Russia

Russia 090415Basic Political Developments

· Russia says not selling missile system to Iran: report

· Russia not supplying air defence systems to Iran - "Nothing is happening. Supplies are not taking place," said Alexander Fomin, deputy head of the Federal Service for Arms Cooperation, at an arms fair in Rio De Janeiro.

· Russia Invites India to Invest in Uranium Plant, Line Reports - The investment would be in lieu of payments for fuel supplied to Russian-built light-water reactors being set up at Kudankulam in southern India, according to the report.

· Larsen, Atomstroyexport Sign Nuclear Reactors Accord - The two companies will cooperate in providing equipment and services to build four new reactors at a nuclear power plant at Kudankulam in southern Tamil Nadu state and other plants at new sites, Larsen & Toubro said in a statement to the Bombay Stock exchange today.

· Typhoon submarines may sail again - Last week, on April 8th, Sergey Stepashin, the chairman of Russian Accounts Chamber visited Severodvinsk and discussed the future of the remaining Typhoon-class submarines with Nikolai Kalistratov, the director general of Sevmash shipyard, reported by Nuclear.ru.

· Putin Touts Nord Stream To Schroeder - "The northern European gas pipeline is in the interests of many European countries, above all Germany and Russia," Putin told Schroeder, who chairs the Nord Stream shareholders' committee and is his longtime ally.

· Russia: Response by Russian MFA Spokesman Andrei Nesterenko to a Media Question Relating to Upcoming Session of Foreign Ministers Council of the Collective Security Treaty Organization in Yerevan

· Zubkov in the Netherlands - First Deputy Prime Minister Viktor Zubkov arrived in the Netherlands on Tuesday for two days of talks and was scheduled to meet with Dutch Prime Minister Jan Peter Balkenende and Royal Dutch Shell CEO Jeroen Van de Veer on Wednesday.

· Pravda: U.S. retargets nuclear missiles to 12 Russian economic facilities

· Tbilisi accuses Moscow of violating “Medvedev-Sarkozy plan” - "The Russian party has systematically and gravely violated the plan signed by it, which is known as the "Sarkozy plan"," Sikharulidze told journalists in Tbilisi on Tuesday.

· HRW: Russia, Georgia should stop cluster bomb use

· Russia's Medvedev grants interview to opposition paper

· Medvedev Chooses Critic for an Interview Debut - Mr. Medvedev spoke with Novaya Gazeta editor Dmitry Muratov on Monday for more than an hour at the president's residence outside Moscow. Topics ranged from democracy in Russia to the latest criminal trial of jailed oil and banking tycoon Mikhail Khodorkovsky.

· Putin Hikes Road Spending by 25% - The government will increase spending on building roads by 25 percent to $16 billion this year, Prime Minister Vladimir Putin said Tuesday on his latest trip to discuss the state's plans to support various industries.

· Just Russia Candidate Kicked Off Sochi Ballot - A Sochi court eliminated A Just Russia's candidate from the city's mayoral election on Tuesday, effectively turning the race into a face-off between United Russia and opposition politician Boris Nemtsov.

· Russian Eco-Regulator Quits to Lead Green Movement - Oleg Mitvol, who was appointed deputy director of Russia's Environmental Protection Agency by the government in 2004, said he was resigning to lead a new "green" movement that would challenge Kremlin candidates in local elections. He said he could focus on the same issues just as well from outside government, harnessing public concern about environmental issues.

· Russia faces $10 billion international ruling over Yukos bankruptcy

· FT on oligarchs: Tension at the top as crisis deepens - While it was a bad year everywhere – $1,400bn in billionaire wealth has vanished globally – Russia’s wealthiest were particularly hard hit by a combination of falling prices for oil and metals, Russia’s main exports, and frozen international credit markets.

· Will Moscow Expand Assistance to Russian-Language Schools in Ukraine?

· Russian Minister of Foreign Affairs Sergey Lavrov Interview to the Interstate Television and Radio Company ‘Mir,’ Ashgabat, April 10, 2009

· Air defence regiment in Polyarny - The Russian television channel Zvezda News has visited one of Russia’s largest air defence units in the closed military town of Polyarny, the Northern Fleet’s largest submarine base, and provides unique video material.

· Vremya Novostei: Russian Army badly needs modern weapons

· What Countries Care About - At a recent meeting of Russia’s Council for Foreign and Defense Policy, experts from across the political and professional spectrum debated the threats facing the country, and what policies would counter them best.

· Reuters PRESS DIGEST - Russia - April 15

National Economic Trends

· Budget deficit is to be reduced: Dvorkovich

· Single Regulator Considered - Arkady Dvorkovich, the top presidential economic aide, said Tuesday that it was "worth thinking about" the creation of a unified financial regulator to cover everything except the banking sector, Interfax reported.

· Kudrin Considers Sovereign Eurobond - Finance Minister Alexei Kudrin said Tuesday that the government would hold an international investment road show this year and consider issuing debt abroad in 2010, tapping foreign markets for the first time in a decade.

· Producer prices index increases 4.1% MoM in March

· Inflation expected at 1.0-1.2% in April vs. 1.4% April 2008

· Russia's PPI up 4.1% in March and 5.1% YTD

Business, Energy or Environmental regulations or discussions

· Russian Stocks Decline, Paced by Sberbank, VTB Group, Lukoil

· Gazprom Neft, Inter RAO UES, Rosneft: Russian Equity Preview

· Rencap Russia: 2Q Outlook - The long road to recovery

· Russia Banks to Be Hit by Bad Loans ‘Avalanche,’ UniCredit Says

· VEB Bought $5 Billion of Russian Stocks, Bonds With State Cash

· Russia's VEB says some firms may struggle to repay

· Magnitogorsk First-Quarter Crude Steel Output Falls 42% on Year

· Russian diamond firm Alrosa posts 1,650% q-o-q net profit rise

· Alrosa posts Q1 loss of about 2 bln rubles (Part 2)

· Globaltrans Profit Up 5%

· More Pork Plants Banned - Russia is halting imports from three U.S. pork facilities, including a John Morrell plant owned by Smithfield Foods, because of problems with export certificates, the U.S. Department of Agriculture said Tuesday.

· Aviva signs agreement to acquire pension fund from ING in Russia

· Malis to be president of Evroset?

· UPDATE 1-Rambler Media appoints new CEO

· Moscow Court Postpones Decision in Telenor Case

· UPDATE 1-Moscow court postpones Telenor hearing to April 30

· Proposal for long-term capacity market to be ready in 2Q09

· OGK-1 optimizes personnel expenses and CAPEX

· TGK-8 board recommends no dividend for 2008

· Moscow And St Petersburg Power Use May Fall Less Than Average

· S.Korea's Hyundai Heavy in Russian farm deal

· Black Earth Eyes First Profit - Black Earth Farming, an owner and developer of agricultural land in Russia, may post its first net profit in 2010 as its farms mature.

· Wal-Mart may enter the Russian market - Reports of out Russia suggest Wal-Mart Stores Inc. may be in negotiations to buy a controlling stake in one of the country's leading “hypermarket” big box retailers.

· Discussions on retail law to be extended until October 2009

· TUI, Billionaire Mordashov, Agree to Form Russia Travel Venture

· UPDATE 1-TUI Travel establishes Russian joint venture

Activity in the Oil and Gas sector (including regulatory)

· Russia seeks Japan help for Sakhalin-1 - The construction costs are projected to total about 500 billion yen ($5 billion), and Russian Prime Minister Vladimir Putin, who is scheduled to visit Japan in May, is likely to propose starting full-scale talks, the Nikkei business daily paper reported, citing an unnamed Japanese foreign ministry official.

· Russia Raises Oil Export Duty to $137.70 a Ton From May 1

· UralSib: OPEC-Russia Dispute to Weaken Oil?

· Rosneft: Tax holidays for offshore regions

· Rosneft completed early repayment of a state bank loan

· TNK to Pay 40% Of Profit in 2009

· TNK-BP Will Not Change the Dividend Policy Despite the Crisis

· TNK-BP shows interest in Sibir Energy

· Sibir Energy Hasn’t Been Approached by TNK-BP (Update1)

· LUKoil to sell 160 gasoline stations in the US

· LUKoil to reduce natural gas production in Uzbekistan

· LUKoil Outlines Expansion Abroad - LUKoil plans to drill three deep-water exploration wells in Africa in the next year as it urges the Russian state to offer more licenses domestically, CEO Vagit Alekperov said in an interview, in which he talked about the oil major's plans for expansion abroad

· Phantom LNG carrier sketched - DESIGN sessions for Russia's first LNG carrier have begun in St Petersburg – even though it is not certain that the ship will ever be built.

· Norwegian terminals seek Russian oil - As the amount of Russian oil exported through Arctic waters increases, several Norwegian ports and terminals now step up their bids for participation in the lucrative oil trade.

· Troika: Oil And Gas Quarterly - Ruble Played Out

· Rencap: Oil and gas dividend forecasts

Gazprom

· Russia Gazprom estimates reserves up 11 pct in 2008

· Gazpromneft to Sell 10 Billion Rubles of Bonds, Banker Says

· Gazprom, Conoco Discuss Alaska Offshore Exploration

· On working meeting between Alexey Miller and Jim Mulva

· Turkmenistan: Gas Deal Negotiations Underway In Iran - In mid-March, Iran and Russia signed a gas swap deal that would see Gazprom assume responsibility for the delivery of Turkmen gas to Iran. Ashgabat would benefit from this arrangement since Russia would purchase Turkmen gas at a premium price. Iran currently pays $140 per thousand cubic meters (tcm); Gazprom is willing to buy the same gas for re-export from Ashgabat for $240/tcm.

· On working meeting between Alexey Miller and Jean de Gliniasty

· Gazprom officials arrive in Libya

· Gazprom delegation visits Libya

· Gazprom Neft wants to develop 8 oil and gas deposits in Iraq

· Turkmen imports down sharply - According to Kommersant, Gazprom reduced its off-take of Turkmen gas by 90% on April 8, the day before an explosion on the main export line between the two countries would have forced such a step.

· Gazprom Turns the Crisis Into an Opportunity -and a New Crisis

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Full Text ArticlesBasic Political DevelopmentsRussia says not selling missile system to Iran: report

http://www.reuters.com/article/topNews/idUSTRE53E18720090415

Wed Apr 15, 2009 3:04am EDT

MOSCOW (Reuters) - Russia has not supplied Iran its advanced S-300 anti-aircraft missile systems, an official in Russia's state arms export service was quoted as saying on Wednesday.

"Nothing is happening. There are no deliveries," Interfax news agency quoted Alexander Fomin, first deputy director of Russia's Federal Military and Technical Cooperation Service, as saying at an arms fair in Rio de Janeiro.

Any possible sale of the S-300 systems to Iran is a sensitive issue in Moscow's relations with the United States.

Senior Russian officials have repeatedly denied media speculation that Russia would sell Iran the systems.

(Reporting by Amie Ferris-Rotman)

Russia not supplying air defence systems to Iran

http://www.google.com/hostednews/afp/article/ALeqM5jbieSKOHZPS5CCvEIzN2su_paeGQ

2 hours ago

MOSCOW (AFP) — Russia is not currently implementing its planned sale of sophisticated S-300 air defence systems to Iran, a top official with the state office for arms sales told Interfax.

"Nothing is happening. Supplies are not taking place," said Alexander Fomin, deputy head of the Federal Service for Arms Cooperation, at an arms fair in Rio De Janeiro.

Russia's plans to provide the systems to Iran have attracted criticism from the United States and Israel, neither of which have ruled out attacks on Iran's controversial atomic facilities.

The comment came after an unnamed official at the same agency said last month delivery of the defence systems, intended to shield key areas from attack, would depend on the "developing international situation and the decision of the country's leaders."

Moscow's decision to hold back on the sales partly reflects international pressure but also warming ties between Russia and the United States, a chief adversary of the Islamic republic.

This month Russia also said it was making its first ever purchase of reconnaissance drones from Israel, reflecting closer ties with the Jewish state in the defence sphere.

Russia Invites India to Invest in Uranium Plant, Line Reports

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=avTKO2nOinXk

By Archana Chaudhary

April 15 (Bloomberg) -- Russia has proposed that India invest in a uranium enrichment center in Angarsk, Siberia, in return for guaranteed supplies of the radioactive fuel, the Hindu Business Line reported, without citing anyone.

The investment would be in lieu of payments for fuel supplied to Russian-built light-water reactors being set up at Kudankulam in southern India, according to the report.

The center is being built under the supervision of the International Atomic Energy Agency, the newspaper said. The proposal was made during a visit to the plant on April 9 by Anil Kakodkar, chairman of India’s Atomic Energy Agency, the newspaper said.

To contact the reporter on this story: Archana Chaudhary in Mumbai at achaudhary2@bloomberg.net.

Last Updated: April 14, 2009 23:53 EDT

Larsen, Atomstroyexport Sign Nuclear Reactors Accord (Update1)

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ap6RxKJ7uadM

By Gaurav Singh

April 15 (Bloomberg) -- Larsen & Toubro Ltd., India’s biggest engineering company, signed a preliminary agreement with Russia’s ZAO Atomstroyexport for nuclear power reactors.

The two companies will cooperate in providing equipment and services to build four new reactors at a nuclear power plant at Kudankulam in southern Tamil Nadu state and other plants at new sites, Larsen & Toubro said in a statement to the Bombay Stock exchange today.

Indian power equipment makers are forming partnerships with overseas companies as the world’s second fastest-growing major economy targets 60,000 megawatts of nuclear generation by 2030 to help reduce outages. Toshiba Corp.’s Westinghouse Electric Co. said on Jan. 16 it will tie up with Larsen & Toubro to build nuclear power equipment in India.

Larsen shares gained 2.3 percent to 845.6 rupees at 11.47 a.m. in Mumbai trading, while the Bombay Stock Exchange’s benchmark Sensitive Index advanced 0.1 percent.

To contact the reporter on this story: Gaurav Singh in New Delhi at gsingh31@bloomberg.net.

Last Updated: April 15, 2009 02:30 EDT

Typhoon submarines may sail again

http://www.barentsobserver.com/typhoon-submarines-may-sail-again.4580091-58932.html

2009-04-15

The world’s biggest nuclear powered submarines, the Typhoon-class, can again be put into ordinary operation. The two submarines Severstal and Arkhangelsk, today in reserve, can in the future be sailing for the Northern fleet.

Of the originally six submarines of the giant Typhoon-class, only one remains operational. This submarine, Dmitry Donskoi, is used as a test platform for the new Bulava sea based intercontinental missiles, as previous reported by BarentsObserver. Three submarines of the class are scrapped.

The two last Typhoon-class submarines, Severstal and Arkhangelsk, remain in reserve at a Belomorsk naval base in Severodvinsk. Now, the debate has started about their future use.

Last week, on April 8th, Sergey Stepashin, the chairman of Russian Accounts Chamber visited Severodvinsk and discussed the future of the remaining Typhoon-class submarines with Nikolai Kalistratov, the director general of Sevmash shipyard, reported by Nuclear.ru.

During his visit to Severodvinsk Stepashin also visited to the nearby Belomorsk naval base where he stayed on board Severstal.

All the Typhoon-class submarines were built at the Sevmash yard in Severodvinsk and the constructors today believe both Arkhangelsk and Severstal can be put into operation in the Northern fleet again.

The 175 meter (574 feet) long and 24,000 tons heavy vessel is the largest nuclear powered submarine ever built. During the Cold War the six Typhoon-class submarines were based at the naval base in Zapadnaya Litsa, only some 50 kilometres from the border to Norway. Three of the six Typhoon-class subs are decommissioned.

Putin Touts Nord Stream To SchrЪder

http://www.themoscowtimes.com/article/1010/42/376209.htm

15 April 2009 The Moscow Times

Completing the Nord Stream pipeline will give Germany a new status as a "major transporter" of Russian gas, Prime Minister Vladimir Putin told former Chancellor Gerhard SchrЪder in St. Petersburg on Tuesday.

"The northern European gas pipeline is in the interests of many European countries, above all Germany and Russia," Putin told SchrЪder, who chairs the Nord Stream shareholders' committee and is his longtime ally.

Putin's comments appeared to refer to the pipeline consortium's desire to bring in Gaz de France as an investor. The pipeline, which would run from Russia to Germany under the Baltic Sea, is 51 percent controlled by Gazprom, with Germany's BASF/Wintershall and E.On Ruhrgas each holding 20 percent and Dutch Gasunie holding 9 percent.

Stanislav Tsygankov, head of Gazprom's external relations department, said Friday that the consortium had entered into talks with GDF. Gazprom said Tuesday that CEO Alexei Miller met with French Ambassador Jean de Gliniasty for energy talks. De Gliniasty "noted the importance of the successful completion of the Nord Stream project for Europe's energy security," Gazprom said in a statement.

Russia: Response by Russian MFA Spokesman Andrei Nesterenko to a Media Question Relating to Upcoming Session of Foreign Ministers Council of the Collective Security Treaty Organization in Yerevan

http://isria.info/pages/14_April_2009_61.htm

Question: A session of the Foreign Ministers Council of the Collective Security Treaty Organization will take place in Yerevan this week. What is the agenda of this event?

Answer: The CSTO Foreign Ministers Council will meet in ordinary session on April 16-17 in Yerevan, capital of Armenia, the country currently holding the chairmanship of the Collective Security Treaty Organization.

The session is slated to discuss a communication of the CSTO Secretary General on foreign policy cooperation among member states on topical international security issues and on the main directions of their interaction with international regional organizations, with emphasis on streamlining the mechanism of coordination of their approaches to global problems.

It is planned to endorse a Memorandum on Cooperation between the CSTO and UN Secretariats with a view to formalizing and fostering practical interaction between the two Organizations.

A communication of the Secretary General on the outcomes of the consideration in the sessions of the Defense Ministers Council in November 2008 and of the Committee of Secretaries of Security Councils in December 2008, of the prospects for military cooperation to 2020 and for increasing the effectiveness of multilateral cooperation in combating the new challenges and threats is due to be heard.

The interim outcomes of the work on carrying out the decisions of the extraordinary session of the CSTO Collective Security Council on February 4, 2009 and the creation of a Collective Operational Response Force of the CSTO feature prominently on the agenda.

Guidelines will also be discussed for the joint activities of the CSTO member states in helping stabilize the situation in Afghanistan and in countering the narco-threat emanating from IRA territory, particularly by collaboration with interested countries and international and regional organizations.

Meeting participants will agree on the time and venue for the next FMC session.

Zubkov in the Netherlands

http://www.themoscowtimes.com/article/1012/42/376220.htm

15 April 2009

First Deputy Prime Minister Viktor Zubkov arrived in the Netherlands on Tuesday for two days of talks and was scheduled to meet with Dutch Prime Minister Jan Peter Balkenende and Royal Dutch Shell CEO Jeroen Van de Veer on Wednesday.

Van der Veer met with Gazprom chief Alexei Miller in Moscow last week. Gazprom said after the meeting that Shell had "very good chances" of winning a tender to become their partner at Sakhlin-3. Shell has a stake in the nearby Gazprom-controlled Sakhalin-2 project.(MT)

U.S. retargets nuclear missiles to 12 Russian economic facilities

http://english.pravda.ru/world/americas/15-04-2009/107402-nuclear_missiles-0

15.04.2009

The USA is developing a new nuclear doctrine. American experts believe that today’s system of U.S. nuclear forces is out of date. Now they are going to change nuclear targets on the territory of Russian federation. The U.S. is going to retarget their nuclear missiles from large Russian cities to 12 most important Russian economic facilities. According to the U.S. experts destruction of these facilities will paralyze Russia’s economy and Russia will not be able to maintain military resistance.

This information was provided in the Natural Resources Defense Council (NRDC) report calling for fundamental changes to U.S. nuclear war planning, a vital prerequisite if smaller nuclear arsenals are to be achieved.

"From Counterforce to Minimal Deterrence - A New Nuclear Policy on the Path Toward Eliminating Nuclear Weapons" calls to abandon the almost five-decade-long central mission for U.S. nuclear forces, which has been and continues to be "counterforce," the capability for U.S. forces to destroy an enemy's military forces, its weapons, its command and control facilities and its key leaders.

"The current rationale for maintaining an arsenal of nuclear weapons no longer exists." said Ivan Oelrich, vice president of the Strategic Security Program at FAS and one of the report authors. "And to get future reductions in the number of weapons, we have to eliminate the missions they are assigned."

Talk of efforts to control nuclear arms typically focuses on sheer numbers of warheads and their explosive power.

But with President Obama and his Russian counterpart, Dmitry Medvedev, putting nuclear arms control back on the Washington-Moscow agenda, a new study looks beyond simple comparison of numbers and types of weapons to the more harrowing question of just what those weapons are targeted to strike.

During the Cold War, they were aimed at Russia's hardened silos, bomber bases and military installations. Later, similar sites in China were added. Now, potential nuclear facilities of other regional countries are on the list, as well as chemical and biological weapons facilities.

"From Counterforce to Minimal Deterrence”, takes a close look at "strike options," giving their view of the role nuclear intercontinental ballistic missiles and strategic bombs play in today's post-Cold War world.

Instead of just comparing numbers among the nuclear powers, the authors representing the Federation of American Scientists and Natural Resources Defense Council focus on what the United States is targeting and whether this approach should change, the Washington Post reports.

The study points out the obvious -- that "nuclear weapons are horrific things and nuclear war would be an unimaginable disaster." But it says current Pentagon plans for using strategic nuclear weapons include "individual strike options that probably range from using just a few weapons to using more than 1,000."

The authors also note that political and military leaders argue "that nuclear weapons are not really intended to be used, but are meant only to deter, and therefore detailed war plans and alert forces increase the credibility of the deterrent and make an attack less likely."

Tbilisi accuses Moscow of violating “Medvedev-Sarkozy plan”

http://www.kyivpost.com/world/39624

Today, 11:05 | Interfax-Ukraine

Georgian Defense Minister David Sikharulidze has accused Russia of breaching a plan intended to help settle the Georgian-South Ossetian conflict that was agreed upon by the Russian and French presidents following the August events in South Ossetia.

"The Russian party has systematically and gravely violated the plan signed by it, which is known as the "Sarkozy plan"," Sikharulidze told journalists in Tbilisi on Tuesday.

"We have systematically observed increases in the amount of weapons and hardware deployed in the occupied territories, which once again confirms violations of this agreement by Russia and steps to obstruct the Geneva talks," the defense minister said.

The Georgian authorities again underscore two factors they view as a matter of concern, Sikharulidze said. "They are the disregard for the Sarkozy plan and threats facing security and stability in the region as a whole," he added.

HRW: Russia, Georgia should stop cluster bomb use

http://www.monstersandcritics.com/news/europe/news/article_1470728.php/HRW_Russia_Georgia_should_stop_cluster_bomb_use_

By DPAApr 14, 2009, 13:11 GMT

Geneva - Advocacy group Human Rights Watch called on Russia and Georgia, who both employed cluster bombs in their conflict last summer, to end the use of the controversial weapon, in a new report released in Geneva Tuesday.

The report showed that 18 civilian towns were affected by cluster munitions during the conflict last August, in violation of international law.

At least 16 civilians were killed by cluster bombs and dozens more were wounded. Unexploded sub-munitions were said to still be affecting farmers in several regions, with de-miners not expected to finish work on clearing the potentially lethal devices until late next year.

The use of the munitions in civilian-populated areas was a violation of the laws of war, said Bonnie Docherty who authored the report, entitled A Dying Practice.

Last year, 96 states signed a treaty banning cluster bombs. The largest military powers and weapons producers, like the United States, Russia, China and Israel, did not sign the treaty.

'Cluster munitions are too dangerous to be used,' Docherty said, adding that they 'should be banned.'

Russia denies that it used clusters, in spite of hard evidence to the contrary, while Georgia says it was investigating incidents where its use of the weapon apparently violated international law.

The HRW report was released as negotiations, being pushed ahead largely by states which did not sign last year's treaty, were underway at the United Nations in Geneva on a protocol to the Convention on Conventional Weapons, which was seen as a compromised version of the total ban.

The convention on cluster munitions completely prohibits the use, production, transfer, and stockpiling of all such bombs.

By contrast, a draft text of the protocol allowed states to continue to use cluster bombs, drawing harsh criticisms from HRW which called for the new negotiations to be abandoned and countries to instead join the existing treaty.

Cluster munitions have also been used this decade by Israel in Lebanon in 2006 and in Iraq and Afghanistan.

'We have not found an instance when (cluster bombs) were used in compliance with international humanitarian law or have given the military advantage they are advertised to do,' noted Mark Hiznay, a researcher with HRW.

Since 1997, over 100 states have also joined the convention banning landmines and most have begun to take action to clear affected areas.

Russia's Medvedev grants interview to opposition paper

http://www.reuters.com/article/GCA-Russia/idUSTRE53D4JO20090415

Wed Apr 15, 2009 3:26am EDT

By Oleg Shchedrov

MOSCOW (Reuters) - Russian President Dmitry Medvedev has given a fiercely critical publication his first Russian newspaper interview, in what the Kremlin said was a gesture of solidarity with a newspaper which has seen two of its reporters murdered in the past three years.

The interview, to be published on Wednesday, is with Novaya Gazeta, where investigative journalist Anna Politkovskaya was working when she was shot dead in 2006. Another Novaya Gazeta reporter, Anastasia Baburova, was murdered in January.

"Novaya Gazeta has suffered many losses," Kremlin spokeswoman Natalya Timakova told reporters on Tuesday. "(By giving the interview) the president wanted to express his moral support to it... The decision was the president's initiative."

The newspaper admonished former President Vladimir Putin for crushing freedoms and he never give it an interview. It did however have an interview with Putin's predecessor, Boris Yeltsin, who left office in 1999.

Medvedev promised the interview after meeting the paper's editors in January and expressing condolences over the murder of Baburova, who wrote about neo-Nazi and skinhead groups and was shot just a few kilometres (miles) from the Kremlin.

Putin angered some reporters at Novaya Gazeta in 2006 by saying that Politkovskaya's work had little impact on Russian politics. Politkovskaya had sharply criticized Putin over the war in Chechnya Russian officials say her murder was ordered abroad to discredit the Kremlin.

No one has yet been convicted for the murder of Politkovskaya. In February a Moscow court acquitted a group of suspects accused by Russian prosecutors.

The Kremlin spokeswoman said the interview will touch upon civil society, the fight against corruption and reform of the judiciary, issues Medvedev has flagged as priorities.

A third reporter at Novaya Gazeta, Igor Domnikov, was killed in 2000 and a fourth, Yuri Shchekochikhin, died in 2003 from a mysterious illness. The newspaper has lampooned officials for corruption and human rights abuses.

(Editing by Jonathan Wright)

Medvedev Chooses Critic for an Interview Debut

http://online.wsj.com/article/SB123975255322318709.html

APRIL 15, 2009

By ALAN CULLISON

MOSCOW -- Dmitry Medvedev gave his first interview to a Russian newspaper as president, choosing a sharply critical publication whose staff has been targeted with murders and harassment.

Mr. Medvedev spoke with Novaya Gazeta editor Dmitry Muratov on Monday for more than an hour at the president's residence outside Moscow. Topics ranged from democracy in Russia to the latest criminal trial of jailed oil and banking tycoon Mikhail Khodorkovsky.

Mr. Medvedev's choice of Novaya Gazeta -- a paper that specializes in investigative journalism and has criticized the growth of Kremlin control over politics and media -- contrasts with the practice of Vladimir Putin, who generally blacklisted critical publications in his eight years as president. It appears to be Mr. Medvedev's latest effort to strike a liberal pose in the rarefied world of Kremlin politics.

Kremlin spokeswoman Natalya Timakova said Mr. Medvedev chose to meet with Novaya Gazeta because after the deaths of journalists on its staff, "the president wanted to express his moral support. It was his initiative." She said Mr. Medvedev has decided to meet with newspapers more in the future.

Nevertheless, in the interview to be published Wednesday, Mr. Medvedev revealed little new and gave lawyerly answers. The newspaper provided a transcript of the interview in advance.

Asked whether it was time to revive democracy in Russia, Mr. Medvedev rejected the question's premise. "I don't think that democracy needs any kind of rehabilitation," he said. "Democracy was, is and will be."

Mr. Medvedev denied that mayoral elections in the southern Russian city of Sochi set for later this month are "imitations." The race is important because the Black Sea resort is to host the 2014 Winter Olympics, and a fierce Kremlin critic, Boris Nemtsov, is in the running. Another critic -- an owner of Novaya Gazeta -- has been excluded from the mayoral contest on technical grounds.

Mr. Medvedev said he didn't know "who or how anyone was taken out, but in any case there is a real political skirmish going on. And it's a good thing that different political forces are taking part."

Mr. Medvedev declined to predict an outcome of the latest criminal trial in Moscow of Mr. Khodorkovsky, saying that as president it would be against the law.

Four of Novaya Gazeta's reporters have been murdered or died under mysterious circumstances over the past nine years, with the latest death in January. In 2006, Mr. Putin called the shooting death of the newspaper's reporter Anna Politkovskaya an "unacceptable crime that cannot go unpunished," but famously added that "her ability to influence political life in Russia was extremely insignificant."

Mr. Medvedev has said he wants to revamp Russia's corrupt court system, and earlier this year revived a long-dormant human-rights council. His moves have stirred hopes the Kremlin will relax some of its control over society. But critics say Mr. Medvedev is making token gestures to lessen tension at a time when Russians are suffereing deep economic troubles.

Yevgenia Albats, a radio talkshow host and editor of the Moscow newspaper New Times, said Mr. Medvedev sent "a very significant message" by meeting with Novaya Gazeta. "Now the question is whether there will be any follow-up," she said. "We know he can speak nicely, but can he act?"

Write to Alan Cullison at alan.cullison@wsj.com

Putin Hikes Road Spending by 25%

http://www.themoscowtimes.com/article/600/42/376231.htm

15 April 2009

By Anatoly Medetsky / The Moscow Times

The government will increase spending on building roads by 25 percent to $16 billion this year, Prime Minister Vladimir Putin said Tuesday on his latest trip to discuss the state's plans to support various industries.

Putin traveled to St. Petersburg, home to one of the country's most ambitious road programs, to announce that private investment has slid on the project and to discuss the outlook for the rest of the transportation sector.

He said the state will boost spending to support jobs and future economic growth.

The state will make up for private investors in the construction of the 50-kilometer toll road in St. Petersburg, Putin's native city, by allocating 20.6 billion rubles ($617 million) this year and next, Putin said.

"Unfortunately, private investors are not an option in modern conditions," Putin said.

The city of St. Petersburg said it would spend 6.6 billion rubles as previously promised on the road over the same two years.

The road -- called the Western High-Speed Diameter -- is scheduled for completion in 2013, contractors told Putin at the meeting, Interfax reported. Estimated to cost 213 billion rubles, it will be the first toll road in the country.

Construction started in 2006 and was originally planned to end in 2011.

A call to St. Petersburg's construction company Mostotryad No. 19, which leads a consortium of private contractors for the projects, went unanswered Tuesday afternoon.

As a measure to stimulate economic growth at a time when private investors are rolling back spending, the government increased the budget for road building by 100 billion rubles to 550 billion rubles this year, Putin said.

Similar measures will apply to a range of other industries as the state taps its huge cash reserve from the past oil boom, the Reserve Fund.

Putin has used meetings with representatives of various sectors -- such as Tuesday's event -- to announce efforts to support the economy. He has met aerospace, coal and oil managers and workers in recent weeks. Next in line is the nuclear power industry, which will come under discussion in the Tver region on Wednesday.

Putin said Tuesday that the government was considering proposals to provide an additional 100 billion rubles to the state-owned Russian Railways company for upgrading its rolling stock.

"There are various opinions and various approaches," Putin said. "However, we have to find some kind of solution. This would mean additional orders for domestic equipment makers and the preservation of thousands of jobs."

The government has already decided to increase the company's capital by 50 billion rubles as compensation for a partial freeze on transportation rates this year.

Participants at Tuesday's meeting included Deputy Prime Minister Sergei Ivanov, Transportation Minister Igor Levitin and company executives such as Russian Railways chief Vladimir Yakunin.

Just Russia Candidate Kicked Off Sochi Ballot

http://www.themoscowtimes.com/article/600/42/376217.htm

15 April 2009

By Natalya Krainova / The Moscow Times

A Sochi court eliminated A Just Russia's candidate from the city's mayoral election on Tuesday, effectively turning the race into a face-off between United Russia and opposition politician Boris Nemtsov.

Sochi's Central District Court ordered that candidate Viktor Kurpitko be struck from the ballot for failing to properly fill out his registration paperwork, Nikolai Levichev, head of A Just Russia's faction in the State Duma, told The Moscow Times.

Levichev accused the court of bowing to pressure from regional authorities to eliminate rivals of United Russia's candidate, acting Sochi Mayor Anatoly Pakhomov.

Levichev said Kurpitko's papers had been filled out correctly, noting that they had been accepted by the city's election committee. Kurpitko will appeal, he said.

Repeated calls to the press office of the regional administration went unanswered Tuesday.

The same court also expelled wealthy businessman Alexander Lebedev from the race on Monday for purportedly failing to fill out his registration properly. Lebedev has vowed to appeal.

The two court rulings came in response to complaints by another mayoral candidate, Krasnodar businessman Vladimir Trukhanovsky, whom Levichev called a "technical candidate" whose "only task" was to eliminate competitors from the race.

Also Tuesday, the court rejected a request by the Communist Party's candidate, Yury Dzaganiya, to invalidate the registration of Pakhomov, of United Russia, Interfax reported.

Kurpitko has also asked the court to reject Pakhomov's bid.

The Sochi election, slated for April 26, has turned into the country's most intriguing political battle of the year. Sochi is to host the 2014 Winter Olympics, a project for which the federal government has earmarked billions of dollars, and the next mayor will have a strong say over how the government will spend the money.

Former presidential hopeful Andrei Bogdanov dropped out of the race Monday, leaving eight candidates if Kurpitko and Lebedev successfully challenge the court's decisions to disqualify them.

Nemtsov, a former deputy prime minister and leader of the Solidarity movement, told reporters Monday that the government wants Pakhomov to win the election "at any price."

"The Sochi elections are 100 percent lawlessness and 100 percent fraud," he said.

APRIL 15, 2009

Russian Eco-Regulator Quits to Lead Green Movement

http://online.wsj.com/article/SB123975317926818841.html

By ANDREW OSBORN

MOSCOW -- A prominent Russian environmental regulator known for his fierce campaign against Royal Dutch Shell PLC resigned to lead a political opposition movement, complaining that his bosses had lost their appetite for his high-profile attacks on environmental violators.

Oleg Mitvol, who was appointed deputy director of Russia's Environmental Protection Agency by the government in 2004, said he was resigning to lead a new "green" movement that would challenge Kremlin candidates in local elections. He said he could focus on the same issues just as well from outside government, harnessing public concern about environmental issues.

"The ecological sphere must be politicized," Mr. Mitvol said. His new movement, Green Alternative, plans to field at least 100 candidates in municipal elections in October, he said. One Green Alternative candidate has already won the job of mayor of a town outside Moscow after thrashing the ruling United Russia party last month.

Mr. Mitvol, 42 years old, sprang to global prominence in 2006 when he accused Royal Dutch Shell of a string of environmental failings at its giant Sakhalin II oil and gas project in Russia's Far East. Under pressure from Mr. Mitvol and other Russian officials, Shell, which had a 55% stake in the project, sold control to state-controlled OAO Gazprom. Shell now owns a 27.5% stake in the project.

Shell denied Mr. Mitvol's allegations; when Gazprom took charge, his campaign ended, fueling suspicions that the battle had been political, not ecological, analysts say.

Mr. Mitvol strongly denies that his decisions at the agency have ever been Kremlin-orchestrated. He says Kremlin officials warned him more than once that his high-profile criticism of multinationals was scaring off foreign investors and that he should desist.

The Environmental Protection Agency is part of the ministry of natural resources. The ministry said through a spokesman that it accepted Mr. Mitvol's resignation. The spokesman declined further comment.

Mr. Mitvol's supporters in Russia's green movement say they are grateful to him for bringing previously ignored environmental issues to national prominence.

"Overall, his role has been quite positive," says Igor Chestin, director of the World Wildlife Fund in Russia.

Alexei Yablokov, widely regarded as the founding father of Russia's green movement, describes Mr. Mitvol as politically ambitious but says he's acquired real expertise in environmental matters.

Neither man was optimistic about the prospects for Mr. Mitvol's new movement.

"He [Mr. Mitvol] thinks that money and public-relations spin can achieve anything," says Mr. Yablokov. "But he'll come up against the Kremlin and big business."

Russia faces $10 billion international ruling over Yukos bankruptcy

http://en.rian.ru/analysis/20090414/121111794.html

Vedomosti

A number of Spanish investment funds, holders of Yukos Oil Company American Depositary Receipts (ADRs), have secured a major victory in an international arbitration against Russia - the decision on jurisdiction by the Arbitration Institute of the Stockholm Chamber of Commerce (SCC).The Spanish holders are seeking damages arising from the Russian government's uncompensated expropriation of the bankrupt Russian oil firm's assets. Russia will face a $10 billion worth of claims if it loses the case.

The fund Renta 4 S.V.S.A. represents the consolidated position of the affected parties, according to Covington & Burling LLP, the legal firm acting on behalf of the plaintiffs.

Baker Botts, the lawyers representing Russia, declined to make a comment to Vedomosti. A Justice Ministry official confirmed the receipt of the arbitration documents which were "being studied."

Information of the lawsuit by seven Spanish funds against Russia was leaked to the media back in 2007. According to the Law.com website, the court eventually took jurisdiction of only four claims, while the other three funds' legal status was not confirmed under Spanish legislation. Neither the full list of the plaintiffs, nor the size of their claims was disclosed then.

"This case will have significance for Yukos ADR holders in all countries that have BITs with Russia. The losses of Yukos ADR holders in such countries exceed $10 billion," Covington & Burling said in a statement.

The Covington arbitration team in 2005 was led by partner O. Thomas Johnson, Jr., who presented a $9 million claim of 11 individuals and the company FCT America Ltd in the U.S. District Court for the District of Columbia against the Russian Federation, the country's top officials, Gazprom, Rosneft and Baikalfinansgroup. The claim was not set to hearing.

Baker & McKenzie Partner Vladimir Khvalei from the Firm's Moscow office predicts that Russia stands a 90% chance of losing the case, after the Stockholm Arbitration Institute's decision on jurisdiction. Further disputes will focus on the size of compensation, he added.

The court will include very influential arbiters, and the case is expected to have important implications for future investment arbitrations against Russia on behalf of Yukos ADR holders in Spain, Denmark and Britain.

Tension at the top as crisis deepens

http://www.ft.com/cms/s/0/114ef5fc-27ce-11de-9b77-00144feabdc0.html?nclick_check=1

By Charles Clover

Published: April 14 2009 15:59 | Last updated: April 14 2009 15:59

Russia’s ruling classes have always been uniquely precarious. Kondrati Rileev, the 19th century poet, even referred to his homeland derisively as a country run by vremenshchiki or “temporaries”.

His words were prophetic: over the past century Russia has been a revolving door for some of the most routinely unfortunate elites in the world: first the 1917 revolution dispossessed the tsarist aristocracy, then dictator Joseph Stalin purged an entire generation of apparatchiks in the 1930s and again in the 1940s.

Hyperinflation and privatisation in the 1990s replaced the old Soviet nomenklatura, or ruling class, with the flashy, blingy “new Russians” of which the topmost echelon became known as the oligarchs.

This generation of the Russian elite may face a premature demise too, because of the global economic crisis. A year ago, Moscow was the top city in the world for billionaires, according to Forbes magazine, edging out New York at 74 to 71. But in this year’s rankings, Russia has tumbled farther than any other country, losing an astounding two-thirds of its 2008 crop, or 55 of the total 87 billionaires.

While it was a bad year everywhere – $1,400bn in billionaire wealth has vanished globally – Russia’s wealthiest were particularly hard hit by a combination of falling prices for oil and metals, Russia’s main exports, and frozen international credit markets.

As a result of the financial paralysis, the rouble has sunk almost a third in just six months and the stock market has fallen by more than three-quarters.

Even before the global financial crisis, the “new Russians” had been gradually surrendering ground to even newer ones since the election of Vladimir Putin as president in 2000.

Several 1990s oligarchs have gone into exile, and one who dared challenge the Kremlin politically, Mikhail Khodorkovsky, languishes in prison. Many may yet go bankrupt and hand over their empires to their creditors – or to the state, which lent them billions in bail-out loans last autumn.

The government has said it does not want to nationalise the assets, although a strong faction favours greater state control. Already, some metals groups such as Rusal, the over-leveraged aluminum giant, are in trouble. Oleg Deripaska, Rusal’s majority owner, was Russia’s richest man last year, but he may become the biggest casualty of the crisis.

“When we are at the bottom we shall see some very serious bankruptcies,” says Pyotr Aven, president of the well-connected Alfa Bank. Masha Lipman, a political analyst at the Carnegie Centre in Moscow, says: “The 1990s had one big wave of redistribution. Then, under Putin, came the redistribution in favour of another group of hand-picked elites. This process has never stopped and it is continuing today amid the crisis.”

Those waiting to step into the shoes of the old oligarchs are a much less flashy type of capitalist. In fact, they are not really capitalists at all. They are bureaucrats who run state monopolies and giant state corporations. They do not drive Lamborghinis and Humvees, they do not dress in cravats or velvet jackets or wear Steve Jobs trainers.

They are not the buccaneers of the 1990s; they are the dour-faced, serious men, whose main asset is their good relationship with their dour-faced, serious prime minister, Vladimir Putin.

A clique of former spies and security men – like Putin, himself a former KGB officer – they are known as the siloviki,“strong ones”, epitomised by Igor Sechin, the deputy prime minister and chairman of Rosneft, the state oil company, Vladimir Yakunin, head of Russian railways, and Sergei Chemezov head of Rostechnologia, the state arms and aerospace giant.

The siloviki have been very successful in extending their control over the economy but, if they pay attention to history, they may fear their seats on the board of Russia Inc may be just as temporary as the last group’s.

Already, the crisis is aggravating divisions in the government. Cabinet factions are squabbling over policy remedies, with “liberals” advocating a hands-off approach clashing with “statists” in favour of greater state controls.

Business groups, meanwhile, are fighting one another to keep their share of a shrinking economic pie.

While the popularity of the ruling tandem of President Dmitry Medvedev and Prime Minister Putin remains practically undented, the crisis could yet test the two men’s thus far cordial relationship. Mr Putin stepped down as president in 2008, anointing his long-time friend Mr Medvedev as his heir apparent, who succeeded him in a carefully managed election and began ruling in May 2008.

Fyodor Lukyanov, editor of the journal Russia in Global Affairs, says: “The dual leadership approach is appropriate to a more prosperous age. As long as you can say ‘yes’ to everyone, it runs smoothly. But the moment you have to say ‘yes’ to one person and ‘no’ to another, these are the seeds of a conflict”.

Peoples’ willingness to give the Kremlin the benefit of the doubt does not extend to United Russia, the party headed by Mr Putin. It is the embodiment of Kremlin power in the regions, but that is where its popularity has been badly dented.

In the far eastern city of Vladivostok, there were riots in December and, in the northern province of Murmansk, a governor was removed after he backed an opposition mayoral candidate last month.

Human rights activists say there has been a crackdown on political dissent.

In a sign of renewed pressure on the regime’s opponents, Mr Khodorkovsky, having landed in jail after charges of tax evasion in 2005 – which most people saw as a political vendetta by the Kremlin – now faces another prosecution on roughly the same grounds.

A number of unsolved attacks on human rights activists and opposition journalists in recent months seems to signal a campaign of intimidation, although no one is sure by whom.

In January, Stanislav Markelov a human rights lawyer working for the newspaper Novaya Gazeta, and Anastasia Baburova, a trainee journalist at the same newspaper, were murdered in an assassination-style shooting in central Moscow. Lev Ponomarev, a well-known human rights activist was badly beaten. The perpetrators of these crimes, and many others like them, have not been found.

Newspapers and TV stations have been officially discouraged from reporting on the economic crisis, a sign of how much fear it generates in ruling circles.

On the policy front, the Kremlin’s response has been to put off painful decisions in the hope that it will see the end of the tunnel first. The central bank, under pressure from the Kremlin, for example, refused to devalue the rouble. But its attempts to defend the currency cost up to $200bn and it still depreciated by a third.

Rather than make deep cuts in the budget to match lower revenues, Mr Putin said last month the government would fund the record deficit – 7.4 per cent of gross domestic product – out of reserves, which it can afford to do for three years, according to Igor Shuvalov, the first deputy prime minister.

There is evidence to justify the views of the optimists. Despite the plunge in oil prices, Russia still runs a current account surplus, and while it has spent huge sums defending the rouble, it still had reserves of $385bn at the beginning of the month, the third largest in the world.

Alexei Kudrin, the finance minister, says he expects growth to resume in the fourth quarter and, after a one-third slide since the summer, the rouble seems to have stabilised.

Capital flight, which amounted to $33bn in the first two months of the year, had all but stopped in March, according to Andrei Klepach, the deputy economy minister.

The bad news, however, is as dire as the good news is good. The rouble’s stability was accomplished by raising interest rates, which could harm economic growth, and by instituting “currency control in all but name”, according to Chris Weafer of Uralisib, the Moscow investment bank.

Credit markets continue to be frozen and most businesses – aside from the banks’ “tier one” customers – say it is almost impossible to get finance. Accounts payable have shot up, as have wage arrears, as enterprises borrow instead from their workers and their suppliers.

About $130bn in foreign loans mature in 2009, and not all of them will be paid back: a wave of defaults and bankruptcy work-outs – and possibly, nationalisations – could come in the autumn, when state bail-out loans come due.

Some see a silver lining in the crisis. Mr Shuvalov says that low prices for oil and gas might be a blessing in disguise for the Russian economy, too long dependent on metals and oil exports and in need of structural reform.

“The longer we have low commodity prices, the sooner we will have a new model for our economy,” Mr Shuvalov told the FT last month.

“Even now, people say: ‘Don’t worry, in a year all the prices will come up again and you’ll have your annual budget completely full of money and you will carry on’. But that’s not good. It’s better if we have two, three, five years as a difficult period.”

Stephen Jennings, chief executive of Renaissance Group, the Moscow investment bank, says that in the current decade Russia has managed impressive structural economic reforms, such as slashing tax rates. But, he says, more remains to be done, such as partially privatising the pension system as a way of making capital markets more resilient.

“The problem with the Russian market is that there is not broad enough ownership. It’s a very narrow group and 99 per cent can sell. So when you pull the plug, all the water goes out of the bath.” He advocates a comprehensive pension programme similar to those of Australia and Chile as a way to stabilise the stock market.

Like the economy, most Russians see foreign affairs as another area which has come dangerously close to disaster and needs to be brought back into balance.

Relations with Washington hit a fresh low, as the US stepped in to back Georgia in its war with Russia last August. Since then, relations with the new US administration of President Barack Obama have been on the mend. Joe Biden, US vice-president, said in February that Washington wanted to “press the reset button” in its relations with Russia.

Sergei Lavrov, foreign minister, told the FT last month that this was a positive sign. “There is always a place for hope and, certainly, when we hear signals from Washington that they want to ‘reset’ relations, meaning that they want constructive engagement and co-operation and partnership on so many issues which we really can usefully co-operate on, we welcome this.”

Many areas of tension under the last US administration, such as the prospect of Nato enlargement to Ukraine and Georgia, and the installation of a ballistic missile shield in eastern Europe, are being quietly defused by the Obama presidency.

“Everything that was creating tension in 2008 has gone from the front burner to the back burner,” says Dmitri Trenin of the Carnegie Moscow Centre. But he adds pessimistically: “Mentally, we are back in the Soviet days of the Washington-Moscow relationship. Now, as then, you have periods of détente, and periods of tension.”

Additional reporting by Catherine Belton

Will Moscow Expand Assistance to Russian-Language Schools in Ukraine?

http://georgiandaily.com/index.php?option=com_content&task=view&id=11105&Itemid=72

April 14, 2009

Paul Goble

Vienna, April 14 – A Russian activist has written President Dmitry Medvedev asking that the Kremlin help Russian regions provide assistance to Russian-language schools in Ukraine, an effort that recalls Soviet-era projects, threatens Kyiv’s control of its schools, and unintentionally calls attention to the absence of Ukrainian-language schools in the Russian Federation.

Anatoly Lisitsyn, who heads a charity foundation, wrote Medvedev to say that he had been asked by students at one Russian-language school in Ivano-Frankivsk to provide assistance, given the difficulties that school has had in obtaining Russian-language instructional materials.

In his letter, which was reported today by Novosti and other Moscow news outlets, Lisitsyn said that the request which arrived by email on his foundation’s website had convinced him that Russia’s regions should take responsibility for providing such help to Russian-language schools in Ukraine more generally.

The students said in their message, Lisitsyn continued, that they “would like Russia to devote more attention” to their desire to study in Russian, especially since “the Poles are making massive efforts to introduce Polish language in [Ukrainian] schools,” even to the point of paying for computerization and trips to Poland.

If Poland can do that, the students said and Lisitsyn agreed, then Russia should be able to do at least as much. Lisitsyn told journalists that he would like to see Medvedev back a program in which “all regions of Russia through various charitable foundations and organizations” would “support Russian-language schools in Ukraine.”

According to Lisitsyn, he has already met with Russian Foreign Minister Sergey Lavrov who supports the idea as do the pro-government United Russia Party in the Duma, especially since many of Russia’s regions have already “assumed responsibility for providing schools and other institutions in Ukraine with some aid.

Such aid, RUpor.ru noted, “frequently can assume a political character,” and the news agency noted that last year, Russian special services had promoted the activities of Ruthenian separatists in the Transcarpathian districts of Ukraine “under the aegis of the Orthodox Church of the Moscow Patriarchate.”

And Ukrainian officials are clearly concerned that Lisitsyn’s proposal represents another attempt by Moscow to increase Russian influence in Ukraine and undermine the authority of Kyiv. Ukraine’s education minister, Ivan Vakarchuk, for example, said that there currently are “no especial problems” with Russian-language schools in his country.

“Today more than 17 percent of Ukrainian pupils and the same percentage of university students study in Russian,” he pointed out. And he noted that in Ukraine there are also schools “in the languages of other national minorities,” including Hungarian, Polish, Moldovan, Crimean Tatar, and Romanian.

And Vakarchuk observed that while Russians and others the opportunity to study in their native languages in Ukraine’s educational system, “in Russia there is not a single Ukrainian school financed by municipal governments.” As a result, “children of ethnic Ukrainians” in Russia – and there are several million Ukrainians there – have access only to “Sunday schools.”

“I have raised this question at bilateral meetings” Vakarchuk added, “but the Russian side still has not been willing even to bring it up for discussion.” He implied but did not say that once the economic crisis in Ukraine passes, perhaps Kyiv will follow Moscow’s example and offer to provide outside assistance to Ukrainian-language programs in the Russian Federation.

Russian Minister of Foreign Affairs Sergey Lavrov Interview to the Interstate Television and Radio Company ‘Mir,’ Ashgabat, April 10, 2009

http://isria.info/pages/14_April_2009_57.htm

Question: Before your recent visit to Baku, you said a CIS anti-crisis plan to 2020 will be presented at a session of the CIS Council of Heads of Government in Astana on May 22. How acceptable can the unified anti-crisis plan turn out to be for the Commonwealth countries?

Foreign Minister Lavrov: There is no special anti-crisis plan to 2020 being contemplated. We have the CIS Economic Development Strategy to 2020, which remains fully valid. Actually, the CIS Council of Heads of Government on May 22 will consider the Stage 1 Plan of Implementation of this Strategy 2009-2011. In preparing the Plan for the next three years, the events in world financial, economic and currency markets are being taken into account. But the goals of the CIS Strategy to 2020 remain unchanged.

Speaking of anti-crisis efforts of the countries which form the Commonwealth of Independent States, I will, of course, mention the decision of EurAsEC to set up a billion Anti-Crisis Fund. The upcoming session of the EurAsEC Interstate Council in early June is slated to definitively approve the parameters determining the operation of this mechanism. By decision of the Heads of State, EurAsEC is also setting up a High Technology Center to help our countries step up work in this direction and prepare for exit from the crisis so that our competitiveness not only does not suffer, but also increases. The complex of these measures, adopted with regard for what is happening in the world’s financial and currency markets, will help retain unchanged the goals that are set into the CIS Socioeconomic Development Strategy to 2020.

Question: What should Russian foreign policy in Central Asia be primarily directed at?

Foreign Minister Lavrov: As in any other adjacent region to us, we are interested in seeing friendly, stably dynamic states in Central Asia. We presume that our relations must rest on equality and mutual respect and benefit. That’s exactly how these relations are evolving, bilaterally and within different structures. EurAsEC incorporates practically all countries of Central Asia. There is also the Shanghai Cooperation Organization, which comprises together with Russia Uzbekistan, Tajikistan, Kazakhstan, Kyrgyzstan and in whose activities Turkmenistan shows interest. The leadership of Turkmenistan participates in the SCO as a guest. We welcome this, and Turkmenistan’s growing interest in the CIS. Ashgabat serving as the CIS FMC venue indicates this. An Agricultural Producers Forum is also slated here for the autumn. Turkmenistan becomes actively involved in different CIS projects and in the humanitarian collaboration sphere.

Returning to Central Asia, I shall also say that we have enough grounds to be certain that our collaboration will only grow deeper. There exists a whole array of joint energy projects, including the Caspian Gas Pipeline. This project is being implemented by Russia, Kazakhstan and Turkmenistan. Together with Uzbekistan our three countries are also realizing the idea of modernizing the North Asia-Center Gas Pipeline. We have good prospects. I am certain that we will cooperate ever more deeply.

Question: What is the position of Russia on the question of water resources in Central Asia?

Foreign Minister Lavrov: We are interested in seeing the EurAsEC work on the creation of a Concept for developing the water energy resources of the Central Asian region completed as soon as possible. The question is not simple because there is a need to consider the interests of the countries possessing considerable water resources and countries which experience a shortage of these resources. Undoubtedly, mutually advantageous compromises need to be found and we will help the Central Asian states arrive at such arrangements.

Question: How is it possible to assess the refusal of Kyrgyzstan to provide the Manas military base for the Americans?

Foreign Minister Lavrov: The decision of Kyrgyzstan to close the US base at Manas was taken by the leadership of the country independently, bears a sovereign character and we consider that it should be treated with respect.

The background of the American and other foreign military presence in Central Asia is well known. After the events of September 11, 2001, and the start of the antiterrorist operation in Afghanistan, Central Asian states to some or other degree provided their infrastructure for its support. At that stage, this undoubtedly helped reinforce stability and security in the region. The American colleagues then told us and our Central Asian partners that they needed such assistance for the period of active struggle against terrorism.

In 2005 a SCO summit adopted a recommendation calling on the countries of the international coalition to set the dates for stationing of their troops in the Central Asian states. In so doing the SCO members were guided by the fact that the hot phase of the antiterrorist operation was already over, which American representatives then also indicated, by the way. At the end of 2005, by decision of the leadership of Uzbekistan, the US base at Khanabad was closed. So the issue of Manas is not something exceptional. Support in tackling the continuing tasks of the world community in Afghanistan can be rendered in other forms. In particular, Russia provides together with Central Asian countries the possibilities for transit of nonmilitary cargo.

We pay special attention to combating the narco-threat. CSTO member states, which annually conduct special antinarcotics operations called Kanal, have repeatedly invited the NATO nations as the backbone of the coalition in Afghanistan under the UN mandate to forge interaction for the purpose of intercepting and destroying narcotics. This proposal remains on the table and we expect that it will be accepted.

Question: What possibilities exist for Russian-American cooperation in the post-Soviet space?

Foreign Minister Lavrov: There is already some cooperation experience available in this sphere. Russia and the United States collaborated in tackling the problems inherited from the former USSR, associated, in particular, with the issues of nuclear security, the storage and utilization of nuclear materials, and adaptation to the new condition of obligations under some disarmament accords.

Speaking of the present day, economic projects are being realized in a number of CIS countries involving Russian and US capital as well as the capital of the receiving countries. We are open for such cooperation. We understand the interests of the United States in this space, interests of developing cooperation with the countries which are ready for this. We want this interest of the United States or any other extra-regional country to be realized by understandable transparent and legitimate methods, with no geopolitical games being played here, that there be respect, first of all, for the interests of the candidate CIS countries themselves for proposed cooperation and that the countries not be placed before the wrong choice of “you’re either with us or against us.” Unfortunately, our partners did make such attempts. We are against this. We want this unnecessary legacy to be left in the past.

Russian President Dmitry Medvedev in his recent article, which was published on March 31 in The Washington Post, came out for us taking a new approach towards cooperation and trying to find ways for its development which would unite us, would be in the interests of the CIS countries, and would create no unnecessary problems and suspicions for anyone.

Question: The elections in the Republic of Moldova were recognized by all observers, but the situation got out of control. Will the CIS FMC session adopt a joint statement on this issue today?

Foreign Minister Lavrov: At the CIS FMC session we will certainly discuss this situation. The Republic of Moldova is a member of the Commonwealth and we are not indifferent to what is happening in that state. It causes anger what happened – violence, pogroms, the defilement of the parliament building as a symbol of democracy and of the presidential office, and looting. We have already said, but I consider it necessary to re-emphasize that the fact that these vandals went on a ransacking spree under the flags of Romania and the European Union, of course, makes it necessary for Europe to clearly voice its position. The slogans under which all this was done were unequivocally directed at undermining statehood and democratic processes. I think that all CIS countries share this position.

Question: What is your vision of an agenda that can serve to create, as you put it, a “polycentric system of global governance”?

Foreign Minister Lavrov: In the first place, we must all of us proceed from reality. And the reality is such that there have appeared many centers of economic growth and financial power in the world. With economic and financial clout, of course, comes political influence. Therefore now, when a crisis has broken out, everybody is concentrated on real problems. These are being considered and tackled by recognizing that no one can solve them single-handedly or double-handedly. It is necessary to look for solutions which will be the fruit of collective wisdom, of collective initiatives and will present a consensus of the entire world community as to how to move further so that the world economy and world finance no longer experience such upheavals and so that reliable mechanisms are created to enable governing the financial-economic architecture with regard for the interests of all countries. That all of us have had in this period of crisis to concentrate on the real problems offers the hope that in world politics there will be less temptation to engage in virtual problems, to plunge into various geopolitical projects, but that there will be more understanding of the need to be concerned with essential things, in particular, such issues as international security, restrictions on strategic offensive arms, and the proliferation of weapons of mass destruction. As in the economy, solutions of security problems must rest on the opinion of all states and on the consideration of their interests. This is the aim behind the initiative of President of the Russian Federation Dmitry Medvedev for a European Security Treaty which would make it possible to avoid drawing new dividing lines in the Euro-Atlantic area and would create a new security architecture instead of the one that now exists and is patchy. It is not about dissolving NATO, the European Union, OSCE, CSTO or CIS. It is necessary that all these organizations, each of which is concerned with security problems to some or other degree, should find a common denominator, forms which would enable them to secure their members in such a way that no one’s security outside this or that organization is placed in jeopardy. We do not claim having any ready-made recipes, but are convinced that such dialogue is a must. The reaction to our proposals even by countries that are so far in doubt shows that the problem does exist.

Air defence regiment in Polyarny

http://www.barentsobserver.com/air-defence-regiment-in-polyarny.4580178-58932.html

2009-04-15

The Russian television channel Zvezda News has visited one of Russia’s largest air defence units in the closed military town of Polyarny, the Northern Fleet’s largest submarine base, and provides unique video material.

The regiment is equipped with the long range surface-to-air missile systems S-300, SA-10 in NATO reporting name. The S-300 system was developed in the late 1980’s, but has still got unique capacities. The missile can hit targets moving at up to 10 000 km/h, including ballistic missiles moving at the stratospheric border. The command wagon is like a bunker – it is self-supporting with air, water and electricity and gives protection from nuclear, biological and chemical weapons. Aiming, firing and movement to another position is done on less than half an hour.

Commander of the division, Lieutenant Colonel Nikolay Markovkin tells Zvezda News that the division’s main task is to protect the Northern Fleet’s bases and vessels. The fleet’s main base Severomorsk is located only some tens of kilometers away.

The air defence regiment in Polyarny has an excellent geographical location – close to the border with Norway and NATO.

See material from Zvezda News.

Russian Army badly needs modern weapons

http://en.rian.ru/analysis/20090414/121111794.html

Vremya Novostei

The main threat to Russia's security comes from its technological backwardness in the area of offensive and defensive precision weapons.More than six months have passed since the August operation to force Georgia to stop the conflict in South Ossetia. The conflict exposed the lack of modern weaponry in Russia, but the Russian army has failed to draw the proper conclusions.

It is said that the conflict highlighted the flaws in of the Russian armed forces, but this is not true. These drawbacks were a common fact 10 years ago. Inefficient reconnaissance equipment affects the effectiveness of Russian weapons, putting it at 60%, and prevents the swift use of intelligence data. The army also lacks automated command and control equipment, especially at the tactical level.

In March 2009, President Dmitry Medvedev, who is also the commander-in-chief of the armed forces, said that Russia had a unique opportunity to create a highly effective armed forces despite the economic and financial problems. He said a large-scale rearmament program would begin in 2011.

Defense Minister Anatoly Serdyukov complained that modern systems comprised only 10% of the weaponry in the Army. Ex-defense minister Sergei Ivanov said the figure was 20% in 2003. If this is true and the number of modern weapons is falling by 10% every five years, there must be a systemic flaw in the state rearmament programs.

In fact, these modernization programs are limited to expensive repairs of obsolete weapons. The current system of manufacturing weapons is insufficient to ensure quality and a high rate of rearmament. The policy of consolidating defense companies into holdings has proven ineffective. When 15-20 nearly bankrupt companies with obsolete equipment that lack skilled personnel are brought together in a super holding, this can only create a huge, unwieldy, ineffective and problem-ridden monster.

April 14, 2009What Countries Care About

http://www.russiaprofile.org/page.php?pageid=Politics&articleid=a1239728230

Comment by Alexander ArkhangelskySpecial to RIA Novosti

To Get the Balance of Future Development Right, We Need to Think About Future Generations

At a recent meeting of Russia’s Council for Foreign and Defense Policy, experts from across the political and professional spectrum debated the threats facing the country, and what policies would counter them best. But while soldiers worried about missiles, and demographer—about future population shifts, each group of experts arguing for priority spending in their chosen field, the delegates overlooked the most important question: what kind of world do we want our children to live in?

A regular session of the Council for Foreign and Defense Policy (CFDP) took place this past weekend just outside of Moscow. The CFDP is a non-governmental organization; its members include liberals, conservatives, nationalists and cosmopolitans, along with fighters against the murderous chekists, former FSB and SVR (the Service of External Intelligence) generals, hardened anti-Soviets and the heads of Soviet delegations at disarmament talks, whose logic is still the same: not a step backward. That’s a very useful system. Any healthy society (or one that at least hopes to become healthy) should have neutral stages where everyone must listen to everyone, not where it’s just a conversation of insiders among themselves. The condition is very simple: as long as a person is serious and reasonable, they can participate.

Many different things were discussed, but three speeches were especially memorable.

The current minister of foreign affairs stated that we cannot allow ourselves to have another false start in resetting the relations with the United States: he does not exclude the possibly of strengthening the dialogue with NATO, and, maybe for the first time ever, he publicly acknowledged the fact that the West may also have its own interests in the CIS countries, as long as these interests don’t contradict those of the countries themselves.

This also had its own logic—the logic of careful compromise for the sake of surviving in the situation of the current crisis.

The former deputy minister of defense clearly drew the diagram of Russia’s missile defense. He explained why the United States is the real target of our “defense initiative,” while China (for the time being) is just a conditional target. He was also rather convincing in proving that the only reason why other countries still reckon with us, at least in some areas, is the potential threat we pose for America.

This had its own logic, too. One of the experts grumbled, though: in order to realize this plan, we need to increase the budget of the Ministry of Defense at least by three times. But even if that’s true (let’s suppose that we don’t and can’t have any opinions of our own on this matter), so what? There are situations when you need to tighten your belts – for the sake of self-preservation; there are other situations that can be resolved only with the help of a Bulava missile, but sometimes you can ride the Bulava missile right into bankruptcy. The only question is what the real threats to a country are, in what name must it sacrifice a considerable part of its prosperity, and whether it’s true that this is something that absolutely can’t be done without.

In his turn, one outstanding demographer described the near-term outlook for the increase of the Asian population. He spoke about the fact that in the 21st century our planet will grow on account of Pakistan, Bangladesh and, in part, India. Their population is already incredibly dense, but it will become even denser. This will create colossal problems for everyone – including us. Fighting for territory, wars for control of water and resources will very soon become a reality. In this state of affairs, do we have the right to pay attention to minor frictions with America? To see it not as an ally, but as a geopolitical opponent? Or is the real threat seeping in through other cracks, and they can be filled only together with the West?

Undoubtedly, there was logic in this, too. Very obvious logic. Although some people did object to the demographer, saying that it would not be right to move toward the United States alone, while there was no obvious desire for a compromise expressed by the other side. A different desire was evident, however – the desire to break things roughly.

It was nice for the old Rabbi in that popular joke to answer to everyone: “you’re right,” “and you’re right,” “and you, woman, are also right.” But what’s a political practitioner to do when he’s surrounded and constrained by problems? A practitioner who’s told by military men (and intelligent military men at that, not like the late-Soviet generals), very convincingly, that technological rearmament is essential, even if it means cutting down on expenses for education, culture and social services – all those budget outcasts. And the demographers are no less convincing when they demonstrate the map of global challenges that implicate economizing on ambitious defense and turning toward an allied (i.e. not completely equal, because the specific weight of the economies is incomparable) relationship with the United States. And the diplomats carefully cover their backs, but their gazes are silently questioning: what is our long-term policy? What is the strategic objective our tactical words need to suit, the words we’ll use to weave our diplomatic lace?

It will not be possible to combine everything with everything. Unlike during the CFDP assembly, in practical politics the sheep and the goats cannot be reconciled and heard with equal cordiality—somebody will inevitably feel deprived. It may be that the only possible way for making sound decisions is to take into consideration the interests of – no, not the military men, not the human rights activists, nor the diplomats, nor the scientists, nor the education professionals – of our children. What kind of world should they live in? Which of our tabs will they have to pick up? What dividends will they collect? It is the answer to this key question (and not the distribution of the available forces, nor the mutual ambitions of the Western and the Eastern leaders) that determines how many missiles and mines we need, what budget needs to be assigned for the Ministry of Defense and what budget – for the Ministry of Education.

If we run on the assumption that our children will have to be at war with America anyway, like the children born in 1910s and the 1920s were inevitably destined to be at war with Hitlerism, we must already start that war now. Without minding the costs. But if we’re sure that they are threatened by something else, something that implies an alliance with the West per se, with all of its flaws, then we need to step over our personal dislikes and we need to form a strategic alliance in the name of our children. And then – we need to keep moving, maneuvering, compromising, backing off from declared goals and then returning to them. But most importantly, we’ll keep moving with a clear understanding of where we’re heading and in what name.

Reuters PRESS DIGEST - Russia - April 15

http://www.reuters.com/article/rbssOilGasExplorationProduction/idUSLF36448620090415

Wed Apr 15, 2009 3:00am EDT

MOSCOW, April 15 (Reuters) - The following are some of the leading stories in Russia's newspapers on Wednesday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- The newspaper has an interview with Ukrainian President Victor Yushchenko on Russian-Ukrainian relations.

- Russia's SOK group has sold Izhavto a 75 percent controlling stake for $200 million to the management of the Izhavto car plant. The daily says it may result in the plant's bakruptcy.

- Debt-burdened Russian oligarch Oleg Deripaska halved the staff of his Basic Element holding group. This may save $30 million to $90 million per year, the daily writes.

- The daily issues an interview with the Vladimir Dmitriev, the CEO of state-controlled VEB bank, on the cost of anti-crisis measures.

VEDOMOSTI

www.vedomosti.ru

- Russia wants to borrow 5 billion roubles ($149.5 million) from foreign investors, the daily reports.

- One of the most popular social networking web sites in Russia, Odnoklassniki.ru, introduces more paid services. Its profit in 2009 may reach 690 million roubles ($20.63 million), the daily writes, citing experts.

- The daily publishes an interview with the Alexander Shokhin, the President of the Russian Union of Industrialists and Entrepreneurs, the country's main Russian business lobby.

- U.S. company Moncrief Oil International wants to sue Russian gas export monopoly Gazprom for 110 million dollars, the daily says.

- More than 700,000 square meters of office buildings were built in Moscow in 2009, and around 62 percent of it stands empty, the daily wites.

ROSSIISKAYA GAZETA

www.rg.ru

- Russian President Dmitry Medvedev promised that pensions for the elderly in 2010 will be higher than the minimum cost of living, the daily says.

VREMYA NOVOSTEI

www.vremya.ru

- Ukraine's broadcasting council urged national cable television providers to exclude Russia's state-controlled First Channel from their broadcasting networks, the daily writes.

National Economic TrendsBudget deficit is to be reduced: Dvorkovich

http://www.russiatoday.ru/Business/2009-04-14/Budget_deficit_is_to_be_reduced__Dvorkovich.html

14 April, 2009, 16:34

Tuesday’s meeting of Senior Finance Ministry officials reviewed results of 2008 and plans for the coming years, with anti crisis measures in focus.

Budget deficit:

Russia’s federal budget deficit should not amount to 5% of GDP in 2010, according to Russian Presidential aide, Arkady Dvorkovich.

“The State budget deficit is expected to be at least 8 percent this year. Speaking of next year's deficit, I don't think that a level of 5% is acceptable. It should be lower – or the country will face an excessive level of risk.”

Borrowing plans:

Deputy Prime Minister and Finance Minister Alexei Kudrin said Russia may raise foreign loans in 2010. Kudrin thinks it would be worthwhile to go to international capital markets in 2010, and to conduct a road show, without raising borrowing, this year, in order to inform investors about Russia’s goals and plans.

The country's State foreign debt shrank by $4.3 billion in 2008 and totaled $40.5 billion on January 1. Eurobond issues account for a large share of this debt. The share of foreign debt in Russia's overall national debt declined to 44.3% in 2008 from 45.8%. It’s the first time Russia has resumed issuing bonds almost in a decade. The country last issued bonds in August 2000, when it placed $21.2 billion worth of bonds with maturity in 2030.

Out of the crisis. When?

Finance Minister Kudrin also noted that emerging from this economic crisis could be more difficult than the 1998 emergence because of the gloomy global economic outlook.

“The recession in U.S. economy will last for at least 16 to 18 months. The way out of the crisis may stretch for several years. Thus we should not be expecting external market conditions to be favorable as they were in 1999, after the crisis ten years ago.”

Economics minister Elvira Nabiullina, however, says an upturn is possible towards the end of this year.

“According to our estimates an upturn is possible toward the end of the year under the influence of growing export revenues and import replacement, including that encouraged by the Rouble's devaluation.”

Other issues:

The Ministry also discussed cuts in budget spending and the need for a better distribution of budget liabilities.

Single Regulator Considered

http://www.themoscowtimes.com/article/1012/42/376220.htm

15 April 2009

Arkady Dvorkovich, the top presidential economic aide, said Tuesday that it was "worth thinking about" the creation of a unified financial regulator to cover everything except the banking sector, Interfax reported.

Speaking at a Finance Ministry meeting, Dvorkovich said the Central Bank should maintain its oversight role for banks, the news agency said.(MT)

Kudrin Considers Sovereign Eurobond

http://www.themoscowtimes.com/article/600/42/376207.htm

15 April 2009

By Ira Iosebashvili / The Moscow Times

Finance Minister Alexei Kudrin said Tuesday that the government would hold an international investment road show this year and consider issuing debt abroad in 2010, tapping foreign markets for the first time in a decade.

Kudrin outlined the proposals at a Finance Ministry meeting attended by Deputy Finance Minister Sergei Storchak, marking his first appearance in an official capacity since being released from jail last October.

"In this crisis period, condition