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Russia 111003Basic Political DevelopmentsRussia, U.S. will agree on missile defense data exchange system - U.S. envoy - "I am convinced that by the next NATO summit, which will be held in Chicago in 2012, we will have already got a Russian-NATO agreement on the missile defense," Beyrle told Kommersant.US ambassador to Russia: US ready to continue reset with Russia - "We are ready to continue the reset policy with the next president of Russia. But it's up to the Russians to decide who it will be," Beyrle said in an interview published in the Monday edition of Kommersant.Russia on track to WTO membership – ambassadorRussia, U.S. have little chance to missile defense agreement as yet – newspaper - "There is no chance to reach an agreement. Now we should either build our missile defense or enlarge our nuclear potential," a Kremlin source told the newspaper… He confirmed the U.S. offer to set up joint centers for analyzing data on missile launches of third countries and for making joint decisions in the reaction to real missile threats and to sign an agreement on cooperation in defense technologies. It would be premature to say that Moscow has accepted the offers, Ryabkov noted.Russia still concerned about US missile shield - Deputy FM Russia eludes missile defense - Practically no chances left to reach an agreement on missile defense By Vladimir Solovyev and Aleksandr Gabuyev Antony starts defence visit to Moscow news - "The defence minister will co-chair the 11th meeting of the India-Russia Inter-Governmental Commission on Military Technical Cooperation (IRIGC-MTC) with his Russian counterpart AE Serdyukov," a defence ministry spokesperson said here.Russians may buy shares at Athens intl airport, Greek gas & oil firmsGreece and Russia rally behind Cyprus - GREECE AND Russia rallied behind Cyprus yesterday in the island’s rights to explore for hydrocarbons in its Exclusive Economic Zone (EEZ) and to condemn Turkish threats as the Cyprus Republic turned 51.Cyprus company seeks equity proceeds to finance Russian land acquisition and housing developmentsLa Stampa said on Sunday Russian business tycoon Roustam Tariko was interested in buying stakes in Italian banks But did not say which. China gaining upper hand in friendship with Russia – reportChina relying less on Russia for weapons - China's dependence on Russia for arms and energy imports has declined and Moscow's position when dealing with Beijing has weakened as a result, a Swedish think tank said.Russia to make aerial observation of Turkey - A group of Russian air inspectors are scheduled to make an aerial observation flight over Turkey on 3-7 October?as part of the Open Skies Treaty, Russia’s Defense Ministry spokesman said.UK introduces secret ban on visas for unnamed Russian officialsBritain 'Blacklists' Magnitsky Officials High Court of London to hear ?2 billion dispute between Russian oligarchsRussia 'gave agents licence to kill' enemies of the state - The Russian secret service authorised the “elimination” of individuals living overseas who were judged to be enemies of the state and ordered the creation of special units to conduct such operations, according to a document passed to The Daily Telegraph. Bulgaria, Russia Agree on New Nuclear Project Delay - Bulgaria's National Electric Company NEK and Russia's Atomstroyexport, a subsidiary of Rosatom, signed on September 30 a new annex extending by the end of March 2012 their contract for the construction of two 1,000 megawatt nuclear reactors at Belene, a statement of the Bulgarian state utility said.Belarus, Gazprom agree on reduced gas price for 2012 - Lukashenko BELARUS DECIDES TO GET $1 BILLION LOAN FROM RUSSIA'S SBERBANK SECURED BY NAFTAN SHARES - NATIONAL BANK OF BELARUS CHAIRMANAbkhazia president to make official visit to Russia on Oct 6Tbilisi insists on deployment of international forces in Abkhazia, South Ossetia - Georgian representatives departed for Geneva on Monday morning.Georgian Airways acquires right to fly to Russia by late 2011Dzambolat Tedeev still under siege in Tskhinvali Police summon Dzambolat Tedeyev for questioning over disorders at South Ossetian government buildingPankisi Is a Breeding Ground for Radicalism - By Paul RimpleBaku to host Azerbaijan-Russia business forum tomorrowRussian consulate holds photo exhibition on ‘Muslims in Russia’ - A rare exhibition of pictures of muslims in Russia was organized the other day by Russian Consul general Andrey V. Demidov at his consulate in Karachi, portraying the rights the muslims enjoy in a country, for long treated as communist and against Islam.Kremlin chief-of-staff to head United Russia’s HQ - paper Int’l Astronautical Congress to discuss Earth observation new ways - The Russian delegation headed by the chief of the Federal Space Agency (Roskosmos) Vladimir Popovkin is participating in the forum with the theme of African Astronaissance.Russia's Soyuz-2.1B carrier rocket orbits Glonass satelliteRussia launches first Soyuz rocket since August crashPolice officer’s car exploded in DagestanTwo policemen killed in car blast in Russia's DagestanTwo policemen die in blast in Dagestan’s KizilyurtEmergency still in effect over forest fires in Bratsk districtFirefighters put out 8 forest fires in Russia's Far East over past 24 hoursRIA Russian Press at a Glance, Monday, October 3, 2011Moscow’s Jet Expo Show Reveals Russian Bizav Recovery - by? Vladimir KarnozovThe Caucasus' Own Hamas - By Anna DolgovNew gas deal might warm up Caucasus politics further - Now Nabucco is seeking its future in Azeri gas. If they can convince the Shah Deniz Consortium (BP and Norway’s Statoil having more than half of the shares and with a small Russian Lukoil presence), then Nabucco can live.New cold peace between Russia and the West? - Interview with Alexander Panov, former Deputy Minister of Foreign Affairs of the Russian FederationRussia Profile Weekly Experts Panel: Putin for President, Medvedev for Prime MinisterWatch out for Putin, and Russia - The country is headed for a dead end, as it seems likely Vladimir Putin will regain the presidency. The U.S. should be prepared for that. By Leon AronNational Economic TrendsCentral bank expects to lose over $10 bln of reserves in 2011Russia Sees Reserves Falling In 4Q, Boosts Outflows ForecastRussian Manufacturing Stagnated in September, HSBC SaysRussia’s grain harvest expected to reach 93 million tonsRussia must diversify or growth will stall, says regional expert - Russia needs to diversify its economy or growth could be undermined, according to Renaissance Asset Management portfolio manager Takouhi Tchertchian.Business, Energy or Environmental regulations or discussionsRussian stock markets open with slipping share pricesStocks May Extend Biggest Decline Since 2008: Russia OvernightRosneft, Lukoil, Gazprom, Sollers: Russian Equity PreviewInter RAO to float GDRs outside Russia Acron sells eight potash permits in Canada to Chinese company for CAD110mn: Positive for Acron Russia's OGK-2, OGK-6 to complete merger as of Nov 1Caterpillar, Uralvagonzavod May Form Venture, Kommersant SaysFortum commissions new capacity at Tobolsk in RussiaEurochem to Build $1 Billion Fertilizer Complex, Vedomosti SaysKerimov May Get EurasiaTower in Moscow City, Vedomosti SaysActivity in the Oil and Gas sector (including regulatory)Russian September Oil Output Rises to Record, Exports SurgeRussia Sept oil output hits post-Soviet recordRussian gas production numbers - Interfax reported Russian gas production numbers for September this morning, showing that Gazprom's production dropped 5.5% y-o-y in the month, which we think was likely due mostly to a drop in exports due to the company's price disadvantage on the European 't rolls back fair access to gas pipes - The draft resolution intended to ensure non-discriminating access to natural gas pipelines is unlikely to receive the go-ahead from the government any time in the near future, RBC Daily reported today, citing a source familiar with the situation.Sakhalin Energy to sell LNG to Japan's TEPCONovatek Takes Yamal LNG GazpromPutin says Russia to watch EU Gazprom raids – IfaxN Stream’s first line to go operational November 8Nord Stream official launch set to Nov 8 – GazpromMILLER ON EC REVIEWS: GAZPROM TO RETAIN ALL RIGHTS, READY TO DEFEND THEM IN LEGAL ARENAGAZPROM HOPING ITS LEGAL INTERESTS IN EUROPE WILL BE RESPECTED, COMPANY OPEN TO DIALOG – MILLERPUTIN INSTRUCTS GAZPROM TO MAKE DETAILED PROPOSALS ON COOPERATION WITH ASIAN COUNTRIES, I.E. JAPAN, SOUTH KOREA, CHINACOMBINED SOUTH STREAM FEASIBILITY STUDY QUITE ENCOURAGING – MILLERGAZPROM: POSSIBLE TO CONSIDER NEW NORD STREAM BRANCHESGAS EXPORTS RISE 25 BCM IN 9MTHS – MILLERGAZPROM: RUSSIAN ECONOMY OUT OF CRISIS, GAS SHIPMENTS IN RUSSIA TOP PRE-CRISIS LEVELGazprom Gets Exemption - Gazprom may get a?10-year tax exemption for?crude oil exported from?its Prirazlomnoye development, Russia's first major offshore oil project in?the Arctic.Gazprom could raise Kirinskoye production target – SourceUPDATE 2-Gazprom weighs options after Botas ends gas deal - Botas ends deal to buy 6 bcm of gas a year from Gazprom; Gazprom eyes other contracts with Turkish firms; Turkey hones gas balance; Deal to supply Turkey with gas via Blue Stream pipeline remains; Gazprom delivered 18 bcm of gas to Turkey last year------------------------------------------------------------------------------------------Full Text ArticlesBasic Political DevelopmentsRussia, U.S. will agree on missile defense data exchange system - U.S. envoy 03/10/2011MOSCOW, October 3 (RIA Novosti)Russia and the United States will sign an agreement on the information exchange system of the European missile defense shield during the NATO-Russia Council summit in Chicago in May 2012, Ambassador to Moscow John Beyrle said in an interview with Russian business daily Kommersant."I am convinced that by the next NATO summit, which will be held in Chicago in 2012, we will have already got a Russian-NATO agreement on the missile defense," Beyrle told Kommersant.The Ambassador said the information exchange system will include an exchange of technology as well as two command centers aimed at tracking missile launches all over the world and analyzing possible threats.Russia is insisting on a joint system with full-scale interoperability to ensure that NATO's system will not be directed against Moscow. The alliance, however, favors two independent systems which exchange information.Russia and NATO agreed to cooperate on European missile defense system at the Lisbon Summit in November 2010. President Dmitry Medvedev proposed a system in which Russia would be responsible for shooting down missiles aimed at NATO members but passing through Russia's airspace or sector, with NATO members committing to protect Russia in a similar fashion.Russian-U.S. controversy on the European missile defense issue should be considered as a positive sign rather than a failure, as the talks are still proceeding, Beyrle said.NATO has refused to provide legally binding guarantees that its missiles would not be directed against Russia, which Moscow says is the only way to prevent a new arms race.US ambassador to Russia: US ready to continue reset with RussiaToday at 10:30 | Interfax-Ukraine Moscow - The "reset" policy has helped Russia and the U.S. heed each other's opinion more and this policy will continue regardless of who will be elected president of Russia in 2012, U.S. Ambassador to Russia John Beyrle said. "We are ready to continue the reset policy with the next president of Russia. But it's up to the Russians to decide who it will be," Beyrle said in an interview published in the Monday edition of Kommersant.Beyrle believes the future of U.S.-Russian relations does not depend on the outcome of the upcoming presidential elections in Russia."I am confident that the reset policy is in line with the national interests of the U.S. and Russia and the whole world," the ambassador said.Beyrle added that the achievements of the reset policy, which began after the meeting between U.S. President Barack Obama and Russian President Dmitry Medvedev in London in 2009 include "a change in the tone in the relations between the two countries.""We have started listening to each other and paying much more attention to each other's concerns," Beyrle said.Beyrle recalled that "a number of historical breakthroughs, primarily the signing in 2010 of a new treaty on strategic offensive weapons" were achieved by the bilateral presidential commission created after the meeting between the two leaders.In addition, the 123 Agreement, which heralds a new era in Russian-U.S. cooperation in the sphere of peaceful use of nuclear energy, has taken effect, commercial contracts on the exp[ort of U.S. goods to Russia and U.S. companies' investments in Russian companies, which are worth billions of dollars, have been signed, the ambassador said.The 2008 economic crisis had a considerable effect on both Russia and the U.S., Beyrle said. "If affected both countries and made us value the fact that our economies are interconnected," he said."The business achievements in the process of reset were born from the understanding that our relations need a solid economic foundation, which could endure economic and political shocks," the U.S. diplomat said. Read more: on track to WTO membership – ambassador 3, 2011 06:22 Moscow TimeRussia may join the WTO already before the end of this year. US ambassador to Russia, John Bayrle, mentions the prospect in an interview with the Moscow-based Kommersant newspaper, Interfax reports.Bayrle said that?the huge amount of?accession-related technical work done last year inspired hope that Russia would finally be granted membership in the organization.Газета "Коммерсантъ" от 03.10.2011"Слабая Россия — это самый жуткий кошмар для США"Джон Байерли — о российско-американских отношениях Возвращение Владимира Путина в Кремль в 2012 году может изменить внешнюю политику России. О том, как изменятся отношения РФ с ключевой мировой державой США после ухода Дмитрия Медведева с поста президента…October 03, 2011 11:08Russia, U.S. have little chance to missile defense agreement as yet – newspaper. Oct 3 (Interfax) - The United States believes in the soonest settlement of the European missile defense problem while Russia is skeptical, the newspaper Kommersant wrote on Monday."There is no chance to reach an agreement. Now we should either build our missile defense or enlarge our nuclear potential," a Kremlin source told the newspaper.Russia and the West are taking the last attempts to reach a compromise in the missile defense issue. The United States has offered Russia to sign an agreement on cooperation in defense technologies and to set up two joint analytical centers, Kommersant said.Moscow and Washington are negotiating a number of U.S. initiatives, including the ones concerning missile defense. The proposed cooperation agreement stipulates the exchange of both information and technologies.The joint analytical centers are supposed to process and analyze Russian and U.S. data on missile launches and to provide a joint response to a possible missile launch by a third party."The missile defense dialog with the United States encounters big problems. There are a number of elements in the positions of both countries, which are hard to bring to a common denominator," Russian Deputy Foreign Minister Sergei Ryabkov told the newspaper.He confirmed the U.S. offer to set up joint centers for analyzing data on missile launches of third countries and for making joint decisions in the reaction to real missile threats and to sign an agreement on cooperation in defense technologies. It would be premature to say that Moscow has accepted the offers, Ryabkov noted."The foreign and defense ministries are considering the cooperation options. The proposal of setting up the joint centers has been made, and we are grateful for that to the Americans, but it is impossible to cooperate without a foundation," he said.It is necessary to obtain legal guarantees that the U.S. missile defense will not be targeted against Russian strategic nuclear forces before starting to cooperate, and the U.S. administration is not prepared to grant such guarantees so far.The discussion of the possible agreement on cooperation in defense technologies is also far from being complete, the deputy minister said. "The draft agreement is being negotiated. We are not at the beginning, but the negotiations are in full swing," he said. The agreement will not be ready by the APEC Honolulu summit of November 12-13, where the presidents of the United States and Russia are due to meet, he said.te(Our editorial staff can be reached at eng.editors@interfax.ru)Russia still concerned about US missile shield - Deputy FM 3, 2011 09:37 Moscow TimeMoscow is still concerned about the deployment of elements of the US missile defense system in Europe, Deputy Defense Minister Sergei Ryabkov said in an interview with the Rossiyskaya Gazeta newspaper published on Monday.He added that Moscow wants a spate of legally-binding guarantees that the US missile shield is not directed against Russia.“What we mean is a raft of parameters, which should confirm Washington’s declarations that the shield does not target Russia,” Ryabkov pointed out.He cited the US’ plans to deploy its radar station in Turkey, plus missile interceptors in Romania?and Poland within the framework of the European missile defense system.(Interfax)Russia eludes missile defense: 3 October, 2011, 06:18Edited: 3 October, 2011, 06:58 Practically no chances left to reach an agreement on missile defense By Vladimir Solovyev and Aleksandr Gabuyev Kommersant learned that the United States has offered Russia to sign an agreement on cooperation in the sphere of defense technologies, including creating two centers which will not only work on analyzing information about missile launches in third countries, but also make joint decisions on ways to respond to real missile threats. In Moscow, according to Kommersant’s sources, these proposals were received with skepticism. Meanwhile, a source in the Kremlin told Kommersant: “There is no chance to come to an agreement. Now we either need to create our own missile defense, or build up the nuclear forces.”After Russia’s proposals to create a sectorial anti-ballistic missile (ABM) system with NATO were rejected by the US and Europe, the West decided to take a reciprocal step. Kommersant learned that Moscow and Washington began discussing several US defense initiatives, including those related to ABM defense. They involve Russia’s proposal to sign a defense cooperation agreement, which not only provisions information exchange, but also exchange of technologies. The fact that the parties are indeed considering this idea was confirmed to Kommersant by the US ambassador to Russia, John Byerly.Another US initiative deals directly with cooperation in the sphere of missile defense – namely, creating two centers. One of the centers is intended by Washington to process and analyze Russian and US information on missile launches. The second center is designed to allow Russia and the US to act cooperatively in the event a missile launch is detected in a third country. Byerly has even predicted the date on which a missile defense agreement will be reached between Moscow and Washington: next year, at the Russia-NATO summit in Chicago.In Russia, meanwhile, the chances of coming to an agreement with the US are not regarded with quite as much optimism. The US initiatives have appeared at a time when Russia seems to have lost hope in the possibility of reaching a compromise on missile defense. A high-ranking Kremlin official answered Kommersant’s question of whether or not it was possible to agree on this issue by frankly saying that such possibilities have been exhausted.“There is no chance to come to an agreement,” the Kremlin official told Kommersant. “We offered to join forces and create a joint AMB defense. They suggested information exchange. We disagree [with this approach]. Now we either need to create our own missile defense, or build up the nuclear forces.”However, despite this fact, Russian negotiators argue that they will try reaching an agreement until the very last moment.“The dialogue on missile defense with the United States is faced with great difficulties,” Russia’s deputy foreign affairs minister, Sergey Ryabkov, told Kommersant. “The parties’ positions contain a wide range of elements, which are hard to bring to a common denominator.” He acknowledged the receipt of the US proposals on joint centers as well as on defense technologies, saying that it is still too early to talk about their adoption by Moscow. “Issues related to cooperation are considered by the Foreign Affairs Ministry as well as the defense agencies,” said Ryabkov. “The proposal to create joint centers has been made, for which we are grateful to the US. But having cooperation without a foundation is impossible.”According to Ryabkov, in order to start working together there needs to be legal safeguards against Russia’s strategic nuclear forces becoming a target of the US missile defense – a guarantee which the US administration is not ready to provide. As for the agreement on cooperation in the sphere of defense technologies, according to the deputy foreign affairs minister, here it is also far from the final stage.“The draft agreement is being discussed,” he said. “We are not at the beginning stages, but in the midst of negotiations. It will not be ready before Hawaii [the November 12-13 APEC summit in Honolulu, where the US and Russian presidents have been scheduled to meet].”The need to continue negotiations has also been expressed by Russia’s permanent envoy to NATO, Dmitry Rogozin.“The topic has not been exhausted, and while there is still a possibility, we will continue trying to reach an agreement,” the permanent envoy told Kommersant. “Until NATO passes the point of no return, we will continue to engage in talks with our partners.”However, the diplomat is not particularly impressed with the recent US proposals.“I have the impression that the US is interested in Russia’s groundwork developments, where we are still advancing and where we are ahead,” he said, referring to Washington’s suggestion to sign an agreement on defense technologies. “They do not want to share the information that interests us, but want to obtain the information that interests them. Meanwhile, we support the idea of parity.”As for missile defense negotiations, the permanent envoy says that Moscow will continue to insist on safeguards.“No matter how long the thread stretches, there is an end,” Rogozin said. “They will either have to give us some long-term credible assurances that the ABM defense is not aimed against us, or they will need to tell us that they are not giving us any guarantees whatsoever. So far, we have been hearing assurances and pats on the back… ‘Hey guys, it’s not against you.’ But it could also be said, ‘Guys, it is for you.’”Antony starts defence visit to Moscow news October 2011New Delhi: Indian defence minister AK Antony will start a three- day visit to Moscow from Monday where he will take stock of military cooperation with Russia and review ongoing projects.? Antony will also witness the test-flight of the Fifth Generation Fighter Aircraft (FGFA) which is being developed under an Indo-Russian joint venture."The defence minister will co-chair the 11th meeting of the India-Russia Inter-Governmental Commission on Military Technical Cooperation (IRIGC-MTC) with his Russian counterpart AE Serdyukov," a defence ministry spokesperson said here.The meeting comes as a run-up to prime minister Manmohan Singh's summit-level talks with Russia, likely to be held in December.Besides regional and global security issues, the two sides will review progress of important ongoing projects such as the refit of Admiral Gorshkov and the delivery of frigates for the Indian Navy as well as the Multi-Role Transport Aircraft.The two sides will also deliberate upon aspects relating to licensed manufacture and maintenance of T-90 tanks and Su-30 MKI aircraft in India, the MoD spokesperson said.The two sides are also expected to discuss delivery of K-152 Nerpa nuclear submarine which is being leased to India by Russia, non-adherence to delivery schedule, mid-contract cost escalation, lack of spare support and issues over transfer of technology of weapon systems procured from Russia by India.In the run-up to the meeting, the defence secretary and several senior ministry officials have visited Russia. Indian Navy chief admiral Nirmal Verma and former IAF chief air chief marshal PV Naik had also gone there to review the respective projects of their services.The annual meeting is held alternatively in India and Russia.17:37?02/10/2011ALL NEWSRussians may buy shares at Athens intl airport, Greek gas & oil firms, Greece, October 2 (Itar-Tass) — Russians may purchase shares at the Athens international airport, Greek gas and oil corporations during the beginning process of privatisation, said on Sunday prominent Greek lawyer and consultant of major investment projects Alexandros Likurezos, speaking in an interview with Itar-Tass.Likurezos was the key reporter on a juridical basis of Greek-Russian relations at the first bilateral conference “New horizons of economic mutual relations between Greece and Russia in the sphere of investment policy, commerce and tourism”, that ended on Rodos Island on Sunday.According to the lawyer, the forum discussed a programme for privatisation of Greek state property, in which Russian firms may participate. “We are very interested in Russians purchasing important infrastructure projects in Greece, since this will contribute to our country’s economic development,” Likurezos said.According to the lawyer, the authorities will implement a plan on selling the new Athens international airport in the area of Spata near Athens where 55 percent of stocks are owned by the Greek state, 40 percent by the German company Hochtief and five percent – by the group of compnies of Greek tycoon Copelouzos.“There is another major and interesting project – a sale of a large area of the old Athens international airport in the Athens suburb Elliniko,” the lawyer added. Elliniko assets were handed over to the Fund for using state property, which now announced a tender on hiring real estate experts.The list of privatisation also contains the company “State Lottery (100 percent), the State Power Company (17 percent), the State Gas Corporation and the oil corporation Hellenic Petroleum.Greece and Russia rally behind Cyprus Jean Christou Published on October 2, 2011 GREECE AND Russia rallied behind Cyprus yesterday in the island’s rights to explore for hydrocarbons in its Exclusive Economic Zone (EEZ) and to condemn Turkish threats as the Cyprus Republic turned 51.Greek Minister of National Defence Panos Beglitis, who attended yesterday’s parade, told reporters: “We are in close cooperation with Cyprus’ leadership, we are watching Turkey’s actions very closely, in a composed and decisive manner and I would like once again to denounce statements often made by the Turkish political leadership, as well as the policies followed.”Russian Ambassador to Cyprus Vyacheslav Shumskiy said Moscow’s position was “absolutely clear” on the issue. “We were among the first countries to comment on that, and we totally support the sovereign right of the Cypriot people for exploitation of natural resources , this is totally in accordance with the international law ?and with the EU regulations, so there is no doubt about that,” he said.The comments came amid increasing reports of military activity around the area of Block 12 within the Cyprus EEZ where American company Noble Energy has begun drilling.Also the New York Times reported that NATO’s secretary general, Anders Fogh Rasmussen, had expressed disquiet about tensions over natural gas exploration in the Mediterranean between a newly assertive Turkey and Cyprus, as well as Turkey’s strained relations with Israel, saying that they were both “a matter of concern.”Rasmussen said he did not foresee the tension turning into conflict, and he praised Turkey as an indispensable member of NATO that could be “a bridge” between the West and the Arab countries now engaged in revolts.“Obviously the tensions between Turkey and Israel are a matter of concern,” he said in an interview in Brussels. “It’s a bilateral issue, NATO is not going to interfere with that,” he added, “but it is the interest of the alliance to see these tensions eased, because Turkey is a key ally and Israel is a valuable partner for the alliance.” ?Asked about Turkey’s warning that it might send military ships toward Cyprus, Rasmussen said that “NATO as an organization is not going to interfere with these disputes,” while adding, “I do not envisage armed conflict in the eastern part of the Mediterranean.”Yesterday local daily Phileleftheros reported that Turkey planned to escalate its activities in and around the Nicosia Flight Information region (FIR) with a series of military night-time “search and rescue” exercises stretching between Akrotiri – south of Limassol - and Noble’s rig the Homer Ferrington, which is around 160 km off the coast.The paper also said that Israel was monitoring the Turkish moves with unmanned drones circling the drilling area.?Meanwhile under the headline “The Russians are coming’, daily Politis yesterday said the Russian aircraft carrier ‘Admiral Kuznetsov’ was expected in the eastern Mediterranean region next month.?An officer of the Russian fleet, speaking to the ITAR-Tass news agency reportedly said that the aircraft would arrive in the region on November 19 for three months, carrying with it a large number of Russian fighters. A submarine was also mentioned for “patrol purposes” as part of exercises with other countries in the area. Politis said the arrival of the Russians coincided with the expected announcement by Noble of its initial drilling results.Asked yesterday about the possible visit by the Admiral Kuznetsov, Russian ambassador Shumskiy said he had no such information but would be available to comment once he was briefed.“This is news to me, I don't have anything official about that, absolutely nothing, so far it’s news to me,” he said.Shumskiy did say he thought Turkey’s stance was not a “wise one”, although he added that he did not see the situation becoming “hot”.President Demetris Christofias yesterday repeated that Cyprus’ sovereignty was non-negotiable and that the Republic would not consider any form of arbitration or mediation in exploration issue.He did however extend a comment to the Turkish Cypriots, saying that a discovery of oil and gas would be a “blessing” for the entire peoples of Cyprus. He urged that the matter become a catalyst for a Cyprus solution rather than an obstacle.Christofias attended the parade, along with Archbishop Chrysostomos as well as Greek National Defence Minister Panos Beglitis, and diplomats.?The day was not without incident however when a small group from the ‘Indignant’ protesting against the Mari blast events tried to approach the officials’ platform, and clashed with the police.?“Police members tried to stop this group… one of them tried to break through the police barrier. A police officer tried to stop him and in doing so the member of the public fell on the ground and claimed he was hit by police,” spokesperson Michalis Katsounotos said.?The report into the Mari blast compiled by investigator Polys Polyviou, comes out tomorrow.?Cyprus company seeks equity proceeds to finance Russian land acquisition and housing developments Business News Correspondent - 03.10.2011The EBRD is considering up to USD 20 million equity investment in Arrones Ltd, a limited liability company registered in Cyprus. The Bank’s equity proceeds will be used to finance land acquisition, infrastructure and other start-up and construction costs of low-rise housing developments in Russian regional cities. ?The Project transition impact will derive from the following key areas:The Project will deliver one of the first large-scale mass-market residential developments involving a number of regional cities and built with the use of modern construction technologies, a uniform architectural concept and integrated and well-organised commercial and social space.The Project will also demonstrate the use of energy efficiency technologies and practices which exceed national standards in terms of energy performance and comply with international best practice. The upgraded specifications, which include super-insulation, ground source heat pumps, LED lighting and photovoltaic panels, are comparable to the Western European best practice.Arrones Ltd, a limited liability company registered in Cyprus. The Company is beneficiary controlled by Baring Vostok Fund IV Management Limited. Source; EBRDItalian stocks - Factors to watch on Oct 3 La Stampa said on Sunday Russian business tycoon Roustam Tariko was interested in buying stakes in Italian banks But did not say which. China gaining upper hand in friendship with Russia – report ISTBEIJING (Reuters) - China is gaining the upper hand in its much vaunted friendship with Russia due to Beijing's shift away from relying on Moscow for advanced weapons and deep problems with energy cooperation, a report released on Monday said.While leaders of both countries play up the extent of their alliance and strategic ties, this partnership is unlikely to develop into anything more significant, the Stockholm International Peace Research Institute (SIPRI) said."In the coming years, while relations will remain close at the diplomatic level, the two cornerstones of the partnership over the past two decades -- military and energy cooperation -- are crumbling," the think-tank wrote. "As a result, Russia's significance to China will continue to diminish."China and Russia's ties have careened between cooperation and near war in past decades, veering from firm Communist friends in the 1950s to fighting over a border dispute in 1969.While both work closely at the United Nations and frequently oppose U.S. policies or Western demands for sanctions on countries like Syria, China and Russia also value their relationship with Washington, the report said."Furthermore, there are strategic planners in Beijing and Moscow who view the other side as the ultimate strategic threat in the long term."China once relied significantly on Russia for weapons. But dramatic advances over the past few years mean that China will actually become a competitor to Russia on the world stage.That is one reason why Russia does not wanted to export its most high-tech equipment to China, the report said."A more advanced Chinese defence industry is increasingly able to meet the needs of the PLA (People's Liberation Army), limiting the need for imports of large weapon platforms," it said."At the same time, it is unclear if Russia is able and willing to meet Chinese demands because of problems with its own arms industry and concerns that China will copy technology and compete with Russia on the world market."In energy cooperation, ties have frayed, as the sides argue about details of oil and gas imports into China and as Beijing turns to other suppliers, notably in central Asia, SIPRI said.A $1 trillion deal to supply Russian gas to China over 30 years, supposed to be the high point of President Hu Jintao's visit to Russia in June, has failed to materialise.Sources close to talks said price differences between the world's largest energy producer and Beijing were still too big."China is now in a position to have greater expectations of and place demands on Russia, while Russia is struggling to come to terms with this new power dynamic," the report said."In both countries, strategic planners warn that the present competition could escalate to a more pointed rivalry, entirely undermining the notion of a strategic partnership."Consequently, China and Russia will continue to be pragmatic partners of convenience, but not partners based on deeper shared world views and strategic interests."(Reporting by Ben Blanchard; Editing by Ron Popeski)Politics - Published Monday, 03 October 2011 06:50 | Author: AFP / The Swedish Wire China relying less on Russia for weapons (AFP) - China's dependence on Russia for arms and energy imports has declined and Moscow's position when dealing with Beijing has weakened as a result, a Swedish think tank said."Decreasing dependence on Russian arms exports and a growing number of alternative energy suppliers mean that China has taken the upper hand in the relationship," the Stockholm International Peace Research Institute (SIPRI) said in a report released Monday.A key to the changing dynamic, the report said, is that China "is today mainly interested in acquiring technology to develop its own arms industry," and so its need for Russian-made weaponry has diminished.Moscow has proved unwilling to sell its most sophisticated systems to Beijing, because it fears China will copy the technology and then export its own product."The nature of the arms transfer relationship will increasingly be characterised by competition rather than cooperation," said Paul Holtom, who heads SIPRI's arms transfer programme.China's position has been further strengthened because its need for Russian crude oil has declined over the past five years, according to SIPRI."China's largest oil supplier is Saudi Arabia, followed by Angola, Iran and Oman," SIPRI said."In the gas sector, Russia's negotiating position has been seriously weakened by China's success in finding other partners, especially in Central Asia."Although the former Cold War allies are often viewed as partners in international diplomacy, notably when opposing Western-led drives to sanction autocratic regimes, China and Russia share limited mutual trust.Russia and China have threatened to veto any United Nations Security Council resolution against the Syrian regime -- a move favoured by many Western nations -- over Damascus's crackdown on pro-democracy activists.Despite often taking similar diplomatic positions, there are policy makers in both capitals, "who view the other side as the ultimate strategic threat in the long-term," according to SIPRI."The China-Russia partnership is plagued with problems," report co-author Linda Jakobson said."When interests converge, Beijing and Moscow collaborate, but when interests diverge the strategic partnership has little meaning. Genuine political trust is lacking," she added.SIPRI, established in 1966, in an independent policy research centre that is 50 percent funded by the Swedish state.Last Updated (Monday, 03 October 2011 06:56) Russia to make aerial observation of Turkey 3, 2011 10:14 Moscow TimeA group of Russian air inspectors are scheduled to make an aerial observation flight over Turkey on 3-7 October?as part of the Open Skies Treaty, Russia’s Defense Ministry spokesman said.He added that the range of the flight, which is supposed to be monitored by both Russian and Turkish experts, will be 1,500 km.The Open Skies Treaty comprising 34 states was signed in 1992. (RIAN)19:11?02/10/2011ALL NEWSUK introduces secret ban on visas for unnamed Russian officials, October 2 (Itar-Tass) – Britain’s Home Office has imposed a secret ban on the issuance of travel visas to the Russian citizens allegedly linked to the case over death in custody of the Moscow-based lawyer Sergei Magnitsky, who worked for the Hermitage Capital Management hedge fund, The Observer weekly said quoting a well-informed MP.Chris Bryant, a former UK foreign minister, told the newspaper he had received confirmation about the ban from the immigration minister Damian Green."From conversations with Damian Green, I took it that these people would not be welcomed,” the Observer quoted the MP. “It seems now as if there is a secret ban on these people."The article notes the British government’s reluctance "to publicly confront the Kremlin” on the Magnitsky problem, although Prime Minister David Cameron raised the case during his visit to Moscow last month, the article said.“The move, which has not been publicised for fear of doing damage to Anglo-Russian relations, follows the lead of the US, which introduced visa bans for individuals accused of involvement,” The Observer said.“Washington's decision last August provoked Russia’s foreign ministry to draw up its own blacklist of banned US government officials,” it indicated.However, Bryant believes the government should move beyond the constraints of diplomacy and announce the ban."America and countries in the EU are moving towards a full open public ban on these people,” he said. “If people are not welcome, they /the British government – Itar-Tass/ should make it clear they are not welcome; not just privately to the individual, but publicly, because it would make it absolutely clear to anybody else that if you are engaged in corruption and criminality in Russia, you are not coming to Britain."The Observer recalls in this connection the Home Office said it would not comment on individual cases, but added: "We can refuse a visa when an individual's character, conduct or associations make entry to the UK undesirable."Britain 'Blacklists' Magnitsky Officials 03 October 2011The Moscow TimesBritain has secretly blacklisted at?least 60 Russian officials implicated in?the 2009 prison death of?lawyer Sergei Magnitsky, a?British media report said Sunday.The?move would replicate a?measure taken by?the United States in?July that prompted the?Russian Foreign Ministry to?draw up a?blacklist of?U.S. officials in?retaliation.?If the?British move is confirmed, it could strain relations after a?whistle-stop visit to?Russia by?Prime Minister David Cameron last month that saw the?signing of?$340 million in?business deals. The?visit marked the?highest-level British-Russian talks in?Moscow since 2006.?The?Observer newspaper reported that British officials introduced the?blacklist secretly in?order not to?damage ties between Moscow and?London. British lawmaker Chris Bryant said the?visa ban had been confirmed to?him by?Immigration Minister Damian Green, the?report said. "From conversations with Damian Green I took it that these people would not be welcomed, it seems now as if there is a?secret ban on?this list of?people," Bryant was quoted as saying.A?spokesman for?the British Embassy in?Moscow did not respond to?repeated calls to?his cell phone Sunday.?British-Russian relations sank to?post-Soviet lows after the?2006 poisoning death of?former FSB agent Alexander Litvinenko in?London and?the Russian government's subsequent refusal to?extradite Britain's prime suspect, State Duma Deputy Andrei Lugovoi.?U.S. politicians, including Senator John McCain, have called on?the British government to?introduce visa bans and?asset freezes on?officials linked to?Magnitsky's death.?Hermitage Capital, the?investment fund that employed Magnitsky, said in?a statement that the?documents revealed by?the Observer report show that "a number of?government officials and?Russian criminals named by?Sergei Magnitsky as perpetrators of?the $230 million theft have regularly traveled to?the U.K. in?the last five years."Read more: The Moscow Times High Court of London to hear ?2 billion dispute between Russian oligarchs 03/10/2011The High Court of London will start hearing a ?2 billion lawsuit on Monday filed by Boris Berezovsky, a Russian billionaire currently living in the UK, against his former business partner Roman Abramovich.Berezovsky is seeking compensation for a number assets he was forced to sell to Abramovich between 2000 to 2003.Berezovsky claims in his lawsuit that Abramovich intimidated him and his business partner Badri Patarkatsishvili into selling a number of assets including a 43 percent in Russian oil company Sibneft, and a stake in the aluminum group Rusal, for significantly less than the shares were worth.?The British mass media has described the dispute between two Russian oligarchs as the legal battle of the year.?Russia 'gave agents licence to kill' enemies of the state Russian secret service authorised the “elimination” of individuals living overseas who were judged to be enemies of the state and ordered the creation of special units to conduct such operations, according to a document passed to The Daily Telegraph. By Duncan Gardham, Security Correspondent10:23PM BST 02 Oct 2011The directive refers specifically to the European Union and western Europe and appears to be signed by the head of counter-intelligence of the FSB, the successor to the KGB. It is dated March 19, 2003 - four years before the killing of the former Russian spy Alexander Litvinenko in London. It sets a provisional deadline of May 1 2004 for the new units' work to begin. It is understood the document is also in the possession of Scotland Yard's counter-terrorism command which is investigating the Litvinenko case. A hearing is to be held next week into whether a full inquest should take place into Mr Litvinenko's death, as the Russian government has insisted that Andrei Lugovoi, the former KGB bodyguard who is a main suspect in the case, will never be extradited back to Britain. Labelled "Secret documentation. For internal use only. Do not copy", the leaked document refers to a law on "countering extremist activities" passed eight months earlier, although that law does not refer to the use of force. The objectives, the directive says, are "observation, identification, possible return to the Russian Federation" of their targets. But it also allows for "under special directives" the "elimination outside of the Russian Federation in the countries of Near Abroad [former Soviet states] and in the European Union, of the leaders of unlawful terrorist groups and organisations, extremist formations and associations, of individuals who have left Russia illegally [and are] wanted by federal law enforcement". Apparently with leaders of rebellions in the Caucasus in mind, among others, it names the crimes of those sought as terrorism, "extremist activity," murder, kidnapping and "others classified as especially serious crimes against citizens of the Russian Federation and directed against the Russian state and government". The order sets up the "intensive training of the newly formed groups and units in relation to specific conditions of work in Western Europe and countries of the European Union". It says there will be "in-depth training of individual agent-analysts for work in the countries of European Union". It is signed at the bottom by Col General Nechaev, First Deputy Head of the FSB counter-intelligence branch and also bears the organisation's stamp. Colonel General Nechaev is a former civil and military health minister who was invited to London by the then health minister Virginia Bottomley in 1993 to "see the operation of the NHS at first hand". Vladimir Putin, then the Russian president and now the prime minister, pushed a law on "counteracting terrorism" through the Russian Duma in March 2006 which gave the FSB the power to kill "terrorists" abroad. However, the latest document suggests an extensive secret programme was already in place. The Russians have conducted controversial assassinations against Chechens in Dubai, Qatar, and Vienna. The latest, in Istanbul, was just last week, when a gunman shot a Chechen rebel leader and his two bodyguards dead in a busy street in Istanbul. Mr Litvinenko died in a hospital bed in London in November 2006 after allegedly being poisoned by a former FSB bodyguard using radioactive polonium 210. Other potential Russian targets in Britain include the oligarch Boris Berezovsky, who was the subject of a suspected assassination plot in 2007, and the Chechen dissident Akhmed Zakaev. Mr Zakaev said: "I knew anytime that something like this could happen to me. They want to eliminate me before 2012 when Putin comes back to the Kremlin [as president]. They need to solve these 'problems.' That is what they call us and it doesn't matter where we are." Mr Berezovsky said: "I knew this a long time ago and there were several attempts to kill me. I was lucky, I was warned and I am safe." He said he had been told again only a month ago not to travel abroad. Bulgaria, Russia Agree on New Nuclear Project Delay | October 3, 2011, Monday|?185 viewsBulgaria and Russia have reached an agreement to extend the negotiations over Belene nuclear project by another six months as of the beginning of October amidst continuing haggling over its price and feasibility.Bulgaria's National Electric Company NEK and Russia's Atomstroyexport, a subsidiary of Rosatom, signed on September 30 a new annex extending by the end of March 2012 their contract for the construction of two 1,000 megawatt nuclear reactors at Belene, a statement of the Bulgarian state utility said.The new, fourteenth, annex between the two sides will allow them to take into account the results from the stress tests and the expected developments on the electricity market.Bulgaria's Economy Minister Traicho Traikov recently commented that the project's consultant HSBC has already come up with its first conclusions, which show that there are ways to make Belene profitable.Traikov however stressed that the line between "profitable" and "unprofitable" is very thin and a matter of detailed negotiations.In the middle of July Russia's state nuclear company Atomstroyexport took Bulgaria's NEK to an arbitration court for EUR 58 M over delayed payments for its work on two nuclear reactors.The next day the Bulgarian company said it is ready to strike back with a EUR 61 M counter claim against Atomstroyexport over delayed payments for purchases of old equipment for the plant, worth about EUR 300 M.The 12th annex triggered a huge scandal at the beginning of April after the head of the national utility company NEK Krasimir Parvanov signed an agreement with Rosatom's subsidiary Atomstroyexport that potentially threatens Bulgaria's national interests by obliging the Bulgarian government to reach a final agreement with the Russians on Belene by July 1, 2001.Traikov slammed Parvanov and announced he is going to be fired, but the dismissal was later overturned by Prime Minister Boyko Borisov.Borisov harshly criticized the Energy Minister's hasty and emotional reaction and threatened him with being kicked out of office.It turned out that Parvanov has coordinated his actions with Deputy Prime Minister, Simeon Djankov, who oversees finance and economy.The signed document stirred heated debates in Bulgaria as it came before the two sides agree on the price of the project and conduct safety checks.Bulgaria and Russia are unable to agree on the major bone of contention?- the price for the construction of the 2000-MW Belene NPP.Russia says the project construction price should be?EUR 6.3 B. The Borisov government wants to set the price at as little as EUR 5 B.After it was first started in the 1980s, the construction of Bulgaria's second nuclear power plant at Belene on the Danube was stopped in the early 1990s over lack of money and environmental protests.After selecting the Russian company Atomstroyexport, a subsidiary of Rosatom, to build a two 1000-MW reactors at Belene and signing a deal for the construction, allegedly for the price of EUR 3.997 B, with the Russians during Putin's visit to Sofia in January 2008, in September 2008, former Prime Minister Stanishev gave a formal restart of the building of Belene. At the end of 2008, German energy giant RWE was selected as a strategic foreign investor for the plant.The Belene NPP was de facto frozen in the fall of 2009 when the previously selected strategic investor, the German company RWE, which was supposed to provide EUR 2 B in exchange for a 49% stake, pulled out.Belarus, Gazprom agree on reduced gas price for 2012 - Lukashenko NovostiOctober 2, 2011Belarus will receive Russian gas in 2012 for a significantly reduced price, Belarusian President Alexander Lukashenko said on Friday. Lukashenko, who met last week with Alexei Miller, the CEO of Russian gas giant, Gazprom, said that next year Belarus would buy Russian gas for a lower price but did not specify the amount of the new gas price. The gas pricing formula is a major concern for Belarus, which currently buys Russian gas for $286 per 1,000 cubic meters. Russian Prime Minister Vladimir Putin said this summer that Russia would introduce "an integrative decrease adjustment into the gas pricing formula" for Belarus from 2012, but added that it should be accompanied by Gazprom's acquisition of the Belarusian government's 50% stake in Beltransgaz. Gazprom had already bought a half of Belarusian gas giant in 2007. Minsk is ready to sell the remaining Beltransgaz's half on condition that the pipeline would be fully filled up with gas in order "to have transit payments," Lukashenko said. Belarusian leader has also reiterated his stance on the equal prices both for Belarus and Russia, citing a membership in the Customs Union and the Common Market that is due to start operating on January, 1 in 2012. Gazprom's four-year contract with Belarus, under which the ex-Soviet republic pays for natural gas at a considerable discount to European gas prices, expires on December 31.10/03 12:08 ? BELARUS DECIDES TO GET $1 BILLION LOAN FROM RUSSIA'S SBERBANK SECURED BY NAFTAN SHARES - NATIONAL BANK OF BELARUS CHAIRMAN NEWSAbkhazia president to make official visit to Russia on Oct 6, October 3 (Itar-Tass) - - President of the Republic of Abkhazia Alexander Ankvab will make an official visit to Russia on October 6, 2011. As the Kremlin press service reported, a corresponding invitation to the newly elected president of Abkhazia was sent by Russian President Dmitry Medvedev.October 03, 2011 12:38Tbilisi insists on deployment of international forces in Abkhazia, South Ossetia. Oct 3 (Interfax) - Georgia will demand the deployment of international peacekeepers and police forces in Abkhazia and South Ossetia at the upcoming round of the Geneva negotiations.Georgian representatives departed for Geneva on Monday morning.Tbilisi will demand the creation of international security mechanisms in Abkhazia and the Tskhinvali region, head of the Georgian Interior Ministry's analytical department Shota Utiashvili said."Georgia has long been demanding the deployment of international peacekeeping forces and an international police mission on the occupied lands," he said.te jv(Our editorial staff can be reached at eng.editors@interfax.ru)Georgian Airways acquires right to fly to Russia by late 2011 October 2011, 10:31 (GMT+05:00)Georgia, Tbilisi, Oct.3 / Trend, N. Kirtskhalia /Georgian airline Georgian Airways has acquired a permission of aviation authorities of the Russian Federation and Georgia to continue direct charter flights between Moscow and Tbilisi for three more months - by late 2011, the airline told Trend.A similar permission was granted also to the Russian Siberia Airlines (S7 Airlines).The term of the previous permission for air flights between Russia and Georgia, under which the two airlines began to carry out daily flights in parallel to these directions in last summer, expired in October.It should be noted that flights between the two countries after three-year break was resumed in early 2011.Do you have any feedback? Contact our journalist at trend@trend.azDzambolat Tedeev still under siege in Tskhinvali 09:24 A situation in the Tskhinvali region remains tense. The regime of Eduard Kokoity and supporters Dzambolat Tedeev came into a power struggle in the occupied territory. Tskhinvali law enforcers are trying to detain head coach of Russian national team in freestyle wrestling. But these attempts are hampered by armed supporters of Tedeev who is locked inside his house.On Sunday, "Dickie" (Dzhambolat Tedeev) was summoned to the prosecutor's office for questioning in Tskhinvali regarding the case of a clash that occurred in the local CEC on September 30th. He is accused of insulting the authorities, trying to influence work of the CEC and organization of turmoil. But Dzhambolat Tedeev refused to receive summons, and now they want to bring him in for questioning by compulsion. To prevent this, his supporters blocked the passage for law enforcement officers by parking cars in front of Tedeev's house.On October 1st three cars with Tskhinvali riot police headed by "attorney general" Taimuraz Khugaev arrived at Tedeev's house. They grabbed two guards of unlucky candidate for "president" and took them to different jails. They also took away two cars of security team of the leader of the Tskhinvali opposition. "Prosecutor general" also demanded transfer of Dzambolat Tedeev and his 71-year old father Ilia.The Tedeev team say that Kokoity militants detained about 60 supporters in Tskhinvali, Java and Znauri, and only a few of them were charged. Local interior ministry denied this and mentioned 5 arrested, 2 of whom are charged with "hooliganism." Dzambolat Tedeev told Russian media that he intends to remain in Tskhinvali region until the upcoming November 13th "elections", but he fears for his life.Police summon Dzambolat Tedeyev for questioning over disorders at South Ossetian government building South Ossetian prosecutors have summoned Dzambolat Tedeyev, Chief Coach of the Russian national free wrestling team, for questioning, Deputy Prosecutor General of South Ossetia Eldar Kokoyev said, Gazeta.ru reports.Tedeyev refused to receive the summoning note. The coach is to be questioned over the protests at the government building on September 30, when a crowd tried to break into the Central Electoral Commission.Tedeyev denied that 150 of his supporters were detained. Kokoyev said that the police had detained 14 people. Russian Interior Minister Rashid Nurgaliyev arrived to stop the protests over the refusal of the CEC to register Dzambolat Tedeyev as candidate for president, Georgia Online reports.The minister has recently been to Vladikavkaz and Cherkessk. Media of Tskhinvali has not reported on Nurgaliyev’s arrival to Tskhinvali.The CEC refused to register Tedeyev on Saturday due to residence qualification. The local law requires candidates to live permanently live in the country for 10 years.The presidential polls will be held on November 13.Tendeyev is considered one of the main opponents of Eduard Kokoity. He has conflicts with the local military support of Kokoity. Mass disorders happened in Tskhinvali on Friday.Arsen Fadzayev, Russian MP, deputy chairman of the committee for the CIS and compatriots, Olympic champion for free wrestling twice, wants to be a mediator between Kokoity and Tedeyev. He urged them to show prudence and composure. Fadzayev was reported to leave Moscow for Vladikavkaz on Sunday and then to Tskhinvali.Pankisi Is a Breeding Ground for Radicalism 03 October 2011By Paul RimpleThe Pankisi Gorge is back in the news — but this time not for harboring Chechen militants. In a display of Georgian overkill, witnesses say about 25 masked officers arrested English teacher Shorena Khangorshvili for possessing heroin on Sept. 16 as she was walking out of a pharmacy in Akhmeta. The incident risks destabilizing a defensive and traumatized community.A decade ago, Pankisi was notorious for being “Georgia’s most dangerous region,” where Tbilisi officials not only turned a blind eye to kidnapping, arms and drug smuggling but often participated in these activities as well. By about 2004, Pankisi began to fall off the radar as authorities cracked down on crime, and many Chechens migrated to other countries or returned home.Today, Pankisi would be just another impoverished rural Georgian region if not for the increasing presence of fundamentalist Islam in the valley — a byproduct of the Chechen wars. The ethnic Kisti — Georgians of Chechen descent — belong to either the Sunni or Sufi branches of Islam and find their indigenous forms of prayer and traditions under increasing threat from what they call Wahhabism. Georgian President Mikheil Saakashvili has warned of the terrorist threat that these fundamentalists pose.Shorena says she was approached in July to work as an informant for the Georgian security services and believes her arrest is punishment for refusing to cooperate. According to Shorena, a man walked up and slipped three packets of heroin into her pocket as she was coming out of the pharmacy. A policewoman pulled a mobile phone out of her bag, which she had never seen nor touched before. This method of apparent entrapment harks back to Pankisi’s worst days of lawlessness.The Interior Ministry claims that Shorena is part of a drug network with her brother, a fugitive assumed to be in Russia. The ministry also claims that “large quantities of heroin were found at her house,” yet there is no evidence that police have visited Duisi, where she lives. Duisi is a small village, and it would be nearly impossible to perform a house search without neighbors seeing it.The efforts that Pankisi has made to integrate itself into Georgia over the past few years have been set back by what locals believe is a bogus case. Pankisi remains a frightened community that mistrusts central authority. Such fears are ripe grounds for the fundamentalist missionaries whose radicalism is a threat to Pankisi’s existing social order.Paul Rimple is a journalist in Tbilisi.Baku to host Azerbaijan-Russia business forum tomorrow, Fineko/abc.az. The Azerbaijani-Russian business forum is to be held in Baku tomorrow.The Azerbaijan Export & Investment Promotion Foundation (AZPROMO) informs that the event will be attended by businessmen representing the agricultural sector, food industry, energy, construction, consulting, and mechanical engineering.The forum will be conducted within the framework of the visit to Azerbaijan by Vice Prime Minister of Russia and presidential representative in the North Caucasus Federal District Alexander Khloponin. He will arrive in Baku, accompanied by the heads of seven subdivisions of the Russian Federation. ?03.10.2011 10:09Russian consulate holds photo exhibition on ‘Muslims in Russia’ HaiderA rare exhibition of pictures of muslims in Russia was organized the other day by Russian Consul general Andrey V. Demidov at his consulate in Karachi, portraying the rights the muslims enjoy in a country, for long treated as communist and against Islam.A galaxy of invitees, including the UAE consul general Sohai, diplomats from a number of other countries, journalists, businessmen, etc, were excited to see muslims praying in their mosqies, in Moscow, in Kazan,.Mai Kop and Ufa, various areas in the Russian federation. In fact the Grand mufti of muslims in Russian federation was shown discussing religious affairs with other people.An Islamic University in Russia ,located on a hill top in Moscow was a delight for those who thought muslims were treated badly in the Russian federation , an impression, persisting for long, and strengthened by the former Soviet Union occupation of Afghanistan .A Kufi Quran was prominently displayed and so was the religious independence in the Chechen state, where muslims fought against the Moscow regime after USSR split into several states after the Afghanistan war. Muslims men and women were shown celebrating eidul fitr festival, and keeping fasts, and praying in mosques.The consul general informed his guests that Russia is a multi-religious country,.The vast majority of the population is orthodox Christian. Muslims are second largest religious community. According to an assessment, Muslims constituted 20 percent of the total population of the country, Andrey said.He said “we in Russia attach very serious importance to inter-religious harmony between jews, Buddhists, animists, Catholics, etc We consider muslims as an integral part of our society. They are indigenous inhabitant of our country. They are not migrants” he proudly announced.He said the supreme Mufti of Russian is one of the informal advisers of the President of his country. He is member of the governing body of the ruling party.It was delight to see such pictures.Only a day earlier, the Saudi consul general Faleh Mohammad Al –Ruhaili held a grand reception at a local hotel to celebrate nation day day of the Kingdom , which is the holiest place for the muslims of the world with Makkah and Medina and Masjid-e-Nabwi, and the last resting place of the Holy Prophet (PBUH).Governor,Isratul Ebad, chief minister Qaim Ali Shah, speaker, Sindh assembly Nisrak Khuhro and a number of ministers and parliamentarians leading businessmen, media elite, senior journalists, and a huge number of people attended. There were religious scholars, professors and intellectuals. It was a grand assembly.RT News line, October 3Kremlin chief-of-staff to head United Russia’s HQ - paper Russian president’s administration will take charge of the United Russia party’s election campaign because Dmitry Medvedev heads the ruling party’s list in parliamentary elections, the Kommersant daily reports. The paper’s sources say the Kremlin chief-of-staff, Sergey Naryshkin, will be in charge of the party’s HQ in the run-up to the December polls. He has reportedly presided over two meetings devoted to United Russia’s campaign stategy.03:20?03/10/2011ALL NEWSInt’l Astronautical Congress to discuss Earth observation new ways TOWN (South Africa), October 3 (Itar-Tass) —— The 62nd International Astronautical Congress will open here on Monday to discuss new ways of Earth monitoring from space. More than 2,000 people, including the chiefs of the national space agencies, astronauts, scientists, writers and journalists, will also discuss the involvement of the developing countries in space research, the use of advanced materials and technologies, the problems of legal regulation in this sphere.The Russian delegation headed by the chief of the Federal Space Agency (Roskosmos) Vladimir Popovkin is participating in the forum with the theme of African Astronaissance.The International Astronautical Federation together with the International Academy of Astronautics and the International Institute of Space Law hold annual International Astronautical Congresses. Africa hosts the congress for the first time. Africa shows a growing interest in space research and the launches of satellites for Earth observation from space. The latest UN General Assembly session supported the intentions of the developing countries to explore the outer space for the security of the humankind and environment. The European Space Agency is about to launch a program to use the telecommunications satellites for distant medical consultations in African remote villages.Russian boosters have recently orbited two Nigerian satellites – NigeriaSat-X and NigeriaSat-2, which Nigerian space engineers designed and produced. The Russian launch vehicle has earlier put into orbit the South African satellite SumbandilaSat.Nigeria is seeking to take a dominating position in the space exploration among African countries, Director General of the Nigerian National Space Research and Development Agency Seidu Onailo Mohammed said. Mohammed spent his childhood in a so poor family that they cannot afford themselves to buy a TV set and when a US astronaut Neil Armstrong became the first man to set foot on the Moon in 1969, he listened to the radio footage of the event. Nigeria is competing with the South African Republic, Algeria and with Ghana recently in the space exploration.The highlight of the congress is expected to be a presentation of a new US space vehicle Orion, which is positioned as a multi-purpose crew vehicle designed for the missions to asteroids and on the Mars. NASA is planning to launch Orion by Russian boosters Soyuz. The first Orion unmanned mission is scheduled for 2017.Russia's Soyuz-2.1B carrier rocket orbits Glonass satellite 03/10/2011PLESETSK, October 3 (RIA Novosti)Russia's Soyuz-2.1B carrier rocket has put into orbit a Glonass-M navigation satellite, Space Forces spokesman Colonel Alexei Zolotukhin said on Monday.He said the satellite separated from the carrier rocket in line with the schedule at 3:53 on Monday Moscow time (23:53 GMT on Sunday).The Soyuz-2.1B carrier rocket was launched on Monday at 0:15 Moscow time (20:15 Sunday GMT) from the Plesetsk Space Center in northern Russia.The launch was initially scheduled for Saturday, but it was postponed since the wind force exceeded the characteristics, allowed at the altitude of 7-10 kilometers.Glonass is Russia's answer to the U.S. Global Positioning System, or GPS, and is designed for both military and civilian uses. Both systems allow users to determine their positions to within a few meters.Russia launches first Soyuz rocket since August crash(AFP) – 9 hours agoMOSCOW — A Russian Soyuz-2 rocket launched a GLONASS navigation satellite on Sunday, the defence ministry said, in the first launch since a freighter carried by the flagship vehicle crashed into Earth in August.Russia has "successfully completed the launch of a Soyuz-2 rocket with the GLONASS-M (satellite) at 0015 (2015 GMT)," Colonel Alexei Zolotukhin was quoted as saying by the Interfax news agency.The satellite was launched from the Plesetsk cosmodrome 800 kilometres (500 miles) south of Moscow.In August, an unmanned Progress space ship carrying tonnes of cargo for the International Space Station (ISS) crashed into Siberia in August shortly after blast-off.Sunday's launch had been scheduled for late August, but was repeatedly postponed following cargo ship's crash.11:06?03/10/2011ALL NEWSPolice officer’s car exploded in Dagestan, October 3 (Itar-Tass) —— Unidentified people exploded a VAZ-2110 car which was driven by chief of the operational search unit of the Interior Ministry of Dagestan in the settlement of Turali near Makhachkala on Monday morning. As a source in the Interior Ministry of the republic told ITAR-TASS, the wounded policeman was hospitalized.“The blast of an unknown device occurred at about 08.00 Moscow time on Monday when the chief of the operational search unit was leaving the settlement to go for work,” the source specified.An investigation team is working at the site of the incident. Measures are being taken to establish the criminals.Two policemen killed in car blast in Russia's Dagestan 03/10/2011MAKHACHKALA, October 3 (RIA Novosti)Two policemen were killed after their minivan was hit by a blast in Russia's North Caucasus republic of Dagestan, a local police spokesman said on Monday.He said two policemen were driving their police minivan in the Kizilyurt district of the republic late on Sunday night, when a car loaded with explosives and parked on a roadside exploded as they drove by.Earlier reports said that a suicide bomber drove his car into the police minivan, killing two officers.Dagestan has been hit by a series of terrorist attacks recently, including fatal bombings and shootings.10:53?03/10/2011Top NewsTwo policemen die in blast in Dagestan’s Kizilyurt, October 3 (Itar-Tass) —— Two police officers died in a car blast in Dagestan’s city of Kizilyurt.As a source in the Interior Ministry of the republic told ITAR-TASS, “the power of an explosive device planted in a car was equivalent to about 20 kilograms of TNT.“At about midnight, when an armoured Gazel car with police officers was going by, unidentified people set off a bomb planted in a VAZ-2106 car parked on the roadside,” the source said. As a result, two police officers died of wound. The car was heavily damaged.”Criminal proceedings were instituted.05:30?03/10/2011ALL NEWSEmergency still in effect over forest fires in Bratsk district, October 3 (Itar-Tass) —— No wildfires were reported burning at 7 a.m. local time (2 a.m. Moscow time) on Monday in the park area in the city of Bratsk, a source in the Irkutsk regional emergency situations department told Itar-Tass on Monday. However, the emergency regime, which was introduced over the dry weather and a high fire hazard on September 30, is still in effect in the city of Bratsk and the Bratsk district, the source said.Seven fires on about 450 hectares were put out in Bratsk last weekend. Some 665 people and 32 machines have been involved in the efforts to put down the fires completely and to patrol the fire area since Monday morning. Some 1,460 volunteers are planned to be engaged in the firefighting efforts.A Mi-26 helicopter and two Mi-8 helicopters are on standby in Bratsk.“The weather is forecast not to change in the next 24 hours. The precipitation is forecast starting from October 7,” the source noted.The number of ambulance calls did not reduce and the studies are cancelled at educational establishments over a heavy smoke in the city, the Bratsk authorities reported.Firefighters put out 8 forest fires in Russia's Far East over past 24 hours 03/10/2011VLADIVOSTOK, October 3 (RIA Novosti)Firefighters and rescuers extinguished eight forest fires in Russia's Far East over the past 24 hours, a spokesman for the regional emergencies ministry said on Monday."All forest fires were registered in the Amur Region. Rescuers put out all of them in the past 24 hours," the spokesman said.Over 100 people and 26 units of firefighting hardware, including two aircraft, were involved in combating the wildfires, he added.Wildfires across Russia are common during dry and hot summers and in the fall. Most fires start because of the careless behavior of local residents.Forest fires devastated a number of regions in central Russia last year, killing 62 people and leaving thousands homeless.Russian Press at a Glance, Monday, October 3, 2011 03/10/2011POLITICSRussian President Dmitry Medvedev said in an interview with state TV channels on Friday that he is making way for Vladimir Putin because the latter has “greater authority” and “higher approval ratings.” He also said that he wants to modernize government if Putin triumphs in next March’s presidential polls(Vedomosti, Kommersant, Rossiiskaya Gazeta, Nezavisimaya Gazeta, the Moscow Times)The Russian government has submitted its draft 2012-2014 budget, drawn up by former Finance Minister Alexei Kudrin, to the State Duma lower chamber on Friday(Rossiiskaya Gazeta)The speakers of Russia’s lower and upper chambers, Boris Gryzlov and Valentina Matviyenko, agreed on a new concept of cooperation between the State Duma and the Federation Council(Rossiiskaya Gazeta)An interview with Russian Deputy Foreign Minister Sergei Ryabkov on Russia’s position in the world and on the situation with Iran’s controversial nuclear program(Rossiiskaya Gazeta)?ECONOMY & BUSINESSRussians recalled the recent global financial crisis and rushed to change their rubles into dollars and euros(Vedomosti)U.S. chain Victoria's Secret is poised to take a portion of the $11.2 billion lingerie and cosmetics market, celebrating its arrival in Russia with a store opening in a Mega Mall on Moscow's outskirts(The Moscow Times)?OIL & GASTurkey decided to terminate its 25-year old deal with Moscow on natural gas supplies(Rossiiskaya Gazeta)The Russian oil industry expects a 2012 windfall of almost $6 billion after changes to the oil taxation system designed to sustain high production levels came into force Saturday(The Moscow Times)?WORLDU.S. police arrested more than 700 anti-Wall Street demonstrators, who tried to block traffic on the Brooklyn Bridge in New York and attempted an unauthorized march across the roadway on Saturday afternoon(Kommersant, Rossiiskaya Gazeta)Ukrainian Prime Minister Yulia Tymoshenko is likely to be found guilty of charges of abuse of office linked to the signing of a gas deal with Russia in 2009(Kommersant)?RULE OF LAWA jury acquitted the captain of a Russian nuclear submarine of negligence charges over an accident in which 20 people died when a fire suppressant system was inadvertently set off three years ago(Kommersant, Rossiiskaya Gazeta)Anton Mukhachyov, one of the founders and leaders of the Severnoye Bratstvo (Northern Brotherhood) nationalist movement was sentenced to nine years in prison(Kommersant, Rossiiskaya Gazeta)?CRIMEUnknown suspects attacked in Russia’s Tver region a bus with Zenit FC fans, who were en route to Moscow for their club’s game against Spartak FC(Rossiiskaya Gazeta)Police in the city of Bratsk in the Irkutsk Region opened criminal cases in the wake of wildfires that recently covered the city with thick smoke. The wildfires have caused the resignation of the acting head of the Bratsk administration, Alexander Tuikov and led to the concentration of harmful substances in the air exceeding normal levels.(Kommersant)A Russian businessman suspected of using $56 million in embezzled funds to buy a German shipyard died after being shot by a gunman at a Moscow restaurant in what appeared to be a contract killing(The Moscow Times)For more details on all the news in Russia today, visit our website at ’s Jet Expo Show Reveals Russian Bizav Recovery International News ? October 2011by? HYPERLINK "" \o "View user profile." Vladimir KarnozovOctober 1, 2011, 10:20 PMAfter being dented by the financial crisis, Russian business aviation is back in growth mode. This trend was confirmed by Moscow’s Jet Expo show (September 14 to 16), staged for the first time in the Vnukovo-3 business aviation center of the Russian capital’s Vnukovo Airport. The move from the downtown Crocus City Hall, 20 miles away, allowed for indoor exhibits to be co-located with a busy static display area occupied by 28 fixed-wing aircraft and one helicopter.Jet Expo 2011 drew 75 exhibitors, which was 22 more than in 2010 but still 16 fewer than the previous high point in 2008. The event, which is supported by the Russian United Business Aviation Association, attracted almost 7,000 visitors.Significantly, given ongoing controversy over punitive Russian tariffs on imported aircraft, not one Russian-made aircraft was on display. This is despite the fact that Russian airframer Sukhoi is introducing a Sukhoi Business Jet derivative of its Superjet SJ100 airliner. “I think the local companies want to participate, but the fact is that none of the domestic airframers has a competitive product in [the business aviation] market segment,” Jet Expo director Aleksander Evdokimov told AIN.Bombardier claims to be dominating efforts to fill the market vacuum in Russia and the Commonwealth of Independent States (CIS). Christophe Degoumois, the Canadian manufacturer’s regional vice president, predicted that between 2011 and 2020 Russia and the CIS will receive some 525 business aircraft (plus another 210 in Eastern Europe) and that Bombardier will account for as many as half of these deliveries. For the 2021-2030 time frame, its forecasters see another 1,010 aircraft being delivered. According to Bombardier, the size of the combined Russia/CIS business jet fleet almost quadrupled in recent years, rising from 100 in 2004 to 380 in 2010. Russian fleet statistics are muddied by the fact that the majority of Russian owners still register their aircraft outside the country.Excluding very lights jets, Bombardier claims to have won a 47-percent share of jets delivered by the end of last year in Russia and the CIS. It estimates that Gulfstream and Dassault each have a 15-percent share, followed by Embraer with 9 percent, Cessna with 8 percent and Hawker Beechcraft with 7 percent. It is little wonder that these manufacturers were so eager to make a strong showing at Jet Expo, given that Moscow is now claimed to have the world’s second largest concentration of billionaires (around 50) after New York City.According to Degoumois, the legislative landscape for private aviation in Russia is improving, as exemplified by recent liberalization of the country’s sprawling air traffic control system. Long overdue improvements to infrastructure on the ground are also being made, with facilities being upgraded at key southern Russian cities such as Tartartan and Krasnodar.Gulfstream has attended all six Jet Expo shows held to date, along with its newly appointed president Larry Flynn, who told AIN that the company’s tenacity in Russia has paid off. “We’ve sold a little bit of everything: the G150, G200 and now getting into the G280, and also G450, G550 and G650,” he said. “The larger-cabin airplanes have been a little more popular than the mid-cabin due to the range, and the ability of these airplanes to go from continent to continent.” In late 2013, the first Russian G650 customer will receive his aircraft.Flynn argued that Gulfstream has had an edge over competitors in terms of its customer support capability in Russia, which is furnished through an alliance with its General Dynamics group sibling Jet Aviation and the maintenance facility at Vnukovo-3 that it established in 2007. The U.S. manufacturer also has a field-service representative in Moscow and parts inventory at Vnukovo.Embraer Makes Inroads in the RegionBut rival Embraer is seeking to close this product-support gap, having announced at Jet Expo plans to extend support arrangements for its Legacy 600 and 650. In a deal signed at the show by Ernest Edwards, president of Embraer’s Executive Jets division, and new Jet Aviation president Daniel Clare, a 24/7 AOG support operation will be established in Moscow for Legacy operators, including spares inventory. This will be operational in December, and both companies will be supporting the effort to train more local mechanics to work on the Embraer aircraft, with the help of FlightSafety International.Embraer displayed its flagship Lineage 1000 at Jet Expo, along with a Legacy 650 and a Phenom 300. The Brazilian airframer now has 34 aircraft operating for clients in Russian and the CIS.In August, Embraer delivered the first Phenom 100 to the region, with a Ukrainian client using it for flights to Moscow and other Russian cities. It is scheduled to deliver a second example of the type to the region in October.After a period of strong bizliner sales in Russia and the CIS, Airbus Corporate Jets has somewhat lowered its expectations for the region. Vice president of worldwide sales Francois Chazelle attributes this shift to the worldwide economic crisis, which has hit Russia harder than some other countries. “Business jets were selling better here in 2008,” he told AIN during Jet Expo, explaining that eight ACJs are operating in the region.?As for his marketing strategy in the region, Chazelle said Airbus will devote more energy toward selling bizliners to corporate and private clients–a marked change from the past focus on government sales. At Jet Expo, Airbus displayed a Comlux ACJ318, an aircraft that is among the 15 ACJs now available for charter flights in Europe.?The Caucasus' Own Hamas 03 October 2011By Anna DolgovMagomed Tagayev, a Dagestani ideologist of separatism and torchbearer of the 1999 Islamist insurgency in Dagestan, has called for Russians to be expelled from the Caucasus and eventually from all of Russia. In his book “The Call of Eternity, or My Caucasus,” he talks about “Russian colonists,” “bloodthirsty occupants” and “Russian terrorists” and concludes: “One way or another, the Russians shall be forced to pack up their belongings and get out of the Caucasus.” In another book, eerily titled in an apparent nod to Hitler “Our Struggle, or the Rebel Army of Imam,” he writes: “There is only one solution — with the sword and fire, to burn and raze everything and everyone so that not a single one of them may crawl away.”Imagine a hypothetical scenario. Let’s roll the clock back a few years to the time when Tagayev was at large and Chechnya’s late separatist President Aslan Maskhadov was still alive. Imagine a pact between these two men, along with notorious terrorists such as Umar Khattab and Shamil Basayev. Imagine Maskhadov then going to the United Nations to present the group’s bid for a sovereign state called the “North Caucasus Emirate of Chechnya and Dagestan.” Imagine also that he vowed, from the UN podium, that his people would not rest after getting that state but would continue their “struggle.”Finally, imagine that the declaration was met with roaring applause from world leaders at the UN, and a major power with a permanent seat on the Security Council announced that it would support “any proposal put forth by the Chechens and Dagestanis.”Replace Maskhadov with Palestinian President Mahmoud Abbas, Russia with Israel, and Khattab with the terrorist group Hamas and its genocidal anti-Semitic charter,?and you will get a good picture of what happened at the UN General Assembly on Sept. 23, when the Palestinians applied for statehood. Just as Tagayev said the Caucasus state would not allow any Russians in it, Palestinian officials in New York said the Palestinian state would not allow any Jews in it. Just as Tagayev said the North Caucasus had been under Russian “colonial military occupation” since the Russians set foot on his land, so the Palestinian leader said his land had been under Israel’s “colonial military occupation” for 63 years — the time since Israel’s creation. This is not a dispute about land that Israel took over in the 1967 defensive war against far more numerous Arab armies. It is about Israel’s very existence.Never mind that Israel has repeatedly offered to recognize a Palestinian state, if only the Palestinian administration would concede that the Jewish state had the right to exist. As Israeli Prime Minister Benjamin Netanyahu noted in his own remarks at the UN, “The Palestinians want a state without peace.” Tagayev declared that his “liberation struggle is the way of the righteous [and] will continue eternally.” Abbas declared that his people “will continue their popular peaceful resistance to the Israeli occupation.” The Palestinians’ “peaceful resistance” includes firing Grad rockets, supplied by Iran, at Israeli cities. Notably, the very day Abbas was extolling the Palestinians’ peacefulness before the UN, an 18-month-old Israeli boy and his 25-year-old father were killed when a mob of Palestinian activists attacked their car with rocks.Israel went beyond an offer of state recognition. It actually pulled out its troops and settlers from Gaza in 2005. But you would never know that from the Palestinian president’s speech. Nor would you know that Hamas has been launching a steady barrage of missiles from Gaza into Israel. In response, Israel imposed a blockade.But in Abbas’ opinion, his land is suffering from a “war of aggression,” “ethnic cleansing” and “apartheid policies.” The Palestinian president could have easily borrowed his language from Tagayev’s books or from the separatist web site Kavkaz Center.Having delivered the theatrics, Abbas once again refused talks. When Netanyahu appealed to him from the UN podium to negotiate face to face while they were both in New York, the Palestinian leader responded by hopping on the next plane home.The Palestinians must recognize Israel’s right to exist. The alternative scenario of a continued “struggle” has already been outlined by Tagayev, when he wrote that Russians would need to leave “the lands that were never theirs — Vologda, Kostroma, Vyatka, Ryazan and many others.”Anna Dolgov is assistant director of media relations of the American Jewish Committee.Read more: The Moscow Times New gas deal might warm up Caucasus politics further, October 2, 2011Those interested in a new natural gas field with an incredible 50 billion to 100 billion cubic meters of reserves in the Azeri quarters of the Caspian Sea are to submit their offers by the end of today, Oct. 3, to the Shah Deniz-2 Consortium.The Nabucco Consortium submitted theirs yesterday. The Nabucco project had aimed to bring Caspian gas to Central Europe to break the dependency on Russian gas and meet the continuous rise of demand there.Things did not go as planned for the shareholders. At first the United States-led embargo on Iran made it practically impossible for them to build a pipeline passing from the Iranian territory to reach Turkey and then further west. Secondly, in order not to lose its upstream advantage, Russia had a deal with Turkmenistan to buy all of its existing reserves.That was not a good time for Nabucco executives; there was a pipeline project with no gas to fill it. Yet an agreement was signed in 2004 between Turkey, Bulgaria, Romania, Hungary and Austria companies with equal shares. The Americans were encouraging them by saying that the invasion of Iraq started, which in 2003 was going to end with success soon, and they could use rich gas fields there to bring Nabucco back to life.In the meantime a pipeline crossing the Black Sea under water was constructed and started pumping Russian gas to the Turkish port of Samsun in 2005. It is called the Blue Stream project and together with the Western Route (passing through Ukraine, Romania and Bulgaria) that was a second tie to increase Turkish electricity production to Russian gas.Vladimir Putin, Russian president, then told Turkish Prime Minister Tayyip Erdo?an that they could actually built the Southern Corridor through Turkey to meet the European needs and even fill Nabucco; a great irony, since the idea of Nabucco was an alternative to Russian offerings.Then something more interesting happened. After retiring from being chancellor of Germany, Gerhard Schroder started to work for Gazprom and in the Northern Corridor project to pump more Russian gas to Europe. (Nobody could rely on the possibilities in Moammar Gadhafi’s Libya then.)Now Nabucco is seeking its future in Azeri gas. If they can convince the Shah Deniz Consortium (BP and Norway’s Statoil having more than half of the shares and with a small Russian Lukoil presence), then Nabucco can live.Nevertheless, it is important for Azerbaijan to find another route to sell its natural gas to outer markets with a route not passing through Russia; an improvement started with the Baku-Tblisi-Ceyhan oil pipeline carrying Caspian oil to Turkey’s Mediterranean coast. As Shah Deniz will enrich and empower Azerbaijan and bring the country closer to the western system, it will put Armenia, its rival in the Nagorno-Karabakh conflict, under more pressure.Speaking of rising political tensions and pressure, a day after Erdo?an’s meeting with Schroder on Sept. 29, 2011, that is last week, Turkish Energy Minister Taner Y?ld?z announced that the Western Route agreement with Russia was terminated. That will not affect the Turkish-Russian trade or political relations, but leave Ukraine alone in its gas fights with Russia and put Kiev under pressure for sure.New cold peace between Russia and the West? EkaterinaOct 3, 2011 09:30 Moscow TimeInterview with Alexander Panov, former Deputy Minister of Foreign Affairs of the Russian FederationMr. Panov, thank you very much for joining us. So our question is – how do you see the prospects for Russian foreign policy in the mid-term perspective, so to say, suppose Mr. Putin wins the election. Many western analysts believe that it inevitably would lead to a new cold peace between Russia and the west. Just how accurate do you think this assessment is?First of all I think that there will be no changes, any substantial changes in the foreign policy of Russia. The foreign policy of Russia, as we see it for the last 10 years, is absolutely the same, I mean not the same as you expect every time the same steps of Russian leaders, but the same in the sense that the strategic goals of the Russian foreign policy are set and the political elite, the economic elite of Russia agree with these goals and principles and this foreign policy, the main idea of this foreign policy is to create favorable conditions for the Russian reemergence as an influential international power and also this foreign policy should create favorable conditions for Russia to solve its internal problems, especially economic and social ones. In this sense this policy which proved to be successful, I don’t think will be or should be changed in the nearest future, I am sure it will continue. As far as concrete steps to concrete situations are concerned, it of course will be formulated in accordance, first of al, with the strategic goals and also with the concrete situation which will require the Russian involvement or non-involvement, also of course according to the national interests of Russia, involvement in international affairs or playing a role as a major power in solving some conflicts or some incidents. So I expected that western observers and analytics may predict that under Putin the Russian foreign policy might be more – how to say – not tougher, but more resolute towards some steps which Russian leaders may judge as harmful to Russian interests. But every country does it if its national interests are under question or harmed, then the answer, especially from big countries, is quite strong and resolute, and there is not any doubt that in this sense the Russian foreign policy will be strong if Russian national interests are put under question. But I don’t foresee such situations in the coming months or even years, because Russia doesn’t pose any threat to anyone and especially to the international relations. Such minor frictions or incidents, they may occur, but it will not lead to any big problems between Russia and other states.Interestingly enough, my impression was that many analysts and observers in the west have been pretty much scared by Mr. Putin’s Munich speech, and I think they are still scared without giving much attention to what essentially he was saying in that speech. Do you really think it could be justified to see that speech as an indication of Mr. Putin’s anti-western sentiment?Not at all. The essence and substance of Putin’s speech in Munich was just to explain to Russian partners at the international arena what Russia would like to see in the international relations, and it was not a threat to anybody, but just to explain that yes, there are some redlines in the Russian foreign policy which might require the response, adequate response if Russian interests may be harmed. The same speech we can hear from the president of the United States many times or from many other leaders, and I think that those who try to judge such speeches or sayings of Russian leaders as something extraordinary and something that is against their interests, it is absolutely nonsense, and those analytics who are trying to explain it in such a way they simply themselves would like to see such situation in a way that the relationship between Russia and major other powers are spoiled or bad, because you can always find a scape goat to explain your own mistakes and in this sense many still are thinking with nostalgia about all this of cold war when it was absolutely clear that there is confrontation and the situation is clear, so we can use this confrontation to reinforce our efforts everywhere to pay more money for armaments, to unite our allies; well, it is a very simple philosophy of those from old days of cold war.Mr. Panov, what is your impression, how wide-spread is the sentiment in the expert and policy-maker community in the west? I mean is it just an impression that is created by the mass media, this fear, this guarded attention towards the prospects of Putin’s elections, or perhaps it is still something more complicated?I understand that there are still a lot of those who would like to see a weak Russia, and a weak Russian response to the international affairs, and for them Putin is a strong leader, with a strong vision, who will not hesitate to defend the national interests of Russia, that is all. They simply worry that he will be a partner with whom it will not be easy to deal with, just trying to gain benefits for them, without respecting interests of Russia, that is all. For those people Putin will not be the best partner, I should say so.So what is your forecast, do you think that these artificial or non-artificial concerns will be subsiding with time or perhaps they will be just worked up?I see that especially next year it will be quiet, because the president of the United States is facing elections, change of leadership will take place in China, in South Korea, in many other countries, so during this period main efforts will be and should be devoted to solve internal problems, not so much problems in foreign relations, so it will be some kind of a period of accommodation. Of course sometimes there is such a situation that new leaders would like to have a strong? position in foreign affairs to show that they are strong leaders, but I don’t expect that it will change much in our relations with the so-called west or east, I don’t predict any big changes.Mr. Panov, thank you very much!Russia Profile Weekly Experts Panel: Putin for President, Medvedev for Prime Minister by Vladimir Frolov Russia Profile 09/30/2011 Contributors: Vladimir Belaeff, Vlad Ivanenko, Elena Miskova, Alexander Rahr, Vlad Sobell, Ira Straus, Alexandre Strokanov, SrdjaTrifkovicLast Saturday, Russia’s ruling tandem of President Dmitry Medvedev and Prime Minister Vladimir Putin ended the longstanding mystery of who would run for president in 2012, appearing jointly at United Russia’s party congress. Putin first asked Medvedev to lead United Russia’s party list for the next Duma elections in December. Medvedev, accepting the offer, suggested he would be happy to lead United Russia’s government were the party to win the parliamentary elections, and proposed that United Russia nominate Putin for president in 2012. What does the tandem’s decision to trade places mean for Russia? Does it spell progress and modernization, or does it foretell gloom, stagnation and political repression? How will the West deal with the reversed tandem?I have long argued that Putin would return as president in 2012. He is, after all, a more popular and stronger leader than Medvedev, who is a bright and well-intentioned technocrat but not a natural politician. I have also argued that nominating Medvedev for prime minister was the only politically and morally decent way of arranging Putin’s return to the presidency.It is my view that Putin and Medvedev had the good sense to keep the tandem. It is a strong signal to the Russian elites to close the ranks before the gathering perfect storm of global economic adversity hits Russia hard in the next several years.Putin’s return to the presidency is essential to guarantee that the country will not come apart as Medvedev implements his broad mandate for change to modernize Russia. It is a sensible mix of continuity and badly needed reform. Medvedev will have a guaranteed six-year term as prime minister to carry on with his program that would not be limited to economic modernization.Critics argue, however, that the tandem’s decision would lead to stagnation in Russia, as it dispels hopes for liberal reform and political opening. In their view, it means more autocracy and corruption as Putin clings to power for another six or even 12 years.Opposition leaders Mikhail Kasyanov and Boris Nemtsov predicted the move would lead to a social explosion in Russia in the very near future. Medvedev’s own economic advisor, Arkady Dvorkovich, expressed shock and regret over the decision, while former presidential consultant Gleb Pavlovsky said that Medvedev’s decision to step down after one term might not be voluntary and was perhaps made under pressure.Western leaders, however, expressed readiness to work with any president Russia would elect in 2012, while the United States voiced hope that Putin would continue the “reset” in U.S.-Russian relations launched by Medvedev and U.S. President Barack Obama.What does the tandem’s decision to trade places mean for Russia? Does it spell progress and modernization, or does it foretell gloom, stagnation and political repression? Does Putin risk an Egypt-style social explosion in Russia as he contemplates a Mubarak-length term in office? Was Medvedev debased when he agreed to step down as president? How would this affect his performance as prime minister? Will he have a free hand to implement his program for change? What will be the markets’ reaction to this announcement? How will the West deal with the reversed tandem? What impact it will have on the post-Soviet states?Alexander Rahr, Berthold-Beitz Center for Russia, Ukraine, Belarus and Central Asia Studies, German Council on Foreign Relations, BerlinThe outcome was predictable. I never understood the majority of Russians at the Yaroslavl Forum who told me that Medvedev will remain president.A continuation of the tandem was not possible. A weak Medvedev in the Kremlin, controlled by a strong prime minister, would have ruined the institution of the presidency. Russia is not yet ready to transform itself into a parliamentary republic. So, what happened at United Russia’ party congress had its historical logic.What will happen in 2012? Medvedev will create a reformist government, consisting of people such as Aleksander Konovalov, Arkady Dvorkovich, Svetlana Mironyuk, German Gref and others. He will continue his course of modernization and the West will pretty much applaud him.The St. Peterburg siloviki, now older, will move to the presidential apparatus. I expect Dmitry Rogozin and Mikhail Margelov to move to the forefront.Putin will become something like a tsar, remaining above daily politics. He will follow two major goals: building a Slavic Union with Ukraine and Belarus and making Russia one of the future poles in a multi-polar world.Whether he succeeds is another question. But he will try. Russia has a chance to strengthen its role in global politics not because it will be stronger, but simply because the Western world will be weaker.Some fear that this is a step toward chaos. In the following half-year before the presidential elections, Putin will quickly assert power. He will show the West that he is interested in the “reset” with the United States and in close cooperation with the EU. We will see a Putin of 2000 to 2004, not of 2004 to 2008.Elena Miskova, Managing Partner, LEFF GROUP Public Relations, MoscowIn his comment on Putin’s return to the presidency, Russian political analyst Dmitry Orlov labeled the ruling tandem “a new institution.” Although this has bizarre, almost heraldic connotations, one can probably agree with this term – the Putin-Medvedev tandem is indeed a brand new political institution in the modern Russian state.Vladimir Putin created this quasi-democratic institution to serve as a vehicle for his legitimate return to the presidency. For the last four years, Russia, constitutionally a presidential republic, has been a presidential-prime ministerial republic in which the power of the president has been checked by a more than just powerful prime minister.Like all other issues for Russia’s future, the issue of the durability and survival of this newest “institution” will be on the agenda. To what extent is Putin ready to sustain and nurture this “friendly alliance,” which will begin to check his own presidential power starting in May?In the past four years, Medvedev has accumulated substantial political capital. He has positioned himself as a democratic modernizer, a staunch fighter against corruption and a sympathizer with liberal values and ideals. He has gathered a community of experts who share a liberal outlook. He has made his mark in foreign policy, having established good personal relationships with the leaders of Russia’s key international and post-Soviet partners. Despite a sharp drop in the value of these assets during Putin’s speech at United Russia’s congress – he basically said Medvedev is a modernizer but is no longer president of Russia – they will not depreciate completely.At the start of Medvedev’s presidency, it was clear that he was simply acting like a president, while Putin continued to actually rule the land, as his authority and power was enormous. Of course, Putin did not create the tandem to put limits on his power – quite the opposite.However, the simmering rivalry within the tandem has quickly become a fact of Russian political life and even compensated for some elements of democratic politics which were lacking. For example, the media and the expert community, having received a subject over which to fulminate, have rightly suspected that the only political space beyond the reach of the Great Puppet Master is the narrow space of real political and personal tensions between the two leaders of the tandem.The decision for a flip-flopped tandem speaks for itself: Putin had to find an acceptable way of limiting Medvedev’s presidency to only one term – instead of demoting him to Skolkovo or to the Constitutional Court in St. Petersburg – but making him the leader of United Russia for the Duma elections and a future reformist prime minister.This decision clearly makes Putin choose between the functionality of a tandem, on one hand, and limits on his authority and power, on the other. The entire political responsibility for unpopular reforms at the time of economic hardship will fall on Medvedev’s shoulders, but the jury is still out on as to how this will affect his political capital; it can destroy it completely, but it can also boost Medvedev’s authority. The political construct of “Putin is the guarantor of stability and Medvedev is the reformer-modernizer” is too hard to balance properly. Of course, the president can always fire his prime minister at will, but this doesn’t relate to the tandem, our new “institution.” Judging by how skillfully Putin has attached United Russia to his future prime minister, he does not want to subject his own power to any checks and balances – not even that of his own party. This makes one wonder whether political analysts in the near future would have to think about other political concepts such as “strengthening the vertical of power.” What is truly important is that this does not degenerate into a real personality cult.Alexandre Strokanov, Professor of History, Director of Institute of Russian Language, History and Culture, Lyndon State College, Lyndonville, VT The recent announcement that Vladimir Putin will run for presidency in 2012 is certainly good news for Russia and the majority of Russian people. Vladimir Putin is the best choice to lead the country in the current situation of an unfolding economic crisis in Europe, growing instability in the Middle East, including consequences from recognition of the Palestinian statehood, the collapse of the governments in Libya and Yemen, irresponsible statements like the one made recently by the French foreign minister about attacks on Iran, as well as NATO’s deepening failure in Afghanistan.? In such a reality, the Russian people certainly will feel much more comfortable seeing power in the hands of a trusted and popular leader. Let’s look around Russia’s political scene and try to find any better choice than Putin today.? Who can seriously consider giving this role to former government officials and current “street showmen,” like Nemtsov and Kasyanov, or the “unchangeable leaders” of the Communist Party and the Liberal Democratic Party, not to mention Grigory Yavlinsky, Mikhail Prokhorov and others? Today, Russian politics obviously has nobody equal to Vladimir Putin in experience, popularity and trust expressed by ordinary people.? The fact that the political scene and the actors on it are not really attractive to many people is not a purely Russian phenomenon. Are there really popular politicians in Western countries today? Maybe Silvio Berlusconi, Nicolas Sarkozy, David Cameron or Barack Obama? I have serious reservations about every one of those leaders. I firmly believe that that none of them will be capable partners for Putin in the years to come, due to the simple fact that they will be thrown out of power by their own people in the near future.The West and the rest of the world will work with whomever the Russian people will choose. However, there is a Russian peculiarity in this reality – since the year 2000, Russian presidential elections have not been very competitive (the selection of party leadership in oppositional parties hasn’t been very competitive either). People see the same Gennady Zyuganov and Vladimir Zhirinovsky as in the early 1990s, and are obviously tired of seeing these aged politicians who never win, but never resign after defeat, either. Despite my critical attitude toward the Kremlin, it obviously can’t be blamed for this fact. So, to make Russian politics competitive, people should begin by freshening up the opposition, bringing new blood and stronger zeal into it. Only this can make Russian elections competitive and intriguing, and not the West or the Kremlin itself. And only in this case may we eventually see somebody who can compete with Vladimir Putin.Democracy is the rule of majority. Undoubtedly, Vladimir Putin will receive the majority of votes in March 2012. However, the question is not so much how he will get back to the Kremlin, but how he will perform there again in his third term. Of course, we are not going to see anything similar to the “Arab spring” in Russia. At the same time, Putin’s major task will be to prove to the Russian people that post-Soviet Russia can be better than Soviet Russia. In the last 20 years, nobody could accomplish this goal. This is not only an economic, but also a social and moral question, as well as a question of relations and integration with other former Soviet republics.On State Duma elections: Medvedev has a unique opportunity to lead the United Russia Party in these elections since he accepted the number one position on its list of candidates. This is a good and fair way to prove that he deserves to be the next Russian prime minister. However, I think that this task will not be very easy for him, and who will really occupy the office of the head of the Russian government is too early to judge at this point. We will receive the answer to this question only after December 4, and many things may happen before then.Vlad Sobell, Independent analyst, London“The graveyards are full of indispensable men” (widely, but some allege incorrectly, attributed to General Charles De Gaulle).Since its inception in 2008 I have been convinced that the Putin-Medvedev tandem was a very bad idea. To my dismay, I am now compelled to conclude not only that I have been right all along, but, even more alarmingly, that the costs of the initial error continue to multiply. Instead of acting to correct that mistake, Putin, who is undoubtedly a statesman of great intelligence, has blundered to make things worse by announcing his return to the presidency.In the process he has not only undone many of his historic achievements – and these were achievements for which everyone, Russians and foreigners alike, should be grateful. He has also compromised the principle he professes to value the most – namely the rule of law.The ability to produce a towering figure who could lead the country at a time of great danger or seemingly insurmountable challenges is one of the defining attributes of a major civilization, such as Russia. And Vladimir Putin will undoubtedly enter history books as one of his country’s great saviors. Coming to office soon after the 1998 default and the war against Chechen separatists, when the federation was teetering toward disintegration, Putin managed to reverse the rot. Inheriting very weak cards, he has outwitted the legions of domestic and foreign predators and established a strong state and functioning, albeit “controlled,” democracy, built on the ruins of communism. Hence his genuine popularity and unmatched authority.Herein, however, lie the roots of his subsequent (and, arguably, just as monumental) failure. Having accomplished his historic task, Putin should have crowned it with one last act of supreme statesmanship – namely relinquishing control over his creation and passing the torch to his successor.Having resuscitated and reshaped the Russian state, pushing it safely into the post-communist and post-imperial era, it was incumbent on Putin to ensure that the edifice would stand and function without him. Indeed, genuine stability, security and continuity will come only from the system’s ability to stand on its own feet, without the need for its architect to prop it up. The reasons for this conclusion are obvious: like everyone else, the Father of the Nation is mortal, and even he can end up blundering.This is why human societies have evolved the institution of the law, including (in the modern era) the Constitution. This intangible, but also very real, entity has not only the distinct advantage of being immortal, but also of having a separate existence – that is, independent of any person or group. The more robust the “life of its own,” the more secure the society in question. And the best way to make this institution robust is to set a precedent.Initially, it seemed that Putin had indeed embarked on the right course. Before the 2008 presidential elections he signaled that he was well aware of the need for his departure, reassuring his audiences that when the time came, he would withdraw from the presidency as required.Unfortunately, however, it soon became clear that this was a subterfuge: he would indeed withdraw, but only formally. He would take on the post of prime minister, while continuing to act as a de facto paramount leader within the “tandem,” with president Medvedev, and remain the ultimate policy arbiter. Insofar as the letter of the law is concerned, Putin acted within his rights. But everyone knew that this arrangement was not exactly in the spirit of the law, nor was it what he had signaled he would do.Despite this turnaround, it was still possible to hope that Putin remained on the right track. Given his huge political capital, his sudden (albeit well prepared) departure would indeed have been destabilizing. So for a time it seemed that the tandem was actually a clever and legally sound device for solving this problem: although the Constitution does not provide for an arrangement of this kind, it does not prohibit it, either.Furthermore, Putin’s choice of his long-standing and close associate Dmitry Medvedev as his heir apparently suggested that due care was being taken to ensure a seamless succession with maximum continuity. Indeed, having been duly elected president, Medvedev seemed to have plenty of time to grow into his predecessor’s large shoes.Unfortunately, we learned last weekend that this had apparently never been the plan, and that we all (Russians and foreigners) and – possibly even president Medvedev himself – had been taken for a ride. Far from retiring gracefully, Putin appears to be ensuring that Russia is blessed with a president for life and the world will be stuck with yet another “indispensable leader.”But the damage does not end there. By setting this sorry precedent, Putin has sent the following message to future would-be Russian rulers for life: feel free to go ahead; all you need to do is to select a buddy who will temporarily keep the seat warm for you. It is tragic that the man who justifiably takes the most credit for building a new, legally based and democratic Russia should have ended up in a blind alley.The small crowd of commentators sympathetic to Russia (in whose ranks I firmly remain) has and will continue to come up with numerous reasons for justifying Putin’s return to the presidency. Perhaps the weightiest is that, given the current global upheavals, Russia needs Putin’s steady hand. My answer to that is: of course Russia needs a steady hand, but the most reliable way to ensure that stability is not through “more of the same old Putin,” but through a successor whose credibility and authority derives from the rule of law (the Constitution) rather than from a fallible and mortal individual, albeit the architect of the state himself.Regarding stability, is it not the case that Putin is merely postponing the problem of succession? And in doing so, is he not making the succession even more difficult, in effect planting a time-bomb? After all, the longer he stays, the more destabilizing his (inevitable) departure will mentators are also saying that Medvedev failed to make a sufficiently powerful impact. Of course, he has failed in this regard. But how could he have made an impact if the puppet master had never intended to leave the stage? Great leaders are made by rising to the occasion, by the enormity and challenges of their jobs: Medvedev was never given such a chance because he was never fully entrusted with the job.Finally, since Russia’s greatest weakness is its endemic corruption, the struggle against it will hardly be helped by the spectacle of the supreme leader playing fast and loose with the Constitution. All corrupt officials throughout the Russian Federation can only rejoice at the spectacle of the law being brought into disrepute by the Father of the Nation himself. Vlad Ivanenko, Ph.D., economist, OttawaIn 1866, the poet Fyodor Tyutchev wrote about Russia:The mind cannot grasp this country,It does not follow common trails,Russia keeps its own postureAnd one can only trust in her.Having exhausted all logical possibilities to portray Vladimir Putin as a coherent leader, the only remaining explanation becomes mystical: apparently, one cannot rule out that Putin has been blessed to lead Russia.Mysticism, however, is not helpful in advancing our analysis of the situation. As a supplement to true faith in Putin the Savior of the Nation, I propose to use four more mundane diagnostic tools, each of which would indicate if this hypothesis of blessing holds water.Firstly, Putin’s behavior as the next president will be indicative. Removing the last vestige of public oversight over his rule, the voice of his own conscience becomes the only limit on his potentially tyrannical inclinations. From now on, he must accept the asceticism of Mahatma Gandhi (whom Putin has said he respected as the “last democrat”) as the new way of his personal life, and forget about his personal pleasures (for example, à la Silvio Berlusconi).Secondly, Medvedev’s progression after the election will reveal if Putin has cynically complotted his return to power since 2007 or not. Having proved his loyalty to the patron, Medvedev should be able to show himself as a really independent political force. Putin must keep him as prime minister at least until 2018, and avoid the temptation to micromanage his work.Thirdly, the Russian middle class has to retain trust in the country. A number of indicators can help in this respect. If one observes accelerating capital flight, or high business and professional immigration, or the bust of real estate markets outside of Moscow; one can safely conclude that the median Russian has lost faith in Putin the Everlasting President.Finally, how the state budget will evolve will show if Putin keeps the power for Russia’s benefit or for his personal gain. The country is slowly breaking down. Given the dearth of private business responsibility for the country, the government should take the lead in redirecting its economy toward the path of sustainable development. Putin has to amass enormous resources for the public benefit without being afraid to irritate his powerful friends. Certainly, the investments should be channeled toward projects in public infrastructure and key economic sectors (tentatively, in defense industry and energy-intensive manufacturing) instead of being stolen by presumed “public servants.”By choosing to run for president, Putin has greatly narrowed his choices. Save for extreme contingency (for example, becoming suddenly incapacitated), he can go down in history either as the most successful leader that Russia has had or as nothing more than a petty dictator.Vladimir Belaeff, Global Society Institute, San Francisco, CAThe lengthy debate about who would succeed Medvedev as president of Russia was curious, and had tinges of comedy. It started almost right after Medvedev’s inauguration, and from that perspective it appeared insulting to the new president: here he was only starting his term of office, and already diverse pundits were arguing about who would succeed him. It appears that Medvedev viewed the situation with sufficient forbearance and good humor, although repeated pestering by journalists with “the question,” often on a daily basis, was definitely stubborn bad form.From the perspective of current political effectiveness, Putin’s decision to run for the presidency again is completely sensible. He is recognized as the most popular politician in Russia. He has a program. He has goals. Why should he not use this political capital to gain electoral victory? Those who criticize Putin for standing for election are in fact expressing an anti-democratic attitude: they object to a candidate who is very likely to be the choice of the majority of the Russian electorate.The alleged “rifts” between Medvedev and Putin were the wishful inventions of those who oppose Russia’s present direction, who seemed to hope for any kind of weakness at the top. This is very telling about the ideological strength of the opposition: instead of drawing on their inner resources, they hope for signs of weakness in their political foe, or blame external and invented events for their own failure to earn the confidence of the electorate. Thus, some partisans of one of the political contenders in the December 2011 elections have declared in a public forum that the election results “will be falsified.” It will be ironic if that particular party puts in a strong showing in the December vote: would these partisans consider the election “falsified” then as well?Longevity in public office is not unusual in fully democratic societies. Franklin Delano Roosevelt, arguably the best U.S. president of the 20th century, was elected to four consecutive terms of office and would have ruled for 16 years, had he not died in office. Tenures of 40 years or more are known in the U.S. Congress and in state legislatures. Therefore, Putin’s tenure as president of Russia for several cycles should not be shocking, nor is it particularly problematic. Comparing Putin’s political career with that of Hosni Mubarak of Egypt is simply frivolous. One could just as readily compare Mubarak with Roosevelt.Failed Russian politicians and has-beens who predict “social explosions” demonstrate a remarkable lack of understanding of political realities and social processes per se. One should remember that Russians did not “socially explode” when Nazi soldiers reached the outskirts of Moscow and the Volga. This does not mean that Russian society is incapable of explosion, but it does indicate enormous reserves of social resilience and flexibility.Most importantly, over the past 11 years Russians have experienced direct social and economic progress. They now know that progress and constructive reforms are possible in their country and that these reforms deliver tangible improvements in their well-being. Whoever has managed and delivered this progress obviously enjoys the confidence of the electorate. Or should the Russian electorate prefer those politicians who wiped out the life savings of the voters with clumsy attempts at “market reforms?”Srdja Trifkovic, Foreign Affairs Editor, the Chronicles: A Magazine of American CultureThe news is as welcome as it is unsurprising. Short of an act of God, the world’s largest country will have Putin as president for the next two six-year terms, until 2024. This will ensure much needed stability amidst the ongoing program of reforms at home and an equally desirable continuity in Russia’s foreign relations.Medvedev is an able technocrat, Putin is a statesman. Medvedev is strongly aware of Russia’s pressing need to modernize, to diversify its economy and to streamline its bureaucracy, and he is well equipped to continue his earlier efforts in that direction. Putin is primarily focused on Russia’s need to preserve and enhance its identity as a Christian nation and a great power. He knows that Russia’s first-order priorities are to increase its relative political, economic and military clout in the global system, to revive the national sense of purpose, and to resist Western pressures to entwine modernization with suicidal “multiculturalization.”The former is the job of a hard-working prime minister and his teams of hand-picked managers; the latter is the task of a visionary president. There is no contradiction between these two sets of tasks, the Western media pack’s claims to the contrary notwithstanding. Modernization devoid of the guiding hand of statesmanship is self-defeating – as witnessed by Spain after Francisco Franco – a once-great country sadly adrift today. On the other hand, a strong insistence on rootedness, cultural identity and tradition, however healthy in itself, may hamper a state’s ability to maintain the dynamics of its autochthonous existence if it is not accompanied by long-overdue reforms – as witnessed in Belarus.Putin’s return to the helm is a key precondition for Russia to preserve its internal cohesion and external security as Medvedev proceeds with his modernization projects. The experience of the past four years proves that Russia is not inherently ill-suited to a successful “dual power.” It enjoyed 14 years of successful dual monarchy after the Times of Troubles (1619 to 1633) when the young, reform-minded yet weak Tsar Mikhail Romanov ruled in conjunction with his father Philaret, the Patriarch and the “Great Sovereign.”Ira Straus, U.S. Coordinator, Committee on Russia in NATO, Washington, DCPutin's return is moderately bad news for Russia’s relations with the West, firstly because most Westerners equate Putin with authoritarianism and anti-Westernism in Russia. They do so with an element of truth that is unlikely to go away. They also often exaggerate it, something that is also unlikely to go away. Secondly, because Putin's instincts are in fact less pro-Western than Medvedev's. He is more given to making demagogic comments against the West and half-believing them. This ranges from matters of the greatest importance – such as stoking the national phobia about Russia falling apart, and insinuating that the Western powers are the source of this danger – to lesser but not-minor matters, such as complaining of a Western "crusade" in its Libya intervention. Medvedev slapped Putin down for the latter remark as contributing to the prospect of a clash of civilizations. It was illustrative of the difference in their instincts. Medvedev was right, but Putin succeeded in framing the main narrative in Russian discourse, in which Medvedev's position is counted as a "mistake." Thirdly, because many Russians have felt that in order to remain accepted as loyal players in the political system, they have to repeat some of Putin's most demagogic lines, such as that Russia is in danger of falling apart … unless he stays at the helm. This re-entrenches, as a foundational currency of political discourse, the phobia that worked powerfully just a few years ago for demonizing Westernization and excluding many forms of cooperation with the West, and that has the potential for a much more radical use for populist anti-Western mobilization.His return is, however, moderate in its badness – and mixed in its potentialities – firstly because Putin has usually been sober and moderate. He has been less prone than many other Russian politicians to sacrifice national interest to nationalist sentiment, although over the years he has gradually grown worse in this regard. Secondly, because Putin, having a stronger nationalist reputation than Medvedev, can more readily carry the power structures and political elites with him if he takes a pro-Western turn, as he showed in 2000 to 2002. He can be not only flexible, but rather daring, thanks to his self-confidence.The negatives outweigh the positives, but this does not mean that Putin should be approached as a fixed adversary. His reasoning is often in a contingent, double-edged, if-then logical language. It is often an open-ended question as to which way Putin will go; it depends partly on circumstances and on the nature of the external inputs and options available to him. For example, Russia in the Putin era no longer says with Boris Yeltsin's reassuring constancy that it aims to join NATO; it says – in Putin's original formula – that it is ready to go as far in cooperating with NATO as NATO is ready to go, and, in a more recent formulation by the Ministry of Foreign Affairs under Medvedev, it is not going to knock on the door of NATO, but would have a hard time refusing to join if invited.For the West, this means that it is necessary to continue to play a double-edged game with open-ended options. In other words, the options the West gives Putin are likely to have a significant effect on what kind of relationship he will choose to have with the West.news/opinion/commentary/la-oe-aron-russia-putin-20111003,0,474901.Op-EdWatch out for Putin, and RussiaThe country is headed for a dead end, as it seems likely Vladimir Putin will regain the presidency. The U.S. should be prepared for that.By Leon AronOctober 3, 2011The news itself was hardly startling. It has been increasingly clear during the last year that the Regent (Vladimir Putin) would recover the throne from the Dauphin (Dmitry Medvedev). But now that it seems a certainty that Russia is headed for (at least) 12 more years of Putinism, alarm bells ought to be sounding. Why? Because by every indicator — macroeconomic, political, social — the system that Putin forged in the early 2000s is all but exhausted and is driving the country toward a dead end. It must be radically reformed, or better yet, discarded. But how can it be gotten rid of with its creator back in control?In the last 12 years, first under Putin and then under the Putin-Medvedev duo, Russia's dependence on oil exports has grown enormously, and with it the economy's vulnerability to swings in the world hydrocarbon market. In the early years of this century, oil exports accounted for one-third of the state budget; today they constitute one-half. At this point, the country's budget could be balanced only if the price of oil were to rise above $125 a barrel. Already the ruble is at a two-year low against the dollar, and the stock market is down 20% this year.If it continues on its current path, Russia is headed toward becoming a petro-state, with all the problems such systems spawn: pervasive corruption, sharp income differentiation, a lack of social mobility, a decline in scientific and technological progress, and increased control of the economy by government monopolies. As Medvedev himself has admitted, a trillion rubles (or about $30 billion) is simply stolen from the budget every year.According to public opinion polls, a majority of Russians believes that there is more corruption today than during the "lawless 1990s." The courts are for sale and police are so corrupt, incompetent and brutal that Russians say they are often more afraid of them than of criminals. Business creation is stifled, because for many potential entrepreneurs, the "corruption tax" is prohibitive. Despite trillions of petrodollars pouring into government coffers, education and healthcare are, in many instances, less available and of poorer quality then they were in the old Soviet Union.The deterioration of education has meant that as the current generation of scientist and engineers reaches retirement age, there aren't enough highly trained people to replace them. With its satellites falling out of the sky and its intercontinental ballistic missiles failing test after test, Russia now imports not only passenger planes but high-tech weaponry and battleships.With the population aging rapidly, the state-owned pension fund has run up enormous deficits and may be close to collapse. Inflation is dangerously high at 8% — largely the result of a government move to raise pensions and salaries in advance of the December and March elections, which will be little more than shams. As Putin himself acknowledged last week, very painful cost-cutting measures will have to be undertaken to stave off budget deficits and inflation.The result of all these things has been a mass out-migration of Russia's most productive citizens and their families, with more than a million leaving in the last few years. Many more have vowed to leave if Putin becomes president again.The cure for this systemic and increasingly acute malaise is well known: modernization. Both Medvedev and Putin have uttered that word hundreds of times, but they have failed to embrace what it would mean in Russia: impartial courts, honest and competent bureaucracies, a truly uncensored press, free and fair elections at all levels of government, de-monopolization of key sectors of the economy and a reduction of state control of the economy.In other words, to truly embrace modernization, Putin would have to dismantle the very institutions and traditions he set up — a most unlikely eventuality. Yet, with its continuity now assured and normal channels of political feedback and change stifled, discontent is certain to acquire more dangerous street forms.The United States must prepare for all manner of destabilizing developments in the world's other nuclear superpower. We should also be ready for greater truculence in Russia's relations with the West and greater assertiveness with regard to the former Soviet republics, which it still considers part of its "sphere of influence."The U.S. and its allies are likely, once again, to be exposed to Putin's harangues and to policies informed by his profound mistrust of the West and his perennial theatrical overreactions to perceived slights. Moscow's cooperation on Afghanistan is likely to continue, because a Taliban victory would not be in Russia's strategic interest. But no progress should be expected on the European missile defense, Putin's bête noir, while the modest progress that has been made in enlisting Russian support of sanctions on Iran might be halted or even reversed.Over the last few years, the U.S. goal with regard to Russia has been to try to reset relations. To the extent that success requires at least some confluence of values between the two political systems, that objective now seems almost impossibly distant. Russia is entering rough waters, and the world will feel the turbulence.Leon Aron is director of Russian studies at the American Enterprise Institute. Copyright ? 2011, Los Angeles TimesNational Economic TrendsCentral bank expects to lose over $10 bln of reserves in 2011 03/10/2011MOSCOW, October 3 (RIA Novosti)The Russian central bank expects its gold and foreign currency reserves to shrink to $515 billion by the start of next year from the $526 billion now, according to a 2012-2014 monetary program obtained by RIA Novosti on Monday.The ruble has been falling against the dollar and the euro since the start of September, when reserves stood at about $545 billion.The bank expects its reserves to stand at between $505 and $589 billion depending on the price of oil, Russia's key export.Russia Sees Reserves Falling In 4Q, Boosts Outflows Forecast -(Dow Jones)- The Bank of Russia Monday published a report indicating it sees its gold and foreign-exchange reserves falling in the fourth quarter, and the central bank also boosted its capital outflow forecast for 2011.In 2011, Russia's reserves will probably climb by only $43 billion, to $522.4 billion, the central bank said in a report on monetary and credit policy published on its website.As of Sept. 23, the reserves stood at $526.0 billion.Meanwhile, the central bank said the net capital outflow will probably total $ 36 billion this year, or higher than a previous forecast of $35 billion.Central bank data released in July showed a $9.9 billion capital outflow for the second quarter, after outflows of $21.3 billion in the first three months of the year. -By William Mauldin, Dow Jones Newswires; ????????????+7 495 232-9192??????, william.mauldin@ (END) Dow Jones Newswires 10-03-110314ET Copyright (c) 2011 Dow Jones & Company, Inc.Russian Manufacturing Stagnated in September, HSBC Says Yuliya Fedorinova - Oct 3, 2011 6:27 AM GMT+0200 Russian manufacturing stagnated in September, according to the HSBC Purchasing Managers’ Index. The index rose last month to a seasonally adjusted 50 from 49.9 in August, HSBC said today, citing data compiled by London- based Markit Economics. The average third-quarter figure of 49.9 was the lowest since the fourth quarter of 2009, and contrasted with the post- crisis high of 54.8 registered in the first quarter 2011, HSBC said. “Russian manufacturers face lasting stagnation,” Alexander Morozov, HSBC’s chief economist for Russia, said in the statement. “In seasonally adjusted terms, demand weakness has become more and more apparent, especially as far as external demand is concerned,” he said. To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@ To contact the editor responsible for this story: John Viljoen at jviljoen@ 12:45?03/10/2011ALL NEWSRussia’s grain harvest expected to reach 93 million tons, October 3 (Itar-Tass) —— Russia’s grain harvest in 2011 is expected to reach 93 million tons, if the weather is favourable, head of Russia’s Grain Union Arkady Zlochevsky said on Monday.“The most optimistic forecast is 93 million tons, although it is obvious already now that 90 million tons are a guaranteed harvest,” he told journalists, adding that 83 million tons have already been harvested. “This is bunker weight,” he noted.According to Zlochevsky, final harvesting figures will be available by December. At the same time, he admitted that weather may influence the harvest. Thus, in his words, “there were too many rains” in the Volga region.According to Zlochevsky’s forecasts, Russia’s wheat harvest is expected to be at 50-55 million tons, and barley harvest – at 16-17 million tons. “It will be enough to ensure exports although the quality of wheat has somewhat deteriorated as compared with the last year’s harvest,” he said.Apart from that, rice harvest is expected to reach 1.2 million tons, maize harvest – six million tons, sunflower harvest – nine to ten million tons, and soy beans harvest – from 900,000 to one million tons.He also spoke about plans for winter crops. Thus, he said, “It was initially planned to sow winter crops on an overall area of 17.8 million hectares but time has been lost in some regions, so the plans reduced to 17 million hectares.”“We will have to compensate what we have lost in terms of winter crops in the spring sowing campaign, virtually as we did last year,” he added.Russia must diversify or growth will stall, says regional expert Chris Sloley on Oct 03, 2011 at 07:01Russia needs to diversify its economy or growth could be undermined, according to Renaissance Asset Management portfolio manager Takouhi Tchertchian.Echoing?comments made by her colleague Plamen Monovski, Tchertchian said, while the country was blessed with masses of natural resources, the unrealised potential of infrastructure development will form a foundation of the country’s economy in the future.‘Going forward, if Russia wants to remain a high growth country it needs to diversify its economy. For the last 10 years, real GDP growth has been over 5% per annum, which has mainly been driven by commodities,’ she said.‘It is still very much dependent on oil, as well as gas, because Russia is the number one producer of oil and the number two gas and potash producer in the world. But it has become much more important to diversify into different areas.’Tchertchian made the comments while outlining the potential for the firm’s Russian Infrastructure Fund, which is a closed-ended fund devised by Renaissance in order to tap into infrastructure prospects in the country.‘There is a high demand for investing in infrastructure in Russia. It has become even more acute in recent years, and that is because we have had decades of under investment,’ she said.‘Super cycle’Outlining the potential for a ‘super cycle’ in infrastructure spending, Tchertchian said years of under-spending in this area meant improvement had become a necessity. This, she said, would also allow companies operating in this sector to expand significantly.In the next five years, Tchertchian anticipates $25 billion to be spent on road construction alone in Russia, with a further $25 billion going into railway and runway construction and improvements.Tchertchian name-checked road building company Mostotrest, rail container operator TransContainer and warehouse builder Raven Russia as three companies which stand to benefit from a boom in the infrastructure sector.The burgeoning middle class will also offer an opportunity in terms of investment, Tchertchian said. And, at present, she said Russia has a higher GDP per capita than the other BRIC nations – Brazil, China and Russia.She said: ‘Russia is nearly at $10,000 in terms of GDP per capita, compared to $6,000 in China and $3-4,000 in India. If we look at consumer spending, it is better than Brazil.’Business, Energy or Environmental regulations or discussionsOctober 03, 2011 10:18Russian stock markets open with slipping share prices. Oct 3 (Interfax) - Share-trading on the Russian Trading System and MICEX began the week with blue chip share prices trending down amid renewed concerns over a weakening world economy.By 10:01 a.m. Moscow time, the RTS index had lost 2.13% to 1312.56 points, the MICEX index was down 2.78% at 1328.56 points, and prices for most benchmark shares had dropped up to 3.5%.VTB (RTS: VTBR) was down 3.2% by that time, Gazprom (RTS: GAZP) had lost 2.5%, Lukoil (RTS: LKOH) 2.1%, Norilsk Nickel (RTS: GMKN) 1.9%, Rosneft (RTS: ROSN) 3.3%, Rostelecom (RTS: RTKM) 3.3%, Sberbank of Russia (RTS: SBER) 3.5%, Surgutneftegas (RTS: SNGS) 2.7%, and Tatneft (RTS: TATN) 3.5%.Cf(Our editorial staff can be reached at eng.editors@interfax.ru)Stocks May Extend Biggest Decline Since 2008: Russia Overnight Leon Lazaroff - Oct 3, 2011 6:28 AM GMT+0200 Russian stocks may extend their biggest quarterly decline since 2008 amid prospects a global recession will stymie the nation’s already slowing economy by cutting demand for commodities, trading in futures shows. Contracts on Russia’s dollar-denominated RTS index expiring in December dropped 1.9 percent to 129,305 on Sept. 30, as the measure in Moscow slid 3.5 percent, bringing its slump in the three months to Sept. 30 to 30 percent. The 30-stock Micex Index (INDEXCF) lost 18 percent in the period, the worst quarter for both indexes since the last three months of 2008. The Bloomberg Russia-US 14 Index of Russian companies traded in New York dropped 3.8 percent to 85.74, bringing its quarterly loss to 32 percent as German retail sales in August declined the most in more than four years, fueling concern that the region’s debt crisis is hitting consumer demand in Europe, Russia’s biggest trading partner. Data today may show U.S. factories grew last month at the slowest pace since July 2009, adding to speculation about faltering global growth. “The markets are driven by this type of uncertainty and fear, a real crisis of some kind approaching,” Mattias Westman, managing director of Prosperity Capital Management, the largest Russia-focused equity investor with about $5 billion under management, said in a phone interview from London on Sept. 30. “People can’t really quantify the risk of something really bad happening. A lot of people just want out.” Faltering Economy The International Monetary Fund cut its forecast for global growth for 2011 and 2012 to 4 percent on Sept. 20, reducing previous estimates of 4.3 percent and 4.5 percent respectively. Oil and gas make up 17 percent of Russia’s gross domestic product, which expanded 3.4 percent in the second quarter, the slowest pace since the three months to Sept. 30 2010. Oil declined 17 percent in the three months to Sept. 30, also the worst quarter since the global financial crisis, which was ignited by the collapse of Lehman Brothers Holdings Inc. in September 2008. Crude for November delivery dropped 3.6 percent to settle at $79.20 a barrel in New York at the end of last week, the lowest settlement since Sept. 29, 2010. The delay in resolving Europe’s sovereign-debt crisis, which spurred $9.4 trillion to be wiped off global stock markets last quarter, may push the world economy into another economic slump, Josef Ackermann, Deutsche Bank AG’s chief executive officer said last week. OAO Mechel (MTL) is Russia’s largest maker of coal for steelmakers and about 19 percent of the company’s 2010 sales were to Europe. Mechel (MTLR)’s American depositary receipts declined 6 percent in New York to $10.19 on Sept. 30, bringing its loss in the third quarter to 57 percent, the most since the last quarter of 2008. European Delays “If Europe continues to kick the can down the road, there will be continued pressure on markets such as Russia, until policy makers there deliver some real solutions,” Vlad Milev, a Los Angeles-based analyst at Metzler Payden, which manages $750 million in assets, said in a phone interview on Sept. 30. “Russia is still a good market long term, but there are very few reasons for momentum at this stage.” Russia’s Finance Minister Alexei Kudrin was ousted last week after refusing to serve in a government under President Dmitry Medvedev because of spending disagreements. Prime Minister Vladimir Putin, who was president from 2000 to 2008, said on Sept. 24 that he’ll swap jobs with Medvedev by running for the presidency again in March elections. Kudrin oversaw Russia’s recovery from its 1998 debt default and presided over budget surpluses through Putin’s presidential term. Gazprom, Lukoil American depositary receipts of OAO Gazprom, the world’s biggest natural gas exporter, fell 3.3 percent to $9.55, bringing their loss for the quarter to 34 percent, the most since the last quarter of 2008. Gazprom fell 1.9 percent on the Micex index on Sept. 30 to 156.07 rubles, or the equivalent of $4.83. OAO Lukoil, Russia’s largest non-state oil producer, fell 2.6 percent in New York to $50.19 for a 21 percent third-quarter loss. Lukoil in Moscow dropped 1.1 percent to 1,637.40 rubles, or the equivalent of $50.64. CTC Media Inc. (CTCM), a Russian television network, was the biggest decliner on the Bloomberg Russia-US 14 index last quarter, tumbling 58 percent, the most since the last three months of 2008. The stock fell 3.2 percent to $8.90 in New York on Sept. 30 and was downgraded last week to “neutral” from “overweight” at JPMorgan Chase & Co. The Moscow-based company cut its forecast for revenue growth to 15 percent from 20 percent on Sept. 12 because of lower-than-anticipated audience share. Yandex Tumbles Yandex NV, the operator of Russia’s most popular Internet search engine, lost 42 percent last quarter. Dow Jones Newswires reported on Sept. 29 that Chief Executive Officer Arkady Volozh told investors that the company had lost ground to Google Inc. Yandex spokesman Ochir Mandzhikov didn’t immediately reply to a phone call and e-mail requesting comment after hours in Moscow on Sept. 30. Netherlands-registered Yandex, which trades at 38 times analysts’ estimates for its earnings, fell 9.5 percent to $20.46 on Sept. 30, its lowest level since going public on May 24 at $25 a share. The shares sank 20 percent last week. “In these times, when people are very cautious, that’s an excuse for some rapid selling,” Prosperity Capital’s Westman said. “Yandex has one of the highest valuations in the markets, so it has further to fall.” ‘Open Interest’ Investor unease about Russian equities can be illustrated in the drop in number of RTS futures contracts that were rolled- over to December from those that came due on Sept. 15, according to Luis Saenz, chief executive officer of the U.S. unit of Moscow-based brokerage Otkritie Financial Corp. The number of contracts in “open interest” has fallen to about 617,000 valued at about $1.6 billion, from more than 1.2 million contracts on Sept. 14 valued at about $3.5 billion, according to Otkritie. Open-interest contracts are both long and short bets on equities that haven’t closed. The decline is largely due to Russia-based traders exiting the market because price volatility has made it difficult for them to “meet their margin calls,” Saenz said in a phone interview from London, referring to brokers’ demands for cash from investors to cover adverse price movements. The average margin requirement for RTS futures rose to 18 percent over the past two weeks, from 10 percent in early September, he said. The RTS Volatility Index, which measures expected swings in the index futures, rose the most in a week on Sept. 30, gaining 7.7 percent to 57.27 points. The index more than doubled in the three months to Sept. 30, its biggest advance since the third quarter of 2008. Metals Fall The Standard & Poor’s 500 Index declined 2.5 percent to 1,131.42 on Sept. 30, losing 14 percent in the quarter, its worst performance since the last three months of 2008. The Dow Jones Industrial Average lost 2.1 percent to 10,913.38, falling 12 percent in the third quarter. The Standard & Poor’s GSCI index of 24 raw materials fell 2.6 percent to 591 as commodities recorded their biggest quarterly drop since the end of 2008. Nickel declined 5.7 percent to settle at $17,600 a ton on the London Metal Exchange, while copper for delivery in three months slid 2.2 percent to settle at $7.018 a metric ton. Gold futures gained 0.3 percent to $1,622.3 on the Comex in New York. Lower Valuations The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, retreated 6.5 percent to $25.30, down 34 percent last quarter, while the Bank of New York Mellon Russia ADR Index dropped 5.1 percent, for a 36 percent quarterly drop. The Micex has slipped 19 percent in 2011 and trades at 4.9 times analysts’ earnings estimates for member stocks. That compares with a 25 percent slide for Brazil’s Bovespa index, which trades at 9 times estimated earnings, according to data compiled by Bloomberg. The Shanghai Composite Index trades at 10.9 times estimated earnings, and the BSE India Sensitive Index has a ratio of 13.7. Members of the Bloomberg Russia-US 14 Index:CTC Media Inc.OAO Gazprom NeftOAO LukoilOAO Mobile TeleSystemsOAO MechelOAO GMK Norilsk NickelOAO GazpromOAO Polyus GoldOAO RostelecomOAO RusHydroOAO SberbankOAO SurgutneftegasVimpelCom Ltd.Yandex NVTo contact the reporter on this story: Leon Lazaroff in New York at llazaroff@ To contact the editor responsible for this story: David Papadopoulos at papadopoulos@ Rosneft, Lukoil, Gazprom, Sollers: Russian Equity Preview Alex Nicholson - Oct 3, 2011 4:00 AM GMT+0200The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow. The 30-stock Micex Index lost 2.9 percent to 1,366.54. The dollar-denominated RTS Index dropped 3.5 percent to 1,341.09. OAO Rosneft (ROSN RX): Russian crude oil production rose to a post-Soviet record in September and exports jumped. Output reached 10.3 million barrels a day last month, while exports surged to 5.47 million barrels a day, 7.2 percent more than in September of last year. Shares of the country’s biggest oil producer fell 3.4 percent to 189.84 rubles. OAO Lukoil (LKOH RX), Russia’s second-largest oil company, slid 1.1 percent to 1,637.40 rubles. OAO Gazprom (GAZP RX): The world’s biggest natural-gas producer will meet investors in Switzerland from Oct. 3 and may sell dollar-denominated euro commercial paper, according to a person with knowledge of the plans. The shares fell 1.9 percent to 156.07 rubles. OAO Sollers (SVAV RX): The Ford Sollers joint venture will start producing the U.S. automaker’s Explorer sport-utility vehicles at a plant in the Tatarstan region next year, Vadim Shvetsov, head of the Russian company, said Oct. 1 at a ceremony in Moscow. Shares of the country’s second-biggest automaker dropped 1.6 percent to 336.20 rubles. To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@ To contact the editor responsible for this story: Gavin Serkin at gserkin@ Inter RAO to float GDRs outside Russia , 03.10.2011, Moscow 12:46:21.Russian electric power supplier Inter RAO UES has filed an application with the Federal Service for Financial Markets (FSFM) for permission to place its ordinary shares as GDRs outside Russia, the company said in a statement.??????Inter RAO plans to offer approximately 1.97 trillion shares at RUB 0.02809767 a share on the London stock exchange. Acron sells eight potash permits in Canada to Chinese company for CAD110mn: Positive for Acron CapitalOctober 3, 2011Event: On Friday (30 September) Nordic Atlantic Potash, the Canadian subsidiary of Acron, sold eight of its permitted areas to Yancoal Canada Resources of China for CAD110mn ($106m). Action: The news is positive for Acron, in our view. Rationale: Acron bought 28 permits areas in Canada for CAD61mn (CAD2.2mn per permit) in 2008. Last year the company sold two permits to BHP Billiton and Sanya Resource for about CAD6mn per permit. The current sales price is CAD13.75mn per permit, which is 6.3x the initial price. We expect that Acron can use the proceeds from the deal for investing in its other permits in Canada, its phosphate project Oleniy Ruchey and in its Talitsky potash project in Russia. In addition, this deal is positive in terms of revaluation of Acron's remaining 18 permits in Canada, whose current value we estimate at $240mn. Acron is implementing its strategy regarding potash projects in Canada, according to which the company intends to sell some permits and develop others. Last week Acron announced a JV with Rio Tinto on developing nine permits. Currently Acron has not announced a decision for the remaining nine permits. Mikhail SafinRussia's OGK-2, OGK-6 to complete merger as of Nov 1 ISTMOSCOW, Oct 3 (Reuters) - Russian electricity generators OGK-2 and OGK-6 will be a merged company as of Nov. 1 having had the tie-up approved by Russia's anti-monopoly watchdog, OGK-2 said on Monday. The two companies, both controlled by Gazprom , are being combined as part of the state-owned gas giant's plans to consolidate its various power assets. (Reporting By John Bowker; Editing by Lidia Kelly) Caterpillar, Uralvagonzavod May Form Venture, Kommersant Says Yuliya Fedorinova - Oct 3, 2011 6:07 AM GMT+0200 Caterpillar Inc. (CAT) and state-owned Uralvagonzavod of Russia may set up a joint venture to make engines and road-construction machinery, Kommersant reported today, citing Oleg Sienko, the Russian’s company chief executive officer. A railroad car repair business may be also form part of the partnership, he said. To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@ To contact the editor responsible for this story: John Viljoen at jviljoen@ 3 Oct, 2011 09:00 CET Fortum commissions new capacity at Tobolsk in Russia releaseFortum commissions new capacity at Tobolsk in RussiaEspoo, Finland, 2011-10-03 09:00 CEST (GLOBE NEWSWIRE) -- PRESS RELEASE 3October 2011 Fortum has completed the third project of its Russian investment programme atTobolsk, in Tyumen region, Russia. The new power capacity commissioned atTobolsk CHP, adds approximately 210 megawatts (MW) to the market. The newcapacity was taken into commercial operation on 1 October 2011. "Having completed the investment at Tobolsk CHP Fortum has once again confirmedits commitment to the execution of its Russian investment programme which is akey driver for solid earnings in the country. The additional new capacity inTobolsk supports the petrochemical industry of the area and promotes thedevelopment of the region's economy", says Tapio Kuula, President and CEO ofFortum. The capacity increase in Tobolsk CHP is the third completed project of Fortum'sinvestment programme in Russia. In February 2011, Fortum started commercialoperation of the new unit at Tyumen CHP-1 with a capacity of 230 MW. In June2011, Fortum commissioned another new unit at Chelyabinsk CHP-3 with a capacityof 226 MW. The investment programme continues near the city of Nyagan inKhanty-Mansiysk, where the first two out of three new units are estimated to becommissioned in 2012. Fortum's subsidiary in Russia, OAO Fortum, has committed to implementing one ofthe largest investment programmes in the Russian power generation in terms ofrelative increase in the total installed capacity. The value of the remainingpart of the investment programme is estimated to be approximately EUR 1.3billion from the beginning of July 2011. The programme is planned to becompleted in 2014, and it will increase the generating capacity of Fortum'spower plants in Russia by approximately 85 % up to 5146 MW. Fortum CorporationCommunicationsAdditional information:Anne Brunila, Executive Vice President, Corporate Relations and Sustainability,tel. ????????????+358 10 4520970?????? About Tobolsk:The Tyumen region, where Tobolsk is located, is the centre of Russian gas andoil production and the wealthiest region after Moscow. Tobolsk has a populationof 100,000 people. The prime consumption in the area is based on the localpetrochemical industry. Because of its energy production-focused industry, theTyumen region saw minimal decreases in electricity consumption during the lastyears, compared to significant decreases elsewhere in Russia. FortumFortum's purpose is to create energy that improves life for present and futuregenerations. We provide sustainable solutions that fulfil the needs for lowemissions, resource efficiency and energy security, and deliver excellent valueto our shareholders. Our activities cover the generation, distribution andsales of electricity and heat as well as related expert services. Fortum's operations focus on the Nordic countries, Russia and Baltic Rim area.In the future, the integrating European and fast-growing Asian energy marketsprovide additional growth opportunities. In 2010, Fortum's sales totalled EUR6.3 billion and comparable operating profit was EUR 1.8 billion. We employapproximately 10,500 people. Fortum's shares are quoted on NASDAQ OMX Helsinki. Further information: Eurochem to Build $1 Billion Fertilizer Complex, Vedomosti Says Yuliya Fedorinova - Oct 3, 2011 6:48 AM GMT+0200 OAO Eurochem, a Russian fertilizer maker, may spend as much as $1 billion on building a new complex to produce 700,000 tons of ammonia per year, Vedomosti reported today, citing unnamed company’s employee. To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@ To contact the editor responsible for this story: John Viljoen at jviljoen@ Kerimov May Get EurasiaTower in Moscow City, Vedomosti Says Yuliya Fedorinova - Oct 3, 2011 6:44 AM GMT+0200 Suleiman Kerimov’s Nafta Moskva may get control of the EurasiaTower in the Moscow City complex, Vedomosti reported today, citing unidentified people familiar with the situation. Nafta Moskva purchased a 5 billion-ruble ($155 million) loan from OAO Sberbank to the current owner of the tower, which is pledged against the loan, the newspaper said. To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@ To contact the editor responsible for this story: John Viljoen at jviljoen@ Activity in the Oil and Gas sector (including regulatory)Russian September Oil Output Rises to Record, Exports Surge Torrey Clark - Oct 2, 2011 5:17 PM GMT+0200 Russian crude and gas condensate production rose to a post-Soviet record in September and exports jumped before Prime Minister Vladimir Putin approved a new tax structure raising the duty on fuel oil shipments. Production reached 10.3 million barrels a day last month, remaining at the highest level in the world, according to preliminary data from the Energy Ministry’s CDU-TEK unit sent by e-mail today. That is 0.2 percent higher than the previous month’s 10.27 billion barrels a day and 1.2 percent higher than in September of last year. Crude oil exports surged to 5.47 million barrels a day, 7.2 percent more than in September of last year and 5.7 percent more than in August of this year, according to the data. Putin lowered the crude export tax rate from Oct. 1, while raising the duty on heavy oil products, such as fuel oil, to spur investment in production. The leader, who may return as president in the March election, has called for daily output to remain above 10 million barrels for at least the next decade. Oil is Russia’s largest source of tax revenue. Soviet-era output in Russia peaked at 11.48 million barrels a day in 1987, according to BP Plc data. Lukoil Decline OAO Lukoil, controlled by billionaires Vagit Alekperov and Leonid Fedun, remained the only of Russia’s five biggest oil producers to show annual declines, as traditional fields in western Siberia age. The company’s output at Russian fields fell 5.4 percent from a year earlier to 1.7 million barrels a day, while remaining little changed from the previous month. OAO Bashneft, the regional oil producer controlled by billionaire Vladimir Yevtushenkov, lead the annual gain, boosting output 5.3 percent to 307,400 barrels a day, that was 0.2 percent more than the previous month. Russia reduced its export duty on most crude shipments by 7.4 percent to $411.40 a ton ($56.12 a barrel) as of Oct. 1 because of the new “60-66” tax measure and a decline in oil prices, on which the duty is based. The crude duty rate was lowered to 60 percent from 65 percent last month under a decree signed by Putin, while the tax on refined products was unified at 66 percent of the crude levy. Given recent oil prices, that decreased the tax on middle distillates such as diesel by 8.7 percent this month, while pushing up the rate for heavy products by 31 percent. Gas production fell 0.7 percent from a year earlier to 1.59 billion cubic meters a day. That was an increase of 7.6 percent from the previous month, according to the data. To contact the reporter on this story: Torrey Clark in Moscow at tclark8@ To contact the editor responsible for this story: Will Kennedy at wkennedy3@ Russia Sept oil output hits post-Soviet record, Oct 2 2011MOSCOW, Oct 2 (Reuters) - Oil output in Russia, the world's top crude producer, hit a new post-Soviet high of 10.3 million barrels per day (bpd) in September compared with 10.28 million bpd in August, Energy Ministry said on Sunday. Daily natural gas production increased 8.2 percent to 1.59 billion cubic metres (bcm) last month from 1.47 bcm in August. (Reporting by Vladimir Soldatkin) Russian gas production numbers 3, 2011Interfax reported Russian gas production numbers for September this morning, showing that Gazprom's production dropped 5.5% y-o-y in the month, which we think was likely due mostly to a drop in exports due to the company's price disadvantage on the European market. However, we suggest not reading too much into this, as a) according to futures prices, which indicate market prices of c$12/mcf mid-winter (vs. c$13/mcf for Gazprom's contract gas), the company should be quite competitive vs other producers during the peak demand season (especially as further LNG gets siphoned off to seek even higher Asian prices); and b) reports last week by Interfax indicated that Gazprom's export volumes had already begun rising towards the end of the month. Novatek production ticked up slightly m-o-m from 141.3mcmpd to 143.9mcmpd. Assuming flat production at that level, Novatek would produce some 51.7bcm for the whole year, while normal seasonality with some modest caps would indicate c53bcm of full-year production, both easily exceeding management's most recent guidance of 't rolls back fair access to gas pipes , 03.10.2011, Moscow 10:58:11.The draft resolution intended to ensure non-discriminating access to natural gas pipelines is unlikely to receive the go-ahead from the government any time in the near future, RBC Daily reported today, citing a source familiar with the situation.??????The Federal Anti-Monopoly Service, which drafted the document, and the Energy Ministry, declined to comment on when it could be approved.??????The blueprint was submitted to the government in early July and has still not managed to advance. Antitrust chief Igor Artemyev said in September the chances that the government approves it in the near future were slim. Under the draft resolution, natural gas pipeline monopoly Gazprom is expected to be obliged to disclose information about free capacities of its pipeline system on a regular basis and provide access to it to all independent gas producers, which conclude gas supply agreements for more than one year. Sakhalin Energy to sell LNG to Japan's TEPCO 03/10/2011MOSCOW, October 3 (RIA Novosti)Sakhalin Energy, the operator of the Sakhalin-2 oil and gas project off Russia's Pacific coast, will supply Tokyo Electric Power Company (TEPCO), Japan's largest electricity provider, with liquefied natural gas under a mid-term contract, the Energy Ministry said on Monday.The contract was approved at a meeting of the Sakhalin-2 supervisory board, which includes officials from various ministries. The Energy Ministry did not mention any other details of the contract in its statement.Russia's gas giant Gazprom holds a 50 percent stake in Sakhalin Energy. Other shareholders include Royal Dutch Shell with 27.5 percent, Japan's Mitsui and Mitsubishi with 12.5 percent and 10 percent respectively.The $20 billion Sakhalin-2 project includes the Piltun-Astokhskoye and Lunskoye oil and gas fields on Sakhalin Island's northeastern shelf, with recoverable reserves estimated at 150 million tons or 1.1 billion barrels of oil and 500 billion cubic meters of natural gas.Novatek Takes Yamal LNG 03 October 2011Novatek raised its stake in?the Yamal LNG project to?100 percent, exercising options it bought earlier this year, and?will make the?payments for?the 23.9 percent and?25.1 percent stakes by?June 30, 2012, the?company said Friday.Novatek plans to?offer shares to?future partners in?the project to?produce liquefied natural gas, while retaining the?51 percent it had previously. Yamal LNG may need as much as $20 billion in?investments, not including spending on?a tanker fleet to?ship the?fuel from?the icebound waters.Total agreed in?March to?purchase a?20 percent stake in?the project in?a deal that has not yet closed and?to buy 12 percent of?Novatek for?about $4 billion. That deal was completed in?April.(Bloomberg)Read more: The Moscow Times GazpromPutin says Russia to watch EU Gazprom raids – Ifax EDTMOSCOW, Oct 3 (Reuters) - Russia's Prime Minister Vladimir Putin said on Monday that the government was paying close attention to the situation surrounding recent raids on subsidiaries of Gazprom and ordered the company to cooperate with European authorities. "The government of Russia will follow what is going on around Gazprom in the most attentive way," Putin told Gazprom chief Alexei Miller, Interfax reported. He said it was "necessary to cooperate". The European Commission raided offices of Gazprom subsidiaries in central and eastern European states last week as part of an investigation into firms involved in the supply, transmission and storage of natural gas. The Commission has said the raids were linked to suspicions about anti-competitive practices. (Reporting By Thomas Grove; editing by Steve Gutterman) 12:37?03/10/2011Top NewsN Stream’s first line to go operational November 8, October 3 (Itar-Tass) —— The first line of the Nord Stream gas pipeline will go operational on November 8, 2011, Gazprom’s CEO Alexei Miller told Russia’s Prime Minister Vladimir Putin on Monday.“Construction of the first line is over, now we continue starting-up and adjustment works and fill the pipe with gas,” he said. “Today I am ready to quote the exact date the gas pipeline will go operational – it is November 8, 2011, as we used to say in the old times – by the November holidays.”The gas pipeline’s second line of 700 kilometres long is ready now, which is about 60 percent, he said.“At the same time, while putting the first line operational, we start the second, very important and major stage, of ecology monitoring,” Miller said. “As of now, we have agreed on financing of the permanent ecology monitoring in the amount of 40 million euros.”Putin wanted to learn progress in another gas transporting project, which Gazprom is implementing jointly with European counterparts.“As for the South Stream, we have finalised the general feasibility study of the project,” Miller reported. “It proves that the project is economically effective and may be implemented from the technical point of view.”“We have started the next stage – the project’s specifications,” he continued. “We follow the schedule and are ready to confirm that by December of 2015 the project will be finalised and the first commercial gas will be supplied to consumers via the South Stream.”Nord Stream official launch set to Nov 8 – Gazprom 3, 2011 12:17 Moscow TimeThe Nord Stream gas pipeline will be officially launched on November, 8th, Gazprom`s chief Alexei Miller said during his meeting with the Russian Prime Minister Vladimir Putin in Moscow on Monday.Mr. Miller added that now that the Nord Stream`s first leg has been completed, the pipe is being filled with technical gas.Nord Stream, its length being 1,222 km, runs under the Baltic Sea, from Vyborg in Russia to Greifswald in Germany.The capacity of the first line is expected at 27.5 billion cubic meters of gas per year. With the construction of the second line to be completed in autumn of 2012, the pipeline`s annual capacity will be increased up to 55 billion cubic meters.Nord Stream will supply the Russian gas to Germany, Denmark, the Netherlands, Belgium, France and Great Britain. (RIAN)11:37MILLER ON EC REVIEWS: GAZPROM TO RETAIN ALL RIGHTS, READY TO DEFEND THEM IN LEGAL ARENA HOPING ITS LEGAL INTERESTS IN EUROPE WILL BE RESPECTED, COMPANY OPEN TO DIALOG – MILLER INSTRUCTS GAZPROM TO MAKE DETAILED PROPOSALS ON COOPERATION WITH ASIAN COUNTRIES, I.E. JAPAN, SOUTH KOREA, CHINA SOUTH STREAM FEASIBILITY STUDY QUITE ENCOURAGING – MILLER: POSSIBLE TO CONSIDER NEW NORD STREAM BRANCHES EXPORTS RISE 25 BCM IN 9MTHS – MILLER: RUSSIAN ECONOMY OUT OF CRISIS, GAS SHIPMENTS IN RUSSIA TOP PRE-CRISIS LEVEL октября 11:35 Председатель Правительства России В.В.Путин провёл рабочую встречу с главой ?Газпрома? А.Б.Миллером Gazprom Gets Exemption 03 October 2011Gazprom may get a?10-year tax exemption for?crude oil exported from?its Prirazlomnoye development, Russia's first major offshore oil project in?the Arctic.The?project will probably not be able to?turn a?profit without the?tax relief, said two government officials, who declined to?be identified before the?exemption is approved. The?project has received a?temporary exemption from?the mineral extraction tax.Production drilling on?the project is planned for?around the?first quarter of?next year, with output planned to?peak at?about 6 million to?6.5 million tons a?year in?2019. The?project's platform and?40 wells may cost $7 billion, Gazprom deputy department head Nikolai Kabanov said Sept. 13.(Bloomberg)Read more: The Moscow Times Gazprom could raise Kirinskoye production target – Source, 03 Oct 2011Interfax quoted a source with knowledge of the project implementation said Gazprom could revise its planned production at the Sakhalin offshore Kirinskoye field upwards.The source said "The current target of 4.2 billion cubic meters assumed reserves of 100 billion cubic meters but reserves data have now risen to 136 billion cubic meters and we'll revise production accordingly.”Gas production is due to start at the end of 2012. The source said "At least that is the task we have been set. But commercial gas production might stat closer to 2014. We need to begin in order to evaluate the system."Gas production will begin later at the Kirinskaya structure, where drilling data suggest reserves are up to 300 billion cubic meters and at the Myginskaya structure which is part of the Kirinsky block. Gas production at the Kirinsky block could run to 15 billion cubic meters to 20 billion cubic meters.The Sakhalin-3 project East Odoptu and Ayash blocks are expected to go into production after 2020.Gazprom planned to supply the Kirinskoye field gas to the Russian Far East. In this connection, the company has said it would accelerate the launch of production there to 2012 instead of 2014. The Far East gas needs will be covered by the government share of the Sakhalin-2 production until then. A government decree says the government will take its share of the Sakhalin-2 project in gas until 2014.(Sourced from Interfax)UPDATE 2-Gazprom weighs options after Botas ends gas deal, Oct 2 2011* Botas ends deal to buy 6 bcm of gas a year from Gazprom* Gazprom eyes other contracts with Turkish firms* Turkey hones gas balance* Deal to supply Turkey with gas via Blue Stream pipeline remains* Gazprom delivered 18 bcm of gas to Turkey last year (Adds analyst comments, detail) By Vladimir Soldatkin MOSCOW, Oct 2 (Reuters) - Russia's Gazprom is mulling new deals in Turkey after it received notification from Turkish state pipeline company Botas that it had decided to end a contract to buy 6 billion cubic metres (bcm) of gas annually, a Gazprom source told Reuters on Sunday. "This could be less or more than 6 bcm. We already have some contracts with Turkish private firms," the source said. "We received the notification from Botas, they decided to end the deal. But Blue Stream supply contract remains in place," the source added. Botas decided to end the contract to receive gas via the so-called western line due to a pricing disagreement. The western line is one of the routes it uses to acquire the fuel from abroad. The contract was signed in 1986 and was due to expire later this year. Mikhail Korchemkin of East European Gas Analysis believes that Ankara is adjusting its gas balance and the contract was surplus to requirements. "A decade ago Turkey overestimated its natural gas demand and signed too many import contracts. Now Botas is using its first opportunity to correct the gas balance," he said. ATTACK ON GAZPROM Last year, Gazprom supplied Turkey with 18 bcm of gas, of which 8 billion were shipped via the Blue Stream pipeline on the seabed of the Black Sea. Korchemkin says Turkey might use Blue Stream with its capacity of up to 16 bcm to receive additional volumes within take-or-pay contracts with Gazprom. "I think Blue Stream supply could rise to 11-12 bcm this year and 13-14 bcm in 2012," he said. The decision by Botas to end the deal comes as European Union is intensifying its pressure on Gazprom, fearing that the Russian company will increase its influence in the EU by succeeding against rival EU-backed gas projects. Last week, the EU's anti-monopoly authorities raided offices of Gazprom's subsidiaries in Europe in a wider probe into alleged breaches of anti-trust regulations. European companies are increasingly dissatisfied with long-term gas supply contracts with Gazprom, demanding that the Russian company cut gas prices, which are linked to the price of oil and oil products. Gazprom, Russia's largest company with a market capitalisation of $113 billion, is looking to increase its gas supplies to Europe this year by 12 percent to 155 billion cubic metres. It also eyeing a 30 percent share of the European gas market, up from around 25 percent now, in coming years. (Reporting by Vladimir Soldatkin; Editing by Robert Birsel and Jane Merriman) ................
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