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Basic Political Developments
• Trend.az: Russian air force to deploy new stealth bomber in 2025-2030 - The research and design work of the new-generation strategic bomber is underway, Russian Long-Range Aviation Commander Major-General Anatoly Zhikharev told the Itar-Tass news agency.
• Russia Today: “Russia will never participate in a military operation in Afghanistan” - With the situation in Afghanistan showing no sign of improvement, NATO and the US are increasingly seeking the help of Russia. Russian Deputy Foreign Minister Aleksey Borodavkin spoke with RT on the issue.
• RIA: Russian warship to continue escorting vessels off Somalia
• The Messenger Online: Kremlin hopes Eastern Partnership Programme will die
• PTI: Goa govt demolishes Russian-owned hotel
• Charter97: Agreement with Russia not signed, but oil flow continues
• Reuters: ANALYSIS - Russia's oil spat with Belarus
• EurActiv: Russian oil flowing to EU despite Belarus dispute
• : Russia averts oil crisis as it ends Belarus embargo
• WSJ: Energy Row Escalates - Belarus, Russia fail to clinch oil-price deal, though supplies resume
• ISRIA: Russia - Prime Minister Vladimir Putin met with Deputy Prime Minister Igor Sechin
• Gazeta.kz: Customs Union of Kazakhstan, Russia and Belarus starts its work
• EurasiaNet: Georgia: First Tbilisi-Moscow Flight Since 2008 Set To Depart On January 8
• News.az: Charter flights Tbilisi-Moscow-Tbilisi will implement on 8, 9 10 of January
• Itar-Tass: Medvedev nominates Darkin for Primorye governor
• RIA: Incumbent head of Far Eastern region nominated for another term
• RIA: Major terrorist attack thwarted in North Caucasus
• The Georgian Daily: Kirill Positions Moscow Patriarchate for Expanded Political Role in 2010 - In the waning days of 2009, Patriarch Kirill made three statements designed among other things to position the Russian Orthodox Church for even greater role in Russian politics at home and abroad in the year to come, a role that some may welcome but that others will see as a challenge to secular values and human rights in both Russia and Europe.
• VOA: Russian Orthodox Church Opens its First Seminary Outside the Former Soviet Union - The Russian Orthodox Church has opened its first seminary outside the former Soviet Union - in a small French town outside Paris. The institution is starting modestly but has big ambitions: to serve Russia's growing diaspora and foster closer ties between Eastern and Western Christian churches.
• The Jamestown Foundation: Ingush-Ossetian Relations Show Signs of Improvement
• Expert Club: Caucasus in anticipation of a peaceful new year - Some leaders of the Kremlin mentioned "traditional Caucasian clan system" as a reason for all the above that has been happening in the North Caucasus. Some named past mistakes and unemployment of population as reasons. But Vladimir Ustinov blamed everything on activization of geopolitical rivals of Russia in the Caucasus!!!
• The Georgian Daily: Life Expectancy Figures Failing to Recover in Russia, Ukraine and Belarus
• NY Times: The Kremlin Keeps a Bankrupt City Humming - For more than a year, the Kremlin has been scrambling to address the future of places like Baranchinsky, one of Russia’s 300 or so “monocities,” where a single plant supplies heat, income and social security. Many of these factories are hemorrhaging money, leaving leaders with an array of unpalatable choices: To allow factory towns to die gradually, as they did in the 1990s? To liquidate them? Save them?
• Asia Times Online: Russia-India ties sour in Central Asia - It has not received a lot of help from India's opportunistic decision to play the "Great Game" on the cheap - piggybacking the military and diplomatic presence of Moscow and Washington in selected pro-Russian and pro-Western states in Central Asia to score points off its rivals China and Pakistan.
Petroleum Economist: Russian companies head east to cement oil and gas ties with China
• Tehran Times: China: Russia’s land of opportunity - By Joshua Kucera
• Telegraph.co.uk: Moscow is planning to become a key transit link for EU-China trade - An international air hub is taking shape in Moscow, which has the potential to unite trade flows throughout Russia and become an important transit link in EU-China trade. However, Russia's notorious flyover fees and rivalry between major airports are factors which may effect the nature and pace of development.
National Economic Trends
• Agrimarket: In 2015, Russia to increase grain production to the level of 120 mln tones
• Agrimarket: Russia to completely satisfy own requirements in sunflower oil
Business, Energy or Environmental regulations or discussions
• Bloomberg: Russian Prosperity’s Branis Rides Oil to Lead Mid-Size Funds
• Itar-Tass: Siemens to supply 54 trains for Sochi Winter Olympics
• BarentsObserver: Sevmash needs more workers
• WSJ: A Hard Pitch for Rusal - The Hong Kong Stock Exchange has agreed to list the shares but, such are its concerns about the company, it has insisted on the extraordinary restriction that the stock may only be sold to professional investors prepared to buy in blocks of at least HK$ 1 million. Given the significant qualms that must have given rise to such a stipulation, the mystery is why the Hong Kong exchange is prepared to have the shares on its board at all.
• Russia Today: Altimo ends disputes to set sail as more competitive telecoms player
• Russia Today: Moscow Real Estate looks for rebound
Activity in the Oil and Gas sector (including regulatory)
• KUNA: Concerns over Russia''s high crude production - Sources at the Organization of the Petroleum Exporting Countries (OPEC) said Tuesday that they were concerned of Russia's high crude production which surpasses OPEC's and might jeopardize the stability of the market.
• Abc.az: Azerbaijan started gas supplies to Russia under schedule and without any upsets
• Komsomolskaya Pravda: Mikhail Gutseriev regained Russneft
• Reuters: Russia's Deripaska sells Russneft to founder-paper
Gazprom
• : Serbia to buy up to 2bn cubic meters of natgas from Russia in 2010 - State-owned Srbijagas and Russia's Gazprom have signed a contract for supply of up to 2 billion cubic meters of natural gas to Serbia in 2010.
• The Globe and Mail: 'LET'S DRINK TO ALL THE RUSSIAN GAS' - Written and performed by Vladimir Tumayev, director of a Gazprom subsidiary, the song jogs between slow rock and folk-drinking tune, which fits nicely with a video that features oil workers sharing a light on the job
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Full Text Articles
Basic Political Developments
Trend.az: Russian air force to deploy new stealth bomber in 2025-2030
05.01.2010 12:59
Russian Air Force will be equipped with a new-generation strategic bomber using stealth technology in 2025-2030, said the commander of Russia's strategic aviation on Tuesday.
The research and design work of the new-generation strategic bomber is underway, Russian Long-Range Aviation Commander Major-General Anatoly Zhikharev told the Itar-Tass news agency.
With superior combative and taking-off performance, the new strategic bomber designed with stealth technology will replace the Tu-95MS, the Tu-160, and long-range Tu-22M3 strategic bombers currently in service between 2025 and 2030, said Zhikharev.
Meanwhile, Russian Air Force has planned to launch an extensive modernization project among the aircraft of its strategic aviation, he added, 30 percent of which will be updated by 2015, Xinhua reported.
The president of Russian aircraft manufacturer Alexander Bobryshev said in late December that a new-generation Tu strategic bomber would be developed by 2017.
He said the draft of the new airplane would be finished by 2012.
Russia Today: “Russia will never participate in a military operation in Afghanistan”
05 January, 2010, 11:13
With the situation in Afghanistan showing no sign of improvement, NATO and the US are increasingly seeking the help of Russia. Russian Deputy Foreign Minister Aleksey Borodavkin spoke with RT on the issue.
“Russia is trying to contribute to finding a solution to the challenges that Afghanistan faces – first of all, terror and drug trafficking. The new history of Afghanistan which began in 2001 is also a new page in our relationship,” Aleksey Borodavkin says. “We would like to back Afghans in the restoration of their economy, to help them create new jobs, first of all for young people, and in this way to create opportunities for peaceful life in Afghanistan, in order that people may work, earn money, provide for their families and renounce the old consuming culture of war that is regrettably currently prevalent in Afghanistan.”
He has added that though the Russian Foreign Ministry rarely uses the word “never” in their diplomatic practice, it is appropriate in this case – the Russian Federation has never considered a possibility of participation in military operations in Afghanistan.
RIA: Russian warship to continue escorting vessels off Somalia
07:4905/01/2010
A Russian warship will escort a regular convoy of commercial vessels through pirate-infested waters off the Horn of Africa on Tuesday, a Navy spokesman said.
The Admiral Chabanenko destroyer from Russia's Northern Fleet, which is presently replenishing its supplies from the Lena tanker, began escorting commercial ships in the Gulf of Aden on December 4.
"The warship is expected to start escorting a regular convoy off the Horn of Africa on Tuesday," the spokesman said.
A Russian task force comprising the Admiral Chabanenko and a support ship arrived in the Gulf of Aden in late November 2009 to resume Russia's anti-piracy mission.
The Russian Navy has maintained a constant presence off the Horn of Africa, with each fleet dispatching warships on a rotational basis. Russia joined international anti-piracy efforts off the Somali coast in October 2008.
Somalia has been without an effective government since 1991.
The number of attacks by Somali pirates in the Gulf of Aden and off the east coast of Somalia exceeded 170, with more than 30 vessels hijacked and some 600 crew taken hostage in 2009.
MOSCOW, January 5 (RIA Novosti)
The Messenger Online: Kremlin hopes Eastern Partnership Programme will die
By Messenger Staff
Monday, January 4
Russian analysts maintain that from January 1, 2010, when Spain succeeds Sweden in the EU Presidency, the Eastern Partnership Project will die. Sweden, together with Poland, was one of the initiators of this project but not much has been done during the Swedish presidency. No financing has been achieved and the most attention was paid to instituting visa free entry programmes.
Spain has said that its major goal is rescuing the EU from economic crisis and conducting further negotiations concerning Turkey's possible entry to the EU. It will also try to facilitate Croatia’s entry into the EU and further negotiations with Iceland and possibly Serbia.
Maybe these are only the dreams of Russian analysts, but we will see how Spain deals with this issue.
PTI: Goa govt demolishes Russian-owned hotel
STAFF WRITER 12:49 HRS IST
Panaji, Jan 5 (PTI) Goa government has demolished a hotel owned by Russian nationals in the state for violating Coastal Regulation Zone (CRZ) law, officials said today.
The district administration brought down the construction yesterday.
The construction at Goa's Morjim beach had gathered much political debate in the Legislative Assembly with state Environment Minister Aleixo Sequeira alleging "non-cooperation by district administration" for demolishing the structure.
Certain structures in the resort, owned by True Axis company, were violating CRZ law and were ordered to be demolished by Goa Coastal Zone Management Authority (GCZMA).
The firm comprising two Russians ? Rashid Valiulin and Ana Litvinova ? on its Board of Directors (BoD), received demolition notice from GCZMA a year back.
But the notice remained unexecuted forcing the district collector to issue another notice in December, last year, which resulted in the demolition of controversial structures.
Charter97: Agreement with Russia not signed, but oil flow continues
11:16, — Politics
Russian Prime Minister Vladimir Putin ordered vice premier Igor Sechin to settle all problems with Belarus.
Russian continues oil transit through Belarus and resumed oil deliveries to the Belarusian refineries, though an agreement on duty-free oil supplies has not been signed with Minsk. According to RIA Novosti, it was said by Russian vice premier Igor Sechin at his meeting with Russian PM Vladimir Putin o January 4.
“We continue transiting oil to European consumers; yesterday we started shipments to the Belarusian refineries: about 100,000 tonnes of oil was supplies to the Navapolatsk plant, and 78,000 tonnes were shipped to the Mozyr plant,” Interfax quotes Igor Sechin.
Sechin reminded that on January 1, 2010, all decreasing coefficients expired. However, taking into account Russia’s “special attitude” toward our Belarusian partners, Russia proposed an extension of privileged (duty-free) supply costs in volume of 6 million tonnes of oil.
According to Sechin, the Russian party presented all proposals to the Belarusian partners.
Vladimir Putin told Sechin in turn: “I hope agreements will be reached in the nearest future on the basis of our common interests and the current Russian legislation.”
“We will do this,” the vice premier responded.
As the website has earlier informed, Belarus and Russia failed to sign an agreement on conditions of oil deliveries as planned, on December 30–31. Russia announced a decision to deliver oil to Belarus since January 1, 2020 including 100% of export duty to the price. In 2009 a special duty of 35.6% of standard export due was included in the price.
In response Belarusian government stated that Russia exerts unprecedented pressure in the talks on oil deliveries. The two sides however confirmed they are ready to continue talks.
On January 2 talks on oil deliveries continued. It was confirmed by Russian Energy minister aide Irina Esipova. “Transporting is done in full measure, the process of negotiations is continued at the moment,” she said to journalists refusing to reveal details.
On the same day Vice President of Transneft company Mikhail Barkov stated that Russia would cut down volumes of oil transit via Belarus under no circumstances. As for oil deliveries to the Belarusian side, everything depends on the position of Minsk in this situation, he added.
However, Reuters informs referring to Russian oil traders that Russia halted oil flow to Belarusian refineries since 2010. This information was denied by Maryna Kastsyuchenka, a representative of Belneftekhim.
Reuters: ANALYSIS - Russia's oil spat with Belarus
Tue Jan 5, 2010 10:40am IST
By Chris Baldwin
LONDON (Reuters) - Russia said on Monday it had resumed oil supplies to refineries in neighbouring Belarus after a brief rupture, but tensions were still simmering.
The following outlines some of the issues at stake.
- News of the dispute helped push crude above $81 a barrel on Monday, although analysts said the impact was more psychological than physical, as oil markets were well-supplied and Belarussian refineries have at least a week's worth of stockpiled crude.
They also predicted any tensions would be contained as Russia would not wish European customers to consider it an unreliable supplier.
They were unanimous in ruling out upheaval on the scale of last year's gas disruption following a pricing dispute between Russia and Ukraine, which affected supplies for nearly two weeks.
"If the oil cut-off was severe, Europe would take action and aggressively look to diversify supplies. Russia is aware of that," said Michael LaBelle, an independent energy analyst in Budapest who focuses on Central Europe and the Balkans.
"In the short term it is not such a problem because of the stockpiles that are in place. Countries have more options than they do for gas but I don't see it developing into a serious crisis."
The Paris-based International Energy Agency also took the view tensions would be resolved.
"As long as the transit flows and we are not affected we are not talking about a crisis, there are just negotiations going on. We are not worried," said Aad Van Bohemen, head of the IEA's emergency policy division.
Europe overall is less dependent on Russia for oil than it is for gas, although central European countries rely very heavily on crude from the Druzhba, or friendship, pipeline through Belarus.
Russia supplies around 25 percent of the European Union's gas supply, while the Druzhba pipeline carries around 10 percent of the EU's oil supplies.
- This winter Russia managed to settle its differences with Ukraine and analysts have said it was anxious to avoid any clash this side of presidential elections on Jan. 17 that might give the Ukrainian President political capital. The incumbent President Viktor Yushchenko, disliked by Moscow, is expected to lose, according to opinion polls.
The timing is less problematic for a dispute with its neighbour Belarus. Relations between the two have been strained since late 2006 when a separate pricing disagreement led to a three-day halt in oil supplies in early 2007.
Russia has said it would gradually increase prices to Belarus and other former neighbours to bring them in line with market levels.
For its part, Minsk has insisted Russia continue supplying duty-free oil not only for volumes consumed domestically in Belarus, but for all transit crude via the country because of a customs union agreement it signed with Russia and Kazakhstan last year.
Analysts said Belarussian President Alexander Lukashenko could have felt his negotiating position was strengthened following a Commonwealth of Independent States summit in December when he ended his reluctance to sign up to the customs agreement.
"(Lukashenko) changed his tone at a CIS summit in Kazakhstan, and the premise is that Russia made some promises. What was promised at the CIS summit is unknown, but it looks like Lukashenko is trying to get them delivered," said analyst Lilit Gevorgyan of IHS in London.
(Additional reporting by Michael Kahn in Prague, Muriel Bosellli in Paris and Dmitry Zhdannikov in Moscow; editing by Sue Thomas)
(For more news on Reuters Money visit reutersmoney.in)
EurActiv: Russian oil flowing to EU despite Belarus dispute
Published: Tuesday 5 January 2010
Russia said it had resumed flows of crude to refineries in Belarus but it did not clinch a deal to resolve a tense price dispute with Minsk, which had raised fears that oil supplies to European Union countries might be blocked.
Russia's foremost energy official, Igor Sechin, told Prime Minister Vladimir Putin on 4 January their country had restarted supplying refineries in neighbouring ex-Soviet Belarus on 3 January, but there were still "no signed agreements" with Minsk.
In a transcript of the Moscow meeting, published on the government website, Putin told Deputy Prime Minister Sechin he hoped an agreement over oil deliveries to Belarus for 2010 and beyond would be reached "sometime soon".
Moscow had halted oil supplies to Belarussian refineries after failing to agree terms for this year.
"Russia has handed over its proposals to our Belarussian partners. We are in constant contact with them," Sechin said.
Minsk earlier on Monday warned it may cut electricity supplies to Russia, ratcheting up tensions in the dispute that broke out on New Year's Eve.
The spat has raised the spectre of another winter of supply disruptions for EU customers such as Germany, which buys 15% of its oil from the arm of the Druzhba pipeline that goes to Europe through Belarus.
Sechin on Monday said European customers were unaffected by the dispute, and a spokeswoman for Belarus state oil company Belneftekhim said Russian crude was flowing normally through the Druzhba pipeline. She said refineries were working normally.
But Belarus's state power company said the lack of a proper agreement governing electricity supply meant it might have to be cut to the Russian enclave of Kaliningrad on the Baltic Sea.
"The Belarussian side will be forced to stop the unsanctioned commercial transit of electricity across the Belarussian grid which could threaten supplies to customers in Kaliningrad," a unit of Belenergo said in a statement.
The dispute and cold weather caused oil prices to rise to their highest for more than two months on Monday, hitting $81 a barrel.
Russia, the world's largest oil and gas producer, has repeatedly clashed with its neighbours, particularly Ukraine, over Soviet-style subsidised energy prices, though several winters of supply disruptions have also strained ties with the European Union, Moscow's biggest trading partner.
Now the focus has shifted to Belarus, which is in dispute with Moscow over how much export duty it should pay to Russia for supplies which are then refined and exported to the West, a pillar of the $50 billion Belarussian economy.
Russia wants Belarus to pay tax on oil supplies that it does not consume domestically. Of the 20 million tonnes of crude (400,000 bpd) that Belarus receives annually from Russia, six million tonnes (120,000 bpd) are used domestically.
The rest is refined by Naftan and Mozyr refineries in Belarus for re-export to the West. Only a small portion of refined products actually stay within Belarus.
Minsk wants all 20 million tonnes received annually at a discounted export duty, as it had before 1 January this year.
(EurActiv with Reuters)
: Russia averts oil crisis as it ends Belarus embargo
By Charles Clover in Moscow
Published: January 5 2010 02:00 | Last updated: January 5 2010 02:00
A European energy crisis has been averted after Russia restarted oil shipments to Belarus, following a cut-off lasting several days.
The two sides remain locked in a dispute over the tariffs Belarus must pay for oil, which it refines and exports to Europe. But Igor Sechin, Russia's deputy prime minister, said yesterday during a meeting with Vladimir Putin, the prime minister, that supplies had resumed the day before.
"We yesterday started shipments to Belarusian refineries," Mr Sechin was quoted as saying, adding "We are continuing uninterrupted transit to western European customers."
Mr Putin said he hoped an agreement with Belarus would be reached soon.
Oil traders had said on Sunday that the supplies had stopped after talks over tariffs ended unsuccessfully on December 31. The talks have since restarted.
About 800,000 barrels a day of oil are transported through Belarus to Poland and Germany, and, while these volumes were never cut, the spat raised the prospect that Belarus could retaliate for the Russian cut by drawing off exports bound for Europe.
Ukraine was accused of doing this last January during a similar dispute over gas with Russia, which left several east European cities without gas for several days.
At one point yesterday, Belarus threatened to retaliate by cutting off supplies of electricity to the Russian enclave of Kaliningrad, which borders Poland and which receives electricity via Belarus.
The European Union confirmed yesterday that it had received no warning from Russia that a cut-off in oil supplies via Belarus was possible, despite the existence of an early-warning mechanism agreed last year in the wake of the row with Ukraine.
Additional reporting by Tony Barber in Brussels
JANUARY 5, 2010
WSJ: Energy Row Escalates
Belarus, Russia fail to clinch oil-price deal, though supplies resume
By WILLIAM MAULDIN and RICHARD BOUDREAUX
MOSCOW -- An energy price dispute between Russia and Belarus escalated Monday, raising concerns about midwinter disruptions in the flow through a pipeline system that supplies 10% of the European Union's oil.
The dispute focuses on the Soviet-era Druzhba system that is the main pathway of Siberian petroleum to Europe. Russia began curbing supplies through the pipeline to Belarus's domestic market after an oil-supply agreement between the two countries expired Dec. 31.
On Monday, Russian officials said those deliveries had been resumed, but not before Belarus threatened to cut off electricity to Russia's westernmost region if the Russians insisted on imposing a new tax on the oil Belarus processes for export.
Russia's top energy official, Igor Sechin, said European customers were unaffected by the dispute and that Russian crude was flowing normally through the pipeline. But he emphasized that Russia and Belarus had yet to clinch a new oil pricing agreement, although the two sides were in "constant contact."
Three years ago, Russia briefly cut oil exports to the European Union nations through a Belarussian pipeline as the two former Soviet republics quarreled over price. That shutdown, along with a January 2009 natural-gas cutoff to Europe caused by contract disputes with Ukraine, raised doubts in Europe about Russia's dependability as a top energy supplier.
The dispute poses less of a threat to Europe than last winter's gas cutoff did. European countries have stockpiles in place and more options, such as sea shipments, for diversifying their supplies of oil.
Russia's new position could prove costly for Belarus, a former Soviet republic that has traditionally counted Moscow as its closest ally and sponsor.
Until now, Belarus has received Russian crude at effectively subsidized prices, paying a crude-oil tariff of about one-third of what Moscow charged internationally. Belarus has used some of the oil domestically, then has refined and exported the rest at a hefty profit.
Russia is now demanding that Belarus pay full customs duties on the oil it doesn't consume domestically. The new tax could cost Belarus an estimated $5 billion this year, more than 10% of its gross domestic product.
Belarus's Belenergo energy company issued a written warning Monday that it could retaliate by interrupting electricity transfers to Russia's Kaliningrad region, a Baltic Sea enclave sandwiched between Poland and Lithuania.
A spokesman for Inter RAO UES, the Russian operator of power exports and imports, said Belarus was trying to "blackmail Russia through the media."
Relations between the former Soviet neighbors have been increasingly strained by financial disputes. Belarussian President Alexander Lukashenko has accused Russia of trying to acquire key industrial assets in the country of 10 million people.
Belarus has limited leverage to confront Moscow, however. Russia is building a second phase of the Baltic Pipeline System, scheduled to be completed in 2012, which would route oil around Belarus to Europe via the Baltic Sea.
Poland depends on the Druzhba pipeline for most of its crude oil. Germany received about 15% of its crude through the pipeline in 2008.
Oil prices rose Monday to $81 a barrel, the highest in more than two months, partly because of the Russia-Belarus dispute.
Write to William Mauldin at william.mauldin@
ISRIA: Russia - Prime Minister Vladimir Putin met with Deputy Prime Minister Igor Sechin
Transcript of the beginning of the meeting:
Vladimir Putin: Mr Sechin, the agreement on the Customs Union between Russia, Kazakhstan, and Belarus became effective January 1. As you and our partners in Kazakhstan and Belarus know, oil and gas supplies were not mentioned in the agreement. We are planning to sign separate documents on this issue before July 1, 2010. How is this work going?
Igor Sechin: Mr Putin, you are absolutely right, an additional agreement on hydrocarbon supplies needs to be signed. All these documents will be discussed, signed and implemented before July 1.
During the past months, in November and December, we have been discussing these issues with our partners at meetings in Yalta, St. Petersburg, and at a meeting of the Supreme State Council of the Russia-Belarus Union State in Moscow. We plan to finish this work within the next few months.
Vladimir Putin: Belarus has long bought Russian oil at a customs duty discount of 36%. What about this agreement?
Igor Sechin: You are right, Mr Putin, according to the agreement signed on January 12, 2007, Belarus bought oil with a decreasing coefficient: 0.356 against the standard Russian export oil duty. On January 1, 2010, all decreasing coefficients expired.
Vladimir Putin: You mean that the agreement itself has expired?
Igor Sechin: Let's put it this way: the decreasing coefficients had a period of validity. It has expired.
Vladimir Putin: And what is next?
Igor Sechin: Taking into account our special attitude toward our Belarusian partners, during a meeting of the Supreme State Council in Moscow, we proposed an extension of privileged supply costs for Belarus in volumes needed for domestic use. These volumes are now being discussed by the Russian and Belarusian Energy Ministries. We are considering 6 million tons of oil.
Vladimir Putin: No duties?
Igor Sechin: No duties.
Vladimir Putin: Did you reach any agreements?
Igor Sechin: We introduced our proposals to our Belarusian partners. We are constantly in touch with them. Yesterday, I spoke to Belarusian First Deputy Prime Minister Vladimir Semashko.
We have not signed an agreement yet, but we provided Belarus with all the needed documents.
Vladimir Putin: What about supplies to Belarusian LNG plants and oil transit to our European customers?
Igor Sechin: We are preparing all these agreements, but they should not affect supplies to our customers. We are providing them fuel with no interruptions.
Yesterday, we started shipments to the Belarusian LNG plants through the main trunk line: about 100,000 tons of oil was shipped to the Novopolotsk NLG plant, and 78,000 tons to the Mozyr plant.
Vladimir Putin: I would ask you to continue negotiations. I hope you will sign the needed agreements as soon as possible because it is in our interest and in the interest of the current Russian legislation.
Igor Sechin: Yes, Mr Putin. We will do that.
Gazeta.kz: Customs Union of Kazakhstan, Russia and Belarus starts its work
12:59 05.01.2010
text: "Kazakhstan Today"
The Customs Union of Kazakhstan, Russia and Belarus will strengthen our economy and will open new prospects. The President of Kazakhstan, Nursultan Nazarbayev, said in his New Year's congratulation speech, Kazakhstan Today agency reports citing the text of the ew Year's congratulation of the President of Kazakhstan published on the official site of the head of state.
"We will be living in the Customs Union from January 1 together with Belarus and Russia. We will start creation of the uniform economic space. It will strengthen our economy, will open new prospects, and will raise quality of life of Kazakhstan citizens," the President of Kazakhstan said.
The Presidents of the EurAsEC countries made the decision on creation of the Customs Union on October 6, 2007. In October, 2008 Russia, Belarus and Kazakhstan created the Customs Union Commission.
Formation of the uniform customs territory assumes cancellation of customs borders between the Customs Union states and shifting all kinds of state control, except boundary, to the customs border of the union. It is planned that control will be cancelled from July 1, 2010 at the Belarus-Russian border and in Kazakhstan - from July 1, 2011. The uniform custom duties in the territory of three countries will come into force on January 1, 2010. The customs code will start to work from July 1 of 2010.
EurasiaNet: Georgia: First Tbilisi-Moscow Flight Since 2008 Set To Depart On January 8
1/04/10
A passenger plane is scheduled to fly from Tbilisi to Moscow on January 8 for the first time since Georgia and Russia went to war over breakaway South Ossetia in 2008.
A private carrier, Georgia Airways, announced January 4 that it will operate three Tbilisi-Moscow charter flights in the coming weeks. Georgian Airways spokesperson Nino Giorgobiani told a news conference that Russia transportation authorities on December 31 granted permission to the company to operate the flights.
Georgian Airways is selling tickets for 170 euros ($245 roughly). Airline representatives said that more charter flights to Moscow may be scheduled for January 16, 20 and 22. "I hope that the Russian and Georgian governments will soon hold negotiations on the resumption of regular flights," Giorgobiani said during the January 4 conference.
News.az: Charter flights Tbilisi-Moscow-Tbilisi will implement on 8, 9 10 of January
Tue 05 January 2010 | 05:36 GMT
Russia opens its air space for Georgian air companies.
Georgian United Transport Administration and Air company Airzena have received a confirmation letter from the Russian transport ministry, which allows the company to make several charter flights Moscow-Tbilisi on January 8, 9, 10, and Tbilisi-St. Petersburg on January 9 and 10.
Airzena Air Company staff hopes to make additional charter flights on January 16,20, 26.
The United Transport Administration of Georgia fails to specify if Russian side will resume regular flights with Georgia, which were suspended during the August war in 2008.
Itar-Tass: Medvedev nominates Darkin for Primorye governor
05.01.2010, 09.49
MOSCOW, January 5 (Itar-Tass) -- Russian President Dmitry Medvedev nominated Sergei Darkin’s candidature for consideration of the Legislative Assembly of the Primorsky Territory for vesting him with powers of governor.
As the Kremlin press service reported on Tuesday, the president did it under Article 18 of the federal law on the general principles of organization of legislative and executive bodies of state power in constituent territories of the Russian Federation and under Article 261 of the federal law as of July 11, 2001 on political parties.
Sergei Darkin was born in the city of Bolshoi Kamen of the Primorsky Territory on December 9, 1963. In 1985, he finished the Admiral Nevelsky Far Eastern Engineer-Nautical School, then he worked there as a teacher. In the 1990s, he was engaged in business, headed a number of industrial enterprises in the Far East. In 1999, graduated from the Far Eastern State Academy of Economy and Business.
As of June 17, 2001, he occupies the post of governor of the Primorsky Territory.
RIA: Incumbent head of Far Eastern region nominated for another term
10:0905/01/2010
MOSCOW/VLADIVOSTOK, January 5 (RIA Novosti) - Russian President Dmitry Medvedev has nominated the incumbent governor of the Far Eastern Primorye Territory for another term, the Kremlin press service said on Tuesday.
Sergei Darkin, 46, has already served two terms as the region's governor since being first elected to the post in 2001.
Since 2004, the heads of Russia's regions have been nominated by the president and approved by the regional legislature. Prior to this, elections were held to determine regional governors.
The date when the local legislature will vote on Darkin's candidacy has yet to be fixed.
Out of Russia's 83 regional leaders, 29 have held their posts since the last century. Russian President Dmitry Medvedev has warned the country's governors in late December that most provincial heads would be able to hold office for three terms in the future.
RIA: Major terrorist attack thwarted in North Caucasus
10:4605/01/2010
MOSCOW, January 5 (RIA Novosti) - Police in Russia's North Caucasus Republic of Kabardino-Balkaria have prevented a major terrorist attack after discovering a powerful bomb planted near a busy road, a police source said on Tuesday.
A 40-liter barrel stuffed with explosives was found some two meters (six feet) from the Baksan-Azau highway. It was taken to a safe place and detonated.
"The blast was equal to 50 kg of TNT, and might have resulted in many deaths," the source said.
Russia's mainly Muslim North Caucasus republics, especially Chechnya, Dagestan and Ingushetia, have seen an upsurge of militant violence this year, with frequent attacks on police and officials.
The Georgian Daily: Kirill Positions Moscow Patriarchate for Expanded Political Role in 2010
January 04, 2010
Paul Goble
In the waning days of 2009, Patriarch Kirill made three statements designed among other things to position the Russian Orthodox Church for even greater role in Russian politics at home and abroad in the year to come, a role that some may welcome but that others will see as a challenge to secular values and human rights in both Russia and Europe.
First, in what must be music to the ears of many in the Russian government, Kirill repeated his longstanding view that Russia represents a unique civilization and should therefore can and should ignore the evaluations offered by outside experts and institutions like the European Court of Human Rights (interfax-religion.ru/islam/?act=news&div=33588).
Second, and as part of his campaign to build bridges with the Papacy and conservative Christians more generally, the outspoken Russian patriarch lashed out at Europeans for surrendering their cultural and political values to what he described in Gumilyev-style language as “passionate” Muslims (islamnews.ru/news-21966.html).
And third, the head of the Russian Orthodox Church further integrated that institution with the state not by signing an expanded cooperation accord with the Academy of Government Service (mospat.ru/ru/2009/12/29/news10989/), and demanding that the powers that be support religions relative to their size (interfax-religion.ru/islam/?act=news&div=33590).
In a speech to the Russian Academy of State Service, the patriarch said that Russians must not allow themselves to be judged “on the basis of alien criteria” and that it was long past time for Russians to stop trying to show outsiders that “we are good little boys, we live according to the same criteria, it is simply that we have certain shortcomings.”
Kirill’s rejection of universal values, his insistence that Russia cannot be measured except in terms of itself, and his dismissal of the findings of Western governments and the European Court of Human Rights have figured in his speeches and writings long before he became patriarch.
But now that he is patriarch, Kirill’s overt hostility to common values takes on new meaning, reinforcing the attitudes of some in the Russian government including Vladimir Putin that no one has the right to judge anything Moscow does and that any attempts to do so will be met first with scorn and then with charges that their authors are guilty of the same or worse.
Moreover, in this speech, Kirill went even further, arguing that if Russia follows Western values, which he said were defined by “an orientation to success, well-being and comfort,” then there was real danger that Russia, as Europe already is doing will yield “to that ‘passionate force, which today the Islamic communities are exerting” there.
As Kirill pointed out, “for Muslim countries, the religious factor in social life has always played a primary role while in Europe the situation is the reverse, and many Europeans have lost ‘the ability to sacrifice themselves, to give up their life for the Motherland,” a risk that he insists Russia cannot afford.
“If we will realize liberal ideas in social consciousness in a thoroughgoing manner (not in economics, in economics, liberalism is an appropriate phenomenon and an important factor, albeit with qualifications), then” Kirill insisted, “at the end we too will have a weak man who will defend neither his Motherland nor his family and friends.”
Two aspects of these remarks are worth noting. On the one hand and more than in the past, Kirill is using the language of Eurasianist Lev Gumilyev, an indication of his increasing tilt toward that element of the Russian nationalist spectrum, possibly on the basis of his judgment that that is the coming thing.
And on the other, his outspoken defense of religious supremacy and traditional values not only will find support among many Russians who have had their lives upset by the turmoil of transition but perhaps even more among those around Pope Benedict XVI who has warned of many of the same things in his homilies and statements.
Indeed, it appears likely that Kirill who very much hopes for a rapprochement politically if not theologically with the Vatican was directing his remarks last week as much at the Vatican as at the Kremlin, although the Russian powers that be would certainly welcome closer ties with Rome.
Finally, after his speech, Kirill signed a new cooperation agreement with the Russian Academy of State Service, something that will open the way for even more priests to receive training there, and he indicated that in his view the government must support religious communities “proportionately to their presence in society.”
Kirill has pushed that idea before, but because the Moscow Patriarchate is seeking to expand the inter-religious council system down to the regional level, the realization of this idea is certain to touch off disputes not only about how many followers any particular faith has – no one knows for sure – but also about what religions should be represented.
In the patriarch’s view, only the four “traditional” religions of Russia -- Russian Orthodoxy, Islam, Judaism and Buddhism – have that right and only they can expect state support as protected faiths. If Kirill continues to push this view without modification, he may please the Russian powers that be, but he will offend many in Russia and in Europe as well.
VOA: Russian Orthodox Church Opens its First Seminary Outside the Former Soviet Union
Intent to serve Russian diaspora, foster ties between Eastern and Western Christian churches in face of increasing secularization
Lisa Bryant | Epinay-Sous-Senart 04 January 2010
The Russian Orthodox Church has opened its first seminary outside the former Soviet Union - in a small French town outside Paris. The institution is starting modestly but has big ambitions: to serve Russia's growing diaspora and foster closer ties between Eastern and Western Christian churches.
It is a bitterly cold afternoon, but the large stone building in the heart of Epinay-Sous-Senart is warm and welcoming, with smells of cooking and a Christmas tree in the front hall. Upstairs, half a dozen black-robed students are studying theology.
The building is an old convent. But the nuns are gone and their Roman Catholic crosses have been traded for Russian icons and incense. The students are on the front lines of a bold experiment launched by the Russian Orthodox church, the first pupils of the church's first seminary in the West.
Alexander Siniakov is the seminary's director.
"The Russian Orthodox church needs more than ever good specialists who know not only the life of Christian churches in western Europe, and in the West generally, but also who know the theology, the history of the Catholic Church and the other Orthodox Churches and specialists who know foreign languages and are able to study the experience that Christians in Europe encounter with secularization," Siniakov said.
The seminary was officially inaugurated in November and it is starting modestly with about a dozen students enrolled in its five-year program. Most are from Russia and former Soviet republics, but there are plans to diversify and grow the student body to 40 over the next few years, with the seminarians also earning master's degrees in theology from the Sorbonne University in Paris.
One of the students, 25-year-old Andrew Seebrych Anekcandroviych from Ukraine, says he likes the cross-cultural experience.
"It is a nice possibility to study French and to study and to know how western people live in France and in other Western countries," Anekcandroviych said.
Some students will return home after graduating. But others are being groomed to serve Russia's far-flung diaspora that has ballooned after the collapse of the Soviet Union.
Establishing a Russian Orthodox seminary in the West was the idea of Patriarch Kirill, who was elected to head the Moscow church in February. Orthodox priest and researcher at the French National Center for Scientific Research, Stephen Headley, says Patriarch Kirill wants to train priests to serve parishes wherever Russian expatriates are located.
Father Headley also teaches at the seminary.
"He wanted to have a seminary in Paris where people would get used to using foreign languages, get used to living in a secularized society, like France," Headley said.
The seminary's director, Father Siniakov, says the institution is open to students of all Orthodox faiths, including those linked to the Patriarch of Constantinople in Istanbul.
The Moscow Patriarchate has also reached out to the French Catholic Church, asking for help in finding a location to house the seminary. French bishops put the Russians in touch with elderly nuns living in Epinay-Sous-Senart, who were moving out of their convent. The nuns still come back to teach the young seminarians French.
Monsigneur Michel Dubost is bishop of the Evry-Corbeil-Essonnes diocese where the seminary is located. He explains why it is important to have ties between the Roman Catholic and Russian Orthodox Churches.
"We cannot be Christian ignoring the oriental tradition. The church has got two lungs as Pope John Paul said, one occidental and one oriental. And we cannot know the roots of the Catholic Church when ignoring what happened in the Orthodox Church," Dubost said.
The relationship between the seminary and the French Catholic Church reflects more broadly the warming ties between the Vatican and the Russian Orthodox Church after centuries-old divisions. The dialogue has intensified under the current leaders, Pope Benedict XVI and Patriarch Kirill, who have met several times in the past.
Although differences remain, Father Headley, the Orthodox researcher, believes the leaders are focusing on ways they can work together.
"I think there was a conscious decision on the part of the Vatican and the Moscow Patriarchate to try to cooperate on the social level, which talks about the re-Christianization of western Europe and the Christian roots of western Europe, because that would be a more fruitful and productive venue for them to work on," Headley said.
On a practical level, Father Headley believes the two churches may eventually lobby for causes they believe in. Both Pope Benedict and Patriarch Kirill have conservative views on matters like euthanasia, abortion and homosexuality.
Russian Orthodox church expert Michael Bourdeaux, who founded the British Keston Institute, agrees.
"If the Catholic and Orthodox churches came closer together, they would form a huge beacon for conservatism in the world today. Conservatism in terms of theology which they share, and conservatism in terms of sexual morality, morality in society in general," Bourdeaux said.
As night falls, the students at the Epinay seminary put their books aside and head for the large, plain room that serves as the school's chapel. They chant for Vespers service in Russian, with director Siniakov chiming in in French.
Asked earlier what the Orthodox Church can offer the West, student Anekcandroviych thinks for a while. His answer: spirituality. He says for many Russians, the Orthodox faith is not just a matter of rules and rituals. The Orthodox faith, he says, is alive.
The Jamestown Foundation: Ingush-Ossetian Relations Show Signs of Improvement
[tt_news]=35867&tx_ttnews[backPid]=7&cHash=336b40ba98
Publication: Eurasia Daily Monitor Volume: 7 Issue: 1
January 4, 2010 03:32 PM Age: 9 hrs
By: Valery Dzutsev
On December 17, Ingushetia’s President Yunus-bek Yevkurov and the head of North Ossetia, Taimuraz Mamsurov, signed an agreement on developing good-neighborly relations between the two republics. The agreement stipulates a plan of joint actions for the republican governments and government controlled civil organizations in 2010. Drawing on the importance of the agreements, Yevkurov stated it was a landmark day in the history of both peoples –the Ingush and the Ossetians (kavkaz-uzel.ru, December 17). The well-known liberal Russian economist Andrei Illarionov rated the agreement between Yevkurov and Mamsurov as the most important event in domestic Russian politics in 2009 (Independent Information Center, December 29).
The agreement aims to end the longstanding tensions between Ingushetia and North Ossetia over the disputed Prigorodny district of North Ossetia and its capital Vladikavkaz. The Ingush side laid claims to territory in neighboring North Ossetia that once belonged to Ingushetia, and the dispute finally erupted into large scale violence in fall 1992. Hundreds of people were killed in a short but bitter war and tens of thousands of ethnic Ingush –up to 60,000 people– were forced to leave North Ossetia or fled fearing for their lives following the conflict.
Numerous attempts to reconcile the two republics had been made prior to the latest agreement, but they had limited results. The issues of the disputed territory, the refugees’ return and concerns for their safety have remained points of contention between the governments of Ingushetia and North Ossetia. Even though the Ingush refugees were partially allowed to return to their homes, some areas in North Ossetia, including Vladikavkaz, have remained off limits to the return of Ingush refugees. “The ultimate aim [of the agreement] can be only one thing: the return to the Prigorodny district of absolutely all the Ingush people who left it,” stated the Ingush presidential spokesman Kaloi Akhilgov. North Ossetian leader Taimuraz Mamsurov, for his part, stressed the necessity of finding solutions to the problems shared by both neighboring republics, such as poor economic development, corruption and crime (kavkaz-uzel.ru, December 17).
As an oblique sign that the agreement is being forced upon the regional leaders rather than a product of internal and voluntary development, there has been little information about its actual contents. There was no public discussion prior to the signing of the agreement either in Ingushetia or North Ossetia. Instead, the leaders of both republics made several conciliatory statements that apparently were meant to pave way for the introducing the plan for yet another final settlement.
The Russian government plans to invest 7 billion rubles ($230 million) into the economy of the Prigorodny district in an attempt to create jobs for the returning Ingush refugees (Regnum news agency, December 17). For the Prigorodny district, with its current population of little more than 100,000, this investment is substantial, provided it is used with prudence.
The disastrous security situation in Ingushetia may have been one of the main drivers behind the latest attempt to return the Ingush refugees to their homes in North Ossetia. Little Ingushetia has become arguably the hottest spot in the volatile North Caucasus region, where attacks, abductions, clashes between government forces and the insurgency are almost a daily routine. The Ingush religious authorities and elders, an important and respected institution in Ingushetia, asked President Dmitry Medvedev to help stop what they called in their address the “elimination of the Ingush population” in the past several years (, December 19). On several occasions, President Yevkurov conveyed the message that resolving the Ingush refugees issue would undermine the influence of “extremists.” Yevkurov is himself a live victim of the destabilization in Ingushetia, having barely survived a suicide bomber attack in June 2009, which added an extra weight to his words. Moscow may have been convinced that facilitating the Ingush refugees’ return would provide a way out of the unending low-key civil war in Ingushetia by soothing the sensitive issue of the territorial dispute over Prigorodny district.
However, at the same time, the mass return of the Ingush refugees will hardly be received well in North Ossetia, where locals have little real experience of co-existence with the Ingush, but have heard much about deadly attacks in Ingushetia and Ingush participation in the Beslan school hostage drama in 2004. Therefore, Moscow will have to strike a careful balance between pushing the Ossetians and the Ingush to find a permanent settlement and at the same time avoiding alienating these two peoples.
Another unexpected result of the mass return of the Ingush refugees to North Ossetia might be the spread of Islamic extremism and its related insurgency to the relatively quiet North Ossetia. Even though North Ossetian officials, contrary to various reports, deny there is a problem with Islamic insurgency in the republic, the republican authorities decided to put up banners in the streets to fight extremism and terrorism (kavkaz-uzel.ru, December 30). This can be interpreted as a tacit acknowledgement of the presence of an Islamic insurgency in North Ossetia, where Muslims make up approximately 25 to 30 percent of the total population. Moreover, the head of South Ossetian Orthodox Church pointed out that Wahhabi cells were already present even on the South Ossetian religious landscape, where previously there had been no Muslim tradition at all (, December 19).
If the insurgency and the law enforcement agencies expand their war to North Ossetia, it may even trigger another outbreak of the Ossetian-Ingush conflict, as the questionable practices of the security services will be rendered even more irksome by adding an ethnic dimension to the fight.
It already looks as if, by transferring a portion of the Ingush population to North Ossetia, Moscow is delegating the North Ossetian government the authority to deal with the insurgents. Sources in Ingushetia recently complained about the abduction of a 60 year-old Ingush man in the Prigorodny district and his torture and mistreatment by North Ossetian police (, December 16, 30).
Expert Club: Caucasus in anticipation of a peaceful new year
05/01/2010 11:53
Gocha Guniava
"The Club of exsperts", exspert
On May 21st, 1864 Commander-in-Chief of the Caucasian army issued a special decree in connection with annexation of Western Caucasus and the end of the Caucasian War:
With sincere joy and respect for your courage I congratulate you, the troops of the Caucasian Army, with subjugation of Western Caucasus and the end of the Caucasian War.
With your courage in battle, your unparalleled firmness to endure heavy labor and hardship you have rendered a great service to the Sovereign and the country: no terrors of wild, inaccessible mountain refuges or desperate resistance of its inhabitants, no severe cold or scorching heat - nothing could stop you, you have overcome all for in the course of many years, without weakening spirit, and imprinting every step with sweat and blood, and you reached the goal.
Glory to God who crowned your efforts, thanks and appreciation to the motherland – you - conquerors of the Caucasus! Eternal memory to those fallen comrades of yours who have not waited for this joyful moment.
Signed Chief of the Caucasian Army General Michael Romanov
But Mikhail Nikolaevich was mistaken. He conquered but did not subdue, and the war did not end in the Caucasus. He could not even calculate that many more Russian soldiers would be sacrificed to restrain imperial ambitions in this area.
The war continued for those hundreds of thousands of angry Caucasian Muhajirs, who were forced to leave their homeland forever because of their belonging to a different religion.
The war continued for those peoples who were driven from their land and dispersed across Central Asia and Kazakhstan.
300 thousand orthodox Christian Georgians have been driven out of Abkhazia and Tskhinvali region with fire and sword only because they were Georgians.
The Chechens suffered two devastating wars, because they had different from them view on freedom and justice.
Two indigenous regions were taken away from Georgia by force.
After 150 years since publication of the above decree current "governor" of the North Caucasus Vladimir Ustinov proudly announced while assessing activities of 2009 that the following were taking place in the North Caucasus in the course of 11 months: tens of anti-terrorist operations and the same amount of intelligence operations were carried out; there were 786 terrorist and subversive acts; more than 80 cases of terrorist acts have been prevented; more than 100 militants were killed and over 800 of them were captured. More than 1263 law enforcement workers and civilians became victims of these operations; Interior Minister of Dagestan A. Magomedtagirov has been killed; President of Ingushetia Y. Yevkurov miraculously survived a terrorist act. Also several high rank religious officials have been killed despite the fact that according to the Koran they are untouchable even during the war. There was no mention that these thousands of killed, wounded and exiled left tens of thousands of their families and relatives behind.
It's hard to believe after seeing these figures that all the above is happening during so-called peace and not in the wartime.
Some leaders of the Kremlin mentioned "traditional Caucasian clan system" as a reason for all the above that has been happening in the North Caucasus. Some named past mistakes and unemployment of population as reasons. But Vladimir Ustinov blamed everything on activization of geopolitical rivals of Russia in the Caucasus!!!
On December 17th 2009 a car was blown up in Nazran in which pregnant widow of a prominent Ingush opposition politician Maksharip Aushev who was killed in October - Fatima Janieva, her mother and two brothers were traveling. All of them died on the spot except seriously wounded Fatima Janieva. As it became known afterwards the car was blown up by law enforcement workers. The next day Janieva's third brother Batir Janiev who was enraged by slaughtering of his family blew himself up in protest and revenge in a car and wounded more than 20 policemen and military personnel.
It is hard to believe that 23 year-old young and full of life Batir Janiev was fulfilling a geopolitical order.
Vladimir Ustinov is not alone in his assessment of reasons for aggravation of the situation in the region. He is supported by the most aggressive leader of the region - the President of Chechnya Ramzan Kadirov. He managed to gather so much armament and managed to gather so many armed people that scope of operations in Chechnya seems to be too small for him and wants to spread his wings more widely. He is attacking the west interested in weakening of Russia and calls on Russian authorities (probably with their order) to use their military and technological capabilities and start an attack on Georgia and Ukraine in order to once and for all resolve this problem and cure this old "disease".
Ramzan Kadirov has other plans also: he plans to unite two Vainakh people – Chechens and Ingush, take advantage of offer of 100 000 Chechens who live in Dagestan, to finance construction of a new settlement for his elite officers near the capital of Kabardo and to befriend and get closer to people that know well the Pankisi gorge and its adjacent territories.
A geographical area drawn by Ramzan Kadirov is not far from a concept of a creation of well-known Sharia state of Doku Umarov - the Caucasus Emirate - which includes Dagestan, Chechnya, Ingushetia, a part of Stavropol oblast, North Ossetia, Kabardino-Balkaria, Karachay-Cherkessia and ideological foundation of which is Vahabism and Jihad.
The President of Ingushetia Yunus-Beck Yevkurov knows well negative attitude of his people towards possible merging of Chechnya and Ingushetia and he won't be able to support this idea. He also knows historically positive attitude of Ingush people towards Georgia and in contrast to his Chechen colleague was very reserved towards hints of Moscow for all North Caucasian leaders to be equally aggressive towards neighbouring Georgian people for the New Year. Although given the current situation in the republic he is not against for certain part of the population to receive willingly Georgian citizenship and even settle there.
Like Yevkurov leaders of Dagestan could not be talked into by the high authority. But this idea was picked up by the head of the state security service of Dagestan Vyacheslav Shashnin. On the 23rd of December he issued an order to find subversive and terrorist groups that were to go from Georgia into Dagestan and who were ordered to carry out subversive and terrorist acts on power facilities and railway lines and to destroy them.
Neither "public" organization Dariali operating in North Ossetia was left out of Moscow's New Year scenario. They discussed an issue of no less than return of the Kazbegi district into composition of South Ossetia at their session of the 23rd of December. According to the head of Dariali Gairbek Salbiev he already had this conversation with the president of South Ossetia Eduard Kokoiti who was delighted with this offer and expressed his willingness to defend interests of Ossetia and Ossetians. Initiative of Dariali was followed by reaction and promises of active support from member of the State Duma A. Fadzaev. The same was done by so-called ambassador of South Ossetia to North Ossetia Stanislav Jioev. He admonished his comrades with calmness characteristic of diplomat that return of the Kazbegi district into South Ossetia should happen gradually by using a "civilized" dialogue.
A list of facts that reflect the attitude of some leaders of Georgia's northern neighbour would be incomplete without mention of a possible future informal visit to Turkey of the recently re-elected president of Abkhazia Sergei Bagapsh. According to the calculations of his "friends" this visit would be tantamount to an official.
Interested forces in Russia are doing everything in Moscow and Ankara in order to arrange a meeting between Bagapsh in Turkey, not only with business circles, but also with officials of Caucasian origin, which will subsequently be used to introduce disorder in the Georgian-Turkish relations.
All this "soap opera" for a whole month passed to the accompaniment of the columnist of Moscow newspaper Nezavisimaya Gazeta and one of the instigators of the Cold War, Yuri Simonian. For him Georgian theme has been a leading topic for years and who in December last year dedicated a whole series of articles to blackmailing of the Georgian side.
- A diplomatic row between Georgia and Ankara is brewing. Moscow and Ankara held secret talks on Turkey's recognition of sovereignty of Abkhazia and, respectively, Russia's recognition of the Turkish Republic of Northern Cyprus - Simonian said in his article of December 23rd. He continues in the December 24th article: coming year will be a year of political and economic expansion of Iran into the South Caucasus; Iran has expressed readiness to cooperate with Abkhazia in the economic field, although the issue of recognition of its sovereignty has not been yet discussed. Also Simonian has not left without notice a subject of stir that was raised around the Patriarchate of Georgia and the accident that occurred during the dismantling of the memorial in Kutaisi.
Another year – 2009 – full of tensions and tragic events for the Caucasus has ended. In 2010 a new governor in the status of a special representative of Russian President is expected in the North Caucasus. We wish him and his Moscow leaders to make the long-suffering peoples of the Caucasus happy with new, civilized approaches consistent with the spirit of the XXI century.
The Georgian Daily: Life Expectancy Figures Failing to Recover in Russia, Ukraine and Belarus
January 04, 2010
Paul Goble
Most post-communist countries experienced major declines in life expectancy figures during the 1990s, but only the three Slavic countries – Russia, Ukraine and Belarus – have not seen a significant recovery in those figures over the last decade, a pattern that reflects continuing “super-high” mortality rates among working-age males in all three.
That is one of the conclusions offered by Elena Paliy in the current issue of Moscow’s “Demoscope Weekly” in an article devoted to the situation in Ukraine, where she says, birthrates are now at European levels but where “mortality rates correspond to the worst examples of the post-Soviet space” (demoscope.ru/weekly/2009/0403/tema05.php).
Arguing that while “it might be logical to suppose” that improving economic conditions would have changed that, in fact, in these three countries, life expectancy figures have remained stagnant and thus have fallen ever further behind the numbers not only in Europe but even in many other parts of the post-Soviet world.
In her article, Paliy focuses on the situation in Ukraine in particular. There, she writes, during the 1990s, there was an increase in mortality among almost all age groups, although she notes that Ukraine “was able to achieve definite successes in preserving the lives of newborns,” something that prevented the overall figures from being even worse.
During that decade, “the most unfavorable shifts” involved working-age people and especially working-age males. While there were differences within this latter group, she continues, it is appropriate to speak about “super-high mortality” among that category as a whole.
In 2008, she reports, “more than a third died before reaching age 65; that is, as measured by the standards of the World Health Organization, they died prematurely,” with 73 percent of those deaths taking place in the working-age cohorts. And despite some improvement in survival rates among the young, life expectancy for men thus fell by four years after 1990.
Health experts have made it clear what Ukraine needs to do – provide better health care to all age groups, reduce alcohol consumption, improve diet and so on – but Paliy notes with regret, “despite the obviousness of the recipe,” Ukraine, as a result of the systemic social crisis has not been able to adopt it.
In particular, she says, increased income differentiation and social inequality have led to serious health problems among the poorer and less-well-placed groups, and especially among male members of the latter. But “judging from everything,” she concludes, “it is difficult to expect an essential improvement in mortality figures” anytime soon.
The Moscow Institute of Demography and Social Research projects that life expectancy for Ukrainian males is likely to increase by only four years by 2020 -- for women, the increase will be two years – although some projections suggest that Ukraine may not achieve even those increases over the next decade.
Looking out even further, Paliy says, “even if Ukraine is able to realize the high variant of the prediction – an increase in average life expectancy of men and women to 76 and 81 years respectively by 2050, with a fertility rate of 1.9 children per woman, the population of Ukraine will decline by three million.”
But using what she says is “a more realistic mid-range” projection, the population of the second Slavic republic will decline to 36 million and the percentage of those above working age will increase from 30 percent now to 36 percent in 2050, putting additional burdens on the working age population.
In short, she says, Ukraine “is entering into a special stage of demographic development,” one in which there will be fewer workers to support more non-working age people. This trend, which also exists in Russia and Belarus, she says, “must serve as a warning to politicians about the impermissibility of further delay in pension reforms and in the social sphere as a whole.
NY Times: The Kremlin Keeps a Bankrupt City Humming
By ELLEN BARRY
Published: January 4, 2010
BARANCHINSKY, Russia — For a few weeks this winter, this town wobbled on the edge of nonexistence.
Workers were showing up every morning at Baranchinsky’s lone factory, even though many had received their tiny salaries only once in the last 16 months. But then the local utilities cut off the factory’s electricity and heat over unpaid debts. Temperatures were dropping to 15 degrees below zero, and exterior pipes began to burst. A few more days and the factory would be damaged beyond repair.
The workers responded by putting on sweaters and showing up for work. Shop managers told them to go home — there were barely any orders to fill, anyway. But many refused, said Svetlana I. Yelpanova, president of the factory’s trade union.
“I guess they just thought that if they stopped showing up, the factory would close,” she said, with affection. “Some people are just enthusiasts. I wouldn’t do it myself.”
For more than a year, the Kremlin has been scrambling to address the future of places like Baranchinsky, one of Russia’s 300 or so “monocities,” where a single plant supplies heat, income and social security. Many of these factories are hemorrhaging money, leaving leaders with an array of unpalatable choices: To allow factory towns to die gradually, as they did in the 1990s? To liquidate them? Save them?
What happened in Baranchinsky, population 11,000, says much about the consensus Russia reached in 2009. Business did not want to spend money; workers did not want to relocate; the government did not want the political instability that comes with unemployment and was able to pay huge sums to stave it off. This consensus has kept much of Russia in a state of suspension, just when the economy would seem to demand change, said Natalya V. Zubarevich, an analyst at the Moscow-based Independent Institute for Social Policy. “This is a kind of quarantine, in which people simply wait until the end of the crisis,” she said. “The authorities are doing everything they can to support inefficient employment.” As for most people, she added, “they just want things to be the way they were.”
A central road runs through Baranchinsky and comes to a stop at the gate of the Electro-mechanical Factory. At the start of a shift, workers — mostly women — stream in as if inhaled by a giant lung, and nine hours later, they stream out, having changed their work clothes for fur coats and boots with kitten heels.
This rhythm has repeated itself since 1763, when Catherine the Great commissioned the factory to make artillery shells. But something changed with the fall of Communism. Defense orders vanished, and as the plant adjusted to the civilian market for electric motors and generators, there were periods when workers were paid in shoes, or not at all. Baranchinsky survived the 1990s, but life had become a roller coaster of good years and bad ones.
People in town blame Pavel Fedulov, a local oligarch who bought the factory in 2001. Mr. Fedulov snapped up dozens of local enterprises, and critics say he milked the factory of profits and invested nothing in its antiquated infrastructure. (Some machine tools were brought back from Germany as booty after World War II, workers said.) The plant was also hampered by age — it still produces its own fittings in an in-house foundry and smithy, a necessity during wartime — and faced rising competition from China and Europe.
At some point, the town began to look and feel poor. The bridge connecting its two halves has holes so large that a child recently fell through into the river. The swimming pool has been shut for a decade. In the evening, said Katya Zhukova, 16, teenagers “walk from one end of town to the other,” and then “we turn around and repeat it.”
“It is a dying settlement,” she said. “There’s nothing else for us to do, so young people start drinking.”
And yet, few people have left. A year ago, with the factory near bankruptcy, Ms. Yelpanova stacked her desk with resignation forms, expecting a mass exodus. For a while, it happened; 360 workers out of 1,369 resigned. But by spring, the same people were coming back to ask about vacancies.
There are various reasons for this. The obvious place to search for work was Nizhny Tagil, a large city just 25 miles away, but transportation is so difficult that commuters must leave for the train at dawn and return late, something many mothers refused to do. Those who wanted to move found that no one would buy their apartments.
Job searches petered out; Baranchinsky is in Sverdlovsk, Russia’s historic industrial center, and all the nearby cities have similar problems. The truly vibrant cities of Russia, Moscow and St. Petersburg, were as unreachable as the moon — because of exorbitant rents and because their governments still require registration, as they did in the Soviet days.
Yevgeny Nevolin, 25, smiled wanly when asked if he thought of leaving.
“I would have left immediately,” he said, “if I had somewhere to go.”
Many just waited, living off pay from a federal public-works program or sharing paychecks from government jobs. They nurtured a kind of faith: sooner or later, the state would step in to save the factory.
“We are patient people, and optimistic,” Ms. Yelpanova said. “Maybe it’s not a capitalist idea, but they just don’t think there is any way this factory could ever close.” Before long, their patience was rewarded. The new governor of Sverdlovsk Oblast, Aleksandr S. Misharin, had been in office just four days, but it was no coincidence that his first trip was to Baranchinsky. The Kremlin had put him in charge of one of Russia’s biggest collections of monocities, and it was the small, isolated ones Moscow viewed as tinderboxes. And so, bareheaded and in a cloth coat, the governor strode into the factory’s frozen workshops.
“When was the last day you worked?” he asked.
When there was heat, someone said.
“When there was heat,” he said. “You will have heat, you will have electricity. You have orders? Do you have a desire to work?”
Yes, they told him.
“Then you will work.”
That day the demise of Baranchinsky’s factory was, if not averted, postponed for the foreseeable future. Its longtime general manager and commercial director, minority shareholders who had been locked in a bitter feud with the majority shareholder, were arrested on fraud charges; the utilities reluctantly agreed to overlook an estimated $14 million in debts and turn the heat and electricity back on. Mr. Misharin said the factory was now state property, since it had been repossessed by a state-owned bank, but he made it clear that a new owner would soon step in.
The news delighted workers. They had long lobbied regional officials to replace Mr. Fedulov and his management team, but always got the same answer: that private property was sacred.
“I believe the difference is that Misharin has the support of the prime minister,” said Eduard V. Sazonov, 70, a deputy director of the factory in Soviet days. “I believe he got precise orders from Putin.”
And so the crisis passed, for the moment. The past year could have forced the closure of scores of small factories in the Urals — many of them outfitted with 19th-century technology — but the state has taken pains to prevent this, said Ms. Zubarevich, the Moscow-based analyst. There was also a ban on layoffs, which could have allowed business to set aside money for improvements. The policies averted social unrest, she said, but they will slow Russia’s recovery and modernization.
“It’s populism,” said Sergei Yermak, who covers economics at Expert Ural, a magazine based in Yekaterinburg, of Mr. Misharin’s visit. “From an economic point of view, he didn’t do anything. What is important for the authorities is just patching up holes and putting a stop to social tension. It’s not even patching an economic hole, but a social one.”
But no one said so that day in Baranchinsky. As the governor’s motorcade set off, life began to return to normal. Women padded through the snow, carrying tin pails of water, as they have for 10 generations. People hauled groceries home on sleds. Yellow light pooled in the windows of log houses, and the sharp smell of wood smoke filled the air.
The town survived to greet another year, at the pleasure of the czar.
Asia Times Online: Russia-India ties sour in Central Asia
By Peter Lee
Jan 5, 2010
Unsound strategy, mutual mistrust and opportunism are combining to frustrate the efforts of Moscow and India to blunt China's soft-power push into Russia's "near beyond" - the oil and gas-rich former Soviet republics that line the path of the ancient Silk Road from the Caspian Sea to China's doorstep at Xinjiang province.
Russia's unwelcome efforts to cobble together a Central Asian security bloc and claim a central role in a new, multi-polar Euroasian security structure have been the main stumbling block to advancement of its interests in the region.
It has not received a lot of help from India's opportunistic decision to play the "Great Game" on the cheap - piggybacking the military and diplomatic presence of Moscow and Washington in selected pro-Russian and pro-Western states in Central Asia to score points off its rivals China and Pakistan.
Perhaps the most remarkable news in a year of Eurasian overreach by India was the revelation that New Delhi had been considering the establishment of an Indian Air Force base in, of all places, Mongolia.
But the most significant development was perhaps the thwarting of India's signature piece of air-base diplomacy - in the tiny but suddenly crucial nation of Tajikistan - thanks to Chinese resistance and Russian mistrust.
In many ways, the Russia-India strategic partnership looks like a bad marriage, with each side using the relationship to wrangle over, attempt to obscure, and unwittingly reveal their inadequacies.
The clearest sign of Russia's failure to gain traction for its diplomatic initiatives in Europe and Asia was perhaps the desperately effusive welcome it gave to India's Prime Minister Manmohan Singh in December.
Manmohan was promised delivery of the aircraft carrier Admiral Gorshkov, which has been languishing in Russian hands because of a dispute over the cost of upgrading it for delivery to India. In return - though the sequence of quid pro quo may have gone the other way - India agreed to exercise its new privileges under its US-brokered nuclear deal to buy four civilian nuclear reactors from Russia.
The joint communique issued at the summit endorsed a key Indian aspiration - permanent membership on the UN Security Council - and extolled the virtues of an alphabet soup of multilateral talking shops from the Group of 20 to BRIC (Brazil, Russia, India and China), RIC (Russia, India and China) and the relatively unheralded "Heiligendamm - L'Aquila Process" - that acknowledge India's growing international stature.
It also pointedly advocated Indian membership in two organizations that have demonstrated a marked unwillingness to welcome New Delhi: the Shanghai Cooperative Organization (SCO) and the APEC (Asia-Pacific Economic Cooperation) forum.
Students of geography will note that there is no clear justification for including India in either organization. SCO addresses the security and integration issues across common borders affecting Russia, China, and four "Stans" created by the collapse of the Soviet Union. APEC is a regional grouping designed to expedite reduction of the trade barriers erected by the notoriously protectionist economies on the western side of the Pacific Rim.
Beyond irking Beijing and creating an additional counterweight to China - which is undoubtedly the decisive voice behind the scenes arguing for exclusion of New Delhi from the SCO and APEC - Russia's endorsement of India's desire to push its way into these two fora appears to represent an attempt to gain vitally needed support from a credible, emerging superpower for Moscow's faltering security doctrine.
In December, Russia published a long-gestating draft treaty, the European Security Treaty, meant to replace the North Atlantic Treaty Organization (NATO) as the mechanism for managing disputes on the continent. The response from the West has been resounding silence, and it appears that NATO - composed largely of states that hate, fear, or mistrust Russia - will remain Moscow's nettlesome interlocutor on the continent.
Russia has also promoted the Collective Security Treaty Organization (CSTO), composed of a hodge-podge of ex-Soviet states and Stans, as a kinder and gentler successor to the Warsaw Pact. Moscow wishes that the CSTO would be recognized by its members and the outside world as a valued and pre-eminent mechanism for injecting responsible Russian power into security issues on the fringes of the former Soviet empire, especially Afghanistan.
Russia has been laboring with scant success to leverage its potential utility on Afghanistan into Western recognition of the CSTO. The United States and NATO members have instead concentrated on bilateral negotiations with Uzbekistan, Kyrgyzstan and Tajikistan. The existence of the CSTO is barely acknowledged.
In its dealings with the ex-Soviet states, Russia is still haunted by the shovel-to-the-back-of-the-head foreign policy legacy of the USSR. Prime Minister Vladimir Putin succumbed to the urge to respond to Georgia's admittedly over-the-top provocations (and the West's high-handed orchestration of the independence of Kosovo) with overwhelming force in 2008.
Russia won the war but no overt backing from ex-Soviet states. The two breakaway statelets of South Ossetia and Abkhazia have, aside from Russia, attracted diplomatic recognition only from Nauru, Nicaragua, Venezuela, and "Transnistria", itself an unrecognized pro-Russian breakaway republic carved from Moldova.
Moscow also suffers from the resentment and suspicion of the Central Asian Stans and beyond over its attempts to build a culture of dependency on Russian military might and arms sales.
India - Russia's largest arms customer - has endured legendary difficulties in its arms dealings with Moscow, culminating in the case of the Admiral Gorshkov - the long-promised (initial agreement was made early in 2004) but endlessly withheld aircraft carrier whose purchase price inflated from less than US$1 billion to well over $2 billion after the contract was signed between Moscow and New Delhi. Russia's anxiety has increased exponentially as India enjoys its new strategic partnership - and the potential for arms sales - with the United States instead.
While Russia struggles with its diplomatic isolation and tries to enlist the support of India, it is confronted with the apparent success of a Eurasian regional grouping centered on China - the SCO.
There is an undeniable security element to the SCO, which was formed in part to assist the rulers of the newly independent Stans in resisting both US-sponsored color revolutions such as the Tulip Revolution that eventually roiled Kyrgyzstan, and brutal Islamicist insurgencies such as the seven-year revolt that plunged Tajikistan into civil war - and ensure that governments, forces, and ideologies inimical to China's control of its restive Muslim autonomous region of Xinjiang did not take root in the region.
The Western commentariat appears obsessed with Central Asian blocs, possibly as a threat to the US franchise as manager of the dominant NATO bloc, and periodically denigrates the SCO for its lack of cohesion and fearsome regional muscle that, in its view, renders the SCO unworthy of engagement.
However, the point of the SCO is multi-lateral economic and security integration that creates a profitable, stable, and strategically friendly backyard for China, not to expend political and diplomatic capital in a futile attempt to weld the bickering central Asian Stans into a monolithic pro-Beijing bloc.
China has resisted calls to use the SCO as the basis for a military alliance.
Undoubtedly, its considerations are shaped by awareness that any military organization would be dominated by the Russians and attract the overwhelmingly hostile interest of the US. In any case, it would be virtually impossible to get the disorganized and mutually bickering Stans to agree on any security goal beyond suppressing internal threats to their current leadership - the only task for which the increasingly undemocratic republics have shown any real interest or aptitude.
Finally, China is very anxious to keep a lid on things in Central Asia and avoid escalated conflicts that might provide inspiration, strategic space, and fighters and materiel to the aggrieved Uyghur separatists of Xinjiang.
The SCO has a permanent security office in Tashkent, Uzbekistan, of the Regional Anti-Terrorism Structure, known by its unfortunate acronym of RATS, which is designed to assist the member states in combating the "three evils" of terrorism, extremism and separatism.
Beijing's vision for Central Asia, of course, involves using its geographic, economic and financial strengths to demonstrate the advantages of stable, pro-Chinese regimes to the nervous rulers of Central Asia.
At the October meeting of SCO prime ministers, China's Wen Jiabao reiterated a pledge of $10 billion in loans to member states to help them ride out the global financial crisis.
China's extensive economic penetration of Central Asia is a matter of public record.
The eyes of the world - at least the Eurasian gas pipeline-obsessed world - were riveted on the bank of the Amu Darya River on December 14 as the leaders of China, Turkmenistan, Kazakhstan and Uzbekistan turned the valves ceremonially commissioning a pipeline that will carry 30 billion cubic meters per annum of Turkmenistan gas over Uzbekistan and Kazahkstan to Xinjiang and, from there, onward to China's heartland.
It is a big, multi-national project - built at a cost of $7.3 billion and 1,833 kilometers long - whose success is attributable to China's diplomatic finesse and financial muscle in Central Asia.
An oil industry observer nicely illustrated the distinction between promoting regional integration and assembling a geopolitical bloc, in pointing out that Turkmenistan now has a major alternative outlet to Russia's contentious and overbearing Gazprom to move its gas to market - and Uzbekistan and Kazakhstan will also be able to piggyback their product onto the pipeline. This was noted in the article "China's gas supply from Turkmenistan" published on December 28, 2009, by Hurriyet Daily News:
The additional bargaining power Turkmenistan, Uzbekistan and Kazakhstan gained from diversifying their energy export routes, thanks to the Chinese assistance, strengthens their political and economic independence and reinforces regional stability and security and that achievement deserves recognition.
Russia's riposte to the effectiveness of China's SCO-based penetration of Central Asia appears to be to assert the existence of an existential narcotics and Islamicist security crisis in Central Asia, one that can only be resolved with recourse to Russian military muscle.
Up to a point, Russia has been able to enlist India - now firmly committed to the civilization-versus-terror narrative courtesy of its burgeoning partnership with the US - in endorsing this world view.
Russia and India share a convergence of strategic interests in Afghanistan, one that conflicts with China's desire to let the Pashtuns sort things out in their own bloody fashion under the watchful eye of Pakistan's Inter-Services Intelligence.
Russia hopes to leverage the Afghan crisis into an acceptance of Moscow's security leadership by Stans vulnerable to Taliban-inspired Islamic militancy. India recognizes any victory by pro-Pakistan Pashtun factions, Taliban or otherwise, in Afghanistan
as a defeat for its efforts to distract and bedevil Pakistan.
This shared interest was reflected in the joint statement of Manmohan and President Dmitry Medvedev, which used the rhetoric of terrorism to preclude negotiating with the Taliban insurgency - the unacknowledged centerpiece of the US strategy to cobble together a political settlement and depart the benighted region.
The communique stated:"[Russia and India] agree that the fight against terrorism cannot be selective, and drawing false distinctions between 'good' and 'bad' Taliban would be counter-productive."
But a meaningful alliance between Russia and India appears to founder on the collision between Moscow's crude anti-diplomacy and India's ineffectual and opportunistic outreach. Their divergence of interests is neatly illustrated in the determined dance of the two powers with the tiny republic of Tajikistan.
Tajikistan borders Afghanistan to the north. The Tajik ethnic group disregards the artificial border and dominates northwestern Afghanistan, including the Ferghana Valley, the legendary bulwark of the anti-Pashtun, anti-Taliban Tajik leader and Russian asset, Ahmad Shah Massoud.
Russia relied on Tajikistan to provide a logistical rear area for its support of the Northern Alliance during the period of Taliban domination. India pitched in by constructing a military hospital at the town of Farkhor in Tajikistan territory a scant two kilometers from the Afghan border. Massoud, mortally wounded by an al-Qaeda hit squad, died at the hospital two days before the September 11, 2001 attacks.
Now, Tajikistan is the new hotspot in the global "war on terror" as it forms the centerpiece of US Central Command commander General David Petraeus' efforts to support the Afghan surge with a new supply route - the Northern Distribution Network (NDN) - bypassing Pakistan - and bringing an ocean of cash, development, graft and trouble to the impoverished mountain republic.
Tajikistan security has deteriorated markedly as militants fleeing the Pakistan government crackdown in Waziristan have found refuge in Tajikistan's vulnerable border regions. Tajikistan's Taliban problems have also been exacerbated by the movement of militants to Afghanistan's previously peaceful northern border districts to attack the NDN.
In addition to the US and NATO, Russia and India sense opportunity in Tajikistan, giving the local boss, Emomali Rahmon, a chance to play off one interested party against the other and settle old scores - and reveal the fragility of the strategic partnership between Russia and India in Central Asia.
After the US-led invasion, India maintained its presence at Farkhor and, in a virtually unreported development, quietly negotiated terms in 2002 for its first significant military base outside India, at the Ayni airport on the outskirts of Tajikistan's capital of Dushanbe.
India's ubiquitous quasi-military Border Roads Organization - which increasingly finds itself operating beyond India's borders in places like Afghanistan - went to work expanding Ayni's runway. Stories were floated to anxious observers in Beijing and Islamabad that India would station helicopters or even MiG fighters at Ayni in order to project its power into the remote corners of Central Asia.
The catch was that Ayni would be operated in rotation by Russia, India and Tajikistan, and the Indian Air Force would be reliant on Russia's good offices and logistical support to maintain its presence.
In 2007, an Indian defense website reported:
The Russians have given India the option of sending a squadron of Mi-17 helicopters to Ayni, with a detachment of pilots and support personnel. With Russia and Uzbekistan just next door, logistics support has been assured. Russia has also offered to build fighter maintenance infrastructure at Ayni with India. The option will be made available to India to base a squadron of MiG-29 fighters at the base, but this will not be in the near future, though the implications of this are huge - Indian fighters can be scrambled at a moment's notice for operations anywhere in the area. With mid-air refuelling support promised by the Russians, their reach will be immense.
But what Russia giveth, it taketh away.
Russia has been eyeing India's rapprochement with the US with considerable jealousy and anxiety. It apparently also covets Ayni (and the runway improved by India) as a platform for its own aircraft, so the Russian-backed security collective, the CSTO, can make a statement of its importance in the suddenly significant northern Afghan theater.
Last September, India apparently tried to bypass its putative partner, Russia, and play its own bilateral hand in Tajikistan. India's President Pratihba Patil paid an unprecedented visit to Tajikistan to talk up potential economic, aid, security links and India's interest in Ayni.
However, reports indicate that Tajikistan, responding to some combination of Russian resentment, Chinese objections, and insufficient bribery, decided to evict 150 Indian military engineers, support staff, and trainers from Ayni.
Russia's desire to demonstrate its leverage over its putative strategic partner seems to have been decisive.
An Indian defense website picked up a report from the News Post India:
"This [Russian pressure] appears to be a ploy for more concessions and indulgence from India," a senior military officer associated with the Central Asian Region said. Its Moscow's way of telling New Delhi not to "stray" into the American military hardware camp, the official told IANS.
India annually conducts defense business of over $1.5 billion [...] with Russia, and since the 1960s has acquired Soviet and Russian military equipment worth over $30 billion.
Over the next decade, military planners anticipate purchases of over $40 billion to replace or upgrade India's predominantly Soviet and Russian defense equipment that have reached collective obsolescence.
Moscow is understandably anxious to encash this potential and is wary of competition from other suppliers, particularly the US, in support of IAF's latest requirement of 126 multi-role combat aircraft.
Alongside, India is deadlocked in delicate discussions with Russia wanting to renegotiate its $85 billion Sukhoi 30MkI multi-role fighter deal by demanding a higher price for the timely delivery of the combat aircraft with the agreed specifications.
In July, reportedly at the behest of a seemingly "displeased" Moscow, Tajik Foreign Minister Hamrahon Zaripov declared that Dushanbe was not negotiating with New Delhi about permitting India a military base at Ayni.
As the US demonstrated in its convoluted but ultimately successful (and expensive) efforts to forestall eviction from its airbase at Manas Airport in Kyrgyzstan, even apparently hopeless situations can be turned around through the right combination of concessions to Russia and payoffs to the local potentate.
So India might still find a precarious foothold for its air force in Tajikistan, but it will remain beholden to the support of its unpopular Russian patron for its continued presence.
It is not surprising that Russia's heavy-handed approach to Central Asia security, India's aspirations, and military sales has forestalled a genuine strategic partnership between Moscow and New Delhi that will counter the "soft power" outreach of Beijing through the SCO.
While acknowledging seemingly every international organization that engages India - or, like the SCO, resists India's determined efforts to engage with it - the December Russia-India communique made no mention of Russia's pet geopolitical projects: the European Security Treaty or the CTSO.
However, for the time being New Delhi seems bereft of its own strategy and resources for advancing its independent interests in Central Asia.
As long as India continues to rely on its equivocal relationship as an auxiliary to Russia and, increasingly, the US in their great power machinations in Central Asia, it is likely that India and Russia will keep spinning their gears as China and the SCO continue to move ahead.
Peter Lee writes on East and South Asian affairs and their intersection with US foreign policy.
(Copyright 2010 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
Petroleum Economist: Russian companies head east to cement oil and gas ties with China
China and Russia have entered a new phase of strategic energy co-operation, re-orientating Russia's Euro-centric oil and gas trade towards the east, writes Isabel Gorst
RUSSIA HAS always been reluctant to allow its strategic oil and gas resources to pass into foreign hands and has, until now been particularly wary of its powerful neighbour to the east. But the global financial meltdown has pushed Russia into the arms of China.
Burdened by debt, Russian state-owned oil firms have borrowed billions of dollars from China to guarantee future energy supplies to the country and to build pipelines to carry oil and gas exports to the east.
Locking together the world's biggest producer and fastest-growing consumer of energy will have far reaching implications for the world's energy markets, re-orientating Russia's Euro-centric oil and gas trade towards the east.
China's readiness to enter a broad range of contractual arrangements, including equity deals, loans for oil and infrastructure investments have helped it leap ahead of …
Tehran Times: China: Russia’s land of opportunity
By Joshua Kucera
SUIFENHE, China -- In 1989, the opening of the border between Russia and China raised Russian fears of a “yellow peril”: millions of Chinese citizens flooding north into relatively unpopulated, but richly endowed, Siberia. Some contrarian publications even went so far as to suggest that Russia should just accept the inevitable and sell the whole territory to China.
Demographically, it makes sense that Chinese people would flock to Russia. Look at it in economic terms, though: China's economy is booming, and its prospects seem limitless. Meanwhile, Russia is highly dependent on uncertain oil and natural gas reserves. Professionals already make more money in China than they do in Russia, and as China's economy grows, blue-collar wages will likely outpace Russian pay. So, rather than Chinese people moving to Russia, isn't it more likely that Russians would move to China?
I asked this question of many Russians in the Far East, and I usually got the same answer: It's already happening. Thus far, the Russian migration to China seems to be only a trickle. But it's not hard to imagine that this is just the start.
The energy in Suifenhe, a relative backwater, is so much greater than in Vladivostok-a city three times the size-that taking the four-hour bus trip across the border is like switching from black-and-white to color. The road from Vladivostok becomes progressively worse the closer you get to the border, and the land is almost empty of people. As soon as you cross the border into China, there is a massive shopping mall with red cupolas, an apparent nod to Russian architecture, and an international-standard Holiday Inn.
The mall is part of what was supposed to be a joint Chinese-Russian free-trade zone, where people would be able to come to shop and tour visa-free. But all Russia has built on its side of the border is a church, which Chinese tourists photograph through the chain-link fence.
The day I arrived was one of the biggest celebrations in recent Chinese history: the 60th anniversary of the establishment of the People's Republic of China. Still, at the many construction projects around the city's center, workers were on the job until after dark. I thought back to Vladivostok, where a huge suspension bridge is under construction. It is supposed to be ready by 2012, when the city plays host to the Asia-Pacific Economic Cooperation summit. Ostensibly, this is a priority project overseen from Moscow, but when I mentioned to my translator that I hadn't seen anyone working on it, she smiled. “Yes,” she said. “We notice that all the time.”
Suifenhe's economy is driven by Russian shoppers on package tours, and the shops in the city center all have signs in the Cyrillic alphabet. One sporting goods store was called CSKA, after Moscow's legendary soccer team. I flipped through the T-shirts on sale at another boutique and saw shirts advertising the 2014 Sochi Olympics and United Russia, Vladimir Putin's political party.
But in addition to the many Russian tourists, there is a growing population of Russian expatriates living in Suifenhe. One, a journalist named Stanislav Bystritski, is a former reporter for a Vladivostok TV station. He moved here five years ago and produces two Russian-language shows on local Suifenhe TV, one oriented toward Russian tourists and one for Chinese people who want to learn about Russia and the Russian language.
As he showed me around town, an elderly Chinese man greeted us with a smile and said “Horosho,” which means good in Russian. It seemed a strange thing to say, but Bystritski told me it was a common greeting by Chinese people here, because it sounds like it could be a Chinese word and is easy for Mandarin speakers to pronounce.
He echoed what I had heard in Blagoveshchensk and Vladivostok-Russians come to China because it is easier to get a good job and easier to do business. “So many Russian businessmen say it's easier to work here, there is so much less corruption and bureaucracy,” he said.
Suifenhe's government once had plans to build a Russian quarter, reportedly with the expectation that up to 50,000 Russians might relocate here, though those plans appear to have been abandoned. Bystritski said that the rules on apartment ownership by foreigners have been loosened, so the government may have decided that there is no longer a need for a special Russian district. (We couldn't find out for sure. Bystritski set up a meeting with a member of Suifenhe's local government to talk about that and other issues involving Russian migrants. The official apparently assumed I would be Russian, and when Bystritski introduced me as an American, the official's eyes widened somewhat cartoonishly. He probably wasn't the best person, he said, and in the end I couldn't get anyone from the local government to talk to me.)
Still, I was able to meet several Russians who had moved here. Petr is building a small complex of apartment buildings for Russians. The Suifenhe government is so enthusiastic about the project that it is bulldozing the homes of the Chinese people who currently live in the area.
Viktor, a Russian engineer who moved here at the beginning of 2008, is working on a pollution-control technology that has excited more interest in China than it did in Russia. “The Chinese are more interested in innovative projects, so there are more opportunities here,” he said. His wife, Natasha, works as a technician with Suifenhe's pioneering (and, to a civil libertarian, rather ominous) “electronic security” system, in which surveillance cameras all over town are controlled from a spotless control room in a glass-fronted building called the Suifenhe Cyberport. She says she wants her 4-year-old son to be raised “in Chinese traditions,” and she is making sure he learns Chinese.
“People are so friendly here, I feel so comfortable,” she said. “This is my new home.”
China: Russia’s Land of Opportunity Where Russia Meets China: The final part of a 5-part series in cooperation with Slate. BY JOSHUA KUCERA | DECEMBER 30, 2009 Suifenhe's economy is driven by Russian shoppers on package tours, and the shops in the city center all have signs in the Cyrillic alphabet. One sporting goods store was called CSKA, after Moscow's legendary soccer team. I flipped through the T-shirts on sale at another boutique and saw shirts advertising the 2014 Sochi Olympics and United Russia, Vladimir Putin's political party.
But in addition to the many Russian tourists, there is a growing population of Russian expatriates living in Suifenhe. One, a journalist named Stanislav Bystritski, is a former reporter for a Vladivostok TV station. He moved here five years ago and produces two Russian-language shows on local Suifenhe TV, one oriented toward Russian tourists and one for Chinese people who want to learn about Russia and the Russian language.
As he showed me around town, an elderly Chinese man greeted us with a smile and said “Horosho,” which means good in Russian. It seemed a strange thing to say, but Bystritski told me it was a common greeting by Chinese people here, because it sounds like it could be a Chinese word and is easy for Mandarin speakers to pronounce.
He echoed what I had heard in Blagoveshchensk and Vladivostok-Russians come to China because it is easier to get a good job and easier to do business. “So many Russian businessmen say it's easier to work here, there is so much less corruption and bureaucracy,” he said.
Suifenhe's government once had plans to build a Russian quarter, reportedly with the expectation that up to 50,000 Russians might relocate here, though those plans appear to have been abandoned. Bystritski said that the rules on apartment ownership by foreigners have been loosened, so the government may have decided that there is no longer a need for a special Russian district. (We couldn't find out for sure. Bystritski set up a meeting with a member of Suifenhe's local government to talk about that and other issues involving Russian migrants. The official apparently assumed I would be Russian, and when Bystritski introduced me as an American, the official's eyes widened somewhat cartoonishly. He probably wasn't the best person, he said, and in the end I couldn't get anyone from the local government to talk to me.)
China: Russia’s Land of Opportunity Where Russia Meets China: The final part of a 5-part series in cooperation with Slate. BY JOSHUA KUCERA | DECEMBER 30, 2009
Still, I was able to meet several Russians who had moved here. Petr is building a small complex of apartment buildings for Russians. The Suifenhe government is so enthusiastic about the project that it is bulldozing the homes of the Chinese people who currently live in the area.
Viktor, a Russian engineer who moved here at the beginning of 2008, is working on a pollution-control technology that has excited more interest in China than it did in Russia. “The Chinese are more interested in innovative projects, so there are more opportunities here,” he said. His wife, Natasha, works as a technician with Suifenhe's pioneering (and, to a civil libertarian, rather ominous) “electronic security” system, in which surveillance cameras all over town are controlled from a spotless control room in a glass-fronted building called the Suifenhe Cyberport. She says she wants her 4-year-old son to be raised “in Chinese traditions,” and she is making sure he learns Chinese.
“People are so friendly here, I feel so comfortable,” she said. “This is my new home.”
(Source: Foreign Policy
Telegraph.co.uk: Moscow is planning to become a key transit link for EU-China trade
This online supplement is produced and published by Rossiyskaya Gazeta (Russia), which takes sole responsibility for the content.
Irina Sukhova, Viktor Kuzmin, Russia Now
Published: 2:09PM GMT 04 Jan 2010
An international air hub is taking shape in Moscow, which has the potential to unite trade flows throughout Russia and become an important transit link in EU-China trade. However, Russia's notorious flyover fees and rivalry between major airports are factors which may effect the nature and pace of development.
Moscow's airports are not what they used to be. Their design, service and logistic systems have undergone a radical transformation. With the infrastructure updated, preparations have begun for the next stage, which will eventually see Moscow's aviation hub entering the global competitive market.
The impressive growth rate of the Chinese economy, despite the crisis, combined with growing domestic demand, promises future expansion of the transit flow between Europe and Asia. In 2006, flights to China accounted for as much as one fifth of Europe's total air traffic. According to Airbus' Global Market Forecast (China) for 2007-2008, a five-fold increase in passenger traffic and a six-fold rise in freight transport over the next two decades is expected.
"This is a juicy fruit, and Moscow is in a condition to fight for it," one company head said.
The problem, however, is that foreign companies currently have to pay extra fees for the right to fly over Russia, on top of the usual air navigation fees; consequently, many of them find ways to bypass Russia altogether.
To create an effective transit link between Europe and Asia, Russia will have to revise its policy on flyover fees. Before the crisis, as part of preparation for WTO entry, Moscow was at least ready to discuss the technology and terms of the gradual withdrawal of the fees, but it is unlikely to do so before the end of the crisis.
Three rivals
Moscow's hopes of becoming a key global air hub are also, paradoxically, held back by the existence of its three international airports – Domodedovo, Sheremetyevo and Vnukovo – which are located far away from each other and have different owners. Domodedovo, Russia's largest airport by passenger volume (more than 20 million in 2008), is owned by the private company East Line; Sheremetyevo (14 million) is state-owned – except for Terminal D (see below), which is owned by a consortium with Aeroflot at the head; Vnukovo (eight million) belongs to private investors and the Moscow city government. All three have to compete for carriers and cash.
Over the past few years, the three airports have launched large-scale construction projects, changing them beyond recognition. Domodedovo transformed from a backward airport to Moscow's most modern facility, luring clients from its rivals, including S7 Airlines (formerly Sibir). S7, Russia's second largest carrier, left Vnukovo for Domodedovo, becoming its main domestic customer.
Sheremetyevo was not spared, either, with three large customers – British Airways, Swiss International Air Lines, and Russia's Transaero – defecting to Domodedovo. "Our shift to Domodedovo six years ago enabled us to introduce electronic ticketing ahead of other players in the sector," explained Galina Karzova, head of British Airways for Russia and Ukraine.
Germany's Lufthansa also opted for Domodedovo last year. Domodedovo has been upgraded recently, adding a multimodal transport hub with the focus on transfer passengers and freight traffic between Europe and Asia.
Hi-tech for Sheremetyevo
Sheremetyevo is fighting back hard. A new state-of-the-art Terminal D has just opened its doors and soon the new terminal will service all of Aeroflot's domestic and international flights, as well as the flights of its SkyTeam partners.
In an attempt to avoid the problems that London's Heathrow airport experienced on the opening of its Terminal 5, when nearly 30,000 items of baggage were lost, Sheremetyevo's management began testing baggage scanning equipment in Terminal D as early as May.
At the end of the testing period, a special exercise was held in which 600 people played the role of passengers with 5,000 pieces of baggage to be processed. A new automatic baggage processing system – unlike any other in the world – has been installed that uses a system of radio tracking devices for each item of baggage. It is based on a five-stage scanning process that allows for 100pc of outgoing baggage to be processed.
Air industry communications business SITA was hired to provide air transport communication and IT solutions within Terminal D.
"Over the course of a year, SITA has been working on one of its largest projects in Eastern Europe at Sheremetyevo," said the company's regional vice-president Ilya Gutlin.
"We can confidently say that SITA's hi-tech approach to security within Terminal D allows us to guarantee a new standard of passenger service."
The airport is improving fast. In 2007, Terminal C came into operation, located next to the Sheremetyevo-1 terminal for domestic flights. In addition to the just-opened Terminal D, Terminal E is in the final stages of construction. In December, the company also plans to complete the refurbishment of its old international terminal, Sheremetyevo-2.
Together with Terminal E, all of Sheremetyevo's international terminals will be under the same roof. The united complex will be able to serve up to 25 million passengers a year.
The master plan up to 2030, which Sheremetyevo has developed together with British design and engineering group Scott Wilson, focuses on the northern section of the airport, which is spacious enough to accommodate a third runway (the southern and northern sections will be linked via an underground automated transportation system), a new technical base and a multimodal freight complex.
According to Scott Wilson's forecasts, Sheremetyevo's total capacity by 2030 will rise to 64 million passengers and more than one million tons of freight.
Facing the future
With the launch of Terminal D, Sheremetyevo becomes an international hub for the SkyTeam alliance, which Aeroflot joined in 2005. As for the two other Moscow airports, their fate is still unclear.
Domodedovo currently has two global customers: Star Alliance, led by Lufthansa, and One World with British Airways in the lead. Unlike SkyTeam, Star Alliance and One World don't have Russian airlines among their members. It is on Russian airlines joining these alliances that the future of Sheremetyevo's rivals depend.
S7, which is the leading domestic carrier, has announced talks with One World. If the talks are successful, the alliance will settle at Domodedovo, while Lufthansa will have to find another Russian partner with a developed route network.
Rossiya Airlines, based in St Petersburg, and UTair are seen as the most likely candidates for an alliance with Lufthansa. However, there are a few things to consider: although Lufthansa's partner Fraport was among the winners in the tender for the reconstruction and management of St Petersburg's Pulkovo airport, it won't be easy to adjust business for connections with Russian flights in St Petersburg, as the bulk of the passenger flow from Germany goes to Moscow.
As for UTair, which has increased its share of the domestic market recently, it prefers Vnukovo. Whether the German company will agree to change an airport for the sake of its Russian partner is another question.
There are no doubts about Vnukovo's technical capacity: like Sheremetyevo and Domodedovo, ongoing construction is extensive.
According to Vitaly Vantsev, deputy general director of Vnukovo, a new terminal – one of Europe's largest – will be completed by 2012.
If all goes to plan, all three airports will become major air hubs, which will undoubtedly pave the way for new levels of competition.
Big future for a northern hub
In October the government of St Petersburg agreed to develop Pulkovo Airport as a concession. Built in the early 1970s, Pulkovo will become one of the most advanced transit hubs in Europe. The terminal and fleet will be restructured by an international consortium, The Aerial Gates to the Northern Capital, whose controlling stockholder is Russia's Vneshtorgbank.
The general plan is for a new international passenger terminal, which would be able initially to process some 7.4 million passengers a year and 22m by 2025. In addition to the terminal, Pulkovo will have a transit hotel, business centre, office buildings and parking. St Petersburg has earmarked 41,400 sq m for the entire Pulkovo project. The principal runway will also be refurbished, costing about 3.5m roubles. It should be ready by the end of this year.
Meanwhile, an agreement has been reached with the Leningrad region regarding the construction of a third runway. Elena Myagkova
National Economic Trends
Agrimarket: In 2015, Russia to increase grain production to the level of 120 mln tones
01/05/2010 10:04
To date, Russia takes the third place in the world at the volumes of grain production, and plans to increase the production volumes to the level of 120 mln tonnes in 2015. At the same time, the export volumes will total 30-40 mln tonnes, declared Elena Skrynnik, the Minister of Agriculture of Russia.
According to her, Russia support the direct communication between exporters of agricultural products and consumers, without participation of any dealers. Russia plans to reach self-production volumes with food products at the level of 80-90%, grains – 90%, explained E.Skrynnik.
Agrimarket: Russia to completely satisfy own requirements in sunflower oil
01/05/2010 10:20
Russia produced the sufficient volumes of sunflower seed, which will completely satisfy all domestic requirements in sunflower oil declared Sergey Makeev, the head of the department of analytics and projection of the managing company “Solnechniye producty” (Russia).
According to him, during two recent seasons, the market of sunflower oil in the Russian Federation faces transformation and stagnation. At the same time, in the season 2008/09, the decreasing market of bottled oil provided the largest effect on the collective consumption, in 2009/10 MY – the decreasing production of mayonnaises and margarines. The current market volumes of sunflower oil in Russia is estimated at the level of 2-2.1 mln tonnes. The country needs nearly 5 mln tonnes of sunflower seed for production of the mentioned sunflower oil volumes.
According to S.Makeev, to date, real processing capacities of sunflower seed in Russia totals 7.5-8 mln tonnes. At the same time, the country has opportunities to process nearly 11 mln tonnes of the oilseed.
Business, Energy or Environmental regulations or discussions
Bloomberg: Russian Prosperity’s Branis Rides Oil to Lead Mid-Size Funds
January 05, 2010, 03:12 AM EST
By Stephanie Baker
Jan. 5 (Bloomberg) -- When oil prices began rallying in 2009 off a five-year $34 low, Alexander Branis was well positioned.
Branis, 32, chief investment officer of Prosperity Capital Management and manager of the firm’s Russian Prosperity Fund, had several long-term bets on petroleum producers. One was OAO Bashneft, a southern Russian driller, which soared 542 percent through Dec. 23. Another was TNK-BP, BP Plc’s Russian joint venture, which rose 165 percent in 2009.
Those stocks helped Russian Prosperity, with $750 million in assets, to a 169 percent return for the 10 months ended on Oct. 31, making it the world’s best-performing hedge fund with assets from $250 million to $1 billion, according to data compiled by Bloomberg.
Branis, who has advised the Russian government on restructuring the electricity market, also profited from investments in utilities and OAO Dixy Group, Russia’s third- largest publicly traded retailer, which rose 321 percent through Dec 28.
While the main RTS index surged 129 percent in 2009 as of the same date, Branis thinks the Russian market still looks cheap. It’s trading 35 percent below its level in 2007, when commodity prices were comparable to those at the end of 2009, and stocks are still playing catch-up, he says.
“Russia is cheap in absolute terms and compared to other emerging markets,” he says. “We hope the catch-up will continue in 2010.”
--Editor: Michael Serrill
To contact the reporter on this story: Stephanie Baker in London at +44 20 7330 7558 or stebaker@.
To contact the editor responsible for this story: Michael Serrill at +1-212-617-6767 or mserrill@
Itar-Tass: Siemens to supply 54 trains for Sochi Winter Olympics
04.01.2010, 21.40
FRANKFURT-AM-MAIN, January 4 (Itar-Tass) - Germany’s largest industrial and electronics company Siemens will supply 54 regional trains for the 2014 Winter Olympic Games in Russia’s Black Sea resort of Sochi.
These trains will run between Sochi Airport and the Olympic facilities beginning from the autumn of 2013, Germany’s leading business newspaper Handelsblatt said on Monday. The contract is estimated at 580 million euros.
The daily said under the effective contract the first thirty-eight Desiro trains estimated at 410 million euros will be built at Siemens’ Krefeld-Uerdingen plant. According to a preliminary contract, other sixteen trains will be partially assembled in Russia.
What concerns the railroad engineering, Russia is a tremendously growing market, said Siemens division CEO, Hans-Jorg Grundmann.
Handelsblatt reported that Russia seeks to adjust its railroads to western standards. Earlier, it ordered 200 Siemens sleeping carriages worth 320 million euros and eight Velaro high-speed trains that are running between Moscow and St. Petersburg.
BarentsObserver: Sevmash needs more workers
2010-01-05
Sevmash shipyard in Severodvinsk, Arkhangelsk Oblast, will need at least 1500 new workers to complete construction of the Prirazlomnaya platform.
According to Deputy General Director Vasily Ugryumov at Sevmash, the shipyard is in need of a large number of qualified workers, Severodvinsk newspaper Korabelnaya Storona reports.
In addition to the finishing stages of construction of the ice-strengthened platform Prirazlomnaya, Sevmash will be busy with the modernization of the Russian aircraft carrier “Admiral Gorshkov” for the Indian Navy.
Sevmash shipyard in 2008 had 25 000 workers according to Wikipedia.
JANUARY 5, 2010, 2:33 A.M. ET
WSJ: A Hard Pitch for Rusal
By Patience Wheatcroft
As a sales pitch, the prospectus for Rusal is about as enticing as an invitation to invest in Bernie Madoff's boys' latest venture. The first dire warning against putting any cash into this Russian aluminium giant comes in large red letters on page three of the document. Then many more of its more than a thousand pages detail the causes for concern.
The Hong Kong Stock Exchange has agreed to list the shares but, such are its concerns about the company, it has insisted on the extraordinary restriction that the stock may only be sold to professional investors prepared to buy in blocks of at least HK$ 1 million. Given the significant qualms that must have given rise to such a stipulation, the mystery is why the Hong Kong exchange is prepared to have the shares on its board at all.
The risks inherent in the business range from the commercial and financial to the personal and the political, often becoming inextricably intertwined. Undeniably, prospects for the world's largest aluminium business are hitched to the outlook for the world economy. The slump impacted demand, tore into prices and pushed Rusal into the red, in a big way: a net loss of $868 million in the first half of last year. Even taking an optimistic view on world trade, Rusal isn't predicting a return to the dividend lists before 2013.
That is because of its crushing debts, the reason for its desperate dash to find some cash from a flotation. Even after some shuffling of obligations last year, it has $14.9 billion of debt, of which $4.5 billion is due for repayment by October this year. That is one mighty big risk factor: if the debt cannot be extended, refinanced or repaid, well that might spell the end for Rusal.
But such concerns are prosaic compared with some of the risk factors that pertain to this fascinating business. How intense must have been the discussion amongst the extensive team of blue chip advisors employed to get the business floated as they wondered how best to explain the company's more colorful aspects.
Most of these centre around Oleg Deripaska, the man who runs the company and owns 53.4 per cent of it, although that will fall to 47.6% after flotation. Mr. Deripaska's has been a remarkable career. In 1993, he was a 25-year-old graduate working as a manager in a smelter at Sayaogorsk. Fifteen years later, he was labelled as the 9th richest man in the world by Forbes magazine, with a fortune put then at $28 billion and an empire that encompassed resources, energy, manufacturing, financial services, construction and aviation.
Mr. Deripaska had stopped working in smelters and moved to owning them, emerging as the victor in the notorious 'aluminium wars' which raged in Russia in the 1990s. He took to oligarchy in style, acquiring a London home in the heart of upmarket Belgravia and other essential trappings of the billionaire lifestyle, including a luxury yacht on which, last summer, the U.K.'s business minister, Peter Mandelson, was on vacation.
Mr. Deripaska's relationships with other governments are less cordial. Amongst the risk factors is the fact that his applications for visas to travel to the United States were turned down in 1998, 1999 and 2,000. The refusal came under the section "based on security, unlawful activity and related reasons," and Canada also turned down applications in 2003 and 2006. The prospectus notes that there has been speculation in the media that the refusals might be because of "alleged connections with organized crime." But potential investors may find it reassuring to know that Mr. Deripaska "to the best of his knowledge" is not under investigation by any U.S. authority and he has since been allowed into the country.
That may not sound like a ringing endorsement of the man at the top of the business but the controversy does not end there. There is the little matter of the court case, now under way in London, in which a former business associate, Michael Cherney, is claiming that a fifth of Rusal belongs to him and is only being held in trust by Mr. Deripaska.
This case could have an adverse effect on the company and the trading price of its shares, concedes the prospectus.
In deciding how to explain the aspects of Rusal that make it such a unique investment proposition, the advisors appear to have opted for a certain strain of deadpan humor. Thus we learn that other Deripaska-owned businesses supply close to 70% of its energy requirements to Rusal. "Generally speaking, such transactions may be on terms more or less favorable to the group than those that could be obtained from a third party supplier," we are told. And that must be true but, given that energy costs are such an important part of the aluminum equation, accounting for more than a quarter of the cost of goods sold, the statement rather raises the question about what the future may hold for the group.
Similar questions must arise from the company's complicated structure which involves a trading structure located in Switzerland, a principal-trading company in Jersey, a holding company registered in Jersey and the holding of group assets through a number of interconnecting holding companies scattered in what used to be referred to as tax havens.
Those advisors know the risks: "Russian tax and customs laws and regulations, including the transfer pricing rules...are subject to varying interpretations and changes, which can occur frequently." Those who followed the Yukos saga, and saw how tax demands could appear to be politically rather than fiscally inspired, would have to agree. This is not yet a problem for Rusal, for prime minister Vladimir Putin appears to be a supporter of Mr. Deripaska, and Russia's state bank is one of the cornerstone investors in the IPO.
But the biggest risk factor of all, and it is not spelt out in the prospectus, is that oligarchs can lose their popularity with the Russian PM. A bet on Rusal is a bet on its chief remaining in favor.
Write to Patience Wheatcroft at patience.wheatcroft@
Russia Today: Altimo ends disputes to set sail as more competitive telecoms player
05 January, 2010, 11:39
2009 has seen the Alfa Group’s telecoms arm, Altimo, end two long term disputes with the outcome being a larger more competitive access to overseas markets.
It was far beyond the expectations of even the boldest analysts. After five years of legal battles and PR wars, Vimpelcom’s main shareholders found common ground.
It settles a simmering conflict of interest as Vimpelcom and Kievstar competed on the Ukraininan market. The result is a new company Vimpelcom Limited. Norwegian telecoms company Telenor merged its stakes in Vimpelcom and Kievstar – with those of investment group Alfa. Altimo CEO, Aleksey Reznikovich hailed the outcome.
“We manage to put this all behind, we are now on the same page. And we are getting back to a normal partnership mode of operation.”
The new company will be the biggest emerging markets operator in Europe, the Middle East and Asia. Listed in New York, it will neighbor another Russian operator Megafon that merged with a Turkish mobile company in late 2009.
It once again involved Alfa Group, and settled a turf war by merging stakes in Megafon and Turkcell with the Nordic operator TeliaSonera. The mergers gave operators access to foreign customers and better growth potential than its closest rival MTS.
The number three mobile company is weighing its options according to CEO, Mikhail Shamolin.
“We are not planning any changes in strategy for the time being. But if we see certain changes on the market that could influence us we’ll look into the issue. So far we hear only about property restructuring.”
2010 may bring further developments. Mobile firm SkyLink, partly owned by state-controlled telecoms giant Svyazinvest, merges with one of the big three operators.
Russia Today: Moscow Real Estate looks for rebound
05 January, 2010, 11:45
The Moscow residential real estate market has been lucrative, with an accommodation deficit driving sales and rental prices over the last decade. But it too felt the impact of the 2009 economic downturn.
With Moscow being not only the capital of Russia, but also the capital of the region, in terms of opportunities and level of living, it is no wonder that the residential real estate market has grown exponentially over the years.
Pre-crisis, a square meter in a luxury apartment cost between $15 thousand and a whopping $40 thousand dollars. To rent the same square meter would go for anywhere between $7-20 thousand. The overall average sale price per square meter was roughly $6,500 and rising monthly.
A lack of accommodation – not to mention quality – was the main driver behind this growth; but even this growth slowed during the crisis says Maxim Mokeyev, Executive Director for Evans Real Estate.
“In the beginning of the year it was very much slow in all segments and in all respects. It started basically with the beginning of the crisis so the end of last year and all throughout January, February and maybe into March it was still – prices were on the decline, demand was very, very low, especially on the sales side, in all budgets.”
Many real estate companies and developers fell during the downturn – either heavily downsizing or even leaving the market completely. But the crisis wasn’t all bad according to Konstantin Kovalev, Managing Director, Blackwood Real Estate.
“In most of the cases it was a really healthy cleaning of the market from all non-professional and non-effective companies.”
Rent prices, especially in the elite segment, plummeted up to 50%, due to personal incomes dropping, bonuses being cut and clients having to relocate to more modest living abodes. But sales prices didn’t drop as much as rental prices did. Kovalev says this is because low supply always commands a premium price, especially in exclusive areas such as the center of Moscow.
“The prices now in comparison to the pre-crisis level are something about 25% lower, not more than that, and if you really face the problem to find something very interesting in the very centre of Moscow in a newly erected building I would say you would face a price of something about $25-30 thousand per square meter.”
With such a constant demand for all things central – and with growing suburbia – it is hard to imagine that this downturn will last for long. Analysts agree that this deficit will only lead to demand growing, supply staying low and prices eventually coming back up – at least for the next three years, before yet another batch of quality accommodation comes onto the market.
Activity in the Oil and Gas sector (including regulatory)
KUNA: Concerns over Russia''s high crude production
Economics 1/5/2010 9:58:00 AM
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By Abdelwaheb El Gueyed
VIENNA, Jan 5 (KUNA) -- Sources at the Organization of the Petroleum Exporting Countries (OPEC) said Tuesday that they were concerned of Russia's high crude production which surpasses OPEC's and might jeopardize the stability of the market.
Russia which is close to producing 10 million barrel per day (bpd) refuses to cooperate with OPEC's decision aimed at avoiding fluctuating prices especially that the organization is expecting a decline in demand in the first and second quarters of 2010, sources told KUNA.
OPEC members and oil producers overall are responsible for the stability of oil prices, the sources said, and noted to the report issued by Russian Ministry of Energy which states that the country reached unprecedented daily production estimated at 9,925 million bpd in 2009.
By that, Russia became the biggest oil producer after over passing that of Saudi Arabia which is sticking to OPEC's quota.
Due to the hike in prices witnessed in 2009, Russia was able to develop Siberia's oil fields and pump oil to the Pacific through the new pipelines; however it is expected that production will jump 1.1 percent.
OPEC which provides 40 percent of world's oil decided in its December meeting which took place in the Angolan capital, Luanda, to stick with quota of 24,800 bpd to ensure balance between demand and supply.
The organization said that it was satisfied by the current oil prices estimated at USD 70-80 as they were suitable for producers and consumers.
Secretary General of OPEC Dr. Abdullah Al-Badri recently called on oil producers that are not members of the organization such as Russia, Norway and Mexico to join forces with OPEC in order to maintain price stability. (end) amq.aia KUNA 050958 Jan 10NNNN
Abc.az: Azerbaijan started gas supplies to Russia under schedule and without any upsets
Baku, Fineko/abc.az. Azerbaijan has made a breakthrough in its energy history by launching gas supplies to Russia for the first time.
State Oil Company of Azerbaijan informs that Azeri gas supplying to Russia started at 11 am on 1 January.
“As it was planned their primary volume totals 1.5 million cu m a day. Export is carried out without upsets,” the Company says.
Examination of gas compressor station Shirvanovka by Russian specialists and signing of a protocol on Azerbaijan’s readiness for start of gas export to Russia preceded export start.
In 2010 SOCAR is ready to supply totally up to 1 bn cu m of gas to Gazprom, although the signed contract says of at least 500,000 cu m a year.
05.01.2010 09:51
Komsomolskaya Pravda: Mikhail Gutseriev regained Russneft
/GOOGLE TRANSLATION/
Oleg Deripaska, the company actually paid for the debts
Alexander Zyuzya - 05.01.2010 14:50
Russneft has found a new owner. According to Vedomosti newspaper, on Monday, Oleg Deripaska has sold the company to its former owner Mikhail Gutseriev. Negotiators say that Gutseriev, pays only $ 600 million. The main costs to businesses in the future - a businessman pledged to pay the debts of the oil companies, which are about 6 billion dollars.
Changed and the provision of collateral. Structures of Oleg Deripaska to buy Russneft borrowed 2.7 billion dollars from the Savings Bank. Subsequently the loan was redesigned for the company, as well as security offered stake in GAZ Group. Now motor enterprise securities withdrawn from the pledge.
Recall Russneft came under the control of Deripaska in the summer of 2007, when the tax authorities and the Ministry of Internal Affairs filed several criminal cases against Gutseriev. Gutseriev hastily rode to London where he sold the company at that time Russia's richest man. According to experts, Gutseriev earned peredatse Russneft Deripaska 2,8-3 billion.
Reuters: Russia's Deripaska sells Russneft to founder-paper
Tue Jan 5, 2010 8:43am GMT
MOSCOW, Dec 5 (Reuters) - Debt-laden Russian tycoon Oleg Deripaska has sold mid-sized oil company Russneft back to its founder, Mikhail Gutseriyev, for $600 million and repayment of outstanding debt of around $6 billion, a newspaper reported.
The sale took place on Jan. 4, business daily Vedomosti reported, citing an unnamed source close to the deal.
Deripaska, majority owner of aluminium producer UC RUSAL, purchased Russneft from Gutseriyev for $3 billion in 2007, taking a $2.7 billion loan from Russia's biggest lender, Sberbank (SBER03.MM: Quote, Profile, Research).
The newspaper said the loan, secured by GAZ Group shares, will now be guaranteed by Gutseriyev's assets. No other details were provided.
Gutseriyev fled Russia when police pursued him over a tax claim and Deripaska has been waiting for over two years to get clearance from antitrust authorities to complete the purchase.
Russia removed Gutseriyev from an international wanted list in November, in a move that many analysts interpreted as a precursor to his return.
In early November, Russia's media reported that Russian oil-to-telecoms group Sistema (SSAq.L: Quote, Profile, Research) was in talks to acquire Russneft from Deripaska, but negotiations were complicated by Russneft's huge debt burden.
In December Russneft produced an average of 259,300 (1.04 million tonnes) a day of oil, out of Russia's total output of 10.05 million bpd (42.49 million tonnes), according to figures provided by the Energy Ministry.
(Writing by Lidia Kelly; editing by John Stonestreet)
Gazprom
: Serbia to buy up to 2bn cubic meters of natgas from Russia in 2010
Marko Subotic in Belgrade - 05.01.2010
State-owned Srbijagas and Russia's Gazprom have signed a contract for supply of up to 2 billion cubic meters of natural gas to Serbia in 2010.
The contract signed with Russian-Serbian gas trader Jugorosgas, 50% owned by Gazprom (), extends an existing supply pact, management of the Serbian gas company said in a statement.
Russia supplied Srbijagas () with 2.2 billion cubic meters of gas in 2008, the statement added.
Source: Business News
The Globe and Mail: 'LET'S DRINK TO ALL THE RUSSIAN GAS'
An energy monopoly celebrates itself with Soviet-style images and a call to imbibe
SIMON HOUPT
From Tuesday's Globe and Mail Published on Tuesday, Jan. 05, 2010 12:00AM EST Last updated on Tuesday, Jan. 05, 2010 2:46AM EST
Is Borat moonlighting? The kooky Kazakh who once crooned of the superiority of his country's potassium (to the tune of The Star-Spangled Banner) seems to have infected Gazprom. A corporate anthem for the Russian energy monopoly that has made its way to YouTube blends Soviet-style lyrics with images that might make even Borat blanch. "Don't bother trying, you'll never ever find / A surer friend than Gazprom," begins the song, with lines that won't help the company's image among those who worry about its cozy relationship with the Russian military.
Written and performed by Vladimir Tumayev, director of a Gazprom subsidiary, the song jogs between slow rock and folk-drinking tune, which fits nicely with a video that features oil workers sharing a light on the job as the chorus swells: "Let's drink to you / Let's drink to us / Let's drink to all the Russian gas." We should say that, to our ears, every single corporate anthem we've ever heard has a whiff of numbing Soviet style, even KPMG's ditty ("We'll be number one, with effort and fun / Together each of us will run for gold that shines like the sun in our eyes") and PwC's soft-rock ballad ("Yeah the word is out ... PricewaterhouseCoopers[pic], it's comin' from the heart").
As for the Gazprom tune, we have but one minor quibble with the video: For an anthem that seeks to inspire workers by belting, "We're giving people warmth and light / For office and for home," we think it might have been a good idea to include a scene or two of, say, giving people warmth and light in an office or home. But then, if we were a well-remunerated director of Gazprom, we probably wouldn't care what anybody else thinks.
***
THE GAZPROM SONG / I'LL DRINK TO THAT
Don't bother trying, you'll never ever find
A surer friend than Gazprom
We're giving people warmth and light
For office and for home
We should always keep in mind
From dawn till sun down,
That our work is always needed
Working day or holiday.
Let's drink to you, let's drink to us,
Let's drink to all the Russian gas
That it never comes to an end,
Though it's so hard to obtain.
We're renowned for our deeds
The world over
And all your troubles will recede
If Gazprom people are nearby.
Don't try, you'll never ever find
A surer friend than Gazprom
We're giving people warmth and light
For office and for home. Let's drink to you, let's drink to us,
Let's drink to all the Russian gas
That it never comes to an end,
Though it's so hard to obtain.
................
................
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