Download 60029_Russia 101119

Russia 101119
Basic Political Developments
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RUSSIA-NATO
o Combined Russia-NATO missile defense could emerge from new
relationship - "It will certainly be a summit that marks a fresh start in our
relations," NATO Secretary General Angers Fogh Rasmussen said on the
eve of the landmark November 19-20 meeting. "I hope in particular that
NATO and Russia will be moving forward on missile defense
cooperation."
o NATO Lisbon summit to see ‘fresh start’ in Russia ties - Rasmussen
o Relations with Russia-keynote of NATO summit - Russia, in its turn, still
has misgivings concerning the ABM system. According to Rogozin,
Russia has not got a promise from the United States to keep the NATO
ABM system on a tactical level and to give up the idea to create in Europe
the weapon systems capable of intercepting ballistic missiles, which make
the backbone of the Russian nuclear potential.
o Russia-NATO missile shield possible "in mid-term perspective" - Kremlin
o US defense chief to skip NATO summit - US Defense Secretary Robert
Gates will not attend today’s NATO summit in Lisbon and will go instead
to Chile and Bolivia to meet his Latin American colleagues there.
o Poland seeks assurances at NATO summit - Poland is also supporting the
addition of Georgia and Ukraine into the alliance.
o NATO summit to tackle alliance’s identity crisis – Russia Today
o NATO to Offer Medvedev a Warm Embrace at Summit - By Nikolaus von
Twickel
o 5 Reasons Why Russia Will Never Join NATO - By Michael Bohm
START TREATY
o Obama rallies bipartisan support for New START - Obama’s meeting met
with various former secretaries of state, national security advisors and
experts from both major political parties is a sign of how important the
treaty is, and signifies there is hope it will pass before the end of the year.
o US-Russian 'reset' in trouble as nuke pact stalls - By VLADIMIR
ISACHENKOV
o FACT CHECK: Arms treaty debate full of half-truths - By DESMOND
BUTLER
Moscow hopes Iran Six resume talks in December (Update 1) - "I hope they
[talks] will occur. At least we are now discussing concrete dates - the beginning
of December," Lavrov said.
China-Russia Relations Maintain Sound Development Momentum - Chinese
Premier Wen Jiabao's upcoming visit to Russia will further bolster the relations
between Moscow and Beijing that have maintained a sound momentum of
development in recent years.
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Chinese Navy Commander visited Northern Fleet - A Chinese delegation headed
by Commander of the Chinese Fleet Admiral Wu Shengli visited Murmansk on
November 16-17, GTRK Murman reports.
Slovenian president to visit Russia’s city of Samara - Turk will meet with
governor of the Samara region Vladimir Artyakov, attend a Russian-Slovenian
business conference, plant trees in the Alley of Cooperation, and visit Slovenia’s
consulate and a local cancer centre, a source in the regional government told ItarTass.
Putin to attend meeting of CIS Prime Ministers in St. Pete - Russian Prime
Minister Vladimir Putin is due to attend a meeting of the Council of CIS Prime
Ministers, of the Inter-State Eurasian Economic Community Council and of the
Customs Union’s top body in St. Petersburg today.
o Armenian Prime Minister Travels To Saint Petersburg - The Armenian
delegation accompanying the premier consists of Vice Premier and
Territorial Administration Minister Armen Gevorgyan, Head of the
Government’s Administration David Sargsyan, Culture Minister Hasmik
Poghosya, Economy Minister Nerses Yeritsyan, Deputy Foreign Minister
Shavarsh Kocharyan, Deputy Transport and Communication Minister
Artashes Avetisyan and other officials.
o Azarov Leaves For Russia To Take Part In Meeting Of CIS Governments'
Heads Council - The meeting plans to discuss course of preparation of
draft agreement on free trade zone and interstate program on innovative
co-operation between CIS countries. ..The program of the meeting also
envisions discussion of agreements on co-operation in protection of
intellectual property and plan of measures in the sector of humanitarian
co-operation.
Medvedev to discuss security in N. Caucasus - During a visit to the southern spa
towns of Kislovodsk and Yessentuki the President will take part in a ceremony to
award Interior Ministry officers and soldiers who distinguished themselves in
combat.
Israel to roll out the red carpet for Medvedev, Peres says - President tells Russian
deputy PM that Russian leader will receive same level of importance, prestige as
former US president Bush.
Russia not refusing territorial talks with Japan: official - Alexei Sazonov, deputy
director of the Information and Press Department at the ministry, said at a briefing
that Russia has never expressed that it would refuse such talks. The Etorofu,
Kunashiri and Shikotan islands and the Habomai islet group are known in Japan
as the Northern Territories and in Russia as the Southern Kurils.
Russia against any haste in UNSC expansion - "Recent statements of the US
President Barack Obama in New Delhi and Tokyo are in line with similar
statements by other world leaders," Russian Foreign Ministry spokesman Alexei
Sazonov said in response to a question about Obama's backing for India and Japan
as the permanent members of the apex UN body.
Thai government ordered Bout's extradition in advance - source
o Russia insists on fair trial for Bout
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Russia summit seeks to save tiger from extinction - Russia Sunday hosts an
unprecedented summit of the last 13 states with populations of the fabled beast.
The summit in Russia's second city of Saint Petersburg, hosted by Prime Minister
and self-proclaimed animal lover Vladimir Putin, is aiming to double the number
of tigers living in the wild by 2022.
o A last chance to save the tiger - As hunting and loss of habitat push the
world's biggest cat to the brink of extinction, the 13 'tiger nations' are
gathering in Russia determined to halt its calamitous decline
Georgian president:Country welcomes any EU-Russia dialogue - Georgia
welcomes also any dialogue that European Union has with Russia, Georgian
President Mikheil Saakashvili said at the joint news conference with President of
the European Council Herman Van Rompuy.
o Georgian youth restores bridges with Russia - A group of Georgian young
people today will travel to Moscow to strengthen humanitarian ties with
Russia and to launch a dialogue with Russian youth.
o Church important factor of Russian-Georgian relationship stabilization Patriarch Kirill: "The involvement of Russian Orthodox Church
representatives in the life of the Georgian Church, and visits by Georgian
clergymen to Russia and by Russian ones to Georgia allow not only
ecclesiastical but also humanitarian ties to be maintained, while leaving
real prospects for normalization of the relationship between the two
countries," the Patriarch said at a meeting with the alumni of the Russian
Foreign Ministry's Academy and diplomats in Moscow.
Military plane crashes in Perm - MIG-31 HIGH-ALTITUDE INTERCEPTOR
FIGHTER JET CRASHES IN PERM TERRITORY - LOCAL
ADMINISTRATION
PART OF ROSTEKHNOLOGII'S DEFENSE COMPANIES COULD BE
PRIVATIZED - CHEMEZOV
Russia's leading shipbuilder seeks arms exporter status - Russia's United
Shipbuilding Corporation (USC) is seeking to become an independent exporter of
vessels, naval arms and equipment, a respected Russian business daily said on
Friday.
Russian company cancels Karabakh tours - Russian travel company Astravel has
changed plans for three-day tours to occupied Azerbaijani land after an approach
from the Azerbaijani embassy.
Bashkir teenager attacked a policeman with a cry of "Allahu akbar!"
Border unit, police building come under gun fire in Dagestan
Police officer dies after Dagestan attack
Additional Buildup of Military Forces in Dagestan Proceeds with Caution
Dagestan's deadly Islamic insurgency - By Steve Rosenberg BBC News,
Dagestan
Sheikh Yousef Al-Qaradhawi to the Chechens: Lay Down Your Arms, Make
Peace with Russia
Mayor personally heads Moscow urban planning commission - The mayor’s First
Deputy Vladimir Resin and Deputies Yuri Roslyak and Natalia Sergunina are
appointed deputies to the commission chairman.
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Russian Massacre Sparks Corruption Probe After Decade of Terror - The Russian
government plans to investigate a decade of unsolved crimes in two southern
regions after the murders of 12 people focused attention on allegations that local
officials aided a gang terrorizing the region.
CORRUPTION WATCH: Kremlin refuses income probe - The Kremlin has
refused to investigate disputed income declarations from several State Duma
deputies, casting doubt over whether the government is serious about fighting
corruption.
Mironov Loses Power To Check New Senators
Russian census results to be made public before end of 2012
Moscow Patriarchate, Vatican wage common fight against secular liberalism Patriarch Kirill
Russian World countries will lead mankind out of deadlock - Patriarch Kirill
Russian Press at a Glance, Friday, November 19, 2010
o The third gathering since 2002 of presidents of the five Caspian Sea
littoral states failed to resolve outstanding territorial issues, amid
assertions by analysts that continuing ambiguity is in the interests of
Russia and Iran(The Moscow Times, Vremya Novostei, Vedomosti,
Kommersant, Rossiiskaya Gazeta)
o President Dmitry Medvedev will visit the NATO summit in Lisbon on
Saturday. Secretary-General Anders Fogh Rasmussen has made it clear
that he wants the summit to be a turning point in NATO's often-stormy
ties with Moscow(The Moscow Times, Nezavisimaya Gazeta)
o President Barack Obama said it was a "national security imperative" for
the Senate to ratify a pending nuclear arms treaty with Russia before
ending its work this year(The Moscow Times, Vremya Novostei,
Nezavisimaya Gazeta)
o Russia has "nothing to hide" from the U.S. authorities in the case of
suspected arms dealer Viktor Bout and hopes that he will get a fair
trial(The Moscow Times, Nezavisimaya Gazeta, Rossiiskaya Gazeta)
o Prime Minister Vladimir Putin said that the government planned to create
a “Titanium Valley” special economic zone in the Urals, at the cost of 40
billion rubles ($1.3 billion), to bring together manufacturers in the aircraft,
automotive, shipbuilding and medical industries.(The Moscow Times,
Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta,
Rossiiskaya Gazeta)
o Imports of handmade cigars should return to pre-crisis levels in 2012 after
falling by nearly half last year, Russia's exclusive importer of Cuban
cigars has said.(The Moscow Times)
o Russian stocks, the cheapest worldwide, are getting cheaper after the
nation's companies posted record profits that topped analysts' estimates by
the widest margin in emerging markets(The Moscow Times, Vedomosti)
o Russia's United Shipbuilding Corporation (USC) may seek arms exporter
status. If the government supports the initiative, Russia's state-run arms
exporter Rosoboronexport may lose its monopoly status and up to 25% of
current export contracts(Kommersant)
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o Russian Investigative Committee head Alexander Bastrykin reported to
the lower chamber of the Russian parliament, the State Duma, on the
investigation into the horrifying massacre of 12 people in the southern
Russian village of Kushchevskaya on November 4(Moscow Times,
Vremya Novostei, Vedomosti, Nezavisimaya Gazeta, Rossiiskaya Gazeta)
o Viktor Biryukov, a spokesman for the Moscow police department, became
the first Russian official to accuse the opposition of receiving money for
staging unsanctioned rallies. He said the Strategy 31 rallies on the last day
of each month that has 31 days and the Day of Wrath protests near the
Moscow City Hall were “commercial projects,” adding that he “was told”
this. Opposition leaders regret that it is impossible to sue Biryukov over
the statement(Kommersant)
o The North Caucasus social and economic development strategy, proposed
by the presidential envoy to the region, came under strong criticism from
Russian analysts. Experts from both liberal and conservative circles say
that the North Caucasus is on the verge of revolution and the pessimistic
forecasts of its separation from Russia may now become a reality (Vremya
Novostei)
Moscow press review for November 19, 2010
o VEDOMOSTI:
o Having borrowed $900 million from Western banks, SUEK started
repaying early to Russian ones. The company decided to repay the loans
granted by Gazprombank, Sberbank (RTS: SBER) and VTB (RTS:
VTBR), secured by the shares of its largest subsidiaries in Kuzbass and
Krasnoyarsk Territory. By June 30 SUEK's net debt was 80.3 billion
rubles according to the IFRS. By late September - 87.9 billion rubles
according to the IFRS. Collateral debt obligations - 70.8 billion rubles
(before repayment of Sberbank and VTB loans). Last year banks lent
reluctantly even to companies with good finances and demanded a high
security, says Alexei Bulgakov, an analyst with Troika Dialog (RTS:
TROY). ("SUEK going away from pledges")
o Oleg Deripaska has sold the most attractive forestry asset: Austria's Pulp
Mill bought from BazEl 33.6% shares in the Arkhangelsk pulp and paper
mill (RTS: ACBK) (ACBK). As a result, the interest of the Austrian
company rose 97.42%, the company said on Thursday. The deal is worth
$150 million, an ACBK spokesman said. The company lent this sum to
Pulp Mill a day earlier and borrowed from Unicredit. The deal is in the
process, a BazEl official said declining to elaborate. Both Pulp Mill and
Deripaska became ACBK shareholders in 2003. ("Deripaska surrendering
wood," also Kommersant, page 11 - "BazEl moving out from
Arkhangelsk")
o VTB Capital has become the main and almost the only creditor of Seventh
Continent (RTS: SCON), the supermarket chain's owner Alexander
Zanadvornov told Vedomosti through his aide. In October VTB Capital
granted a five-year $400 million loan at 9.75% interest rate per annum, in
December it could grant another $250 million on the same terms. "The
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$400 million line was approved by the board of directors. Raising the limit
to $650 million requires an approval by a general meeting of shareholders,
which is what will happen on December 12," Zanadvornov said. The VTB
Capital loan will be secured by property: "almost all" of it has been
pledged, the businessman said. ("Seventh Continent's helper")
o KOMMERSANT:
o Gazprom (RTS: GAZP), which has long been trying to enter the Israeli
market, will be finally able to do so. Before the end of 2010 the monopoly
wants to receive 50% in the country's shelf blocks. According to unofficial
reports, it is buying a share in the project run by local company Ratio
Yam. The forecast resources are not big - around 100 billion cubic meters,
but they are located close to better explored blocks with much bigger
resources. At the same time, the start of its own gas production in Israel
will put an end to Gazprom's plans to supply natural gas to that country
through the Blue Stream gas pipeline. (page 11, "Gazprom goes to Israel")
o Rostelecom (RTS: RTKM) which has not yet completed the merger seems
to have already found would-be shareholders. Kommersant has learnt that
two months before his resignation General Director of Svyazinvest
Yevgeny Yurchenko signed a memorandum with Swiss-registered fund
Savoretti & Partners, which received an exclusive five-month right to
negotiate the acquisition of up to 15% in the merged company for its
clients. Investment bankers and the communications company managers
polled by the newspaper know nothing about the fund. (page 1,
"Rostelecom issued with Swiss bill")
Russian Troops Dying Amid Cruelty Claims - An estimated 3,000 Russian
soldiers die every year despite the fact the country is not at war.
Russian soldiers to be dressed in state-of-the-art uniforms - Russian military men
will be outfitted with state-of-the-art uniforms. The new uniforms will protect
them against fire and cushion the consequences of bullet impacts. The new
uniforms are to be introduced already next year. The program will cost Russia 5.5
billion rubles, Dmitry Bulgakov, Deputy Defense Minister of the Russian
Federation said.
Caspian Sea littoral states need a cooperative organization - Valdaiclub.com
interview with Jahangir Karami, Assistant professor, faculty of World Studies,
Department of Russian Studies, University of Tehran
National Economic Trends
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Russia's budget deficit to come to around 4.6% of GDP for 2010 – Kudrin
Russia's Kudrin: 2010 Budget Deficit To Be 4.6% Of GDP
Russia's tax burden to grow by 2 pct of GDP over lack of reform warns Kudrin
Tax rises – trend, not temporary measure – Kudrin
Ban on tax benefits could eliminate budget deficit says finance minister
Capital inflow to funds investing in Russian and CIS stocks total $52 mln for Nov
11-17 - experts
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VTB: Russia/CIS bonds extend gains
Reserves Fall to $495.7Bln
TABLE-Russia monetary base falls to 5.29 trln rbls
RenCap: Ulyukaev comments on rouble and inflation
Russia to launch road show for sovereign ruble bonds in the US and Europe on
November 30
Business, Energy or Environmental regulations or discussions
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Vimpelcom, Norilsk Nickel, Razgulay: Russian Stocks Preview
Russian markets -- Factors to Watch on Nov 19
Export duty on copper to be levied as of Dec 18 – FCS
MTS to acquire stake in MGTS from AFK Sistema
Government not discussing a merger between RTS and Micex
Gref Says Tax Hikes to Erase Sberbank Savings From Staff Cuts
Titanium past the bottom of the trough setting VSMPO-AVISMA for growth The world's top titanium producer VSMPO Avista has revised its development
program, according to CEO, Mikhail Voevodin, speaking exclusively to RT
Business.
Titanium Valley Emerges in the Mountains - Prime Minister Vladimir Putin said
Thursday that the government planned to create a “Titanium Valley” special
economic zone in the Urals Federal District, which may cost 40 billion rubles
($1.3 billion) and will make products for the aircraft, automotive, shipbuilding
and medical industries.
Uralsib gearing up for IPO, mulls direct sale to investor
Inter RAO Eyes Enel's Bulgaria Coal-Fired Plant, Wind Parks – Report
Stockmann opens 100,000 sq m complex in Saint Petersburg
RosDorBank Plans to Offer 1.05 Billion Rubles in Bonds in the Beginning of
December 2010
Russia’s Cyrillic cybernauts - For once, a Russian company was being floated
whose success was not based on privatised Soviet assets and the export of raw
materials. This month’s initial public offering in London by Mail.ru instead
reflects the values of a “modernised” and “innovative” Russia, two buzzwords
much favoured by President Dmitry Medvedev.
The Finance Ministry has proposed changes seeking greater oversight of foreigncurrency transactions, according to a bill published on the ministry’s web site
Thursday. (Bloomberg)
MICEX is seeking to buy its smaller, dollar-denominated competitor, RTS, in a
“friendly takeover,” Central Bank First Deputy Chairman Alexei Ulyukayev said
Thursday. (Bloomberg)
Russia’s bid for soccer’s 2018 World Cup championship is the most expensive,
with estimated costs of $4.5 billion, Kommersant reported Thursday, citing the
Federation Internationale de Football Association. (Bloomberg)
Rostelecom was denied approval to provide so-called 4G services by the Defense
Ministry, Kommersant reported Thursday, citing an unidentified government
official. (Bloomberg)
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Russian stocks now even cheaper
Activity in the Oil and Gas sector (including regulatory)
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Kudrin Sees Room to Raise Natural-Gas Extraction Tax (Update1)
BRIEF-Malaysia's KNM bags $216 mln Uzbek job from LukOil
Urals Energy reports flow rates at first sidetrack at Petrosakh
OPAL natural gas pipeline reaches Czech Republic
Russia and China still poles apart on gas prices - The discussion is top of the
agenda for November 22, said Jun, when China's Deputy Prime Minister Wang
Qishan and Russian Deputy Prime Minister Igor Sechin will meet to hold energy
talks.
Gazprom
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Gazprom May Seek China, Korea Partners to Work at Chayanda Field
Gazprom mulls Israeli energy co investment
Gazprom May Delay Nigerian Investment Plans Until Next Year
Official: Study to Decide if South Stream Will Pass through Slovenia
Gazprom could sell Gazprom Drilling
Gazprom close to selling Burgaz
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Basic Political Developments
RUSSIA-NATO
Combined Russia-NATO missile defense could emerge from new relationship
http://en.rian.ru/world/20101119/161405424.html
11:43 19/11/2010
MOSCOW, November 19 (RIA Novosti) - Missile defense, one of the thorniest points in
Russia-NATO relations, could be the focus for new cooperation between the two sides
after the NATO summit in Lisbon.
"It will certainly be a summit that marks a fresh start in our relations," NATO Secretary
General Angers Fogh Rasmussen said on the eve of the landmark November 19-20
meeting. "I hope in particular that NATO and Russia will be moving forward on missile
defense cooperation."
The Russian side agrees - something the two sides have rarely managed to achieve on
missile defense issues in the past.
"I consider this realistic," presidential aide Sergey Prikhodko said, adding that the
realization of the system was simply a matter of "political will." He also said a joint
system was possible in the "mid-term, rather than the long-term".
Russian Air Force Commander Alexander Zelin said on Tuesday the Air Force was ready
to work on missile defense systems with NATO.
The Kremlin insists that the readiness to cooperate on missile defense issues should be
laid down in a written document.
Rasmussen also said that the alliance is hoping for further cooperation with Russia on
Afghanistan.
"We are hoping to finalize an understanding which would broaden the existing agreement
on transit. It would allow for land movements across Russia both to and from
Afghanistan. And the list of approved goods would be enlarged," he said.
That enlarged cooperation could include Russian training and support for Afghanistan's
helicopter force.
He also expressed hope that NATO and Russia would "increase the scope" of its work on
combating the drug trafficking from Afghanistan. Russian and U.S. personnel recently
combined to launch raids on drug labs.
The NATO head also remarked that "new NATO" meant "a more engaged NATO, open
to deeper partnerships in a wider world, including with Russia."
NATO Lisbon summit to see ‘fresh start’ in Russia ties - Rasmussen
http://en.rian.ru/world/20101119/161404726.html
10:47 19/11/2010
Russian President Dmitry Medvedev’s visit to the NATO Lisbon summit will herald a
new era in the military alliance’s relations with its Cold War-era adversary, NATO
Secretary General Angers Fogh Rasmussen has told RIA Novosti.
“It will certainly be a summit that marks a fresh start in our relations,” Rasmussen said in
an interview on the eve of the landmark meeting. “I hope in particular that NATO and
Russia will be moving forward on missile defence cooperation.”
“I was very heartened by the approach of President Medvedev during our meeting in
Moscow. He agrees with me that the Lisbon summit provides the allies and Russia with
an opportunity to build a modern, durable and long-term strategic partnership,” he went
on.
The NATO-Russia Council meeting on Saturday will see the highest level talks between
the 28-member alliance and Moscow since Russian troops moved deep into Georgia in
August 2008 as part of a campaign to defend the breakaway republic of South Ossetia.
Rasmussen earlier said he wants to invite Moscow to join a U.S.-sponsored missile
defense shield, and the Kremlin responded ahead of the summit that the once-unthinkable
development was more than feasible.
“I consider this realistic,” presidential aide Sergey Prikhodko said, adding that the
realisation of the system was simply a matter of “political will.” He also said the joint
system was possible in the “mid-term, rather than the long-term”.
Rasmussen also said that the alliance is hoping for further cooperation with Russia on
Afghanistan.
“We are hoping to finalize an understanding which would broaden the existing agreement
on transit. It would allow for land movements across Russia both to and from
Afghanistan. And the list of approved goods would be enlarged,” he said.
He also expressed hope that NATO and Russia would “increase the scope” of its work on
combating the drug trafficking from Afghanistan. Russian and U.S. personnel recently
combined to launch raids on drug labs.
The NATO head also remarked that “new NATO” meant “a more engaged NATO, open
to deeper partnerships in a wider world, including with Russia.”
Relations with Russia-keynote of NATO summit
http://www.itar-tass.com/eng/level2.html?NewsID=15696433&PageNum=0
19.11.2010, 10.55
LISBON, November 19 (Itar-Tass) -- The problem of relations with Russia is the keynote
of the agenda of the NATO summit, which opens in Lisbon on Friday. The leaders of 28
NATO member countries are to adopt its new strategic concept, to approve a plan of the
stage-by-stage turning over of the powers for ensuring security in Afghanistan to the
national troops, to reach agreement on the beginning of the creation of a territorial NATO
ABM system and to approve a plan of a large-scale reduction of the NATO command,
staff and rear structures.
The new NATO strategic concept will outline its goals and tasks, and will name the main
threats and methods of warding them off for the coming decade. It is not surprising that
the part of the doctrine, that deals with Russia, evoked a most lively discussion not only
among the NATO countries, but also between Russian and NATO experts, because it is
the level of the Russia-NATO relationship that will determine the real degree of security
on the Euro Atlantic territory. One should say it for NATO: during the drafting of the
document, which took a year and a half, the NATO Council of Sages even visited Russia
in full strength, with Madeleine Albright in the lead, where it had a number of meetings
with Russian senior officials and experts.
The NATO countries realise that partner relations with Russia are the best guarantee of
security in the region. At the same time, they find it difficult to overcome the inertia of
the ‘cold war’, when it comes to putting that understanding into effect. As a result of it,
the earlier version of the new NATO doctrine included both the tasks connected with the
development of strategic partnership with Russia and items on the need for providing
“additional military guarantees of security” to the East European countries. It was not
specified, whom those NATO countries should be protected against, but the choice was
clear. The document was edited several times. “We hope that NATO has at last made up
its mind about Russia,” Dmitry Rogozin, Russia’s official representative at NATO, told
Itar-Tass.
Another aspect of the strategic concept, which evoked Russia’s keen interest, is the
intention of NATO to turn from a regional organization into a global military alliance
operating where it pleases, and not only within its boundaries, but also all over the world.
According to the coming reports, the draft concept contains a provision on the need for
staging combat operations by NATO for ensuring the security of its allied countries. The
NATO Secretary-General assures that NATO is not going to become “a world
gendarme,” and that its combat operations will be based exclusively on the principles of
the U.N. Charter, but Russia would prefer to see a more clear statement, to the effect that
any operations abroad can be staged only with the sanction of the U.N. Security Council.
Another sphere, in whose solution Russia could play a very important role, will be a
resolution of the NATO summit on the creation of the NATO anti-ballistic missile
(ABM) system. NATO Secretary-General Anders Fogh Rasmussen is sure that shortly
after the adoption of the resolution NATO will invite Moscow to take part in the creation
of the system. The NATO countries are not unanimous in their opinion of the initiative.
Most West European countries believe that the NATO ABM system should be created on
the basis of transparency and should not become the reason for the growth of suspicion in
relations with Russia. At the same time, some East European countries doubt the need for
too much openness in relations with Russia in the ABM sphere.
Russia, in its turn, still has misgivings concerning the ABM system. According to
Rogozin, Russia has not got a promise from the United States to keep the NATO ABM
system on a tactical level and to give up the idea to create in Europe the weapon systems
capable of intercepting ballistic missiles, which make the backbone of the Russian
nuclear potential.
So, the resolutions of the NATO summit on the ABM system will become a topic for
discussion at the summit of the Russia-NATO Council about a possibility of cooperation
in that sphere.
The summit is to approve a “road map’ for turning over the powers for ensuring security
in Afghanistan to the Afghan authorities and armed forces. The plan will be intended for
a period of 2011-2014. The NATO Secretary-General has stressed on more than one
occasion that this is not a strategy of the withdrawal and that NATO will remain in
Afghanistan as long as it is needed. Nevertheless, the reduction of the international
contingent in Afghanistan will become a natural element of the process. At present its
numerical strength is 130,000. A number of the leading NATO countries – Spain, France,
Germany, Italy and Sweden – intend to begin the withdrawal of their troops from
Afghanistan no later than 2012.
The Afghan direction is of great interest for Russia. “If NATO withdraws from
Afghanistan too quickly, without creating conditions for the maintenance of stability, the
country will again fall into the hands of the Taliban movement, and the consequences of
this situation will be faced by the Central Asian countries and Russia, which is their main
ally,” Rogozin explained. This is why Russia not only follows the discussion at NATO on
the problem, but also is willing to take steps for supporting NATO’s efforts. The RussiaNATO summit will expand the agreement on the transit of non-lethal cargoes across the
Russian territory for the NATO troops in Afghanistan and will continue the discussion
about the purchase for Afghanistan of a consignment of Russian helicopters together with
services for their maintenance and the training of pilots and engineers. Apart from it,
Russia and NATO are going to expand the centre for the training of Afghan drug-control
specialists in Domodedovo.
The last of the main problems to be discussed at the summit is a large-scale reduction of
the NATO command and staff structure. At first sight, it is not connected with Russia. In
fact, however, the reduction of the number of NATO staffs from eleven to seven and of
their personnel – from 13,500 to 8,500 is more than just “the reduction of the personnel.”
It means the removal of stationary structures, left after the ‘cold war’ period, and the
improvement of the mobility of the NATO command system. Most staffs are to become
fully mobile, which will make it possible to transfer them to areas of possible conflicts.
If Russia and NATO choose cooperation as a vector of the development of their relations,
the reform will promote a higher level of mutual understanding, because it will bring
down the history-based orientation of the NATO infrastructure and command system
towards the warding off of the “threat from the east.” If the parties prefer conflict
relations, the NATO military reform will soon force Russia to take steps for adjusting its
military potential to a new situation.
Russia-NATO missile shield possible "in mid-term perspective" - Kremlin
http://en.rian.ru/world/20101119/161401517.html
04:07 19/11/2010
A joint Russia-NATO missile shield may be created in mid-term perspective, Kremlin
aide Sergei Prikhodko said ahead of the Russia-NATO summit.
Russia-NATO council will convene on Saturday in Lisbon. Russian President Dmitry
Medvedev is due to take part in the top-level gathering for the first time since the August
2008 war between Russia and Georgia, which soured Russia's relations with the alliance.
"I think that [the idea of joint missile defense] is real... The process is quite simple. We
are ready to integrate," Prikhodko said.
"The issue is purely practical, and its implementation, according to experts... may be
carried out not even in long-term, but in short-term perspective, given that [the sides]
have political will," he said.
He added that Russia had political will to go ahead with the project.
Russian Air Force Commander Alexander Zelin said on Tuesday the Air Force was ready
to work on missile defense systems with NATO. The Air Force is looking into the
possibility of using military transport aircraft in the interests of NATO, he added.
The Kremlin insists that the readiness to cooperate on missile defense issues should be
laid down in a written document.
NATO Secretary General Anders Fogh Rasmussen earlier said the alliance hoped to work
with Russia on a variety of issues, including the European missile defense.
Moscow hopes that the summit in Lisbon will finally put an end to the post-Cold War
period and will set guidelines toward a strategic partnership between Russia and NATO.
MOSCOW, November 19 (RIA Novosti)
US defense chief to skip NATO summit
http://english.ruvr.ru/2010/11/19/35259960.html
Nov 19, 2010 04:28 Moscow Time
US Defense Secretary Robert Gates will not attend today’s NATO summit in Lisbon and
will go instead to Chile and Bolivia to meet his Latin American colleagues there.
Pentagon press secretary Jeff Morrell Thursday that Secretary Gates believed there was
very good US representation in Lisbon in President Barack Obama.
Poland seeks assurances at NATO summit
http://www.thenews.pl/international/artykul143766_poland-seeks-assurances-at-natosummit-.html
19.11.2010 08:03
A new strategic concept for the 21st century, a missile defence shield and the war in
Afghanistan are just some of the issues on the table at the NATO summit which
begins in Lisbon today.
Poland will be pushing for a clarification of NATO’s traditional defence functions
embodied in Article V, guaranteeing collective security in the event of an attack on any
one member state. In a world where attacks by one state on another by traditional warfare
methods are unlikely, Article V must take into account new threats such as cyber attack,
threats to energy security or environmental disaster.
President Bronislaw Komorowski, Foreign Minister Radek Sikorski and Defence
Minister Bogdan Klich will also be seeking further defence investment in Poland in the
shape of a permanent NATO base in the country.
A withdrawal from Afghanistan is also on the agenda, with President Komorowski saying
that Poland aims to change the nature of its mission in the war-torn nation in 2012, where
Polish troops would concentrate not on fighting the Taliban but on training Afghanistan
security forces to be able to hold back the insurgency.
NATO leaders will also be inviting Russia’s president, Dmitry Medvedev to become
involved in a new anti-missile shield.
A new start
“This summit will be a new start in relations with Moscow. The time has come as we no
longer fear each other. We need to work more closely together and I believe that will
happen,” said NATO chief Anders Fogh Rasmussen.
Warsaw is anxious that any closer cooperation with Moscow should not endanger
Poland’s security. Though welcoming the thaw in relations with Russia, President
Komorowski wrote in an article published in the Gazeta Wyborcza daily yesterday that
any new deal “must not interfere with the unity of NATO or its ability to fulfil all its
functions. NATO's relations with Russia cannot be developed at the cost of the security
interests of other nations in Eastern Europe.”
Poland is also supporting the addition of Georgia and Ukraine into the alliance.
President Komorowski will be giving a press conference on the summit in Lisbon on
Friday evening. (pg)
NATO summit to tackle alliance’s identity crisis
http://rt.com/news/nato-goal-summit-lisbon/
Published: 19 November, 2010, 09:40
Created more than 60 years ago to counter the Cold War threat of the USSR, the NATO
alliance is now in a search of a new clear goal, which it is expected to present at a summit
set to open in Portugal.
NATO is the biggest and oldest military alliance in modern times. But when you come to
think about what its place in the world today is, the answer does not come easily.
Decades after the Cold War ended, NATO member countries have no common enemy.
“Originally it was supposed to defend Western Europe against the Soviet Union,” said
Ivan Eland, the director of the Center on Peace & Liberty at the Independent Institute.
NATO allies have been at a loss for a new one – and at a loss for a clear purpose.
“NATO has been in identity crisis for a while,” said Patricia DeGennaro, adjunct
professor of the Department of Politics at New York University.
Weakened severely by the seemingly endless Afghan war, with NATO members growing
weary, and countries such as Canada and the Netherlands pulling troops out, the power of
the bloc is in question.
“Now in Afghanistan and in many other places in the world we are seeing the
consequences of the lack of NATO’s ability to transform and adapt,” said Dmitry Suslov,
political analyst for the Council for Foreign and Defense Policy.
And perhaps, that is the consequence of a growing group of now 28 nations driven
together, but still largely led by the interests of one.
“The US is trying to use NATO directly and indirectly – directly it is trying to use NATO
as it does in Afghanistan to fulfill American missions,” Suslov added.
Yet everyone feels the strain. And with goals not having been laid out since before the
9/11 attacks which drove the alliance into war, there is little in the way of concrete aims
to guide an organization seemingly in crisis – which is just one reason why now in
Lisbon, this meeting matters.
The alliance is going to try to vie for modern relevance with the promise of “new
strategic goals”, but also in Lisbon, are a group of “international critics”, who believe
there is no place for NATO in the 21st Century.
One of them, Reiner Braun, is planning an anti-NATO protest.
“I think there is no place for NATO. I think there is no place for military alliances any
longer in the world, because you can’t solve any of the global problems with military.
None,” he believes.
NATO is now looking to old foe for help in solving its problems.
“It is impossible for NATO to deal with such burning issues as the ongoing war in
Afghanistan without Russia, which has now emerged as one of the basically leading
global players,” says Viktor Mizin from Moscow State University of International
Relations.
The alliance is looking to Russia for help with supply routes and fighting the drug trade.
And now, an organization that famously touted a mission of “keeping the Russians out
and the Americans in” needs the Russians “in” Afghanistan to help Americans get out.
“I am not sure that NATO is in the 21st Century, and I think it is outdated,” Ivan Eland
said.
And without a major rethinking of its goals, policies, and missions, an alliance looking
for a new place in the world may find itself fumbling along without one.
NATO to Offer Medvedev a Warm Embrace at Summit
http://www.themoscowtimes.com/news/article/nato-to-offer-medvedev-a-warm-embraceat-summit/423831.html
19 November 2010
By Nikolaus von Twickel
When President Dmitry Medvedev visits the NATO summit in Lisbon on Saturday, he
should be prepared for some unusual courting from the alliance's leadership.
Secretary-General Anders Fogh Rasmussen has made it clear that he wants the summit to
be a turning point in NATO's often-stormy ties with Moscow.
"My strong sense is that Russia shares our view that the time has come to stop worrying
about each other. The time has come to work together," Rasmussen said in a video
address released late Wednesday on his web site.
Rasmussen, who has made improving NATO-Russian ties a hallmark of his tenure, has
said he wants to widen cooperation over Afghanistan and invite Moscow to join a U.S.sponsored missile defense shield.
But a senior State Duma deputy cautioned that NATO should be judged by its actions,
not by the words of its leaders.
The first challenge for Russia will be to analyze a new strategy that the 28-member
alliance will unveil at the summit, which opens Friday, said Andrei Klimov, deputy
chairman of the Duma's International Affairs Committee.
"President Medvedev is going there to get a firsthand account of how NATO’s leadership
sees the future of the organization," Klimov, a member of United Russia, said in an
interview in his Duma office.
Expectations have been high, and in his remarks Rasmussen dubbed the summit "the
most important in NATO's history." He said the new strategy would guide NATO for the
next decade.
A first draft published in May said NATO should focus on improving ties with Moscow,
which has assisted the alliance by opening overland supply routes to Afghanistan.
Medvedev is expected to sign an agreement in Lisbon allowing NATO to use more
supply routes through Russia.
The expert group under former U.S. Secretary of State Madelaine Albright that prepared
the draft strategy held consultations with Moscow, but the final version to be presented at
the summit is expected to differ significantly.
Klimov said that once the new strategy is known, it will be easier for Russian
policymakers to formulate future relations with NATO.
Apart from areas where NATO's and Moscow's interests have long been close, like
Afghanistan, terrorism and piracy, Rasmussen has called for Russia to join a planned
missile defense shield that roiled U.S.-Russian relations under former U.S. President
George W. Bush.
Russia had complained that those plans, which consisted of launch pads in Poland and a
radar station in the Czech Republic, were too close to its borders and undercut its own
nuclear deterrent.
As part of his "reset" policy, U.S. President Barack Obama replaced Bush's shield with a
downscaled and more mobile version, but the revamped plans still feature stationing
elements in Turkey and Romania, also close to Russia's borders.
At the Lisbon summit, NATO members are expected to accept Obama's missile plan and
transform its European dimension into a NATO project.
Rasmussen has said cooperation with Moscow on missiles will be discussed at a later
stage.
Pavel Zolotaryov, a retired general and deputy head of the Institute for the USA and
Canadian Studies, said Obama's concept was less controversial because it focuses on
protection from short- and medium-range missiles, while Bush included long-range
strategic missiles.
But he said any progress depends on Washington's willingness to make it a cooperation
of equals, including sharing sensitive technology.
"If they look at Russia as a potential ally, possibly we can go ahead," he said.
Klimov, the Duma deputy, cautioned that hopes for a NATO-Russia reset should not aim
too high.
"We do not see NATO as an enemy — but we understand that it is a military organization
with live nuclear weapons and carrier systems," he said.
He noted that the most serious disagreements with NATO — the 1999 war over
Yugoslavia and the 2008 conflict in Georgia — occurred long after the Cold War ended
and continue to influence current relations.
"We have not forgotten that NATO bombed the Balkans and killed civilians. And we
remember very well that [Georgian President Mikheil] Saakashvili hoped for NATO
protection when he decided to attack South Ossetia," he said.
Rasmussen has said the fact that both sides continue to have disagreements should not be
an obstacle for cooperation.
Klimov agreed, saying he would prefer a world without NATO, where security policy is
made by the UN Security Council and the Organization for Security and Cooperation in
Europe — both of which have Russia as a member.
"My belief is that there is no place for this organization in the 21st century," he said. "But
as a realist, I understand that it won't go away.
5 Reasons Why Russia Will Never Join NATO
19 November 2010
By Michael Bohm
Georgia war of 2008. On the eve of the meeting, Ivo Daalder, U.S. ambassador to NATO,
dropped a hint about future NATO membership for Russia. While referring to Article 10
of the alliance’s charter, which says NATO membership is open to any European
country, he stressed that this article certainly applies to Russia — as long as it meets the
alliance’s requirements. Former U.S. Secretary of State Madeleine Albright, head of a
panel working on a new mission statement for NATO, and former NATO SecretaryGeneral George Robertson have also supported the idea of working toward NATO
membership for Russia. In addition, Igor Yurgens, head of the liberal Institute for
Contemporary Development think tank, has said repeatedly that NATO membership is in
Russia’s best interests.
Unfortunately, this is all wishful thinking. There are five main reasons why Russia will
never become a NATO member.
1. NATO requires that its members have civilian and democratic control over their armed
forces. This is a fundamental principal that allows for military integration and interoperability among members. Although NATO countries have different political systems
— some are presidential republics, others are parliamentary — they all have transparent
defense budgets and public and legislative oversight over their countries’ military affairs.
This includes independent investigations into military failures and abuses, parliamentary
control over how funds are allocating — or not allocated — for weapons programs and
constitutional checks and balances on a leader’s ability to send troops to fight in foreign
military operations.
In Russia, however, civil control over the military is anathema to the basic principles of
Prime Minister Vladimir Putin’s vertical power structure, which has effectively folded all
three branches of power into one huge executive branch. Any autocratic power, by
definition, rejects public accountability in all spheres of government — and this is
particularly true for its armed forces. In Russia, a lack of public and parliamentary
accountability allows the Defense Ministry to cover up the true scope of its inefficiencies,
blunders and overall backwardness. In addition, a closed military structure also allows
rampant corruption at all levels of the military to continue unchecked. As long as the
vertical power structure is in place — whether it be headed by Putin or his successor —
there will never be civilian control over the military.
Another reason why Russia will fiercely resist NATO’s requirement for transparency in
military affairs is that it is hypersensitive about sharing its “military secrets” with NATO
— particularly concerning its nuclear forces — even when its so-called secrets are wellknown in the West. Nonetheless, a commitment to transparency is a basis for cooperation
among NATO members.
2. Russia needs NATO as an “enemy,” not as an alliance partner. NATO is seen by
conservative and nationalist forces that dominate the defense and security establishment
as an inherently anti-Russian alliance. All the talk about NATO’s revised strategy and
focus on new threats — terrorism, sea piracy, narcotics or cyberattacks — is a sham, we
are told. The alliance’s real target remains Russia, just as it was during the Cold War.
Even Dmitry Rogozin, Russia’s envoy to NATO, wrote on Twitter in March that
NATO’s top brass to this day are developing military strategies and plans aimed against
Russia.
This fear was reflected in Russia’s latest military strategy, published in February, in
which NATO was listed as the country’s No.1 danger. Hardened NATO opponents
within the political, military and government-controlled media elite are against any
cooperation (including joint projects in Afghanistan) with the alliance, which they view
as a tool for U.S. imperialist aggression and military expansion — “an iron leviathan that
crushes all humanity,” as Maxim Shevchenko, host of Channel One’s “Sudite Sami”
political talk show, described NATO in a September 2009 interview on Ekho Moskvy
radio. As soon as Daalder and Yurgens floated the idea of possible NATO membership
for Russia, the first thing we heard from many of these opponents was: “Beware of
Greeks bearing gifts. This is another NATO trick.”
3. China. If Russia ever became a NATO member, it would extend the alliance’s territory
to China, which has a 4,000-kilometer border with Russia. This would upset the tripolar
global security balance between NATO, Russia and China, and it would cause China —
which is just as suspicious of enemy conspiracy theories as Russia is — to believe that
Russia and NATO are joining forces to “contain,” or even weaken, China. It is clearly not
in the interests of Russia or the United States, which both have deep economic ties with
China, to heighten tensions or provoke China, even if Beijing’s fears are exaggerated.
Moreover, we are told, the possibility that the United States’ or NATO’s next reckless
military venture will be aimed at China (or Iran) should not be excluded. If this happens,
Russia, as a NATO member, would automatically become a target for a Chinese (or
Iranian) counterattack. To avoid this scenario, the argument goes, Russia should insist on
strict military neutrality from NATO.
4. The Collective Security Treaty Organization. NATO membership would effectively
mean the end of the CSTO, which Russia has worked so hard on since its creation in
2002 to compete with NATO for influence in the global security arena. “I believe it
[Russia’s membership in NATO] is absurd,” said CSTO chief Nikolai Bordyuzha on
Sept. 16. “What is the sense of NATO membership if Russia has created its own security
framework with its allies and this system of collective security functions well?”
Rogozin, for his part, in an April 2009 interview with European-Asian News service,
said: “We can handle our security problems independently. … We don’t need NATO.”
5. Russia’s global ambitions. Most important, Russian membership in NATO would all
but mean the end of Russia’s dream of restoring its former superpower status. By joining
NATO, Russia would effectively become “just another large European country” on the
same level as Germany, Britain or France — a “sacrilege” for the derzhavniki, or greatpower nationalists, who remember when the Soviet Union was larger and more powerful
than these three countries combined.
It would also be an admission that Russia is de facto subordinate to the United States in
the world’s largest and most influential security organization, which is unacceptable even
to moderate members of the political and military establishment. Although the Kremlin
no longer has messianic ambitions to create a Third Rome or Third International, at the
very least it will want to preserve its sovereignty and independence as a regional and
global power. That will be impossible to accomplish if it becomes a member of NATO
with the United States at the helm of the alliance.
The United States’ disingenuous peace feelers to Russia about NATO membership was
clearly more PR and provocation than anything else. As President Dmitry Medvedev
attends a NATORussia Council meeting in Lisbon on Saturday, it would be much better if both sides
focus on smaller, more realistic NATO-Russian partnership projects — such as regional
missile defense or fighting terrorism together — and forget once and for all about Russia
ever becoming a member of NATO.
Michael Bohm is the opinion page editor of The Moscow Times.
START TREATY
Obama rallies bipartisan support for New START
http://rt.com/usa/news/republicans-block-start-ratification/
Published: 19 November, 2010, 01:09
US President Barack Obama met with a group of bipartisan leaders in an effort to push a
nuclear arms deal with Russia through the US Congress by year’s end.
The New Start Treaty replaces an older version of the bilateral nuclear arms reduction
agreement between the US and Russia. It was initially signed by both Presidents
Medvedev and Obama on April 8, 2010. It has yet to be ratified by national legislative
bodies.
Many have called the treaty Obama’s main foreign policy success. Even with bipartisan
support, there are a number of challenges to the ratification. Republicans who once
openly favored the treaty now oppose it, and newly elected conservative members
continue to rally against it.
Obama’s meeting met with various former secretaries of state, national security advisors
and experts from both major political parties is a sign of how important the treaty is, and
signifies there is hope it will pass before the end of the year.
“I think the group around the table will confirm — that this New START treaty is
completely in line with a tradition of bipartisan cooperation on this issue. This is not a
Democratic concept; this is not a Republican concept. This is a concept of American
national security that has been promoted by Ronald Reagan, George H.W. Bush, Bill
Clinton, George W. Bush, and now my administration,” said Obama.
Joseph Cirincione, a nuclear weapons policy expert and the president of the Ploughshares
Fund said many people were surprised when Republicans, such as Senator Jon Kyle,
reversed their position on ratifying the treaty swiftly.
Kyle was previously in favor of ratifying the agreement, on conditions that Congress
would fund the modernization if the remaining US nuclear arsenal. Now, he wants to put
off the ratification until at least next year.
“He [Kyle] seems to have alienated not just the administration, not just the members of
the Joint Chiefs of Staff, the military in the United States really want this treaty, but
members of his own party,” said Cirincione.
Senior US Senator Richard Lugar, the ranking Republican member of the Senate
Committee on Foreign Relations, blasted Kyle. He said Kyle’s change in stance is a
mistake, calling treaty and positive US-Russian relations vital to US national security.
“It looks like the administration wants this treaty ratified by the end of the year and
there’re willing to fight for it,” said Cirincione.
This is evidenced by high level talks between the Obama administration and Republican
leadership.
The treaty is necessary to secure US national security, argued Cirincione. The entity of
the US national security establishment is solidly in favor of the agreement.
“You have the military backing this; you have almost every senior former Secretary of
Defense and Secretary of State and national security advisor backing it,” he added.
However, there are those on the right who continue to oppose the treaty.
“You have a minority within the Republican Party that are trying to score political
points. They think that they can show that Obama is weak or humiliate him in some way
by using this treaty as part of their partisan battle,” Cirincione explained. “I think that
this is going to back fire a bit time on them.”
There are still thousands of nuclear weapons in existence, yet much of the public has
forgotten or is unaware of the magnitude. But when informed, the America public favors
a reduction in nuclear arms, according to recent polls.
Cirincione said there is unease in the US about nuclear weapons and with incidents of
mistakes being made; the answer is to reduce the number weapons to their lowest
possible levels and many in America support this goal.
Brent Budowsky, a columnist with The Hill in Washington, DC said he believes the
treaty has a 95 percent probability of ratification, but only a 30 to 40 percent chance of
being ratified by the end of this year. However, high level Democrats and Republicans
are involved in ongoing meetings to work together to find a compromise in order to ratify
the New START by year’s end.
“There is some politics and on the Republicans side there is a pressure to attack the
President and to delay,” said Budowsky.
There are a number of Republicans who oppose the treaty, and a few who see its merit.
They understand a need for a positive change in US-Russian relations and the need for
nuclear arms reeducation.
“Military leaders in the US are telling Republicans as well as Democrats that this treaty
serves the interests of the United States and the Russians, and that’s why it ought to be
ratified,” Budowsky explained. “Many people in Russia are saying the same thing over
there.”
However, Republicans fundamentally do not believe in cooperating with democrats,
argued Budowsky.
“Short of President Obama becoming a Republican,” said Budowsky, conservative
leaders will not cooperate with the President’s goals or agenda. “We have reached a point
in Washington of non-stop partisan politics.”
He argued that American voters want politicians on both sides to cooperate, however that
is rarely the reality, and is becoming increasingly rare in US politics as recent statements
have shown.
“As Senator McConnell, the Republican leader in the Senate said, hours after the election
was over his main priority is defeating President Obama in 2012in the presidential
campaign,” Budowsky said.
US-Russian 'reset' in trouble as nuke pact stalls
http://www.washingtonpost.com/wpdyn/content/article/2010/11/19/AR2010111900498.html
By VLADIMIR ISACHENKOV
The Associated Press
Friday, November 19, 2010; 2:22 AM
MOSCOW -- Is the reset on the rocks?
Rumblings in Washington by the resurgent Republican Party against Senate ratification
of the New START nuclear arms reduction treaty raise doubts about a fragile U.S.Russian rapprochement - the "reset" that has been a centerpiece of President Obama's
diplomacy.
An unraveling of ties, which hit post-Cold War lows during the administration of George
W. Bush, would erode global stability at a time of burgeoning security threats and harm
international efforts to stem the spread of weapons of mass destruction.
New START bolstered mutual trust, helping Washington win crucial Kremlin backing for
a new set of sanctions against Iran and stronger support for the war in Afghanistan.
"The failure to ratify the treaty will deal a very painful blow to Obama's administration
and the policy of 'reset,'" said Sergei Rogov, head of the Moscow-based U.S.A. and
Canada Institute, a top think-tank advising the government on foreign policy.
If "the administration can't deliver what it promised, it would seriously undermine
Obama's position in the international arena."
The Russian Foreign Ministry sought to play down a statement from Sen. Jon Kyl, a
leading Republican, who spoke against holding a ratification vote this year. But it warned
that the process should go forward in both countries at the same time.
Obama on Thursday urged the Senate to ratify the treaty, appearing at the White House
with former secretaries of state and defense of both parties who all support it.
"This is not about politics," he said. "It's about national security."
Some Kremlin-connected legislators and political pundits said Senate failure to ratify the
agreement would likely push Moscow to rethink its relationship with the United States.
Mikhail Margelov, head of the foreign affairs committee in the upper house of
parliament, said Moscow may reconsider its stance on Iran and Afghanistan if the treaty
fails.
"We should agree with Vice President Joe Biden who fears that due to procrastinations
with the ratification, the United States may lose Moscow's vital support in tackling the
problem of Iran and in the war in Afghanistan," Margelov was quoted in Russian news
reports as saying. "The continuation of 'reset' that envisages the development of
partnership on security issues hinges on the treaty's ratification."
Moscow backed the latest set of U.N. sanctions against Iran in June and later shelved a
2007 contract to supply Iran with sophisticated S-300 air defense missile systems that
drew strong U.S. and Israeli concerns. The moves angered Tehran, which accused
Moscow of kowtowing to the West.
The Kremlin also has offered stronger support for NATO operations in Afghanistan,
allowing the alliance to carry supplies across the Russian territory. A Russia-NATO
summit in Lisbon this weekend is expected to see the signing of a new deal on the socalled "reverse" transit that would allow NATO to ship cargo back from Afghanistan.
Rogov said Russia would be unlikely to backtrack on its moves regarding Iran and
Afghanistan, even if the Senate fails to seal the arms deal, but that it would close the door
to any further friendly action.
"It's not that we will turn back, but any further moves toward cooperation will be
unlikely," he told The Associated Press.
Dmitry Trenin, head of the Carnegie Endowment's Moscow office, said Russia will
continue to cooperate with Obama, but show more caution. "The relations will be stable
and businesslike, but limited in depth and scope," he said.
The nuclear arms deal signed in April by Obama and Russian President Dmitry
Medvedev would reduce strategic warheads to 1,550 for each country from the current
ceiling of 2,200 and restore onsite inspections and other verification measures that ceased
when the previous START treaty expired nearly a year ago.
Trenin said that the unraveling of arms control would erode stability.
"It's always dangerous to have nuclear arsenals of two major powers develop without
proper information exchange," he said. "That would reduce the level of predictability."
Rogov warned that the termination of inspections would prompt each country to
overestimate the other's potential, as happened during the Cold War. "If on-the-ground
inspections aren't restored, both the U.S. and Russia will have to proceed from the worstcase scenario as they did before the first arms control agreements were reached in the
early 1970s," he said.
Rogov and other observers also warned that failure to put New START into force would
ruin hopes for global nuclear disarmament and encourage the spread of atomic weapons.
"The world is no longer bipolar, and the collapse of the U.S.-Russian arms control
mechanism will turn the multipolar world into multipolar chaos, as no one else would be
able to persuade other nuclear powers to accept at least some rules of the game," Rogov
said. "The consequences of the New START collapse could be extremely grave."
Sergei Karaganov, chairman of the Council for Foreign and Defense Policies that
includes some of Russia's top political and military analysts, said that if the treaty fails in
the Senate, Obama and Medvedev might agree to implement its provisions by executive
orders. He added, however, that many in Russian officialdom would likely oppose that,
arguing it would make no sense to fulfill the deal at a time when the U.S. policy may
change soon.
Some said the arms treaty's collapse would play into the hands of hawks in the Russian
government and weaken Medvedev, who has pushed for better ties with the U.S.
"It will raise doubts about the 'reset' and undermine positions of Medvedev who placed
his bets on that," said Sergei Markov, a leading lawmaker with the ruling United Russia
party led by Prime Minister Vladimir Putin.
FACT CHECK: Arms treaty debate full of half-truths
http://www.washingtonpost.com/wpdyn/content/article/2010/11/19/AR2010111900813.html
By DESMOND BUTLER
The Associated Press
Friday, November 19, 2010; 3:46 AM
WASHINGTON -- In their showdown over the fate of a major arms-control treaty with
Russia, Democrats and Republicans are charging each other with undermining national
security. So who's right?
The Obama administration is pushing for a vote this year on the treaty, while Republicans
are calling for a delay until a new Congress convenes in January.
Here's a closer look at the claims flying back and forth in the debate:
EDITOR'S NOTE - An occasional look at assertions by government officials and how
well they adhere to the facts.
THE CLAIM: Opponents of the treaty, known as New START, say it will limit U.S.
options for future missile defense. "New START could hamper our ability to improve our
missile-defense system - leaving us unable to destroy more than a handful of missiles at a
time and vulnerable to attacks from around the globe," Republican Sen. Jim DeMint
wrote in the National Review in July.
THE FACTS: The treaty itself does not place any constraints on missile defense. The
document's preamble, which is not legally binding, acknowledges an interrelationship
between nuclear weapons and missile defense, an assertion that was accepted by George
W. Bush's administration and is self-evident: The point of missile defense is to counteract
nuclear-tipped missiles.
Opponents also point to Russia's assertion in a signing statement that it reserves the right
to withdraw from the treaty if the United States significantly boosts its missile defenses.
In fact, both sides have the right to withdraw from the treaty for any reason they believe
is in their national interest.
The Soviet Union made a similar assertion when leaders signed the original 1991 START
treaty, warning the country might withdraw if the United States did not respect the AntiBallistic Missile Treaty. But when President George W. Bush withdrew from the ABM
treaty in 2001, Russia did not pull out of START. The START treaty held together for the
same reason it was signed: It was in both countries' national interest.
THE CLAIM: Opponents have alleged Russia is likely to cheat on the treaty and that its
compliance will be hard to verify. "I think the treaty is weak on verification, especially
compared to previous treaties," Sen. Kit Bond, R-Mo., the top Republican on the Senate
Intelligence Committee, said on a radio program last month. "We will have much greater
trouble determining if Russia is cheating and given Russia's track record, that's a real
problem."
THE FACTS: Bond has said that a classified report raises concerns about Russian
cheating. That's impossible to evaluate without seeing the document. But without the
treaty, it would be even harder for the United States to make sure Russia is not covertly
expanding or improving its nuclear or ballistic missile capabilities. The U.S. has not had
inspectors in Russia checking its nuclear assets since the 1991 START treaty expired in
December. The only quick way of getting them back is to bring a new treaty into force.
It's debatable whether U.S. treaty negotiators got the best terms on how they can conduct
inspections, but the treaty followed hard-fought talks. The Soviet Union for years resisted
allowing inspections at all. Without inspectors, the U.S. would have to rely on espionage
and satellite monitoring, which are much less effective and more expensive than onsite
inspection.
THE CLAIM: The treaty's backers say getting inspectors back on the ground in Russia is
so urgent that the United States cannot afford to wait until next year. "This is not about
politics," President Barack Obama said Thursday. "It's about national security. This is not
a matter than can be delayed."
THE FACTS: The urgency is political. Next year the Republican ranks in the Senate will
expand by six and it will be much more difficult to ratify the treaty. Even the
administration concedes that the security risk is not immediate. "I am not particularly
worried, near term," Obama's top adviser on nuclear issues, Gary Samore, said Thursday.
"But over time, as the Russians are modernizing their systems and starting to deploy new
systems, the lack of inspections will create much more uncertainty."
Intelligence officials have also expressed concerns about returning inspectors that have
sounded less than urgent.
"I think the earlier, the sooner, the better. You know, my thing is: From an intelligence
perspective only, are we better off with it or without it? We're better off with it," the
director of national intelligence, James Clapper, said recently.
THE CLAIM: Republicans, led by Sen. Jon Kyl of Arizona, say they won't consider the
treaty until the Obama administration budgets adequate money for the nation's nuclear
arsenal and the laboratories that oversee them. The treaty would reduce the limits on U.S.
and Russian warheads, and Kyl says he needs assurances that the remaining nuclear
arsenal is modernized and effective.
THE FACTS: The administration acknowledges that the weapons complex has been
underfunded and says that it wants to address that. It has pledged a total of $85 billion to
maintain the nuclear arsenal over the next 10 years, including a $4.1 billion boost
recently pledged in an attempt to address Kyl's concerns.
The president can't guarantee Congress, which controls spending, will go along with
those figures. For his part, Kyl hasn't said whether he thinks the pledge is enough. But it
would lift average spending over the five years beginning 2012 nearly 30 percent over
2010 levels. Even before the administration's new pledge, Linton Brooks, who oversaw
the nuclear laboratories as director of the National Nuclear Safety Administration during
the Bush administration, told an audience at a Washington think tank that he "would have
killed for" the amount in this year's budget.
Moscow hopes Iran Six resume talks in December (Update 1)
http://en.rian.ru/world/20101119/161400755.html
02:12 19/11/2010
Moscow hopes the Iran Six group of mediators will resume talks in early December,
Russian Foreign Minister Sergei Lavrov said.
"I hope they [talks] will occur. At least we are now discussing concrete dates - the
beginning of December," Lavrov said.
He added that the date and location of talks were not discussed during Thursday's
meeting between Russian President Dmitry Medvedev and his Iranian counterpart,
Mahmoud Ahmadinejad.
"The Russian president indicated our serous interest in resuming the talks as soon as
possible and called on our Iranian colleagues not to procrastinate," Lavrov said.
He added that although Turkey offered to host the event, other locations are also being
considered.
"We may meet in European headquarters of international organizations. We are
convinced that any variant will do, as soon as everyone feels comfortable," the Russian
foreign minister said.
Western powers suspect Iran of building nuclear weapons under the guise of a peaceful
nuclear program, an accusation Tehran strongly denies.
The Iran Six, which comprises Russia, the United States, China, Britain, France and
Germany, has been trying since 2003 to convince Iran to halt its uranium enrichment
program and to alleviate concerns about its nuclear ambitions.
Talks between Tehran and the Iran Six came to a halt in 2009, after an IAEA resolution
condemned the Islamic Republic over the construction of a second uranium enrichment
facility.
Earlier this month, the Iranian Foreign Ministry confirmed Teheran's plans to resume
talks with the Iran Six on Turkish territory. The talks were expected to be held in Istanbul
on November 10 or 15.
MOSCOW, November 19 (RIA Novosti)
China-Russia Relations Maintain Sound Development Momentum
http://english.cri.cn/6909/2010/11/19/1461s605906.htm
2010-11-19 13:25:43
Xinhua
Web Editor: Zhang Jin
Chinese Premier Wen Jiabao's upcoming visit to Russia will further bolster the relations
between Moscow and Beijing that have maintained a sound momentum of development
in recent years.
Wen will pay a visit to Russia on Nov. 22-24, during which he will attend the 15th
Chinese-Russian prime ministers' meeting.
During recent years, political mutual trust between Russia and China has been growing
steadily.
The year 2010 has witnessed the most frequent contacts between top leaders of the two
countries.
On May 9, Chinese President Hu Jintao arrived in Moscow to attend the 65th anniversary
of Russia's Victory Day. In September, Russian President Dmitry Medvedev paid a state
visit to China.
During Medvedev's visit, the two sides signed an agreement on security cooperation,
pledging to fight together against terrorism, separatism and extremism.
The agreement laid a strong foundation for bilateral cooperation between China and
Russia in coping with the threats.
Economic and trade cooperation between China and Russia has also been on the rise.
The latest statistics show that their bilateral trade volume stood at 45.1 billion U.S.
dollars from January to October, surging 45 percent compared with the same period in
2009.
Bilateral trade volume for the whole year was expected to rebound to the pre-crisis level.
Trade and economic cooperation between the two nations has entered an important stage,
as the trade structure has been improved significantly.
Technology-oriented exports from Russia to China have been growing swiftly in the past
three years. Two-way investments have also been increasing steadily.
Meanwhile, bilateral cooperation in special economic zones, property rights protection,
standards setting, timber processing and some other sectors has also achieved visible
successes.
The two countries have been also stepping up their cooperation in such areas as oil and
gas, coal, hydro-energy, and nuclear energy. They have made concerted efforts in
improving energy efficiency and the search for new sources of energy.
Moreover, humanitarian and cultural exchanges between the two nations have also scored
great success.
The successful Russian Language Year in China held last year and the current Chinese
Language Year in Russia have helped deepen the mutual understanding and friendship
between the two peoples and strengthen the social foundation of the two nations' strategic
partnership and cooperation.
Chinese Navy Commander visited Northern Fleet
http://www.barentsobserver.com/chinese-navy-commander-visited-northernfleet.4848873-58932.html
2010-11-18
A Chinese delegation headed by Commander of the Chinese Fleet Admiral Wu Shengli
visited Murmansk on November 16-17, GTRK Murman reports.
The aim of the visit was “to open a new page in the relationship between Russia and
China and bring political trust, strategic interaction and business cooperation to a new
level”, the admiral said to GTRK Murman.
In Murmansk the delegation visited the aircraft carrier “Admiral Kuznetsov”, which
currently is based at the shipyard nr 35 in the Kola Bay and the nuclear submarine “Tigr”,
the Russian Armed Forces’ web site informs.
All of the delegation members, including the admiral himself, have either studied or
worked in Russia earlier, Admiral Wu said.
Slovenian president to visit Russia’s city of Samara
http://www.itar-tass.com/eng/level2.html?NewsID=15695757
19.11.2010, 03.11
SAMARA, November 19 (Itar-Tass) -- Slovenian President Danilo Turk on Friday will
come to the Russian city of Samara as part of his official visit to Russia.
While in Samara, Turk will meet with governor of the Samara region Vladimir Artyakov,
attend a Russian-Slovenian business conference, plant trees in the Alley of Cooperation,
and visit Slovenia’s consulate and a local cancer centre, a source in the regional
government told Itar-Tass.
A source in the Togliatti mayor’s office told Itar-Tass that some members of the
Slovenian delegation headed by Slovenian Minister of Economic Affairs Darja Radic will
visit the city of Togliatti to meet with the city’s officials. The minister will be
accompanied by representatives from Slovenian-based companies specializing in the
manufacture of car components and those active in the area of recreational tourism. The
city officials will hold a presentation of the city’s socio-economic development concept.
The Slovenian delegation will also visit production facilities of Russia’s biggest car
manufacturer AvtoVAZ.
According to customs statistics, the Samara region exports to Slovenia organic chemical
compounds and other chemicals. Imports from Slovenia include tanning and colouring
agents, plastics and plastic items.
In May 2007, Slovenia was the first European state to open a consulate in Samara.
Slovenia’s third consulate in Russia, it was timed to mark the 15th anniversary of
diplomatic relations between Russia and Slovenia.
Samara will be the ultimate destination within Turk’s visit to Russia after he visited
Moscow and St. Petersburg. Late on Friday, the Slovenian president will take off from
the Samara airport for Ljubljana.
Putin to attend meeting of CIS Prime Ministers in St. Pete
http://english.ruvr.ru/2010/11/19/35262512.html
Nov 19, 2010 09:24 Moscow Time
Russian Prime Minister Vladimir Putin is due to attend a meeting of the Council of CIS
Prime Ministers, of the Inter-State Eurasian Economic Community Council and of the
Customs Union’s top body in St. Petersburg today. The Prime Ministers’ Council
meeting will be the last one that Russia has chaired during its one-year long presidency.
During the Inter-State Council meeting the Prime Ministers are due to approve moves to
carry out priority development projects of the Eurasian Economic Community in 2011
through 2013 and subsequent years. Also today the Inter-State EurAsEc Council will
meet as the Top Agency of the Customs Union of Russia, Belarus and Kazakhstan. The
meeting is due to adopt a decision on coming into force the four documents that form a
contractual-legal basis for the Customs Union.
Armenian Prime Minister Travels To Saint Petersburg
http://www.arka.am/eng/economy/2010/11/19/22551.html
YEREVAN, November 19. /ARKA/. Armenian Prime Minister Tigran Sargsyan, with his
wife, Gohar Sargsyan, flew Friday to Saint Petersburg for a two-day official visit, ARKA
News Agency correspondent reports.
The Armenian delegation accompanying the premier consists of Vice Premier and
Territorial Administration Minister Armen Gevorgyan, Head of the Government’s
Administration David Sargsyan, Culture Minister Hasmik Poghosya, Economy Minister
Nerses Yeritsyan, Deputy Foreign Minister Shavarsh Kocharyan, Deputy Transport and
Communication Minister Artashes Avetisyan and other officials.
Sargsyan will attend a CIS prime-ministerial meeting in Saint Petersburg.
The meeting participants will discuss 20 draft documents.
Creation of free trade zone and dairy market as well as enhancement of food safety in
CIS countries and consumption of energy are among top-priority issues on the agenda.
The Commonwealth of Independent States is presided by Russia this year.
The meeting participants will also outline humanitarian cooperation prospects for 2011
and 2012.
The Armenian premier is set to meet with his Russian and Ukrainian counterparts Vladimir Putin and Nikolay Azarov.
Sargsyan will also attend the 28th session of Eurasian Economic Community’s
intergovernmental council.
The nucleus of the competitive integration project of common economic space will be
formed in 2011.
Russia-Belarus-Kazakhstan Customs Union established in July was the first step in this
program.
The Armenian prime minister will visit Saint Petersburg Economy and Finance Institute,
from which he graduated in 1983, and Saint Petersburg State University, where he will
attend the ceremony of unveiling the bust of Iosif (Hovsep) Orbeli, prominent ArmenianRussian orientalist and public activist.
He will also meet with business men in Saint Petersburg. –0-19/11/2010 11:58
Azarov Leaves For Russia To Take Part In Meeting Of CIS Governments' Heads
Council
http://un.ua/eng/article/298011.html
(10:04, Friday, November 19, 2010)
Prime Minister Mykola Azarov has left for Russia to take part in the meeting of the
council of CIS governments' heads.
The meeting plans to discuss course of preparation of draft agreement on free trade zone
and interstate program on innovative co-operation between CIS countries.
The program of the meeting also envisions discussion of agreements on co-operation in
protection of intellectual property and plan of measures in the sector of humanitarian cooperation.
Chairmen of governments of CIS countries plan to hear outlook of production and
consumption of energy resources for the period until 2020, concept on increase of food
security, major trends in functioning of beef and milk products and information about
major targeted macroeconomic indicators of the CIS.
Besides, it is planned to consider the report on activity of the coordination transport
council in 2006-2009, on activity of the interstate council for standardization, metrology
and certification, and information about implementation of the first stage of strategy of
economic development of CIS.
As Ukrainian News earlier reported, in July, heads of CIS countries agreed on
liberalization of trade between the countries.
Medvedev to discuss security in N. Caucasus
http://english.ruvr.ru/2010/11/19/35259244.html
Nov 19, 2010 01:30 Moscow Time
President Dmitry Medvedev will be meeting with senior military and security officials
today to discuss additional measures to ensure peace and security in the North Caucasus.
During a visit to the southern spa towns of Kislovodsk and Yessentuki the President will
take part in a ceremony to award Interior Ministry officers and soldiers who distinguished
themselves in combat.
Medvedev recently threatened to fire the leaders of the North Caucasus republics who fail
to improve the work done by the local law enforcement agencies.
Israel to roll out the red carpet for Medvedev, Peres says
http://www.jpost.com/Israel/Article.aspx?id=195975
By GREER FAY CASHMAN
11/19/2010 05:34
President tells Russian deputy PM that Russian leader will
receive same level of importance, prestige as former US
president Bush.
During his visit in early 2011, Israel wants to give Russian President Dmitry Medvedev
the same degree of importance and prestige it accorded to former US president George
W. Bush, President Shimon Peres told Russia’s First Deputy Prime Minister Viktor
Zubkov on Thursday morning.
The two men met at Beit Hanassi prior to Zubkov’s participation in a Russia-Israel
business meeting aimed at promoting joint ventures between the two countries.
Although Peres acknowledged that Medvedev’s visit will be brief, Israel would
nonetheless like to have an evening of Russian culture, because culture, he said, is part of
diplomacy. The president also emphasized music, noting that Israel has a lot of talented
musicians of Russian background and training, and this would be an ideal opportunity for
cultural bridge-building.
Medvedev will be the second Russian president to visit Israel. President Vladimir Putin
came during the intermediate days of Pessah in 2005, and at a state dinner hosted for him
at a leading Jerusalem hotel by thenpresident Moshe Katsav, was forced to eat matzot,
because there was no bread.
At the time, Israel was greatly concerned about Russian missile sales to Syria and
participation in the creation of Iran’s nuclear reactor. Such issues still remain on Israel’s
agenda in its relationship with Russia, and in all probability will be raised with
Medvedev.
Meanwhile, Zubkov, who is on a working visit to Israel with the aim of strengthening
cooperation in industry and trade, told Peres that Russia is interested in everything from
agriculture to outer space, and would like to work on joint projects with Israel.
Among the joint projects in which Russia would like to engage are a second
communications satellite, a factory for the production of fertilizer, and the creation of a
production plant for medications in partnership with an Israeli company.
In conversations with Peres and other prominent Israelis, Zubkov underscored the
benefits for Israel in entering into joint ventures with his country, due to the size of the
Russian market.
He was pleased that Russia and Israel have signed an research and development
agreement, and stated that there are more agreements in the pipeline.
He also noted the intense political discussions between Russia and Israel, which will be
enhanced with the celebration in 2011 of the twentieth anniversary of diplomatic relations
between the two countries.
The former Soviet Union was among the first countries to recognize Israel after its
establishment but severed ties in the immediate aftermath of the Six Day War.
Russia not refusing territorial talks with Japan: official
http://mdn.mainichi.jp/mdnnews/news/20101119p2g00m0in017000c.html
TOKYO (Kyodo) -- Russia is not refusing to have territorial talks with Japan in the future
over the disputed isles in northern Pacific, the Russian Foreign Ministry's deputy
spokesman said Thursday.
Alexei Sazonov, deputy director of the Information and Press Department at the ministry,
said at a briefing that Russia has never expressed that it would refuse such talks. The
Etorofu, Kunashiri and Shikotan islands and the Habomai islet group are known in Japan
as the Northern Territories and in Russia as the Southern Kurils.
Sazonov said Russia's position regarding the territorial dispute is clear and added that
Russia intends to build its relations with Japan not by focusing on the existence of the
problem but by strengthening political dialogue, economic cooperation and human
exchange.
But Sazonov declined to give direct answers regarding the 1956 declaration between
Japan and the Soviet Union in which Moscow agreed to return Shikotan Island and the
Habomai islet group to Japan following the conclusion of a bilateral peace treaty.
The Soviet Union occupied the disputed isles following Japan's surrender in World War
II on Aug. 15, 1945 and the two have yet to sign a peace treaty.
In a Monday edition, Russian newspaper Kommersant quoted Russian sources as saying
that Moscow will not have talks with Japan based on provisions in the 1956 declaration.
(Mainichi Japan) November 19, 2010
Russia against any haste in UNSC expansion
http://www.indianexpress.com/news/russia-against-any-haste-in-unsc-expansion/713373/
Posted: Fri Nov 19 2010, 08:59 hrs Moscow:
Russia is against any haste in the expansion of the UN Security Council and said the issue
needs much wider support among UN members than the two-thirds majority in the General
Assembly and may take many years.
"Recent statements of the US President Barack Obama in New Delhi and Tokyo are in line
with similar statements by other world leaders," Russian Foreign Ministry spokesman Alexei
Sazonov said in response to a question about Obama's backing for India and Japan as the
permanent members of the apex UN body.
He said that the progress in the issue of UNSC reform was possible only through a search for
a compromise, for which there was a need for delicate work, which, probably may take many
years.
"Like many participants of this process, the Russian Federation has also voiced support for
the candidatures of the countries, which significantly influence the modern international
processes," Sazonov said in an obvious reference to Moscow's support for UNSC aspirants
like India and Germany.
Thai government ordered Bout's extradition in advance - source
http://en.rian.ru/world/20101119/161401189.html
03:19 19/11/2010
The Thai government issued final approval for extradition of Russian national Viktor
Bout at least a day before it took place, a source in the Thai foreign ministry said.
Bout, 43, was extradited to the United States on Tuesday after spending more than two
and half years in Thai prisons. Thai media has reported that the decision to extradite Bout
was made during a governmental session some three hours before the accused arms
dealer was put on a charter flight and flown to New York.
"The decision to extradite Viktor Bout, issued by the prime minister's office, was
received by the Foreign Ministry on Monday afternoon," the source told RIA Novosti on
condition of anonymity.
The Russian side received no formal notification that the government gave its final
approval for the extradition, he added.
Thai foreign ministry officials earlier stated that Russia was notified of all stages of the
extradition procedure.
Bout's lawyer, Lak Nitivat, earlier said that the Thai authorities had not informed him,
Bout's wife, or the Russian embassy in Bangkok about the move.
Bout's extradition to the United States was ordered by the Thai appeals court on August
20, but was not carried out because the United States brought a second set of charges
against him in February.
These charges were dropped in early October, bringing the so-called Merchant of Death
one step closer to extradition. His remand period was due to expire on Friday.
Bout was officially charged in a New York City court on Wednesday. His charges
include conspiring to supply arms to terrorist groups and kill U.S. nationals. He could
face a 25 year sentence if convicted on all four charges against him.
BANGKOK, November 19 (RIA Novosti)
Russia insists on fair trial for Bout
http://en.rian.ru/russia/20101119/161400165.html
01:06 19/11/2010
Russia insists that suspected arms dealer Viktor Bout is given a fair trial, Russian Foreign
Minister Sergey Lavrov said.
"We will not act as Bout's advocates and do not claim that he did not commit any illegal
offences. That we do not know, and no-one will know, until justice is done," Lavrov said.
He said Russia provides its citizens with all the rights guaranteed by international law.
"We want to see justice prevail, nothing more," he added.
The Russian top diplomat said Bout's case sparked too much speculation in Russian and
Western media.
"We are accused of protecting a criminal, though he has never been found guilty of
anything by any court. I would like to make it absolutely clear that we are always obliged
to protect the rights of Russian citizens, regardless of whether this citizen is a suspect or
not. Especially, when no trial has yet taken place," Lavrov said.
He also said that the Russian consul met with Bout on Wednesday, and such contacts
would continue.
"We communicated with Russian citizen Victor Bout through our consul in New York.
The conditions he is being kept in are not quite perfect," Lavrov said.
Bout, 43, was extradited to the United States on Tuesday after spending more than two
and half years in Thai prisons. He was officially charged in a New York City court on
Wednesday. His charges include conspiring to supply arms to terrorist groups and kill
U.S. nationals.
The next hearing in the case of the former Russian officer, dubbed the Merchant of
Death, will be held on January 10 next year. Bout could face a 25 year sentence if
convicted on all four charges against him.
MOSCOW, November 19 (RIA Novosti)
Friday ,Nov 19,2010, Posted at: 11:01(GMT+7)
Russia summit seeks to save tiger from extinction
http://www.saigon-gpdaily.com.vn/International/2010/11/87308/
MOSCOW, Nov 19, 2010 (AFP) - In a meeting billed as the final political
chance to secure the future of the tiger, Russia Sunday hosts an
unprecedented summit of the last 13 states with populations of the fabled
beast.
The summit in Russia's second city of Saint Petersburg, hosted by Prime
Minister and self-proclaimed animal lover Vladimir Putin, is aiming to
double the number of tigers living in the wild by 2022.
Due to decades of poaching and habitat destruction, there are currently only
3,200 tigers living in the wild, according to the World Wildlife Fund
(WWF), compared with 100,000 a century ago.
"Three subspecies have already disappeared and none of the other six are
secure," says a draft declaration that is due to be adopted by the heads of
government at the summit.
Russia is the only country to have seen its tiger population increase in the last
years from 80-100 in the 1960s to around 500 now and experts have hailed
Putin for taking an active role in saving the tiger.
"Russia can play here a leading role as a host and as a good example as its
tiger population has actually grown," Sabri Zain of TRAFFIC, which
monitors the global trade in wild animals and plants, told AFP.
"The important thing here is the attention given to the event by Vladimir
Putin so that other heads of government will sit down and listen," he added.
Putin has personally championed the protection of the Amur Tiger in the
country's Far East, where he once famously fired a tranquillizer dart at one of
the big cats.
But underlining that even the situation in Russia is far from rosy, an Amur
Tiger was found dead from gunshot wounds early on November 16 in
Russia's Far East in the Khasan district, south of the main regional hub of
Vladivostok.
The WWF said in a statement that a criminal inquiry would be opened for
illegal hunting although it was possible that the animal had been killed in
self-defence.
The November 21-24 summit is due to be attended by five heads of
government, including Putin and his Chinese counterpart. The meeting is
thought to be the first time world leaders have gathered to discuss the fate of
a single species.
While there is now consensus on the need to save the tiger, there is a stark
lack of any coordination on the ground to stop illegal trade in tiger parts like
whiskers, paws and bones that are prized in traditional Asian medicine.
"Countries cannot fight the tiger trade individually, because of the very
nature of the trade, where tiger parts come from one country, are processed
in another and consumed in a third," said Zain of TRAFFIC.
Along with Russia, 12 other countries host fragile tiger populations -Bangladesh, Bhutan, Cambodia, China, India, Indonesia, Laos, Malaysia,
Myanmar, Nepal, Thailand and Vietnam.
But experts say by far the key players in saving the tiger are India and China.
India is home to half of the world population, while the Chinese remain the
world's biggest consumers of tiger products despite global bans.
"In China, things are going from bad to worse," said Alexei Vaisman of the
WWF. "But it is hard for the Chinese authorities, who are fighting against a
millennium-old tradition."
Experts meanwhile commend Russia for its far-seeing policies in creating
improved tiger reserves which work together with non-governmental
ecological groups and border guards.
Vladimir Krever, the coordinator for biodiversity at WWF, said that the
current population of 500 tigers in Russia was optimal for the current
availability of habitat. Raising numbers to 600 would be "an absolute
maximum."
Zain of TRAFFIC described the target of the summit of doubling tiger
populations by 2022 as "very ambitious but achievable".
"Proof is Russia, it's a success story as the number of tigers has increased,"
he said.
A last chance to save the tiger
http://www.independent.co.uk/environment/nature/a-last-chance-to-save-the-tiger2138131.html
As hunting and loss of habitat push the world's biggest cat to the brink of extinction, the
13 'tiger nations' are gathering in Russia determined to halt its calamitous decline
By Shaun Walker
Friday, 19 November 2010
The remains were discovered in the woods early on Tuesday, thousands of miles from
Moscow, near Russia's distant eastern border with North Korea. A single bullet had
proved fatal, and by evening the country's Interior Minister had been tasked with
mounting a thorough investigation and severely punishing the culprits. The victim? Not a
muck-raking journalist, or a local mafia boss, but a Siberian tiger, one of only about 450
left in the far east of Russia.
It was a gruesome reminder of the severity of the threat to wild tigers. This weekend, the
leaders of the world's 13 "tiger nations", including Russia, China and India, are to meet.
Billed as the last chance to save the wild tiger, the St Petersburg summit will be hosted by
the Russian Prime Minister, Vladimir Putin, and will launch a programme to double the
number of tigers in the wild by 2022, the next Chinese Year of the Tiger.
There are now just 3,200 tigers left in the wild, compared to about 100,000 a century ago,
and wildlife experts say that if serious measures are not taken, the tiger could die out
within a generation. "This summit may be the last chance for the tiger," said Robert
Zoellick, President of the World Bank, which is coordinating the programme to be
presented at the summit. "Tigers are vanishing, due to illegal poaching, trafficking and
loss of habitat."
Mr Zoellick said financial and legal measures were required. "We need to see poachers
behind bars, not tigers," he said, but added that there was also a need for community
programmes to teach people the value of tigers, and conservation programmes to
safeguard tiger habitats.
Poaching is still a major problem, usually aimed at servicing the black market in China,
where tiger parts are in great demand for use in traditional medicines and as aphrodisiacs.
A tiger skin can fetch anything up to £15,000 on the Chinese black market, and the bones
go for more than £500, to be used as medicines or alleged aprodisiacs.
Experts were divided on whether the target of doubling tiger populations over the next 12
years is achievable. "The goal is realistic, but achieve it, there needs to be a lot of
political will and financial support," said Vladimir Krever of the World Wildlife Fund's
Moscow Office.
Of all the tiger countries, Russia has been the most successful at breathing new life into
its tiger community, with the Siberian tiger rescued from the brink of extinction to a
population of about 450 in the Russian Far East that has remained stable for a decade.
Russia's tigers live in the forests along Russia's borders with North Korea and China,
which was where the dead tiger was found this week. In the Pacific port city of
Vladivostok, there is even a Tiger Street, and a monument to tigers will be unveiled
tomorrow to coincide with the St Petersburg forum.
Siberian tigers, the largest subspecies, can grow to over two metres in length and 400kg
in weight, and occasionally become a threat to local residents. Just last week, in the city
of Nakhodka, a tiger veered into a residential area in search of food and ended up
mauling a dog to death. Locals have been advised not to walk dogs in the woods until the
tiger has been found.
The appearance of tigers in urban areas speaks to a growing problem for conservationists,
the destruction of traditional tiger habitats, and the encroachment of human infrastructure
onto what were once tiger-hunting grounds. "The problems facing tigers vary from
country to country," says Mr Krever. "But it's fair to say that while poaching still remains
a huge problem, especially in the Asian countries, the bigger problem is now that the
traditional habitats of tigers are being destroyed."
Cambodia, China, Malaysia, Burma, Thailand and Vietnam all have small tiger
populations, varying in size from just a few remaining specimens up to about 300. Some
experts in these countries expressed scepticism that the goals of the summit were
manageable. "It sounds very ambitious and positive that we will have 6000 tigers in two
decades, but tell me how will they do it without being able to save the existing ones?"
Belinda Wright, director of Wildlife Protection of India, told Agence France Press.
"Patchy intelligence-gathering techniques across Asia and lack of cross-border
commitment to end the sale of tiger parts has led to a collective failure."
In India, which has the largest tiger population of any country, the population of wild
tigers has fallen to 1,411, compared to 3,700 less than a decade ago, and 40,000 at the
time that the country gained independence from Britain in 1947. Since 2007, a new tiger
protection force has been introduced in the country, and promised millions of pounds of
funding for a new anti-poaching programme. The government has even moved villagers
out of tiger-reserve areas to allow the beasts to roam more freely. But the results have
been mixed.
That this summit will attract a large number of heads of state, including Chinese Premier
Wen Jiabao, is extremely important, say the organisers. "[Mr Putin] has taken a personal
interest in trying to increase their numbers," said Mr Zoellick. "If it weren't for Prime
Minister Putin I don't think we'd have the level of heads of government that we're having
put this together."
Mr Putin is known for his fondness for the wide range of wild animals to be found in
Russia, an interest that often manifests itself in televised stunts designed to boost his
"macho man" image, and appeal to Russian voters. He has been pictured shooting a
tracking device onto a whale with a crossbow, seeking out a polar bear in the Arctic ice,
and riding horses through the taiga, and the Siberian tiger has not been spared his
attention either.
In 2008, during a visit to a tiger reserve in the Russian Far East, a tiger apparently
advanced on the Russian Prime Minister and television crew that had travelled with him.
Mr Putin, according to the reports, fired an accurate shot with a tranquiliser gun to
neutralise the animal. Mr Putin stroked the unconscious tiger while it was fitted with an
electronic tracking device, and Russian media have reported that the female has since
given birth to two cubs.
Aside from the suspicion that Mr Putin's animal encounters are cheap publicity stunts,
campaigners agree that the attention given to the issue from the top can only help.
"Having commands come from right at the top of government forces those agencies and
structures that need to implement measures to do so," says Mr Krever of the WWF.
Mr Zoellick, of the World Bank, said: "Ultimately, we need to find ways that people can
benefit more from live tigers than dead ones." He added that given that every child across
the world knows from a young age how endangered the tiger is, it sends a bad signal if
efforts to save the creature in the wild fail. "If we can't save the tiger, what is the
likelihood that we'll be able to save other species?"
Georgian president:Country welcomes any EU-Russia dialogue
http://en.trend.az/news/politics/1783795.html
19.11.2010 11:06
Georgia, Tbilisi, Nov. 19 / Trend N.Kirtzkhalia /
Georgia welcomes also any dialogue that European Union has with Russia, Georgian
President Mikheil Saakashvili said at the joint news conference with President of the
European Council Herman Van Rompuy.
"Obviously we welcome also any dialogue that European Union has with Russia,
provided also that this dialogue is not used by Russia to divert away from the existing
issue," Saakashvili said.
Saakashvili said people mustn't forget that Russia keeps occupying territory of the
sovereign European country. "In any case, this is our way; Georgia's way is European
way," he added.
Van Rompuy made a statement in which he expressed his support to Georgia and pointed
out that EU continues its full support to Georgia's security, stability, sovereignty and
territorial integrity.
"I underline the European Union's full support for the security, the stability and territorial
integrity of Georgia, to expect in tight international community to do so as well," he said.
"Future of the EU's energy supply and energy security is of course linked with this
neighborhood as well. Including the countries of Eastern Partnership and beyond."
"I recognize the constructive role Georgia plays in development of energy transit route,"
Van Rompuy stated.
Military actions were launched in the unrecognized republic of South Ossetia in August
2008. Georgian troops entered Tskhinvali, the capital of de facto South Ossetia, and later
Russian troops occupied the city and drove the Georgian military back into Georgia.
Russia recognized the independence of Abkhazia and South Ossetia on Aug. 26 and
established diplomatic relations with these regions on Sept. 9, 2008.
Georgian youth restores bridges with Russia
http://www.aysor.am/en/news/2010/11/19/georgian-youth/
A group of Georgian young people today will travel to Moscow to strengthen
humanitarian ties with Russia and to launch a dialogue with Russian youth.
The Union of Georgians of Russia has organized the visit which will last 7 days, ITARTASS reports.
19 November 2010, 10:02
Church important factor of Russian-Georgian relationship stabilization Patriarch Kirill
http://www.interfax-religion.com/?act=news&div=7926
Moscow, November 19, Interfax - Inter-Orthodox relations play a special role in the
relationship between Russia and Georgia, said Patriarch Kirill of Moscow and All Russia.
"The involvement of Russian Orthodox Church representatives in the life of the Georgian
Church, and visits by Georgian clergymen to Russia and by Russian ones to Georgia
allow not only ecclesiastical but also humanitarian ties to be maintained, while leaving
real prospects for normalization of the relationship between the two countries," the
Patriarch said at a meeting with the alumni of the Russian Foreign Ministry's Academy
and diplomats in Moscow.
The latest such visit was made by head of the Moscow Patriarchate Department for
External Church Relations Archbishop Hilarion of Volokolamsk, to Georgia for the
celebration of the millennium of the Metropolitan Cathedral in Mtskheti in October 2010,
and this Sunday the Patriarch will conduct a prayer service with two Georgian hierarchs
at the Kremlin.
November 19, 2010 12:18
Military plane crashes in Perm
http://www.interfax.com/newsinf.asp?id=203231
PERM. Nov 19 (Interfax) - A military fighter jet crashed in the Perm territory on Friday,
local Public Security Minister Igor Orlov told Interfax.
"The preliminary information available to us confirms that two pilots ejected near the
village of Troitsa in the Perm district in the Perm territory. Presumably, the plane flew
farther and crashed near the village of Denisovka in the Chusovo district," Orlov said.
Rescuers are searching for the airplane and the pilots, he said.
"It is still unclear whether the pilots are alive," he said.
tm mj
MIG-31 HIGH-ALTITUDE INTERCEPTOR FIGHTER JET CRASHES IN
PERM TERRITORY - LOCAL ADMINISTRATION
12:07
PART OF ROSTEKHNOLOGII'S DEFENSE COMPANIES COULD BE
PRIVATIZED - CHEMEZOV
http://www.interfax.com/news.asp
Russia's leading shipbuilder seeks arms exporter status
http://en.rian.ru/mlitary_news/20101119/161403037.html
07:54 19/11/2010
Russia's United Shipbuilding Corporation (USC) is seeking to become an independent
exporter of vessels, naval arms and equipment, a respected Russian business daily said on
Friday.
According to USC's draft development concept, the 100% state-owned company is
seeking the status of a separate "entity in military-technical cooperation," which allows it
to "carry out foreign trade activities concerning military equipment," Kommersant said.
The document was submitted for approval to the Russian government about a month ago.
So far, only Russia's state-run arms exporter Rosoboronexport is entitled to export the
whole range of military items, including fully assembled equipment. Other 21
engineering companies and manufacturers, also vested with the status, are allowed to
export only spare parts, disassembled equipment and carry out service maintenance.
"We are now studying various models of entering foreign markets, in calm dialog with
Rosoboronexport," an unnamed source in USC told Kommersant.
Rosoboronexport, which accounts for 80% of all Russian arms exports, said, however,
that USC's plans may damage Russia's national interests.
"The emergence of new entities in military cooperation, entitled to sell ready-to-use
military equipment, is a step backwards. In fact, it will return us to the times when
Russian arms exports stood at $2 billion. At that moment, we eliminated competitiveness
on the export market, and now the figure has grown to $10 billion," a Rosoboronexport
spokesman, Vyacheslav Davydenko, told the paper.
Exports estimate that Rosoboronexport may lose up to 25% of its current export contracts
if the government approves the initiative.
"According to Rosoboronexport's forecasts, Russia's overall defense exports will top $10
billion and set another record this year, and actual deliveries of new vessels and naval
arms constitute a considerable share in it," Kommersant quotes Mikhail Barabanov, the
editor-in-chief of the English-language Moscow Defense Brief magazine, as saying.
"It's highly unlikely that Rosoboronexport agrees to give up its monopoly status," he
added.
The Federal Service for Military-Technical Cooperation did not comment on the reports.
Similar attempt by United Aircraft Corporation (UAC) failed several years ago.
MOSCOW, November 19 (RIA Novosti)
Russian company cancels Karabakh tours
http://news.az/articles/politics/26708
Fri 19 November 2010 07:42 GMT | 8:42 Local Time
Russian travel company Astravel has changed plans for three-day tours to occupied
Azerbaijani land after an approach from the Azerbaijani embassy.
An official from the Azerbaijani embassy in Moscow explained to Astravel President
Valeriy Loshits that the trips to Karabakh would be illegal.
Astravel was planning three-day trips to the occupied Azerbaijani lands as part of a 14day tour called "The Golden Ring of Armenia".
The company has now cancelled the trips to the occupied areas, according to the
Azerbaijani Foreign Ministry press service.
Bashkir teenager attacked a policeman with a cry of "Allahu akbar!"
http://www.lenta.ru/news/2010/11/19/akbar/
Friday, 19.11.2010, 8:51:38
Armed with a knife, a resident of the Bashkir October, shouting "Allahu akbar!"
stormed the local police station and wounded a policeman, according to the website
MVD of Bashkortostan.
After this 18-year-old unemployed tried to escape, but in the courtyard of his office
colleagues were detained militiamen. During the arrest teenager managed to stab a
sergeant.
First Lieutenant Vilmir Minnikhanov received stab wounds neck, chest and left forearm.
He was hospitalized. According to Interfax, the state Minnikhanov assessed as
satisfactory. Sergeant assistance was rendered on the spot.
I seized the detained teenager note read: "in the October and throughout the world should
be the law of Allah." In connection with this investigation considers the version of the
religious background of the crime. As part of the criminal case teen screened for mental
competency.
Border unit, police building come under gun fire in Dagestan
http://www.itar-tass.com/eng/level2.html?NewsID=15695722&PageNum=0
19.11.2010, 02.25
MAKHACHKALA, November 19 (Itar-Tass) -- A border unit of the Russian Federal
Security Service and the local police building came under grenade and gun fire in the
Khunzakh district of Russia’s North Caucasian republic of Dagestan overnight to Friday,
a spokesman for the republican interior ministry told Itar-Tass.
According to the spokesman, the incident occurred at about 00:30 a.m. Moscow time.
Luckily, no one was hurt but the shooting caused fire at one of the border unit’s
buildings. The fire was extinguished instantly.
Police officer dies after Dagestan attack
http://en.rian.ru/russia/20101119/161403408.html
08:46 19/11/2010
A police officer has died in hospital after a suspected militant attack in Russia’s North
Caucasus republic of Dagestan, a police source said on Friday.
The attack took place on Thursday evening in the Khasavyurtovsky district of the volatile
republic.
“Three officers were taken to hospital, where one of them later died of his injuries,” the
source said.
According to the National Anti-Terrorist Committee, more than half of all terrorist
attacks in the North Caucasus in 2010 have occurred in Dagestan.
November 19 (RIA Novosti)
Additional Buildup of Military Forces in Dagestan Proceeds with Caution
http://georgiandaily.com/index.php?option=com_content&task=view&id=20435&Itemid
=132
November 19, 2010
Valery Dzutsev
On November 14, Russian Deputy Interior Minister, Nikolai Rogozhkin, who is
commander of the ministry’s internal troops, announced the first native Dagestani
military detachment formation. The new unit is comprised of 300 people and eventually
will grow to 700 servicemen.
Rogozhkin concisely expressed Moscow’s hopes: “The unit is mostly comprised of
Dagestanis who performed their military service in the Russian army. We expect that
Dagestanis themselves will give a proper rebuff to the bandit scum that is tying to
terrorize the local population” (www.kavkaz-uzel.ru, November 14).
The decision to set up a locally manned military unit was announced earlier on
September 27. The move was modeled on the example of Chechnya, where Moscow
pursued the so-called policy of “Chechenization,” recruiting former insurgents to fight
their former comrades. However, infrastructural problems and lack of financing have
plagued the establishment of a Dagestani military force.
Instability in the North Caucasus manifests itself most evidently in Dagestan. Two-thirds
of those lost on the government side in the North Caucasus in 2010 were killed in
Dagestan. According to Dagestan’s interior ministry, 104 members of the law
enforcement agencies and 123 suspected militants have been killed in the republic since
the beginning of 2010 (www.kavkaz-uzel.ru, November 14).
On November 11, a group of four militants staged a series of spectacular quick attacks
and retreats in Dagestan’s capital Makhachkala. The group attacked several grocery
stores that sold alcohol, as well as policemen and military personnel. The militants killed
7 servicemen before the police, aided by the Russian military, managed to kill them in a
shootout (Kommersant, November 12).
The Kremlin is trying to exert additional pressure on the North Caucasian leaders to make
them more eager to quell the insurgency. On November 8, President Dmitry Medvedev
threatened to dismiss those republican leaders who fail to make progress in reducing the
level of insurgent activity. The Russian president entrusted this evaluation to his envoy in
the region, Aleksandr Khloponin. Experts say, however, that it is unlikely Khloponin will
use his powers anytime soon, given that the three most restive republics –Ingushetia,
Kabardino-Balkaria and Dagestan– acquired their leaders not long ago. Rather,
Medvedev’s statement should be interpreted as an attempt to boost Khloponin’s
credentials as a powerful decision-maker. The head of the Russian parliament’s
committee on security, Vladimir Vasiliev, held up Chechen President Ramzan Kadyrov
as the desirable type of leader in terms of security (Kommersant, November 9).
However, speaking in the Russian parliament on October 25, Russian Deputy ProsecutorGeneral, Ivan Sydoruk, who oversees the North Caucasus, expressed the opposite opinion
about Chechnya. According to Sydoruk, in the first ten months of 2010, 352 terrorist
attacks took place in the North Caucasus and 254 of them were carried out in Chechnya.
The next day, October 26, the Chechen interior ministry stated there was not a single
terrorist attack in Chechnya in 2010. Sydoruk said that 400 insurgents were killed,
reflecting an increase in the number of suicide bombers, while the law enforcement
agencies suffered 205 casualties in the same period.
Sydoruk was very critical of the law enforcement agencies in the North Caucasus, calling
for a massive clean-up of the police forces “to get rid of cowards and traitors.” Also, he
stressed the problem of illegal arms, most of which are sold by corrupt government
officials to the insurgents. In the first ten months of 2010, over 500 guns and 100 grenade
launchers were confiscated by the police forces (Interfax, October 25). Sydoruk later
backtracked on his statements about massive betrayal on the local police forces’ side in
the North Caucasus, saying that the media misrepresented his words (Kommersant,
October 28). Even if there are many cases of the law enforcement members aiding the
insurgents, it would be not in the best interests of Moscow to admit that, as this would
reflect badly on its standing in the North Caucasus.
Meanwhile, the Dagestani government set up a commission to help repentant insurgents
adapt to civilian life. On November 17, the commission issued a special guide for people
willing to give up their resistance and surrender to the authorities. However, the
government appears to have failed to provide any additional guarantees for the rebels,
outside of those that are already incorporated in the Russian Criminal Code, such as
reaching a deal with investigators, revealing the identity of accomplices and receiving
shorter jail terms. The head of the commission, Dagestani Deputy Prime Minister, Rizvan
Kurbanov, reportedly made an astonishing statement to the members of the commission,
saying that president of Dagestan had promised that those who surrender would not be
subjected to torture by the police (www.kavkaz-uzel.ru, November 17). If this assertion is
read backwards, it represents a tacit official recognition of that suspected insurgents are
tortured in Dagestani detention centers.
Conflicting statements by Russian officials, inconclusive actions like the halfhearted
amnesty for insurgents in Dagestan and the creation of a local military force in Dagestan
indicate deep divisions inside the Russian government on what to do next in the North
Caucasus. The serious rifts among the key political players in Moscow in regard to North
Caucasus policy make it hard for Moscow to pursue a particular strategy. It is more likely
there will be no drastic changes in Moscow’s approach to the North Caucasus in the near
future, although administrative reshuffles are still a possibility. As Russia enters a new
electoral period, with parliamentary elections in 2011 and presidential elections in 2012,
the North Caucasus will most likely be used in internal political battles.
Source: http://www.jamestown.org/programs/edm/
18 November 2010 Last updated at 13:18 GMT
Dagestan's deadly Islamic insurgency
http://www.bbc.co.uk/news/world-europe-11777853
By Steve Rosenberg BBC News, Dagestan
Magomed has one of the most dangerous jobs in Russia. He is a policeman - in Dagestan.
"Police here are constant targets," he tells me as we drive through the capital,
Makhachkala.
"Whenever I get out of the police car, I always wonder if the insurgents will see my
uniform and will shoot me. Six of my colleagues have been killed this year. At night you
won't find any policemen on the streets - we're all too frightened."
From the car window, Makhachkala looks like a normal, bustling city.
The roads are full of traffic, the streets bristling with pedestrians hurrying home from
work. With its stunning backdrop of the Caucasus mountains on one side, and the
Caspian Sea on the other, the place almost feels like the Russian Riviera. But an Islamic
insurgency has turned a potential resort into a war zone.
Nearly every day, the rebels attack police and local officials. In one shooting spree last
week, seven Dagestani policemen were killed. On Monday, a gunman burst into a
hospital and murdered a traffic policeman who had been recovering in bed.
The Russian security forces respond by carrying out "special operations" in towns and
villages across Dagestan. Acting on intelligence, they seal off streets, whole
neighbourhoods, and open fire to root out rebel fighters.
But who are the insurgents? And what are they fighting for?
'Foreign training'
"The aim of the extremists is to tear the Caucasus away from Russia," Dagestan's
President, Magomedsalam Magomedov, tells me.
"Many of them are mercenaries who've undergone instruction in Taliban training camps
in Afghanistan and Pakistan.
"They have links to al-Qaeda and to other terrorist groups across the Caucasus which
share the same goal.
"They want to turn the whole region into an Islamic state based on sharia [Islamic] law
but we will defeat them."
Moscow sees this is as a battle it cannot afford to lose - not only if it is to retain control of
the North Caucasus, but also provide security for the whole country.
In recent years, different parts of Russia have suffered acts of terror carried out by
extremists from the Caucasus. Police say it was female suicide bombers from Dagestan
who attacked the Moscow Metro earlier this year killing 40 people.
I head into the mountains and drive to Gubden - a village viewed by the authorities as a
hotbed of Islamic fundamentalism.
A Gubden rebel commander was suspected of having organised the Moscow Metro
attacks and there have been "special operations" in and around the village.
The atmosphere is tense. One entrance to the village is blocked off and there is a
checkpoint with troops.
When I finally get in, the streets are busy. There are children driving mopeds down
narrow twisting lanes and women in headscarves gathering water from a well.
The entire village and its small white houses seem to grow out of the rock of the
Caucasus mountains themselves.
'Abducted and tortured'
In his garden in Gubden, Magomed Saidgadzhiev keeps sheep and chickens. There are
fruit trees too.
As we stroll across the grass, Magomed, 77, tells me about his son Saidgadzhi, killed by
the security forces.
The police had told Magomed his son had been caught taking supplies to the insurgents
and that he had been shot in a gun battle.
But Magomed claims his son was abducted and tortured to death. To prove their case, his
family later show me photographs of the corpse taken in the morgue
"There was only one bullet hole in his whole body," Magomed tells me.
"The rest of his wounds were made by a knife. A dagger. He'd been sliced up like you'd
cut up a pig. What the authorities want all of us to do here is turn our backs on
fundamentalist Islam. Then they'll leave us in peace. But I will never turn my back on my
faith."
Human rights campaigners in Dagestan warn that brutality by the police and the security
forces is pushing some Muslims to take up arms against the state.
Followers of Salafi Islam, the kind of strict Islam promoted by Saudi Arabia, regularly
complain of police harassment and persecution. The authorities concede that force alone
will not secure peace.
The chronic economic and social problems of the region - high unemployment and
rampant corruption - feed extremism. Radical ideas thrive in such a soil.
'There will be war'
Even the police admit the situation is out of control.
When I sit down with policeman Magomed and two other officers to talk about Dagestan,
together they paint a bleak picture. They tell me about the sons of police chiefs who had
become insurgents. One had driven a rebel commander round in his father's police car for
a year. Another had ordered his own father's murder.
In this atmosphere of increasing brutality, the lines between religious extremists, mafia
gangs and corrupt officials are blurred. One of the officers told me that on one occasion
local police had pretended to be Islamic fighters so they could extort money from local
businessmen.
At the end of our meeting, Magomed drives me back to my hotel. I ask the policeman
what he thinks will happen in Dagestan.
"There will be war here, war!" he tells me.
"Don't expect anything else. It'll be the same as it was in Chechnya. No. It will be even
worse. The war in Chechnya was simpler - it was a conflict between Russians and
Chechens.
"Dagestan is such a multi-ethnic republic. When it all explodes here, you won't be able to
restore peace between all the different peoples of Dagestan. Nobody will know who's
fighting who. Not here. It will be a nightmare."
Sheikh Yousef Al-Qaradhawi to the Chechens: Lay Down Your Arms, Make Peace
with Russia
http://www.memri.org/report/en/0/0/0/0/0/0/4776.htm
November 18, 2010
Sheikh Yousef Al-Qaradhawi, head of the International Union of Muslim Scholars, has
recently spoken out against the terrorist attacks and guerilla war that Muslim Chechen
separatists are waging against the Chechen government of President Ramzan Kadyrov,
whom the separatists accuse of collaborating with Russia. In a recorded speech he sent
to a June 2010 Islamic convention held in the Chechen capital, and in a September 2010
fatwa he issued in response to a request by Chechen Muslim scholars, Al-Qaradhawi
called on the Chechen insurgents to abandon violence and take up diplomacy in order to
further their cause, because, he explained, Islam is a peaceful religion that advocates
fighting only against those who wage war on Islam or expel Muslims from their homes,
and jihad is allowed solely for defense purposes.
Al-Qaradhawi's statements met with criticism from several Muslim clerics and
organizations supportive of the Chechen insurgents' cause, which asked why the sheikh
drew a distinction between the Palestinian struggle and that of the Chechens, and
claimed that his religious ruling deviated from Islamic law. It should be noted that the
Chechen jihadists do not consider Al-Qaradhawi a religious authority; however, in light
of his prominent status in the Islamic world at large, his ruling could dissuade nonChechen Muslims from joining the Chechen insurgency.
It is noteworthy that in the past Al-Qaradhawi has expressed opposite views, calling to
support the Chechen jihad and its struggle for independence from Russia. Chechen Mufti
Sultan Haji Mirzayev explained that Al-Qaradhawi had changed his position after
Chechen Muslim clerics and President Kadyrov presented him with a clear picture of the
situation on the ground, while in the past he had been given misleading reports on
circumstances in Chechnya.
Mayor personally heads Moscow urban planning commission
http://www.itar-tass.com/eng/level2.html?NewsID=15696503
19.11.2010, 11.34
MOSCOW, November 19 (Itar-Tass) -- Moscow Mayor Sergei Sobyanin has signed a
resolution of November 16 to form a Moscow urban planning and land commission and
personally headed it.
The mayor’s First Deputy Vladimir Resin and Deputies Yuri Roslyak and Natalia
Sergunina are appointed deputies to the commission chairman.
According to the resolution, the commission is established to promptly settle issues of
urban development, investment activities, land relations, construction, reconstruction and
restoration of cultural heritage sites.
The commission will hold meetings when needed, but at least twice a month.
Commission decisions come into effect from the date of approval by the chairman and
must be obligatorily followed by city executive authorities.
The executive authorities must within their jurisdiction ensure participation in preparation
and commission consideration of draft resolutions on all issues of changing investment
contract (agreement) terms and land lease agreements concluded by the Moscow
government or its representative authorities, on construction, including special measures
to preserve and regenerate historic urban and natural environment of cultural heritage
sites, reconstruction of buildings and restoration of cultural heritage sites.
Russian Massacre Sparks Corruption Probe After Decade of Terror
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a_n5oys1nJPA
By Ilya Arkhipov
Nov. 19 (Bloomberg) -- The Russian government plans to investigate a decade of
unsolved crimes in two southern regions after the murders of 12 people focused attention
on allegations that local officials aided a gang terrorizing the region.
Members of three families, including four children, were killed Nov. 5 at a cottage in the
town of Kushchevskaya, police say. The suspects are allegedly members of a gang that
has operated in the Krasnodar and Rostov regions since the 1990s, said Alexander
Bastrykin, head of the Investigative Committee of the Prosecutor General’s Office.
Teams of investigators have been sent to the region to uncover any links between the
gangsters and local officials, said Vladimir Vasiliev, head of the Security Committee of
the State Duma. President Dmitry Medvedev has made fighting corruption one of his
main goals and plans to reorganize police nationwide after reports of illegal arrests and
beatings.
“This case will make us assess the situation across the country; this is about the new
police law,” Vasiliev told reporters yesterday in Moscow after meeting with Bastrykin.
“We need to go there and work with people so residents understand this gang doesn’t
represent the Krasnodar region or Russia.”
Bastrykin said he will travel to Kushchevskaya personally to meet with residents and
receive their complaints.
Federal investigators have arrested six people in connection with the Kushchevskaya
case, including the alleged gang leader, Sergei Tsapok, a member of the municipal
parliament for Kuschshevsky district Tsapok’s elder brother, Nikolai, helped found the
gang in the mid-1990s and was killed in 2002, according to the committee.
Authorities ‘Compromised’
“We think these are not the final arrests,” Bastrykin said. “There are two main motives
that could be behind this crime. One is a robbery and the second is the revenge for the
killing of the elder brother.”
Investigators will review information about the gang previously published in the local
media, Bastrykin said.
The newspaper Komsomolskaya Pravda published the results of its first investigation of
violence in the region of 73,000 people four years ago, saying many complaints of rapes
and other attacks weren’t accepted by police. Komsomolskaya Pravda this week reported
that members of the gang raped more than 220 girls over the past 16 years.
Residents were unwilling to provide police with information about the suspects in the
Kushchevskaya killings because local officials are “compromised,” Vasiliev said. As a
result, the investigation is being conducted by teams assigned by federal authorities, he
said.
Russia is the world’s most corrupt major economy, according to Berlin-based
Transparency International’s 2010 Corruption Perceptions Index released Oct. 26. It
ranked 154th among 178 countries, alongside Tajikistan and Kenya.
Criminal cases will be opened against local officials if evidence of their involvement is
uncovered, Bastrykin said.
“We have a law that allows us to give life sentences to officials if they are cooperating
with gangs,” Vasiliev said.
To contact the reporters on this story: Ilya Arkhipov in Moscow at
[email protected]
To contact the editor responsible for this story: Willy Morris at [email protected]
Last Updated: November 19, 2010 03:43 EST
CORRUPTION WATCH: Kremlin refuses income probe
http://www.bne.eu/dispatch_text13658
bne
November 19, 2010
The Kremlin has refused to investigate disputed income declarations from several State
Duma deputies, casting doubt over whether the government is serious about fighting
corruption.
Opposition Yabloko party leader Sergei Mitrokhin, who appealed to the Kremlin to
investigate the income declarations earlier this autumn, criticized the Kremlin's rationale
as "artificial" on November 18, reports The Moscow Times. "The presidential
administration has showed that this issue is extremely uncomfortable for them,"
Mitrokhin said.
On Sept. 23, Mitrokhin and the Russian office of the Transparency International anticorruption watchdog petitioned Kremlin chief of staff Sergei Naryshkin to review the
income declarations of Duma Speaker Boris Gryzlov of United Russia, Liberal Democrat
Ashot Yegiazaryan and Communist Sergei Levchenko.
On Oct. 4, the petitioners submitted a second letter, urging Naryshkin to review the
declarations of five additional lawmakers, all from United Russia.The appeals noted that
the lawmakers' declared assets were not compatible with their modest incomes for the
year.
The Kremlin has redirected his request to the Federal Tax Service and to the Duma's
ethics committee, he claims. Meanwhile, the Kremlin said that the Duma deputies, all
from the ruling United Russia party, are not specified as officials in the presidential anticorruption decree.
In spring 2009, President Dmitry Medvedev ordered all top officials to declare their
incomes, and later the same year authorized the Kremlin directorate for state service and
the Cabinet chief of staff to open reviews of income declarations at the request of
political parties and nongovernmental organizations.
"The refusal [to check the declaration] does not confirm the seriousness of the real fight
against corruption," Mitrokhin claims.
On November 6, the Investigative Committee opened a $65m fraud case against
Yegiazaryan after the Duma lifted his immunity from prosecution. Yegiazaryan, who
reportedly has fled to Britain, has denied wrongdoing.
Mironov Loses Power To Check New Senators
http://www.themoscowtimes.com/news/article/mironov-loses-power-to-check-newsenators/423810.html
19 November 2010
The Moscow Times
President Dmitry Medvedev on Thursday signed into law a bill that strips the Federation
Council speaker from confirming the credentials of new senators, the Kremlin said,
ending a procedure that was known to sometimes take months of elaborate checks.
Under the new rules, a candidate will automatically become a senator on the 10th day
after his appointment by regional authorities. The law takes effect on Jan. 1.
The speaker, Sergei Mironov, who heads the pro-Kremlin A Just Russia party, opposed
the bill, introduced by rival pro-Kremlin United Russia, which controls both houses of
parliament.
In an article published in Vedomosti on Nov. 9, Mironov predicted that the new rules
could allow people with low professional skills to become senators, lowering the quality
of the chamber's work on bills.
Nevertheless, Mironov said he convinced fellow senators to support the legislation. He
was the only senator to vote against the bill, which was previously approved by the State
Duma.
Meanwhile, Mironov is drafting am amendment that might give parties a chance to
participate in proposing gubernatorial candidacies to the president, Kommersant reported
Thursday.
Currently, the party that wins regional legislative elections has the right to pitch
candidacies to the president, regardless of how many votes it collects in elections. United
Russia has been winning most elections at all levels for years, often with more than 50
percent of the vote.
Mironov's proposal says that if no party garners more than 50 percent of the vote, a
coalition of parties that jointly have more than 50 percent of the vote should be granted
the right to propose gubernatorial candidacies.
Mironov's bill could break United Russia's monopoly on the right to propose governors in
St. Petersburg and the Novosibirsk, Severdlovsk and Kurgan regions, Kommersant said.
Separately, Kremlin first deputy chief of staff Vladislav Surkov said Thursday that
United Russia might fail to collect two-thirds of the vote in the 2011 Duma elections and
"will have to enter into coalitions to pass a number of important issues," RIA-Novosti
reported.
Russian census results to be made public before end of 2012
http://english.ruvr.ru/2010/11/19/35262849.html
Nov 19, 2010 09:41 Moscow Time
The final returns of the recent All-Russia census are due to be made public before the end
of 2012. The Rossiyskaya Gazeta daily will have carried the results of the first stage of
the census by May 31st next year. Earlier the authorities said they would not be able to
sum up the census results before 2013. According to the previous census in Russia in
2002, the population of this country made up 145 million 274,000.
19 November 2010, 10:18
Moscow Patriarchate, Vatican wage common fight against secular liberalism Patriarch Kirill
http://www.interfax-religion.com/?act=news&div=7927
Moscow, November 19, Interfax -Despite a difficult relationship between the Russian
Orthodox and the Roman Catholic Churches, they have been effectively cooperating
along many avenues, Patriarch Kirill of Moscow and All Russia told students and
diplomats at the Russian Foreign Ministry Diplomatic Academy in Moscow.
"Together with the Roman Catholic Church we have been defending the traditional
Christian concept of family and human values from aggressive secular liberalism. Our
Churches are waging a common fight against medico-biological experiments
incompatible with respect for human dignity," His Holiness said.
Cooperation with the Roman Catholic Church has become possible thanks to Pope
Benedict XVI and is proceeding simultaneously along several avenues.
"Starting from 1980, we have been conducting a theological dialogue in the course of
which and together with other Orthodox churches we were discussing problems that
separate us such as the role of the Roman bishop, the Unia issue and others," the
Patriarch said.
This has not been an easy dialogue as it is "impossible to find quick solutions to problems
that have separated the Christian East and West for a whole millennium".
Nevertheless, "thorough theological analysis of all that has happened is being carried out,
in particular, our understanding of history because many differences stem from the way
we understand it", Patriarch Kirill said.
The Primate of the Russian Orthodox Church expressed concern over trends in some
Protestant communities towards liberalizing theology and Christian morals. Thus, some
Protestant communes have sanctioned mono-sex marriages and the ordaining of
homosexuals.
At the same time, he pointed out that in the majority of Churches in the CIS and Eastern
Europe - the Orthodox, Catholic and Protestant Churches - adhere to the traditional
understanding of Christian values.
For example, Protestants in Russia and the Baltic countries are closer to Orthodoxy than
to their Western fellow Christians because "they are not striving to liberalize their
doctrine", the Patriarch said.
19 November 2010, 11:01
Russian World countries will lead mankind out of deadlock - Patriarch Kirill
http://www.interfax-religion.com/?act=news&div=7928
Moscow, November 19, Interfax - Russia, Ukraine and Byelorussia have a special
mission on the global arena, said Patriarch Kirill of Moscow and All Russia.
"We [the countries of the Russian world: Russia, Ukraine and Byelorussia] must
make our own unique contribution to the development of the human civilization,"
the Patriarch said at a meeting with the alumni of the Russian Foreign Ministry's
Academy and diplomats in Moscow.
There have been statements lately about the relativism of moral principles, "leading in a
number of countries to the fall of family values, legalization of immoral models of
behavior such as drug addiction, prostitution and homosexualism," he said. "It is the
mission of the Russian world to thwart this destructive trend leading humankind into a
deadlock," Patriarch Kirill said.
Today the deficit of moral values "is being felt in international relations like never before,
with many countries succeeding in building effective economies, coherently advancing
their national interests and strengthening of the technological potential," he said.
However, all these achievements "remain a 'colossus on clay feet' unless they are propped
by moral values, by the integrity of human personality, as the recent global crisis has
shown well," the Primate said.
Russia has "both spiritual and intellectual potential to face up to the super-challenges, one
of which is to change the spiritual and, intellectual paradigm, including in the
international relations," he said.
In the modern world, no country "can declare itself a serious global player without an
articulate moral position and a vision of the humankind's ideology," and "the great power
is characterized by the ability to defend the traditions of its people, its religious, cultural
values and the moral backbone of society," the Patriarch said.
Russian Press at a Glance, Friday, November 19, 2010
http://en.rian.ru/papers/20101119/161403638.html
09:15 19/11/2010
POLITICS
The third gathering since 2002 of presidents of the five Caspian Sea littoral states failed
to resolve outstanding territorial issues, amid assertions by analysts that continuing
ambiguity is in the interests of Russia and Iran
(The Moscow Times, Vremya Novostei, Vedomosti, Kommersant, Rossiiskaya Gazeta)
President Dmitry Medvedev will visit the NATO summit in Lisbon on Saturday.
Secretary-General Anders Fogh Rasmussen has made it clear that he wants the summit to
be a turning point in NATO's often-stormy ties with Moscow
(The Moscow Times, Nezavisimaya Gazeta)
President Barack Obama said it was a "national security imperative" for the Senate to
ratify a pending nuclear arms treaty with Russia before ending its work this year
(The Moscow Times, Vremya Novostei, Nezavisimaya Gazeta)
Russia has "nothing to hide" from the U.S. authorities in the case of suspected arms
dealer Viktor Bout and hopes that he will get a fair trial
(The Moscow Times, Nezavisimaya Gazeta, Rossiiskaya Gazeta)
VEHICLES & ENGINEERING
Prime Minister Vladimir Putin said that the government planned to create a “Titanium
Valley” special economic zone in the Urals, at the cost of 40 billion rubles ($1.3 billion),
to bring together manufacturers in the aircraft, automotive, shipbuilding and medical
industries.
(The Moscow Times, Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta,
Rossiiskaya Gazeta)
CONSUMER
Imports of handmade cigars should return to pre-crisis levels in 2012 after falling by
nearly half last year, Russia's exclusive importer of Cuban cigars has said.
(The Moscow Times)
STOCK MARKETS
Russian stocks, the cheapest worldwide, are getting cheaper after the nation's companies
posted record profits that topped analysts' estimates by the widest margin in emerging
markets
(The Moscow Times, Vedomosti)
DEFENCE
Russia's United Shipbuilding Corporation (USC) may seek arms exporter status. If the
government supports the initiative, Russia's state-run arms exporter Rosoboronexport
may lose its monopoly status and up to 25% of current export contracts
(Kommersant)
CRIME
Russian Investigative Committee head Alexander Bastrykin reported to the lower
chamber of the Russian parliament, the State Duma, on the investigation into the
horrifying massacre of 12 people in the southern Russian village of Kushchevskaya on
November 4
(Moscow Times, Vremya Novostei, Vedomosti, Nezavisimaya Gazeta, Rossiiskaya
Gazeta)
SOCIETY
Viktor Biryukov, a spokesman for the Moscow police department, became the first
Russian official to accuse the opposition of receiving money for staging unsanctioned
rallies. He said the Strategy 31 rallies on the last day of each month that has 31 days and
the Day of Wrath protests near the Moscow City Hall were “commercial projects,”
adding that he “was told” this. Opposition leaders regret that it is impossible to sue
Biryukov over the statement
(Kommersant)
The North Caucasus social and economic development strategy, proposed by the
presidential envoy to the region, came under strong criticism from Russian analysts.
Experts from both liberal and conservative circles say that the North Caucasus is on the
verge of revolution and the pessimistic forecasts of its separation from Russia may now
become a reality (Vremya Novostei)
November 19, 2010 10:03
Moscow press review for November 19, 2010
http://www.interfax.com/newsinf.asp?id=203170
MOSCOW. November 19 (Interfax) - The following is a digest of Moscow newspapers
published on November 19. Interfax does not accept liability for information in these
stories.
VEDOMOSTI:
Having borrowed $900 million from Western banks, SUEK started repaying early to
Russian ones. The company decided to repay the loans granted by Gazprombank,
Sberbank (RTS: SBER) and VTB (RTS: VTBR), secured by the shares of its largest
subsidiaries in Kuzbass and Krasnoyarsk Territory. By June 30 SUEK's net debt was 80.3
billion rubles according to the IFRS. By late September - 87.9 billion rubles according to
the IFRS. Collateral debt obligations - 70.8 billion rubles (before repayment of Sberbank
and VTB loans). Last year banks lent reluctantly even to companies with good finances
and demanded a high security, says Alexei Bulgakov, an analyst with Troika Dialog
(RTS: TROY). ("SUEK going away from pledges")
Oleg Deripaska has sold the most attractive forestry asset: Austria's Pulp Mill bought
from BazEl 33.6% shares in the Arkhangelsk pulp and paper mill (RTS: ACBK)
(ACBK). As a result, the interest of the Austrian company rose 97.42%, the company
said on Thursday. The deal is worth $150 million, an ACBK spokesman said. The
company lent this sum to Pulp Mill a day earlier and borrowed from Unicredit. The deal
is in the process, a BazEl official said declining to elaborate. Both Pulp Mill and
Deripaska became ACBK shareholders in 2003. ("Deripaska surrendering wood," also
Kommersant, page 11 - "BazEl moving out from Arkhangelsk")
VTB Capital has become the main and almost the only creditor of Seventh Continent
(RTS: SCON), the supermarket chain's owner Alexander Zanadvornov told Vedomosti
through his aide. In October VTB Capital granted a five-year $400 million loan at 9.75%
interest rate per annum, in December it could grant another $250 million on the same
terms. "The $400 million line was approved by the board of directors. Raising the limit to
$650 million requires an approval by a general meeting of shareholders, which is what
will happen on December 12," Zanadvornov said. The VTB Capital loan will be secured
by property: "almost all" of it has been pledged, the businessman said. ("Seventh
Continent's helper")
KOMMERSANT:
Gazprom (RTS: GAZP), which has long been trying to enter the Israeli market, will be
finally able to do so. Before the end of 2010 the monopoly wants to receive 50% in the
country's shelf blocks. According to unofficial reports, it is buying a share in the project
run by local company Ratio Yam. The forecast resources are not big - around 100 billion
cubic meters, but they are located close to better explored blocks with much bigger
resources. At the same time, the start of its own gas production in Israel will put an end to
Gazprom's plans to supply natural gas to that country through the Blue Stream gas
pipeline. (page 11, "Gazprom goes to Israel")
Rostelecom (RTS: RTKM) which has not yet completed the merger seems to have
already found would-be shareholders. Kommersant has learnt that two months before his
resignation General Director of Svyazinvest Yevgeny Yurchenko signed a memorandum
with Swiss-registered fund Savoretti & Partners, which received an exclusive five-month
right to negotiate the acquisition of up to 15% in the merged company for its clients.
Investment bankers and the communications company managers polled by the newspaper
know nothing about the fund. (page 1, "Rostelecom issued with Swiss bill")
Russian Troops Dying Amid Cruelty Claims
http://news.sky.com/skynews/Home/World-News/Russia-Thousands-Of-Soldiers-DieEvery-Year-Even-Though-Country-Is-Not-At-War-Moscow-Charity-
Says/Article/201011315814944?lpos=World_News_Top_Stories_Header_2&lid=ARTIC
LE_15814944_Russia%3A_Thousands_Of_Soldiers_Die_Every_Year%2C_Even_Thou
gh_Country_Is_Not_At_War%2C_Moscow_Charity_Says
2:53am UK, Friday November 19, 2010
Amanda Walker, Moscow correspondent
An estimated 3,000 Russian soldiers die every year despite the
fact the country is not at war.
The shocking figure comes from a mothers' rights charity in Moscow.
Olga and Anatoly Kolychev visit their son Ivan's grave every day. Flowers and other
effects are their attempt at honouring his memory which they feel has been trampled on.
At their home in Siberia, they showed Sky News a video of their son in uniform - smiling
as he kisses his girlfriend while on leave.
Ivan served in the army for 18 months. His parents described him as a happy and open
young man who was at first proud to be a soldier.
But then, the cruelty began.
Ivan told his mother that he and his fellow soldiers had to eat stray dogs to stay alive.
Their senior officers were starving and beating them.
She said: "An officer called us late at night and said - your son got bored with his life and
hanged himself. They said come and pick him up.
"Why did they tell me this on the phone? It seemed like they were teasing us."
Mrs Kolychev said her son would never have taken his own life.
She showed Sky News a certificate proclaiming his excellent service - which was
contradicted after his death by officers who said he was a bad soldier.
The mother said: "There is no order in the army. Commanders don't fulfil their duty.
"Every time I saw my son's unit commander he was drunk. Even when they handed out
my son's coffin, the commander was drunk."
Sky News obtained a video filmed by soldiers showing the sort of brutality that goes on.
It shows one officer going down a line of young men who are each braced for a punch or
kick. They are resigned to it.
It is accepted as the norm by many of those who serve - but the consequences lead to an
alarming number of bereaved families.
The Mothers' Right Foundation in Moscow fights for families like Ivan's - if not to
disprove spurious suicide claims, then at least to allow some form of compensation.
Its founder, Veronika Marchenko, said: "One reason for the high number of deaths is that
the whole system of military service is ancient - another is that there is no proper
investigation into deaths and other crimes."
Russia's President Dmitry Medvedev says the modernisation of the Russian army is vital
- he plans to fully re-equip the armed forces with modern military hardware within the
next 10 years.
The focus does seem to be more on weapons than the treatment of the people who serve.
Some 280,000 soldiers are in the process of being conscripted right now. For these young
men, a life of humiliation and brutality seems almost inevitable.
Russian soldiers to be dressed in state-of-the-art uniforms
http://english.pravda.ru/business/finance/18-11-2010/115842-russian_uniforms-0/
18.11.2010
Russian military men will be outfitted with state-of-the-art
uniforms. The new uniforms will protect them against fire and
cushion the consequences of bullet impacts. The new uniforms
are to be introduced already next year. The program will cost
Russia 5.5 billion rubles, Dmitry Bulgakov, Deputy Defense
Minister of the Russian Federation said.
The delivery of new fabric for the Russian Armed Forces has been included in the state
defense order for 2011, a spokesman for a group of textile companies Dmitry Rybakov
told Interfax. The new "Termofort 220" heat-resistant fabric is made of aramid fiber and
protects a human being from fire and high temperatures.
"The fabric neither burns nor melts, and it is resistant to contacting solid surface heated
up to 400 degrees Celsius. The fireproof and stability qualities of the fabric do not depend
on the number of washings or dry cleanings, the official added.
"Fort 220" fabric is going to be another novelty for the Russian army next year. The
fabric is used for designing bulletproof vests and coatings for helmets. This is 100%
polyamide fabric that can withstand strong impacts and breaking loads up to 20,000
newtons.
It was reported on November 10, 2010 that the federal budget plans to assign over 25
billion rubles for purchasing new uniforms for military men in 2011-2013. The material
support for the Russian army will cost approximately 38 billion rubles in 2011-2013,
reports said.
However, Deputy Defense Minister Dmitry Bulgakov rejected the information.
"I don't know where this number comes from. The introduction of the new uniform next
year will cost 5 or 5.5 billion rubles maximum," the official said.
Marina Volkova
Bigness
Caspian Sea littoral states need a cooperative organization
http://en.rian.ru/valdai_op/20101119/161404285.html
10:09 19/11/2010
© RIA Novosti. Dmitri Astakhov
Jahangir Karami
A resolution to all of the problems in the Caspian such as drug trafficking, environmental
disasters and terrorism depend on forming an organization of cooperation between
Russia, Iran, Kazakhstan, Azerbaijan and Turkmenistan.
Valdaiclub.com interview with Jahangir Karami, Assistant professor, faculty of World
Studies, Department of Russian Studies, University of Tehran
Q.: What do you think about the economic development levels and potential of the
Caspian states?
A.: In this region, there are five countries at different levels of economic development.
Russia is a great power in the world and is a member of both the G-8 and BRIC. It has
the 12th largest economy in the world by nominal GDP and the 7th largest by PPP. Iran is
a regional power, and the economy of Iran is the 19th largest economy in the world by
PPP. The other states are at lower levels of GDP, GNP, total population and
infrastructure development. But the rate of economic growth in Azerbaijan and
Turkmenistan is high and the potential for economic development in Kazakhstan and
Azerbaijan is very active. Further cooperation in the region depends on the programs and
interest of the stronger countries.
Q.: The security of external borders, primarily in terms of the Afghan drug threat
in the Caspian region, is seen as a high-priority objective. How can we cooperate in
finding a solution to the Afghan drug threat?
A.: First it depends on security and development in Afghanistan. Second, the countries in
the region need to create cooperative processes for security and construct permanent
border security facilities around the area. At the Azerbaijan summit, the heads of the five
states discussed Caspian Sea security arrangements.
Q.: Could you please say a few words about the Nabucco gas pipeline project and its
role in regional cooperation?
A.: The Nabucco project is an attempt to decrease European dependence on Russian
energy. The project is backed by several European Union states and the United States.
Project parameters deny any role for Iran or Russia but it is difficult to protect regional
cooperation.
Q.: Protecting the environment while extracting natural resources has become a
high priority issue after the disastrous April 2010 oil spill in the Gulf of Mexico. Do
you think it’s necessary to stipulate common Caspian environmental standards
between the regional countries?
A.: The oil and gas reserves in the Caspian region have highlighted the state of the
environment in this basin. Unfortunately, petrochemical and refining complexes are
sources of pollution, and discharges and spills from oil and gas drilling have had negative
impacts on the environment. Thousands of seals that live in the Caspian Sea have died
since 2000 due to pollution that weakened their immune systems. In the absence of
regional cooperation, exasperated by the still unresolved legal status of the Caspian Sea
as well as weak environmental regulation and an inability to enforce them, it is difficult
to find an affective approach to protect the Caspian's environment. But there remains an
urgent need to protect the Caspian environment for future generations. Regional
cooperation will be required to create a single set of Caspian environmental standards.
This is necessary to improve the state of the environment in and around the Caspian Sea
in coming years.
Q.: Regional security and the struggle against Islamist terrorism are important
challenges the region faces. Could you please evaluate the cooperation of the
Caspian countries in this respect? Where do you see the potential for improving
cooperation on this issue?
A.: A resolution to all of the problems in the Caspian such as drug trafficking,
environmental disasters and terrorism depend on forming an organization of cooperation
between these five countries. Iran has promoted the creation of such an organization since
1992. Three years ago, Iranian President Mahmoud Ahmadinejad said that the Caspian
Sea littoral states needed a cooperative organization.
National Economic Trends
November 19, 2010 10:42
Russia's budget deficit to come to around 4.6% of GDP for 2010 – Kudrin
http://www.interfax.com/newsinf.asp?id=203184
MOSCOW. Nov 19 (Interfax) - Russia's budget deficit for 2010 will come to around
4.6% of the country's GDP, Deputy Prime Minsiter and Finance Minister Alexei Kudrin
said at a tax conference in Moscow on Friday.
"Our deficit this year will come to around 4.6% of GDP, a bit less than we initially
supposed. Nonetheless we will have to reduce it in the coming years. For such favorable
prices, around $75-$77 per barrel [of oil], which will be the average this year, we need to
reach a deficit of zero by 2015," Kudrin stressed.
Ih
Russia's Kudrin: 2010 Budget Deficit To Be 4.6% Of GDP
http://www.nasdaq.com/aspx/stock-market-newsstory.aspx?storyid=201011190255dowjonesdjonline000274&title=russias-kudrin2010budget-deficit-to-be-46of-gdp
MOSCOW -(Dow Jones)- Russia budget deficit will be lower than previously expected at
4.6% of gross domestic product, the country's finance minister, Alexei Kudrin, said Friday.
"The budget deficit for this year will be 4.6%, slightly lower than expected," Kudrin said.
Russia ran its first budget deficit in over a decade in 2009, and had previously expected a
deficit of 5.3% of GDP this year. Prime Minister Vladimir Putin has called for the deficit
to be cut to zero by 2015.
Kudrin said he did not see sustained higher oil prices in coming years, and emphasized
the role taxes would play in filling Russia's budget gap.
"Over 50% of budget revenue may soon come from higher taxes," he said.
-By Ira Iosebashvili, Dow Jones Newswires; +7 495 232 9197; ira.iosebashvili@
dowjones.com
(Jacob Gronholt-Pedersen in Moscow contributed to this story.)
Russia's tax burden to grow by 2 pct of GDP over lack of reform warns Kudrin
http://en.rian.ru/business/20101119/161405793.html
12:12 19/11/2010
MOSCOW, November 19 (RIA Novosti) - The share of tax receipts in Russia's 2011
budget revenues will rise by two percent of gross domestic product (GDP), Finance
Minister Alexei Kudrin said on Friday.
"Taxes will rise by two percent of GDP from next year," Kudrin told a tax conference.
"We are standing at a crossroads and facing the choice of paying more attention to
improving the effectiveness of spending... or the bulk of the (burden) will be a tax
increase."
Kudrin said he preferred the first option, but warned that if "the government was weak
and afraid to implement structural reforms," it would have to choose the second option.
Tax rises – trend, not temporary measure – Kudrin
http://www.itar-tass.com/eng/level2.html?NewsID=15696619&PageNum=0
19.11.2010, 11.56
MOSCOW, November 19 (Itar-Tass) - A higher tax burden is a trend, but not a
temporary measure, Finance Minister Alexei Kudrin told a tax conference on Friday.
“We face not a temporary measure, we face a tax increase trend,” he said adding that the
relevant measures are being taken in many countries, including Western Europe.
All countries face the problem of the budget deficit and all of them should pass through
the budget consolidation in the volumes from 3-4 percent to 8-10 percent of the GDP, he
was quoted by the Prime-Tass business news agency as saying.
Speaking about the budget consolidation Kudrin noted that taking into account
experience of the 1998 crisis the burden of the spending cuts to tax rises was split 50-50
in industrialized countries and 30-70 in developing countries.
“During this crisis we will have 50-50 ratio (of the tax rises and spending cuts) or over 50
percent of tax rises,” the minister said.
“We need to create a neutral tax system and evade tax incentives,” Kudrin said.
He expressed confidence that measures aimed at increasing indirect taxes, mainly the
value added tax, will be more effective from the point of view of economic development,
as “this slightly slows down the economic growth.”
A higher profit tax restrains the economic growth, as “profits can be hidden or taken to
tax havens,” Kudrin said.
Ban on tax benefits could eliminate budget deficit says finance minister
http://en.rian.ru/business/20101119/161405655.html
12:05 19/11/2010
A ban on tax breaks could balance Russia's 2010 budget without the government having
to resort to raising tax rates, Finance Minister Alexei Kudrin said on Friday.
"If we want to cut the budget deficit by 4.6 percent of gross domestic product, than an
end to all kinds of tax breaks without raising rates could solve the problem," Kudrin said,
referring to this year's expected budget deficit.
Tax breaks amounted to about five percent of GDP, Kudrin said, adding he was not
proposing cancelling all benefits.
MOSCOW, November 19 (RIA Novosti)
10:27
Capital inflow to funds investing in Russian and CIS stocks total $52 mln for Nov
11-17 - experts
http://www.interfax.com/news.asp
Russia/CIS bonds extend gains
http://www.bne.eu/dispatch_text13658
VTB Capital
November 19, 2010
Russian/CIS enjoyed a healthy rally yesterday on the back of notable trading volumes.
Gazprom's longer-dated bonds led the way with GAPZRU 22 (YTM 6.14%), GAZPRU
34 (YTM 6.72%) and GAZPRU 37 (YTM 6.87%) up 1.5-2.0pp. These were closely
followed by TMENRU 20 (YTM 6.03%), VEBBNK 20, SCFRU 17 (YTM 5.71%) and
CHMFRU 17 (YTM 7.05%) that added near 1.00pp in price. Russian government bonds
lagged the market with the benchmark RUSSIA 30 (YTM 4.46%) closing almost flat to
Wednesday's levels at 118.25pp, while in the first half of the day we saw deals at 2550bp higher price-wise. Russian 5-year CDS-spread tightened 5bp to 141bp.
In the CIS universe, long KMG, BTAS and Ukraine sovereign bonds were in demand
posting 1.0-1.5pp in gains. Once again we want to spotlight the KMG 15 (YTM 5.38%,
+405bp to swaps) and KMG 18 (YTM 6.32%, +390bp to swaps) issues that trade 3050bp wider than the wings of the KMG's curve. In general, as we wrote in yesterday's
Fixed Income Monitor we continue to expect a further tightening in the credit spreads of
Russian/CIS bonds.
Reserves Fall to $495.7Bln
http://www.themoscowtimes.com/business/article/reserves-fall-to-4957bln/423842.html
19 November 2010
Russia’s international reserves, the world’s third largest, declined last week as the
dollar’s advance eroded the value of the portion denominated in other currencies.
“Most of the decline was because of the dollar’s strength,” Alexandra Yevtifyeva, an
economist at VTB Capital, the investment banking arm of Russia’s second-largest bank,
said Thursday.
The stockpile fell $3.5 billion to $495.7 billion in the week to Nov. 12, the Central Bank
said Thursday, the lowest level since the week ended Oct. 29.
The euro slid 2.4 percent against the dollar last week, its biggest weekly decline since
August, as concern about Ireland’s debt-laden banks spurred investors to seek the safety
of the greenback. The pound dropped 0.4 percent against the dollar last week and the yen
lost 1.5 percent.
(Bloomberg)
TABLE-Russia monetary base falls to 5.29 trln rbls
http://in.reuters.com/article/idINLDE6AI05G20101119
Fri Nov 19, 2010 12:11pm IST
MOSCOW, Nov 19 (Reuters) - Russia's monetary base fell to
5.29 trillion roubles ($176.9 billion) on Nov. 15 from 5.30
trillion roubles a week earlier, the central bank said on
Friday.
It provided the following details.
Date
2010
Monetary base
(bln roubles)
Nov 15
Nov 8
Nov 1
Oct 25
Oct 18
Oct 11
Oct 4
Sept 27
Sept 20
Sept 13
Sept 6
Aug 30
Aug 23
Aug 16
Aug 9
Aug 2
July 26
July 19
July 12
July 5
June 28
June 21
June 15
June 7
May 31
May 24
May 17
May 11
May 4
April 26
April 19
April 12
April 5
March 29
March 22
March 15
March 9
March 1
Feb 24
Feb 15
Feb 8
Feb 1
Jan 25
Jan 18
Jan 11
Jan 1
5,294.4
5,302.0
5,220.6
5,290.2
5,280.4
5,226.7
5,163.3
5,214.9
5,235.8
5,174.3
5,132.0
5,147.1
5,190.0
5,165.1
5,101.8
5,065.6
5,133.1
5,134.4
5,075.3
4,996.6
5,005.6
5,032.4
4,985.0
4,883.2
4,861.2
4,890.0
4,842.6
4,801.9
4,760.9
4,746.2
4,728.4
4,642.9
4,566.7
4,581.8
4,617.4
4,578.4
4,553.8
4,479.5
4,563.2
4,483.4
4,420.0
4,403.1
4,479.2
4,482.5
4,716.0
4,716.0
2009
Dec 28
Dec 21
Dec 14
Dec 7
Nov 30
Nov 23
Nov 16
Nov 9
Nov 2
4,487.6
4,353.0
4,246.4
4,154.7
4,103.5
4,157.7
4,133.8
4,081.3
4,049.7
Oct 26
Oct 19
Oct 12
Oct 5
Sept 28
Sept 21
Sept 14
Sept 7
Aug 31
Aug 24
Aug 17
Aug 10
Aug 3
July 27
July 20
July 13
July 6
June 29
June 22
June 15
June 8
June 1
May 25
May 18
May 12
May 4
April 27
April 20
April 13
April 6
March 30
March 23
March 16
March 10
March 2
Feb 24
Feb 16
Feb 9
Feb 2
Jan 26
Jan 19
Jan 12
Jan 1
4,101.6
4,095.9
4,047.0
3,988.3
4,026.8
4,055.4
4,039.3
3,990.9
3,976.4
4,078.6
4,076.5
4,023.5
3,985.7
4,059.6
4,083.6
4,055.8
3,986.6
3,988.4
4,007.3
3,975.8
3,883.5
3,857.4
3,893.9
3,871.7
3,848.2
3,820.2
3,820.9
3,825.7
3,772.0
3,710.1
3,729.8
3,759.6
3,751.5
3,741.4
3,715.9
3,781.8
3,741.2
3,707.5
3,755.4
3,896.1
4,066.2
4,218.7
4,391.7
2008
Dec 29
4,283.1
2007
Dec 24
4,016.6
2006
Dec 25
3,002.0
NOTE - Monetary base comprises cash in circulation and
commercial banks' deposits at the central bank.
To see more detailed historical data on Russia's monetary
base you can go to www.cbr.ru/eng/main.asp
Ulyukaev comments on rouble and inflation
http://www.bne.eu/dispatch_text13658
Renaissance Capital
November 19, 2010
Yesterday (19 Nov), during the Prime-TASS Conference, Alexey Ulyukaev, first deputy
chairman of the Central Bank of Russia (CBR), commented on rouble dynamics and
inflation.
• According to Ulyukaev, the CBR has moved the floating corridor in the past two days
after having reached $650mn in "accumulative FX interventions". Given the 8-12 Nov
international reserves dynamics, the CBR sold around $1.5bn (approximately $750mn is
attributed to "accumulative"), we estimate. As such, the regulator has already
accumulated about $2.2bn in so-called accumulative interventions.
• The regulator does not intend to disclosure to the market details regarding recent rouble
movements, as, based on monetary policy guidelines, the CBR has already moved the
floating corridor 20 kopecks. Prime-TASS reports the floating corridor is currently at
33.0-37.0.
• The CBR is surprised by recent rouble dynamics and expects the trend to reverse,
according to Ulyukaev. The CBR's general explanation of rouble weakening is that it is
due to foreign debt repayment. We, however, do not share this view because the amount
of foreign debt due is always overestimated by official statistics and could not be solely
responsible for the rouble's recent movements. Thus, in addition to foreign debt
repayment, pure capital outflow and speculative plays against the rouble are likely the
main explanations for recent rouble dynamics, in our view.
• Furthermore, Kommersant reported yesterday that the CBR will review the FX
positions of Russia's top-100 banks and the major transactions of the banks' clients. As
such, we believe the CBR is unhappy with recent rouble movements and this review
signals that speculative plays against the rouble are not supported by the regulator.
• Ulyukaev also said that inflation in November should be around 0.8% MoM. The
corresponding consumer price change for Nov 2009 was 0.3% MoM. Hence, given 7.5%
YoY inflation as at the end of October, we think 2010 inflation could be higher than the
regulator's range of 7-8%. However, we do not see any reason to change our inflation
forecast of 8.2% for 2010.
Anton Nikitin
Russia to launch road show for sovereign ruble bonds in the US and Europe on
November 30
http://www.bne.eu/dispatch_text13658
Alfa Bank
November 18, 2010
The issue may total RUB30-80bn, with a maturity of 3-10 years. The yield is not meant
to exceed the OFZ yield, i.e. it should be no more than 6-7.7% p.a. J.P. Morgan,
Deutsche Bank, HSBC, Renaissance Capital and VTB Capital are the issue's lead
managers.
Business, Energy or Environmental regulations or discussions
Vimpelcom, Norilsk Nickel, Razgulay: Russian Stocks Preview
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aNtmiKhNaKrA
By Anastasia Ustinova
Nov. 19 (Bloomberg) -- The following companies may have unusual price changes in
Russian trading. Stocks symbols are in parentheses and share prices are from the previous
close.
Russia’s Micex Index rose 1.2 percent to 1,552.21.
Vimpelcom Ltd. (VIP US): Orascom Telecom Holding SAE said it could be in
international arbitration next year unless it can resolve a dispute with the Algerian
government over its local unit, Djeezy, Chief Executive Officer Khaled Bichara said
yesterday at a Morgan Stanley conference in Barcelona. The shares added 1.7 percent to
$15.79 in New York.
VTB Group (VTBR RX): VTB Bank, a unit of Russia’s second- largest bank, may sell
Eurobonds denominated in Brazilian reais, a banker with knowledge of the proposal said
yesterday. The shares rose 1.7 percent to 10.47 kopeks in Moscow.
OAO GMK Norilsk Nickel (GMKN RX): Copper rose for a second day in New York and
London as the dollar weakened, spurring demand for commodities as an alternative
investment. Russia’s largest mining company added 1.1 percent to 5,847.01 rubles.
OAO Razgulay (GRAZ RX): Wheat rose the most in almost two weeks on signs that
global demand is increasing while supplies remain tight. The Russian grain and sugar
producer was little changed at 46.40 rubles.
To contact the reporter on this story: Anastasia Ustinova in St. Petersburg at
[email protected].
To contact the editor responsible for this story: James M. Gomez in Prague
[email protected]
Last Updated: November 18, 2010 22:00 EST
Russian markets -- Factors to Watch on Nov 19
http://af.reuters.com/article/energyOilNews/idAFLDE6460BT20101119
Fri Nov 19, 2010 7:26am GMT
MOSCOW, Nov 19 (Reuters) - Here are events and news stories
that could move Russian markets on Friday.
You can reach us on: +7 495 775 1242
STOCKS CALL (Contributions to [email protected]):
OLMA: Sharp movements are unlikely as no important
statistics or reports are scheduled for today. The RTS .IRTS
index is likely to remain within the 1,580-1,620 point range.
OTP Bank: We expect the market to open near yesterday's
closing levels.
EVENTS [RU-DIA] (All times GMT):
KISLOVODSK, Russia - Russia's President Dmitry Medvedev to
hold a meeting on the development of the North Caucasus Federal
District.
MOSCOW - Finance Minister Alexei Kudrin and Sberbank
(SBER03.MM) Chief Executive German Gref to attend a tax
conference.
MOSCOW - Russia's top cosmetic maker Kalina (KLNA.MM) to
announce third-quarter financial results, followed by a
conference call.
MOSCOW - Russian pharmaceutical company Pharmsynthez to
price its Moscow IPO.
IN THE PAPERS [PRESS/RU]:
The Moscow City government may sell its stakes in Vnukovo
airport and the Moskva airline as part of new mayor Sergei
Sobyanin's plan to unload non-core assets, business dailies
Vedomosti and Kommersant report.
Kommersant writes that Russia's gas export monopoly Gazprom
(GAZP.MM) plans to set up a joint venture in Israel to develop
offshore gas deposits.
TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]:
TOP NEWS:
*Russia says 'nothing to hide' in Bout case [ID:nLDE6AH1LN]
COMPANIES/MARKETS:
*Rouble rebounds on firmer oil, c.bank comments [ID:nLDE6AH1VQ]
*Russia to launch yuan-rouble trade in mid-Dec [ID:nLDE6AH1DG]
*Russia to create "Titanium Valley"
[ID:nLDE6AH1U5]
*Russia's MTS beats profit forecast, eyes NTC [ID:nLDE6AH198]
*Russia's VTB holds roadshow, mulls Eurobonds [ID:nLDE6AH1SG]
*Russia could list 10-15 pct of First Freight [ID:nLDE6AH18A]
*Russia's InterRAO seeks asset swap with Enel [ID:nLDE6AH173]
ECONOMY/POLITICS:
*Russia NATO envoy stresses gap on mis.defence [ID:nLDE6AH0YD]
*Russia c.bank cancels OBR bill auction
[ID:nLDE6AH1AV]
*Russian gold/fx reserves fall to $495.7 bln [ID:nMOS007660]
*Russia Oct jobless rate up to 6.8 pct
[ID:nLDE6AH1RQ]
*Russia average wages up 9.7 pct y/y in Oct
[ID:nLDE6AH1TP]
*Russia Oct capital investment up 10.7 pct y/y [ID:nLDE6AH1SY]
*Russia Oct retail sales +4.3 pct y/y
[ID:nLDE6AH1R9]
*Russia's Oct housing completions -0.2 pct y/y [ID:nLDE6AH1T3]
ENERGY:
*Kazakhstan suspects Agip of $110 mln fraud
[ID:nLDE6AI019]
*Belarus to get Venezuela crude in Glencore swap [ID:nLDE6AH1WR]
COMMODITIES:
*Russia needs to reap 80 mln T grain in 2011/12-lob [nLDE6AH11Y]
*Russia Silvinit potash output fell 13 pct in Oct y [nLDE6AH0LX]
MARKETS CLOSE/LATEST:
RTS
.IRTS
1,599.5 +0.05 pct
MSCI Russia
.MIRU00000PUS 844.2 +2.13 pct
MSCI Emerging Markets .MSCIEF
1,110.5 -0.04 pct
Russia 30-year EurobondRU011428878= yield: 4.501/4.470 pct
EMBI+ Russia 11EMJ 209 basis points over
Rouble/dollar RUBUTSTN=MCX 30.9350
Rouble/euro EURRUBTN=MCX 42.3110
NYMEX crude CLc1
$81.54 -$0.31
ICE Brent crude LCOc1 $84.80 -$0.25
For Russian company news, double click on [E-RU]
Treasury news [M-RU] Corporate debt [D-RU]
Russian stocks [.ME] Russia country guide RUSSIA
All Russian news [RU] Scrolling stocks news [STXNEWS/EU]
Emerging markets top news [TOP/EMRG]
Top deals [TOP/DEALS] European companies [TOP/EQE]
November 19, 2010 11:55
Export duty on copper to be levied as of Dec 18 – FCS
http://www.interfax.com/newsinf.asp?id=203215
MOSCOW. Nov 19 (Interfax) - An export duty on copper measuring 10% will be levied
in Russia effective December 18, the Federal Customs Service told Interfax.
It was earlier reported that a government decree (N893) on introducing the duty had been
signed on October 12. The currently export duty on copper stands at 0%.
It was earlier reported that a governmental subcommittee on customs and tariff policy,
chaired by First Deputy Prime Minister Viktor Zubkov, approved introducing an export
duty on copper at the end of September. In addition, the export rate on nickel was raised
from 5% to 10%.
According to the calculations of Russia's Finance Ministry, the introduction of a 10%
duty on the export of copper will net the Russian budget 8.8 billion rubles in additional
revenue for 2011.
Russia's main producers are OJSC MMC Norilsk Nickel (RTS: GMKN), CJSC Russian
Copper Company and Urals Mining and Metallurgical Company (UGMK).
Ih
MTS to acquire stake in MGTS from AFK Sistema
http://en.rian.ru/business/20101119/161404488.html
10:27 19/11/2010
MOSCOW, November 19 (RIA Novosti) - Russia's top mobile phone operator Mobile
TeleSystems (MTS) plans to buy 23.3 percent of the Moscow City Telephone Network
(MGTS), the capital's fixed-line incumbent, from AFK Sistema, MTS' parent company,
MTS President Mikhail Shamolin said on Friday.
The deal's date and parameters have not yet been discussed, Shamolin said, adding that if
MTS decided to acquire Sistema's stake in MGTS, the price would be defined by an
independent appraiser chosen by an MTS board committee, consisting of independent
directors.
MGTS' current core shareholder is Comstar-UTS, which plans to merge with MTS in
April 2011, after which Comstar will cease operating as a single legal entity.
Government not discussing a merger between RTS and Micex
http://www.bne.eu/dispatch_text13658
bne
November 19, 2010
A merger between the RTS and Micex is not being discussed at a governmental level,
Intellinews reports quoting deputy finance minister Alexei Savatyugin.
Savatyugin said that the government has no such plans, despite an amalgamation of the
two bourses having been mentioned as a vital measure in President Medvedev's ambition
to turn Moscow into an international financial centre.
At the same time deputy head of the Federal Antimonopoly Service (FAS) Andrei
Kashevarov said that the watchdog has never supported the idea of merging the pair. He
said instead that FAS believes that competition supports the development of financial
infrastructure.
Some sources linked the recent decision by RTS to list at least 20% of its shares in 2011
as a move trying to avoid the possible merge with the Micex.
Gref Says Tax Hikes to Erase Sberbank Savings From Staff Cuts
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a4EQbEcC8iBM
By Maria Levitov
Nov. 19 (Bloomberg) -- OAO Sberbank Chief Executive Officer German Gref said tax
increases next year will erase savings the lender made in the last two and a half years by
cutting about 15 percent of staff and “optimizing” other procedures. He spoke at a
conference in Moscow today.
To contact the reporter on this story: Maria Levitov in Moscow at
[email protected]
To contact the editor responsible for this story: Patrick Henry at [email protected]
Last Updated: November 19, 2010 02:43 EST
Titanium past the bottom of the trough setting VSMPO-AVISMA
for growth
http://rt.com/business/news/titanium-avisma-recover-production/
Published: 19 November, 2010, 11:29
The world's top titanium producer VSMPO Avista has revised its development program,
according to CEO, Mikhail Voevodin, speaking exclusively to RT Business.
MV: “I think that the global titanium market is passed the bottom of the trough.
VSMPO, as the player which controls a third of the market, is also recovering. 2010 has
become the turning point – volumes are increasing, and we are anticipating even more
substantial growth of around 20% in 2011.”
RT: Back in 2007, your company agreed on a programme aimed at increasing
capacity to 46 thousand tonnes of titanium production per year, and has postponed
this because of the crisis. When do you plan to achieve this goal?
MV: “Our development concept till 2015 implies a shift from the raw materials market
to the manufacture of more advanced products in area of industrial titanium. I should
point out that VSMPO AVISTA is the only vertically integrated holding with titanium
grain at the input and finished products at the output. There are no equivalents in the
world.”
RT: China is increasingly becoming an active player on the titanium market. How
does this change things?
MV: “China as a new player on the titanium market, started by producing products for
use in industry. But it's now moving into the production of titanium products that are sold
to the public. This has resulted in some dumping of products, which has had the familiar
effect of lowering prices."
RT: There are proposals to create a special economic zone in the so-called titanium
valley in Russia. What difference will this make?
MV: “The idea originated in 2006. Intuitively, we felt that we needed to create new
production plants here. A free economic zone is a good way to attract financial and
technological investment.”
RT: Who has already shown interest and what needs to be done to attract more
firms?
MV: “First of all, we are inviting our partners and our buyers. These are the companies
like Boeing, Airbus, Goodrich and Rolls Royce. This fully corresponds with their aims to
cut costs. In some sense, this will require investments, but in the following 3-4 years they
will get more advanced products. Plus, the list of incentives provided in the free
economic zone is extensive and attractive, especially for those companies already
interested in investing in the Russian Federation.”
Titanium Valley Emerges in the Mountains
http://www.themoscowtimes.com/business/article/titanium-valley-emerges-in-themountains/423833.html
19 November 2010
By Irina Filatova
Prime Minister Vladimir Putin said Thursday that the government planned to create a
“Titanium Valley” special economic zone in the Urals Federal District, which may cost
40 billion rubles ($1.3 billion) and will make products for the aircraft, automotive,
shipbuilding and medical industries.
“We'll issue a governmental decree in the coming two weeks on creating a special
economic zone here with special benefits, including customs privileges,” Putin said
during his visit to the Sverdlovsk region.
Putin, who visited facilities of the region's key industrial enterprises, including the
world's largest titanium manufacturer VSMPO-Avisma, said the funds for the economic
zone would be appropriated in the 2012 budget, while building infrastructure would start
next year.
The new economic zone will create “a new technological base” for the titanium maker
and allow it to attract new partners, Putin said.
The project will create a total of 20,000 jobs, Bloomberg reported, citing documents
provided by the Sverdlovsk region government ahead of Putin's visit.
A total of 20 companies involved in shipbuilding, power-plant engineering,
petrochemicals and medicine may participate in the project, said Sergei Chemezov, head
of Russian Technologies, which owns VSMPO-Avisma.
Chemezov said Russian Technologies planned to attract current partners of the titanium
maker, and partners of Boeing, a stake holder in a joint venture with VSMPO-Avisma.
Among the companies which may launch production in the Titanium Valley are RollsRoyce Group and Goodrich — which supplies parts for the aircraft and defense
industries, Chemezov said.
VSMPO-Avisma has invested a total of $700 million in modernization over the past
several years and plans to invest another $500 million by 2015, said the company's head
Mikhail Voyevodin.
The investment volume in the Sverdlovsk region will reach the 2008 pre-crisis level of
240 billion rubles this year, said the region's governor Alexander Misharin, according to
the government’s web site.
Russia's 16 special economic zones, or territories providing economic benefits to
investors, include two industrial zones, four innovation zones, eight tourism zones and
two ports.
Putin also took part in launching an electric arc furnace at pipe maker ChelPipe's steel
mill in Pervouralsk. ChelPipe, also known as ChTPZ, invested a total of 19 billion rubles
in the project, including 8 billion rubles loaned by Sberbank.
The new mill, whose capacity is 950,000 metric tons of steel annually, will supply solid
billets for pipes to ChelPipe. The facility will reach full capacity next year.
During his visit to Uralsky Lokomotivny Zavod, a joint venture between Siemens and
Russia's Sinara Group, Putin said that manufacturing of Russian Railway's high-speed
Sapsan trains might start in Russia.
“Prospects are good,” Putin said. “Good suppliers allow to localize production not only
of Lastochka, but other new generation stock as well, for example Sapsans,” he said,
RIA-Novosti reported.
The Sapsan trains traveling between Moscow and St. Petersburg and Moscow and
Nizhny Novgorod are currently supplied by Siemens.
The German concern signed contracts with Russian Railways, or RZD, in 2009 and 2010
to supply 54 Desiro Rus trains, also known as Lastochka, which will start running during
the Sochi Winter Olympics in 2014.
The sides also signed a memorandum in July to supply another 240 trains over the next
10 years.
RZD may partner with Siemens in implementing a program to develop high-speed
railway traffic in Russia, Putin said, adding that the program could include maintenance
of the rail beds, as well as manufacturing of rails and stock.
The program could become a big joint project with the German company “for many,
many years to come,” the prime minister said at a meeting with Siemens president Peter
Loescher.
“… in that case we're interested in localizing production here,” Putin said, Interfax
reported.
Russian Railways' Sapsan fleet includes eight trains, with more vehicles to come. RZD
may buy another four to eight Sapsans, the company's senior vice president Valentin
Gapanovich said, RIA-Novosti reported.
Gapanovich said local manufacturing of high-speed trains might be launched in the
future, though for now the infrastructure is not ready.
Uralsib gearing up for IPO, mulls direct sale to investor
http://www.rbcnews.com/free/20101119115914.shtml
RBC, 19.11.2010, Moscow 11:59:14.Uralsib is preparing for an IPO in 2011, but
does not rule out the possibility of selling shares directly to a strategic investor, the
RBC Daily newspaper reported today citing a source in the lending institution. The
bank intends to put at least a blocking stake up for sale. According to the source,
Uralsib is currently in the midst of holding a 'beauty contest' among investment banks.
Analysts believe, however, that next year will prove to be a tough one for private
banks' share offerings, since investors will most likely focus their attention on the
privatization of state-owned banks.
Meanwhile, according to the publication's source in Uralsib, eight leading
investment banks have already expressed interest in the deal, including J.P.Morgan.
Uralsib is expected to select two lead managers for the flotation.
The IPO or sale of shares to a strategic investor is expected to help Uralsib
increase its lending and strengthen its positions in all of Russia's regions, except for
the Far East.
Inter RAO Eyes Enel's Bulgaria Coal-Fired Plant, Wind Parks – Report
http://www.novinite.com/view_news.php?id=122316
Energy | November 19, 2010, Friday
Russia's state power trader Inter RAO wants to acquire not only the majority stake of
Italian energy giant Enel in Maritsa East 3, a Bulgarian coal-fired plant, but also its
wind parks near the Black Sea coast, according to reports.
"We will offer in exchange the Russian government's stake in Russian power producer
OGK-5, controlled by Italy's Enel," Boris Kovalchuk, Chairman of Management Board
at Inter RAO UES, said, as cited by Moscow-based Komersant newspaper.
Italian energy major Enel owns 56% of OGK-5, the Russian government owns 26.4%
and the rest is held by minority shareholders, including the EBRD. Inter RAO is
expected to take over the governmental share at the end of this year or the beginning of
next year.
Should the Russian company acquire Enel's assets in Bulgaria, it will become of the
biggest energy companies in the country, accounting for about 12% of the electricity
output.
Komersant newspaper cites experts, who say the planned Bulgarian purchases fit in well
with the strategy of the Russian company, which already owns GRES, the largest power
station of Moldova, which exports electricity to Romania and Bulgaria.
Inter RAO also plans to be part of the consortium, which will construct the 4.8 GW
Akkuyu nuclear plant. Turkey's first nuclear power plant is scheduled to be put into
operations in 2011, with completion expected in 2018.
Russia's Inter RAO has been tipped as the most likely buyer of a majority stake in
Bulgaria's Maritsa East 3 coal-fired power plant, controlled by Italy's Enel SpA,
according to Italian media reports from the beginning of October.
Inter RAO may be the leading candidate among five bidders interested in Maritza,
Italian daily Il Messaggero reported, without citing sources.
According to the report Enel, advised by Deutsche Bank AG, aims to pocked EUR 600
M from the sale and talks are at advanced stage.
Fulvio Conti, CEO of Enel SpA, said at the beginning of September that the Italian
company will sell its stake in Bulgaria's Maritsa East 3 power plant in the fall of 2010.
Conti made it clear that Enel plans to sell gas distribution assets in Spain by September,
and its Bulgarian coal-fired power plant shortly after that, but declined to give a value for
the sales.
In late July, Austria's utility EVN, which already owns EVN Bulgaria, an electricity
distribution company in south and southeast Bulgaria, confirmed it is holding talks for the
acquisition of a majority stake in the Maritsa East 3 coal-fired power plant.
British utility International Power, US power producer AES Corp. and CEZ AS are also
said to have shown interest in acquiring Enel majority stake in Maritsa East 3.
A year ago Enel increased the capacity of Maritsa East Three plant to 908 megawatts, up
from 840 MW, and also put new desulphurisation installations on the plant's four units.
Experts comment that the potential buyer is probably eying a 100% stake in the plant, in
which the state owns a 27% stake. The rumors were fanned by a statement of Energy and
Economy Minister Traicho Traikov, who recently announced that the state can land EUR
200 M from the sale of its stake in the plant.
The plant is located in the Maritsa East lignite coal mining complex in southern Bulgaria.
Stockmann opens 100,000 sq m complex in Saint Petersburg
http://www.bsr-russia.com/en/retail-fmcg/item/1213-stockmann-opens-100000-sq-mcomplex-in-saint-petersburg.html
Written by Elena Toporikova on Friday, 19 November 2010 03:25 | Published in Retail &
Consumer Goods
Stockmann, the Finnish retailer, opened a new retail and office complex "Stockmann
Nevsky Center" in Saint Petersburg earlier this week. The complex which is almost
100,000 square meters in size and cost over €185 million to build will include a 20,000
square meter Stockmann department store and 80 other retail, catering and office units.
The center is located in a prime location in central St Petersburg benefiting from high
footfall and close proximity to the Nevsky railway station which bring 10,000 passengers
daily from Moscow to St Petersburg.
Stockmann was established in 1862 and has stores in Finland, Russia, Estonia, Latvia,
and Lithuania. It entered the Russian market in 1987 and has 7 department stores in the
country. An 8th is currently under construction and due to open in Ekaterinburg next
year. The Russian market is increasingly important for Stockmann, it accounted for over
€177 million (17.4%) of global sales so far this year.
November 19, 2010 03:00 AM Eastern Time
RosDorBank Plans to Offer 1.05 Billion Rubles in Bonds in the Beginning of
December 2010
http://www.businesswire.com/news/home/20101119005100/en/RosDorBank-PlansOffer-1.05-Billion-Rubles-Bonds
MOSCOW--(BUSINESS WIRE)--RosDorBank plans to offer 1.05 billion rubles in
bonds series 01 on December 07, 2010. The book opened on November 15, 2010. The
maturity of the issue is 3 years, with 1-year put option. The first 6-month coupon will be
determined by the issuer as a result of the tender on December 07, 2010. The first coupon
rate is expected to be within the range of 10.25-10.75% per year. The second coupon rate
is equal to the first coupon rate. RosDorBank is the arranger and the payment agent.
RosDorBank will use the funds to increase its credit portfolio, including development of
SME credit programs. In July 2010 Moody’s Investors service has assigned B3 rating to
RosDorBank, outlook is “stable”.
Gleb Gurin, Chairman of the Board of RosDorBank, said: "We are pleased to launch the
issue, that will help our liquidity and publicity. RosDorBank will use the funds to
increase its credit portfolio, including development of SME credit programs."
"We made preliminary poll and see good demand. So we hope the issue will be well
subscribed," the Head of Treasury of RosDorBank, Alexey Androsov, said.
Russia’s Cyrillic cybernauts
http://www.ft.com/cms/s/0/dc12822c-f351-11df-a4fa00144feab49a.html?ftcamp=rss#axzz15iKk21zr
By Charles Clover, Joseph Menn and Courtney Weaver
Published: November 18 2010 20:46 | Last updated: November 18 2010 20:46
For once, a Russian company was being floated whose success was not based on
privatised Soviet assets and the export of raw materials. This month’s initial public
offering in London by Mail.ru instead reflects the values of a “modernised” and
“innovative” Russia, two buzzwords much favoured by President Dmitry Medvedev.
The company is driven by brainpower rather than oil and gas, it is globally competitive
and it is open to the world, with a reach from China to South Africa to Silicon Valley. A
small but valuable stake in Facebook, the west’s biggest social networking site, is just
one of its jewels.
But there are other areas where Mail.ru is uniquely Russian. It is not just a Russian
internet company: to all intents and purposes it is the Russian internet. It owns or partowns sites, including the country’s top two social networking sites and its largest free email service, that together represent as much as 70 per cent of page views on the Russianlanguage web.
Concentrating the ownership of a resource in a few trusted hands has proved an
established method of economic management for the Kremlin. Oil, metals, transport,
television and other commanding heights of the Russian economy are either in state
hands or in companies that are at least quasi-state – owned by oligarchs dependent on
Kremlin patronage.
“Just as Gazprom is to the gas industry, Rosneft is for oil, Mail.ru is the internet,” one
Russian politician says wryly.
It is not that no other companies of its kind exist in Russia. For instance, there are
Yandex, the country’s biggest search engine, and ProfMedia, which owns the rival
Rambler.ru search engine. Tellingly, there is also Gazprom Media, which recently bought
Rutube, the local equivalent to YouTube, the video-sharing site. But Mail.ru is by far the
biggest.
Most of its assets were formerly owned by DST Global. The two companies have
different managements but the same shareholders. DST, now a $1bn venture fund, retains
roughly 6 per cent of the Facebook stake, while Mail.ru has more than 2 per cent.
In a country where the big mass media are by and large muzzled, the web is widely seen
as the last domain for the free exchange of information. And some internet users express
increasing concern that the company, because it is so big and is owned by businessmen
with close links to the Kremlin, represents a threat to internet freedom in Russia. Having
internet companies in friendly hands could also make it easier for the authorities to
monitor users’ online activity.
So far the Kremlin seems to have opted for a policy of “soft control” rather than the
“China scenario” of overt state control, says Ilya Ponomarev, a member of parliament
and an avid blogger. “Why set up a Great Firewall”, he asks, referring to China’s massive
internet filtering apparatus, “when you can just pick up the phone and give some advice
to the key sites, about what they should do and what they shouldn’t?”
The closure by Yandex of a blog ratings site, where blogs by the political opposition were
achieving high popularity scores, gave rise to suspicions of censorship by displeased
officials. “It is understood they [Yandex] got a phone call,” says Mr Ponomarev. “And
Yandex acted fairly. Instead of manipulating the numbers, they just shut it down.”
Yandex, however, blames the closure not on outside pressure but on manipulation of the
figures by users, saying its decision was unprompted.
For its part, Mail.ru has avoided controversy by steering clear of politics and news.
“News sites don’t make any money,” says a senior executive of DST, out of which
Mail.ru was spun ahead of the flotation. Both Mail.ru and DST, he says, are focused on
electronic commerce, social networking and online gaming because that is where the
profits lie. Alternatives to Mail.ru sites exist, he points out. “If consumers thought the
service was [politically] influenced they would use different services. There are plenty of
[competitors] to Mail.”
All the same, DST and Mail.ru carry with them the perception in Russia of a close
relationship to the Kremlin. This among other things led to scrutiny by American law
enforcement agencies of its recent purchase of ICQ, the US web chat service. Law
enforcement representatives say they complained that the sale would prevent them from
monitoring chats by Russian criminal organisations that might use the service.
Objections from law enforcement agencies reached the Committee on Foreign Investment
in the US, a panel led by the Treasury that has representatives from the departments of
defence, justice and homeland security and on occasion can block acquisitions on
national security grounds. Those submissions proved to be in vain, however.
DST and Mail.ru say that while they a good relationship with the government, they
remain independent.
Nonetheless, Yuri Milner, founder and chief executive of DST and still a shareholder in
Mail.ru, is one of few private individuals to sit on Mr Medvedev’s prestigious
commission for modernisation and technological development, part of the president’s
effort to promote his innovation agenda. He is an unofficial ambassador to the global
technology sector – whether seeking to sell Silicon Valley on the merits of Mr
Medvedev’s zeal for innovation or to attract investment in a state-led project to build a
technology centre in Moscow.
Boris Nemtsov, an opposition politician and former business partner, says Mr Milner’s
connections have been a helpful but not decisive factor in his success. “Yes he has a close
relationship to the Kremlin, but this is not the reason for his success. He just sees farther
than everyone else.”
Silicon Valley sees Mr Milner as a long-term investor with unusual flexibility: he puts in
millions of dollars without demanding a board seat, and his willingness to buy shares
from early employees has helped keep the Valley’s important secondary market liquid
and profitable. That combination has made him virtually irresistible.
“He is not a venture capitalist in the pure sense,” says a western investment banker in
Moscow. “He doesn’t make risky bets. He puts money in proven companies which
already have cash flows.”
Marc Andreessen, a Silicon Valley venture capitalist and member of Facebook’s board,
says of Mr Milner and his empire: “They have been a fantastic investor. They have an
edge in really understanding what is happening globally. We don’t have that.”
The DST executive says the company “functions like a private equity fund” that has
“purely financial interests” in its stakes, because it does “not want to end up in a situation
where we’re on the board of a company we have a minority stake in” if that company
ends up being a competitor of another one of its businesses.
A rush of acquisitions since 2008 has expanded DST’s global reach. “What astonishes
me,” says a DST competitor “is where they got all that money.” The answer to that
question appears mainly to be Alisher Usmanov, metals magnate and part owner of
Arsenal football club in London, who took an estimated 34 per cent stake in DST in
2008. He now has 25 per cent of Mail.ru and an unspecified stake in DST Global.
At a time when Russian oligarchs were being driven into exile or worse, Mr Usmanov
quietly eased his way into the Kremlin’s favour. “He is basically Medvedev’s proxy in
many matters,” says Stanislav Belkovsky, a Moscow political commentator.
Mr Usmanov did spend six years in prison in Soviet times, following allegations of fraud,
but after his conviction was overturned he emerged as a Gazprom executive in the 1990s.
Most of his metals holdings are assets that were put into bankruptcy by Gazprom after
Russia’s 1998 financial crisis.
His 50 per cent controlled Metalloinvest was among those to benefit from state largesse
in the wake of the latest global crisis. In September last year it received Rbs30bn in state
guarantees as part of a Rbs61bn bail-out loan from VTB, a state-controlled bank,
allowing the company to get through the crisis without costing shareholders any equity.
“When you get a wodge of credit this big from a state bank, it suggests that politically
everything is in very good order,” says one analyst. However, as with other oligarchs, the
relationship has a price: “When mother Russia calls, you do what they say.”
Despite being so cash-strapped that he needed the bail-out, Mr Usmanov was able to
finance the $200m purchase of 2 per cent of Facebook in May 2009. Operating profits
and asset sales by DST also contributed to the purchase, according to someone close to
Mail.ru.
Other acquisitions have relied on his financial backing as well, although DST has
accumulated further shareholders including Tencent, the Chinese internet portal, and
Naspers, the South African media company. Last December came a $180m stake in
Zynga, the maker of social games. That was followed by the $188m purchase of ICQ in
April, a month in which it also paid $135m for a stake in Groupon, the social commerce
site. A spokesman for Mr Usmanov declined to say how much of these purchases he
financed.
Mr Usmanov’s relationship with the Kremlin is one of quid pro quo, say insiders. He has
done everything from buying Fabergé eggs and the art collection of cellist Mstislav
Rostropovich and donating them to the state, to interceding in a 2006 feud between
Altimo, a telecommunications company, and investment funds with ties to top politicians
over shares in Megafon, the third largest mobile phone provider.
He emerged as its biggest shareholder but “played the role of a mediator and problem
solver”, says Vladimir Zhukov, an analyst for Nomura, the investment bank. “Not
everyone gets asked to do such favours for the Kremlin, which kind of indicates his
relationship with top-level figures.” The Usmanov spokesman says the Megafon deal was
simply a long-term investment and not a favour for the Kremlin.
While Mr Medvedev has often stated his commitment to keeping the internet free, many
remain concerned that the tide may be shifting towards a crackdown.
Mr Ponomarev says he sees the Kremlin’s goal as having the infrastructure available so
that it could launch a crackdown at a moment’s notice if it chose to. “Technically
speaking, if a political decision were taken to launch a ‘China scenario’ in Russia, it
would be possible to do this quite quickly and simply,” he says.
The technology is already in place – every Russian internet service provider is legally
bound under a programme known as Sorm-2 to install monitoring equipment at its own
expense. In the interior ministry there is a special “department E” that monitors internet
“extremism” and can recommend to federal prosecutors that a site should be closed.
The internet is “the remaining source for the free exchange of information in Russia”,
says Kimberly Zenz, a Moscow-based cybersecurity analyst for VeriSign, an internet
infrastructure company. “This encroaching control gets no attention because it’s not
direct censorship.”
Kremlin provides valuable protection, but at a price
The state is ever present in Russian business. Keeping political ties to the Kremlin is an
important ingredient for success in any industry, including the internet, and Mail.ru is not
alone in keeping lines open to the leadership, writes Charles Clover.
The Kremlin considers it desirable to control the commanding heights of the Russian
economy, either through shareholdings in strategic companies such as Gazprom, the
state-controlled gas producer, or through the loyalty of private strategic shareholders. It
has encouraged consolidation in key industries around companies owned by loyal private
businessmen such as Oleg Deripaska, head of UC Rusal, the aluminium giant, or around
state-controlled companies such as Rosneft, the oil company.
This not only gives the Kremlin influence over management decisions but also provides
Russian companies with a competitive advantage. In the case of Mail.ru, its dominant
position has allowed it to withstand the onslaught from brands such as Google and
Facebook.
The price of loyalty is steep. Even wholly private companies such as Rusal salute when
the Kremlin barks an order – for example, investing in building infrastructure for the
2014 winter Olympic Games in Sochi.
In return, the Kremlin takes care of its own. None of Russia’s 100 largest companies was
allowed to fail during the 2008-09 global economic crisis, when Russian gross domestic
product fell by 7.9 per cent. Many banks and industrial groups received state bail-out
credits that totalled roughly $200bn.
But for those businessmen seen as politically disloyal, the price is high. Mikhail
Khodorkovsky, the oil magnate, was jailed for tax evasion in 2003 and is likely to be
sentenced again to another jail term in December. Alexander Lebedev, who owns the
Independent and Evening Standard newspapers in the UK but in Russia also part-owns
the opposition Novaya Gazeta, underwent a mysterious police raid this month on the
bank he owns.
For the Record
http://www.themoscowtimes.com/business/article/for-the-record/423845.html
19 November 2010
The Finance Ministry has proposed changes seeking greater oversight of foreign-currency
transactions, according to a bill published on the ministry’s web site Thursday.
(Bloomberg)
MICEX is seeking to buy its smaller, dollar-denominated competitor, RTS, in a “friendly
takeover,” Central Bank First Deputy Chairman Alexei Ulyukayev said Thursday.
(Bloomberg)
Russia’s bid for soccer’s 2018 World Cup championship is the most expensive, with
estimated costs of $4.5 billion, Kommersant reported Thursday, citing the Federation
Internationale de Football Association. (Bloomberg)
Rostelecom was denied approval to provide so-called 4G services by the Defense
Ministry, Kommersant reported Thursday, citing an unidentified government official.
(Bloomberg)
Russian stocks now even cheaper
http://www.bne.eu/dispatch_text13658
bne
November 19, 2010
Russian stocks, the cheapest worldwide, are now even better value after the nation's
companies posted record profits that topped analysts' estimates by the widest margin in
emerging markets, Bloomberg reports. Meanwhile, whilst investors have begun to switch
their attention to Russia from fashionable emerging markets like Turkey and South
Africa, with fund flows perking up over the last month or so, that money appears happy
to remain on the sidelines for the moment.
Micex Index companies reported combined earnings of RUB178 a share ($5.70) during
the past year, the most since at least 2003 and 29% above the average of about 400
analyst estimates compiled by Bloomberg. The Micex is valued at an average P/E of 6.8
based on profit forecasts for the next 12 months, the lowest level among 59 world stock
indexes tracked by Bloomberg, and about half the global average of 12.
While the Micex advanced 13% in the past year, its valuation tumbled 31% because
Russian shares failed to keep pace with a surge in earnings estimates spurred by oil's rally
above $80. Equity mutual funds in the world's largest energy exporter attracted less
money in the past six months than funds in the other so-called BRICs -- Brazil, India and
China -- as investors favored more expensive shares in faster-growing economies, EPFR
Global data show.
However, fund flows into Russia have started picking up in the last month, as it appears
investors may finally be ready to take a punt on the low valuations of Russian stock. That
said, for the moment, much of that money appears to be waiting on the sidelines whilst
the global picture remains so rocky.
"Russia really stands out as being cheap and attractive," said Maarten-Jan Bakkum, an
emerging-market equity strategist in The Hague at ING Investment Management, which
oversees about $100 billion in developing nations. "Investors will increasingly be looking
for emerging economies that can still improve," he said. "For Russia, there should be
some room for improvement."
Russia's economic expansion will probably accelerate to 4.3 percent next year from 4
percent in 2010, according to October estimates from the International Monetary Fund.
China's growth will slow to 9.6 percent from 10.5 percent, while the pace in India will
drop to 8.4 percent from 9.7 percent, and Brazil's expansion will decelerate to 4.1 percent
from 7.5 percent, IMF forecasts show.
Russia has lagged behind the other BRIC nations in luring investors. Chinese equity
mutual funds attracted about $3.3 billion in the past six months, while Indian funds
received $1.3 billion and Brazil got $1.9 billion, data compiled by Cambridge,
Massachusetts-based EPFR Global show. Russian funds took in $637 million, the data
show.
Gazprom shares are poised to rally 34 percent in the next 12 months, according to the
average of 10 analysts' share-price estimates compiled by Bloomberg. The stock has
retreated 7.8 percent this year, compared with a 2.3 percent gain for PetroChina.
Russia has the cheapest stocks among major developing nations, based on 10-year
reported earnings, a valuation measure designed to adjust for economic cycles, Jonathan
Garner, the chief Asia and emerging markets strategist at Morgan Stanley in Hong Kong,
wrote in a November 8 report.
"It's probably the cheapest market among global emerging nations," said ING's Bakkum,
who recommends an "overweight" position in Russia. "A lot of people are prepared to
buy Russian assets."
Activity in the Oil and Gas sector (including regulatory)
Kudrin Sees Room to Raise Natural-Gas Extraction Tax (Update1)
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=avEHRUTD9oG0
By Maria Levitov
Nov. 19 (Bloomberg) -- Russian Finance Minister Alexei Kudrin said the government has
room to increase the natural-gas extraction tax further.
“I believe there’s still room to raise the mineral extraction tax for gas,” Kudrin told a
conference in Moscow today.
Russia plans to raise the tax by 61 percent next year and may peg increases in 2012 and
2013 to the estimated level of inflation. The government needs to boost taxes on
commodities to help meet its spending plans, including a 9 percent rise in pensions next
year, Prime Minister Vladimir Putin said on July 28.
To contact the reporter on this story: Maria Levitov in Moscow at
[email protected]
To contact the editor responsible for this story: Willy Morris at [email protected]
Last Updated: November 19, 2010 03:48 EST
BRIEF-Malaysia's KNM bags $216 mln Uzbek job from LukOil
http://af.reuters.com/article/energyOilNews/idAFSGE6AI00320101119
Fri Nov 19, 2010 12:05am GMT
KUALA LUMPUR Nov 19 (Reuters) - Malaysia's KNM Group (KNMP.KL):
* says won $216 million job to provide technical documentation, equipment and services
for development of gas condensate fields in Uzbekistan.
* says awarded two-year contract by the Uzbek unit of LukOil (LKOH.MM) and covers
Adamtash, Gumbulak and Djarkuduk Yangi Kizilcha gas condensate fields.
* says project to contribute positively to KNM Group's earnings for the financial years
ending 31 December 2011 and 31 December 2012.
(Reporting by Niluksi Koswanage)
Urals Energy reports flow rates at first sidetrack at Petrosakh
http://www.bne.eu/dispatch_text13658
Renaissance Capital
November 19, 2010
Event: Yesterday (18 Nov) Urals Energy (UEN) provided an operating update,
confirming that it has paid back the first tranche ($3mn) of its debt to Petraco and
announcing that the initial flow rate at sidetrack well 35b was 152 bopd. The company
also reported that accumulated material prevented the tubing from being run further down
the hole and that the tubing was stopped at 1,478 metres (while the well was perforated at
1,470-1,535 metres). According to UEN, the well has been producing for six days and is
still flowing back drilling fluid and cuttings as a result of lost circulation. The company
plans to remove this material from the well and commence full-scale production. The
company will start drilling a second sidetrack well at Petrosakh in Jan 2011. Current
production at both fields amounts to 2,475 bopd.
Action: We confirm our BUY rating on the company.
Rationale: While the loss of circulation may be perceived as a serious technical problem,
we think it could be resolved in this case. We also point out that the current flow rate is
occurring naturally without the use of pumps. After a conversation with the company, we
think there is a reasonable chance that the flow rate could be higher following the
removal of fluids from the reservoir. We initially estimated that both sidetracks could
increase daily output by over 300 bopd and we still think the company can achieve this.
The fact that current production is 7% higher than in September confirms the company's
commitment to focusing on efficient operations and unlocking the value of its reserves, in
our view.
Ildar Davletshin
OPAL natural gas pipeline reaches Czech Republic
http://www.ogj.com/index/article-display/4385952023/articles/oil-gasjournal/transportation-2/pipelines/construction/2010/11/opal-natural_gas_pipeline.html
Nov 18, 2010
Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Nov. 18 -- The Ostsee-Pipeline-Anbindungs-Leitung (OPAL) pipeline,
which eventually will extend 470 km to link the Nord Stream Pipeline to Eastern Europe,
has been laid across the German-Czech border, according to company officials.
“The closer cross-border integration of national natural gas pipeline systems called for by
the European Union has taken a key step forward,” said Bernd Vogel, managing director
of OPAL Nel Transport GMBH, a subsidiary of the Wingas Group, which is co-owned
by Germany’s Wintershall and Russia's OAO Gazprom.
"By building the Nord Stream Pipeline and its connecting pipeline OPAL, European
customers are gaining direct access to the major Russian natural gas reserves in Siberia,”
said Vogel, whose firm will perform the tasks of network operator for OPAL.
About 400 km of the pipeline’s overall length have already been laid, and the welding
together of the more than 26,000 pipes has also largely been completed.
"This makes us confident of completing the pipeline by the late summer 2011 as planned
and bringing it online in October 2011 together with the first Nord Stream Pipeline," said
Vogel.
Gazprom projects completion of the first 27.5 billion cu m/year Nord Stream line in
2011, with a parallel line of the same capacity to follow in 2012. The line will pass
through Russian, Finnish, Swedish, Danish, and German waters.
Construction of the 1,200-km Nord Stream system, which will extend through the Baltic
Sea from Vyborg, Russia, to Greifswald, Germany, began Apr. 9 (OGJ Online, Apr. 9,
2010).
Meanwhile, Wingas Chief Construction Manager Michael Muth outlined the work
program for OPAL over the coming months, saying that it “will concentrate on the
construction of the gas transfer station in Lubmin and the natural gas compressor station
in Baruth, south of Berlin.”
When complete, OPAL will be the largest gas line to be laid in Europe, with an annual
transport capacity of 36 billion cu and a diameter of 1.4 m.
In addition to OPAL, Wintershall and Gazprom also are planning construction of the 440km North European gas pipeline (NEL), which will transport Nord Stream gas from
Greifswald on the German coast west to Rehden in Lower Saxony. NEL is scheduled to
come on stream in 2011 and has a planned capacity of 20 billion cu m/year.
“It will connect Nord Stream with the European gas network, just as the OPAL natural
gas pipeline does to the Czech Republic,” Wingas said. That will facilitate gas
transportation from Russia, through Germany, to Belgium, the Netherlands, France, and
the UK.
Earlier this week, the European Union described the Nord Stream line part of one of four
“big axis” for the diversification of gas supplies in Europe: the Southern Corridor from
the Caspian, the Northern Corridor from Norway, the Eastern corridor from Russia, and
the Mediterranean Corridor from Africa.
Wingas is owned 50.02% by BASF subsidiary Wintershall and 49.98% by Gazprom.
Wingas owns 80% of OPAL and 75% of NEL, with E.On Ruhrgas holding the remaining
20% and 25%, respectively.
Nord Stream's shareholders include Gazprom 51%, E.On Ruhrgas and Wintershall 15.5%
each, and Dutch state Gasunie and France's GDF Suez, each with 9%.
Contact Eric Watkins at [email protected].
Russia and China still poles apart on gas prices
http://www.bne.eu/dispatch_text13658
bne
November 19, 2010
Russia and China still are still far from finally agreeing a pricing formula for gas
supplies, a Chinese official said yesterday ahead of another round of energy talks in
Moscow on Sunday.
The pair has been at loggerheads in negotiations for years now, but following President
Dmitry Medvedev's visit to Bejing in September to sign off on a raft of deals, Russian
officials said they were optimistic that an agreement was close.
However, with Prime Minister Wen Jiabao set to lead a delegation to Moscow on
November 20, the deputy director general of China's National Energy Administration Gu
Jun told a Foreign Ministry briefing: "Companies from both countries have made a
considerable effort during price negotiations, but we should admit that there is still a
large difference, which now amounts to about $100 per 1,000 cubic meters," reports RIA
Novosti.
The discussion is top of the agenda for November 22, said Jun, when China's Deputy
Prime Minister Wang Qishan and Russian Deputy Prime Minister Igor Sechin will meet
to hold energy talks.
On returning from Bejing two months ago, Medvedev said that the pair moved as much
as $60 closer in their positions, whilst Deputy Prime Minister Igor Sechin told the press
that he expected an agreement in the first six months of 2011.
Russia is attempting to ward off a rash of demands from European customers for lower
prices since spot prices have dwindled in the wake of the financial crisis. At the same
time, it is attempting to accelerate its strategy to forge a closer relationship with China,
and opened a new spur of the ESPO oil pipeline last month that will start delivering crude
to the north of the country in January.
Gazprom is also discussing guaranteed supply volumes with Bejing, reports Prime Tass,
whilst the company said in September that in mid-2011 it planned to sign a 30-year
contract to supply 30bcm per year starting 2015. The Russian gas giant currently makes
no exports to China.
As part of that deal, it announced it will bring forward construction of the Altai pipeline,
linking gas fields in western Siberia with western China. Reports suggested that Russia
hopes Bejing will finance the project, in an extension of the 2008 deal that saw China
grant $20bn to power development of energy infrastructure.
For its part, China is scouting for more energy, and more diversity in suppliers, to feed its
booming economy. It has ploughed billions into a pipeline carrying gas from Central
Asian, with a second on the drawing board, whilst energy imports from South America
have been growing dramatically.
Commenting on Chinese Prime Minister Wen Jiabao's visit to Russia, one official said
that China also expects to sign agreements on cooperation in the nuclear power and coal
industries, as well as on the upgrade of electric power grids in both countries.
Gazprom
Gazprom May Seek China, Korea Partners to Work at Chayanda Field
http://www.businessweek.com/news/2010-11-18/gazprom-may-seek-china-koreapartners-to-work-at-chayanda-field.html
November 18, 2010, 8:55 PM EST
By Stephen Bierman and Anna Shiryaevskaya
Nov. 18 (Bloomberg) -- OAO Gazprom may invite Chinese and South Korean companies
to help develop the Chayanda oil and gas field in eastern Siberia, said Valery Golubev,
deputy chief executive officer of the Russian gas exporter.
South Korean and Chinese companies may join the project as services contractors,
Golubev told reporters today in Ashgabat, Turkmenistan. He didn’t name the companies.
Gazprom, the world’s biggest gas producer, targets Chayanda as “the main base field” for
exports to Asia, said Vsevolod Cherepanov, head of the gas, condensate and oil
production department in June. In the first half of next year, the Moscow- based company
plans to complete an investment study for Chayanda, which may match supply volumes
to Europe in the future.
The field holds 1.24 trillion cubic meters of gas and 68.4 million metric tons of oil and
condensate. Crude production may start in 2014, to be followed by gas output in 2016.
Gazprom is yet to start building a pipeline connecting the field with existing and planned
infrastructure on the Pacific coast.
Gazprom News: GAZP RM <Equity> CN <GO>
--Editor:
Anna Shiryaevskaya in Moscow at [email protected]
To contact the reporters on this story: Stephen Bierman in Ashgabat via Moscow at
[email protected].
To contact the editor responsible for this story: Will Kennedy at
[email protected]
Gazprom mulls Israeli energy co investment
http://www.globes.co.il/serveen/globes/docview.asp?did=1000602252&fid=1725
Gazprom officials have held talks in recent months with various parties in Israel's
energy market.
18 November 10 17:54, Tal Moise
Russia's Gazprom is planning to invest in Israel and acquire 50% of private Israeli
company that holds licenses to offshore deposits, form a joint venture, and start
exploration, reports "Interfax", citing Stanislav Tsygankov, head of the company's
foreign economic operations.
Moscow-based Gazprom plans to begin the necessary studies and drilling by next year.
"Interfax" quotes First Deputy Prime Minister Viktor Zubkov as saying that the
cooperation would not put an end to talks about supplying Russian gas to Israel.
According to foreign media reports, Gazprom will make the investment this year, after
company officials held talks in recent months with various parties in Israel's energy
market.
Published by Globes [online], Israel business news - www.globes-online.com - on
November 18, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010
Gazprom May Delay Nigerian Investment Plans Until Next Year
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a.BsJc7t17CY
By Paul Okolo
Nov. 18 (Bloomberg) -- OAO Gazprom, the world’s largest gas producer, may delay
plans to invest billions of dollars in Nigeria until after an oil bill is passed and general
elections are held next year.
“Any investment decision has to be after the elections,” Vladimir Ilyanin, chief executive
officer of Gazprom’s Nigerian unit, said in an interview yesterday in the capital city of
Abuja. Once the polls are over and legislation is passed, “we’ll roll out our plans.”
Nigeria has Africa’s biggest hydrocarbon reserves of about 36 billion barrels of crude oil
and 187 trillion cubic feet of gas, according to the Petroleum Ministry. The country plans
to spend $30 billion to build a gas pipeline network and processing facilities to supply
domestic users and a pipeline across the Sahara Desert to Europe. Failure to link power
plants now under construction to gas supplies by investing in a pipeline network will
frustrate efforts to end chronic power shortages, Bart Nnaji, presidential adviser on
power, said Nov. 8.
The country’s parliament is working on new petroleum industry legislation that will spell
out rules for operating in the oil and gas business. The law is likely to be approved before
the end of this year, Emmanuel Egbogah, presidential adviser on petroleum, said Nov. 16.
The delay in passing the bill is a “major impediment,” Ilyanin said. “We need clear rules
and a level-playing ground.”
Shell, Chevron
International oil companies, including Royal Dutch Shell Plc and Chevron Corp., have
protested against proposals to raise oil royalties and taxes, which they say will discourage
capital- intensive investments in the country’s deep offshore waters. Nigeria says oil
production will remain competitive under the provisions of the law.
Last year, Gazprom signed an agreement in Abuja to form a company called NiGaz
Energy Co. Ltd. that will invest in gas production, transportation and infrastructure in
Nigeria. Boris Ivanov, head of Gazprom’s global exploration and production unit, valued
the venture at a minimum of $2.5 billon.
“The projects are long term” and the partners are in “a lot of discussions,” according to
Ilyanin.
Gazprom also has an understanding with Nigerian energy company Oando Plc “to jointly
develop projects in multiple sectors of Nigeria’s oil and gas industry.” The two operators
were among 15 energy companies selected by the Nigerian government in March last
year as potential investors to help develop gas projects.
Political tension has heightened in Africa’s most populous nation after President
Goodluck Jonathan, a southerner from the oil-rich Niger Delta region, declared his
intention to run for president again in the elections expected to be held in April.
To contact the reporter on this story: Paul Okolo in Abuja [email protected].
To contact the editor responsible for this story: Peter Hirschberg at
[email protected].
Last Updated: November 18, 2010 10:30 EST
Official: Study to Decide if South Stream Will Pass through Slovenia
http://www.sta.si/en/vest.php?s=a&id=1576644
Moscow/Ljubljana, 18 November (STA) - Russian energy giant Gazprom has not yet
decided whether to route its South Stream gas pipeline through Slovenia. The decision on
this will be based on a feasibility study that is nearing completion, officials from the two
countries have said.
11/19 11:40 Gazprom could sell Gazprom Drilling
http://www.interfax.com/
Gazprom close to selling Burgaz
http://www.bne.eu/dispatch_text13658
Renaissance Capital
November 19, 2010
Event: Today (19 Nov) Kommersant reported that Gazprom's board of directors recently
approved the sale of the company's drilling and service subsidiary, Burgaz, for an
estimated price range of $75-130mn. According to unofficial comments from Gazprom,
the asset will be put up for sale before year-end. Arkady Rotenberg, a Russian
businessman who is a core shareholder of Stroytransgaz, was mentioned by Kommersant
as a potential buyer of the asset. Accordingto Kommersant, in 2009 Burgaz generated
$1.3bn in revenue and a net loss of $62mn ($1.5mn profit in 2008).
Action: We confirm our BUY rating on Gazprom.
Rationale: Gazprom's intention to sell Burgaz was reported earlier this year (click here to
read our article Gazprom may divest its drilling subsidiary in the CIS Morning Monitor
dated 24 May 2010) . On our estimates, Gazprom's sum-of-the- parts valuation amounts
to $16.3/share, providing over 150% upside potential. Thus, we welcome any efforts
aimed at crystallising the value of Gazprom's assets. The sale price may seem low when
compared with Burgaz's turnover (we note that TNK-BP sold its oilfield services [OFS]
subsidiary for about 0.8x revenue); however, in the valuation of OFS subsidiaries, much
depends on internal pricing, which in this case seems to favour Gazprom. We also note
that Burgaz has an estimated $203mn of short-term debt.
Ildar Davletshin