Russia 110309

Basic Political Developments Medvedev, Biden to meet in Moscow

o Medvedev, Biden to discuss ABM, Russia’s accession to WTO, Libya -“High on the agenda of the negotiations between Medvedev and Biden are Russia’s accession to the World Trade Organization,” Medvedev’s press secretary Natalia Timakova told Itar-Tass. U.S. Under Secretary of State for Public Diplomacy Judith MacHale said on Monday that the Obama administration gives priority to Russia’s accession to the WTO and does all to abolish the Jackson-Vanik Amendment this year.

o Biden in Moscow for 2 days of talks - "We are, I think, on the verge of trying to take an issue that used to be extremely contentious between the United States and Russia and to try to see if we can make this an area of cooperation," the White House's Senior Director for Russian and Eurasian Affairs Mike McFaul said last week.

o Biden Visit to Focus on Business - Commercial cooperation will come in addition to routine bilateral topics of U.S. missile defense plans and Russia's bid to join the WTO, White House advisers said.

Finland, US back Russia's speedy WTO entry - Finland’s Prime Minister Mari Kiviniemi and United States Vice President Joe Biden have expressed their support for Russia’s more expeditious entry to the World Trade Organization (WTO).

Pravda: USA to defend Poland against Russia Rosoboronexport sales topped $8.6 bln in 2010 - general director (Part 2)

o Russia discusses supply of Russian helicopters to Afghanistan, Iraq with U.S. – Rosoboronexport

o Russia, France in talks over Mistral price – Rosoboronexporto China accounts for up to 10% of all Russian arms exports -

Rosoboronexport heado ROSOBORONEXPORT PLANS TO SELL $9.5 BLN WORTH OF

WEAPONS IN 2011 - GENERAL DIRECTORo ROSOBORONEXPORT: RUSSIA'S POSSIBLE LOST PROFITS FROM

NOT SHIPPING WEAPONS TO LIBYA COULD AMOUNT TO $4 BILLION

o Rosoboronexport denies cooperation with Taiwano Russia ready to supply submarines to Venezuela, doesn't have requests yet

- Rosoboronexport Russia, NATO, UN authority in Kosovo may help negotiate settlement Western style democracy could fuel Islamic radicalism in Middle East – Rogozin Russia and Georgia in WTO talks - Talks between Russia and Georgia on

Russia’s membership in the WTO are getting under way in Berne. o Georgia sends delegation to Bern for Russia WTO membership talks - The

Georgian delegation is headed by the prime minister's economy adviser,

Tamar Kovziridze, not the prime minister as had been previously suggested.

o Georgia, Russia Meet on WTO o Russia and Georgia begin secret talks – Izvestiya

Young Russia will hold a picket at the Japanese Embassy in Moscow Democratic Republic of the Congo Foreign Ministry delegation to visit Russia Expo – Russia Jordan at Le Méridien Amman – Royal Convention Centre Deputy Premier receives Russian ambassador - Deputy Prime Minister Shaikh

Khalid bin Abdullah Al Khalifa received in his office today Russian Ambassador to Bahrain Victor Smirnov.

Russian Satellite Came Close to Colliding with Cheollian Russian Polar Bears Coming to Seoul Possibility of war in Karabakh not removed from agenda - According to famous

Russian military expert Pavel Felgenhauzer, the joint statement on Nagorno Karabakh settlement, signed by the presidents of Russia, Armenia and Azerbaijan by results of the Saturday talks in Sochi, are of no importance.

Austrian Spy-Soldier Given Sentence - The court in Munich ruled that Sodnikar, 54, had helped an agent of the Foreign Intelligence Service, or SVR, to obtain technical documentation about Eurocopter helicopters.

Medvedev signs law on Central Asian anti-drug centre - Russian President Dmitry Medvedev has signed a federal law ratifying an agreement between Russia, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan on a Central Asian regional information and coordination anti-drug centre, the Kremlin press service reported on Wednesday.

Russia, Kyrgyzstan, U.S. Nervously Eyeing Tajikistan’s Borders - In Russia, the latest alarm bell sounded two days ago, when Semyon Bagdasarov, a member of the State Duma’s International Affairs Committee, said the Tajiks are not keeping Afghan drugs out of Central Asia -- and, by extension, out of Russia -- and should either hand control of the Afghan border back to Moscow, or suffer the consequences. 

WikiLeaks: Karimov Plays U.S. Off Against Russia Plane crash in central Russia caused by controls’ malfunction – source

o South Russian plane crash caused by speed indicator failure - paper Prominent Russian Rights Activist Calls On EU To Change Asylum Policy A cache of 46 kg of explosives found in Dagestan An explosive device with 8 kg of TNT defused in Makhachkala Gunman killed in grenade blast while detained in southern Russia Search for a possible terrorist Dvorakovsky yet returned no results Anti-Wahabi group vows to punish militants in Kabardino-Balkaria Novosibirsk State University evacuated due to letter about explosive Policeman Hated by Nationalists Shot in Head in Moscow Moscow to spend $12.8bn on development in 2011 Moscow suburb protests over 20 years of brown tap water Russian dry-cargo ship thrown ashore in Marma Sea Russian Press at a Glance, Wednesday, March 9, 2011 WWF cancels Amur Leopard count due to lack of snow

Construction for Sochi Olympic games outruns environmental law while authorities rat out their own crimes

Insurgency in Russia's Caucasus a growing threat US Ambassador John Beyrle: "Feminism" is a Dirty Word in Russia IISS outlines Russian navy's regeneration plans - defpro Russia’s Fog of Military Reform - By: Roger McDermott

National Economic Trends Putin’s Gain on Crude Sends Swaps to 2008 Low: Russia Credit January capital outflow estimated at $13bn Will Investors Ever Commit to the Russian Ruble? - By Ira Iosebashvili

Business, Energy or Environmental regulations or discussions Russia Stocks Climb on Metals, $100 Crude as Trading Resumes UniCredit SpA raised its 12- month price target for the Russian oil producer

controlled by OAO Gazprom and reiterated its “buy” recommendation on “strong” 2010 earnings, the bank said on March 7 in an e- mailed note.

OAO Mostotrest: The bridge and road builder that raised $388 million in an initial share sale in November was initiated with a “buy” recommendation at VTB Capital in Moscow, which said the shares may gain 50 percent in the next 12 months.

Shares in TNK-BP, Russia’s third-largest oil producer, rose 0.1 percent to 87.70 rubles.

AFK Sistema to morph into investment fund Russian transport giant to operate new container terminal in Muuga VTB may gain control of Bank of Moscow this week - Kommersant Rosneft to buy the shares of Sakhalin Energy Company CERBA Russia, CIS int’l mining conference to open in Toronto Credit Suisse to Sell Moscow Bank Stake to VTB, Kommersant Says Adani buys first Russian coal cargo Russians value Facebook at $76bn Russia to supply $139mn worth of equipment for ITER McDonald’s Keeps Direct Ownership Hermitage Capital Sues in Constitutional Court

Activity in the Oil and Gas sector (including regulatory) Russia mulls LNG plant on the Black Sea Shmatko: Russia is exploring the possibility of LNG production at the Black Sea Lukoil's Alekperov Looking for Partners to Invest in U.S. Shale Gas Fields Norex Sues Blavatnik, Access in New York Over Yugraneft

Gazprom Russia May Overturn Gazprom Kovykta Deposit Win, Kommersant Says Kovykta sale may be reversed in favor of Rosneftegaz Gazprom dissatisfied with Armenia Gazprom signs agreement to buy RUSIA Petroleum properties Gazprombank to earn $867 mln from Novatek sale-paper

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Full Text Articles

Basic Political Developments

Medvedev, Biden to meet in Moscowhttp://en.rian.ru/world/20110309/162915006.html

02:01 09/03/2011

Russian President Dmitry Medvedev and U.S. Vice President Joe Biden will meet on Wednesday in Moscow to discuss Russia's admission to the World Trade Organization, missile defense and international issues.

Biden arrived in Russia on Tuesday. His visit is taking place against a backdrop of the second anniversary of the much heralded 'reset' in bilateral relations, notable in particular for the signing of a new arms deal between Russia and the United States.

Russia and the United States completed the ratification of the New START in February. The new deal replaced START 1, which expired in December 2009. The document slashes the Russian and U.S. strategic nuclear arsenals to a maximum of 1,550 warheads, down from the current ceiling of 2,200.

A Kremlin source earlier said Biden's visit is a run-up to an official visit to Moscow by U.S. President Barack Obama, due later this year.

On Wednesday, Biden will also meet with U.S. businessmen and visit Skolkovo, dubbed Russia's Silicon Valley outside the capital, where he will participate in a roundtable with Russian businessmen.

On Thursday, Biden will meet with Russian Prime Minister Vladimir Putin and will later give a speech at Moscow State University on the two countries' relations.

Biden will leave Russia on Friday and head for Moldova.

MOSCOW, March 9 (RIA Novosti)

Medvedev, Biden to discuss ABM, Russia’s accession to WTO, Libya

http://www.itar-tass.com/eng/level2.html?NewsID=16021923

09.03.2011, 02.02

MOSCOW, March 9 (Itar-Tass) -- Russian President Dmitry Medvedev will receive visiting U.S. Vice-President Joseph Biden at his presidential residence in Gorki, the Moscow Region, on Wednesday. The U.S. high-ranking official arrived on a three-day working visit in Moscow on Tuesday evening.

Dmitry Medvedev will have negotiations with Joseph Biden on Wednesday evening. On Wednesday morning the U.S. vice-president will meet with U.S. diplomats in Moscow and will have a luncheon with U.S. businesspeople working in Russia. They will accompany Biden during his visit to the Skolkovo innovation center, where the latter will have a bilateral round-table meeting with Russian business captains. Aeroflot and Boeing will sign an agreement in the presence of Biden and First Deputy Prime Minister Igor Shuvalov.

“High on the agenda of the negotiations between Medvedev and Biden are Russia’s accession to the World Trade Organization,” Medvedev’s press secretary Natalia Timakova told Itar-Tass. U.S. Under Secretary of State for Public Diplomacy Judith MacHale said on Monday that the Obama administration gives priority to Russia’s accession to the WTO and does all to abolish the Jackson-Vanik Amendment this year.

The White House stated that Biden’s visit in Moscow will focus on the expansion of the reset results in Russian-U.S. relations. “Russia and the United States stated that bilateral relations are positive and the dialogue should be continued,” Natalia Timakova reaffirmed. “We have several important issues, which we hope to fulfill this year,” she said. Biden was the first to introduce the term reset. He outlined the guidelines of U.S. President Barack Obama’s foreign policy at the Munich Conference in 2008 and urged to settle U.S.-Russian relations pushing the reset button.

The U.S. anti-missile defence will be also high on the agenda of the Moscow negotiations. In 2001 Biden, who is an expert in arms control and non-proliferation, opposed George Bush’s decision on U.S. walkout from the 1972 Anti-Ballistic Missile Treaty (ABM).

U.S. officials recently stated the intentions to conclude an antimissile defence treaty with Russia in 2011.

The U.S. vice-president also intends to discuss the situation in Libya with the Russian leadership. White House officials said that Libya would be discussed as an item on the international agenda and that Russia is a highly important partner of the U.S. "This issue will be touched upon" at the negotiations, Timakova confirmed. "However, the focus of the talks will be bilateral," Timakova added.

On Thursday, the U.S. vice-president will have negotiations with Russian Prime Minister Vladimir Putin. The interlocutors “will focus on trade and economic cooperation with the U.S., because its potential is not realized fully,” Putin’s press secretary Dmitry Peskov told Itar-Tass. They “will also discuss the current world situation, including Libya,” Peskov said.

On Thursday evening, Biden is to meet with members of Russian opposition and the leaders of Russian civil society. The meeting will be held at the Spaso House, which is the residence of the U.S. ambassador in Moscow.

At the end of the visit Biden will deliver a major speech on Russian-U.S. relations at Moscow State University.

Senior Director for Russia and Eurasia at the U.S. National Security Council Michael McFall said the U.S. does not intend to intervene in forthcoming 2012 presidential elections in Russia and does not view Biden’ s visit to Moscow as support for any candidate.

U.S. Vice-President’s wife Jill, who has Doctorate in Education, is accompanying Biden in his visit to Russia. Jill Biden is to tour the Kremlin and the Red Square, visit the Bolshoi Theater, meet students of the Ballet Academy and tour the obstetrics, gynecology and perinatology scientific center named after Academician V. A. Kulakov.

On Friday morning, March 11, the U.S. vice-president is to leave Moscow for Chisinau.

Biden in Moscow for 2 days of talks

http://www.washingtonpost.com/wp-dyn/content/article/2011/03/09/AR2011030900056.html

By JIM HEINTZThe Associated Press Wednesday, March 9, 2011; 12:15 AM

MOSCOW -- Two years after he introduced the phrase "push the reset button" for America's relations with Russia, Vice President Joe Biden is in Moscow to see what sort of fine-tuning is needed.

Biden plans two days of meetings Wednesday and Thursday, including with President Dmitry Medvedev, Prime Minister Vladimir Putin and representatives of Russia's beleaguered opposition groups. He is to cap the trip with an address at Moscow State University that is expected to lay out the White House's vision for U.S.-Russian relations in the last half of President Barack Obama's term.

"This trip for the vice president is an opportunity to take stock of the reset and what we've achieved and where we hope to go next," said Biden's national security adviser Tony Blinken.

The address and the results of his meetings with Russia's leadership duo will be closely parsed at home, where Obama's policies run head-on into newly confident congressional Republicans who are frequently suspicious of Russia. The signal achievement of Obama's Russia policy to date, the New START arms-control treaty, was ratified by the U.S. Senate only after extensive efforts to bring hesitant Republicans on board.

An even-knottier defense issue will be on the top of Biden's agenda: European missile defense.

After years of opposition, Russia agreed last fall to talk about cooperating with NATO and the United States on an anti-ballistic missile plan for Europe, which the U.S. says may be needed if Iran develops nuclear weapons.

But Moscow has refused to budge from its demand for joint control, and has been keeping up the rhetorical pressure. Last fall, Medvedev said if an agreement on missile defense can't be reached, Russia may deploy new offensive weapons, triggering a new arms race.

"We are, I think, on the verge of trying to take an issue that used to be extremely contentious between the United States and Russia and to try to see if we can make this an area of cooperation," the White House's Senior Director for Russian and Eurasian Affairs Mike McFaul said last week.

The other key issue, McFaul said, will be to try to facilitate Russia's entry into the World Trade Organization.

Russia, the largest economy outside the WTO, has sought membership, with varying levels of enthusiasm, for the past decade and a half. Although the country wants to improve its prospects for international trade, it has been leery of dropping some protectionist tariffs. The United States has supported WTO membership for Russia, believing that developing the country's economy will lead to more stability.

"This cannot be a relationship just about arms control and nonproliferation. It has to be about investment, it has to be about innovation," McFaul said.

Despite advances in the manufacturing sector, Russia remains largely a natural-resources economy, with exports of oil and natural gas as its backbone. Russia is concerned that dropping import tariffs for manufactured goods such as automobiles could undermine its attempts to boost industry.

Biden on Wednesday will make a visit to the Moscow suburb of Skolkovo, where the Russian government is building a so-called innovation center that it sees as its equivalent of Silicon Valley. The vast project has been greeted with some skepticism by critics who note that Silicon Valley developed flexibly and organically, rather than by the topdown strategy of Skolkovo.

The United States has encouraged Russia to develop its technology sector by arranging a visit by Medvedev to Silicon Valley last year.

After leaving Moscow on Friday, Biden is to make a short visit to Moldova, the poorest country in Europe. The White House has said the trip would aim at signaling support for a resolution of the dispute over Moldova's breakaway region of Trans-Dniester. Russia has about 1,500 troops stationed in the separatist region and it was unclear whether Biden would raise the question of their presence with Russian officials.

Biden Visit to Focus on Business http://www.themoscowtimes.com/news/article/biden-visit-to-focus-on-business/432187.html

09 March 2011By Anatoly Medetsky

U.S. Vice President Joe Biden starts two days of Moscow talks Wednesday with a focus on building stronger business ties amid a political thaw.

Commercial cooperation will come in addition to routine bilateral topics of U.S. missile defense plans and Russia's bid to join the WTO, White House advisers said.

"We see the vice president's trip as trying to expand into new dimensions of reset with a particular focus on … the business piece," said National Security Council Senior Director for Russian and Eurasian Affairs Michael McFaul.

President Barack Obama's policy of a reset in relations with Russia has lifted them from a low point after the United States condemned Russia's brief war with Georgia in 2008. Moscow and Washington have since then signed a new Strategic Arms Reduction Treaty and engaged in much closer collaboration on Afghanistan, Iran and North Korea. On the economic side, Russia has allowed PepsiCo to acquire a major domestic rival and has given the green light for Chevron and ExxonMobil to team up with Rosneft for oil exploration in the Russian portion of the Black Sea.

"This trip for the vice president is an opportunity to take stock of the reset, what we've achieved and where we hope to go next," said his national security adviser, Tony Blinken.

Biden will meet President Dmitry Medvedev on Wednesday after having lunch with U.S. business leaders at the U.S. Embassy and traveling with them to the Moscow School of Management at Skolkovo, near the place where the government wants to create a Russian Silicon Valley, the White House said in a statement.

At Skolkovo, First Deputy Prime Minister Igor Shuvalov will join Biden to participate in a ceremony for Aeroflot and Boeing to sign an agreement. They will then lead a round-table discussion with Russian business leaders.

Biden will start the next day by meeting with civil society leaders — whose names weren't released — at Spaso House, the U.S. ambassador's residence. A meeting with Prime Minister Vladimir Putin will follow at the Cabinet building. 

The vice president will then return to Spaso House for another round-table discussion — with opposition leaders, whom the U.S. government didn't name either. At 5 p.m., he will deliver a speech on U.S.-Russian relations at Moscow State University, an event hosted by the American Chamber of Commerce. The White House will stream the audio on its web site at www.whitehouse.gov/live.

McFaul said the United States expected an agreement with Russia to cooperate on a missile defense system in Europe by the end of this year. 

He rejected speculation in a Friday report by Nezavisimaya Gazeta that quoted an anonymous State Duma source as saying Biden's visit was a show of support for President Medvedev to run for re-election next year.

It would be "foolish for us to think that that is our role to play," he said in a conference call with reporters. "We're not going to do that."

Biden and his Russian government vis-a-vis will also discuss ongoing riots in Libya, but will stay away from the issue of restrictions on U.S. poultry imports, which McFaul indicated was no longer a problem.

"I'm happy to report having spent many, many hours — not many hours — hundreds of hours on this issue last year, that right now we do not have a serious disagreement about that," he said in the conference call.

Biden arrived in Russia on Tuesday evening from Finland where he began his European tour. He will leave Moscow for Moldova on Friday morning.

Finland, US back Russia's speedy WTO entryhttp://english.ruvr.ru/2011/03/08/47103634.html

Mar 8, 2011 19:24 Moscow Time

Finland’s Prime Minister Mari Kiviniemi and United States Vice President Joe Biden have expressed their support for Russia’s more expeditious entry to the World Trade Organization (WTO).

Russia and the global economy were on the agenda of their talks in Helsinki on Tuesday.

Speaking at a press conference after the meeting, Kiviniemi said that membership in the WTO will be advantageous not only for Russia but also for Finland, Europe and the whole world.

On Tuesday night Joe Biden arrives in Moscow for talks with the Russian leadership. 

USA to defend Poland against Russiahttp://english.pravda.ru/world/americas/09-03-2011/117117-usa_poland_russia-0/

09.03.2011

The U.S. will be deploying elements of its missile defense system in Poland. This was stated by U.S. Secretary of State Hillary Clinton at a meeting with the head of the Polish Foreign Ministry Radoslaw Sikorski.

Clinton stated that, as decided by the two Presidents in December, the US was planning to build an Air Force in Poland, as well as deploy missile defense elements and develop a security plan. She added that topics to discuss included wide range of issues in three important areas: strengthening of mutual security, increase of transparency and promotion of democracy.

The story of the deployment of the elements of U.S. missile defense system in Poland has been ongoing for several years. This intention was first expressed by the administration of George W. Bush in 2005-2006. It was assumed that ten interceptor missiles would be located on the Polish territory and a powerful radar was supposed to appear in the neighboring Czech Republic. The Americans assured that all this military power is directed solely against the missile launches from Iran and North Korea.

However, Russia had a different view. Where is Iran, where is Korea and where is Russia? These fears have been repeatedly affirmed by the statements of Polish (and some Czech) politicians that missile defense was needed precisely to protect their countries from allegedly possible aggression from Russia. Polish political elite was absolutely united in their desire to deploy U.S. missile defense elements and other objects on their territory.

The Bush administration was determined to see this development through, but in 2009 was replaced by the team of Barack Obama. The "reset" in politics was started, and the decisions of the former president have undergone a review. In September of 2009 the U.S. refused to deploy missile defenses in Poland and the Czech Republic. The late

President Lech Kaczynski was extremely dissatisfied. His security adviser at the time Witold Waszczykowsk said that it was not a good situation, and that without the missile defense elements Poland was losing its de facto strategic alliance with Washington.

In order to reassure Polish NATO allies who seemed to have fallen into political hysteria, in October of 2009 the Americans agreed to the deployment of anti-aircraft complexes in Poland. They are placed just 60 kilometers from the border of Russia's Kaliningrad region. It is assumed that soon the command centers with SM-3 missiles will appear there as well. In addition, the Americans decided to locate a few F-16 fighters and transport aircrafts "Hercules" in Poland.

The Russian leadership has repeatedly expressed concerns about these plans, particularly given that the U.S. decided to upgrade its missile defense system and place military installations in several other Eastern European countries such as Bulgaria and Romania. Russia's position was reflected in the contract for the Strategic Arms Reduction Treaty (START-3). Russia is entitled to withdraw from the treaty if it feels that the elements of missile defense (i.e., defensive weapons) are a threat.

Formally, the Russian-Polish relations have improved. Russia has established a good dialogue with President Bronislaw Komorowski. However, during his December visit to the United States he has signaled that he supported the deployment of the American military elements on Polish territory near Russian borders. This time Hillary Clinton made a direct statement about such deployment.

The U.S. administration, as before, insists that the missile defense system and the air force base in Poland do not threaten Russia and are aimed against possible attacks from "outcast countries." However, the ubiquitous site WikiLeaks has recently released another portion of revelations which defeat the Iranian version. In general, missile defense and air force base in Poland are needed against Russia.

British newspaper The Guardian, citing WikiLeaks, wrote that back in 2009 the Obama administration assured the Poles that the new ballistic missile defense elements were capable of destroying missiles fired from anywhere, including Russia. The American Embassy in Warsaw reported that sea-missile platform can provide the ability to quickly respond to threats from unexpected directions, and ground-based facilities can be equipped with an even greater number of interceptors if the threat level rises, and radars can be refocused.

The U.S. diplomats have called attention to the fact that the leadership of Poland strives to obtain all possible NATO military resources. Witold Waszczykowski, who met with U.S. Senators, was asking how much time everyone still needed to realize that Russia and Iran will not change. It turned out that it did not take that much time.

A powerful American military group that includes elements of missile defense and air base is about to appear at the borders of Russia. Who is more interested in the emergence

of provocative objects - the U.S. or Poland? Bogdan Bezpalko, an expert on Poland with the History Department of Moscow State University shared his thoughts with Pravda.ru:

"We can say that the Poles and the Americans have united in an anti-Russian ecstasy. It must be remembered that the ethnic Pole Zbigniew Brzezinski is the author of many anti-Russian doctrines in the U.S. Both countries pursue their own interest.

The doctrine of U.S. global domination involves blocking Russia off and surrounding it with their military objectives. This is missile defense and air force base in Poland, and the objects on the Black Sea coast of Bulgaria and Romania. In the future they are going to extend its military deployment into Ukraine and settle in Sevastopol.

As for Poland, we are not talking about any pragmatic calculations. Recently, the Poles have purchased a large quantity of obsolete U.S. military equipment, some aircrafts were completely defective. This equipment was good only because it was made in the USA. As long as it is not Russian!

The Polish political elite are hopeful that by relying on the United States their country will have the same political weight in Europe as Germany, France and Italy. To do this, they are ready to deploy almost anything on their territory. Today we can talk about the fact that this large, 37-million country in central Europe is not independent. It is to a great extent controlled from Washington.

Another trait of the Polish elite is Russophobia for the sake of which they abandon their own national interests, their own memory. The community in the country has been repeatedly outraged by the fact that, in the desire to make an anti-Russian alliance with Ukraine, the Polish authorities were in every way hushing up the fact that Banderovites were killing the Poles. The deployment of the U.S. facilities is an element of this trait.

Of course, Poland has its intellectuals who oppose this policy. However, there is no major political party that would be opposed to their country's participation in anti-Russian projects. It is not surprising that missile defense and the base of the U.S. Air Force will appear in Poland".

Vadim TrukhachevPravda.Ru

March 09, 2011 12:07

Rosoboronexport sales topped $8.6 bln in 2010 - general director (Part 2)http://www.interfax.com/newsinf.asp?id=227201

MOSCOW. March 9 (Interfax-AVN) - Russia sold over $8.6 billion worth of weapons abroad in 2010, Anatoly Isaikin, the general director of the Russian arms exports monopoly Rosoboronexport, said at a press conference at the Interfax main office on Wednesday.

"We exceeded the level of $8.6 billion in 2010, when our enterprise marked ten years from its establishment," Isaikin said.

Rosoboronexport has been increasing its sales by $500 million-$700 million annually in the past ten years, Isaikin said. In particular, its sales grew from $2.1 billion in 2001 to $7.4 billion in 2009.

Rosoboronexport cooperates with more than 70 countries, Isaikin said. India, Algeria, and China buy up to 60% of the entire amount of weapons and military hardware sold by Russia, he said.

It is also actively developing its military-technological cooperation with Venezuela, Vietnam, Indonesia, Syria and other countries, he said.

Va

03/09 12:16   Russia discusses supply of Russian helicopters to Afghanistan, Iraq with U.S. – Rosoboronexport

http://www.interfax.com/

12:04Russia, France in talks over Mistral price – Rosoboronexporthttp://www.interfax.com/news.asp

 12:04China accounts for up to 10% of all Russian arms exports - Rosoboronexport headhttp://www.interfax.com/news.asp

11:51ROSOBORONEXPORT PLANS TO SELL $9.5 BLN WORTH OF WEAPONS IN 2011 - GENERAL DIRECTORhttp://www.interfax.com/news.asp

11:39

ROSOBORONEXPORT: RUSSIA'S POSSIBLE LOST PROFITS FROM NOT SHIPPING WEAPONS TO LIBYA COULD AMOUNT TO $4 BILLIONhttp://www.interfax.com/news.asp

11:35Rosoboronexport denies cooperation with Taiwanhttp://www.interfax.com/news.asp

11:31Russia ready to supply submarines to Venezuela, doesn't have requests yet - Rosoboronexport

http://www.interfax.com/news.asp

Russia, NATO, UN authority in Kosovo may help negotiate settlement http://english.ruvr.ru/2011/03/09/47113629.html

Mar 9, 2011 09:43 Moscow TimeThe European Union, which is mediating talks between Belgrade and Pristina, may ask Russia, NATO and the UN authority in Kosovo to join the talks. This is reported by the RIA-Novosti news agency with reference to a diplomatic source in Brussels. Talks between Serbia and the Kosovo province, which proclaimed independence from Belgrade in 2008, got under way in Brussels on Tuesday night. The discussion is centred on a settlement of the citizens’ meat-and-potatoes problems of everyday living, and do not bear on the status of Kosovo. The first meeting proved fruitless, so the dialogue is due to resume today.  

Western style democracy could fuel Islamic radicalism in Middle East – Rogozinhttp://english.ruvr.ru/2011/03/09/47119824.html

Mar 9, 2011 11:24 Moscow TimeAttempts to superimpose western style democracy on the conflict-swept nations of the Middle East and North Africa may fuel Islamic radicalism in the region, says the Russian Ambassador to the North Atlantic Alliance Dmitry Rogozin. He said in an interview with the Rossia-24 TV channel that the western countries’ belief that the opposition that’s grown active in some regional nations is democratic in character is erroneous. Rogozin feels that an attempt to interfere in the situation may wreak havoc, and the West will have to cope with a still greater number of refugees as a result.

Russia and Georgia in WTO talkshttp://english.ruvr.ru/2011/03/09/47119149.html

Mar 9, 2011 11:14 Moscow Time

Talks between Russia and Georgia on Russia’s membership in the WTO are getting under way in Berne.

Georgia is seeking to regain control of customs points in Abkhazia and South Ossetia.

According to Chairman of Georgia’s parliamentary Foreign Relations Committee Akakiy Minashvili, membership in the WTO requires transparency of trade between the parties involved.

Russia recognized the independence of Abkhazia and South Ossetia in 2008 following Georgia’s aggression against Tskhinval which resulted in hundreds of civilian deaths and casualties among Russian peace-keepers.

Georgia sends delegation to Bern for Russia WTO membership talkshttp://news.xinhuanet.com/english2010/world/2011-03/09/c_13769124.htm

2011-03-09 17:18:21

TBILISI, March 9 (Xinhua) -- The Georgian delegation for the Russian World Trade Organization (WTO) membership talks scheduled for Bern has left for the Swiss city, Georgia's Foreign Ministry sources said on Wednesday.

The Georgian delegation is headed by the prime minister's economy adviser, Tamar Kovziridze, not the prime minister as had been previously suggested.

Manana Manjgaladze, spokeswoman for the Georgian presidential administration, said the government's position remained unchanged.

"Our position is known to the international community," said the presidential spokesperson, "Preconditions of the negotiations are transparency on Psou and Roki tunnels' checkpoints and to allow Georgian customs services at the checkpoints."

The two checkpoints are on the Georgia-Russia border along a ridge of the Greater Caucasus mountain range.

Other issues expected to be raised at the Bern talks include Russian sanctions imposed on Georgian wine and mineral water.

Georgia's First Deputy Foreign Minister Nikoloz Vashakidze told a routine weekly briefing Monday that Georgia had responded to a Russian initiative to launch talks in Bern concerning Russia's affiliation to the WTO.

"We have received an official initiative from the Russian side over the launch of talks," the senior diplomat said.

Georgia, Russia Meet on WTO http://www.themoscowtimes.com/business/article/georgia-russia-meet-on-wto/432188.html

09 March 2011Vedomosti

Negotiations on Russia's accession to the WTO will begin between Georgian and Russian representatives in Bern on Wednesday. The Georgian delegation will be led by Tamara Koviridze, chief foreign affairs adviser to Prime Minister Mikheil Saakashvili.

Tbilisi will support Russia's accession to the World Trade Organization if Moscow agrees to Georgian control over customs points in Abkhazia and South Ossetia, said Akaki Minashvili, chairman of the Georgian parliament's foreign affairs committee.

"We demand the ability to keep track of the [customs] areas in Abkhazia and Tskhinvali, what goods are being imported and exported from the regions," Minashvili said. "Who the observers will be is a matter for negotiation; maybe they will be Georgian customs agents."

Russia and Georgia begin secret talkshttp://rt.com/politics/press/izvestiya/russia-georgia-talks-trade/en/

Published: 9 March, 2011, 07:46Yevgeny Arsyukhin

Today in Switzerland, Russia and Georgia have begun talking about our country’s accession to the World Trade Organization. The meeting is shrouded with secrecy. Its results will determine whether or not Russia will finally join the global trade club: all other steps have been made, and all that remains is to convince Tbilisi.

Officially, these negotiations are not taking place. It’s no wonder why they are not being held in Geneva, the headquarters of the WTO, but in Berne. There are no diplomatic relations between Russia and Georgia, recalls Aleksey Portansky from the Higher School of Economics, and contacts are maintained through embassies in Switzerland, which happen to be situated in Berne.

The desire not to attract any special attention to the talks is evident, though achieving this in Geneva is difficult. The times and places of meetings are displayed in the lobby of the WTO headquarters, which immediately sets an official tone. But it is formality that Russians are trying to avoid. Meanwhile, Russia was the initiator of the dialogue. While it probably has no desire to communicate with Georgia, it has no other choice: this country is the last major obstacle on the path toward the WTO.

Troubles with Georgia started in 2006. Two events had unluckily coincided: the end of Russia’s negotiations process with all the key partners and the start of the trade embargo on Georgia. So it turned out that small Georgia (behind whose back, however, emerged the shadow of a puppeteer – a.k.a. the US) became the insurmountable barrier. Tbilisi called for resumption of trade and insisted Russia closes border and customs checkpoints on the border with Abkhazia and South Ossetia, which the Georgians found to be, and continue to consider, illegal. Russia insisted that the problem concerning the checkpoints is – outside the scope of the WTO. In the end, in the spring of 2008, negotiations were stopped by Georgia, and the war in August of the same year has made negotiations impossible. But now, there is not much choice left. Portansky says: Tbilisi’s demands have not changed, but that does not mean that the talks will fail.

“Georgia’s tone indicates readiness to compromise and maneuver,” says Portansky, while stressing that he is expressing his personal viewpoint and not the official position of Russia. “If, in addition to everything, Russia makes steps toward lifting the trade embargo, which could be done without restoring diplomatic relations, success may be achieved.”

Say, today, Georgia is no longer demanding that the customs checkpoints are necessarily closed. But, it is insisting that Georgian officers be stationed there. In reality, Georgia will be satisfied if goods and people are examined by some third-party intermediaries, believes Portansky. But how ready Russia is to make concessions – is a question. Members of the Russian delegation had all turned off their phones. Georgian experts, meanwhile, are expressing hope in resumption of trade.

The US officials are, in turn, saying they won’t interfere in the negotiations. Of course, this is also a type of a diplomatic stunt, says Portansky, and yet the US could be doing

“a pure experiment”

: giving Georgia the opportunity to act independently and seeing what happens. This will, above all else, free the US from accusations that it has

“yet again, set everything up”

, says Portansky.

Generally, there is much uncertainty and ambiguity. In particular, yesterday, Georgia held talks with the representatives of Abkhazia and South Ossetia in Geneva. The only thing that is known about the talks is the fact that they took place. Georgia, through its Deputy Foreign Affairs Minister, Nikoloz Vashakidze, is saying that they failed, while, of course, blaming Russia and its “unconstructive position”.

GOOGLE TRANSLATIONYoung Russia will hold a picket at the Japanese Embassy in Moscow

http://www.bbc.co.uk/russian/rolling_news/2011/03/110309_rn_japan_embassy_picket.shtml

Last Updated: Wednesday, March 9, 2011, 07:53 GMT 10:53 MCK Activists of the movement Young Russia will hold a rally Wednesday at the Japanese Embassy in Moscow in protest against the termination of investigation into the burning of the Russian flag. “During the rally, which starts at 12:00, we're going to demand that the Japanese government continue its investigation into the desecration of a Russian flag and punished to the fullest extent of the law violators, whoever defiled our flag," - told Interfax a representative of the movement, Natalia Maslova. Earlier, Russia said Japan's protest of the refusal of the Japanese authorities to prosecute a group of Japanese demonstrators, who on Feb. 7 the Russian flag was burned during the so-called "Northern Territories Day." "Northern Territories Day" - an annual event dedicated to the issue of affiliation southern Kuril Islands.

09:57Democratic Republic of the Congo Foreign Ministry delegation to visit Russiahttp://www.interfax.com/news.asp

Expo – Russia Jordan at Le Méridien Amman – Royal Convention Centre http://www.theopenpress.com/index.php?a=press&id=98397

Published on: March 9th, 2011 12:17am by: SewarSawalha

(OPENPRESS) March 9, 2011 -- The ceremonial inauguration of "Expo – Russia Jordan" was held on the 7th of March at the Royal Convention Centre at Le Méridien Amman, the largest convention center in town. The exhibition which will continue until the 9th of March has been organized by "Zarubezh Expo", Jordan Chamber of Commerce and the International Association of Peace Foundation.

This exhibition has gained over the past ten years a well-deserved reputation of Russia's most important event in the Middle East, and will offer this year various sectors of industry such as power, mechanical engineering, chemistry, geology, agriculture, transportation, construction, oil, gas, timber, innovations and investments.

The General Manager; Giuseppe Ressa, welcomed the visitors by saying: "We are privileged to host the Expo Russia – Jordan at our hotel. This exhibition constitutes a golden opportunity for Jordanian merchants to establish fruitful business relations with their Russians counterparts. The organizing committee’s decision to hold this international exhibition at the Royal Convention Centre is a clear indication of our ability and experience over the past years to provide excellent services, designed for international exhibitions of the highest scale."

It is worthy of mentioning that the Grand Ballroom has been recently re-launched after a period of six months spent in its renovation. The 400 square meter Victorian- style ballroom, which is now easily accessed with the semi-completion of Abdali bridge in Shemisani, is decorated with mahogany wooden walls, gold-plated wall-mounted lighting, crystal chandeliers, hand-tufted royal blue carpets, and is the perfect venue for weddings and conferences seating up to 200 guests.

Professional Free Press Release News Wire

Deputy Premier receives Russian ambassadorhttp://bna.bh/portal/en/news/449386

Manama, March 8 (BNA) Deputy Prime Minister Shaikh Khalid bin Abdullah Al Khalifa received in his office today Russian Ambassador to Bahrain Victor Smirnov. They reviewed bilateral relations and ways of promoting them in various fields. The Russian ambassador reiterated his country’s support for Bahrain’s initiative, assigned to His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and Deputy Supreme Commander, to diffuse tension, solve issues and promote the kingdom’s security and stability through comprehensive national dialogue.A O Q.BNA 1743 GMT 2011/03/08 Date : 2011/03/08

Russian Satellite Came Close to Colliding with Cheollianhttp://www.arirang.co.kr/News/News_View.asp?nseq=113492&code=Ne2&category=2

Korea's geostationary weather-communications satellite, the Cheollian , had to be deflected earlier this week to prevent it colliding with a Russian military communications satellite.The Korea Aerospace Research Institute says the Raduga 1-7 came within three kilometers of the Cheollian's orbit at 128.2 degrees east longitude between Monday and Tuesday. The institute quickly revised Cheollian's orbit using a satellite thrusterand is keeping a close watch on the satellite. The Cheollian is currently 120 kilometers apart from the Russian satellite. The Russian satellite's abrupt movement also caused two Japanese satellites to be deflected. Seoul and Tokyo have jointly asked for an explanation from Russia, but Moscow has not responded yet.MAR 09, 2011  Reporter : yeonjik@arirang.co.kr

Russian Polar Bears Coming to Seoulhttp://english.chosun.com/site/data/html_dir/2011/03/09/2011030901327.html

A pair of Russian polar bears will call Seoul their new home.

Seoul Mayor Oh Se-hoon agreed late last month to receive one male and one female of the endangered species from Russia during a meeting with Moscow Mayor Sobyanin Sergey.

Korea currently has five polar bears in zoos across the country, but they are all old.

The two mayors also agreed to boost the exchange of animals between the two cities with the aim of protecting and preserving endangered animals.

The two polar bears carry significant meaning in this regard, since climate change is blamed for the species' declining population.

From the Seoul Metropolitan Government / Mar. 09, 2011 11:57 KST

Possibility of war in Karabakh not removed from agendahttp://news.az/articles/armenia/32562

Wed 09 March 2011 06:12 GMT | 7:12 Local Time

'Presidents have not moved an inch in the resolution of the Karabakh problem'.

According to famous Russian military expert Pavel Felgenhauzer, the joint statement on Nagorno Karabakh settlement, signed by the presidents of Russia, Armenia and Azerbaijan by results of the Saturday talks in Sochi, are of no importance.

“The presidents have not moved an inch in the resolution of the Karabakh problem. The possible war has not been removed from the agenda”, Pavel Felgenhauzer told an interview with Azatutyun radio station.

The expert said the document just states that the parties will ‘strive to settle all debatable issues by peaceful means’ and the only exact formulation in this document is about readiness ‘to continue such trilateral meetings’.

Meanwhile, according to the expert, if real steps are not taken, the resumption of military actions is ‘inevitabe’. In addition, he believes tensions on the front line will not weaken.

“Currently, we observe the move towards the military conflict”, the Russian expert says.

ARMENIA Today

Austrian Spy-Soldier Given Sentencehttp://www.times.spb.ru/index.php?action_id=2&story_id=33676

The St. Petersburg TimesPublished: March 9, 2011 (Issue # 1646)MOSCOW — A German court has given a one-year suspended prison sentence to an Austrian soldier who admitted to spying for Russia, marking the end of a 2007 espionage scandal that strained relations between Vienna and Moscow.

Harald Sodnikar, a helicopter technician in Austria’s armed forces, accepted Tuesday’s ruling but maintained that he did not divulge any military secrets, local media reported Thursday.

“The German judiciary was seemingly offended that Austria let go the Russian I had been in contact with, despite their extradition request,” Sodnikar said in an interview with the Oberosterreichische Nachrichten daily.

The court in Munich ruled that Sodnikar, 54, had helped an agent of the Foreign Intelligence Service, or SVR, to obtain technical documentation about Eurocopter helicopters.

But the SVR seemingly failed to get valuable military information like documents about Eurocopter’s Tiger combat helicopter.

“No military secrets were divulged — but industrial espionage might also harm national interests,” the newspaper quoted Judge Manfred Gotzl as saying.

The agent, Vladimir Vozhzhov, was based as a trade attache at the Russian Embassy in Vienna in the late 1990s and later worked at the Federal Space Agency.

In 2007, Austrian police, acting on a German arrest warrant, arrested Vozhzhov in Salzburg. But he was released and returned to Moscow a week later.

Vozhzhov’s release was officially explained with the fact that a United Nations inquiry found he had diplomatic immunity, but speculation lingered that Moscow had pressured the Austrian government.

Sodnikar acted as a middleman between Vozhzhov and Werner Greipl, a former Eurocopter engineer, who in 2008 was convicted and given a suspended sentence for selling helicopter plans to a Russian agent.

Austrian prosecutors dropped their case against Sodnikar but the country’s military might open a disciplinary hearing against the warrant officer, the reports said.

Medvedev signs law on Central Asian anti-drug centre

http://www.itar-tass.com/eng/level2.html?NewsID=16022187&PageNum=0

09.03.2011, 11.02

MOSCOW, March 9 (Itar-Tass) -- Russian President Dmitry Medvedev has signed a federal law ratifying an agreement between Russia, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan on a Central Asian regional information and coordination anti-drug centre, the Kremlin press service reported on Wednesday.

The law was passed by the State Duma, or lower house of the Russian parliament, on February 22, 2011 and approved by the Federation Council, or upper house, on March 2, 2011.

Russia, Kyrgyzstan, U.S. Nervously Eyeing Tajikistan’s Bordershttp://www.eurasianet.org/node/63034

March 9, 2011 - 2:45am, by David Trilling Those concerned about the danger of drugs and militants in Central Asia know that all roads lead to -- or through – Tajikistan, the impoverished failing state on Afghanistan’s northern border. In recent weeks, apprehensions about the country’s sieve-like borders

have been stirred up in Moscow and Washington alike. Can the two find enough mutual ground to cooperate on border security in the region, or will mistrust keep them at odds?

In Russia, the latest alarm bell sounded two days ago, when Semyon Bagdasarov, a member of the State Duma’s International Affairs Committee, said the Tajiks are not keeping Afghan drugs out of Central Asia -- and, by extension, out of Russia -- and should either hand control of the Afghan border back to Moscow, or suffer the consequences. 

“Either we go back there and there is control of the situation, or it is time for us to introduce a visa regime with Tajikistan,” the Avesta.tj news service reports Bagdasarov as saying. (By some estimates, as many as a million Tajiks work, legally and illegally, in Russia. Moscow raises the specter of a visa requirement from time to time, usually when it is pressuring Dushanbe for some concession.) 

Bagdasarov’s insistence that Russia take more responsibility for the porous, 1,300-kilometer border is not surprising. He’s said as much before. But chatter in favor of a return of Russian troops (who guarded the border from tsarist times until 2005) is growing louder. The fashionable position in Moscow seems to be that Kyrgyzstan and Tajikistan, the sick men of Central Asia, cannot provide adequate security. 

At least Kyrgyzstan, Tajikistan’s neighbor to the north, is ready to admit it. Only one mountain range separates Kyrgyzstan from Tajikistan’s Rasht Valley, the scene of violence attributed to Islamic militants last fall, and President Roza Otunbayeva says her country desperately needs help protecting itself. In summer of 1999, militants from the Islamic Movement of Uzbekistan negotiated that very range as their doorway into Batken Province, where they captured several villages. 

In Washington this week, Otunbayeva resurrected a request for American military aid, this time specifically for border support in Batken, the southern province surrounded on three sides by Tajik territory. Located just a few hundred kilometers and a couple of mountain passes from Afghanistan, southern Kyrgyzstan had been the proposed site of an anti-terror training center to be built with American money, but that plan was tabled after the Bakiyev regime fell last year. 

"I'm very concerned about the Kyrgyz-Tajik border," Otunbayeva said during a talk at the Carnegie Endowment for International Peace, AFP reported. "We work closely with Russia by the way in this regard. I do seek assistance here in Washington also. ... Border troops need a lot of financial support." 

A recent US government report confirms Otunbayeva’s worries are well founded: “30 percent of the borders in Kyrgyzstan remain virtually uncontrolled,” said the annual International Narcotics Control Strategy Report (INCSR) released this month. 

The report likewise justifies Moscow’s jitters about the Afghan-Tajik frontier, saying that “several Tajik border posts … have been neglected or abandoned in the past year due to

the logistical difficulties of staffing and supplying them.” Overall, it adds, “the 1,344 kilometer border with Afghanistan is sparsely guarded.”

It will be interesting to see how Moscow reacts to Otunbayeva’s request. She sought NATO’s support last week, explicitly stating her concern that militant Islamists will come over the mountain passes from Tajikistan. Usually, the Kremlin doesn’t take kindly to any visible American military presence in the region, but Tajikistan leaves a lot of territory for cooperation. 

WikiLeaks: Karimov Plays U.S. Off Against Russiahttp://www.eurasianet.org/node/63033

March 9, 2011 - 12:03am, by Catherine A. Fitzpatrick

The activist site WikiLeaks recently released a reported State Department cable dated February 11, 2010 that describes Uzbekistan's President Islam Karimov as critical of what he characterized as Russia's meddling and even provocations in the Central Asian region, and portrays the Uzbek leader as ready for closer cooperation with the U.S.

In a one-hour meeting with then-U.S. Ambassador John E. Herbst, Karimov claimed Moscow was trying to bring Tashkent "back into the fold". He said the Russian media exaggerated the danger of a Taliban victory, claiming the Taliban were "supposedly massing forces on the other side of the border from Termez and acquiring boats to infiltrate across the Amu Darya". Karimov said this was done deliberately "to sow panic among Uzbekistan's people.

According to the cable, Karimov said he believed Russian threats of air strikes on terrorist bases in Afghanistan made in May 2009 were designed to set the Taliban against Uzbekistan -- and manipulate Tashkent into cooperating more with the Russian-led Collective Security Treaty Organization. Yet he said Tashkent wanted to "avoid needlessly provoking conflict with the Taliban" and supported a settlement with "an inclusive government encompassing many different political forces.

In this 2010 meeting, Karimov said the U.S. and Uzbekistan had a lot in common, including on issues in the Middle East, and referenced a meeting with Israeli political leader Natan Sharansky. Karimov said he believed that Russia had "no resources to offer and therefore could not contribute to Middle East peace"

The cable came nearly a year after another alleged cable released last December which said that Karimov "flew into a rage" after Secretary of State Hillary Clinton bestowed the State Department's "Women of Courage" award on Mutabar Tajibayeva, a human rights activist in Ferghana Valley who was beaten and hospitalized for demonstrating against a corrupt prosecutor.

The author of the dispatch said that on 18 March 2009, Ambassador Richard Norland, then envoy to Tashkent, "submitted to a personal tongue-lashing from Karimov" with an

"implicit threat to suspend transit of cargo for US forces in Afghanistan via the Northern Distribution Network" (NDN). The U.S. appeared to mute its human rights criticism after this incident, and for some months did not invite human rights activists to the U.S. Embassy in Tashkent.

Another reported cable recently released by WikiLeaks datelined Moscow, February 17, 2010, describes Uzbekistan's increasingly "assertive" role in the region -- and its pushback against Russia:

Uzbek Embassy Political Counselor Farkhad Khamraev termed relations with Russia as "stable and positive," although he was quick to dispel any perception that Russia still dominated the relationship. He said the West should understand that "the old political dynamics in the region have changed," and that Uzbekistan pursued its own national interest. Offering an example of the "new dynamics," Khamraev (quite boldly) claimed that Russia scaled down its plans for a military base in southern Kyrgyzstan after the Uzbeks voiced concerns about its proximity to their border. He said the facility would now be used as a training center for the Collective Security Treaty Organization (CSTO).

Obviously, Karimov plays one power off against another, and blows hot and cold on the U.S. and its allies -- after the meeting with NATO in January 2011 apparently didn't go as well as planned, he raised the tariffs for U.S. companies shipping goods on the NDN.

And when Karimov wants to, he warms to Russia opportunistically, as he did last April during a visit to Moscow, when Kurmanbek Bakiyev was toppled in Bishkek, signalling a potential threat to Karimov's regime.

As Andrew Stroehlein of the International Crisis Group commented acerbically in January at the time of Karimov's trip to Brussels, "Karimov has played the international community off against itself with the talent that comes from boldness and the experience that comes from more time in the top office than almost any leader in the world".

Washington has to thread the needle carefully in this region. Yesterday, Tajibayeva announced that she was returning the award the State Department had given her last year (and which led to the U.S. ambassador's tongue-lashing) in protest against the award the State Department is giving this year to Kyrgyzstan's President Roza Otunbayeva. Tajibayeva said in an open letter that the Kyrgyz president did not respond adequately to the pogroms last June in Osh region that killed at least 400 people and injured thousands mores, Radio Free Europe/Radio Liberty reported. Announcing her rejection of the U.S. award, Tajibayeva wrote that President Otunbayeva

let my compatriots in Kyrgyzstan be violently killed...did not do anything to prevent the stealing of humanitarian aid sent to my people, [and] failed to stop the 'ethnic cleansing'...[and] who is unable to stop persecutions of Uzbeks, which continue even now...to be on one list with Roza Otunbayeva for me would mean a betrayal of my nation, my people. I cannot be on one list with a person whose hands are covered in blood...

Plane crash in central Russia caused by controls’ malfunction – source http://rt.com/news/line/2011-03-09/#id4967

11:25

The Antonov-148 aircraft crash happened March 6 in the central Russian Belgorod Region was caused by the malfunction in the speed-control system, Kommersant newspaper reports Wednesday. The speed controls understated the plane’s speed, which led to pilot accelerating until the engines caught fire and broke into pieces. The version is confirmed by passers-by who witnessed the crash from the land. Some parts of the fuselage were found kilometers from the place of the crash, which also speaks for the scenario, report says. Although not proven by the official investigation, the version is taken as the most plausible, the newspaper states.

South Russian plane crash caused by speed indicator failure - paperhttp://en.rian.ru/russia/20110309/162919762.html

12:14 09/03/2011

Investigators have found that a plane that crashed in the south of Russia on Saturday attempted to land too fast, possibly because of a speed indicator failure, the Kommersant daily said on Wednesday.

All six people on board, including two Myanmar nationals, were killed when an An-148 plane on a test flight crashed on Saturday in the village of Garbuzovo in the Belgorod region.

Investigators say the high speed caused critical pressure in the plane's engines, causing them to ignite and the plane to explode in mid air, a source close to the committee probing the incident told the paper.

Plane parts were found 1.5 kilometers away from the site where the bodies of the crew were discovered.

There has been no official confirmation of Kommersant's report, although the Russian Investigative Committee has admitted that the crash was caused by a technical failure.

The Moscow Inter-regional Investigative Directorate on Transport said on Wednesday speed indicator failure was only one of the possible causes of the crash. Investigators are

also looking at pilot error and a defective fuel gauge as possible reasons, the directorate said.

The aircraft, which belonged to the Voronezh Aircraft Plant, went off the radar screens at 10:40 Moscow time [07:40 GMT] and crashed shortly afterwards. The plane was being tested prior to delivery to Myanmar, which ordered two models last year for government use.

MOSCOW, March 9 (RIA Novosti)

Prominent Russian Rights Activist Calls On EU To Change Asylum Policy http://www.rferl.org/content/feature/2331517.html

March 08, 2011 By Rikard JozwiakBRUSSELS -- Russian human rights activist Svetlana Gannushkina is calling on the European Union to revise its legislation on the treatment of Chechen refugees.

In an interview with RFE/RL, Gannushkina, a leading member of the rights group Memorial, said Chechen asylum seekers face an unforgiving bureaucratic environment in the EU. And far too many, she says, are being forced to return home, where they face persecution.

"What kind of problems do Chechens face in Europe? The main problem is legislation," she says. "They don’t have the status of refugees or any other protection. They cannot work, and of course that makes it very difficult for them. Even if they manage to receive the refugee status, this is such a long process that it causes continued stress."

Gannushkina and the European Council on Refugees and Exiles (ECRE), a Brussels-based advocacy group, are presenting a set of guidelines to revise EU legislation on asylum seekers.

They are particularly critical of something called the "Dublin regulation," which establishes that the EU member state a person first arrives in is ultimately responsible for examining their asylum application.

Undue Burden

Critics say the regulation puts an undue burden on border countries, who often prefer to either send refugees back home or to pass them on to unsafe third countries through bilateral readmission agreements.

Since 2003, refugees from Russia have become the third-largest group of asylum seekers in the EU. And roughly one-third of these are ethnic Chechens, most of whom enter the union via Poland.

Critics say that in recent years, Poland has decided to send an increasing number of Chechen asylum seekers home, arguing that the danger for them there has subsided considerably.

Gannushkina disputes this logic, noting that torture, kidnapping, and disappearances remain the norm in Chechnya under the region's authoritarian leader, Ramzan Kadyrov.

"This is the situation in Chechnya: Anyone can be threatened if they don't obey the system," she says. "This totalitarian society is very difficult for those who have been living in Europe a long time already, especially for young people. For someone who went away at the age of 12, to come back to this situation is, honestly speaking, impossible.

"I know people who returned and simply don't come out of their houses. But again, unfortunately, I cannot tell you their names, because they don't approach us officially. They do that only when they are back in Europe and ask for support. If I would tell you these names today, they would be in danger."

'We Dispute This'

Likewise, Claire Rimmer, who monitors refugees from Russia for ECRE, says Chechen asylum seekers face excessive hardship if they are forced to return home.

"The government seems to be saying the situation is tense in Chechnya but that it is becoming more stable," Rimmer says. "They talk about the opportunities for internal protection, which means that they could live somewhere else in Russia and get protection elsewhere, but we dispute this."

ECRE has also criticized the United Nations High Commissioner for Refugees (UNHCR) for closing its Vladikavkaz office, which supports many refugees in the North Caucasus. As a result, EU countries have been forced to resort to other sources of information in making decisions about returning Chechens -- including state-sanctioned NGOs from inside Chechnya whose impartiality is in doubt.

TRANSLATED FROM RUSSIAN

A cache of 46 kg of explosives found in Dagestan

http://www.bbc.co.uk/russian/rolling_news/2011/03/110309_rn_dagestan_explosives_found.shtml

Last Updated: Wednesday, March 9, 2011, 06:41 GMT 09:41 MCK A cache with 46 kilograms of explosives was found in the outskirts of Makhachkala, according to Russian news agencies, citing sources in the law enforcement of Dagestan. "The cache was found 21 packages of the explosive ammonite, in total weighing 46 kg, as well as several dozen rounds of ammunition of various calibers," - said the source to Interfax.

GOOGLE TRANSLATION

An explosive device with 8 kg of TNT defused in Makhachkala

http://www.rbc.ru/rbcfreenews/20110309095120.shtml

09.03.2011, Makhachkala 9:51:20 On the outskirts of Makhachkala, in the evening, an explosive device was found with 8 kg of TNT. According to the Ministry of Internal Affairs of the Republic of Dagestan, it was stored in piles of debris. Sappers defused the explosives. Currently installed those manufactured and left a bomb in the street.

Gunman killed in grenade blast while detained in southern Russiahttp://rt.com/news/line/2011-03-09/#id4943

RT News line, March 9

02:33

A gunman was killed Sunday in a grenade blast in Nalchik – a city in the south of Russia. The grenade exploded just before the gunman attempted to hurl it at law enforcement officers. The man died instantaneously, though no officers were injured.

GOOGLE TRANSLATION

Search for a possible terrorist Dvorakovsky yet returned no results

http://news.mail.ru/incident/5467854/

Print March 9, 2011, 11:03 Stavropol, March 9 - RIA Novosti. Stavropol police for two days has not received any calls from citizens with information on the declared wanted by Victor Dvorakovsky, which may be a suicide bomber, told RIA Novosti press officer of police for the Stavropol Territory. According to law enforcement agencies the edge, Dvorakovsky might be familiar with Vitali Razdobudko, who is suspected of involvement in terrorist acts in Pyatigorsk. In addition Razdobudko suspected of involvement in the terrorist attack in the Dagestani town Gubdene, where on Feb. 14, two explosions occurred. According to investigators, an explosion in Gubdene Razdobudko committed wife, and the second suicide bombing in a double bombing may have been himself Razdobudko. "Dvorakovsky was wanted on March 7, still no call for any information related to the citizens we have not received" - the spokesman said. The interviewee said that the press-service police department there, and no information about what they wanted was familiar with Vitali Razdobudko. According to police region, Viktor Dvorakovsky born in 1987 is a supporter of the religious movement of the radical wing, was ideological training and, presumably, can be used as a suicide bomber.

09 March 2011, 10:03

Anti-Wahabi group vows to punish militants in Kabardino-Balkaria http://www.interfax-religion.com/?act=news&div=8259

Nalchik, March 9, Interfax - A group of Kabardian-Balkarian anti-Wahabis identifying themselves as the Black Hawks has issued a warning to Asker Japuyev, the so-called emir of Kabardino-Balkaria, regarding the local criminal underworld's possible actions against civilians.

"If your forest thugs take some active steps against the residents of Kabardino-Balkaria, the Black Hawks will start punitive actions against any member of your thuggish clan," the Black Hawks said in an open letter published by a number of Kabardian-Balkarian media outlets.

The Black Hawks have already identified some people aiding and abetting militants, the letter says. "We have enough informants to identify and hunt down those who have links to your gangs. None of them will escape retribution," the letter says addressing Japuyev.

If any militant tries to extort money for the so-called jihad from businessmen or other residents of Kabardino-Balkaria, the Black Hawks will identify the extortionist, "and his family and his clan will suffer damage you cannot even imagine," it says.

It was reported earlier that a spokesman for the Black Hawks had vowed to return terror for terror committed by religious extremists in Kabardino-Balkaria and warned that the Black Hawks would not stop at killing members of militants' families.

09.03.11 09:56Novosibirsk State University evacuated due to letter about explosive

http://www.interfax-russia.ru/Siberia/news.asp?id=215224&sec=1672

Novosibirsk. March 9. Interfax-Siberia - Novosibirsk ATC staff cordoned off the building of the Novosibirsk State University, and with dogs are searching for a bomb, the tab is in the building reported the Provost by e-mail. As the Interfax-Siberia agency informed, the press service of the police department of the Novosibirsk region on Wednesday, the building had already evacuated some 100 people, mostly students and teachers. "This morning around 11 am by e-mail-rector fell letter about the alleged bomb threat. In place of the departed staff ATC with three dogs. Now there is a search for her," - said the agency interlocutor.

Policeman Hated by Nationalists Shot in Head in Moscowhttp://www.times.spb.ru/index.php?action_id=2&story_id=33670

The St. Petersburg TimesPublished: March 9, 2011 (Issue # 1646)MOSCOW — An Armenian-born Moscow police officer was shot and wounded in an attack possibly staged by ultranationalists who had him on their “firing squad lists,” news reports said Thursday.

An unidentified assailant fired three shots at Gagik Benyaminyan, 42, late on March 2 when he arrived in his car at a police building on Shchyolkovskoye Shosse in eastern Moscow, a police spokeswoman told Interfax.

Benyaminyan’s jaw was smashed by a bullet but he managed to drive away, with passers-by calling an ambulance and the attacker fleeing, Lifenews.ru said. The officer remained hospitalized in serious condition Thursday, Interfax said.

Benyaminyan sparked ultranationalists’ fury last year when he was involved in a communal dispute between a Moscow music teacher and an Uzbek family of five who shared an apartment, Gzt.ru said.

The Movement Against Illegal Immigration claimed that the Uzbeks tried to force the teacher, Yelena Zhurina, 45, to move out, “terrorizing” her to that effect, Gzt.ru said. She eventually did leave the apartment.

The ultranationalists said Benyaminyan, who was assigned to resolve the dispute, was a friend of the Uzbek family and sided with them, even opening a case against Zhurina.

The allegations were never proved but prompted many nationalist bloggers to accuse the officer of intentionally harassing “a Russian teacher.”

Moscow to spend $12.8bn on development in 2011http://en.rian.ru/russia/20110309/162915540.html

Some 25% of Moscow's 2011 budget will be spent on infrastructure projects, a deputy mayor of the Russian capital, Vladimir Resin, said.

The city will spend around 360 billion rubles ($12.8bn) of its 1.4 trillion rubles ($49.7bn) budget for 2011 on developing the city, Resin told investors at the MIPIM international trade show in the French city of Cannes.

Resin is heading the Moscow government's delegation to the fair, which runs from March 8-11.

Special attention is to be paid to development of transport, road and hotel construction, Resin said, adding that 75 km (47 miles) of subway lines are to be built in the next five years.

Moscow Mayor Sergei Sobyanin has identified solving the city's transport problems as a key issue on his agenda. During his first week as mayor in late 2010, he pledged to take "extraordinary measures" to eliminate traffic jams. President Dmitry Medvedev said he would personally oversee the effort.

 CANNES (France), March 8 (RIA Novosti)

Moscow suburb protests over 20 years of brown tap waterhttp://themoscownews.com/local/20110309/188477364.html?referfrommn

by Andy Potts at 09/03/2011 11:44

Moscow’s tap water is not widely recommended as a refreshing drink – but residents of one district are hoping that people power can change that.

Fed up with the evil-looking brown liquid which oozes from taps in Losino-Petrovsky, to the north-west of the capital, protestors gathered to call for change.

Bearing bottles of the muddy water they say they get in their homes, and showing newly-bought pans discoloured by the filthy tap water, they gathered outside the local mayor’s office.

 

Two decades of thirst

The protestors demanded urgent action to solve a problem which has been on-going for more than 20 years.

And demonstrators – most of them pensioners – complained that the poor water quality was causing health problems, especially kidney stones.

 

Mocking the mayor

Town chief Yury Yerastov addressed the crowd and promised that a solution was soon in sight, according to accounts on livejournal (link in Russian).

He claimed that the delays in fixing the foul water had been due to a lack of investment, but said the money had now been found and everything would soon be improved.

But few believed him, and his words provoked laughter among the crowd.

 

Widespread worries

Throughout Russia there are concerns about the quality of tap water. From the well-known Giardia parasite commonplace in St. Petersburg to the microscopic red worms, unknown to science, said to be found in Moscow’s pipes, reports have consistently highlighted problems with what comes out of the taps.

The situation has attracted the attention of ruling party United Russia, which launched its own clean water campaign in 2006.

However, since then it has been bogged down by the huge level of investment needed to upgrade those rusting pipes.

And the scheme’s credibility was badly hit last year by a row over the scientific credentials of one proposed water filter scheme.

Shortly after the Russian Academy of Science slammed Viktor Petrik’s plans as based on “wrong ideas”, members of the Clear Water programme were warned not to mention his name.

Russian dry-cargo ship thrown ashore in Marma Sea

http://www.itar-tass.com/eng/level2.html?NewsID=16022179&PageNum=0

09.03.2011, 10.35

MOSCOW, March 9 (Itar-Tass) - The Russian dry-cargo ship Dvina has been thrown ashore the Turkish coast in the Sea of Marma by a heavy storm, the Maritime Bulletin Sovcomfreight reported on Wednesday.

According to the bulletin, the incident took place near the port of Karabiga on March 8. “The ship lied at anchor. The anchor got broken and the ship drifted ashore. The crew of 11 Russian citizens were not hurt,” the bulletin said.

The rescue operation is hampered by strong winds and big waves. The ship supposedly has a hole through which the fuel is leaking out.

Russian Press at a Glance, Wednesday, March 9, 2011http://en.rian.ru/papers/20110309/162917822.html

09:42 09/03/2011

POLITICS

U.S. Vice President Joe Biden began two days of talks with the Russian leadership on Wednesday with a focus on building stronger business ties amid a political thaw.

(Moscow Times, Rossiiskaya Gazeta)

Lawmakers in the southern Russian republic of Chechnya have handed strongman leader Ramzan Kadyrov a new five-year term, unanimously approving the Kremlin nominee in a vote whose outcome was never in doubt.

(Moscow Times)

Social networks were not the cause of the so-called Twitter and Facebook revolutions sweeping the Middle East, but a weapon used to spur them on.

(Kommersant)

ECONOMY & BUSINESS

Hermitage Capital, William Browder's $1.2 billion hedge fund, has filed a suit with the Russian Constitutional Court against the Interior Ministry over a criminal tax investigation opened against the company in 2007.

(Moscow Times)

Russia's second largest bank, VTB, may gain a controlling stake in the Bank of Moscow this week. VTB can buy the shares it needs from Credit Suisse and other minority shareholders, whose overall share amounts to 4.37% of stock.

(Kommersant)

SOCIETY

A frustrated mother has complained that the proceeds from a charity concert in St. Petersburg featuring a solo singing act by Prime Minister Vladimir Putin never reached the child cancer patients they were intended for.

(Moscow Times, Kommersant)

President Dmitry Medvedev signed a law banning minimal prison sentences for 68 criminal offenses.

(Moscow Times, Vedomosti, Rossiiskaya Gazeta)

Yevgeny Chichvarkin, one of London's big-name Russian exiles, sees no prospect for a return to his homeland, despite the Investigative Committee's closure of its case against him in January and the annulment of the warrant for his extradition.

(Moscow Times)

ENVIRONMENT

A new conflict could flare up around a planned Moscow-St. Petersburg toll road as another section of it is scheduled to pass through a national park where construction work is prohibited.

(Kommersant)

ENERGY

The Russian government's plan to curb energy price growth worried foreign investors. They blame officials for "breaking the rules of play."

(Vedomosti)

WWF cancels Amur Leopard count due to lack of snowhttp://en.rian.ru/Environment/20110309/162917129.html

The World Wildlife Fund said on Wednesday it was postponing a large-scale count of the endangered Amur Leopard in the Russian Far East until next year due to a lack of fresh snow fall.

According to the last Amur Leopard census, carried out in winter 2009, fewer than 40 individuals are left in the southern part of the Russian Far East, the species' only habitat in the country.

The environmental organization has been preparing for the census since January 17, but low snowfall has made it impossible to trace the leopards' tracks.

"We count Amur Leopards by tracking their paw prints on the snow, so the ecologists were waiting for fresh snow to carry out the census," said Sergei Aramilev, coordinator of the WWF's Amur Leopard program. "The census must be carried out on the fifth day, when the leopards have had a chance to mark the tracks, but now that the snow is beginning to melt, the census will not be possible."

This year the ecologists planned to track 150 routes, covering the entire area inhabited by the Russia Amur Leopard population.

Some of the wild cats can still be counted using camera-trap monitoring, Aramilev said.

The Amur leopard, also known as the Manchurian, or Far Eastern leopard, is one of the rarest large cats in the world. The International Union for the Conservation of Nature has included the Amur leopard in its list of critically endangered animals.

 

VLADIVOSTOK, March 9 (RIA Novosti)

Construction for Sochi Olympic games outruns environmental law while authorities rat out their own crimeshttp://www.bellona.org/articles/articles_2011/sochi_crimes

MOSCOW – Something has broken down in the government system. Bureaucrats themselves seem to be admitting their own environmental crimes. How else can one explain the recent appearance on the Russian Natural Resources Ministry’s web site of a list of sites under construction for the 2014 Sochi Olympics that are undergoing environmental evaluation? “Under construction” are the key words here, because environmental impact evaluation is a procedure meant for planned economic activities – not wetlands already buried in oblivion by bulldozers, with foundation piles sticking out of them… Bellona, 09/03-2011 - Translated by Charles Digges

The stadium and the swamp

Yet the Russian Natural Resources Ministry, Rosprirodnadzor, should be given its due – compared to other federal bureaucracies, this structure works largely transparently. Because oddities occur that in another country would be at a minimum cause for prosecutorial intervention, where in our country they remain merely misunderstandings. Recently one of these misunderstandings occurred: There appeared on the web site of Rosprirodnadzor a list of Olympic sites undergoing environmental evaluation in Sochi.

None of this would mean anything, where it not for the fact nearly half the construction and communications from this list have been going on for more than a year – with colossal damage to the environment.

As such, at the end of January, the state corporation Olympstroi ceremoniously reported that, “more than half the foundation for the central stadium is complete,” and only one construction piling required “more than 56 cubic metres of steel reinforced concrete.”

Olympstroi plans to complete the concretization of the foundation slabs before the end of the first quarter of this year , and the building the above-ground construction of the stadium is planned to be finished in October.

The Central Stadium is the most important sports structure of the Olympics. It will host the opening and closing ceremonies, and the bulk of competitions in ‘indoor’ sports. When Sochi was still only a candidate to host the Games, it was planned to build a “100,000-strong” stadium, which would exceed the capacity of the main stadium for the 2010 Vancouver Olympic games by two times.

However, in 2009, during the economic crisis, the Sochi Stadium lost a lot of weight, down to a realistic capacity of 40,000 spectators. The most important Olympic structure has been situated in the center of the Imeretinsk Lowlands – a bog-like area in the Adler region of Sochi near the border of the republic of Abkhazia. When in 1911 the Tsar’s

government founded the area as a nature preserve, it did not suspect that century later the unique Armenian bogs would be interred under a two-metre layer of gravel.

Meanwhile, the nightmare came true. In 2009, barbed wire fence was put up around the lion’s share of the Imeretinsk Lowlands in order to teach locals, journalists, and especially curious “greens” from sticking their nose into what was going on. Behind the fence stretched a procession of dump-trucks loaded with gravel that was taken from a place not far

Away – the Mzymta River, which was mutilated along the way. They not only hid the swamp beneath the gravel (according to official data, 4.5 million cubic metres of stones), but several dozen species of endemic plants and examples of Mediterranean flora as well.

The pouring of the foundation for the Central Stadium also began in 2009. The pilings were driven right into the water, fixture welders at times working on their knees in black sludge.

For two years the main Olympic Stadium was being built without a state environmental impact assessment, in essence, illegally, which the web site of Rosprirodnadzor unwillingly had to admit. The site further reports that the deadline for completing the environmental impact assessment is March 2011. This, by the way, is the second assessment for the stadium project: The first, according to the list, “was completed without results”

Whatever the new environmental impact study turns up is no longer very important. Construction will all the same not be stopped, and the recommendations of the experts left unfulfilled. And the real harm that has already been inflicted on the environment cannot even be quantified by the gods of Olympus.

Two years on the areana

The fate of the “big brother” is repeated point for point by another Olympic structure – the 3,000-seat curling arena – that is also jailed away behind the barbed wire fence at from Imeretinsk Lowlands. Although Olympstroi promises that the arena is temporary, and that after the Games its prefabricated construction will be demonstrated, this in no way frees it from a state environmental impact assessment.

And there have been clear problems with it. Rozprirodnadzor reports that a positive state environmental impact assessment for the curling arena will be available only in January 28, 2011, although construction on it began in 2009.

Has work again continued illegally?

Matters are not much better with the training centres for hockey and figure skating: According to some data, the foundations for these arenas are already being laid. At the same time both training centres last year received negative conclusions on their

environmental impact assessments  - probably from the useless materials of the environmental impact study itself. Now they have to shine their light on a repeat environmental impact study, but this is a boring set of conditions for the construction crew, and will likely have no bearing on the construction itself.

A national park versus snowboarding park

The situation with the “mountain clusters” of Olympic facilities, however, is even worse than that with the seaside ones. All sports construction and accompanying infrastructure in the region of Krasnaya Polyana village falls directly on the border of the Sochi national park. In order to make it easier to build on the parks territory, the park in 2006 fundamentally redrew its maps, turning nature preserves into “recreation zones.” Even such radical measures did not assist in legalizing the majority of construction. After the new year’s holiday, Olympstroi announced the completion of construction and installation works at the Laura electrical substation. This substation,  which was under construction for two years, is intended do supply electricity to the Olympic Village and the ski slopes. Now it is coming to light that it was built illegally: a positive decision on its construction was not received until the middle of last month.

To continue the joke, the construction of the snowboard park and ski slopes with space for 18,000 spectators was turned into the Rosa-Khytor, a resort owned by oligarch banker Vladimir Potanin. Rosprirodnadzor reports that both facilities received positive go-aheads on their environmental impact assessments on February 5. But, as far as is known, the spring European Cup ski competitions are to take place here in the spring. That is, the conclusions of the environmental impact assessment barley squeaked through by the beginning of the event. The complex for cross country skiing and the biathlon  in the Psekhako Range, famous for its unique beech tree forests is also being built without an environmental impact assessment. Thanks go to Gazprom, Russia’s natural gas giant, which is all but the single “private investor” in the Sochi Olympics.

Two illegal activities for the price of one

A long time ago, environmental organisations raised a ruckus abou the joint construction of the “combined roads” of Alder-Krasnaya Polyana that unite the mountain and seafront clusters of Olympic facilities. This is the most expensive construction project associated with the Sochi Games, on which it is predicted some $8 billon will be tapped, and which began in 2009 without not only an environmental impact assessment but without even one document of permission. At the beginning, the firm contracted to buld the road, OAO RZhD, didn’t even have confirmation of the road project. The engineering schematics and the environmental impact assessment appeared only at the end of 2009. But since then, the project has suffered serious changes. By law, after engineering documents that were earlier given approval are changed, the environmental impact assessment loses validity because the construction, as earlier, is being conducted outside legal guidelines.

In a perfect world, a new environmental impact assessment would be done. But would it make any sense? The conjunction of the two projects has already caused catastrophic

damage to the Sochi national park. Dozens of hectares plants listed in Russia’s “Red Book” of environmental endangered species have fallen under the ax, like the wig nut and boxwood, which can’t be restored with the stroke of a pen.

An environmental Nuremburg

Because of this in today’s Sochi, one can count on one’s fingers the number of Olympic costructions that don’t have some problem with the law. And you definitely will not find a single facility that did not have such problems earlier.

Constructing the Olympics along plans that have not passed through an environmental impact assessment, even those with no project plans at all, is a usual, one could say, routine practice in the Olympics’ 2014 capital. In circumstances of a complete lack of control by the state over what is happening behind the barbed wire, the single realistic possibility to influence decisions concerning the environmental aspects of the construction are in the hands of the public – the residents of Sochi, representatives of the scientific sphere and civil society organisations. But as it turns this “inconvenient” situation with the public can be easily circumvented: It is sufficient simply not to bother with public hearings and environmental assessments. Moreover, no one is punishing anyone for this. Neither the environmental defence bureaucracy nor the prosecutor’s office have lifted a finger to stop a single illegal construction development over the entire four years that Sochi has been preparing for the Olympics.

The 2014 Olympics will leave an odour in the country's nostrils for many years to come. The most important thing it has demonstrated so far is that under the aegis of any “needed” project, you can rewrite any law – or simply close your eyes to their lack of enforcement.

It remains only to wait while the political circumstances of the country remains unchanged and it is impossible to objectively investigate the implementation of such “mega-projects.” The work of investigators will require years to carry out.

Insurgency in Russia's Caucasus a growing threathttp://www.sify.com/finance/insurgency-in-russia-s-caucasus-a-growing-threat-news-international-ldjkaSjiefh.html

2011-03-09 10:00:00

A police officer stopped at a traffic light in Dagestan's capital is gunned down from an adjacent car. A driver blows himself up at a checkpoint. The mayor has survived 15 assassination attempts.

Attacks on authorities take place almost daily in Dagestan, the largest and most violent of Russia's mostly Muslim provinces in the North Caucasus, a breeding ground for terror spreading all the way to Moscow.

The separatist movement that began more than 15 years ago as a battle for Chechnya's independence has mutated into a violent quest for an Islamic state in a region stretching some 650 kilometers (400 miles) east to west from the oil-rich Caspian Sea to Sochi, venue of the 2014 Winter Olympics.

That's hardly likely to happen, but it ensures that the Caucasus will continue to be post-communist Russia's festering wound.

The pattern is familiar: Poverty, a 50-percent unemployment rate and a government perceived as corrupt and abusive drive the discontented into the arms of Islamic militants, police crack down hard, innocents suffer and the separatists gain more recruits.

"There is a colossal gap between authorities and society in Dagestan," Alexei Malashenko, an expert on the Caucasus with the Carnegie Endowment's Moscow office, said in an interview. "People feel increasingly frustrated and the Islamists are becoming increasingly popular."

The North Caucasus includes six semiautonomous republics, and the Islamic insurgency seems to have a way of jumping from one republic to another.

No sooner did Moscow's long war against Chechen rebels achieve a fragile peace than Ingushetia became a rebel staging ground. Government subsidies and better administration relieved the pressure in Ingushetia, so now the focus is on Dagestan.

But the Kremlin appears to have no comprehensive strategy for countering the rising insurgency. Its response has largely been limited to reshuffling officials in charge of the region while failing to deliver promised reforms.

Now, after years of assurances that Caucasus militants were being brought under control, Russian officials are sounding an alarm. In January, after a suicide bomber killed 36 people at Moscow's biggest airport, President Dmitry Medvevev called terrorism the main threat to Russia and acknowledged that attacks had increased in 2010.

After the bombing, Russia announced grand plans to build job-creating ski resorts in the region's breathtaking mountains. But a month later militants responded by killing three Russian ski tourists and blowing up a major ski lift. Police said they also defused a massive car bomb outside a resort hotel.

These attacks happened in another republic, tiny Kabardino-Balkariya, where attacks on authorities multiplied more than sevenfold to roughly four a week in 2010 and killed 42 police officers, by official count.

Overall, about 300 law enforcement agents were killed in the North Caucasus last year, and about 650 were wounded, according to official figures.

Caucasus insurgents claimed responsibility for the airport bombing and last year's double suicide bombing on the Moscow subway that killed 40. Doku Umarov, the Chechen who leads the rebellion and calls himself the Emir of the Caucasus, vowed that 2011 would be Russia's "year of blood and tears."

Russian authorities have repeatedly said that the rebels have close links with al-Qaida and get funds from sympathizers in the Arabian peninsula.

The insurgents don't appear to have anywhere near the strength to force secession from Russia, but with Moscow unable to suppress them, the region could face a long and violent stalemate. The militants operate in small, autonomous cells that are hard for authorities to track down, says Gennady Gudkov, a veteran counterintelligence officer and now a member of the Russian parliament.

Just over a decade ago, Dagestanis fought alongside Russian federal troops to fend off rebels who invaded from neighboring Chechnya. Chechnya has since grown more stable under the tough rule of its Kremlin-backed strongman, while Dagestan has become the main base for militants.

"In the Caucasus, Russia has effectively turned into a failed state," said political analyst Yulia Latynina. "In 1999 Islamists in Dagestan were marginals who suffered a defeat, but now they have become a powerful force."

Ruslan Gereyev, a sociologist monitoring the youth in Dagestan, said Islamic rebels are gaining popularity among the region's teenagers, who "see them as their idols."

A Russian SWAT team officer, who asked to be identified only as Nikolai because of the sensitivity of his job, said recruits are trained for several months, then go into action in autonomous groups of 10. He estimated the number of militants in Dagestan at about 500, many in their teens.

The recruiters seem to have large sums to attract jobless, impoverished recruits. Nikolai said a group of 12 militants recently wiped out by his unit had more than $1 million in cash. If they need funds quickly, the insurgents extort money from local businesses, he said.

But Isalmagomed Nabiyev, a human rights activist here, says Dagestanis probably fear the Islamists less than they fear the police, who "have all the power, but they act like bandits."

Although Chechnya was the root of the insurgency, it's now probably the toughest place for Islamic militants to operate. Kremlin-backed regional leader Ramzan Kadyrov, himself a former rebel, has co-opted many ex-militants into his paramilitary forces, which

have been accused by rights activists of killing and torturing people with suspected links to militants.

"Kadyrov has been extremely cruel and quite successful in fighting the Islamists," Latynina said.

At the same time, Kadyrov also has sought to undercut the radicals by enforcing Islamic customs and building a colossal mosque, touted as Europe's largest. His construction projects created new jobs and transformed the capital, Grozny, from a war ruin into a modern city.

Unlike in Chechnya, where Kadyrov's word is law, Moscow's forces in Dagestan must navigate a web of shifting alliances in a population of 2.7 million consisting of dozens of ethnic groups.

Said Amirov, mayor of Dagestan's capital, Makhachkala, epitomizes the dangers a senior official position entails. He has been in a wheelchair since an assassination attempt in 1993, and has a private army of several hundred security guards. In 1998, a car bomb aimed at him brought down scores of houses and killed 19 people, but he escaped unhurt.

Gunbattles between security forces and suspected militants can last for hours in this city, a chaotic mix of drab Soviet-era apartment buildings and small private houses stretching between the mountains and the Caspian seaside. Nikolai, the SWAT team officer, said only in Dagestan has he seen a police precinct chief being driven in an armored Mercedes limousine with bodyguards. "And the militants aren't the only ones whom they want protection against."

Dagestan also has criminals who kill police for their weapons and officials for their expensive cars, and who kidnap people for ransom, he said. Such groups often are used as hired guns by rival clans.

Attacks on bars and stores selling alcohol are usually blamed on Islamic militants, but could also be the work of racketeers seeking protection money.

A waitress at the Luvr bar shudders at the memory of a January attack by three masked gunmen, which left two patrons badly burned. "They fired their guns in the air, splashed gasoline on the curtains and fled," said the waitress, who identified herself only by her first name, Patimat, for fear of reprisals.

Dagestan's regional leadership is considering an amnesty for rebels who lay down their arms — a strategy that helped to pacify Chechnya and Ingushetia, the previous epicenter of Caucasus violence.

Ingushetia used to be under the control of a former KGB general who encouraged brutal security sweeps that fomented public anger. The current ruler, Yunus-Bek Yevkurov, has

sought to end abuses against civilians and amnestied many former rebels, and attacks have dropped considerably.

But rebels still have camps in forested mountains, and the suspected airport bomber came from Ingushetia.

The Czars took half of the 19th century to conquer the Caucasus, and analysts don't think the current insurgency can shake Russia's grip. In the turbulent years after the Soviet collapse, weakened Kremlin controls and empty coffers encouraged separatist sentiments, but today the militants are too few to force a separation, and the political and business elites wouldn't support it.

"The Caucasus will not break away from Russia because local elites get money from the federal budget," said Malashenko of the Carnegie Endowment.

The Caucasus factor will play an important role in Russia's politics as it approaches elections in March 2012 in which Prime Minister Vladimir Putin is widely expected to seek his return to the presidency. The second war in Chechnya began under Putin's leadership a few months before March 2000 election, and his tough posture helped him win the presidency.

_____

Isachenkov reported from Moscow. Sergei Venyavsky in Rostov-on-Don and Musa Sadulayev in Grozny, Russia contributed to this report.

A Wikileaks Cable From Moscow

US Ambassador John Beyrle: "Feminism" is a Dirty Word in Russiahttp://www.counterpunch.org/shamir03082011.html

By ISRAEL SHAMIR

IISS outlines Russian navy's regeneration plans http://www.defpro.com/news/details/22681/?SID=af343ef13ae493e9055ba51a99c9e955

07:26 GMT, March 9, 2011 A recent deal under which Russia will buy four Mistral naval ships from France is an important demonstration that Moscow is getting serious about building a modern navy. The first two landing helicopter docks (LHDs) will be constructed in France and, in a significant boost to the Russian shipbuilding industry, the other two will be built under licence in Russia. Agreed on 25 January, the deal will mark the first time that a Western country has transferred any major weapons platform to Russia since the end of the Second World War. However, it remains unclear whether it will kick-start a new phase of modernisation, and whether the large-scale reform envisaged in Russia’s State Programme of Armaments 2011–2020 can be realised.

BOOST TO RUSSIAN INDUSTRY

The agreement has wide-ranging implications for industry, for foreign aspirations to participate in the Russian market, for military capabilities and for Russia’s longer-term modernisation plans.

It will have a considerable impact on Russia's currently stagnant shipbuilding industry. The purchase of the Mistral in effect represents an admission that the industry lacks the technical expertise and capacity to build such complex ships. In February, Chief of the General Staff General Nikolay Makarov admitted that it would have taken Russian yards at least a decade to build a similar ship. However, they will play a significant role in the Mistral deal. The first two ships will be built at the St Nazaire shipyard of STX Europe, a subsidiary of a Korean shipbuilder which has acquired several European commercial shipyards. It will execute the contract jointly with DCNS, the majority state-owned French naval shipbuilder.But a significant portion of the components will be manufactured in Russia: 20% for the first and 40% for the second. The remaining two ships will be built at a specially constructed shipyard on St Petersburg's Kotlin Island by state-owned United Shipbuilding Corporation, with 80% of the manufacturing being of Russian origin. Though the cost is not known, estimates suggest a price of approximately €400 million to €600m ($550m–$820m) per boat. According to RIA Novosti, the Russian news agency, the first two ships will cost Russia a total of €1.37 billion ($1.9bn).

This is the first time that Russia's armed forces have permitted serious foreign involvement in an otherwise closed tendering system under which orders were previously guaranteed to be given to domestic contractors. In light of the Mistral deal, foreign participation seems likely in future modernisation efforts. The signature on 9 February of an agreement that will see Germany's Rheinmetall Defence build and equip a troop-training centre in Russia was further evidence of Moscow's increased openness to foreign competition in defence procurement. The Ministry of Defence has also confirmed that it will go ahead with a joint enterprise with Italy's Iveco to manufacture Lynx armoured vehicles in Russia.

The injection of expertise and technology from France will aid a shipbuilding industry that has been held back by yards that are unable to fulfil domestic and international orders. Only four new surface combatants were launched between 2000 and 2010, all frigates and corvettes. Meanwhile, the Admiral Gorshkov contract, which involves the

refitting and conversion of a Kiev-class aircraft carrier from a short take-off and vertical landing deck to a short take-off but arrested-recovery version for India, has suffered many problems. A $1.5bn deal was originally signed in 2004 and delivery was scheduled for 2008. However, the project was delayed as the scale of the conversion became apparent, and a new $2.3bn deal was signed in 2010 for delivery to India in December 2012.

ENHANCED AMPHIBIOUS CAPABILITY

The procurement of four LHDs provides a much-needed fillip to Russia's maritime projection of air power. The only other aircraft carrier of any sort in the navy is the Admiral Kuznetsov, a fixed- and rotary-wing carrier that has been repeatedly laid up for repairs and seen little operational activity in its 20 years of service. Russia has not operated any pure helicopter carriers since the Moskva-class ships were decommissioned in the early 1990s, although the subsequent Kiev-class and the Admiral Kuznetsov-class both mixed fixed-wing aircraft with helicopters.

The new LHDs will allow Russia to deploy up to 16 helicopters on each ship, probably including a marinised variant of the Kamov Ka-52 Alligator attack helicopter. A Ka-52 was landed on the deck of France's Mistral during a visit to St Petersburg in December 2009, in what now looks to have been a prescient training exercise. Other assets that may be deployed on the Russian LHDs include anti-submarine warfare or transport helicopters such as the Ka-27 and Ka-29 Helix.

As well as helicopters, the Mistral can transport and land 60 armoured vehicles with 450 troops – significantly more than the Ropucha- and Alligator-class landing ships in Russia's current fleet. The Mistral will be the only vessel in active service with the Russian navy with a well deck. Currently, all vehicles aboard Russia's amphibious vessels are loaded and unloaded via stern or bow doors, meaning the ship has to approach within metres of the shoreline and expose itself to enemy fire. A well deck, on the other hand, allows the disembarkation of troops and vehicles aboard smaller landing craft from over the horizon, minimising the ship's vulnerability to missile strikes. It also allows for amphibious landings on more difficult terrain, as the vessels that must approach the shoreline are much smaller.

DEPLOYMENTS SUBJECT TO INTERNATIONAL SCRUTINY

Given this significant improvement in Russia's amphibious capability, the Mistral deal has raised concerns among Russia's neighbours on the Black and Baltic Seas that the LHDs could be used in a conflict against them. During the 2008 war with Georgia, Russia's Black Sea Fleet was able to blockade Poti and launch an amphibious landing in Abkhazia involving several hundred naval infantry soldiers.

Washington is similarly concerned about the deal. In a November 2009 State Department cable published via the WikiLeaks website, United States Ambassador to Georgia John R. Bass noted a request from the Georgian foreign minister 'that the US push back against

this sale'. According to another leaked cable, US Secretary of Defense Robert Gates 'raised US concerns over the sale of a Mistral class helicopter carrier to Russia' in a meeting with his French counterpart in Paris in February 2010.

But in a likely bid to assuage international concerns and particularly those of its neighbours, Moscow has indicated that it will deploy the first two Mistrals to the Northern and Pacific Fleets (although some conjecture remains on their destination). For the Northern Fleet vessel, the assignment suggests a focus on projecting Russia's maritime air power in the Arctic, adding greater muscularity to its diplomatic efforts in the disputed region, and swift access to the Atlantic should it be required. In the Pacific Fleet, the Mistral would not only add an aerial element to any operations but would also greatly expand the fleet's amphibious capabilities in a region that includes an unstable Korean Peninsula, a rapidly improving Chinese navy and an ongoing dispute with Japan over the Kuril Islands. The Mistral could also have a role to play in regional humanitarian-assistance and disaster-relief operations.

It remains open to Russia to deploy the third and fourth LHDs to the Black and Baltic Sea Fleets. Their presence would facilitate swift deployments to crisis-hit regions, and would continue the legacy of the two Moskva-class helicopter carriers that were deployed to the Black Sea in the 1970s and 1980s. Such a decision would indicate the shifting priorities of Russia's navy compared to previous decades: all the Kiev-class carriers were deployed with the Northern and Pacific Fleets, reflecting the perception of the US and NATO as the primary threat.

However, given the dominance of Russia's armed forces over Georgia's, a Mistral seems an unnecessarily large and capable ship for any bilateral conflict. And under a strict legal interpretation of the Montreux Convention of 1936, the LHDs, as aircraft carriers, would not be able to enter or leave the Black Sea through the Bosporus Strait. The Baltic would provide quicker access to the Atlantic, but the difference would be marginal over the Northern Fleet and access would be through a narrow sea bordering several NATO countries.

MODERNISATION DRIVE

Whatever the likely future usage of the LHDs, their purchase raises the possibility that Russia's navy may finally be emerging from a 20-year period of decline and stagnation.

Naval modernisation is an issue that has been debated extensively, particularly since the ascension to power of Vladimir Putin. Just over a year after his inauguration as President in 2000, Putin signed the Maritime Doctrine of the Russian Federation until the Year 2020, which highlighted the navy's role in securing territorial sovereignty and protecting Russia's resources. The doctrine outlined a regional rather than a global role for the navy, but greater emphasis wasplaced on issues such as the Arctic, territorial disputes and undersea resources, highlighting the roles the navy could play in Russia's foreign policy.

Subsequently, two state armaments programmes (Gosudarstvennaya Programma

Vooruzheniya [GPV]) have been published, detailing the defence-procurement plans of the Russian armed forces. The most recent, the GPV 2007–2015 adopted in November 2006, allocated R5 trillion ($188bn at November 2006 exchange rate) to defence procurement over the nine-year period, with the navy supposed to build 17 surface vessels and six submarines. Even though the navy is still largely composed of Cold War-era vessels, the government’s aspirations remain undimmed. President Dmitry Medvedev stated in March 2010 that he wished to see an annual equipment-renewal rate across the armed forces of 9–11%, compared with the current 2%, in order to modernise 70% of military equipment by 2020.

The next GPV, which will outline defence procurement until 2020, is nearing completion. General Makarov claimed in February 2011 that R23trn ($784.5bn) would be allocated for purchases. This is a substantial figure, but tallies with other estimates: in September 2010 Minister of Defence Anatoly Serdyukov claimed that the GPV 2011–2020 would have a budget of R22trn ($751bn), with R19trn ($649bn) allocated to the Ministry of Defence and R3trn ($102bn) to other ministries. Such figures make it clear that Moscow intends to increase procurement expenditure significantly over the coming decade.

According to Mikhail Lukanin, a correspondent for Russian newspaper Trud, of the R19trn allocated to the Ministry of Defence, R5trn ($171bn) would go to the navy. This would be used to purchase more than 30 submarines and 42 surface combatants, representing a substantial turnover in Russia's fleet – it currently maintains 67 submarines and 103 combat vessels of corvette size or larger. The new vessels would include eight ballistic-missile submarines, 22 attack submarines, 12 frigates, 20 corvettes and ten landing ships.

Lukanin's list omits any mention of a fixed-wing aircraft carrier, or the refurbishment or purchase of any cruisers or destroyers. This may be because great uncertainty exists over such programmes, particularly a future aircraft carrier: a statement by Medvedev in October 2008 claimed that Russian-built carriers would be commissioned from 2013, but the GPV 2007–15 failed to mention the possibility. No carrier, cruiser or destroyer is currently being built (though a destroyer is reportedly at the design stage), suggesting that greater attention will be paid to smaller combatants that would prove more useful in smaller conflicts, regional contingencies and constabulary roles such as counter-piracy. This further entrenches the shift in Russia's naval focus, from the possibility of conflict with the US and NATO to perceived threats in East Asia and the country's near-abroad.

PROSPECTS FOR RENEWAL

But even under favourable economic circumstances, the procurement plans to be laid out in the GPV 2011–2020 remain ambitious. The programme is expected to call for the commissioning of between eight and ten combat vessels per year, a very tall order for a navy the size of Russia's – especially taking into account the outdated machine tools and legacy refurbishment projects constraining its shipbuilding capacity, as well as corruption and politicking. Problems besetting programmes such as the Bulava submarine-launched ballistic missile also indicate challenges ahead for the navy's rebirth.

Nevertheless, by avoiding grandiose projects and facilitating overseas purchases, the GPV 2011–2020 could mark the beginning of a process of modest renewal for the navy. With various hulls already in the water but not yet commissioned, including Borey-class ballistic-missile submarines, Yasen-class nuclear-attack submarines, Stereguschiy- and Admiral Gorshkov-class frigates, there is likely to be a steady flow of new vessels for the Russian navy in coming years.  

Russia’s Fog of Military Reformhttp://www.jamestown.org/programs/edm/single/?tx_ttnews[tt_news]=37613&tx_ttnews[backPid]=27&cHash=fbce90327a549c1ea6bf4a9f6c445c55

Publication: Eurasia Daily Monitor Volume: 8 Issue: 46March 8, 2011 01:37 PM Age: 55 minCategory: Eurasia Daily Monitor, Home Page, Featured, Military/Security, Domestic/Social, Russia By: Roger McDermottThe Russian defense ministry plans to convene a broad-based meeting on March 14 to discuss the results of military reform and its prospects during the next decade. On March 3, Viktor Ozerov, Chairman of the Federation Council’s Defense and Security Committee confirmed that the full committee has been invited to attend the meeting, which will hear detailed reports from Defense Minister, Anatoliy Serdyukov, the Chief of the General Staff, Army-General Nikolai Makarov, First Deputy Defense Minister, Vladimir Popovkin and other defense officials. A preparatory meeting on March 1 discussed the new joint-strategic commands, command and control and the development of non-commissioned officers (NCO’s) (Interfax, March 3).

Attendance by the leading personalities involved in the reform raises the profile of the meeting, and brings into focus underlying reasons to hold such “public consultations” more than two years after initiating the reform, and in the context of reform in perpetuity –or at least until 2020. Serdyukov and Makarov, representing a defense tandem mirroring the duumvirate, seek to shirk responsibility for the countless errors accumulated along the way. The reform promised great advances based on using foreign military experience and reorienting the Russian armed forces to meet modern challenges. Colonel Yelena Knyazeva, acting chief of the defense ministry’s Main Directorate for International Military Cooperation, in an interview in Indeks Bezopasnosti stated: “We study foreign armies’ experience not in order to copy it but in order to analyze and adapt it to present-day Russian realities.” Knyazeva cited as an example of this approach the organization of NCO training. Unfortunately, either she was misinformed or deliberately attempted to talk-up non-existent progress in this critical area. The current effort to train professional NCO’s at a specially designed course in Ryazan has all the hallmarks of another in a series of failed experiments (http://pircenter.org/data/publications/sirus1-11/Interview-Knyazeva.pdf, February 2011).

Major-General (retired) Vladimir Dvorkin, chief research officer at the Institute of World Economy and International Relations, and former head of the defense ministry’s 4th Central Research Institute, characterized the reform as being accompanied by “organizational blunders,” damaging morale among servicemen which had inadvertently resulted from officer downsizing. Dvorkin stated that highly professional officers involved in planning combat operations have been removed. Within defense ministry research institutes, Dvorkin said the situation was chaotic, noting that “one minute, a full switch to civilian employees is announced, and officers are dismissed; the next minute, an order comes through once again to keep the officers on.” The original target to reduce the officer corps to 150,000 was apparently planned without any reference to officers taking leave, or the need to cover sick leave. Dvorkin concluded that the mistakes in the reform demonstrate the “lack of any discernible conception of, and strategy for, military reform, both before it started and during it,” adding “the objectives are being attained, as always, with losses. The reasons have long been known. Everything is decided within a restricted circle of senior officials that does this without any feasibility studies or independent research” (Interfax, February 26, March 2).

Colonel-General (retired) Eduard Vorobyev, former first deputy commander-in-chief of the Ground Troops concurred with Dvorkin, also highlighted the serious implications of the muddle and confusion that has marked the conduct of the reform: “Many decisions, including important ones, are taken rashly, hastily and impulsively, without due argument or taking account of public and expert opinion” (Interfax, February 26, March 2). After all the statements from Serdyukov and Makarov to justify the officer downsizing in terms of the need to make the structure of the armed forces less top-heavy and improve the standards of serving officers, in February 2011 the process was suspended. The target for the officer corps is now 220,000, and with it the top-heavy nature of the armed forces is guaranteed to endure. Whatever the original reform agenda envisaged is no longer being pursued. A variant of the “new look” is under construction, and will likely only emerge after the presidential election in March 2012.

Meanwhile, the defense ministry has succeeded in transmogrifying the phrase “fog of war” into the “fog of reform,” which is not a politically sensitive issue in Russia unless it is linked to money. Serdyukov has therefore yet to explain the numerous procurement failures in 2010. While Moscow trumpets a high-profile 19.4 trillion rubles ($688.35 billion) rearmament program for the defense ministry over the coming decade, insufficient levels of new equipment and weapons are reaching the armed forces. In Vedomosti, Aleksey Nikolskiy stressed the constant nature of such setbacks, notably in the defense industry only producing five of the planned 11 satellites, project 677 new diesel-electric submarines are on hold, and tests on Su-35 fighters for the air force have experienced delays (Vedomosti, March 1). Nine Yak-130 training aircraft were ordered and six arrived; 151 BMP-3 combat vehicles were ordered and 78 were received. Serdyukov has advocated tightening the system to include fines and arrests as punishment for defense companies. One defense industry director estimates the overall low profitability of the industry at 6 percent to 7 percent, and suggests this will further decline, though offering no explanation on how this profitability is measured or the deeper problem of price monitoring having been abolished in 1984

(http://www.newsru.com/russia/02mar2011/screwup.html, March 2).

Some observers argue that the military is unimportant to Putin, which may be questionable given its usefulness in the early days of his presidency in re-launching war in Chechnya, or the speed at which he left the Beijing Olympics in 2008 to return to oversee the crisis with Georgia. However, Putin shares with the siloviki the belief in Russia as a great power, which may require a stronger military to support an assertive foreign policy. His reputation as the “father of the nation” and claims to protect the territorial integrity of the Russian Federation also require some semblance of military support, particularly if the insurgency in the North Caucasus continues to escalate. Putin has known for many years that only a small portion of the military is combat capable. Should Putin return to the presidency his priority in the reform would be to ask the General Staff what is required conventionally to inflict a “bloody nose” on Russia’s enemies; western military standards may not be the answer.

National Economic Trends

Putin’s Gain on Crude Sends Swaps to 2008 Low: Russia Credit

By Douglas Lytle - Mar 9, 2011 8:13 AM GMT+0100

The cost of insuring Russian debt against default is tumbling to the lowest level in more than two years as the rally in oil helps the world’s largest energy exporter pare this year’s record borrowing plans.

To contact the editor responsible for this story: Douglas Lytle in Prague 1 at dlytle@bloomberg.net

January capital outflow estimated at $13bn http://www.bne.eu/dispatch_text14392

Alfa BankMarch 9, 2011

According to CBR Deputy Chairman Alexei Ulyukaev, net capital outflow in January amounted to $13bn, one-third of the corresponding 2010 figure, largely offsetting the January trade surplus of $19bn.

As net capital outflow was only around $8bn in December, the January figure indicates

that additional export revenues from higher oil prices contributed to increased capital outflow. As a result, the ruble finished the month at RUB34.6/basket, little changed from RUB34.9/basket at the end of 2010. As CBR officials indicated previously, February is unlikely to bring any improvement in the capital account. We previously noted that the capital outflow was likely to continue, reflecting deteriorating business expectations in response to this year's increased tax burden. However, with oil prices now exceeding $110/bbl, Russia is likely to benefit from an inflow of short-term capital, which will improve the capital account balance starting this month.

Natalia Orlova

March 7, 2011, 10:15 AM GMT

Will Investors Ever Commit to the Russian Ruble?http://blogs.wsj.com/source/2011/03/07/will-investors-ever-fully-commit-to-the-russian-ruble/?mod=google_news_blog

By Ira Iosebashvili

When it comes to the ruble, investors have always been disinclined to display a loving, lifelong commitment.

Last year’s initial passionate embrace grew cold by the end of summer, when the ruble was brought low by a crippling drought, shifting political sands resulting from the ousting of Moscow’s powerful mayor and a spate of year-end corporate debt repayments. While other emerging markets were at their wits’ end in the quest to avoid speculative capital, Russia saw capital outflows, and the ruble was the autumn’s worst performing currency versus the dollar.

Now the ruble is once gain melting investor’s hearts, having risen some 9% since the start of the year. In part, the market can thank the central bank, Spurred by surging inflation, the regulator last month unexpectedly raised rates across the board in its most aggressive monetary policy tightening since the economic crisis.

A few days later, the Bank of Russia widened the ruble’s trading band against a basket of dollars and euros, a move that allows the currency to appreciate and battle the rising prices that are frustrating the population and making the government nervous, especially with presidential elections around the corner in 2012.

International events have played their part as well. With crude hovering near two and a half year highs on political turmoil in the strife-torn Middle East, Russia—the world’s largest energy producer—is seen as a perfect way to play oil with minimal exposure to political risk. Fund flow data for the last several months has shown investors piling into Russia, even as they dump other emerging markets amid a flight to quality.

It’s almost enough to make you hear wedding bells, but alas, with this couple, thunderclouds are always on the horizon. On Friday, a top central bank official said that despite high oil prices and a surging currency, Russia saw $13 billion of capital outflows in January alone—almost a quarter of the whopping $38 billion in capital flight it recorded last year. The culprit, according to Finance Minister Alexei Kudrin, is the upcoming presidential election, which he says will always lead investors to hedge their risks, especially “in a country like ours.”

It is widely assumed Mr. Kudrin’s “investors” are Russian bureaucrats and businessmen taking money out of the country in case they get left out in the cold amid political reshuffling. This outflow, it seems, is so large that it cannot be hidden, not by high oil prices, nor by whatever capital is attracted by higher interest rates.

So can anyone be faulted for thinking that sooner or later, the ruble will get jilted once again?

Business, Energy or Environmental regulations or discussions

Russia Stocks Climb on Metals, $100 Crude as Trading Resumeshttp://www.bloomberg.com/news/2011-03-09/russia-stocks-climb-on-metals-100-crude-as-trading-resumes.html

By Jason Corcoran - Mar 9, 2011 10:01 AM GMT+0100

Russian stocks advanced as metals gained and oil, the country’s largest export earner, held above $100 a barrel after the country’s markets reopened following a two-day public holiday.

The 30-stock Micex Index (INDEXCF) climbed for a second day, adding 0.4 percent to 1,788.1 by 11:31 a.m. in Moscow. OAO Lukoil, Russia’s second-largest oil producer, gained 0.8 percent. OAO Sberbank, the country’s biggest lender, added 1.5 percent while OAO Magnit, the nation’s second-largest retailer, increased 0.9 percent.

“Oil prices continue to dominate markets and will probably remain the key driver in the near term,” Yaroslav Lissovolik, head of research in Moscow at Deutsche Bank AG, wrote in an e- mailed report today.

The U.S. Energy Department increased its oil price forecast for 2011 as unrest in the Middle East and North Africa threatens supplies and global demand climbs. Crude has gained 28 percent in the past year in New York trading. Russia is the world’s largest energy exporter.

Crude for April delivery decreased 60 cents today to $104.21 a barrel in electronic trading on the New York on speculation that OPEC will consider boosting output to compensate for disruptions in Libya, and as rising U.S. supplies signaled weakening demand.

Copper for three-month delivery gained 0.4 percent to $9,570 a metric ton in Singapore. All metals quoted on the London Metal Exchange gained, led by nickel and tin.

To contact the reporter on this story: Jason Corcoran at Jcorcoran13@bloomberg.net

To contact the editors responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Eastern European Stock Markets

OAO Gazprom Neft (SIBN RX): UniCredit SpA raised its 12- month price target for the Russian oil producer controlled by OAO Gazprom and reiterated its “buy” recommendation on “strong” 2010 earnings, the bank said on March 7 in an e- mailed note. Gazprom Neft’s shares advanced 1.4 percent to 154.19 rubles.

By Douglas Lytle - Mar 9, 2011 8:13 AM GMT+0100

http://www.bloomberg.com/news/2011-03-09/east-europe-today-russian-swaps-at-lowest-in-two-years.html

OAO Mostotrest (MSTT RX): The bridge and road builder that raised $388 million in an initial share sale in November was initiated with a “buy” recommendation at VTB Capital in Moscow, which said the shares may gain 50 percent in the next 12 months. Mostotrest rose 1.5 percent to 228.99 rubles.

By Douglas Lytle - Mar 9, 2011 8:13 AM GMT+0100

http://www.bloomberg.com/news/2011-03-09/east-europe-today-russian-swaps-at-lowest-in-two-years.html

Shares in TNK-BP, Russia’s third-largest oil producer, rose 0.1 percent to 87.70 rubles.

http://www.bloomberg.com/news/2011-03-09/east-europe-today-russian-swaps-at-lowest-in-two-years.html

To contact the editor responsible for this story: Douglas Lytle in Prague 1 at dlytle@bloomberg.net

AFK Sistema to morph into investment fund

http://www.rbcnews.com/free/20110309105812.shtml

      RBC, 09.03.2011, Moscow 10:58:12.The board of directors of AFK Sistema, a large Russian conglomerate company, has approved a change in the management structure of the corporation, the holding's press office announced.

      AFK Sistema will replace its four business units focused on specific industries with two business units for key assets and greenfield projects. The heads of the new business units have not been appointed yet, the company said.

      According to earlier reports, the key assets unit is expected to include mobile operator MTS and Bashkortostan-based oil companies, while the greenfield projects unit will include high technology, industrial and consumer sector companies.

Russian transport giant to operate new container terminal in Muugahttp://balticbusinessnews.com/article/2011/3/9/russian-transport-giant-to-operate-new-container-terminal-in-muuga

09.03.2011, 09:25

The decision of supervisory council of Port of Tallinn to award the contract to operate the new container terminal to Russian transport giant Rail Garant and leave Transiidikeskus, operator of the current container terminal second, promises court battles, writes Äripäev.

Erik Laidvee, CEO of Transiidikeskus that belongs to oil businessman Anatoli Kanajev, has publicly accused the council of having forged the winning bid and claims that the decision is damaging Estonia’s national interests.

“We made a better bid, but the contract went to another company,” said Laidvee, adding that because of the decision, the state will lose tens of millions of euros.

Neinar Seli, chairman of the supervisory council of Port of Tallinn, said that a financial bid played only a small role in the decision and said that Rail Garant was offering a novel approach to transport goods not only from West to Russia through Tallinn, but also from Russia to West which enables shipping companies to transport full containers through Tallinn in both directions.

Rail Garant is one of Russia’s largest transport conglomerates that consist of 11 rail freight and container operators as well as logistics businesses. It owns more than 17,000

rail wagons and by 2013 wants to be among Russia’s five largest transport companies. It belongs to Sergei Guchcin, Nikolai Falin and Sergei Smyslov

VTB may gain control of Bank of Moscow this week - Kommersanthttp://en.rian.ru/business/20110309/162919636.html

12:07 09/03/2011

MOSCOW, March 9 (RIA Novosti) - Russia's second largest bank VTB may gain control of Bank of Moscow as soon as this week by acquiring shares from Credit Suisse and other minority shareholders who own 4.37% in the Moscow government's lender, Kommersant business daily reported on Wednesday.

"This deal, approved by Andrei Borodin (Bank of Moscow president and shareholder) will allow VTB to save $80-100 million and increase its stake to a controlling interest as compared with the deal with Goldman Sachs," the source was quoted as saying.

VTB will increase its stake in Bank of Moscow to a controlling interest by purchasing 2.77% from Credit Suisse and about 1.6% from one of Bank of Moscow's minority shareholders instead of buying a 2.77% share package from Goldman Sachs, which was frozen by an injunction from a London court, a source close to one of the shareholders of the Moscow government's lender told the paper.

In February, VTB approved a gradual acquisition of 100% of shares in Bank of Moscow. The state-controlled lender started its takeover bid with the purchase of a 46.48% stake held by the Moscow government and a blocking interest in Stolichnaya Insurance Group, which owned 17.3% of the Moscow bank.

Borodin, however, was unwilling to cede control of the bank but VTB found a way around his objections by agreeing to purchase a 3.88% stake in the bank from Goldman Sachs.

Goldman Sachs' share would have increased VTB's stake in Bank of Moscow to a controlling interest and the investment bank agreed to sell it for 7.1 billion rubles ($247 million). However, a company close to Borodin filed a complaint with the London court, after which Goldman Sachs' stake was seized.

Bank of Moscow, Goldman Sachs and Credit Suisse officials declined to comment, while VTB said it was ready to maintain constructive dialogue with all Bank of Moscow's minority shareholders.

A Bank Moscow shareholders' meeting is scheduled for April 11, prompting VTB to close the deal as soon as possible.

CORRECTED GOOGLE TRANSLATION

Rosneft to buy the shares of Sakhalin Energy Company http://www.interfax.ru/business/news.asp?id=180367

March 9, 2011 5:48 Yuzhno-Sakhalinsk. March 9. Interfax-Far East – The company Rosneft is to invest $ 2 billion rubles in the construction of a fourth unit of the Yuzhno-Sakhalinsk HEP-1, the press service of the Government of the Sakhalin region announced on Wednesday. "Major Player" Rosneft today enters the energy market of Sakhalin and buys the shares of Sakhalin Energy Company. This will be action, fourth-capitalized "gas" energy unit Yuzhno-Sakhalinsk TPP-1. In his construction company intends to invest in the near future, nearly 2 billion rubles, "- said the governor of the Sakhalin region, Alexander Khoroshavin press office, commenting on the results of his working meeting with the president of OAO NK" Rosneft "Edward Hudaynatovym. The Governor noted that, thus, would be guaranteed the construction of critical energy infrastructure facilities south of Sakhalin, which will significantly increase the power plant.

CERBA Russia, CIS int’l mining conference to open in Toronto

http://www.itar-tass.com/eng/level2.html?NewsID=16021578&PageNum=0

09.03.2011, 02.55

TORONTO, March 9 (Itar-Tass) -- The Canada Eurasia Russia Business Association (CERBA) will hold an international conference on mining in Russia and the CIS states here on Wednesday. Russian Deputy Minister of Natural Resources Sergei Donskoy, officials from the Canadian Ministry of Foreign Affairs and International Trade, scientists and analysts of the mining market will deliver speeches for Canadian businesspeople at the conference, a source in the organizing committee of the forum told Itar-Tass.

The participants in the forum will discuss the prospects for the development of the metallurgical industry in Russia, the current situation in the mining industry and future investments. The lawyers and analysts of the mining market will consider the latest amendments in the Russian legislation and will deliver a brief report on the Russian gold industry. Kinross Gold Corporation, Rare Earth Metals Inc. and Centerra Gold will share their experience of successful business in Russia.

Credit Suisse to Sell Moscow Bank Stake to VTB, Kommersant Sayshttp://www.bloomberg.com/news/2011-03-09/credit-suisse-to-sell-moscow-bank-stake-to-vtb-kommersant-says.html

By Yuliya Fedorinova - Mar 9, 2011 7:02 AM GMT+0100

Credit Suisse Group AG (CSGN) agreed to sell its 2.77 percent stake in Bank of Moscow to VTB Group, Kommersant reported, citing an unidentified person familiar with the matter.

The Credit Suisse shares, plus the 1.6 percent stake VTB will buy from unidentified minority shareholders, will give VTB control over Bank of Moscow, Kommersant said. VTB reached the accord with Credit Suisse after a London court halted Goldman Sachs Group Inc. (GS)’s planned sale of 3.88 percent of Bank of Moscow to VTB, Kommersant said.

To contact the reporter on this story: Yuliya Fedorinova at yfedorinova@bloomberg.net

To contact the editor responsible for this story: Brad Cook at bcook7@bloomberg.net

Adani buys first Russian coal cargohttp://www.steelguru.com/raw_material_news/Adani_buys_first_Russian_coal_cargo/195018.html

Wednesday, 09 Mar 2011

Adani Enterprises has bought its first cargo of Russian coal in a bid to diversify its coal supply.Mr Vinay Prakash CEO of Adani Coal and Carbon Credit said that the March loading capesize cargo of low sulphur coal will be shipped from a Pacific port by one of Russia's biggest exporters.

But Mr Prakash declined to name the Russian supplier. The price was close to the current levels for South African coal.

Russians value Facebook at $76bnhttp://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/8369569/Russians-value-Facebook-at-76bn.html

Facebook started as way to help its founder, Mark Zuckerberg, meet girls at university. Yesterday a Russian investment bank valued the phenomenally popular social networking site at more than Barclays, Tesco or Anglo American. By Rupert Neate 5:50AM GMT 09 Mar 2011

Otkritie, one of Russia's biggest financial institutions, said Facebook was worth $76.4bn (£47.3bn). That is 50pc more than the $50bn valuation Goldman Sachs placed on Facebook when it invested in January.

Tibor Bokor, an analyst at the bank, said his sky-high valuation was justified because he expects Facebook to control 20pc of the online advertising market by 2015.

He predicted that Facebook's revenues would soar to $16.8bn in five years, from an estimated $1.2bn last year. He added that the sale of games and virtual gifts is expected to rake in a further $2.9bn a year by 2015.

"In five years we expect Facebook to double its users to 1.2bn people - roughly 40pc of all the world's estimated internet users," Mr Bokor said. "Facebook should have 20pc of all online adverts worldwide in 2015, compared to 2.7pc in 2010."

Mr Bokor predicted that Facebook's market value would swell to $135bn (£83.5bn) by 2015. That would put the seven-year-old website in fourth spot in the FTSE 100, behind HSBC, Vodafone and BP at today's prices.

Mr Bokor attempted to value Facebook in order to determine a valuation for Mail.ru, a Russian internet company that owns a 2.4pc stake in Facebook and floated on the London Stock Exchange last year.

Mail.ru, which was split our of Digital Sky Technologies, is valued at $5.6bn.

Otkritie also valued Zynga, which makes the popular Facebook games FarmVille and CityVille, at $7bn and Groupon, a discount deals site, at $6bn.

Despite the high values placed on Mail.ru's stakes in web companies, Otkritie advised its clients to sell their shares in the company, which closed down $1 to $33.

Russia to supply $139mn worth of equipment for ITERhttp://en.rian.ru/science/20110309/162916801.html

08:00 09/03/2011

Russia will supply over 100 million euros ($139mn) worth of equipment for the international ITER thermonuclear reactor, under construction in south France, the state nuclear corporation Rosatom reported.

The ITER tokamak nuclear fusion reactor is being built by the European Union, China, India, Japan, South Korea, Russia and the United States in the nuclear research center of Cadarache. ITER is experimenting with nuclear fusion in an attempt to develop a clean, inexhaustible source of energy to replace fossil fuels.

Its purpose is to make a transition from plasma physics studies to full-scale fusion power plants.

"The switching equipment agreement is the most expensive of all," Rosatom said. "It is worth over 100 million euros (in 2001 prices). Switching equipment for ITER is to be produced in Russia until 2017."

The agreement on the supply of equipment is to be signed in Moscow on Wednesday.

MOSCOW, March 9 (RIA Novosti)

McDonald’s Keeps Direct Ownershiphttp://www.times.spb.ru/index.php?action_id=2&story_id=33684

By Khristina NarizhnayaPublished: March 9, 2011 (Issue # 1646)MOSCOW — McDonald’s, one of the biggest franchisers in the world, will continue to directly own all of its Russian restaurants for the near future, Khamzat Khasbulatov, the corporation’s president in Russia and Eastern Europe, said last week.

“We have a successful operation, we don’t have the motivation to franchise,” Khasbulatov said.

Khasbulatov touted the company’s franchise model in use worldwide, but said there are some risks involved in applying it to Russia. “There are judicial risks,” he said, without elaborating.

Although the franchise model is widely used in Russian business, the law does not recognize the term. The legal code only has a clause about “commercial concessions.” A new bill is under review in the State Duma that will make franchising official.

Russian Franchise Development Association president Alexander Mailer compared the vague legal situation around franchising to the often quoted talk show when a female citizen maintained that there is no sex in the Soviet Union — meaning the activity was never publicly discussed in the U.S.S.R.

Franchising requires a healthy small business environment with entrepreneurs who have access to large amounts of startup capital — which is in short supply in Russia. Lack of training and intellectual property protection also stands in the way of successful franchising operations.

Last year, the fast-food giant opened 31 restaurants in the country, mostly in Moscow and St. Petersburg and regions surrounding the cities, and has expanded as far south as Belgorod. The total number of McDonald’s outlets in Russia at the end of 2010 was 275. All restaurants are in the European part of the country. Khasbulatov said this is because of logistics and infrastructure challenges.

Local restaurants serve about 700,000 customers a year on average, one of the highest numbers for McDonald’s in the world. In 2010, roughly 200 million people ate at outlets in Russia.

The company plans to open 40 more restaurants in 2011 — at least half of them in Moscow, St. Petersburg and surrounding regions. A McDonald’s is slated to open in a few weeks in Veliky Novgorod, an ancient city 530 kilometers northwest of the capital.

The company has invested heavily in building and training its local supply chain — at one point even owning its own factory. Now McDonald’s sources about 80 percent of its ingredients domestically, but said it plans to increase that to 100 percent eventually.

McDonald’s has enough cash flow to finance expansion and improvement of existing facilities, Khasbulatov said.

Last year, the company invested 5 billion rubles ($176.2 million) to open new restaurants and modernize facilities. This year McDonald’s expects to spend even more, but exact figures are not available.

Russia may not be an ideal franchising landscape, Mailer said, but the main reason for the company’s reluctance is that they are so successful here. The chain attracts a record number of customers and has virtually no competitors.

“What’s the point of sharing profit with an outsider?” Mailer said.

McDonald’s has successfully franchised in nearby countries including Georgia, Moldova and Latvia. The corporation might come up with a franchise strategy for Russia in about two years, Khasbulatov said.

Hermitage Capital Sues in Constitutional Court http://www.themoscowtimes.com/business/article/hermitage-capital-sues-in-constitutional-court/432204.html

09 March 2011By Howard Amos

Hermitage Capital, William Browder's $1.2 billion hedge fund, has filed a suit with the Constitutional Court against the Interior Ministry over a criminal tax investigation opened against the company in 2007.

The suit is an attempt to combat "the development over the last five years of the whole idea of corporate raiding and extortion by law enforcement officers," Browder told The Moscow Times.

Lodged on Feb. 21 by a legal representative of Hermitage Capital, the suit was received and stamped by the Constitutional Court on Feb. 24.

Hermitage Capital contends that the Interior Ministry abused its power by permitting a criminal tax investigation when the tax authorities had never made any tax claims against the company. Furthermore, the subsequent raids on the company's offices were a front for the theft of corporate documents later used to misappropriate Hermitage Fund companies and steal $230 million of taxes that had already been paid to the Russian government, the hedge fund alleged.

Browder said this practice is not unique to Hermitage Capital and that the success of the case — and a change in the law — would benefit thousands of businesses across Russia.

Russia denied Browder entry on national security grounds in 2005 and put him on its international wanted list in 2009 on a charge of tax evasion to the tune of more than 500 million rubles ($16.2 million).

Sergei Magnitsky, an attorney used by Hermitage Capital, died in prison after being denied medical treatment following his arrest in relation to the allegations.

Browder said it is likely that the Constitutional Court will reach a judgment by early fall. Hermitage Capital does not necessarily expect a positive outcome, but it is technically possible for a rejection of the suit to be accompanied by a change in the law.

"At the end of the day, it's a question of public opinion," Browder said.

Activity in the Oil and Gas sector (including regulatory)

Russia mulls LNG plant on the Black Seahttp://af.reuters.com/article/energyOilNews/idAFLDE7280ID20110309

Wed Mar 9, 2011 8:45am GMT

MOSCOW, March 9 (Reuters) - Russia may build a liquefied natural gas plant near the Black Sea as part of the South Stream gas pipeline project, Russian news agencies quoted Prime Minister Vladimir Putin as saying on Wednesday.

"Please, review as a possible part of South Stream implementation the construction of a liquefied natural gas plant in the Russian Federation's southern region of the Black Sea," Putin told Energy Minister Sergei Shmatko.

(Reporting by Vladimir Soldatkin; editing by Alfred Kueppers)

GOOGLE TRANSLATIONShmatko: Russia is exploring the possibility of LNG production at the Black Sea http://www.rian.ru/economy/20110309/344039573.html

09/03/2011 11:26 MOSCOW, March 9 - RIA Novosti. Russian Prime Minister Vladimir Putin instructed to assess whether the construction company for the production of LNG in the Black Sea coast, and calculate the cost of transporting the liquefied fuel to Europe in a joint project of Novatek and French Total. "Would you please consider as a possible part of the project" South Stream "Construction of a liquefied natural gas in the Russian Federation in the southern region on the Black Sea and the possibility of future gas liquefaction plant on the Yamal Peninsula in the project, which was recently formulated by companies Novatek and Total. You can connect with opportunities for Gazprom to do it all. It is necessary to calculate the cost of transport from this region into the European market and other world markets - Putin said at a meeting with Energy Minister Sergei Shmatko. "We all know that the construction of liquefaction plants reveals to us more opportunities to diversify its markets. But in parallel we need to talk with our colleagues in Europe and how to work with them to work on projects of construction of facilities to receive liquefied natural gas and the construction of facilities on its liquefaction and transportation system in the direction of the European partners "- said the prime minister.

Lukoil's Alekperov Looking for Partners to Invest in U.S. Shale Gas Fieldshttp://www.bloomberg.com/news/2011-03-09/lukoil-s-alekperov-looking-for-partners-to-invest-in-u-s-shale-gas-fields.html

By Stanley Reed - Mar 9, 2011 6:01 AM GMT+0100

OAO Lukoil, Russia’s largest non- state-controlled oil company, is scouting for oil and natural- gas investments in U.S. shale fields, President Vagit Alekperov said.

“If we are lucky in identifying a good partner, we are ready to be actively involved in the U.S.,” Alekperov said in an interview yesterday at CERAWeek, a Houston conference held by IHS Cambridge Energy Research Associates.

Alekperov joins a line of companies looking at the North American shale industry, as much to get the drilling technology as the oil and gas. Exxon Mobil Corp. (XOM) bought shale gas producer XTO Energy Inc. for $34.8 billion last June. and PetroChina Co. last month made its biggest overseas investment of $5.4 billion for a stake in Encana Corp.’s Canada shale field.

Shale formations consist of dense rock that can be broken apart to release trapped oil and gas. Advances in directional drilling and so-called hydraulic fracturing techniques have increased production from shale fields. Hydraulic fracturing injects water, sand and chemicals into the rock to crack it.

Alekperov said he wants to be able to apply those techniques to oil-rich shale deposits in Russia. Lukoil already is experimenting in the Bazhenov formation in West Siberia, which has “huge resources of liquid hydrocarbons,” he said.

Siberian Shale

Lukoil is hunting for new ways to recover oil as the Russian oil industry is at “a crossroads,” according to Thane Gustafson, a Russia specialist for energy consultants IHS CERA.

Russia raised production to more than 10 million barrels a day from about 6.2 million barrels a day in 1999 by applying techniques such as water flooding and directional drilling to old Soviet-era fields. Now the payoff from such techniques is declining in mature areas such as West Siberia, Alekperov said.

Russia needs an infusion of Western technology and capital to explore for and develop resources in the Arctic and East Siberia, Alekperov said.

After a lull of several years, Russia has seen a burst of transactions this year.

BP Plc (BP/) agreed a $7.8 billion stock swap with state- controlled Rosneft Oil Co. (ROSN), though it’s being challenged by BP’s Russian partners in TNK-BP. On March 3, France’s Total SA agreed to pay $4 billion for 12 percent of Russia’s NovaTek OAO. Both groups aim to develop fields in the Russian arctic.

Lukoil pioneered such transactions, with ConocoPhillips (COP) taking a stake that at one point reached 20 percent. ConocoPhillips has since sold out as part of a larger asset- disposal program. Alekperov said he didn’t need a new partner to replace ConocoPhillips, saying Lukoil obtained the know-how it needed from service companies such as Baker Hughes Inc. (BHI) and Halliburton Co. (HAL)

Joint Ventures

Joint ventures will continue to be used by international oil and gas companies wanting to acquire shale acreage in the U.S., Michael Wang, a research director for IHS Herold, said yesterday at the CERAWeek conference.

Meantime, the deals keep coming. Last month, Australia’s BHP Billiton Ltd. (BHP), the world’s biggest mining company, agreed to buy Chesapeake Energy Corp. (CHK)’s Arkansas shale gas assets for $4.75 billion.

In the same month, Chevron Corp. (CVX) completed its $3.58 billion purchase of Atlas Energy Inc. (ATLS) to add acreage in the gas- rich Marcellus Shale in the U.S. East.

With assistance from Edward Klump in Houston; Editors: Susan Warren, Peter Langan

To contact the reporter on this story: Stanley Reed in Houston at sreed13@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

Norex Sues Blavatnik, Access in New York Over Yugranefthttp://www.bloomberg.com/news/2011-03-07/blavatnik-sued-by-norex-in-new-york-court-over-yugraneft-1-.html

By Karen Freifeld and Bob Van Voris - Mar 8, 2011 5:44 PM GMT+0100

Norex Petroleum Ltd. sued billionaire Leonard Blavatnik and his Access Industries Inc. over allegations they schemed to strip its controlling interest in a Russian oil company valued at an estimated $500 million.

The suit by Norex, filed yesterday in New York state Supreme Court in Manhattan, follows dismissal of a federal racketeering suit based on the same transaction. Thirteen other defendants, including TNK-BP Ltd., a joint venture with BP Plc, were named in yesterday’s suit.

Norex, a Cypriot company with an office in Calgary, claimed that New York-based Access and other defendants illegally took control of ZAO Yugraneft Corp. through illegal means, including corrupting Russian court proceedings and sending militiamen armed with AK-47s to storm Yugraneft’s offices and production field. Norex is seeking damages of at least $500 million.

“As a result of defendants’ acts, Norex lost the value of its controlling shareholding in Yugraneft, estimated at $500 million, and has not been paid tens of millions of dollars in dividends,” according to the suit.

A U.S. appeals court in September upheld a lower court’s dismissal of the federal racketeering case, citing a ruling by the Supreme Court that limits the reach of civil claims for acts occurring outside the country.

Michael Sitrick, a spokesman for Access Industries, said the company hadn’t been served with a copy of the complaint.

‘Dismissed Twice’

“In 2002, Access was named by Norex as a defendant, along with a dozen other putative defendants from around the world, in a federal court lawsuit that was dismissed twice by the federal court in New York,” he said in e-mailed statement. “Access has always maintained that Norex’s claims were meritless. It does not expect that Norex will have any better success in the state court than it did in its unsuccessful eight-year battle in the federal court.”

Other defendants include billionaire Victor Vekselberg, a former university classmate of Blavatnik’s, according to the suit, his company, Renova Inc. and BP Plc.

E-mails sent to AAR -- the group Alfa, Access, Renova that represents the four billionaires who own 50 percent of TNK-BP -- and Renova spokesman Andrei Shtorkh weren’t immediately returned. A call to Shtorkh’s cell phone was answered by a woman who said he was unavailable because today is a holiday.

David Nicholas, a spokesman for London-based BP, and Thomas Kiehn, a spokesman for TNK-BP, declined to comment.

Access is a closely held company controlled by Blavatnik, who was ranked No. 93 on Forbes magazine’s 2010 list of the the world’s billionaires. Vekselberg was ranked No. 113.

The case is Norex Petroleum Ltd. v. Access Industries Inc., 650591/2011, New York state Supreme Court (Manhattan).

To contact the reporters on this story: Karen Freifeld in New York at kfreifeld@bloomberg.net; Bob Van Voris in New York at rvanvoris@bloomberg.net

To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net

Gazprom

Russia May Overturn Gazprom Kovykta Deposit Win, Kommersant Says

http://www.bloomberg.com/news/2011-03-09/east-europe-today-russian-swaps-at-lowest-in-two-years.html

Russia’s government may overturn OAO Gazprom’s acquisition of the Kovykta gas field near China, saying it may have overpaid at a bankruptcy auction, Kommersant reported, citing unidentified officials.

To contact the editor responsible for this story: Douglas Lytle in Prague 1 at dlytle@bloomberg.net

Kovykta sale may be reversed in favor of Rosneftegaz http://www.bne.eu/dispatch_text14392

Alfa BankMarch 9, 2011

Kommersant reports that the Kovykta sale may be reversed. The Ministries for Economic Development and Energy believe Gazprom paid an excessive price (RUB35bn) for the field, which is potentially unjustified. If this process continues, Rosneftegaz, which intended to pay RUB16bn, may get the license.

Kommersant believes one reason behind this turn of events may be that the Russian government does not want TNK-BP shareholders to excessively benefit from the RUB35bn price, as it exceeds the acquisition price paid by TNK-BP. Also, Gazprom's quick move into the auction, made without official BoD and state approval (which is usually required for transactions of this magnitude) may be used as an excuse to nullify the deal.

It is difficult to make conclusions from this situation, as even if Rosneftegaz eventually gets the license, Gazprom may still be the operator, using the field to fuel potential Chinese supplies. At the same time, any decrease in the purchase price is likely to have a mildly negative effect on TNK-BP International (indirectly on the traded TNK-BP Holding). We note that once again government actions do not improve investor sentiment or transparency.

Pavel Sorokin

Gazprom dissatisfied with Armeniahttp://news.am/eng/news/50638.html

March 09, 2011 | 10:10

The Haykakan Zhamanak (Armenian Times) newspaper reports that Gazprom is dissatisfied with the results of its investments in Armenia. The reason is not lower gas consumption. Gazprom is dissatisfied with the prospects for operation of the 5 th power unit of the Hrazdan power station. Gazprom invested hundreds of millions in the 5 th

power unit that is to be put into operation soon. If operates at full capacity, the 5 th power unit is expected to generate almost as much energy as the Armenian nuclear-power plant.

Armenia has energy surplus even now. However, it cannot export considerable amount of energy now. In this case, the 5th power unit has to either remain inoperative or not operate at its full capacity. In both cases Gazprom will never recoup its investments.

10:50Gazprom signs agreement to buy RUSIA Petroleum propertieshttp://www.interfax.com/news.asp

Gazprombank to earn $867 mln from Novatek sale-paperhttp://www.reuters.com/article/2011/03/09/gazprom-novatek-idUSLDE7280AA20110309

3:18am EST

MOSCOW, March 9 (Reuters) - Gazprombank, a former banking unit of Russian energy giant Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz), may earn $867 million from reselling a stake in gas producer Novatek (NOTK.MM: Quote, Profile, Research, Stock Buzz), business daily Vedomosti said, citing a source.

In December, Gazprombank acquired 9.4 percent in Novatek, Russia's top non-state gas producer, from Gazprom and sold an option for the stake to Hibridge Ventures Ltd, a vehicle of Novatek head Leonid Mikhelson and Gennady Timchenko, a board member.

Later Gazprom revealed that it sold the stake for 57.5 billion roubles ($2.03 billion), around $880 million less than the market price at the time, prompting many investors to question Gazprom's corporate expertise and calling the deal a "disgrace".

Vedomosti said on Wednesday, quoting a source in Hibridge, that the option was valued at a 30-day average market price, a period before the deal, which translates into 82 billion roubles.

As of Wednesday, 9.4 percent of Novatek shares were valued at around 102 billion roubles.

Gazprombank declined immediate comment. ($1=28.27 Rouble) (Reporting by Vladimir Soldatkin; Editing by Hans Peters)