Service, the post-Cold War successor of the KGB, on March 19, 2002, with a poisoned letter. Chechen sources said it was coated with "a fast-acting nerve agent, possibly sarin or a derivative."
October 20, 2010
Drawing the Line
By Justin Lyle
Special to Russia Profile
Is Saakashivli’s Move to Abolish Georgian Visas for the Citizens of Certain Russian Republics a Way to Provoke Moscow to Take Heedless Action?
The Mikheil Saakashvili administration has touted its recent abolition of visa requirements for citizens of Russia’s North Caucasus republics as a step to facilitate tourism, trade and educational relations. Moscow, meanwhile, dismisses this unilateral move as a mere “provocation,” and is clearly irritated by Tbilisi’s appeal to its troubled southern flank. As president Saakashvili promotes the idea of a “united and peaceful Caucasus” on the international stage, it seems that his intentions may be just the opposite.
TBILISI, Georgia/The presidential decree that came into force on October 13 abolished the entry visa requirement for citizens of the Dagestan, Chechnya, Ingushetia, North Ossetia, Kabardino-Balkaria, Karachayevo-Cherkessia and Adygeya republics of the Russian North Caucasus. Citizens of these regions should now be able to cross into Georgia without a visa for up to 90 days via the Upper Lars border crossing point in the mountainous Kazbegi Region, which was re-opened after four years’ closure in March this year. The explicit visa regime cancellation notably excludes citizens of the majority ethnic Russian Krasnodar Region, however, despite the fact that it borders Georgia to the north. President Saakashvili’s spokesperson, Manana Manjgaladze, explained that the visa-free regime is a follow-up to Saakashvili’s UN General Assembly speech a month ago, in which he outlined his vision of a “united and peaceful Caucasus.”
Russian Foreign Minister Sergei Lavrov was quick to dismiss the move as a “propaganda” stunt, and criticized the Georgian administration’s unilateral decision as a departure from the standards of “civilized” international interaction. Grigol Vashadze, his Georgian counterpart, meanwhile asserted his country’s sovereign right to determine its own visa requirements, rejecting any obligations for bilateral agreement on such issues in light of Russia’s “occupation” of breakaway Abkhazia and South Ossetia. Moscow’s recognition of the sovereignty of these republics and the ongoing Russian presence there following the “five-day war” over South Ossetia in August of 2008 remains the intractable bone of contention between Georgia and its larger neighbour.
But Russia-Georgia visa issues have a history of being exploited for ends beyond mere technical questions of border control. It was Moscow, after all, that unilaterally imposed the first visa obligation between the two post-Soviet states back in 2000, when Georgia was still a member of the Russian-led Commonwealth of Independent States. Back then the visa regime – halting the flow of migrant workers into Russia and thereby slashing remittances important to the frail Georgian economy – was the Kremlin’s punishment of Tbilisi for its persistent failure to deal with separatist militants taking refuge on the Georgian side of the mountains.
Archil Gegishidze, a senior fellow at the Tbilisi-based Georgian Foundation for Strategic and International Studies, views the Saakashvili administration’s move as “a kind of reciprocity” for that visa regime initiated a decade ago, which put additional symbolic pressure on Tbilisi by exempting de-facto independent Abkhazia and South Ossetia. The latest Georgian move, though within the bounds of international law, similarly addresses citizens of the Russian Federation’s North Caucasus republics directly, independently of central government. In light of Moscow’s sensitivity to developments in a region that has been torn up by separatist violence and the attempts to contain it for the past two decades, this might indeed be seen as a “provocation.”
On a practical level, the visa-free regime makes sense for North Caucasus residents wishing to enter Georgia over land, because in the absence of diplomatic relations between Tbilisi and Moscow they have had to visit the “Russian Interest Section” of Georgia at the Swiss embassy in Moscow to obtain the visa. However, the application of the visa-free regime in practice – in the form advertized at least – faces certain limitations. Firstly, the Russian Federation passports used by citizens crossing the state borders do not specify a place of residence, making it impossible to restrict visa-free travel to residents of the autonomous North Caucasus republics alone. Equally, any visa-free entry into Georgia will be subject to approval by border guards on the Russian side, which will not be forthcoming without Moscow’s consent.
Tbilisi’s official rationale for the decision has been voiced in two distinct strands: the first centers on the aim of enhancing tourism, trade and educational links between the South Caucasus country and its northern neighbours, while the second is the idea of showcasing Georgia as a model of democratic and modernizing reforms. Gegeshidze, however, believes that for the next couple of years tourism and trade benefits to Georgia from links with the North Caucasus republics will likely be negligible.
Tbilisi’s second justification seems closely connected with president Saakashvili’s plans for a united and peaceful Caucasus in the particular sense of establishing Georgia as a center of gravitation in the region. Gegishidze does not foresee imminent gains for Tbilisi on this front either, however noting that Georgia must “transform itself from a post-Soviet state into a European-style democracy in terms of governance, politics and stability, in order to attract the North Caucasus republics.”
Mamuka Areshidze of the Tbilisi-based House of Free Opinion think tank is skeptical about the long-term substance of Saakashvili’s “United Caucasus” agenda, and thinks that the visa-free regime in particular is driven by short-term motivation. Although Tbilisi does not expect to cause major destabilization in the North Caucasus, he said, it does want “to exacerbate Moscow’s sense of insecurity in the North Caucasus; to create a certain discomfort.” Over the last year Tbilisi has intensified efforts to promote itself on the other side of the mountains and even to encourage anti-Russian sentiment. In December of 2009, for example, the “First Caucasian” Georgian television channel began broadcasting in the North Caucasus in Russian, and in February this year Tbilisi hosted an international conference dedicated to crimes committed against the peoples of the North Caucasus. Few in Moscow – or elsewhere, for that matter – would consider this a solid foundation for the creation of a peaceful Caucasus.
As is so often the case in relations between Tbilisi and Moscow, the elephant in the room is the international audience: both parties are engaged in a symbolic struggle reaching beyond the issues immediately at stake. In particular, Tbilisi’s opposition to Moscow’s two-decade-old bid to join the World Trade Organization is now drawing firm pressure from Washington. This backdrop and the desire to shed the label of occupation led Moscow, at the otherwise unproductive October 15 international Abkhazia and South Ossetia talks in Geneva, to announce an imminent withdrawal of its last checkpoint on Georgian territory beyond the established boundaries of South Ossetia. This measure marks Moscow’s desire, with an eye on the international community, to demonstrate a constructive attitude without making major concessions. Tbilisi’s “united and peaceful Caucasus” agenda and the withdrawal of the visa regime that falls within it may meanwhile be no more than a vain encouragement for Moscow to slip up.
Kremlin Shuffles Army
27 October 2010
President Dmitry Medvedev has sacked three army generals and appointed a number of other top brass to new positions, the Kremlin said on its web site Tuesday, without providing reasons for the reshuffle.
Nikolai Vaganov, Alexander Ionov and Alexander Mazharov, all senior generals, were discharged from the military, the statement said.
Major-Generals Valery Konurkin and Yury Petrushkov got new posts at the military’s educational establishments, and Colonels Igor Afonin and Leonid Mikholap received new rocket divisions under their command.
Lieutenant-General Alexander Miroshnichenko was appointed an aide to Defense Minister Anatoly Serdyukov, who has been embroiled in a dispute with a group of veteran paratroopers this month.
(MT)
Next Bulava missile launch scheduled for Oct. 29
09:22, October 27, 2010
The 14th test-launch of the Bulava intercontinental ballistic missile is scheduled for Oct. 29, official from test flight commission said on Tuesday.
The Bulava missile, a three-stage, liquid and solid-propellant, submarine-launched ballistic missile (SLBM), was designated for the fourth generation submarines of Project 955 Borei. However, it has officially suffered seven failures in 13 test launches.
"Three Bulava tests were planned for late 2010. The three missiles were manufactured under strict technological control which yielded positive results," the Itar-tass news agency quoted the source as saying.
The first test launch of these three submarine-launched ballistic missiles was successfully conducted on Oct. 7. The warhead hit its target in Russia's Far East Kamchatka region.
A further launch of the missile is also scheduled to take place before the end of the year, the local reports said.
The missile with the range of 8,000 km was designed by the Moscow Institute of Thermal Engineering and is capable of carrying up to ten supersonic maneuvering re-entry vehicles.
The Russian military hoped the Bulava program would reach the designated objective to make this intercontinental ballistic missile the backbone of the country's strategic forces.
Source: Xinhua
Next Bulava launch scheduled for October 29
2010-10-26
The next test launch of Russia's troubled Bulava submarine-launched ballistic missile is scheduled for October 29, a source in the test flight commission said to RIA Novosti.
The last test launch of the Bulava missile was conducted from the White Sea on October 7. This was the first launch since the test program was halted in December last year, after several unsuccessful test launches. As RIA Novosti reports, the next launch is scheduled for October 29.
This week’s planned test launch will probably be conducted from the rebuilt Typhoon-class nuclear submarine “Dmitry Donskoy”, the only sub so far to launch the hi-tech ballistic missile. It has earlier been said that if the next test is a success, the planned third test launch this year could be conducted from the submarine “Yury Dolgoruky”, the first of Russia’s fourth generation strategic Borey-class subs.
Progress cargo ship to be blasted off from Baikonur to ISS
27.10.2010, 09.27
MOSCOW, October 27 (Itar-Tass) - The fifth and this year’s last Russian cargo spaceship Progress will be launched from the Baikonur cosmodrome on Wednesday to the International Space Station (ISS).
“The launch of the Progress M-08M spaceship from the first – ‘Gagarin’ – launch pad is scheduled for 19:12, Moscow time,” the Federal Space Agency (Roskosmos) told Itar-Tass. “The cargo craft will deliver to the orbiting outpost about 2.5 tonnes of various cargoes for the station’s life support and the crew.
The spaceship will take to the ISS fuel and equipment for the station, oxygen, water, clothing and food for the cosmonauts. In addition to standard cargoes, the spacecraft will deliver in orbit the equipment for the biotechnological experiment “Constanta,” the results of which will be brought to Earth Fyodor Yurchikhin, whose orbital mission ends on November 30.
The resupply ship will also deliver to the ISS parcels from families and gifts for the crew (Russian cosmonauts Alexander Kaleri, Oleg Skripochka, Fyodor Yurchikhin and American astronauts Shannon Walker, Douglas Wheelock and Scott Kelly). This time the astronauts will receive in the dispatch from Earth, aside from the standard rations, as usual, a portion of fresh vegetables and fruits, as well as sweets, dry fruits and chocolates in parcels from home.
Space designers have sent to the astronauts New Year gifts sealed in a package with the words: “To be opened on December 31.” The next crew that will be launched to the ISS on December 15 will deliver to the cosmonauts New Year’s gifts from psychologists.
Psychologists have sent with the cargo spacecraft only books, magazines and CDs. So, the ISS library will be replenished by two quite specific books on the training of military professionals, ordered by Kaleri, and the ISS video collection will be enriched with 9 DVDs with movies and serials.
Six launches of Russian cargo ships and the second European cargo ship of the ATV series were planned this year for the needs of the ISS. However, in August, regarding that the station is provided with all the necessary, Russian specialists decided to postpone the launch of the Progress M-09M ship until early 2011. The launch of the European cargo spacecraft Johannes Kepler (ATV-2) has also been postponed until next year’ s February.
The Progress M-08M ship is to dock to the Pirs module at 20:39, Moscow time, on October 30 in an automatic mode. After an incident in early July when the sixth ship of the “digital” series failed to dock to the station at the first attempt due to a malfunction in the system of VHF communications, blocks to protect certain frequency range are put in all the spacecraft starting from Progress M-08M.
Operated as a joint project between the five participant space agencies, the ISS sections are controlled by mission control centres on the ground operated by the American National Aeronautics and Space Administration (NASA), the European Space Agency (ESA), the Russian Federal Space Agency (RKA), the Japan Aerospace Exploration Agency (JAXA) and the Canadian Space Agency (CSA). The ownership and use of the space station is established in intergovernmental treaties and agreements that allow the Russian Federation to retain full ownership of its own modules in the Russian Orbital Segment, with the US Orbital Segment, the remainder of the station, allocated between the other international partners. The cost of the station has been estimated by ESA as 100 billion euros over 30 years, and, although estimates range from 35 billion dollars to 160 billion dollars, the ISS is believed to be the most expensive object ever constructed. The station is serviced by Soyuz spacecraft, Progress spacecraft, space shuttles, the Automated Transfer Vehicle and the H-II Transfer Vehicle, and has been visited by astronauts and cosmonauts from 15 different nations.
Russia may invest $5 million in national operating system - paper
09:26 27/10/2010
The Russian government may allocate 161 million rubles ($5.28 million) in 2011 for the development of a national operating system in a bid to reduce the country's dependence on Microsoft, a Russian business daily said on Wednesday.
A further 490 million rubles could be invested in the project from 2011-2013, Vedemosti daily said, citing a draft federal target program.
The project will allow the government to regulate the security of information systems, said Alexander Chachava, president of information technology company Leta Group.
The target program does not include earlier mentioned plans for the development of a national Internet search engine, aimed at stimulating the development of domestic technology.
Instead the draft outlines funding for the development of an internal governmental search engine, which would allow officials to search for documents on ministry databases.
However, specialists told the paper that the project to develop a national search engine is not dead and could find another source of funding.
MOSCOW, October 27 (RIA Novosti)
Moscow police prosecute world's biggest spammer
11:39 27/10/2010
Moscow police have filed a criminal case against businessman Igor Gusev, listed as the world's biggest spammer.
This is the first time a spammer has been convicted in Russia.
His company Despmedia has been sending spam e-mails advertising fake pharmaceutical products to users in the United States, Canada and other countries through a partner program , the Kommersant newspaper reported.
The company has had a turnover of $120 million since 2007, the paper said. Gusev himself has received $2 million in revenues.
He is believed to be outside Russia at the moment, police said.
Russia's Federal Security Service (FSB) last year closed down one of the biggest spam websites , reportedly run by .
According to the Russian Association of Electronic Communications (RAEK), Russia's economy lost 14.1 billion rubles ($462 million) due to spam in 2009, while the spammers made 3.7 billion rubles ($123 million) during the same year.
Spam amounts to 20 percent of Russia's market for Internet advertising, RAEK said, while spam e-mails are estimated to account for up to 70 percent of all e-mails sent.
Russia is in fourth place on the global list in e-mail spam. The United States, China and India make up the top three, said Andrei Nikishin, Director of Content Filtering, Research and Development at security firm Kaspersky Lab.
Relaying spam in Russia is forbidden under a state law, but it prescribes no criminal conviction for spam distributors.
The first spammers to face criminal prosecution were two siblings in the United States, who were convicted of sending hundreds of thousands of e-mails advertising penny stocks and low mortgage rates in 2005.
MOSCOW, October 27 (RIA Novosti)
Noticed less spam lately?
11:55 AM Oct 27, 2010
MOSCOW - Since late last month, the world supply of Viagra ads and other email spam has dropped by an estimated one-fifth. You may not have noticed - with 200 billion spam messages in circulation each day, there is still plenty to go around.
Yesterday, police officials in Russia here announced a criminal investigation of a suspected spam kingpin, Igor Gusev. They said he had probably fled the country.
The Moscow police said Gusev, 31, was a central figure in the operations of , which paid spammers to promote online pharmacies, sometimes quite lewdly. suddenly stopped operating on Sept 27. With less financial incentive to send their junk mail, spammers curtailed their activity by an estimated 50 billion messages a day.
Moscow police officials said they had charged Gusev of operating a pharmacy without a licence and of failing to register a business. Yesterday, they searched his apartment and office in Moscow, Specific, computer-crime related charges may follow after police examine the contents of removable hard drives, flash cards and laptops found during the search.
Gusev's lawyer yesterday claimed his client was not the owner of and had never sent spam email. THE NEW YORK TIMES
Serial spammer: Russian Viagra baron may face jail
27 October, 2010, 08:31
Russian police have opened a criminal case against Igor Gusev, the director of an online pharmacy who is considered to be the world's top spammer.
Russian daily newspaper Kommersant reported on Wednesday that Moscow police are hunting for Gusev, director of Despmedia, on charges of illegal entrepreneurship and tax evasion. If he is found guilty he could face up to five years in prison.
Investigators have already searched the suspect’s home and office. They reportedly found a batch of pharmaceutical goods imported from India. According to investigator Evdokiya Utenkova, some of the documents discovered during the search may help officers find Gusev. The investigators are preparing to approach Interpol over the case.
Kommersant reports that Gusev’s company, Despmedia, was allegedly involved in the sale of counterfeit pharmaceutical products, like generic Viagra, in the US, Canada and other countries through spam emails. Sales over the last three and a half years are estimated to total around US$ 120 million. The market players cannot recall criminal investigations against spammers. However, the paper points out that in 2009, Russia's economy lost around half a billion US dollars in sales through spam.
Another prolific Russian spammer Vardan Kushnir was killed in 2007 in Moscow. Kushnir was the head of English learning centers called the Center for American English, the New York English Centre and the Centre for Spoken English. These enterprises sent millions of spam emails every day. Kushnir said spam is what email was made for.
Russian law prohibits using spam as an advertising method, but does not consider it a crime, which makes it difficult to call spammers in the country to account.
Russia Seeks Arrest of World’s Biggest Spammer, Kommersant Says
By Paul Abelsky
Oct. 27 (Bloomberg) -- Russia’s Interior Ministry is searching for a man it considers to be the world’s most prolific spammer, after an investigation linked him to illegal sales of generic drugs via the Internet, Kommersant reported.
The native Russian is used unsolicited e-mail ads to generate more than $120 million of sales of Indian drugs in countries including the U.S. and Canada over the past 3 1/2 years, the Moscow-based newspaper reported, citing internal reports on the investigation.
The man may also be responsible for spreading computer viruses that helped steal money from victims, Kommersant said. Russia’s ministry is considering placing the suspect on Interpol’s international wanted list, the newspaper said.
Click here for web link
To contact the reporter on this story: Paul Abelsky at pabelsky@
To contact the editor responsible for this story: Brad Cook at bcook7@
Last Updated: October 27, 2010 01:51 EDT
Sobyanin Keeps Luzhkov's Team – for Now
27 October 2010
By Alexander Bratersky and Alexandra Odynova
Nearly no Luzhkov-era officials were dismissed as new Mayor Sergei Sobyanin appointed his government Tuesday — but analysts called the lineup a temporary measure to mask the gradual replacement of the old guard.
The lack of ousters is “a delicate psychological trick” for the Luzhkov team, said Alexei Mukhin, an analyst at the Center for Political Information.
Former Mayor Yury Luzhkov's loyal lieutenant, Vladimir Resin, 74, kept his job as first deputy mayor, becoming the oldest senior city official and only one to hold the title in Sobyanin's administration.
Luzhkov had five first deputies, but Sobyanin said Tuesday that the system is “not up-to-date” and would be replaced.
“There should be one first deputy, and the others would be regular deputies,” he said in televised remarks.
The most significant addition to the lineup of nine deputies is Anastasia Rakova, a member of Sobyanin's team from the time when he served as governor of the Tyumen region in the early 2000s.
Rakova, 34, a lawyer, was also made City Hall's chief of staff, replacing Viktor Korobchenko, another former first deputy mayor who now will act as Sobyanin's adviser, Interfax reported.
Rakova, a member of the ruling United Russia party and listed in the Kremlin's "Golden 1,000" reserve pool of talented officials, previously headed the federal government's legal department.
Public Chamber member Vyacheslav Glazychev, who worked with Rakova in Tyumen, described her as an “accurate, business-like woman.”
The other three former first deputies —, who worked with communal services — kept their portfolios at the demoted rank of regular deputy mayors.
Biryukov is the most controversial figure among the three, earning the anger of pet lovers citywide for authorizing the putting down of dogs held in Moscow's animal shelters — one of which was constructed by a company owned by his brother Alexei. Biryukov also came under fire from Luzhkov last year for going over budget on a replica of a 17th-century palace in Kolomenskoye Park.
"The fact that Biryukov is staying means that he has found common ground with the new mayor,” Sergei Mitrokhin, a former Moscow City Duma deputy who heads the opposition Yabloko party, said by telephone.
In addition to Rakova, Sobyanin scooped two other deputy mayor appointees from the federal government.
Deputy Transportation Minister Nikolai Lyamov was put in charge of traffic issues — highlighted as the city's biggest headache by both Sobyanin and President Dmitry Medvedev — and Federal Property Management Agency deputy chief Natalya Sergunina became a deputy mayor in charge of property issues.
The addition of Rakova and Sergunina may reflect Sobyanin's personal management style. A former Sobyanin aide from Tyumen told The Moscow Times last week that the mayor “prefers to surround himself with women because many of them are dispassionate.”
Sergunina's predecessor, Vladimir Silkin, replaced Oleg Mitvol as a prefect of Moscow's Northern Administrative District. Mitvol was dismissed by Resin on Oct. 4.
Alexander Gorbenko, former general director of the federal government's official mouthpiece Rossiiskaya Gazeta, will be a deputy mayor in charge of interregional cooperation, sports and tourism, as well as mass media, while his predecessor, Sergei Baidakov, was downgraded to prefect for the city's Central Administrative District.
A newly created post of deputy mayor in charge of cooperation with law enforcement agencies was filled by another Luzhkov ally, former City Hall deputy chief of staff Vladimir Shukshin, a retired general who once guarded Soviet President Mikhail Gorbachev.
By keeping Resin and the rest of Luzhkov's men, Sobyanin signaled that he plans no radical policy changes, Yabloko's Mitrokhin said.
Sobyanin “was appointed to carry out two main tasks: include Moscow in the [power] vertical and guarantee election results,” and Resin would be the main person to oversee both tasks, Mitrokhin said.
Resin, a former construction boss, has shown no political ambitions in the past. He joined United Russia in an apparent sign of loyalty to the Kremlin soon after becoming acting mayor following Luzhkov's ouster by Medvedev last month.
Glazychev of the Public Chamber said most of Luzhkov's team would be gradually replaced. “This is a temporary, transitional government,” he said.
His comments were echoed by Kremlin-connected analyst Gleb Pavlovsky, who called the new city government provisional. “They are competent advisers, kind of like members of the Luzhkov legacy liquidation commission,” he said, Interfax reported.
“More allies from Tyumen whom Sobyanin trusts may soon enter the administration,” Mukhin said, adding that Tuesday's shuffle reflected Sobyanin's trademark apparatchik style.
Sobyanin also appointed heads of the City Hall's five “structural divisions” Tuesday.
Artyom Yermolayev, a former aide with the Communications and Press Ministry who once worked at the Moscow office of U.S. networking giant Cisco Systems, became head of the city's information technologies committee.
Sergei Polyakov was made head of Moscow’s health department. He was previously a deputy to the department's head, Andrei Seltsovsky — perhaps best-known for acknowledging that mortality rates doubled to 700 a day during this summer's smog and heat wave. Seltsovsky was named a Sobyanin adviser.
Yegor Polyakov (no relation to Sergei Polyakov) was appointed to run the Moscow control committee, which previously was headed by former Deputy Mayor Alexander Ryabinin, now charged with bribery by the Investigative Committee and dismissed by Resin earlier this month.
Andrei Tsybin became head of the utilities and urban development department, and Yevgeny Sklyarov was put in charge of the energy department. Both men worked under Luzhkov.
Luzhkov's main spokesman, Sergei Tsoi, kept his post.
Sobyanin, whom analysts expect to change the relatively media-friendly atmosphere of the Luzhkov era, did little to dispel the fears by holding his first City Hall meeting Tuesday behind closed doors, allowing only the City Hall-owned TV Center television to cover it.
Sobyanin pledged to keep another Luzhkov-era practice — touring the city's construction sites and other areas — but will carry out the visits on short notice so local authorities have less time to prepare, a city official told Interfax.
“By doing this, the new mayor would try to get rid of the Potemkin villages and force all prefects to actively prepare for the winter,” the official said.
Baturina’s Lawsuits Rejected
27 October 2010
Moscow’s Presnensky District Court on Tuesday refused to consider two defamation lawsuits filed by billionaire Yelena Baturina’s Inteko company against NTV television for September reports that linked her and her husband, former Mayor Yury Luzhkov, to corruption, Interfax reported.
The lawsuits should be filed with an arbitration court instead, a court spokesman said. Inteko said it may appeal.
Meanwhile, self-exiled businessman Boris Berezovsky said Tuesday that he was ready to provide financial support to Baturina and Luzhkov should they seek asylum in Britain, where he lives, Interfax said.
(MT)
Russian mafia boss killed in Sochi
October 27, 2010 - 3:29AM
AFP
A Russian mafia boss was shot dead on Tuesday in the Black Sea resort of Sochi, site of the 2014 Winter Olympics. Real estate owner Eduard "Karas" Kakosyan, 31, was gunned down near a gas station in the centre of town a month after another mafia chief and friend was shot and wounded, Interfax reported.
Authorities are searching for two men in connection with the shooting, a police spokesman told AFP.
"The young men left the scene of the crime on a motorcycle," the spokesman said.
According to Russian media, Kakosyan's death appears to be the latest in a series of shootings targeting mafia bosses jostling for a share of the Olympic construction windfall.
Kakosyan was close to one of Russia's top mafia bosses, Aslan Ussoyan, who was shot and wounded in central Moscow in September, Interfax reported.
Ussoyan had clashed with other mafia groups over the division of a commercial empire linked to the construction of buildings for the 2014 games, the Kommersant daily reported.
That empire was allegedly controlled by Zakhar Kalashov, considered the "godfather" of the Russian-Georgian mafia. Kalashov was arrested in Spain and sentenced in June to seven and a half years in prison for money laundering.
Score settling in the grab for Olympic investments also accounted for the murder of yet another Sochi organised crime boss, Alik Sochinsky, who was killed last year in Moscow, according to Russian media.
The future Olympic town has been transformed into a vast construction site, as workers begin erecting more than 100 structures, including a main stadium and an ice-skating ring.
Choc shock as cops raid Moscow factory
by Andy Potts at 27/10/2010 10:46
Conditions in an illegal chocolate factory give a whole new meaning to the expression “sickly-sweet”.
Police raided the underground confectionary manufacturer in Solnechnogorsk, just outside Moscow, after a tip-off about illegal immigrants working their without proper papers.
But on inspecting the plant they discovered that bogus bureaucracy was the least of the problems as chocolate was prepared in unhygienic conditions using unsafe ingredients, Vesti-Moskva reported.
Counterfeit cakes
Some of the raw materials were as much as three years past their recommended use-by dates, according to officials.
And, once the chocolate had been produced it was sold on to bakers for use in cakes, cookies and icing – finding its way into Moscow’s shops.
A criminal case has been opened and the factory bosses could face a 300,000 rouble fine or up to two years in jail.
Fake foods
Almost half of the food sold in Moscow is counterfeit or countraband, according to 2008 figures from federal health and safety watchdog Rospotrebnadzor.
The most common fakes are vegetable oil and butter, condensed milk, tea, coffee, water, canned meat, honey and confectionary.
A recent raid on The Yakhroma bakery found staff were fiddling the production dates to give their loaves a longer shelf life, Newsmsk reported.
Lost generation: Russia tops youth crime table
27 October, 2010, 09:56
Ranked by the World Health Organization as having the highest rate of youth crime in Europe, Russia is faced with the tough task of rehabilitating its young people and improving the statistics.
“Please show us on this doll where exactly you stabbed him with the knife," a police officer asks a teenager in a crime reconstruction video.
The boy points to the head of the dummy and says he stabbed the victim “roughly seven or ten times." Along with his gang, he carried out a brutal murder, and is now heading to one of Russia’s 62 young offenders’ institutions.
Already being held in one such institution is Oleg Rozanov. He has so far served more than half of his sentence for committing a racial murder. He was a 15-year-old skinhead when he and his friends attacked a foreign looking youth.
"I saw the guy's knife lying next to him,” Oleg recalls. “I suddenly thought: ‘he must have been using this knife to kill Russians.’ I stabbed him twice and then passed it to my three friends who each knifed him."
Stabbings account for almost half of the homicides carried out by youngsters in the European and Central Asian region, according to the report by the World Health Organization. It is the first comprehensive study published in Europe on the subject. It puts Russia top of the table, with the highest rate of violence among the surveyed age group of 10 to 29-year-olds.
Those who deal with young offenders in Russia, say they are not surprised by the country’s ranking.
"A change in psychology, morale and moral values – all this contributes to an extremely high crime rate whipped up by the activities of religious sects,” says Mikhail Vinogradov, head of the Center for Legal and Psychological Assistance in Emergency Situations.
He adds that media and “its stories full of blood” are also to blame for the violence.
Young people become both the victims and perpetrators of the violence, often caused by reasons rooted in childhood.
Sergey Popkov, head of a juvenile correctional facility in Mozhaisk, says a lack of parental love and attention eventually lead to the problem.
"We, grown-ups, parents, are often too busy earning our living. Maybe we should simply love our children,” Mr. Popkov suggests. “The main reason behind those crimes is the absence of parental love. We remember our kids when they are already behind bars, and that is the last place they should be."
Approximately 5,700 minors are currently serving prison terms in Russia. The majority of them come from a one-parent family or children’s homes.
Police say about 80 per cent of serious juvenile crimes take place in the evening or at night when children are supposed to be looked after by their parents. However, in reality many often end up on the streets searching for their own entertainment, which often includes drinking alcohol – a factor that has been fueling youth crime in Russia.
Russian authorities, however, claim the situation among minors is now slowly improving.
"We should be careful when talking of youth crimes,” said Colonel Elena Novolitseva, from the Public Safety Department. “There are minors or those who have not reached the age of 18, and youths, who are up to 30 years old. [The latter] entails a whole different spectrum of crimes. I am dealing with the underage crowd. And in the past five years I have seen a considerable drop in the crime rate."
Meanwhile, as many young people who are serving sentences hope to be able to remain crime-free in the future, it may be down to those on the other side of the barbed wire to ensure they do not become another lost generation.
Russian Press at a Glance, Wednesday, October 27, 2010
08:29 27/10/2010
POLITICS
Russian President Dmitry Medvedev has said that the country should pay more attention to household energy efficiency and promised to deal with governors responsible for delaying the installation of modern utility metering equipment. Promoting energy efficiency is one of the priorities of Medvedev's modernization program.
(The Moscow Times, Kommersant)
Almost no Luzhkov-era officials were dismissed as new Mayor Sergei Sobyanin appointed his government on Tuesday. Analysts view the lineup as a temporary measure to mask the gradual replacement of the old guard, which Sobyanin has described as "not up-to-date."
(The Moscow Times, Vedomosti, Kommersant, Rossiiskaya Gazeta)
SOCIETY
Transparency International placed Russia 154th out of 178 countries in its 2010 Corruption Perceptions Index. Despite President Dmitry Medvedev's promise to tackle corruption, Russia has slipped eight positions down from last year's rating.
(The Moscow Times)
Experts have expressed doubts that data collected during the all-Russian census will represent the real situation in the country. Public polls show that more than one third of Russians did not take part.
(Nezavisimaya Gazeta)
The Memorial rights group appealed to the authorities on Tuesday about a Dagestani journalist who has received anonymous death threats and been harassed by law enforcement agencies after writing a report about police torture.
(The Moscow Times)
DEFENSE
Russia wants NATO to impose a ban on the deployment of major combatant forces on the territories of new NATO member states, according to a draft cooperation deal being discussed by Russian and U.S. officials.
(Kommersant)
BUSINESS
The Russian government may allocate a total of 161 million rubles ($5.28 million) in 2011 for the development of a national operating system in a bid to reduce the country's dependence on Microsoft.
(Vedomosti)
Russian Prime Minister Vladimir Putin has urged Russian businessmen to invest in the development of Siberia.
(Vedomosti)
OIL&GAS
The Russian government may replace Exxon Mobil as the operator of the Sakhalin-1 oil and gas project after it raised spending from $42.8 billion to $95.3 billion for the period until 2055. According to media reports, Russian Energy giant Gazprom has expressed its readiness to join the project.
(Kommersant)
METALS & MINING
One of the co-owners of Metalloinvest, the largest iron ore holding in the Commonwealth of Independent States, may sell his share of the company for around $4 billion.
(Vedomosti, The Moscow Times)
Meeting of the Commission for Modernisation and Technological Development of Russia’s Economy
October 26, 2010, 16:00 Naberezhnye Chelny
A meeting of the Commission for Modernisation and Technological Development of Russia’s Economy devoted to implementing energy efficiency projects was held in Naberezhnye Chelny.
Dmitry Medvedev stressed the strategic importance of energy conservation and energy efficiency programme for the modernisation of Russia's economy and social sphere. This programme essentially shapes a new economy, improves the competitiveness of Russian goods and services, creates new businesses, new industries, and undoubtedly improves the country's environmental situation and quality of life.
However, work carried out in this field remains insufficient. Recalling that a law on energy conservation and energy efficiency was passed almost a year ago, President Medvedev outlined a number of organisational problems that citizens, private companies and the public sector still face.
According to Dmitry Medvedev, regional energy efficiency programmes must be operating in full force. As of now 54 regional programmes have been developed and approved, 25 are under discussion and 4 are being developed.
The President stressed that funds for energy efficiency are desperately needed even during what is a difficult period for many regions, because in the future such investments will amount to budgetary savings. Most importantly, the implementation of energy efficiency programmes should help Russian citizens cut down their expenses for housing and public utility services.
The place for the Commission meeting was not chosen at random: more rational energy usage is one of the main priorities of Naberezhnye Chelny's social and economic policy. This year the city equipped all its apartment buildings with meters monitoring the consumption of all types of utilities. More than 80 percent of households have individual automatic heating units installed to monitor and manage their heat consumption: these devices reduce consumption and heating bills by up to 30 percent. Despite the fact that new housing has been built, the city has reduced its energy consumption over the past five years.
Before the Commission's meeting, President Medvedev examined the automatic heat regulation system in one of the city's apartment buildings, and visited an exhibition of energy saving and energy efficiency technologies implemented in Tatarstan's housing and public utility services sector.
At a meeting with President of Tatarstan, Dmitry Medvedev and Rustam Minnikhanov discussed ways to improve energy efficiency. Particular attention was paid to the introduction of modern technologies in housing and public utility services.
October 26, 2010, 16:00Naberezhnye Chelny
Medvedev Pushes for Efficiency
27 October 2010
By Olga Razumovskaya
President Dmitry Medvedev said Tuesday that the country needs to start thinking seriously about energy efficiency in the housing sector and promised that he would deal with governors who are "irresponsible" in delaying installation of modern utility metering equipment.
He also said he expects private investment to follow as modernization of energy transmission and measurement equipment takes place.
“[Municipal utility] organizations should have the opportunity to attract private investment — which is why we need to lift barriers to implementing energy service contracts,” Medvedev said at a modernization commission session in Naberezhniye Chelny, Tatarstan.
Promoting energy efficiency is one of the priorities of Medvedev's modernization program and includes a goal to cut the amount of energy spent per unit of economic output by 40 percent by 2020.
The country is estimated to use 2.5 times more energy to produce a given amount of goods and services than the world average.
On Tuesday, the president also highlighted some of the problems that people, companies and municipalities encounter when trying to abide by recent legislation aimed at saving energy and improving efficiency. One element of the program foresees the installation of modern "smart" electricity meters that are highly accurate and allow for differentiated charging depending on the time of day.
“The law determines the deadlines for installing meters, but we do not yet have strict requirements for the quality of the meters,” Medvedev said, Interfax reported.
The Interregional Distribution Grid Companies holding has the mandate to work with the regions and install smart meters. Company head Nikolai Shvets said that of the regions that have signed agreements to have smart meters installed, not all are meeting their obligations.
The company has met with governors of 45 out of 69 regions and signed agreements with 28 of them.
“Where [the governors are being] irresponsible, give me a list of those governors so that I understand who is irresponsible and is not meeting with you … who does not sign agreements,” Medvedev told Shvets.
Shvets said his company was planning to spend 39 billion rubles ($1.3 billion) by 2015 to install 13 million meters over the course of 10 years.
As a result, electricity will be saved in an an amount equal to that currently consumed by Tatarstan every six months, Shvets said.
“In 2011, investment to implement the program of installing smart meters is estimated at 5.5 billion rubles,” Shvets said, Interfax reported.
Shvets' company will install 50,000 meters in the Perm region as part of a pilot project.
Tatarstan's efforts to promote energy efficiency were highly praised by Medvedev, who wished to see other regions follow the example of Naberezhniye Chelny and its “progressive people.”
Russia is very far behind in terms of energy efficiency, compared with most industrialized countries.
Energy losses are an acute problem for the North Caucasus: Dagestan wastes about 33 percent, and Chechnya 34 percent, according to Shvets' estimates.
But modernization alone will not solve the country's energy efficiency problems, Medvedev said. There has to be an active promotional campaign for the government's efforts to succeed.
“People think that energy efficiency — all our talking about it — is some kind of bureaucratic fuss. They need to understand that we are doing it so that they spend less, and this needs to be repeated on TV screens and via other media outlets practically every day,” Medvedev said.
Though Medvedev mentioned private investment, he did not comment specifically on how it could help improve energy efficiency or which companies may potentially be interested in investing in related projects in the housing and public utilities sectors, which are notorious for red tape.
“Among financial institutions over the course of the next two years, major investment into energy efficiency retrofits in public buildings and energy service companies is likely to come from the IFC, the EBRD [European Bank for Reconstruction and Development] and state banks such as Sberbank or VTB,” Yana Gorbatenko, program manager at the International Finance Corporation's Cleaner Production program, told The Moscow Times.
“A few years from now, private bankers may become more comfortable with risks related to financing such projects,” she said, adding that there are already a few projects in the area, like the one run by the IFC's partner Center-Invest Bank, which is managing an energy efficiency lending program in the housing sector.
Center-Invest Bank makes loans of up to 4 million rubles for a maximum of five years to homeowner associations and companies that manage residential multifamily buildings so that they can carry out energy efficient renovations, said a statement on the bank's web site.
Loan applications require the decision of a general meeting of the residents or a guarantee from the members of the management company’s board.
“Working with energy service companies is just one of the instruments that helps attract investors,” Gorbatenko said.
This working relationship is currently risky for investors since it takes an average of four or five years — and can even take up to 10 years — to pay for itself and requires a lot of work with regional authorities.
Maintaining a good working relationship with the authorities for seven to 10 years is a hard task, which makes political risks inherent to the work of energy service companies.
An alternative way of financing energy efficiency programs in the public sector may be for the municipalities to borrow directly from financial institutions or by issuing bonds, Gorbatenko said.
National Economic Trends
CBR announces preliminary September statistics
VTB Capital
October 27, 2010
News: Last evening after the cob, First Deputy Chairman of the CBR Gennady Melikyan announced preliminary September banking sector statistics. Key takeaways are as follows.
- Corporate loan book expanded 2.9% MoM (1.8% excluding the RUSAL loan), while retail portfolio grew robustly 1.8% MoM.
- Share of overdue loans keeps declining for the third month in a row: in corporate segment decreased to 6.00% from 6.15% in August, in retail segment the share backtracked to 7.45% from 7.49%.
- Banks' profitability is recovering with 9mo10 earnings of RUB 367bn, implying ROE of 12.5%.
Our View: The stats confirm the strong turnaround in lending and the ongoing recovery in the Russian banking sector, cementing the base under the October banking rally (VTB Capital banks Russia Index is up 14.4%). While statistics were fully confirmed by Sberbank and BSPB 3Q10 RAS reporting we focus on VZRZ 3Q RAS results due to be issued today.
In the meanwhile, we reiterate our positive view on Russian banks and expect an even better fourth quarter in terms of both lending growth and profitability fuelled by NIM stabilising and provision recoveries.
Dmitry Dmitriev
October 27, 2010 11:10
Combined profits in banking sector totaled 367 bln rubles in 9 mths – Melikyan
MOSCOW. Oct 27 (Interfax) - Combined profits in the banking sector continue to rise, reaching 367 billion rubles through the first nine months of 2010, First Deputy Central Bank Chairman Gennady Melikyan told Interfax.
"The profits totaled 367 billion rubles in the first nine months of the year compared with 31 billion rubles in the same period last year. Thus, the net profits rose more than tenfold," he said.
However, "a significant number of banks are posting losses," he said. "The banks are forming into separate categories. That is normal and indicates that the crisis has done its job," Melikyan said.
One hundred seventeen banks posted losses in the nine months. That includes banks currently undergoing rescues, he said.
"We are carefully analyzing information on the loss-making banks. The results of that work have compelled us in particular to send proposals to the State Duma and the Finance Ministry on extending until July 1, 2011 the moratorium on prohibiting banks from taking deposits from the public," he said.
It was reported earlier that the moratorium on excluding banks from the deposit insurance system was established on January 1, 2009 and is set to expire on January 1, 2011. It allows banks to violate standards they must otherwise meet in order to remain members of the deposit insurance system (and thus eligible to take deposits from the public), including indicators based on assets, capital, earnings and liquidity and a qualitative, transparency indicator.
Prior to establishment of the moratorium, a bank that posted losses three months in a row could not accept new deposits from the public.
It was reported earlier that the banks had combined profits totaling 320.1 billion rubles in the first eight months of the year. Central Bank Chairman Sergei Ignatyev forecast in October that combined profits in the banking sector for the full year would reach 500 billion rubles. "In terms of profits, we are approaching the level of the record year 2007," Ignatyev said.
jh
Russian Money Supply Growth to Fuel Inflation, Citigroup Says
By Maria Levitov
Oct. 27 (Bloomberg) -- Russia’s money supply continued its “rapid” expansion last month, threatening to sustain fast inflation through next year, Citigroup Inc. said.
Money supply growth of more than 30 percent in September is set to push up annual inflation to 9.2 percent at the end of the year and 7.6 percent in 2011, Moscow-based economists Elina Ribakova and Natalia Novikova wrote in a research note today.
“Growing producer costs and the acceleration of money supply growth will add to inflationary pressures from the end of 2010 and into 2011,” the note said. “However, we expect the central bank will remain under pressure not to increase rates in order to support a greater issuance of government bonds.”
Inflation accelerated for a second month in September to 7 percent after the country’s worst drought in at least half a century hobbled agricultural output and pushed up food prices. The central bank left its main interest rates unchanged last month, saying “inflationary risks, shaped by monetary conditions, are at an acceptable level.”
Money supply expanded at an annual rate of more than 30 percent every month for the past seven months, rising 31.2 percent in September, according to Bank Rossii data. The ruble weakened 0.6 percent to 30.57 versus the dollar at 10:51 am in Moscow today.
“We are concerned that, without a significant appreciation, pressure on the ruble and a weak interest rate transmission mechanism, inflation will remain elevated in 2011,” Ribakova and Novikova said.
To contact the reporters on this story: Maria Levitov in Moscow at mlevitov@
To contact the editor responsible for this story: Willy Morris at wmorris@
Last Updated: October 27, 2010 03:02 EDT
Assessing Moscow’s Management of the Crisis
27 October 2010
By Anders Aslund
After two years, the global financial crisis has abated and the world economy is set to grow by an impressive 4.8 percent this year. Most governments, apart from some Western culprits, are congratulating themselves for their good crisis management. Astoundingly, this severe crisis has hardly changed political or economic regimes anywhere in the world so far, while many incumbent governments have lost elections.
A comparison between Russia and the 10 new eastern members of the European Union — here called the Central and East European 10, or CEE-10 — offers a perspective on what Russia did well and poorly in the financial crisis.
Eastern Europe was the part of the world worst hit by the financial crisis. Latvia led the pack with a fall of 18 percent of gross domestic product in 2009. On average, however, the 10 new EU members had a GDP decline of “only” 5 percent, about the European average (mainly because of Poland’s growth of 1.7 percent), while Russia’s GDP slumped by no less than 8 percent, more than in any Group of 20 economy.
The direct cause of Russia’s larger contraction was that its exports plunged by 36 percent in 2009, while the CEE-10 exports diminished comparatively little, by less than 10 percent. The Russian export slump was caused by two factors: falling prices of oil, metals and gas and a big decline in gas export volumes. The CEE-10 were saved by their deep integration into the European market and impressive diversification of exports.
In late 2008, all feared that banking systems would collapse, but with the exception of Ukraine that did not happen anywhere in the region. Only one significant bank collapsed, the domestically owned Parex Bank in Latvia. But the bank rescue mechanism was diametrically different. The European Central Bank issued plenty of liquidity salvaging the West European banks, which owned most East European banks and allowed them to share their ECB liquidity. As a result, no single foreign-owned bank in the CEE-10 went under during the crisis.
In Russia, the government bailed out Russian banks through a gradual devaluation during the three months of November 2008 to January 2009. It cost the country $150 billion in reserves, much of which amounted to bank subsidies. In parallel, the government poured money into the already dominant state banks. Presumably, the European crisis resolution was cheaper for the governments and left the economy more competitive.
Only three Central and East European countries required emergency standby programs with the International Monetary Fund — Hungary, Latvia and Romania — although five countries had foreign debts exceeding their GDP, and all had small reserves. Russia benefited surprisingly little from its enormous reserves of $600 billion in August 2008, although its foreign debt was less.
Russia has carried out one important reform during the crisis, characteristically in the macroeconomic realm: a change in the exchange rate policy. The country is now close to inflation targeting, with a floating exchange rate that has worked so well in many countries around the world, from Poland to Chile. This is a good choice for Russia because of its great dependence on fluctuating commodity prices. No CEE-10 country changed its exchange rate policy.
The biggest difference between the CEE-10 and Russia has been in fiscal policy. The Baltic states in particular have undertaken huge cuts in their public expenditures of 8 to 10 percent of GDP, which have facilitated beneficial structural reforms. Many countries have sacked superfluous bureaucrats and other public servants. Latvia has cut public wages by 35 percent and Romania by 25 percent. Latvia has eliminated half of its state agencies and closed half of its hospitals. Finally, teachers have been let go after the number of children has plummeted with lower birthrates. Lithuania has carried out a progressive higher education reform. Yet pensions have been shielded everywhere but in Hungary. As a consequence of all these reforms, the CEE-10 countries are likely to arise more efficient and competitive after the crisis. Like Russia, all of them have already returned to economic growth.
Russia, by contrast, has pursued the opposite policy, carrying out small cuts in many areas and not promoting structural reforms. Strangely, the government has raised pensions this year by 30 to 40 percent. After having carried out an admirably conservative fiscal policy since 1999, the Russian government has suddenly turned populist. It is no problem that the budget deficit will be 4 to 5 percent of GDP this year, which makes perfect sense as stimulus, but public funds are being spent on pensions rather than on the modernization of Russia. Structural reforms remain stalled since 2003.
The key difference between the CEE-10 and Russia in their anti-crisis policies is that the CEE-10 turned against populism during the crisis, while the almighty Russian prime minister embraced populism. This difference derives from the political systems. In a democracy, people mature in crisis. In the CEE-10, social unrest has been minimal, while it has grown in Russia and frightens the White House. Today, moderate center-right parties rule all but one of the CEE-10 countries, and this year responsible center-right parties have won three surprise victories — in the Czech Republic, Slovakia and Latvia.
As the new Czech Foreign Minister Karel Schwarzenberg stated: “We won by telling the truth. Populism is no longer popular.” Most remarkable was the victory of Latvian Prime Minister Valdis Dombrovskis on Oct. 2. His coalition extended its share of the parliamentary seats from 45 percent to 63 percent, despite the shocking fall in GDP. However, Dombrovskis blamed his irresponsible predecessors and voters clearly saw him as the most credible and honest problem solver. Voters are not as irredeemably irresponsible as the Russian elite thinks. The liberal right has never been stronger in this part of the world. The communists have been wiped out and the socialists badly weakened.
Russia would be better off economically if it had offered its citizens the right to influence its government as the democratic countries in Central and Eastern Europe do.
Anders Åslund is a senior fellow of the Peterson Institute for International Economics and author of the book “The Last Shall Be the First: The East European Financial Crisis, 2008-10.”
October 26, 2010
Warning Signals
By Tai Adelaja
Russia Profile
The Complex Challenge of Attracting Foreign Investment Cannot Be Resolved by Simply Privatizing Key State Assets
The latest government privatization program may not be the “silver bullet” it hopes will attract foreign direct investment (FDI) into Russia, since the government is continuing to tighten its stranglehold on the strategic industries that are a magnet for foreign investment, experts say. And with Transparency International’s latest corruption report offering a less than positive view of the Russian business climate, industry executives are warning the government against overly high expectations of a windfall from its new privatization program.
First Deputy Prime Minister Igor Shuvalov announced last week that the government intends to raise nearly $60 billion in 5 years by selling stakes in about 900 companies. Government stakes earmarked for sale include 15 percent of Rosneft the country’s largest oil company and 25 percent of the rail monopoly Russian Railways. There are also plans to sell 50 percent minus one share of the Russian shipping company Sovkomflot and state industrial agro-leasing company Rosagroleasing. The new privatization program could also see 8 percent of RusHydro, the nation’s largest hydroelectric company, sold to private investors while the government has declared its intention to reduce its role in the banking sector by selling stakes in VTB, Rosselkhozbank and Sberbank, the country’s largest lender.
"We're sending investors a clear signal for the next three years, and we're prepared to discuss the sale of even larger stakes," Shuvalov, who is also the nation’s investment ombudsman, said. Russian equity trading edged up in other emerging markets as investors reacted positively to the government’s plans to sell off “surplus” equity in existing listed state companies and to accelerate plans to sell equity in other state owned companies, Chris Weafer, chief strategist at UralSib Capital said in a note to investors on Monday. “Investors interpreted the move as meaning that the government will need to take actions to try and improve the attraction and valuation of these assets and, thereby, boost the overall market,” Weafer said. The Russia domestic story is good and improving, albeit slowly, Weafer said. “The government’s very strong commitment to privatizing “surplus” equity and pushing ahead with other IPOs is part of the continuing effort to improve investor perception of Russia and is contributing to a positive backdrop for the domestic market.”
The government has been pinning its hopes on its latest privatization program as a vehicle to spur a significant increase in total FDI inflows into the economy, Vremya Novostei reported Tuesday. Economic Development Minister Elvira Nabiullina told the cabinet meeting last week that the worst of the financial crisis that hit the country in 2008 was over and that the government expects growth to be around four percent this year. In previous years, revenue from privatization was about $600 million-a-year, the paper cited Nabiullina as saying. "In the future we plan to increase this figure to 10 billion dollars-a-year,” Nabiullina said, Vremya Novostei reported.
Other state officials also said the latest privatization efforts will positively impact the economy unlike the widely-criticized privatization of the 1990s. Viktor Pleskachevsky, chairman of the State Duma Property Committee said unlike Russia's last major privatization in the 1990s, when huge chunks of former state assets were widely sold to powerful individuals, the latest privatization would help entrench a market economy and expand the private sector by reducing government involvement in the economy. “Privatization failed in the 1990s because it had no legal basis,” Pleskachevsky said. “This time around, the country has successfully introduced a raft of regulations to accompany the government privatization drive.”
Prime Minister Vladimir Putin was also upbeat with investors’ response so far to various government initiatives aimed at stimulating foreign investment to modernize the economy. Putin said at a VTB Capital investment forum on October 6 that foreign direct investment has reached $25 billion so far this year. The second wave of privatization is expected to lead to an influx of capital investment in the near future, presidential aide Arkady Dvorkovich said at the same forum. He said however that investment activity is not keeping pace with current economic growth. “Investments aren't yet growing the way we want them to grow," Dvorkovich said, adding that the government's economic growth forecast was unlikely to be reached without increasing investment in the coming months.
But experts say that most of the latest government efforts including its well advertised second wave of privatization did not go far enough to guarantee significant inflow of foreign investment. “The political elite must reach a consensus on whether or not the Russian government is prepared to develop the private sector or keep its stranglehold on key sectors of the economy that are more attractive for private investors,” Alexander Chepurenko, director for international relations at the Higher School of Economics said. “The issue of foreign investment in Russia is both complex and complicated and cannot be resolved by isolated measures such as privatization of key state assets.” There are a whole lot of systemic issues such as unfair competition and the desire on the part of the political elites to tighten their grip on certain segments of the economy even when they cannot effectively control or monitor those sectors, he said. “But above all, there is corruption which is so endemic that other issues pale in comparison,” Chepurenko said.
Russia slipped eight places to 154th in Transparency International's 2010 Corruption Perceptions Index published on Tuesday. Russia performed worse than its former Soviet peers, outdone by countries like Estonia which ranked 26th, Lithuania 46th, Latvia 59th and Georgia in 68th place. Kazakhstan, Moldova, Armenia and Belarus all fared better than Russia which is close to the end of the pack. “The fact that corruption is viewed as worsening in Russia is one of the major reasons why strategic investors remain wary of investing in the country. It is also one of the factors why the equity risk premium in valuations is so high in Russia relative to other big developing economies,” UralSib’s strategist Chris Weafer said. “A number that is as bad, if not worse, than last year’s score of 2.2 will make it a lot tougher for the government to attract foreign strategic investors from risk-adverse industries,” he warned. Russia this year scored 2.1.
In addition to opening up the economy to private investors, the government needs “to soften its requirements for foreign investment in the so-called strategic industries if not completely removing them,” Evsei Gurvich, head of the Moscow-based Economic Expert Group, a think tank said. While the size of government stake in a particular industry does not necessarily deter foreign investors, limiting investment in certain strategic industries still shake investor confidence, Gurvich said.
Business, Energy or Environmental regulations or discussions
Russia’s Micex Falls 2nd Day; Sberbank, Norilsk, Gazprom Decline
By Alex Nicholson
Oct. 27 (Bloomberg) -- Russia’s 30-stock Micex Index slid for a second day, retreating 0.3 percent to 1,520.88 at the start of trading in Moscow. OAO Sberbank, OAO GMK Norilsk Nickel and OAO Gazprom declined.
To contact the editor responsible for this story: Alexander Nicholson at anicholson6@
Last Updated: October 27, 2010 02:32 EDT
RusAl first half net profit up $97 mln to $1.365 bln after reassessment
10:18 27/10/2010
RusAl, the world's largest aluminum producer and owner of a 25 percent stake in Russian mining giant Norilsk Nickel, posted a first half 2010 net profit of $1.365 billion to IFRS, the company said on Wednesday.
Net profit rose $97 million following a reassessment of RusAl's share in associates' profits after Norilsk Nickel published its 2010 interim first half IFRS results on October 7, the company said in a statement.
RusAl's net profit margin rose to 25.7 percent from 23.8 percent.
Profit before tax totaled $1.551 billion compared to an earlier $1.454 billion, while the share of associates' profits increased to $555 million from an earlier $458 million.
The figures include RusAl's stake in Norilsk Nickel.
MOSCOW, October 27 (RIA Novosti)
Domestic market underpins outlook for Russian steelmakers
27 October, 2010, 10:12
Russian steel producers are concentrating on domestic demand, with tax breaks for key users, including the carmaking industry, boosting their bottom line while global demand remains subdued.
Severstal has opened two new Moscow region plants to supply car manufacturers with processed steel, with Evraz is upgrading its Urals plant, while MMK President and Chairman Victor Rashnikov says his company plans to invest up to $3 billion in the country to boost capacity.
“We are planning to produce ten million tons of rolled metal this year. We are going to increase the output by some 20% by 2011 and by another 20% the year after. Our aim is to restore the pre-crisis output."
Recent changes in tax law have made it more profitable for Russian companies to sell processed metal to domestic consumers rather than exporting it. In addition, the state has offered tax breaks to foreign carmakers if they buy supplies from Russian producers. It's part of the government's plan to encourage manufacturers to produce cars from start to finish with locally sourced materials.
Dmitry Kolomytsyn, executive director at Morgan Stanley, says that is bolstering the position of local steelmakers.
“The Russian market is recovering, has recovered enough, and will show enough strength next year to consume more finished steel, and therefore make the Russian steelmakers more competitive compared to the global steelmakers.”
Selling processed steel in Russia can be three times as profitable as sending it abroad. But the market is being distorted by government intervention. Worldwide the demand for steel has yet to recover from the financial crisis and prices remain weak. So producers here have little reason not to take advantage of the situation.
MMK revisits plans for development of the Prioskolskoye iron ore deposit
Renaissance Capital
October 27, 2010
Event: Yesterday (26 Oct) MMK signed an agreement with Hatch Engineering and Consulting (the Russian division of Canada-based Hatch) on a pre-feasibility study of the Prioskolskoye iron ore project. The deposit's iron ore reserves and mine life are estimated at 2bnt and 60 years. MMK plans to build an iron ore beneficiating plant with the capacity to process 25mn tpa of raw iron ore, and to launch the production of pellets and direct reduced iron (DRI) at the deposit.
Action: The news is positive for MMK, in our view.
Rationale: The agreement with Hatch is MMK's first step towards the development of the Prioskolskoye deposit, which may meet with a positive market reaction. MMK has only 30% self-sufficiency in iron ore, including slag processing, while its remaining needs are supplied primarily by ENRC. The Prioskolskoye project may secure close to 90% iron ore self- sufficiency for MMK in the long term, on the company's estimates, while DRI may be supplied to EAF-based steel-making facilities in Russia and Turkey (Atakas site). The high-grade raw iron ore (36-40% Fe) of the Prioskolskoye deposit and favourable geological conditions in the Kursk Magnetic Anomaly region should enable MMK to build a mine comparable to NLMK's Stoilensky GOK and Metalloinvest's Lebedinsky GOK in terms of efficiency. We note that if MMK decides to go ahead with the Prioskolskoye project, it may require significant investment commitments. The initial stage of the project may take four-to-five years, including the development of infrastructure, and will require $3-4bn of capex. However, efficient upstream integration has become a key success factor for steel mills across the globe, so we think MMK's announcement may find investor support.
Boris Krasnojenov
Russia's RusHydro power output down 16% on year in Jan-Sep
Prime-Tass English-language Business Newswire
October 26, 2010
The consolidated electric power output of Russian state-controlled hydropower monopoly RusHydro decreased 16% on the year to 55.569 billion kilowatt-hours (kWh) in January-September, the company said in a statement Tuesday.
The company attributed the decrease to a drop in output at the Sayano-Shushenskaya hydropower plant, which was seriously damaged in a deadly explosion in August 2009, and a drop in output of the cascade at the Volzhsko-Kamskaya GES hydropower plant.
RusHydro's output, excluding output of the Sayano-Shushenskaya hydropower plant, decreased 2% on the year to 48.026 billion kWh.
The company expects its combined output to fall to 70.5 billion kWh in 2010, said George Rizhinashvili, deputy chairman of the company's management board.
In 2009, RusHydro increased electric power output 1.7% on the year to 81.608 billion kWh, it said earlier.
Copyright 2010 Prime-Tass Business News AgencyAll Rights Reserved
Prime-Tass English-language Business Newswire
Polymetal's Nesis Says Ukraine Next Target for Expansion: Video
Oct. 27 (Bloomberg) -- Vitaly Nesis, chief executive officer of OAO Polymetal, talks with Bloomberg's Ilya Khrennikov about the outlook for production at Russia's third-largest miner of gold and silver.
Nesis also discusses the company's expansion in the former Soviet Union countries. They spoke on Sept. 30 in Moscow, Russia. (Source: Bloomberg)
Running time 02:29
-0- Oct/27/2010 00:57 GMT
Last Updated: October 26, 2010 20:57 EDT
HAL, UAC & Rosoboronexport in JV to co-produce Multirole Transport Aircraft
Written by James Wednesday, 27 October 2010 Bangalore: Hindustan Aeronautics Limited has formed a Joint Venture with it's Russian Partners namely United Aircraft Corporation & Rosoboronexport to Co-develop and Co-produce Multirole Transport Aircraft (MTA).
The total development cost is around MUSD 600.70 (approx Rs.2900 crores) to be equally shared by both the sides. It is planned to manufacture 205 aircraft with 50:50 work share between HAL and the Russian partners.
A Joint Venture Company (JVC) is being established with its headquarters at Bangalore, India for executing the MTA project in which HAL and Russian Participants will have equal shareholding.
The agreement for JV Company were exchanged by Mr NC Agarwal, Director (Design & Development) of HAL , Mr S.K Kornev, Head of the Dept. (Air) of Rosoboronexport , and Mr S.V Velmozhkin, General Director of UAC-Transport Aircraft at New Delhi on Sep 09, 2010, in presence of HAL, UAC & Rosoboronexport dignitaries.
MTA is a 15-20 tonnes payload capacity Aircraft which would meet the requirement of the Indian Air Force and the Russian Air Force. The project has been approved by both the Government of India and the Government of Russian Federation.
The main features of MTA are: Maximum takeoff weight 65 tonnes, Payload Capacity 15-20 tonnes, Cruise Speed 800 kmph, Range 2500-2700 km, Service ceiling 12 km. The Aircraft will have two engines, state of the art features such as fly-by-wire, full authority digital engine control, modern avionics and glass cockpit.
Polyus Gold suspends reverse takeover by KazakhGold
Troika Dialog
October 27, 2010
Polyus Gold yesterday announced that its agreement with KazakhGold to conduct a reverse takeover (RTO) will be terminated, as the company does not expect to reach an agreement with the Kazakh government until October 29, its most recent deadline. The deadline has been already pushed back twice, having been set initially at August 10.
Polyus Gold remains committed to the idea of an RTO and expects to complete it once an appropriate solution has been worked out. The announcement is in line with our expectations that there is no simple fix to the full•blown acrimonious conflict with the Kazakh regulator and the painful talks will take some time.
Importantly, the idea of an RTO has not been abandoned by Polyus Gold, which is somewhat disappointing - we still believe that an RTO would at best carry little benefit for minority shareholders, as the company risks losing its core captive EMEA shareholder base. The preferred resolution, in our view, would be the reversal of the acquisition of 50% of KazakhGold by Polyus Gold from mid•2009, but this would be a legally challenging task.
Mikhail Stiskin
TransContainer to begin road show
RBC, 27.10.2010, Moscow 11:34:18.TransContainer (Russian Railways' subsidiary) is planning to launch a road show for the upcoming IPO today.
The company officially announced its IPO plans on October 12, noting that it hoped to raise about $500m. TransContainer is expected to place no more than 35 percent minus two existing shares during the IPO to Russian and foreign investors. As things currently stand, the offering will consist of only existing shares, but if TransContainer manages to secure all the necessary approvals from the authorities, GDRs will be offered as well. The shares are expected to be listed on the London Stock Exchange.
CHERKIZOVO GROUP BEGINS CONSTRUCTION OF A GREENFIELD PORK FARM IN THE LIPETSK REGION
Moscow, Russia – October 27 , 2010 - OJSC Cherkizovo Group (LSE: CHE), one of Russia's leading integrated and diversified meat producers, commences construction of a new greenfield pork farm in the Lipetsk region.
As part of Cherkizovo Group’s dynamic development strategy of its Pork segment, the Company has now started the construction of a new greenfield pork farm in the Lipetsk region of Central Russia.
The new best-in-class integrated multi-site complex will house 4,800 sows and will have an estimated full capacity of 12,500 tonnes of live-weight pork per year. The complex will include separate breeding, rearing and fattening facilities, equipped with state-of-the art technology. The farms will be populated with our own parent stock, using sows from the high yielding and efficient pork breed, DanBred.
The launch of breeding facilities at the new Lipetsk site is scheduled for August 2011, with the rearing and fattening facilities expected to be operational from October 2011. It is expected that the new complex will operate at full capacity in 2013.
The total consideration for the planned investments is expected to be approximately US$50 million, of which approximately 20% will be funded by Cherkizovo and the remaining approximately 80% by bank loans.
Taking into account the recently announced greenfield construction of pork complexes in the Tambov and Voronezh regions, the Group's overall pork production capacity will total an estimated 153,000 tonnes per year by 2013. Additionally, the new site will be closely located to Cherkizovo Group's existing pork production operations, and the Company’s high quality fodder production plant in the Lipetsk region. This proximity is expected to contribute to substantial cost and scale synergies within the high-margin Pork division.
Cherkizovo would like to thank the Lipetsk regional administration for their co-operation in undertaking infrastructure projects to support the facility, and their subsidy support on interest rates and tax benefits, which have facilitated the initiation of work on this site.
For the Record
27 October 2010
PODGORICA, Montenegro — Montenegro regained 29 percent ownership in the nation’s biggest aluminum smelter, which is majority owned by Oleg Deripaska, enabling the government to have one representative on the managing board with the right to veto some of the company’s decisions.
(AP)
Siberian Coal Energy Company, also known as SUEK, signed up on Tuesday for a loan backed by export revenue, now increased to $900 million, almost 30 percent more than it initially sought.
(Bloomberg)
The government may sell as much as 15 percent of Russian Railways shares in an initial public offering after 2013, Interfax reported Tuesday, citing company chief executive Vladimir Yakunin.
(Bloomberg)
Activity in the Oil and Gas sector (including regulatory)
11:50
Russian gas exports up 13.3% in 9 mths - Econ Ministry
Rosneft Raises Crude Output Target as Quarterly Net Doubles
By Stephen Bierman
Oct. 26 (Bloomberg) -- OAO Rosneft, Russia’s largest oil company, raised its output growth target for 2010 after third- quarter earnings beat estimates on tax-exempt production.
The Moscow-based company posted net income of $2.57 billion, up from $1.16 billion in the same period a year earlier. That beat the $2.38 billion average estimate of six analysts surveyed by Bloomberg News. Revenue climbed 19 percent to $15.5 billion.
“We can increase our estimated oil output growth target for the year from 4.5 percent to 5.5 percent to 6 percent,” Chief Executive Officer Eduard Khudainatov said in an e-mailed statement today.
Prices for Russia’s Urals export blend advanced 11 percent to an average of $75.64 a barrel in the third quarter, according to Bloomberg data. Rosneft boosted oil production 5.3 percent to 2.33 million barrels a day in the third quarter and oil-product output by 3.4 percent to 12.4 million metric tons.
“Ramping up Vankor was the key,” Ildar Davletshin, an oil and gas analyst at Renaissance Capital, said by telephone from Moscow. “Any positive news about an extension of tax relief for this field beyond this year would be a big catalyst for the stock.”
Discounted Tax
Production from the Vankor oil field that started in August last year reached about 264,000 barrels of oil a day as of September, according to the Energy Ministry’s CDU TEK statistics unit. Oil produced at the Vankor field was exempt from export duties, Russia’s most burdensome oil tax, until July 1 when the state imposed a discounted tax.
Rosneft pays almost no tax on oil exported from the deposit under discounted duties at prices of $60 to $70 a barrel, Peter O’Brien, Rosneft’s vice president for finance, said by telephone from Moscow.
Net debt fell 26 percent to $14 billion at the end of the third quarter, Rosneft said. That is about the net debt level Rosneft had before becoming the country’s biggest oil producer through the acquisition of bankrupt Yukos Oil Co.’s assets in 2007, according to data compiled by Bloomberg. Rosneft is “confident” about reaching its leverage target by the end of 2010, O’Brien said.
The company spent around $6.2 billion in the first nine months of the year and expects capital expenditure to be in the bottom end of a range of $9 billion to $10 billion by the end of the year, O’Brien said.
Rosneft will release a more complete set of results and hold an investor conference call on Nov. 2, according to the company’s website.
To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@.
To contact the editor responsible for this story: Will Kennedy at wkennedy3@.
Last Updated: October 26, 2010 10:25 EDT
UPDATE 1- Rosneft Q3 net more than doubles, beats forecast
Tue Oct 26, 2010 1:54pm GMT
* Net income $2.57 bln vs $2.46 bln
* Q3 EBITDA up 26.8 pct to $4.64 bln
* Ups year-end production growth goal to 5.5-6 pct
*
By Jessica Bachman
MOSCOW, Oct 26 (Reuters) - Rosneft (ROSN.MM), Russia's largest oil producer, said on Tuesday third-quarter earnings more than doubled on record-high oil production rates, beating analysts' estimates.
The state-owned company, in which the government is looking to privatise 15 percent in coming years, said earnings rose to $2.57 billion from $1.16 billion in the third quarter last year. That was above the $2.46 billion analysts polled by Reuters had predicted.
Crude output rose 5.3 percent to 2.332 million barrels per day (bpd) from 2.214 million bpd in the same period last year.
During the first nine months of this year, output was up 7.5 percent on the back of rising production from East Siberian greenfields, prompting Rosneft to increase its 2010 output growth target.
"Our production intensification has allowed us to raise our output target for 2010 from 4.5 percent to 5.5-6 percent. That said, we are still the most effective company in terms of production costs," said the firm's president, Eduard Khudainatov.
The company also said it reduced its net debt to $13.95 billion from $15.8 billion in the second quarter. Capital expenditure during the third quarter was $2.32 billion.
Rosneft's vice president for finance and investment, Peter O'Brien, said he expects full-year capital spending at the low end of the $9 billion to $10 billion range the company set as its target.
The company said transportation costs for the first nine months of year rose by 36 percent to $5.2 billion, and tax payments equaled 49 percent of total revenues, compared with 45 percent.
"We paid $22 billion in taxes during the first nine months alone, which is almost 52 percent more than in the same period of 2009," said Khudainato
27.10.2010
TNK-BP, Ukraine To Cooperate In Gas Exploration
TNK-BP and the UKrainian government will sign a memorandum of cooperation to explore for gas deposits at the conclusion of a Ukrainian-Russian intergovernmental meeting on economic cooperation, RBK reports.
At the same meeting, Russia and UKraine will sign an intergovernmental agreement on shipbuilding.
Copyright 2010, TNK-BP. All rights reserved.
TNK-BP Third-Quarter Net Rises on Inventories, Ruble (Update1)
By Stephen Bierman
Oct. 26 (Bloomberg) -- TNK-BP International Ltd., BP Plc’s venture with Russian billionaires, said profit rose 25 percent in the third quarter from the previous three months after selling inventories and benefiting from a weaker ruble.
Net income rose to $1.45 billion from $1.16 billion in the second quarter, the Moscow-based company said in a statement today. Compared with the third quarter of last year, net fell 14 percent from $1.68 billion, according to Bloomberg calculations based on information on TNK-BP’s website.
Sales rose 8.4 percent to $11.4 billion from the second quarter, Russia’s third-largest oil producer said. TNK-BP sold about 1.2 million metric tons of oil and products in the period that had been produced in the second quarter, according to the company.
The Russian currency weakened 0.9 percent in the quarter to average 30.6 rubles to the dollar, benefiting exporters with dollar-denominated revenue and ruble costs.
TNK-BP cut net debt about 26 percent to $4.29 billion as of Sept. 30 from $5.82 billion at the end of June, the company said. The company plans to take $1 billion from a credit facility in November, with no immediate plans to take the remaining $1 billion, Chief Financial Officer Jonathan Muir told reporters in Moscow.
Small Acquisitions, BP Stakes
TNK-BP is looking at small acquisitions in retail and natural-gas projects, Muir said. The venture agreed to buy BP’s stakes in some Venezuelan and Vietnamese projects for $1.8 billion on Oct. 18. BP’s partners in Vietnam have two months to decide on exercising their right of first refusal, Muir said.
The venture plans to reduce capital expenditures to $4 billion this year from an earlier planned $4.4 billion, because of lower ruble costs and delays at a Siberian project after failing to agree on access to an oil pipeline controlled by OAO Rosneft, Muir said.
Crude output was little changed at 1.53 million barrels a day, while gas output fell 16 percent to 182,000 barrels of oil equivalent a day, TNK-BP said. Prices for Russia’s Urals blend crude exports fell 1.7 percent to average $75.60 a barrel in the quarter from the previous three-month period, TNK-BP said.
TNK-BP International controls about 95 percent of OAO TNK- BP Holding, its Moscow-traded entity, and additional assets, including almost 50 percent of OAO Slavneft, a venture with OAO Gazprom Neft, and the Linik refinery in Ukraine.
TNK-BP said its ZAO Rospan International gas production unit agreed in September on gaining access to OAO Gazprom’s pipeline network for 6 years with volumes reaching 13.2 billion cubic meters a year in 2016.
To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@.
To contact the editor responsible for this story: Will Kennedy at wkennedy3@.
Last Updated: October 26, 2010 07:42 EDT
Higher output and prices push up TNK-BP sales
By Courtney Weaver
Published: October 26 2010 20:55 | Last updated: October 26 2010 20:55
Sales at BP’s Russian joint venture rose by more than 11 per cent between June and September on the back of higher crude prices and increased production.
TNK-BP said it was targeting production growth of 3 per cent for the full year and between 1 and 3 per cent in 2011 as it builds its presence with a series of small retail and natural gas acquisitions. This month, the company agreed to pay $1.8bn (£1.1bn) for BP’s Venezuelan and Vietnamese assets in its first move to expand abroad and could eventually acquire BP’s assets in Algeria.
Jonathan Muir, TNK-BP’s chief financial officer, said the company was at an “initial point” in discussions with BP regarding the Algerian business and confirmed the company would take control of the Venezuelan and Vietnamese production and pipeline facilities by June next year providing the oil group PetroVietnam and India’s ONGC did not exercise their rights to block the deals. TNK-BP said it would fund the new acquisitions itself.
Sales totalled $11.4bn in the third quarter, an 11.1 per cent increase from the previous year and an 8.4 per cent increase from the previous three months. However, net profit at $1.4m fell 13.7 per cent year-on-year on the back of higher transportation costs and tariffs.
Analysts said the results reflected the company’s improvement from the previous three months, with net profit rising 25 per cent quarter-on-quarter.
“[TNK-BP] has invested big time in greenfields in the past year and now they’re enjoying growth due to these previous investments,” said Lev Snykov, an analyst at VTB Capital in Moscow. He said it was unlikely ONGC and PetroVietnam would block the Venezuelan and Vietnamese acquisitions that were agreed to by TNK-BP and its parent company.
TNK-BP views the acquisitions as a means to fulfil its long-standing ambitions of international expansion.
Previously, BP’s Russian partners claimed BP was blocking TNK-BP’s global expansion during a feud between the two sides for control of the company.
LUKOIL says to invest $100 mln in Turkey in near-term
Tue Oct 26, 2010 7:18pm GMT
ISTANBUL Oct 26 (Reuters) - LUKOIL (LKOH.MM) plans to invest $100 million in Turkey in the near-term, the Russian oil company's president Vagit Alekperov told reporters in Istanbul on Tuesday.
The investment would take the form of expansion of its oil distribution network, oil terminals, and modernisation of its Izmit facilities on the Sea of Marmara coast.
Alekporov added, "We will also focus on our logistics and on projects with Iraq."
LUKOIL, Russia's No. 2 oil company has a large downstream presence in Turkey.
(Reporting by Evrim Ergin; Editing by David Gregorio)
LUKoil Output May Drop
27 October 2010
Oil output from LUKoil may drop under its new 10-year strategy, as the company redirects investment to the Caspian region, Iraq and West Africa, RIA-Novosti reported Tuesday, citing chief executive Vagit Alekperov.
The company’s crude production will probably slump to about 90 million metric tons this year from 97.6 million tons last year, the agency reported. LUKoil plans to invest more than $10 billion annually over the next five to six years.
(Bloomberg)
Sakhalin-1 Operator May Be Changed
27 October 2010
Reuters
The ExxonMobil-led Sakhalin-1 oil and gas project could see a change of operator, Interfax quoted an official from Russia's budget watchdog as saying Tuesday.
"Today their [foreigners'] place may be taken up by Russian companies," Interfax quoted an Audit Chamber representative, Mikhail Beskhmelnitsyn, as saying, when asked whether he would rule out the possibility of dismissing Exxon as the project operator.
But he added that the chamber is not discussing Sakhalin-1's license withdrawal.
Exxon has long been in heated debates with Russian authorities and the state-run gas export monopoly Gazprom over gas sales from Sakhalin-1.
The project budget has also yet to be confirmed for this year.
Both Exxon and Japan's Sakhalin Oil and Gas Development Company, or Sodeko, hold 30 percent stakes in Sakhalin-1, whose three deposits hold an estimated 2.3 billion barrels of oil.
State-owned oil company Rosneft and India's ONGC own the remaining 40 percent.
Audit Chamber warns Exxon Neftegas over Sakhalin-1 spending
RIA Novosti/VTB Capital
October 27, 2010
The Russian government may replace Exxon Mobil as operator of Sakhalin-1 oil and gas project for raising its spending to $95.3 billion from $42.8 billion for the period until 2055, Audit Chamber auditor Mikhail Beskhmelnitsyn said on Tuesday.
"In August 2010, Exxon Neftegas presented a long-term operation program, cost estimates for the full development of the field until 2055. A significant reduction in production is envisaged and at the same time spending rose from the planned volume of $42.8 billion to $95.3 billion. This is a growth of 120 percent ...compared to the costs envisaged in a feasibility study provided for the signing of the Production Sharing Agreement. This will lead to a significant reduction in the state's profit," Beskhmelnitsyn said.
"We have no irreplaceables, this is why any issues and proposals can be considered. Today Russian companies can replace (foreign firms)." The Natural Resources Ministry has also said the government and Exxon Neftegas were at odds over this year's spending and negotiations were difficult.
VTB: We believe a change of operator would not help the investment climate in Russian oil and gas. The most probable candidate for the position of new operator could be Rosneft. We’ve already seen similar situation in 2006 with Sakhalin-2 project, when Gazprom replaced Shell, which was an operator before. Yet it would be largely a formal development and would not affect valuation of Rosneft.
Gazprom
Gaz-System, Europol Gaz Sign Deal on Yamal Pipeline Management
October 27, 2010, 1:06 AM EDT
By Ewa Krukowska
Oct. 26 (Bloomberg) -- Poland’s pipeline operator Gaz- System SA said it signed a deal to take over the management of the Yamal natural gas pipeline from EuRoPol Gaz SA, a joint venture of OAO Gazprom of Russia and Poland’s Polskie Gornictwo Naftowe i Gazownictwo SA.
The deal, initialed on Oct. 18, will pave the way for the Polish energy regulator to officially name Gaz-System as the operator of the Yamal pipeline on the territory of Poland, the company said in an e-mailed statement today.
To contact the editor responsible for this story: Ben Livesey at blivesey@
|Gazprom Neft Launches Field |
| |
| |
|Copyright © 2010 Energy Intelligence Group, Inc. (click for details) |
|Wednesday, October 27, 2010 |
Summary
Russia's fifth largest crude oil producer, Gazprom Neft, has launched commercial production at its Ravninnoye field in the Yamal-Nenets region, in line with plans outlined earlier to boost oil output and offset current declines at mature West Siberian fields.
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related searches
- 10 facts about russia s history
- facts about russia for kids
- videos about russia for kids
- learn about russia for kids
- map of russia for kids
- russia kids learning tube
- russia for kids printables
- information about russia for kids
- russia and central asia map
- german soldiers in russia ww2
- china and russia warn us
- iran china russia news