Russia 110301

Basic Political Developments St. Stephen with evacuees is Malta-bound

o Sveti Stefan ferry with RF evacuees to arrive in Malta by day end RUSSIA AND U.S. COMMITTED TO SEARCH FOR SOLUTIONS TO

MISSILE DEFENSE ISSUES, SIDES WORKING ON COMMON FRAMEWORK FOR COOPERATION IN THIS AREA – RYABKOV

Russian foreign minister to address Conference on Disarmament in Geneva - On the same day, the Russian foreign minister will meet with Swiss President Michelin Calmy Rey, who is also the country’s foreign minister, to discuss security issues. But the sides will evidently centre on the development of the bilateral political dialogue as well as trade and economic cooperation.

Lavrov, Clinton discuss Libya, ABM cooperation, Russia’s accession to WTO Japan will not punish Russian flag desecrators (LEAD) Russia 'very critical' of N. Korea's nuclear program: official Iran, Russia FMs discuss Iranian nuclear issue

o Russia urges rationale on Iran N-case Russian, Azeri, Armenian presidents to discuss Karabakh in Sochi on March 5

o Russian, Armenian, Azerbaijani leaders to discuss Karabakh settlement on Mar 5

o Russia sees Azerbaijan's superiority over Armenia, tries to protect its ward - News.Az interviews MP Mubariz Gurbanly.

Russian official, US ambassador discuss Karabakh conflict - Deputy Foreign Minister of Russia Grigori Karasin and US ambassador to Russia John Beyrle discussed the Nagorno Karabakh conflict, Russian FM’s official website reports.

Kyrgyz Parliament Speaker goes to first working trip to Russia - Akhmatbek Keldibekov will meet with his counterpart - State Duma Chairman Boris Gryzlov and other officials.

Georgian patriarch wants dialogue with Russia - Catholicos-Patriarch of All-Georgia, Archbishop of Mtskheta-Tbilisi and Abkhazia and Pitsunda Metropolitan, His Holiness and Beatitude Ilia II called upon the leaders of Georgia and Russia to engage in a dialogue.

Russian senator blames Georgia for deadly airport blast Belarus prosecutors to bring new charges against Russians Tatarstan president to visit Azerbaijan - The president of the Russian Republic of

Tatarstan, Rustam Minikhanov, will pay a one-day working visit to Azerbaijan on 2 March.

Lawyer to request better prison conditions for alleged arms dealer Bout o Viktor Bout has new team of lawyers

Russian doctor kidnapped in Yemeno Russian doctor kidnapped in Yemen - The tribesmen kidnapped the doctor

in retaliation for an air strike by the Yemeni air force on a suspected Al-Qaeda training camp two years ago, a spokesman for the group said.

Travel to Egypt against the law - Beginning on March 1st,  tour operators intending to send Russian tourists to Egypt will be running counter to the law and the recommendations of state structures.

Macedonia without a visa for Russianso Russian tourists to visit Macedonia without visas from March 1 to Oct. 31

Emirates, Russia sign modernization deal - The contract for modernization of 135 of the amphibious infantry fighting vehicles in service with the Emirates' military is worth $74 million.

Geo-IK-2 satellite out of service after three weeks in orbit - source POLICE PERSONNEL TO UNDERGO EARLY ATTESTATION BEFORE

JUNE 1 2011 – MEDVEDEVo NUMBER OF INTERIOR AFFAIRS AGENCIES STAFF WILL REACH

1.1 MILLION ON JANUARY 1, 2012 – MEDVEDEVo RUSSIAN PRESIDENT SIGNS SEVEN DECREES REGULATING

POLICE WORKo Law on police becomes effective in Russiao Russian police now must explain rights to detaineeso Russian rights activists see no big difference between police, militia

New Term for Kadyrov Militants the shot tourists in KBD belonged to the Dzhappuev gang Militant from Gakayev gang arrested in Chechnya  Accomplice of Chechen militants detained in Moscow Russia marks remembrance day of paratroopers who died in Chechnya Turkish businessmen are ready to organize textile production in Dagestan Robbers take almost $7 mln from North Caucasus bank 190 million rubles stolen in Russian bank robbery Moscow may develop new tourist information system Topol-M missile carriers curb Moscow traffic - The warheads were en route to a

military base to rehearse for the 2011 Moscow Victory Day Parade in May. Moscow’s Vnukovo bans operation of ‘noisy’ aircraft in night time - Moscow’s

Vnukovo airport has banned operation of aircraft of the Tu-134, Tu-154B, Tu-154V, and Ilyushin-86 types in the night time from April 15, the airport’s press service said on Monday.

Metropolitan Jonah rejected rumors of his forced leave RIA Russian Press at a Glance, Tuesday, March 1, 2011 Dismissed Radio Journalist Likens Governor to Hitler - A talk show host who lost

his job on state radio after likening St. Petersburg Governor Valentina Matviyenko to Nazi leader Adolf Hitler stood by his on-air comments Monday, telling The Moscow Times that a groundswell of support for him showed the public was "fed up" with the authorities.

Cartoon Politics - Even the Russian President Seems Unsatisfied With the Sochi Mascots as He Suggests Foul Play

A Recipe for Success in the North Caucasus - By Nikolai Petrov The Plight of Kabardino-Balkaria - The Regional and Federal Authorities Have

No Comprehensive Strategy to Deal With Escalating Violence in Kabardino-Balkaria

Why Russia Should Be Worried About a Coup - By Chrystia Freeland Vladimir Putin's Billionaire Boys Judo Club - By Simon Shuster / St. Petersburg

National Economic Trends Russia Feb manufacturing PMI at 3-year high –poll Russian Manufacturing Activity 'At Three-Year High' Russia’s Reserve Fund to reach one and a half trillion roubles in 2011 Russia to officially start accumulating revenue into Reserve Fund Russian Grain Harvest May Be Up to 86 Million Tons, Union Says Prices on socially important foods growing in Russian regions TABLE-Reuters February Russian economy, rates, rouble poll

Business, Energy or Environmental regulations or discussions New Tax Hampers Small Businesses Ministry of Transport plans to increase penalties for flight delays Russian regulator gives Antonov/UAC merger the green light EuroSibEnergo, China Yangtze Power establishes joint venture Sberbank starts over-the-counter securities operations VTB reaches agreement to buy out major BoM minorities, but may face a court

case seeking to invalidate its acquisition process Uralkali snaps up 20% of Silvinit Polymetal secures credit line from VTB Rusal to contest ruling on Norilsk Russia's Sollers, Mitsui to launch JV in Vladivostok - Sollers Toyota: To Build Land Cruiser Prado In Russia General Motors to increase car production in Russia

Activity in the Oil and Gas sector (including regulatory) Gazprom wins bidding for giant Kovykta gas field Price Pressure Expected to Fuel Oil Exports Russia may extend preferential oil export duties to three more deposits Eurasia to Buy Slavneft Assets for $150 Million in Expansion (1) Surgutneftegaz Sells East Siberian Crude Oil for April, May Lukoil Looks To Romania And Ukraine For Black Sea Entry

Gazprom Gazprom pays $773 mln for Kovykta gas field-Ifax UPDATE 1-Gazprom wins bidding for giant Kovykta gas field Venezuela Assigns Gazprom New Gas Exploration Areas Gazprom Offers Deposit in Russian North to PetroVietnam Venture Experts divided over Gazprom’s efficiency - Decreasing natural gas prices since

mid-2008 have put the debate about Gazprom’s alleged market inefficiency, corruption and mismanagement under the spotlight. Falling revenue for the Russian gas-exporting giant has reopened debates about inefficiency and wastefulness, while other specialists point to ‘politicized accusations’ and a lack of concrete evidence against the company

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Full Text Articles

Basic Political Developments

St. Stephen with evacuees is Malta-boundhttp://english.ruvr.ru/2011/03/01/46748211.html

Mar 1, 2011 11:11 Moscow TimeThe St. Stephen ferry with Russian evacuees from Libya on board is Malta-bound. According to the Russian Emergencies Ministry, there are 397 evacuees on board the ferry, including 126 Russian nationals. They were involved in the construction of a railway between the Libyan cities of Sirt and Benghazi. The ferry set out from the Libyan port of Ras Lanuf on Monday. The Emergencies Ministry will use two aircraft to fly the evacuees from Malta to Moscow. More than 340 Russians were evacuated from Libya earlier.

Sveti Stefan ferry with RF evacuees to arrive in Malta by day end

http://www.itar-tass.com/eng/level2.html?NewsID=15999873&PageNum=0

01.03.2011, 12.00

MOSCOW, March 1 (Itar-Tass) - The Sveti Stefan ferryboat with Russians evacuated from Libya will arrive in Malta on Tuesday evening, the information department of the Russian Emergency Situations Ministry told Itar-Tass.

“The Sveti Stefan II ferry, carrying 397 people, including 126 citizens of Russia, including two children, in the evening of February 28 left Ras Lanuf port. The ferry is scheduled to arrive at the port of Valletta by the end of the day March 1,” a ministry official said.

Two planes of the Russian Emergency Situations Ministry – Ilyushin Il-76 and Il-62 are scheduled to take off on Tuesday afternoon to fly to the Malta International Airport Luqa for the evacuation of citizens of Russia and the CIS.

The Russian Emergency Situations Ministry has been evacuating Russian citizens from Libya swept by disorders since February 22. “A total of 510 people, including 341 citizens of Russia, have been evacuated by its aircraft,” the ministry recalled.

03/01 09:33   RUSSIA AND U.S. COMMITTED TO SEARCH FOR SOLUTIONS TO MISSILE DEFENSE ISSUES, SIDES WORKING ON COMMON FRAMEWORK FOR COOPERATION IN THIS AREA – RYABKOVhttp://www.interfax.com/newsinf.asp?id=225495

Russian foreign minister to address Conference on Disarmament in Geneva

http://www.itar-tass.com/eng/level2.html?NewsID=15999700&PageNum=0

01.03.2011, 00.35

GENEVA, March 1 (Itar-Tass) -- Russian Foreign Minister Sergei Lavrov, who is on a three-day visit to Switzerland, will address the Conference on Disarmament Conference on Tuesday. His address will be the third over the past four years. “This is proof of high significance Russia attaches to the forum,” the Russian Foreign Ministry stressed.

It is expected that the topic of ending the arms race in space will be among priorities in the minister’s speech. Back in February 2008, Lavrov submitted, on behalf of Russia and China, a draft treaty on banning deployment of weapons in space for the consideration of the Conference. The document was widely discussed over the past three years. Proposals were made on various aspects of a possible agreement.

“We believe that the draft treaty and results of past discussions are good grounds for launching negotiating process in future,” the Russian Foreign Ministry noted. “The earliest start of substantive work on space issues will promote predictability of a strategic situation both in space and on the earth.”

Moscow regards the Conference as an important tool for searching a solution to such tasks, but at the same time it calls attention that there are some problems in the forum’s operation. The Conference has not been conducting negotiating activities for the second decade, since member states cannot come to agreement on the main document determining parameters of the negotiating process.

The Conference adopts all decisions by consensus, but some participants are full ready for talks, for instance, on the topic of banning the production of fissionable materials for arms aims, while others regard a possible treaty as counterproductive to national security.

Moscow does not put into doubt “the consensus principle” and is guided by the need for respecting priorities of national security of each state and for continuing patiently a search for mutually acceptable compromises.

“We are committed to do our best to find at the Conference mutually acceptable solutions aimed at safeguarding peace and international security,” the Foreign Ministry said.

On the same day, the Russian foreign minister will meet with Swiss President Michelin Calmy Rey, who is also the country’s foreign minister, to discuss security issues. But the sides will evidently centre on the development of the bilateral political dialogue as well as trade and economic cooperation.

The Conference on Disarmament (CD), confirmed in 1979 as the single multilateral disarmament negotiating forum of the international community, was a result of the first Special Session on Disarmament of the United Nations General Assembly held in 1978. It succeeded other Geneva-based negotiating fora, such as the Conference of the Committee on Disarmament.

Lavrov, Clinton discuss Libya, ABM cooperation, Russia’s accession to WTO

http://www.itar-tass.com/eng/level2.html?NewsID=15998383

28.02.2011, 22.03

MOSCOW, February 28 (Itar-Tass) -- Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State Hillary Clinton met in Geneva on Monday, February 28, to discuss the situation in the Middle East, including Libya, prospects for cooperation on missile defence, and Russia’ s accession to the World Trade Organisation (WTO).

“A great deal of attention was paid to the situation in North Africa and the Middle East, as well as some other regional issues, particularly the situation in Afghanistan,” the Foreign Ministry said.

When discussing cooperation on missile defence, Lavrov stressed that “the drafting of binding guarantees that the relevant potentials of the U.S. and NATO will not be directed against Russia’s strategic interests would serve as a prerequisite for practical interaction on missile defence.”

“The ministers discussed a number of pressing issues on the bilateral agenda, including a schedule of upcoming political contacts at the top and high levels. In this context, they had an interested exchange of opinions on Russia’s accession to the WTO, the preparation of documents in the field of transport security, international adoption and the strengthening of the legal framework for exhibition exchanges,” the ministry said.

Earlier, Foreign Ministry spokesman Alexander Lukashevich, when commenting on Lavrov’s upcoming trip, said, “While in Geneva, Lavrov will hold talks at the Swiss Federal Department of Foreign Affairs.”

Lavrov will also give a speech at the 16th session of the U.N. Human Rights Council on February 28. “Special attention will be riveted to the need for modernisation of certain

countries and the whole system of international relations on the basis of traditional values such as dignity, freedom, individual responsibility, fairness and equality in order to achieve a stable secure world order,” Lukashevich said.

“The minister will stress the U.N. Human Rights Council's significance as an institution that plays an ever growing role,” the spokesman said.

On February 25, the U.N. Human Rights Council advised the U.N. General Assembly to suspend Libya’s membership in the U.N. Human Rights Council due to gross and systematic human rights violations by the Libyan authorities.

The U.S. administration supported the move, and the State Department said Clinton was determined to discuss the situation in Libya with her colleagues from other countries.

Japan will not punish Russian flag desecratorshttp://english.ruvr.ru/2011/03/01/46740572.html

Mar 1, 2011 10:46 Moscow Time

The RIA Novosti news agency quotes a source at the Russian embassy in Tokyo as saying that Japan will not prosecute the radicals who desecrated the Russian flag.

According to the source, Russia has sent a note to Japan urging prosecution of those who desecrated the Russian flag on the 7th of last month in keeping with the Criminal Code article on the destruction of the state emblem of a foreign state.

But Japan says it can see no crime in what the far rightists did. Japan lays claims to the Iturup, Kunashir, Shikotan and Habomai Islands, which formed part of the USSR as a result of the Second World War. Russia is be the legal successor to the Soviet Union.

Moscow believes that Russian sovereignty over the islands is set down in relevant international treaties and is therefore unquestionable.   

(LEAD) Russia 'very critical' of N. Korea's nuclear program: officialhttp://english.yonhapnews.co.kr/national/2011/02/28/39/0301000000AEN20110228010300315F.HTML

2011/02/28 22:12 KSTSEOUL, Feb. 28 (Yonhap) -- Russia is "very critical" of North Korea's uranium enrichment program (UEP), but any concrete steps toward dealing with it will have to be weighed against the country's relations with other key nations, Seoul's ambassador to

Moscow said Monday.

   "Russia is very critical of the nuclear program. This is an unmistakable fact," Amb. Lee Youn-ho told reporters in Seoul. "Regarding the UEP issue, Russia will want to consider its relations not only with North Korea, but also with China, the United States and South Korea before deciding on a direction that best suits its national interests," he said, stressing Russia's consideration of China's stance on the issue.

   South Korea has been pushing for the issue to be discussed at the U.N. Security Council (UNSC) ever since the North revealed its UEP last November, claiming to be enriching uranium only to generate power.

   Seoul and Washington say it is a clear violation of previous UNSC resolutions that ban the North from running such nuclear facilities. They fear that the uranium, if highly enriched, will be used to build atomic bombs and add to the North's existing plutonium-based program.

   Backing from the UNSC's five veto-wielding members is crucial for any discussion of the subject at the global body, and Russia has said it is not opposed to the idea. China, meanwhile, has been openly reluctant, apparently fearing the negative consequences it could have on the already unstable Pyongyang regime.

   "Russia retains the pride of a world power and its position is that it wants to make constructive contributions toward solving the issue within a multilateral framework. That is why it places a large importance on the U.N.," the ambassador said.

   Despite expressing concerns about the facility, Beijing has insisted that the issue be discussed at six-party denuclearization talks involving the two Koreas, China, Japan, Russia, and the U.S.

   Seoul has retorted that no progress on the North's denuclearization will be possible at the talks unless the U.N. first defines the illegal nature of Pyongyang's uranium program and preempts the North from claiming its use for peaceful purposes.

   South Korea has also urged Pyongyang to take concrete steps demonstrating its denuclearization commitments, saying that only then can the nuclear talks reopen. Seoul has proposed bilateral nuclear talks with the communist nation to discuss the issue, but the North has not responded to the offer.

   On Monday, a senior South Korean official told reporters that the demands do not necessarily mean that Pyongyang should express its denuclearization commitment only in talks with the South.

   "The reason we want to hold denuclearization talks with the North is because we want to rectify the North's behavioral pattern of trying to have denuclearization talks only with the U.S.," the official said. "That does not necessarily mean" that the North should

express its denuclearization commitment only in inter-Korean talks, he said.

   The official also stressed that South Korea is always open to holding talks with the North regarding last year's two deadly attacks and Pyongyang's denuclearization.

   North Korea has refused to discuss the nuclear standoff with the South and demanded direct talks with the U.S., claiming it developed nuclear weapons to counter what it claims are "U.S. nuclear threats" and therefore the issue should be discussed with Washington.

   hague@yna.co.kr(END)

Iran, Russia FMs discuss Iranian nuclear issuehttp://en.trend.az/regions/iran/1837583.html

28.02.2011 21:39 Foreign Minister Ali-Akbar Salehi says the main problem with Iran’s nuclear activities is that the other party is ambitious, IRNA news agency reported.

Speaking to his Russian counterpart Sergei Lavrov, Salehi said, “We should focus on common points and further expand our cooperation.”

He said Iran’s nuclear stance has been correct since the beginning, based on engagement and cooperation as the IAEA has repeatedly confirmed peaceful nature of the country’s nuclear activities.

He said good will and determination of the other party are the requisite for dialogue and engagement.

Lavrov for his part said, “We have always been calling for engagement with the Islamic Republic of Iran, believing that dialogue is the best way to settle problems. We have repeatedly announced that we do not accept unilateral sanctions, calling for adoption of a series of confidence-building measures by the two parties so as to reach a strategy to satisfy both parties. We are strongly against politicization of Iran’s nuclear issue, urging investigation of issues through legal and technical channels.”

Russia urges rationale on Iran N-casehttp://www.presstv.ir/detail/167602.html

Tue Mar 1, 2011 8:1AM

Russian Foreign Minister Sergei Lavrov has expressed his country's opposition to unilateral sanctions against Iran over its nuclear program, urging logic to deal with the case.

“We are strongly against politicization of Iran's nuclear case and call for debating the issue through legal and technical channels,” Mehr news agency quoted Lavrov as speaking in a meeting with Iranian Foreign Minister Ali Akbar Salehi in the Swiss city of Geneva on Monday.

“We have repeatedly announced that we do not accept unilateral sanctions and call on both sides to take confidence-building measures which will satisfy the sides through a gradual solution,” he added.

Lavrov noted that his country has always supported interaction with Iran and emphasized that Moscow believes that negotiations would be “the best way to resolve issues.”

The Iranian minister, for his part, said extremism of the other side is the root cause of problems with regard to Iran's nuclear case, adding, “The Islamic Republic has always adopted rightful stance based on interaction and cooperation.”

“The International Atomic Energy Agency has also repeatedly confirmed peaceful nature of Iran's nuclear activities,” he pointed out.

Lavrov and Salehi also exchanged views on ways to strengthen Tehran-Moscow cooperation on regional and international issues.

Meanwhile, Austrian Foreign Minister Michael Spindelegger, in a meeting with Salehi, said his country strongly believes that negotiations and not confrontation would be the best solution to Iran's nuclear issue.

“We call for constant contact and consultation with the Islamic Republic of Iran,” Spindelegger noted.

He also asked for the expansion of relations with Iran on various bilateral and multilateral issues.

Salehi said deep-rooted relations between Tehran and Vienna provide a strong base for promotion of bilateral cooperation in the future.

He added that Iran and Austria enjoy common ground for cooperation in global issues, including restoring peace and security.

The top Iranian diplomat also held separate talks with his German counterpart Guido Westerwelle on the same day. During the meeting, the two ministers discussed the latest developments in Tehran-Berlin ties.

Salehi and Westerwelle praised growing relations between the two countries and called for the continuation of joint consultations.

The Iranian foreign minister arrived in Geneva early Monday at the head of a high-ranking delegation.

He delivered a speech at the 16th session of the UN Human Rights Council on Monday and is scheduled to address a plenary meeting of the Conference on Disarmament.

He also held talks with EU's foreign policy chief Catherine Ashton on the same day.

SF/HRF

March 01, 2011 09:26

Russian, Azeri, Armenian presidents to discuss Karabakh in Sochi on March 5http://www.interfax.com/newsinf.asp?id=225495

MOSCOW. March 1 (Interfax) - Talks between the Russian, Azeri and Armenian presidents on ways to settle the Nagorno-Karabakh conflict will be held in Sochi on March 5, the Kremlin press service has reported.

Azeri and Armenian presidents Ilham Aliyev and Serzh Sargsyan will arrive in Sochi on Russian President Dmitry Medvedev's invitation, the Kremlin said.

sd

Russian, Armenian, Azerbaijani leaders to discuss Karabakh settlement on Mar 5http://en.rian.ru/world/20110301/162805823.html

09:55 01/03/2011

The Russian, Armenian and Azerbaijani presidents will meet in the Russian southern resort city of Sochi on March 5 to discuss Nagorny Karabakh settlement issues, the Kremlin said in a statement on Tuesday.

Russian President Dmitry Medvedev has invited his Azerbaijani and Armenian counterparts, Ilham Aliyev and Serzh Sargsyan to Sochi to discuss the settlement issues of the long-pending territorial dispute, the Kremlin said.

On January 18, during a visit to Cyprus, Sargsyan said that Azerbaijan does not have legal, political, or moral grounds for claiming the territory of Nagorny Karabakh, a predominantly ethnic Armenian region.

The conflict between Armenia and Azerbaijan over Nagorny Karabakh first sparked in late 1980s, when the region claimed independence from Azerbaijan to join Armenia. More than 30,000 people are estimated to have died on both sides between 1988 and 1994. Nagorny Karabakh has remained in Armenian control since then.

Russia, along with France and the United States, is a member of the OSCE Minsk Group, which is mediating efforts to resolve the conflict.

 

MOSCOW, March 1 (RIA Novosti)

Russia sees Azerbaijan's superiority over Armenia, tries to protect its wardhttp://www.news.az/articles/politics/32159

Tue 01 March 2011 06:37 GMT | 7:37 Local Time

News.Az interviews MP Mubariz Gurbanly.

How do you assess Russia's next initiative to organize the 5 March meeting of the presidents of Azerbaijan and Armenia with participation of the Russian president in Sochi?

In general, all negotiations around the resolution of the Karabakh conflict are a positive step, since the presence of negotiations is better than their absence.

Moscow's initiative to hold a trilateral meeting of the presidents of Russia, Azerbaijan and Armenia for the purpose of discussing ways to settle Karabakh conflict is of great importance since we know that Russia's capacity to influence Armenia is much higher than of other Minsk Group co-chairs. I believe these negotiations can accelerate processes on the resolution of the Karabakh conflict.

What does Azerbaijan expect from this meeting?

I believe that anyway all negotiations promote Azerbaijan's definite achievements.  But there are moments which do not depend on us, especially those connected with the absence of sufficient pressure on Armenia.

If enough pressure is made on Armenia, it would be possible to gain results. How effective and expedient is the participation of only Russia of the three co-chairing states in the organization of such meetings? Does it not mean that such meetings held by the Russian side distance other co-chairing states from the resolution of the Karabakh conflict?

If we take a look into history and process of negotiations, we can see periods of activeness of a Minsk Group  co-chair. For example, the United States once initiated talks in Key West on Karabakh settlement, while France initiated talks in Rambuya.

Russia also proposed such initiatives many times. Some of such initiatives are not caused by the lack of information about the actions of other Minsk Group co-chairs, since they inform each other about the process of negotiations. I believe the initiatives and consistent position of Russia can bring more results than the initiatives of other Minsk Group co-chairing states. All the three co-chairing countries must join efforts to put pressure on Armenia.

Do you share the opinion of a number of international observers that by making definite initiatives to settle the Karabakh conflict, Russia is thus trying to avert new war between Azerbaijan and Armenia? And is Russia sincere in its intentions? Anyway, the search of sincerity in diplomacy is like a famous saying of Confucius about looking for a black cat in a dark room. Anyway, the attempts to avert war come not only from Russia but also from other Minsk Group co-chairs. No one wants a new war in the region. Azerbaijani side also does not show willingness to start war. We regard war as a last option to settle the Karabakh conflict. Azerbaijan wants to settle the problem peacefully.

Certainly, Russia sees Azerbaijan's great superiority over Armenia and is trying to defend the country it backs. But regardless of whether Russia tries or not tries to avert war, Azerbaijan will  be obliged to use the last option to settle the conflict in the absence of a result in the negotiation process.

Lala B.News.Az

Russian official, US ambassador discuss Karabakh conflicthttp://news.az/articles/politics/32157

Tue 01 March 2011 05:07 GMT | 6:07 Local Time

The sides discussed cooperation issues on international anti-terrorism including Russia-US cooperation in the Caucasus region.

Deputy Foreign Minister of Russia Grigori Karasin and US ambassador to Russia John Beyrle discussed the Nagorno Karabakh conflict, Russian FM’s official website reports.

The sides discussed cooperation issues on international anti-terrorism including Russia-US cooperation in the Caucasus region.

They also discussed the situation in the South Caucasus, Nagorno Karabakh and Trans-Dnestr problems.

Kyrgyz Parliament Speaker goes to first working trip to Russia 01/03-2011 06:51, Bishkek – 24.kg news agency

Today, Speaker of Kyrgyz Parliament went to first working trip to Russia.

As members of parliamentary staff reported to 24.kg news agency, within his working voyage to Moscow, Akhmatbek Keldibekov will meet with his counterpart - State Duma Chairman Boris Gryzlov and other officials.

It is expected that during the negotiations with the Head of State Duma of the Russian Federation, the sides would discuss bilateral cooperation and inter-parliamentary relations.

It is first foreign visit of Akhmatbek Keldibekov as speaker of Parliament of fifth calling.

URL: http://eng.24.kg/cis/2011/03/01/16549.html

Georgian patriarch wants dialogue with Russiahttp://en.trend.az/news/politics/1837671.html

01.03.2011 12:13 

Georgia, Tbilisi, March 1 / Trend N.Kirtzkhalia /

Catholicos-Patriarch of All-Georgia, Archbishop of Mtskheta-Tbilisi and Abkhazia and Pitsunda Metropolitan, His Holiness and Beatitude Ilia II called upon the leaders of Georgia and Russia to engage in a dialogue.

"I appeal to the leaders of both countries and call on them to show wisdom and courage in order to initiate a dialogue at various levels to discuss and resolve the backlog of complex issues," Ilia II said in a recent statement.

The statement stressed that a difficult situation is presently being observed in the Caucasus due to unresolved conflicts and problems, which are compounded by the virtual absence of dialogue between Russia and Georgia at the state level. This contributes to suspicion and mistrust among the parties with respect to each other and prevent problems from being addressed.

Catholicos-Patriarch believes that some measures have been taken in terms of allowing citizens to move between the two countries, but further steps must be made.

"We must draw lessons from the past and look to the future based on the interests of our two peoples and countries. We should remember the wise words: 'Before we see the rising sun, you see your neighbor.' Continued hostility between neighbors is unacceptable!” Ilia II said.

Earlier, a Georgian patriarchate delegation left for Moscow. It includes the Metropolitan Gerasimos of Zugdidi and Tsaishsky (Sharashenidze), Archimandrite David (Dzhincharauli), Archpriest George (Kharazishvili), ex-Georgian ambassador to Russia Zurab Abashidze.

Members of the delegation will hold talks with the Russian Patriarchate Church and meet with Moscow and All-Russia Patriarch Kirill. The delegation will stay in Moscow until the end of the week.

Russian senator blames Georgia for deadly airport blasthttp://en.rian.ru/russia/20110301/162802870.html

Georgia could be behind January's deadly terrorist attack on the Domodedovo airport in Moscow, said Alexander Torshin, a senator and a member of the National Antiterrorism Committee.

"I'm convinced that the attack was organized from abroad. I understand that my words may cause anger and misunderstanding, but, in my opinion, it was Georgia and its regime," he told the government daily Rossiiskaya Gazeta.

He also said that those who perpetrated the attack in Domodedovo and last year's blast at a market in the North Ossetian capital of Vladikavkaz were not suicide bombers.

"I'm convinced they were blown up from a distance," he said.

The powerful blast that ripped through the international arrivals hall of Russia's largest airport on January 24 killed 36 people and injured over 100.

DNA tests revealed that Magomed Yevloyev, a 20-year-old resident of the impoverished southern Russian region of Ingushetia, was the attacker. His brother and sister were arrested after detectives found traces of explosives on their hands.

 

MOSCOW, March 1 (RIA Novosti)

Belarus prosecutors to bring new charges against Russians

http://www.itar-tass.com/eng/level2.html?NewsID=15999362&PageNum=0

01.03.2011, 09.29

MINSK, March 1 (Itar-Tass) - Hearings in the criminal case of two Russian citizens - Artyom Breus, 28, and Ivan Gaponov, 22, will be continued on Tuesday at the Moskovsky District Court of the Belarusian capital after a week’s recess. The recess was announced in connection with the public prosecutor’s request on bringing new charges against the Russians. The prosecution official said that this need arose after questioning of witnesses and study of written and video materials.

Breus and Gaponov were detained in Minsk on December 19 last year - the day of the presidential election. Then, thousands of supporters of opposition candidates for president of Belarus met in the city centre to protest against, they claimed, falsified election results and demand a new vote. During this unauthorised action a group of people tried to break into the Government House, during which windows and doors were broken in the building. The authorities used police SWAT units and interior troops against the protesters. Dozens of people were beaten. Nearly 700 people were detained, including more than 10 Russian citizens, including Breus and Gaponov.

Most of the detainees were sentenced to administrative arrest. Under pressure from Russian diplomats all Russian citizens were released on December 29. However, on the same day Breus and Gaponov were re-arrested and placed in a detention centre within a criminal case on mass disorders. According to the country’s legislation, the punishment for taking part in them is imprisonment for a term of 3 to 8 years.

The prosecution side failed to present tangible evidence of guilt of Gaponov and Breus both during the preliminary investigation and during the launched trial. The Russians have pleaded not guilty. They said that they accidentally found themselves at the protest action, they did not offer any kind of resistance, the more so armed, as the investigation claimed, to policemen. In turn, two police officers who appeared in court as witnesses were confused in their testimony, which contradicted their written reports previously written.

The arrest of Breus and Gaponov, their totally groundless detention in custody has caused quite a severe reaction from the Russian side. Thus, Russian Foreign Minister Sergei Lavrov called their holding under arrest in Belarus inadmissible and the charges brought against them - not serious.

Tatarstan president to visit Azerbaijanhttp://www.news.az/articles/politics/32160

Tue 01 March 2011 05:51 GMT | 6:51 Local Time

The president of the Russian Republic of Tatarstan, Rustam Minikhanov, will pay a one-day working visit to Azerbaijan on 2 March.

He is visiting at the invitation of Azerbaijani President Ilham Aliyev.

"No bilateral documents are to be signed during the visit," according to an informed source.

Rustam Minikhanov is expected to be received by President Ilham Aliyev, Prime Minister Artur Rasizade and Milli Majlis Chairman Ogtay Asadov. He will also meet Emergencies Minister Kamaladdin Heydarov, visit the Heydar Aliyev Foundation and meet representatives of the Tatar community of Azerbaijan.

The Republic of Tatarstan, located on the Volga River, is part of the Russian Federation. The ethnic Tatar people are Turkic, as are ethnic Azerbaijanis.

Fineko/abc.az

Lawyer to request better prison conditions for alleged arms dealer Bouthttp://en.rian.ru/world/20110301/162804538.html

A lawyer of alleged Russian arms dealer Viktor Bout asked the court on Tuesday to improve incarceration conditions of his defendant.

Hearings into Bout's case are scheduled for March 3. The 44-year-old Russian, dubbed "The Merchant of Death," could face anything from 25 years to life in prison if found guilty.

Bout is being held in a high security bloc of a New York prison while he awaits trial on charges including conspiring to supply arms to a Colombian terrorist group and kill U.S. nationals. He denies all the charges against him.

Attorney Albert Dayan says strict prison conditions, under which Bout is allowed to communicate only through a glass panel, make it impossible to discuss the case properly and violate Bout's right for defense.

Bout's wife Alla earlier complained that her husband, a vegetarian, did not get proper food and his menu did not comply with the prescribed medicine that he has been taking for the last two months.

The former Soviet military officer was arrested in Thailand in March 2008 during a sting operation led by U.S. agents. He was extradited to the United States in November last year after spending more than two and half years behind bars.

NEW YORK, March 1 (RIA Novosti)

Viktor Bout has new team of lawyers

http://www.itar-tass.com/eng/level2.html?NewsID=15999363&PageNum=0

01.03.2011, 08.42

NEW YORK, March 1 (Itar-Tass) - Russian businessman and suspected arms dealer Viktor Bout has a new team of lawyers to defend him from Monday, his wife Alla Bout told Itar-Tass after another meeting with her husband.

According to her, on February 28, Bout notified the court by an agreement he signed that his official lawyers in the United States court are Albert Dayan and Ken Kaplan. Earlier, the interests of the Russian citizen were represented by appointed by the federal court lawyer Sabrina Shroff, who worked in a team with two other defenders.

Since the new team will choose their defence strategy, it will need time to study all the case materials. In this connection the new lawyers filed a motion in court to adjust accordingly the already approved timeframe of the hearings. The hearing, which the court appointed for Thursday, March 3 will be devoted to this issue. It will be held at 11:00 a.m. at the federal court of the Southern District in Manhattan.

The beginning of the trial of the 43-year old businessman is scheduled for September 12, 2011. Four charges will be brought against Bout: “conspiracy to kill US nationals,” “conspiracy to kill officers in government service,” “conspiracy to purchase and sell anti-aircraft missiles” and “criminal conspiracy to supply weapons to terrorist groups.”

The Russian has pleaded not guilty on any of the charges brought against him. If convicted, Bout faces a prison term from 25 years to life sentence.

In cooperation with American authorities, Royal Thai Police arrested Bout in Bangkok, Thailand, in 2008. The United States demanded his extradition, which was eventually mandated by the Thai High Court in August 2010. Before his extradition to the United States in November 2010, he expressed confidence that his trial would eventually lead to his acquittal.

After months of delay, the Criminal Court in Bangkok began an extradition hearing for Bout on 22 September 2008. In February 2009, members of the United States Congress signed a letter to Attorney General Holder and Secretary of State (i.e. Foreign Secretary)

Clinton, expressing their wish that the Bout extradition “remain a top priority.” On 11 August 2009, the Criminal Court ruled in his favour, denying the United States’ request for extradition and citing the political, not criminal, nature of the case. The United States appealed that judgement, and on 20 August 2010 a higher Thai court ruled that Bout could, in fact, be extradited to the United States. On 16 November 2010 at 1:30 p.m., Bout was extradited to the United States; the Russian government called the extradition illegal.

Russia did not want Bout to face trial and called the Thai court decision in 2010 politically motivated. RF Foreign Ministry took steps to prevent his extradition to the US; Russia’s Foreign Minister Sergei Lavrov suggested that Bout was innocent. On 18 November 2010, shortly after Bout’ s extradition to the United States, Russian President Medvedev’s aide Sergei Prikhodko claimed that Russia had “nothing to hide” in Bout’s criminal case stating, “it is in our interest that the investigation... be brought to completion, and [Bout] should answer all the questions the American justice system has.

Bout is currently incarcerated in the Metropolitan Correctional Centre, New York City.

Russian doctor kidnapped in Yemenhttp://english.ruvr.ru/2011/03/01/46722243.html

Mar 1, 2011 03:53 Moscow Time

A doctor from Russia has been kidnapped in southern Yemen. The medic, whose name is so far unknown, was kidnapped in the province of Shabwa, according to representatives of a local tribe.

They kidnapped the Russian national was carried out in protest against an air attack, arranged by Yemeni authorities in 2009.

In Yemen the kidnapping of foreigners occurs frequently.

Typically, the local tribes commit such crimes in order to compel the authorities to release their relatives from prison or to force the government to meet their economic demands.

Russian doctor kidnapped in Yemenhttp://www.google.com/hostednews/afp/article/ALeqM5g-b-sQ0DW7BwB6-l2zkWeBv0RpTQ?docId=CNG.0c072a7a730504b85eecf4e0f0fdd530.a11

(AFP) – 10 hours ago

ADEN, Yemen — Tribesmen in southern Yemen kidnapped a Russian doctor on Monday, a hospital official said.

"A Russian doctor... was abducted by gunmen and taken to the town of Al-Mahfad" in the nearby province of Abyan, the manager of the hospital in the town of Ataq in Shabwa, Mohammed Salman, told AFP.

Salman said that the doctor, who works at Ataq hospital, contacted him by telephone and told him that his abductors have "demands."

The tribesmen kidnapped the doctor in retaliation for an air strike by the Yemeni air force on a suspected Al-Qaeda training camp two years ago, a spokesman for the group said.

They were holding the doctor "to force the authorities to hold accountable those who carried out the raid on Al-Majaala," he said.

Yemeni forces carried out a deadly air strike on a suspected Al-Qaeda training camp in the village of Al-Majaala, in Abyan province, in December 2009.

The air raid killed 23 children and 17 women, a local official and tribal sources said at the time. The government said it targeted a suspected Al-Qaeda training camp killing around 30 militants, some of them foreigners.

The interior and defence ministers as well as the vice premier for security affairs had been due to appear before parliament to take questions about the raid but they never turned up.

Yemen's powerful tribes often kidnap foreigners for use as bargaining chips in disputes with the central government. Of about 200 foreigners seized in Yemen over the past decade, almost all have been released unharmed.

Travel to Egypt against the lawhttp://english.ruvr.ru/2011/03/01/46724922.html

Mar 1, 2011 08:33 Moscow Time

Beginning on March 1st,  tour operators intending to send Russian tourists to Egypt will be running counter to the law and the recommendations of state structures. This was stated by a representative of Rostourism, Oleg Moseev.

A company called Pegas Touristik, which is ready today to take tourists to Hurghada and Sharm el-Sheikh is operating illegally.

The recommendations made by the Russian Foreign Ministry and Rosturizm on Jnauary the 29th are still in place.

The measures will remain in effect until the security level in Egypt returns to what it was before the measures were implemented.

Macedonia without a visa for Russianshttp://english.ruvr.ru/2011/03/01/46722342.html

Mar 1, 2011 04:06 Moscow Time

On the first day of spring, Russian citizens will be able to visit Macedonia through a simplified regime.

The Russian foreign ministry said: "Russian citizens who are interested in short-term visits to Macedonia for a period of 90 days, would no longer be required to present visas, travel vouchers and the originals of invitations at the Macedonian border.  

"Just having a valid passport, proof of insurance and the necessary amount of money is all that one would need," said the diplomat.

However, visas are still to be required for those who intend to engage in work, business, or study in schools in Macedonia.

The simplified regime will be valid until the 31st  October 2011.

Russian tourists to visit Macedonia without visas from March 1 to Oct. 31Today at 09:49 | Interfax-Ukraine Moscow - Russian citizens planning to visit Macedonia for a period of up to 90 days will not be required to receive an entry-visa from March 1 to Oct. 31.

"It means that Russian citizens planning a short-term stay in Macedonia, for a period of up to 90 days, will not have to produce visas, tourist vouchers and the originals of their invitations at Macedonia's border during this period of time," the Russian Foreign Ministry said earlier.

Russian tourists traveling to Macedonia "need only their foreign passports, insurance policies and a sum of money required to cover their needs during the visit," it said.

"However, despite the aforementioned decision, the visa requirement remains in force for Russian citizens planning to work or to run a business on the territory of Macedonia, or to study at Macedonian educational institutions," the ministry said.

Read more: http://www.kyivpost.com/news/russia/detail/98594/#ixzz1FKkWoZ1Z

Emirates, Russia sign modernization dealPublished: Feb. 28, 2011 at 12:05 PM

Read more: http://www.upi.com/Business_News/Security-Industry/2011/02/28/Emirates-Russia-sign-modernization-deal/UPI-34391298912731/#ixzz1FL45fAbr

ABU DHABI, United Arab Emirates, Feb. 28 (UPI) -- The United Arab Emirates and Russian arms exporter Rosoboronexport have signed an agreement for modernization of some the country's BMP-3s.

The contract for modernization of 135 of the amphibious infantry fighting vehicles in service with the Emirates' military is worth $74 million.

The upgrade is expected to modernize the vehicles to BMP-3M level, integrating a modern turbocharged 660 horsepower UTD-32 engine, an improved fire control system and upgraded armor package.

The main armament remains unchanged, with three coaxial weapons -- the 2A70 low-velocity 100mm gun, a 2A72 30mm automatic cannon and 7.62mm coax machine gun. The BMP-3M carries two additional 7.62mm machine guns mounted on hull and turret positions.

The United Arab Emirates is the largest international operator of BMP-3 vehicles. Between 1992 and 2000 about 600 BMP-3 were delivered by Russia to the country.

Details on the length of the contract, delivery schedules and other contract provisions weren't released.

11:32Geo-IK-2 satellite out of service after three weeks in orbit - source (Part 2)

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

11:59POLICE PERSONNEL TO UNDERGO EARLY ATTESTATION BEFORE JUNE 1 2011 – MEDVEDEVhttp://www.interfax.com/news.asp

11:57NUMBER OF INTERIOR AFFAIRS AGENCIES STAFF WILL REACH 1.1 MILLION ON JANUARY 1, 2012 – MEDVEDEVhttp://www.interfax.com/news.asp

 11:56RUSSIAN PRESIDENT SIGNS SEVEN DECREES REGULATING POLICE WORKhttp://www.interfax.com/news.asp

Law on police becomes effective in Russia

http://www.itar-tass.com/eng/level2.html?NewsID=15999680

01.03.2011, 11.21

MOSCOW, March 1 (Itar-Tass) - The federal law on police became effective in Russia on March 1, aiming to facilitate partnership relations between citizens and law-enforcers. In effect, the Interior Ministry creates an entirely new body - police - that will only employ the best personnel.

It was the first time the bill of such level was put up for public discussion. Initially, the document was named "on militia," but Russian President Dmitry Medvedev offered to rename militia to police, arguing that the old name had become obsolete and no longer reflected the essence of work of the interior bodies.

Under the president's instruction, the document was published at the specially created website, zakonoproekt20-10.ru on August 7, 2010. Hundreds of comments from Internet users came daily. Simultaneously, the head of state, who supervises the reform in the country's key agency, held public discussions of the bill at meetings with public representatives and police officers in regions.

After the public discussion, the bill was finalized and on October 27, 2010, President Medvedev personally submitted it to the lower house of the Russian parliament, given the significance of the document.

On January 28, the parliament approved the proposed legislation, and on February 7, the president signed it into law at the conference with police officials. He called the occasion "a long-awaited event."

Medvedev reiterated that "the new law should be absolutely modern and spell out the rights and duties of police officers."

He also said public opinion was the main criterion of the effectiveness of police work.

The police are a body which mostly closely interacts with the civil society, to a larger extent than other law-enforcement bodies such as secret services, prosecutor's office or court. The police should regularly inform the mass media about their activity and the public organizations, and this should be done not formally but substantively, Medvedev said.

The document spells out the duties and rights of police, their status, the list of restrictions and bans related to service, the requirements for policeman's conduct, and the ranking system (from a rank-and-file officer to a police General).

The main guidelines for police work include the protection of the individual, the society and the state from illegal encroachments on the rights and freedoms of Russian citizens, foreigners and persons without citizenship.

Aside from combating crime, ensuring law and order in public places, the safety of traffic and the protection of property and facilities (including on contractual basis), police will engage in expert examinations and forensic work.

One of the crucial changes is the introduction of the so-called Miranda rule (when the police explain to the detainee his right to legal counsel, translator's services, notification of next of kin about his detention and the right to refuse to testify).

It is stipulated that the detainee has the right to one phone call - which, however, is not the call to notify his relatives. A police officer can make the call at the detainee's request. Meanwhile, this opportunity is denied to persons who fled custody or a psychiatric facility, evade serving a sentence or compulsory treatment, or the wanted persons.

Before entering living quarters, a police officer will have to notify the citizens present there about the reasons for entering. However, an exception is made for the cases when a delay "causes immediate danger for life or health of citizens and police personnel, or may entail other negative consequences."

Among the equipment approved for police are "batons, gas means, the means to restrict movement (a lack of them gives the police the right to use the available means for binding), electric shockers, light stun devices. Service dogs, light and acoustic special means, devices for forced stopping of vehicles, water cannons and armored vehicles belong to this group as well.

As the Interior Ministry repeatedly underlined, the key point is to arrange partnership relations between police and citizens. "It will enable each police officer to regard himself part of the society while performing his duties, while the society, in turn, will have a better understanding of the fact that it delegated to the police the functions of protecting itself from lawlessness, including the not very pleasant mission of enforcing in the name of law," Interior Minister Rashid Nurgaliyev explained earlier.

The bill paid close attention to the guarantees of social protection of the police. It states that the life and health of the police must be insured at the expense of federal budget allocations for the corresponding year.

It also sets the sum of allowances to be paid to the police officers' families and the persons whom they supported, in case of the death of the police officer in the line of duty, or as a consequence of the illness developed during the service in police.

In case a police officer is injured in the performance of his duties, with the injury ruling out his further service, he is entitled to a lumpsum compensation in the amount of 60 monthly wages, fixed as of the day of payment.

Russian police now must explain rights to detaineesToday at 09:58 | Interfax-Ukraine Moscow - Police in Russia regained its original name after an interval of almost 100 years as the Law on Police took effect on March 1 and the Socialist-era name "Militia" became a thing of the past.

The name has been changed as part of a radical Interior Ministry reform, which aims to make its work more efficient.

The law introduces new standards in relations between citizens and police, common in the West.

From now on, police personnel will be obliged to explain to a person detained his right to legal defense and to translator's services, to inform the family about the detention and to refuse to testify.

The person detained will also have the right to make one telephone call to relatives to inform them about the detention and about his whereabouts. This right will not apply to those, who are on the run, or have escaped from prison.

Police personnel will have no right to resort to torture, violence or other harsh treatment of citizens, humiliating their dignity.

"Police will be obliged to curb actions which inflict pain, or physical or moral suffering on a person," the law says.

Police personnel will have no right to use special gear, including truncheons, against peaceful rallies, including unauthorized ones. This requirement does not apply to mass disturbances and other actions obstructing traffic, communication services and work of organizations.

Police patrolling public places will carry a badge with their names and details about the

unit they serve in.

Police officers will also have the right to enter residences without a court warrant and without the owner's consent, if other citizens are under threat. If a residence is entered in the owners' absence, the owners will be informed of that within 24 hours. The prosecutor is to be informed about the entry within 24 hours, too.

However, police personnel will have no right to enter a residence without restrictions "for establishing the circumstances of a committed crime."

Read more: http://www.kyivpost.com/news/russia/detail/98595/#ixzz1FKkA9hXL

March 01, 2011 11:00

Russian rights activists see no big difference between police, militiahttp://www.interfax.com/newsinf.asp?id=225521

MOSCOW. March 1 (Interfax) - Human rights activists said the law On the police, which entered into effect on Tuesday, March 1, will not cause any big improvements in the work of the Russian Interior Ministry.

"It's a cosmetic law, and we need radical changes," Moscow Helsinki Group Chairman Lyudmila Alekseyeva told Interfax.

Alekseyeva said she is ready to address policemen as "Mr. policeman" beginning on March 1.

"I have been addressing our citizens by 'Mr.' and not 'comrade.' He is no comrade of mine," Alekseyeva said.

"It's an imitation of police reform," Lev Ponomaryov, leader of the movement For Human Rights, told Interfax.

Ponomaryov said the law On the police largely repeats the old law On militia and there was no big need for a new law.

"There are some improvements and some drawbacks. It was said publicly that the police should report to the public and not abuse violence. However, it is perfectly obvious that they should not beat everyone with batons," Ponomaryov said.

"The problem of a radical militia reform will remain," he said.

"The law On the police does not do anything especially bad or especially revolutionary," Oleg Orlov, the head of the Russian human rights center Memorial, told Interfax.

"There is nothing in this law that makes it possible to hope for big changes in the situation in the law enforcement system. They have replaced the name 'militia' with the name 'police.' Everything that is in the law On the police existed in various regulations before," Orlov said.

New Term for Kadyrov http://www.themoscowtimes.com/news/article/new-term-for-kadyrov/431827.html

01 March 2011

President Dmitry Medvedev has named his picks to head four regions, including Chechnya, for which he nominated the incumbent Ramzan Kadyrov, Interfax reported Monday.

Medvedev also proposed Viktor Il-yukhin to head the Kamchatka region, Rashid Temrezov for the Karachayevo-Cherkessia republic and Sergei Morozov for the Ulyanovsk region, the report said.

Ilyukhin and Temrezov are acting heads of their regions, and Morozov is incumbent leader of the Ulyanovsk region.

Local legislatures now have to confirm the presidential nominees.

(MT)

1 March 2011 11:23 Militants the shot tourists in KBD belonged to the Dzhappuev ganghttp://www.interfax.ru/news.asp?id=179424

Moscow. March 1. INTERFAX.RU - the identity of militants, who shot the Moscow tourists in the Elbrus region, has been revealed, a law enforcement source in Kabardino-Balkaria told Interfax on Tuesday,"Personality of the bandits has been determined. Directly to the executive three were shooting. In total, the group organizing the attack on the tourists were from 8 to 10 people," - noted the official. The participants of illegal armed groups were among a group subordinated to the leader of the Kabardino-Balkar militants Asker Dzhappuev.

03/01 10:45   Militant from Gakayev gang arrested in Chechnya 

http://www.interfax.com/

03/01 10:44   Accomplice of Chechen militants detained in Moscow

http://www.interfax.com/

Russia marks remembrance day of paratroopers who died in Chechnya

http://www.itar-tass.com/eng/level2.html?NewsID=15999361&PageNum=0

01.03.2011, 09.38

MOSCOW, March 1 (Itar-Tass) - Russia marks this Tuesday the remembrance day of paratroopers of the sixth company of the Pskov air-borne division, who fought an unequal battle and heroically died in the Argun gorge, Chechnya, in 2000.

The command of the Air-Borne Troops and veteran organisations stage a series of events, dedicated to one of the most outstanding examples of martial glory in the latest history of the Russian Armed Forces. Events will start with a wreath-laying ceremony at the monument to the paratroopers in Moscow’s Suvorovskaya Square, Itar-Tass learnt from spokesman of air-borne troops Alexander Cherednik.

The sixth company of the Pskov air-borne division waged a battle with terrorists 11 years ago between February 29 and March 3, whose forces exceeded 20-25 times the number of paratroopers. Barring the road to bandits who tried to break through the encirclement, 84 men and officers of the company fell in the line of duty, killing over 700 gunmen.

The Russian president’s decree awarded the title of Hero of Russia to 21 paratroopers, and 63 were awarded the Order of Valour (posthumously). A monument was erected in downtown Pskov in memory of the heroes, while the Chechen capital Grozny called one of its streets “84 Paratroopers”; granite slabs with the names of the dead were installed in the same street.

On March 1, Remembrance Day was instituted by an order of the commander of the Air-Borne Troops. “Rallies and wreath-laying ceremonies at obelisks and burial places of paratroopers will be held at all military formations and units of the Air-Borne Troops,” Cherednik said. “Evening parties with the invitation of relatives of killed servicemen as well as meetings between young people and veterans of combat operations will be held in cities and towns.” The 76th Guards air-borne division, deployed in Pskov, will stage a wreath-laying ceremony at the monument to the fallen troops.

Turkish businessmen are ready to organize textile production in Dagestan http://www.riadagestan.com/news/2011/02/28/6038/28.02.2011 , 12:48Photo: Albert TokaevText: Albina Troshina

Makhachkala, February 28, 2011. On February, 25, the President of the Republic of Dagestan Magomedsalam Magomedov met with Turkish businessmen in Makhachkala. The Chairman of the Government of Dagestan Magomed Abdulaev, the Deputy Chairman of the Government of the republic Rizvan Gazimagomedov, the Minister of Economics of Dagestan Marat Iljasov also took part in the meeting.

Welcoming visitors, the President of the republic noted: We will be glad, if we can organize joint projects, concerning textile production in Dagestan”.

The representative of the Turkish company “Dannik International General Trading” offered projects, concerning light industry development in the Republic of Dagestan.

Robbers take almost $7 mln from North Caucasus bankhttp://en.rian.ru/crime/20110301/162802152.html

Two armed robbers took some 200 million rubles ($6.9 million) from a bank in the North Caucasus city of Vladikavkaz on Monday, police sources told RIA Novosti.

The robbery took place at about 22:00 Moscow time (19:00 GMT).

"Two men wearing balaclava masks and armed with unidentified firearms burst into the bank and took the money," a source in the regional police department said. "It all happened so quickly that security guards had no time to respond."

An investigator working at the crime scene said the robbers fled so quickly that they lost $1 million rubles (about $35,000) while running to their car.

VLADIKAVKAZ, March 1 (RIA Novosti)

190 million rubles stolen in Russian bank robberyhttp://rt.com/news/line/

05:34 RT News line, March 1

A bank in Vladikavkaz, a city in Southern Russia, was robbed Monday evening, officials say. The criminals broke into the central office of the bank and escaped with a sum which is currently estimated as 190 million rubles (over $6 million). On their way from the bank the robbers lost one of the packages with money. The package held over a million rubles, or over $30 000, ITAR-TASS news agency reports.

Moscow may develop new tourist information systemhttp://en.rian.ru/russia/20110301/162804746.html

An information system to help foreign tourists navigate their way around Moscow may be developed this year, Moscow's top tourism official told the Izvestia daily on Tuesday.

"As part of a complex plan for 2011 we are tasked with developing an information portal and a system of navigation like in other capitals. Measures which require no significant funding will be done as soon as possible," said Sergei Shpilko, who heads the city's tourism committee.

The low amount of tourists visiting Russia is the result of the lack of a developed network of tourist facilities in the country and Russia's poor image abroad, experts say. Moscow leads the list of the most expensive hotel rates on an average per day cost, beating out New York, Paris and Hong Kong, according to research by Britain's Hogg Robinson Group.

"We should develop one, two and three-star hotel chains, open hostels and mini hotels, search for suitable construction sites – not in residential districts near the Moscow ring road, but close to the historic center," the official said.

Last summer, the Russian government has approved a 332-billion-ruble ($10.1 billion) program aimed at developing the country's tourism sector until 2016.

In accordance with the program, the flow of foreign tourists to Russia should increase sevenfold by 2016. If the program achieves its goal, Russia will manage to attract 15 million foreign tourists every year.

MOSCOW, March 1 (RIA Novosti)

Topol-M missile carriers curb Moscow traffic http://rt.com/news/topol-m-missile-victory-day/

Published: 1 March, 2011, 06:15Edited: 1 March, 2011, 06:29

Drivers in Moscow may be used to heavy traffic, but none quite as large as three ballistic missiles which rumbled through one of the capital's highways.

The warheads were en route to a military base to rehearse for the 2011 Moscow Victory Day Parade in May.

Topol-M missiles are Russia's most advanced intercontinental weapons. They can travel up to ten thousand kilometers in the air, but in this case they trundled to their final destination by road after a 400 kilometer journey.

Moscow’s Vnukovo bans operation of ‘noisy’ aircraft in night time

http://www.itar-tass.com/eng/level2.html?NewsID=15999376&PageNum=0

01.03.2011, 01.10

MOSCOW, March 1 (Itar-Tass) -- Moscow’s Vnukovo airport has banned operation of aircraft of the Tu-134, Tu-154B, Tu-154V, and Ilyushin-86 types in the night time from April 15, the airport’s press service said on Monday.

“These steps have been coordinated with Russia’s Air Transport Agency,” the press service said, adding that Vnukovo is the first Russian airport to introduce such bans.

The ban was necessitated by “the social importance of the problem of excess noise caused by such types of aircraft,” the press service said.

“The airport does its best to reduce the level of noise at neighbouring settlements and encourages airlines to withdraw “noisy” aircraft from their fleet,” the press service stressed.

01 March 2011, 12:03

Metropolitan Jonah rejected rumors of his forced leavehttp://www.interfax-religion.com/?act=news&div=8237

Moscow, March 1, Interfax - Metropolitan Jonah of All America and Canada made a statement to clear out reasons of his 60-day leave and rejected rumors of its forced character.

"I am still your Metropolitan. I am still your diocesan bishop. I am still the active primate of the Orthodox Church in America. The reports are not true. I am merely taking a retreat, a time for reflection," he said speaking at St Nicholas the Wonderworker

Cathedral in Washington.

The metropolitan noted that the necessity to make such an address cause "sadness" and called Internet reporting that he had been deposed and resigned "inaccurate."

"I had intended, and still plan on doing so, to rest as much as possible during the Great Fast, spending time with loved ones and celebrating and attending the Divine Services at my Primatial Cathedral of St Nicholas in Washington," he said.

According to the Primate, "in line with the Holy Canons, the Statute of the Orthodox Church in America, and the good order of the church, no major decisions will be made" without his "knowledge and consent".

Unofficial OCA website of Orthodox Christians for Accountability posted a report saying that Metropolitan Jonah was placed "on leave of absence." Earlier retired Bishop of Los Angeles Tikhon also reported in the Internet about Metropolitan's Jonah leave.

Bishop Jonah of Fort Worth was elected Archbishop of Washington and New York and Metropolitan of All America and Canada at the 15th All-American Council of the Orthodox Church in America. James Paffhausen, Bishop Jonah to be, was born in Chicago, IL, into a Protestant family. He was received into the Orthodox Church in 1978 at Our Lady of Kazan Moscow Patriarchal Church, San Diego, while a student at the University of California, San Diego.

In early 1990s he worked at the Publishing Department of the Moscow Patriarchate. The spiritual father of the Holy Trinity St. Sergius Laura Elder Kirill (Pavlov) blessed James to become a monk.

The Moscow Patriarchate referred to the election of Bishop Jonah as an event opening a new page in the history of the Orthodox Church in America that received autocephaly from the Russian Orthodox Church in 1970.

Russian Press at a Glance, Tuesday, March 1, 2011http://en.rian.ru/papers/20110301/162805042.html

08:31 01/03/2011

POLITICS

A new law on police will come into force in Russia on Tuesday(The Moscow Times, Izvestia, Vedomosti, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

The United States announced it was regrouping its naval forces near Libya, in a move that some experts see as signs of a possible military operation. Russia and several influential NATO members, led by Germany, oppose the move. Meanwhile, experts predict that the unrest may result in large-scale civil war and the disintegration of the African state into two parts - one having oil-rich regions and the other - sands of the Sahara. (Izvestia, Vedomosti, Kommersant, Rossiiskaya Gazeta)

Russia's greatest curse is not its natural resources as many believe, but its weak and ineffective institutions. According to the 2010-11 Global Competitiveness Report published by the World Economic Forum, Russia ranks 63rd among the 139 countries listed, primarily because of the low quality of its state institutions.(The Moscow Times)

The Russian government will consider a new draft Civil Code designed to toughen control over businesses and defend interests of vulnerable social groups(Izvestia)

ECONOMY

Entrepreneurs worry that small business faces a dismal future after an increase in taxes and utilities at the start of this year. The increased tax seems to go against the government's rhetoric to develop small business.(The Moscow Times)

Russia will curb borrowing plans this year as higher revenue from oil narrows the budget deficit to less than 2% of GDP, Finance Minister Alexei Kudrin said(The Moscow Times)

AEROSPACE

Deputy Prime Minister Sergei Ivanov said that out of 11 military satellites that the government had ordered last year, only five were delivered(The Moscow Times, Izvestia, Vedomosti, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

AVIATION

The International Civil Aviation Organization has toughened its English language requirements for air traffic controllers serving international flights. According to statistics, only 54% of Russian air traffic controllers meet the requirements, others may be sacked (Rossiiskaya Gazeta)

REAL ESTATE

Last year, a record low amount of housing construction took place in Moscow, even less than there was in the early 1990s(The Moscow Times, Vedomosti)

Morton Group will invest $500 million in new housing in two towns outside Moscow, where demand is thriving. The developer has selected the towns of Vidnoye and Balashikha for a 9-billion ruble ($300 million), 180,000-square-meter housing complex and a 5.5-billion ruble, 120,000-square-meter complex, respectively.(The Moscow Times, Vedomosti)

TELECOMS & IT

The Federal Antimonopoly Service fined one of Russia’s largest mobile operators, Vympelcom, for sending SMS-advertisements of its services and campaigns (Izvestia)

JPMorgan’s Digital Growth Fund is in talks to buy 19% in the Twitter microblogging service, one of the fastest-growing social networking sites, for $450 million(Vedomosti)

SOCIETY

President Dmitry Medvedev promised that three years from now all Russians will have a universal identity-payment card. He gave the government until May to make final calculations of the funds necessary to introduce the card, and urged banks to not take advantage of card users at the meeting of the commission on modernization and technological development of the economy(The Moscow Times, Izvestia, Vedomosti, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

A talk show host who lost his job on state radio after likening St. Petersburg Governor Valentina Matviyenko to Nazi leader Adolf Hitler stood by his on-air comments Monday, telling that a groundswell of support for him showed the public was "fed up" with the authorities.(The Moscow Times)

Aeroflot is ready to settle out of court 50 compensation claims from passengers left stranded by the transport collapse at Sheremetyevo Airport in December, a lawyer for the claimants said Monday. Meanwhile, the Russian Transport Ministry wants to increase delayed flight compensations to $6,500(The Moscow Times, Izvestia)

The recent attack on tourists in the popular Mt. Elbrus resort area has no influence on the authorities’ plans to develop tourism in North Caucasus(Vedomosti)

SPORTThe Organizing committee of the UEFA Euro 2012, hosted jointly by Ukraine and Poland, will begin ticket sales today (Izvestia)

Dismissed Radio Journalist Likens Governor to Hitler http://www.themoscowtimes.com/news/article/dismissed-radio-journalist-likens-governor-to-hitler/431794.html

01 March 2011By Natalya Krainova

A talk show host who lost his job on state radio after likening St. Petersburg Governor Valentina Matviyenko to Nazi leader Adolf Hitler stood by his on-air comments Monday, telling The Moscow Times that a groundswell of support for him showed the public was "fed up" with the authorities.

The dismissal may raise new fears about free speech in a country where the state holds a tight monopoly on national media.

Dmitry Gubin, host of a three-hour morning show on Vesti FM, said he told listeners on Friday that Matviyenko was "continuing Hitler's business because she is destroying the city."

Gubin, who had returned to Moscow after a visit to St. Petersburg earlier in the week, also accused Matviyenko of failing to maintain the city "in decent condition."

Two hours after his show ended, one of his superiors informed him that he had been fired, Gubin said by telephone. He declined to identify the superior.

Anatoly Kuzichev, Vesti FM's general producer, said by telephone that Gubin was fired for "impermissible on-air style."

Many Vesti FM journalists use critical rhetoric, he said, but they speak more politely.

Asked what Gubin had said that particularly angered station management, he pinpointed Gubin's description of St. Petersburg as "the hole of a rural loo instead of the window to Europe" and his remark, "Sieg Heil, dear Valentina Ivanovna [Matviyenko]."

Kuzichev refused to say who decided to fire Gubin.

A request for comment left with a secretary at Matviyenko's press office went unanswered Monday.

A video record of his Friday show was not available on the radio station's web site Monday, and a blogger wrote where it formerly had been posted that the show had been edited.

Gubin has made two posts on his LiveJournal blog about his dismissal and received more than 1,000 comments, most of them sympathetic.

"The uproar provoked by my case shows that the people are fed up and they are using my case as a mouthpiece to express their discontent," Gubin said.

On his blog, he wrote that St. Petersburg is "dirt," has "no sidewalks" and is covered in the "[expletive] of road works."

"Housewifely governor-woman, wipe up your household," Gubin wrote to Matviyenko.

Gubin, 46, who had hosted the show from late August, said he had criticized Matviyenko on previous shows. He said station management had warned him a couple times against "cursing" at the governor and asked him to "use constructive criticism."

"Is it possible to constructively criticize Adolf?" Gubin retorted on his blog over the weekend.

Cartoon Politics

Even the Russian President Seems Unsatisfied With the Sochi Mascots as He Suggests Foul Play

http://russiaprofile.org/culture_living/33017.html

Russia Profile 02/28/2011

President Dmitry Medvedev on Monday hinted that there had been vote-rigging in the poll that elected a cartoon leopard backed by Prime Minister Vladimir Putin and two other furry animals to be the three mascots of the 2014 Sochi Winter Olympics. The Leopard, a white and spotted mammal-cum-snowboarder-dude standing upright on his hind legs, as well as the White Bear and the Rabbit swept to victory with a combined 62 percent of the text messaged votes cast in a three-week poll.

Commenting today on the merits of an upcoming online discussion for an all-in-one bank and ID card, Medvedev told journalists that he hopes it “turns out to be fairer than the discussion for the Olympic symbols was,” Interfax reported. Over a million votes were apparently cast in the nationwide contest starting February 7, which whittled down 24,000 public entries to three winning mascots for the Olympics and a further two for the Paralympics. For all its pretensions to democracy, the competition was far from free of

controversy.

The Leopard was the runaway winner with 28 percent of the votes, bringing Prime Minister Vladimir Putin’s mid-vote comments under scrutiny. Putin, who has been one of the driving forces behind the 2014 Winter Games, announced his personal backing of the Leopard on national television before polls closed. "The leopard is strong, powerful, fast and beautiful,” Putin said on national television. “The leopard species was wiped out in the Caucasus, but today it is reviving.” President Dmitry Medvedev was reported to have backed the White Bear, which took 18 percent of the vote. The Rabbit finished with 16 percent. Various opposition figures have condemned the vote as rigged, while some liberal political analysts even suggested that the vote was a test of public loyalty.

The Leopard is not the only entry under fire, though. Viktor Chizhikov, the designer of the mascot for the Moscow Olympics, quickly lambasted the man behind the White Bear, arguing that the latter has simply replicated his 1980 interpretation of the ursine Olympic charm. “When they made the White Bear, they ripped off all the details of my bear,” Chizhikov furiously told RIA Novosti. “The eyes were just as semicircular, they puffed up the nose a little, and the smile has the same characteristics. It’s all been cribbed.”

Chizhikov’s bear – which was actually brown – charmed the world in the1980 Moscow Olympic Games when it shed a tear at the closing ceremony. Russia’s Olympic Committee has said it will respond to Chizhikov’s allegations.

Meanwhile, the many fans of Ded Moroz, the Russian Santa Claus, were left disappointed, too. Father Frost had been leading the pack of entries until he was removed from the list of submissions, after it transpired that the symbol would become the property of the International Olympic Committee if it became the mascot. VTsIOM state pollster had found that 57 percent of Russians were backing Ded Moroz. Anya Zalota, a biology post-doc student, said she was disappointed with the results in general and hinted that that the leopard had won because the animal has been central to the message from Sochi Olympic officials that the winter games will be “green.” She pointed out that leopards were brought to the region in 2007 in the run-up to the Sochi games and that last year in May Putin personally oversaw their transfer to an outdoor enclosure in the region. “It’s not a Russian symbol and what does it have to with sport?” she asked. “Nothing. It’s all to do with the fact the Putin released the leopard in a Sochi park. It’s just a show. Putin’s show.”

While the World Wildlife Fund (WWF) has condemned the preparation for the games, it has still had a strong role in attempts to repopulate the region with leopards. Vladimir Krever, biodiversity program coordinator at WWF, said that the first leopards will be released into the wild in “no less than four to five years.” He said this means little for the NGO’s line on the Olympics. “We have been clear in our point of view – that the creation of Olympic infrastructure is being conducted in violation of the legislation on nature reserves,” said Krever.

But there was less controversy in the contest for the Paralympics, which went to the Ray

and the Snowflake. The former is a cartoon boy in bright orange, wearing a yellow crown, while Snowflake is wearing what appear to be a blue nun’s hat and a matching, webbed shawl, giving the creature the shape of a snowflake.

A Recipe for Success in the North Caucasus http://www.themoscowtimes.com/opinion/article/a-recipe-for-success-in-the-north-caucasus/431807.html

01 March 2011By Nikolai Petrov

Recent headlines have been filled with disturbing news from the North Caucasus: the killing of tourists and a series of terrorist attacks in Kabardino-Balkaria, a meeting in Vladikavkaz of the National Anti-Terrorism Committee headed by President Dmitry Medvedev, the nomination of Chechen President Ramzan Kadyrov to serve a new term in office, and the early dismissal of Karachayevo-Cherkessia Governor Boris Ebzeyev and his replacement with an official from the inner circle of the region’s previous president.

These events underscore how much the Kremlin’s North Caucasus policy has failed. Moscow is pursuing two approaches in the Caucasus: turning the ruling regimes into archaic khanates that rely on ethnic and clan elites to ensure loyalty, and relative stability enforced from above and harsh military pressure from below against potential Wahhabi insurgents as a means of combating terrorism.

The social and economic development of the North Caucasus consists of little more than developing large ski resorts, which looks absurd given the widespread violence and extremism in the region.

The decision to replace Ebzeyev with a young former official closely tied to the republic’s former leader is similar to the Kremlin’s decision last year to name Magomedsalam Magomedov as president of Dagestan. Moscow needs quick results, and it is attempting to obtain them by relying on regimes led by strong individuals backed by ethnic clans. By applying this formula first in Chechnya and now in other North Caucasus regions, Moscow is increasingly placing itself at the mercy of the region’s ethnic clans.

How can the Kremlin institute an effective policy for the North Caucasus?

First, Moscow should stop promoting an archaic model of government for the region’s ruling elite and must end its policy of prohibiting local residents from serving in posts among the regional siloviki and law enforcement structures. It should conduct a balanced policy of progressive modernization to the political system and resolve the bitter confrontation between society and law enforcement structures. The region’s democratic

institutions are in worse shape than the country’s. In particular, the regional branches of national political parties are openly dominated by various clans.

Fighting with potential Wahhabists is pointless because they are only a symptom of a much larger problem. The struggle should be focused on the underlying cause: corrupt ethnic clan structures that maintain and intensify deep social inequalities, depriving youth of any prospects for the future. Without that, no financial investment will help or solve the social and economic problems or motivate the region’s most talented residents to remain in the North Caucasus.

A dialogue is needed with society as a whole and ethnic groups in particular. To a large extent, the ethnic clans supported by Moscow create the greatest barriers to establishing such a dialogue. A variety of channels and formats should be used to facilitate communication among citizens and between society and the authorities. Alexander Khloponin, Medvedev’s envoy to the North Caucasus, has had some success in applying this approach.

Finally, the 2014 Winter Olympics in Sochi tend to provoke destabilizing forces and prevent Moscow from carrying out any long-term strategy in the region. The idea of holding the Olympics in Sochi was a big mistake. The sooner the Kremlin acknowledges this fact, the lower the price in human life it will have to pay — both in the Caucasus and in the capital.

Nikolai Petrov is a scholar in residence at the Carnegie Moscow Center.

The Plight of Kabardino-Balkariahttp://russiaprofile.org/comments/33000.html

The Regional and Federal Authorities Have No Comprehensive Strategy to Deal With Escalating Violence in Kabardino-BalkariaComment by Sergei Markedonov Special to Russia Profile 02/28/2011

In September of 2008 my friend and colleague Konstantin Kazenin suggested that I write the foreword to his book. It was tellingly titled “Quiet Conflicts in the North Caucasus: Adygeya, Kabardino-Balkaria, Karachayevo-Cherkessia.” Two and a half years ago Kazenin, an experienced journalist and political scientist who has spent much time “working in the field,” compared the relatively stable formations in the western part of Russia’s Caucasus with turbulent formations in the eastern part of the region (Chechnya, Dagestan, Ingushetia). Back then this approach would have probably been accepted by many professional Caucasus scholars.

But today it would be impossible to call the events taking place in Kabardino-Balkaria “quiet conflicts.” Last year this republic surpassed Chechnya in the number of terrorist attacks, and it is now in the top three after Dagestan and Ingushetia. Local

counterterrorist operations (CTO) regimes were introduced there twice in the same period, with the operation in Tyrnauza lasting for two months (from October 20 to December 25).

The first attack on an industrial object in the recent history of north Caucasian terrorism – the Baksanskaya Hydroelectric Power Plant – took place last year in Kabardino-Balkaria. Unfortunately, in 2011 the terrifying dynamics of terrorist activity continued. In just one day, on February 18, we heard news of a group of Moscow tourists being shot, the pillar of the “Old Horizon – the World” funicular getting blown up and the murder of Ramazan Friev, the head of the Khasanya settlement administration. A week later there was another incident – on February 25 a couple of insurgent groups made a series of attacks on law enforcement personnel.

So what is the reason behind the increased destabilization of this small north Caucasus republic, which was called the “sleeping beauty” of the Caucasus in the early 1990s? How did it happen that this “quiet” republic turned into a shooting range? Much is being said today about incidents in Kabardino-Balkaria, but for the most part only the facts, explosions, attacks and sieges are being noted, without the larger picture of these events coming to light.

In reality, unlike Chechnya at the end of the last century, the situation in Kabardino-Balkaria is more complex and convoluted. In Chechnya everything was more or less clear. On the one side there were the separatists, on the other – their opponents with the Kremlin as their backer. In Kabardino-Balkaria, however, there was no powerful ethnic-separatist movement throughout the entire post-Soviet period, although ethnic conflicts here always made themselves known. If in the early to mid-1990s these issues were an “unsettled score” with the Soviet authorities (the problem of completely rehabilitating the deported Balkars), then at the beginning of the 2000s it took on distinctively modern connotations. A deficit of land together with the complex of the so-called “ethnic property” (when some area was perceived as the collective property of a specific ethnos), as well as the implementation of reform in the area of local self-government (when Balkar settlements were united with predominantly Kabardin municipalities) sidelined the historic disagreements. The recent murders of such prominent figures as anthropologist Aslan Tsipinov (an authoritative figure in the Kabardin movement) and Ramzan Friyev again broached the notorious “ethnic question.” It was echoed in the recent appeal by the Balkar Council of Elders to the president of the Russian Federation. In this appeal the authors mention an incident of five years ago, when the predecessor of the deceased Friyev was likewise shot, but this crime was never solved.

Besides interethnic problems another schism exists in Kabardino-Balkaria – the prolonged conflict between the official Muslim hierarchy in the face of the republic’s Muslim Spiritual Council and the so-called “new Muslims.” It began in the 1990s as a conflict between the council’s management and its younger wing, and was later transformed into a standoff between the spiritual council and the so-called “Islamic center.” This was a struggle not only for the hearts and minds, but also for specific mosques. On the one side attempts were made to get the authorities involved with their

mechanism of repression. On the other side the balanced criticism addressed mostly to some dogmatic aspects of religion was replaced with extremist activity, including terrorism.

A series of attacks in 2004 and 2005, the most prominent of which was the attack on October 13, 2005 on Kabardino-Balkaria’s capital Nalchik, showed that the “Islamic question” has become the main socio-political problem in the republic. Besides the conflict between the official Islam and the “new Muslims” this conflict became part of the all-Caucasus Islamic movement, directed not only and not so much at the “wrong” Mufti and Imam-Khatibs, but at the Russian state and the republican administration.  

And what about the authorities? How do they react to the above-mentioned problems? It must be said that the approach of the center and the regional authorities has changed over the years. Some severe methods were implemented, including the “elimination” of such leaders of the underground as Mussa Mukozhev or Anzor Astemirov. Before the beginning of 2000 a severe policy was implemented with regard to the so-called “praying people,” when any man with a beard was put on the watch-list of the law enforcement establishment and the special forces. There were attempts to develop the tourist business, to attract investment. But all this was done (and continues to be done) without a unifying strategy. The regional authority in Kabardino-Balkaria is an economy without politics, and the federal authorities are just power politics without elements of “soft power” and a contextual vision of the situation.

All this creates significant problems in legitimizing the authorities’ actions, especially considering the fact that the president of the republic is not directly elected. The extremists use this dissonance to apply greater pressure and make daring and cruel attacks. As for the greater masses of inhabitants, they get even more frustrated and don’t believe that their rights, property and human dignity can be protected.

Why Russia Should Be Worried About a Coup http://www.themoscowtimes.com/opinion/article/why-russia-should-be-worried-about-a-coup/431808.html

01 March 2011By Chrystia Freeland

One casualty of the uprisings in the Middle East has been the professionals who didn’t see them coming.

The International Monetary Fund has taken a hit for its April 2010 report on Egypt, which praised the country’s “sustained and wide-ranging reforms since 2004,” noting that they had made the economy more durable and less vulnerable to external shocks. Ditto the CIA, whose director, Leon Panetta, endured the very personal ignominy of seeing his public predictions to Congress proved wrong within hours of making them.

For anyone who watched the collapse of the Soviet Union or the 2008 financial crisis, there is something very familiar about this failure of the experts. There seems to be something about swift, massive paradigm shifts — whether they are the bursting of a financial bubble that has been years in the making, or a popular revolt against a political regime that had been stable for decades — that we find hard to anticipate.

Research by behavioral economists like Dan Ariely of Duke University has suggested that part of the problem may be that when we have a vested interest in the status quo our brains are wired to view it as good and stable. Ariely’s work has focused on the cognitive blinders our financial self-interest imposes. But a similar bias may shape the views of political experts, who can end up developing a sense of “ownership” of the national elites they study that seems to be nearly as powerful as the proprietary feeling bankers had for the credit derivatives they created.

In a prescient book about democracy and authoritarianism written before he went to work at the White House as U.S. President Barack Obama’s top adviser on Russia, political scientist Michael McFaul argued that assumptions of regime stability are always dominant, and that when those regimes are authoritarian, these assumptions are always wrong.

McFaul strenuously disagreed with that default view, arguing that “assuming that the current configuration of autocratic regimes in play today will persist 50 years from now is much more naive than believing that some of these regimes might succeed in making the transition to democracy.”

McFaul’s conviction is looking pretty good today. But even if we are able to overcome our psychological resistance to the very notion of regime change, anticipating precisely when dictators will be toppled may not be possible.

“By their very nature, these tipping points are not predictable,” said Daron Acemoglu, an economics professor at the Massachusetts Institute of Technology.

A better way of thinking about whether regimes will endure, Acemoglu suggested, might be to try to understand the potential for rebellion, given the right catalyst. “Most of the time it’s dormant and hence there is no predictability of uprisings,” he argued. “But once we enter into a critical period like the current one, this latent factor has some predictive power.”

In that spirit, Peter Rudegeair and I have done a back-of-the-envelope calculation to identify countries with a high latent potential for uprisings. We considered four factors — political freedom, corruption, vulnerability to food price shocks and Internet penetration. Our spreadsheet used publicly available measures of the four factors and came up with a list of the 25 most vulnerable countries.

Libya, Algeria and Egypt made it into the top 10. Perhaps more surprisingly, so did Russia, Uzbekistan, Azerbaijan and Venezuela.

According to Wired.com, the web site for Wired magazine, the U.S. military and intelligence agencies have spent more than $125 million over the past three years on computer models that try to forecast unrest. Bearing that in mind, this fast-and-dirty calculation is meant to provoke discussion, not to pinpoint the next hot spot.

Acemoglu suggested that one way to refine this sort of calculation would be to consider ways in which the different factors that make a regime vulnerable to revolution interact. “For example, a lot of corruption without any Internet penetration or a lot of Internet penetration without corruption may create no pressure for uprisings. But when both of them are present, that might be a whole different ballgame.”

Lucan Way, a professor of political science at the University of Toronto, said another contributor to regime fragility that would be worth factoring in to a more sophisticated analysis is whether the authoritarian government is itself the product of recent revolutionary struggle. Dictatorships run by an ideologically united revolutionary party — Iran, for instance, and to a lesser extent China — are more durable than those whose rulers rely purely on guns and patronage, Way argued.

Food price shocks are often the catalyst that tips a regime with a latent vulnerability to an uprising into one facing people in the streets. That was the case in Tunisia and has been true as far back as the Bolshevik Revolution.

Something else that can propel a society with a latent potential for rebellion into action is the demonstration effect, or what Acemoglu calls “contagion,” a phenomenon also familiar to anyone who was caught in the wildfire global spread of the financial crisis in 2008.

In both cases, the sudden belief that a previously stable status quo could change had the power to alter reality. This interplay between perception and fact is what U.S. financier George Soros, an expert in paradigm shifts in both markets and countries, has called reflexivity.

Even some of the world’s most powerful authoritarian regimes seem to be getting concerned about the danger of contagion and the power of perception — hence China’s efforts to block electronic information and discussion of the uprisings in the Middle East.

The Kremlin may have even more reason to worry. A Russian opinion poll found that one-third of respondents thought the “Egyptian scenario” of mass protests was possible in Russia. Moreover, a recent Public Opinion Foundation poll revealed that 49 percent of respondents were ready to take part in mass protests. That is the kind of thinking that can tip a latent potential for rebellion into a revolution.

Chrystia Freeland is the global editor of Reuters, which distributed this comment.

Tuesday, Mar. 01, 2011

Vladimir Putin's Billionaire Boys Judo Clubhttp://www.time.com/time/world/article/0,8599,2055962,00.html

By Simon Shuster / St. Petersburg

The word judo translates as "gentle way," but you wouldn't know it from the meaty thuds that reverberated through the St. Petersburg gymnasium during Russia's national judo championships on Saturday, Feb. 19. Every now and then, the call to "Finish him!" would issue from the balcony packed with fans and ex-fighters, a crowd with plenty of mangled ears and twice-broken noses. As always, the co-sponsor of the event was the city's elite judo club Yawara-Neva, of which Prime Minister Vladimir Putin — a black belt — is the honorary president. He was unable to attend this year, the organizers explained apologetically, but everyone still seemed aware of his presence.

Since 2000, when Putin first became the President of Russia, Yawara-Neva has shot to incredible heights right alongside its general director Arkady Rotenberg, Putin's childhood sparring partner. This month, in the annual ranking of Russia's wealthiest put out by Finans magazine, Rotenberg jumped 17 spots from the previous year to officially join the list of Russia's billionaires. His fortune is now pegged at $1.75 billion, which seems like a lot for a man whose work before Putin took office was mostly confined to running average businesses and promoting judo. But for the members of their St. Petersburg clique, this isn't extraordinary. (See a picture of Vladimir Putin stretching during a judo training session.)

Most of Rotenberg's fortune has come through his deals with Russia's state-controlled natural-gas monopoly, Gazprom, which is headed by one of Putin's old friends from the St. Petersburg mayor's office. In 2008, Gazprom started selling Rotenberg its subsidiaries, in particular the ones that supply and construct pipelines, and then it started placing huge orders with these companies once they were in Rotenberg's control. In 2009 alone, Rotenberg's firm StroyGazMontazh won 19 of these tenders with Gazprom, sometimes at auctions in which it was the only bidder.

One of the main competitors of StroyGazMontazh for these Gazprom tenders is a company controlled by another one of Putin's judo buddies, Gennady Timchenko, the billionaire oil trader (worth $8.9 billion according to the Finans list) who also helped found Yawara-Neva in 1998. Both men deny that their friendship with Putin has helped them make their fortunes. "Acquaintance with a state official of such a high rank has never hurt anyone yet in our country, but it hasn't helped everyone," Rotenberg said in an interview last April with the daily Kommersant. "It is no guarantee." In 2008, Timchenko said reports of his links to Putin were "overblown" and insisted his career was not built on "favors or political connections."

For their part, the trainers and champions in Russia's judo circuit are quite proud about being close to Putin, Rotenberg and Gazprom, which was the other sponsor of Saturday's

tournament. "We're all in it together," says the event's organizer, Vladimir Gladchenko, gesturing at the banner with the logos of Gazprom and Yawara-Neva that hung above the judo mats. "We have the political support, the financial support, so all we have to do is keep winning tournaments." And with a budget that seems practically limitless, that has come easy so far. Yawara-Neva (the name Yawara refers to a blunt weapon used in martial arts, while Neva is the river that runs through St. Petersburg) has won the European judo championship seven years running, more than any other team in history. (See judo in TIME's list of other Olympic sports.)

It is in many ways a gilded incarnation of the old Soviet judo club where Putin and a handful of his friends trained in the 1960s and '70s, forming a tight circle that seems to have more than its share of distinguished alumni. Besides Rotenberg and his younger brother Boris, who ranked just below his brother on the Finans rich list with a fortune of $1.75 billion, Putin's original judo set included Vasily Shestakov, another co-founder of Yawara-Neva. In 1999, when Putin was first appointed Prime Minister by then President Boris Yeltsin, Shestakov made a sudden break from his life as a judo trainer in St. Petersburg and went into politics, helping create the Unity Party that formed Putin's early base of support. In 2001, that party merged with two others to become United Russia, the political machine that now staffs virtually the entire bureaucracy and every elected chamber in the country. Today Shestakov is a deputy in the federal parliament for Fair Russia, another party loyal to the Kremlin. He is not on Russia's list of billionaires.

"But [Putin], as far as I know, replies to the requests of Arkady, Boris, Vasily and the other boys," said Putin's childhood trainer, Anatoly Rakhlin, in an interview with the Izvestia daily in 2007, referring to Shestakov and the Rotenberg brothers. "They are friends, and Putin's character has maintained that healthy camaraderie. He doesn't take the St. Petersburg boys to work with him because of their pretty eyes, but because he trusts people who are tried and true." (Comment on this story.)

The world of judo is apparently no exception in the ethos of access and influence that dominates Russia. "Clubs without that kind of political support are closing left and right," says Sergei Yudayev, a senior trainer for the Moscow team, as he looks out over the mats where one of his fighters just got creamed. "Yawara is milking its connections," he says bitterly. "Hell, in their place I would do the same." And who can blame him? It may not be the gentle way, but perhaps the surest way to success in Russia lies in having the right connections.

National Economic Trends

Russia Feb manufacturing PMI at 3-year high –pollhttp://www.forexyard.com/en/news/Russia-Feb-manufacturing-PMI-at-3-year-high-poll-2011-03-01T051029Z

PMI-MANUFACTURING/RUSSIA

MOSCOW, March 1 (Reuters) - Russian manufacturing expanded in February at the fastest pace in three years due to an acceleration in new orders and prompting companies to step up hiring, a purchasing managers' survey showed on Tuesday.

The HSBC purchasing managers' index (PMI) rose to 55.2 last month, its highest level since January 2008 and up from 53.5 in the previous month, rising further above the 50 mark that separates expansion from contraction.

Growth rates for output, new orders and purchasing activity were all at their fastest in about three years, while job creation in manufacturing was the fastest since mid-2006.

"Similar to the early stage of the post-crisis industrial recovery, export demand and higher export prices drive the overall growth in manufacturing," said Alexander Morozov, chief economist for Russia and CIS at HSBC.

"Based on these data, we expect a positive surprise from industrial production data for February that will be released in mid-March."

He added that a positive impact from the recent surge in crude oil prices on other sectors of the economy is still to be seen.

The input price index eased from the highest level since April 2008 seen in January, but still remains high at 76.4, probably pushing companies to pass on the higher costs to consumers.

"Strong demand growth and the continuing global commodity price rally will likely sustain high cost pressures and fast output price growth in manufacturing in the coming months," Morozov said.

The Russian central bank raised all its key interest rates on Friday to tighten monetary policy, effective as of Monday, in an attempt to contain inflationary pressures. [ID:nLDE71N2BM]

Consumer prices have risen 3.1 percent already this year, putting the official government forecast of 6-7 percent inflation for the whole of 2011 in jeopardy. [ID:nLDE71N1GD] (Writing by Lidia Kelly; Editing by Susan Fenton)

Russian Manufacturing Activity 'At Three-Year High' http://www.rttnews.com/Content/AllEconomicNews.aspx?Id=1564414&SM=1

3/1/2011 12:19 AM ET

(RTTNews) - Russia's manufacturing sector grew at the strongest pace in more than three years in February, according to the results of a new survey.

The Markit/HSBC manufacturing purchasing managers' index rose to 55.2 from 53.5 in January.

This represents the highest PMI score recorded since January 2008. Any reading above 50 indicates expansion.

New business growth underpinned the resurgence in the Russian manufacturing sector in February, with new orders rising at the fastest pace in nearly three years.

The survey also signaled a slight easing of inflationary pressure, although both input and output price inflation remained substantial.

by RTT Staff Writer

For comments and feedback: contact editorial@rttnews.com

Russia’s Reserve Fund to reach one and a half trillion roubles in 2011

http://www.itar-tass.com/eng/level2.html?NewsID=15999370&PageNum=0

01.03.2011, 05.53

MOSCOW, March 1 (Itar-Tass) -- Russia’s Reserve Fund will reach 1.5 trillion roubles by the end of 2011, Russian Deputy Prime Minister and Minister of Finance Alexei Kudrin said on Monday.

According to Kudrin, growing oil prices driven by the situation in the Middle East will help Russia “resume its Reserve Fund replenishment already in 2011, although it was planned no earlier than in a period of from two to three years.”

“If now our Reserve Fund stands at 700 billion roubles, by the end of the year it will go up to 1.5 trillion roubles,” Kudrin noted and stressed that “budgetary expenses in 2012 will not be increased through oil and gas revenues.”

Russia to officially start accumulating revenue into Reserve Fund

http://www.bne.eu/dispatch_text14316

Renaissance CapitalMarch 1, 2011

On Monday (28 February) Finance Minister Alexey Kudrin announced that the budget deficit would be lower than 2% of GDP, which we expected in early 2011. In addition, in 2011 the Reserve Fund will not be used for deficit financing, and the government will start accumulating some excess oil and gas revenues into the Reserve Fund. Kudrin said that the Reserve Fund could reach RUB1.45trn by the end of the year, and that the Ministry of Finance (Minfin):

• Will continue creating a cash pile in preparation of a possible decline in oil prices.

• Will combat monetary inflation via the sterilisation of any excessive money supply in the Reserve Fund.

We reiterate that these actions are the best way both to reduce monetary inflationary risks from CBR FX interventions and to avoid attracting capital inflows. The 2008 crisis demonstrated that Russia cannot borrow either locally or abroad duringcrisis periods; therefore, we continue to view the announced approach as macro-prudential. Nevertheless, Minfin's pursuit of such a policy will entail a negative cost-of-carry, although this cost is less than 1% of budget expenses. Therefore, it is fundamentally justified to borrow when the markets are doing well and at the same time collect revenues into the Reserve Fund, even if there is a budget deficit.

Anton Nikitin

Russian Grain Harvest May Be Up to 86 Million Tons, Union Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aMetd3VTC2rk

By Marina Sysoyeva

March 1 (Bloomberg) -- Russia’s grain harvest may be between 82 million and 86 million metric tons this year, according to Alexander Korbut, vice president of Russia’s Grain Union.

Grain carry-over stocks are estimated at between 14 million and 15 million tons, Korbut said in an article published today in Rossiyskaya Gazeta, the government’s official newspaper.

To contact the reporter on this story: Marina Sysoyeva in Moscow msysoyeva@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Last Updated: March 1, 2011 03:02 EST

Prices on socially important foods growing in Russian regions

http://www.itar-tass.com/eng/level2.html?NewsID=15999372&PageNum=0

01.03.2011, 04.00

MOSCOW, March 1 (Itar-Tass) -- The situation on food markets in Russian regions is still characterized by soaring prices on socially important foodstuffs, Russia’s Federal Antimonopoly Service said, citing a report on the price situation in the fourth quarter of 2010.

According to the service, food prices have been growing since last summer, when abnormal heat and drought killed a larger part of the harvest. “Basically, it was the grain market that suffered the biggest deficit, which entailed an upsurge of flour prices,” the service noted.

According to the report on the price situation in the fourth quarter of 2010, both procurement and selling prices on all types of flour were growing throughout the period in the majority of Russian regions. As a result, bread prices were also soaring. A similar situation was characteristic of the milk and dairy market as well. Growing prices on raw milk sent prices on heat-treated or sterilized milk up.

“The analysis of prices on the food markets has revealed the biggest price rise on the sunflower oil market, which was caused by higher prices on the raw materials used in the production of sunflower oil,” the service’ s report said.

In the period from August 2010 to January 12, 2011, the Federal Antimonopoly Service’s territorial agencies opened more than 510 cases on charges of violation of antimonopoly and other laws. As of January 12, 2011, more than 110 court writs had been issued on cases of the violation of antimonopoly laws on the markets of flour, bread, sunflower oil, butter, milk, eggs, buckwheat, salt, and more than 55 court writs had been issued on cases of the violation of the law on trade, the service noted, adding that as of January 12, a total of 31.9 million roubles had been claimed in penalties from violators.

TABLE-Reuters February Russian economy, rates, rouble pollhttp://www.reuters.com/article/2011/02/28/russia-economy-poll-idUSBQE7DE00D20110228

Mon Feb 28, 2011 6:00am EST

Feb 28 (Reuters) - Following are the results of a monthly Reuters poll of 18economists on Russia's economic and foreign exchange outlook.

For a story on poll click on [ID:nRUPOLL].

INDICATOR MEDIAN MEAN MIN MAX YR AGO GDP y/y 2011 4.2 4.2 3.0 4.8 4.0 GDP y/y Q111 3.9 4.1 2.5 5.5 3.1 GDP y/y Q211 4.1 4.2 3.5 4.8 5.2 GDP y/y Q311 5.0 4.8 4.1 6.1 2.7 GDP y/y Q411 4.0 4.2 3.5 4.9 5.0 CPI m/m Feb 0.9 1.0 0.9 1.3 0.9 CPI y/y 2011 8.5 8.5 7.0 9.5 8.8 Industry output y/y Feb 7.2 7.2 4.5 9.6 8.4 Industry output y/y 2011 5.1 5.3 3.5 7.5 8.2 Budget balance pct GDP 2011 -2.0 -2.1 -3.8 -0.5 -3.9 PPI m/m Feb 1.5 1.7 1.0 2.5 2.0 PPI y/y 2011 11.3 11.9 9.5 15.5 16.7 Trade balance bln$ Jan 19.2 19.6 15.3 30.0 15.0 Trade balance bln$ 2011 140.0 140.0 107.0 165.6 151.6 C/A balance bln$ 2011 60.2 63.0 50.0 92.3 72.6 M2 y/y Feb 28.3 28.1 27.0 29.0 29.5 M2 y/y 2011 21.6 21.5 11.7 30.0 49.5 Retail sales y/y Feb 2.1 2.2 -0.1 4.5 1.3 Retail sales y/y 2011 5.1 4.8 3.0 6.5 4.4 Capital investment y/y Feb -3.5 0.2 -10.7 12.1 -6.7 Capital investment y/y 2011 8.4 8.6 5.0 13.5 6.0 Real wages y/y Feb 1.3 1.2 0.2 2.2 2.5 Real wages y/y 2011 4.3 4.6 2.5 12.0 4.2 Unemployment rate pct Feb 7.5 7.4 7.0 7.8 8.6 Unemployment rate pct 2011 6.9 6.8 6.2 7.2 7.5 Net capital flows bln$ Feb -6.5 -4.8 -9.0 3.0 -5.0

Net capital flows bln$ 2011 10.0 7.6 -15.0 15.0 -38.3 C.bank reserves bln$ end-2011 544.6 547.7 500.0 580.0 479.4 INTEREST RATES MEDIAN MEAN MIN MAX C.bank refi rate end-Q1 2011 8.00 8.10 8.00 8.25 end-Q2 2011 8.25 8.45 8.00 9.00 end-Q3 2011 8.50 8.55 8.25 9.50 end-Q4 2011 8.50 8.61 8.25 9.50 C.bank overnight end-Q1 2011 3.25 3.22 3.00 3.50 depoist rate end-Q2 2011 3.63 3.57 3.00 4.00 end-Q3 2011 3.75 3.73 3.25 4.50 end-Q4 2011 3.88 3.82 3.25 4.50 CURRENCY OUTLOOK* MEDIAN MEAN HIGH LOW Dlr/rouble RUB= 1-month 29.00 29.12 28.70 29.80 3-month 29.10 29.07 28.30 29.98 6-month 29.40 29.57 28.10 31.07 end-2011 29.35 29.81 28.00 32.45 1-year 29.30 29.20 27.50 31.22 Euro/rouble EURRUB= 1-month 39.54 39.18 37.00 40.00 3-month 38.90 38.50 36.70 39.60 6-month 39.10 38.82 37.30 40.00 end-2011 39.20 39.48 36.40 45.30 1-year 37.80 38.53 36.60 43.30 Basket/roubleRUS=MCX 1-month 33.81 33.68 32.77 33.99 3-month 33.51 33.35 32.52 34.30 6-month 33.63 33.79 32.24 34.99 end-2011 33.80 34.20 31.78 38.21 1-year 33.04 33.39 31.60 36.48

NOTE - Economists from BAML, BDO, Commerzbank, Credit Agricole, EEG,Gazprombank, HSBC, Nomos, Otkrytie, Raiffeisen, Renaissance Capital, Rosbank,Sberbank, Trust, UBS, Unicredit, Uralsib and VTB Capital took part in the poll. * For a related story click at [ID:nRUPOLL] For individual rouble forecasts please see FOREXPOLL51 For key Russian indicators click here <0#ECONRU>.

Business, Energy or Environmental regulations or discussions

New Tax Hampers Small Businesses http://www.themoscowtimes.com/business/article/new-tax-hampers-small-businesses/431816.html

01 March 2011By Khristina Narizhnaya

Entrepreneurs worry that small business faces a dismal future after an increase in taxes and utilities at the start of this year.

"It's a sad situation," Russian Association of Small and Medium Enterprises president Alexander Ioffe said at the National Institute of Systematic Research of Enterprise Problems fifth annual forum. "We are moving backwards, we should be crying."

Many businesses are struggling to afford the 8 percentage point social tax hike, from 26 to 34 percent, that went into effect Jan. 1. On top of the tax increase, the cost of utilities has gone up with inflation.

Marzhanat Ibragimova, chairwoman of the enterprise council of Kizlyar, a small city in the republic of Dagestan, said 70 percent of local businesses have shut down since the beginning of the year because they cannot pay the tax. There is no help available from the regional government.

"Everybody is closing, we don't make the profit to pay that much," Ibragimova said. "Our young people are not working."

Other regions face a similar fate. Several bakeries have shut down, and more are slated to close in the Amur region, head of the region's enterprise council Oksana Stepanova said.

Russia has about 1.2 million small enterprises for a population of 142 million and an area of 17.1 million square kilometers. Small business provides about 20 percent of the country's gross domestic income. This number has stayed roughly the same for nearly 20 years.

Russia's much smaller neighbor Poland has about 27 percent of Russia's population, yet there are 4 million small businesses and the country receives more than 60 percent of its gross domestic product from them.

The increased tax seems to go against the government's rhetoric to develop small business.

The federal budget sets aside 2 billion rubles ($69 million) a year for small business development, and each region is supposed to provide additional financing. But only a small portion of business owners actually get the money. Financing for small business in Moscow has been frozen since January.

One reason many businesses don't get government help is a lack of information about services, institute vice president Maxim Gromov said.

The Economic Development Ministry has offered electronic registration of land, online maps and other services on its web site since the beginning of this year. The Federal Anti-Monopoly Service has increased its web presence in an effort to stop government agencies from outsourcing their services to private firms for kickbacks.

Nongovernmental institutions also provide information services to accelerate small business growth. The U.S. Russia Center for Entrepreneurship trains business leaders, and the National Institute of Systematic Research of Enterprise Problems conducts research on small business. Associations organize forums and seminars.

Corruption is another major hurdle for companies.

For example, the list of fire safety requirements is very long and almost impossible to fulfill. Most companies pay unofficial fines to get approved.

Another issue is securing credit. Business owners complain about either high interest or unaffordable kickbacks.

Administrative barriers are another problem. Entrepreneurs have to file a myriad of documents, which also costs money.

Ministry of Transport plans to increase penalties for flight delays

http://www.bne.eu/dispatch_text14316

Renaissance CapitalMarch 1, 2011

Event: Vedomosti reported today (1 March) that the Ministry of Transport is analysing the possibility of joining Montreal Convention 1999 and increasing fines for flight delays. Currently, fines are set at 25% of minimum wage, or RUB25/hour of delay per passenger, but not more than 50% of passengers' flight expenses. Under the Montreal Convention, fines can be up to $6,500 per passenger, or even higher if delays are proved to be the fault of the air carrier. The Montreal Convention would need to be ratified by the State Duma.

Action: Neutral for Aeroflot's stock price, in our view.

Rationale: Aeroflot was prosecuted following mass flight delays before the New Year's holidays, with total claims amounting to RUB10mn ($346,000, or 0.008% of 2010E revenues), which the company is preparing to contest. As for the future effects of the ministry's initiative, Russian air carriers say they are ready for the new regulations, and they claim that air carrier-caused flight delays are rare.

Alexandra Serova

Russian regulator gives Antonov/UAC merger the green light

http://www.bne.eu/dispatch_text14316

bneMarch 1, 2011

Russia's Federal Antimonopoly Service has cleared Ukrainian aircraft producer Antonov to buy 50% in UAC Civil Aircraft, reports Prime Tass. The news will officially allow the two state-controlled companies to pursue the merger agreed last April as part of the Black Sea Accords.

The deal was cleared by the Russian government's commission for foreign investment in December 2010. In October 2010, UAC said the venture was expected to sell Antonov airplanes. UAC and Antonov are to hold 50% each in the company.

EuroSibEnergo, China Yangtze Power establishes joint venture http://www.hydroworld.com/index/display/news_display.1368690832.html

Chinese Business NewsMarch 1, 2011

EuroSibEnergo, the largest private power-generation company in Russia, and China Yangtze International (Hongkong), a wholly-owned subsidiary of China Yangtze Power, recently announced that the two parties established a joint venture named YES Energo. The joint venture, with registered capital of US$6 million, was registered in Hong Kong. The two companies will share a 50:50 equity in the joint venture. YES Energo will focus on developing fossil power generation and hydropower projects in the Siberian region.

Copyright 2011 Chinese Business NewsAll Rights ReservedChinese Business News

Sberbank starts over-the-counter securities operationshttp://en.rian.ru/business/20110301/162806512.html

Russia's top bank Sberbank has started operations on the over-the-counter securities market as part of its strategy to offer brokerage services, the bank said on Tuesday.

Sberbank will carry out operations with Russia's external loan bonds, corporate Eurobonds and foreign governments' bonds, shares of private equity funds circulating on stock exchanges, and also with American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs), the bank said.

"As part of the efforts to provide services for the conduct of operations with instruments of the over-the-counter market, we are starting to offer new opportunities for work on foreign markets. In particular, an important advantage for investors will be diversification of portfolios by a large number of parameters: asset classes, foreign exchange, the credit quality and the issuer's country," Sberbank Vice-President and Director of the Department for Treasury and Financial Market Operations Andrei Golikov said.

MOSCOW, March 1 (RIA Novosti)

VTB reaches agreement to buy out major BoM minorities, but may face a court case seeking to invalidate its acquisition process

http://www.bne.eu/dispatch_text14316

Alfa BankMarch 1, 2011

VTB reportedly reached a principal agreement with significant minorities of BoM, including CEO Andrei Borodin, to buy stakes totaling 24.2% of BoM. The stakes combine to give VTB 70.7% of BoM together with the 46.5% purchased from the Central Fuel Company, which is owned by the Moscow city government. The effective stake, however, comes to 75.01% of BoM if we include VTB's stake of 25%+1 share held in Capital Insurance Group (SSG), which itself owns 17.3% of BoM. It is not fully clear, however, that VTB has control over SSG.

VTB reportedly noted that precise terms and price details of the BoM transaction have yet to be finalized and are subject to the results of ongoing due diligence procedures. BoM has reportedly confirmed this information. VTB has said that it will not pay more for minorities' stakes than it paid for the city's share in BoM, which may suggest that the bank could even pay a lower figure if the due diligence procedures produce materially negative findings in a review of BoM's assets. Given that BoM had only a 6.6% provisioning level as of 3Q10 and a reported 90-day NPL ratio of just 4.1%, we believe that significant findings are quite possible.

In related news, the Moscow Arbitration Court yesterday reportedly registered a suit brought by OOO EcoTechnology against VTB, the Central Fuel Company and the Moscow department of properties to declare as invalid VTB's acquisition of the city's shares in BoM. BoM is named as a third party under the suit. None of the parties have provided official comments on the suit, to our knowledge. The final beneficiaries of

EcoTechnology are also unknown.

Jason Hurwitz

Uralkali snaps up 20% of Silvinit

http://www.rbcnews.com/free/20110301112217.shtml

      RBC, 01.03.2011, Moscow 11:22:17.Russian potassium fertilizer producer Uralkali has acquired a 19.99-percent stake in Silvinit for $1.4bn from Otkritie Securities Limited, Uralkali announced today. Prior to this transaction, Uralkali held no shares in Silvinit.

      The purchase is part of an ongoing merger between Uralkali and Silvinit.

Polymetal secures credit line from VTB

http://www.rbcnews.com/free/20110301105805.shtml

      RBC, 01.03.2011, Moscow 10:58:05.Leading Russian gold and silver producer Polymetal has contracted a RUB 6bn (approx. USD 208m) revolving credit line from VTB, according to the company's documents.

Rusal to contest ruling on Norilsk http://www.ft.com/cms/s/0/abb43970-4380-11e0-8f0d-00144feabdc0.html#axzz1FKJoLsO6

By Catherine Belton in Moscow

Published: February 28 2011 23:24 | Last updated: February 28 2011 23:24

A Caribbean court has lifted an injunction preventing two subsidiaries of Norilsk Nickel from voting with a 15 per cent stake in the world’s biggest nickel miner, dealing a serious blow to Russian oligarch Oleg Deripaska.

Lifting of the injunction could be decisive at an extraordinary shareholders meeting on March 11 when Mr Deripaska’s UC Rusal seeks to regain parity representation on Norilsk’s board with rival metals tycoon Vladimir Potanin.

Rusal said it would appeal against the ruling, which it said was marred by “highly unusual circumstances”, claiming the court substituted the presiding judge at the last minute and had failed to inform it on time that the hearings were to be brought forward six days to begin on Friday and then during the weekend.

Norilsk said the hearing was brought forward because it urgently needed the injunction to be lifted in order for shareholders to continue a $3.5bn share buy-back.

The chief registrar for the Nevis court said the judge was substituted because the presiding one was serving elsewhere.

The decision means Norilsk’s management will now probably be able to vote the 15 per cent stake it holds via St Kitts and Nevis-registered subsidiaries, which – combined with the at least 25 per cent held by Mr Potanin – gives this alignment of forces more than 40 per cent of the vote.

Rusal, which holds 25 per cent in Norilsk, had sought the injunction against two deals being conducted by the subsidiaries – the $3.5bn share buy-back and the sale of an 8 per cent stake held by the company’s treasury to Trafigura, the Dutch trader, for an undisclosed sum – claiming they were intended to undermine its shareholder rights. Norilsk denies any wrongdoing.

The standoff is part of an intensifying battle for the $45bn company that is now being played out in courts in the US, the Caribbean, the UK and Siberia. Lord Peter Goldsmith QC, the former UK attorney-general, represents Norilsk in the Caribbean.

Mr Deripaska faces growing pressure to sell Rusal’s stake in Norilsk after the nickel miner offered to buy a 20 per cent shareholding for $12.8bn, valuing the company at 40 per cent more than the market price.

Two of Rusal’s biggest shareholders, Mikhail Prokhorov and Viktor Vekselberg, have said that Rusal should accept the offer, which expires on March 4.

Copyright The Financial Times Limited 2011. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

Russia's Sollers, Mitsui to launch JV in Vladivostok - Sollershttp://en.rian.ru/business/20110301/162806905.html

Russian automaker Sollers and Japan's trading house Mitsui & Co will establish a joint venture on a parity basis to produce Toyota cars in Vladivostok, Sollers-Far East company said on Tuesday.

"The joint venture will produce cars in Vladivostok with technical support from Toyota. (Sollers) has signed an industrial assembly agreement with Russia's Economic Development Ministry for efficient implementation of the Sollers-Bussan project," a Sollers subsidiary in Russia's Far East said in a statement.

The joint venture company will build production facilities and launch production of Toyota Land Cruiser Prado, one of Russia's best selling off-road vehicles, in spring 2012. The joint venture is to produce about 1,000 cars per month at first.

"The development of the Sollers-Bussan project in Vladivostok will become an additional incentive for regional development and will help increase accessibility of Toyota cars for Russian consumers, especially for Far East region citizens," Sollers-Far East said.

 

VLADIVOSTOK, March 1 (RIA Novosti)

Toyota: To Build Land Cruiser Prado In Russiahttp://www.automatedtrader.net/real-time-dow-jones/49770/toyota-to-build-land-cruiser-prado-in-russia

First Published Tuesday, 1 March 2011 07:31 am - © 2011 Dow Jones

TOKYO -(Dow Jones)- Toyota Motor Corp. (7203.TO) said Tuesday it will build sport-utility vehicles in Russia at a plant that will be constructed by a joint venture between Japanese trading house Mitsui & Co. (8031.TO) and a Moscow-based auto maker.

The Japanese car maker and the joint venture called OOO Sollers-Bussan plan to begin production in the spring of 2012 in Vladivostok in the Russian Far East.

Toyota will supply parts needed to built the Land Cruiser Prado SUV and the joint venture will assemble 1,000 Land Cruisder Prados a month, which will be sold through the Toyota dealer network in Russia.

The Japanese auto giant said it will be able to meet growing demand for the SUV in Russia.

Sollers-Bussan is a 50:50 joint venture established last year by Mitsui & Co. and Open Joint Stock Company "Sollers."

-By Yoshio Takahashi, Dow Jones Newswires; 813-6269-2791; yoshio.takahashi@dowjones.com

General Motors to increase car production in Russiahttp://www.reuters.com/article/2011/03/01/gm-russia-idUSLDE7200E120110301

MOSCOW, March 1 | Tue Mar 1, 2011 2:59am EST

MOSCOW, March 1 (Reuters) -U.S. General Motors (GM.N) said on Tuesday that it plans to increase production in Russia to 350,000 cars a year.

"GM's goal is to produce up to 350,000 vehicles annually and reach an average component localisation rate of 60 percent," the company said in a statement.

Earlier in the month, sources told Reuters that GM and Russia's Avtotor plan to form a joint venture to produce at least 300,000 cars per year in Russia [ID:nnLDE71K1LG].

(Writing by Lidia Kelly)

Activity in the Oil and Gas sector (including regulatory)

Gazprom wins bidding for giant Kovykta gas fieldhttp://www.reuters.com/article/2011/03/01/russia-gas-kovykta-idUSLDE72002Z20110301

MOSCOW, March 1 | Tue Mar 1, 2011 1:02am EST

(Reuters) - Russian gas export monopoly Gazprom (GAZP.MM) bought the assets of the bankrupt operator of the Kovykta gas field at auction on Tuesday, and will obtain the right to develop the deposit.

"The licence will be re-registered, and the winner has the pre-emptive rights to acquire the licence," a spokesman for the sale organiser said. He declined to say how big Gazprom's winning bid was.

Rights to the field, with enough reserves to cover world gas needs for 8 months, were held by a unit of Anglo-Russian oil firm TNK-BP (TNBP.MM), BP's Russian joint venture.

TNK-BP last year filed to bankrupt its Kovykta subsidiary, RUSIA Petroleum, to recover its investments, after failing to win approval to to export gas from the field to China. (Reporting by Vladimir Soldatkin; writing by Douglas Busvine)

Price Pressure Expected to Fuel Oil Exports http://www.themoscowtimes.com/business/article/price-pressure-expected-to-fuel-oil-exports/431786.html

28 February 2011

Reuters

Oil firms, knowing better than to challenge Prime Minister Vladimir Putin in a pre-election year, have knuckled under his crusade to restrain pump prices in a move that is likely to stimulate exports.

Putin railed against high gas station prices at a meeting in St. Petersburg earlier this month, and within an hour attendants at major oil producers' retail chains were out on their ladders, knocking the rubles off the price boards.

"We had to dramatically drop diesel and gasoline, but the oil price didn't fall, did it? Demand didn't fall," the head of domestic pricing at one of the top five Russian oil companies told Reuters.

"This kind of meddling is not based on market economics, and it will only result in us wrapping up all the pumps and sending everything to export," she said, referring to the Soviet practice of wrapping the hose around the pump to signal no gasoline was available.

Putin rebuked what he called speculative pricing and demanded more anti-monopoly probes, putting a swift end to months of soaring diesel prices, which hit record highs this month and, unusually, surpassed the price of gasoline.

The verbal intervention also marked the beginning of the traditional, pre-election year of the motorist, when producers seek to pacify the government and drivers by restraining fuel prices and make up for foregone profit by ramping up exports.

"The companies got the signal and have no choice but to agree to the wishes of the leadership. They are going to be very careful working on the domestic market this year," said Denis Borisov, an oil analyst at Bank of Moscow.

Borisov said that in the short term, pressure to keep prices down will prompt producers to send more diesel and gasoline to Europe but that after export duties on products and crude oil are adjusted later this spring, more crude could be exported.

The country is expected to change its oil tax regime in April, which could also tip the scales in favor of more exports. The Energy Ministry is proposing to lower the crude export duty by about 7 percent at the expense of higher oil product duties.

"It's the pre-election year, and during this period the government tries to exert more strict control over prices," said Valery Nesterov, an energy analyst at Troika Dialog. "With prices protected, the pressure will be on exporting more crude oil."

Before Putin's broadside caused companies to slash prices, average domestic winter diesel prices in Russia rose by about 55 percent to 29,000 rubles per ton between September and February.

A delayed ramp-up in production of the key winter fuel led to panic buying by wholesalers to insure against a deficit. Meanwhile, gasoline prices, which typically dip between November and January when fewer cars are on the roads, rose as producers held back the light fuel from the market and stored it to avoid a higher excise tax that took effect on Jan. 1.

Ahead of the 2007-08 election season, government officials and lawmakers extracted voter-friendly agreements from oil producers to restrain prices at the pump.

"In Russia, the only real, actual instrument of dialogue in power and business is fear and force. Until this is applied, speculative monopolists can do what they want," said the head of Russia's long-haul truckers union, Valery Voitko.

Russia's domestic fuel market is not regulated, but the Federal Anti-Monopoly Service, which has already fined Russian majors Rosneft, LUKoil, Gazprom Neft and TNK-BP for breaching competition law, is working on a fixed pricing scheme to prevent future spikes.

"Price formulation is now taking place completely outside market factors, and if Russia can't pay market prices, we'll swing all we can over to export," said the head of products pricing at a state-controlled oil company.

Russia may extend preferential oil export duties to three more depositshttp://www.steelguru.com/russian_news/Russia_may_extend_preferential_oil_export_duties_to_three_more_deposits/193632.html

Tuesday, 01 Mar 2011RIA Novosti citing Mr Andrei Slepnyov Deputy Economic Development Minister as saying that the Russian government may include three more oilfields in the list of deposits that enjoy preferential oil export duties.

Mr Slepnyov said the government could add two oil deposits in the Volga republic of Tatarstan and one on the Yamal Peninsula in the Russian Arctic to the list. He said that preferential oil export duties were introduced by the government as a temporary measure until January 1 2012

Mr Slepnyov said "The date from which duties will be cancelled will depend on how quickly we come to agreement. He could not specify, however, the time period for the convergence of export duties on light and heavy oil products.”

He said that "We should think about what we will have to do with a new tax system in the oil industry, adding that it was necessary to weigh all proposed solutions so as not to worsen the position of Russian companies.”

Mr Slepnyov also said that the government had no plans to impose export duties on metals traded on stock exchanges, including copper and nickel. He said that "We have no such plans. The issue is not on the agenda."

The preferential duty on oil from East Siberia and the Northern Caspian Sea will increase to USD 150.4 per ton from the current USD 137.6 per ton from March 1 while the export duty on Russian crude oil will grow to USD 365 to USD 346.6 per ton from March 1.

(Sourced from RIA Novosti)

Eurasia to Buy Slavneft Assets for $150 Million in Expansion (1) http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a0ty0Z.r_dsk

By Stephen Bierman

Feb. 28 (Bloomberg) -- Eurasia Drilling Co., a London- listed oilfield services company, agreed to buy drilling assets from TNK-BP and OAO Gazprom Neft’s OAO Slavneft unit for $150 million to increase its share of the Russian market.

Eurasia plans to close the transaction with Moscow-based Slavneft by the middle of the year, the drilling company said today in a regulatory filing. It has also begun talks on a contract to provide Slavneft with five years of services, according to the statement.

Investment spending may reach $1 billion this year, according to Kim Kruschwitz, Eurasia’s head of investor relations. The company started the year with about $600 million on its balance sheet, including a $250 million loan from Russia’s Alfa Bank, Kruschwitz said by telephone.

The price was attractive for Eurasia when compared with Weatherford International Ltd.’s $489 million purchase of TNK- BP’s drilling assets in 2009, Olga Danilenko, an oil and gas analyst at VTB Capital, said by telephone today. TNK-BP’s drilling arm was about twice the size of that belonging to Slavneft, she said.

Eurasia, formed from the drilling assets of OAO Lukoil, aims to diversify its customer base away from Russia’s second- largest oil producer. The company claimed a 24 percent share of Russia’s drilling market in terms of meters drilled last year.

Eurasia also concluded a deal to buy the Trident XX jack-up rig for $260 million from Transocean Ltd., the company said today. The rig is currently under contract to Petroliam Nasional Bhd.’s Turkmen unit, Petronas Carigali, for Caspian Sea drilling through 2012, according to a regulatory statement.

Plans to acquire Schlumberger Ltd.’s Russian drilling assets, Slavneft’s assets and the Transocean rig will result in total investment of about $600 million, Kruschwitz said. The

company has earmarked an additional $250 million on its own fleet and another $80 million on a jack-up rig for the Caspian Sea that’s currently under construction in Sharjah, he said.

The acquisitions of Slavneft and Schlumberger assets will lift Eurasia’s market share in Russia to the mid-30 percent range, Kruschwitz said. Slavneft will add about 6 percent and Schlumberger 4 percent, he said.

The company may borrow more money this year, potentially tapping the bond market, Kruschwitz said.

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Torrey Clark at tclark8@bloomberg.net

Last Updated: February 28, 2011 07:25 EST

Surgutneftegaz Sells East Siberian Crude Oil for April, May http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aKuL3FWsoBY0

By Christian Schmollinger

March 1 (Bloomberg) -- OAO Surgutneftegaz, a Russian oil producer, sold 500,000 metric tons of East Siberian Pacific Ocean pipeline crude for loading from April to early May, according to three traders who participate in the market. BP Plc, Royal Dutch Shell Plc and JX Nippon Oil & Energy Co. bought cargoes, the traders said.

Details of the sale are as follows:

Crude: East Siberian Pacific Ocean pipeline crudeQuantity: 100,000 metric tons (730,000 barrels) x 5 cargoesBuyers: Shell, BP, JX NipponLoading: April 7-11, 14-18, 22-26, April 28 to May 2, May 3-7Port: Kozmino Bay Terminal, Russia’s Far EastPrice: Premiums of about $4.30 a barrel to the price of Dubai published by Platts.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net

To contact the editor responsible for this story: Clyde Russell in Singapore at crussell7@bloomberg.net

Last Updated: March 1, 2011 02:55 EST

Lukoil Looks To Romania And Ukraine For Black Sea Entryhttp://www.oilandgasinsight.com/file/96819/lukoil-looks-to-romania-and-ukraine-for-black-sea-entry.html

February 2011 | Industry News

BMI View: Legally barred from operating in Russia's section of the Black Sea, Lukoil is looking to participate in this increasingly popular frontier area by taking acreage in other countries' sectors of the sea.

Privately owned Russian oil producer Lukoil has signed a deal to explore and develop two Black Sea blocks offshore Romania. The agreement over the blocks, which were initially awarded in mid-2010, now appears to be part of a broader push by Lukoil into the non-Russian sectors of the Black Sea, following reports in January linking the company to three Ukrainian blocks. Lukoil is prevented by Russian law from working in Russia's section of the Black Sea as an operator, and appears to be looking at offshore blocks in other countries' Black Sea acreage.

Under legislation passed in 2008, offshore fields in Russia can only be developed by companies in which the government owns a stake of 50% of greater and which have a five-year record of working on such projects, effectively limiting participation to state-run Gazprom and Rosneft . Although recent Black Sea deals with US majors Chevron and ExxonMobil suggest that minority stakes can now be farmed out to private partners, the law excludes privately ...

Gazprom

Gazprom pays $773 mln for Kovykta gas field-Ifaxhttp://www.reuters.com/article/2011/03/01/gazprom-kovykta-idUSLDE7200DZ20110301

MOSCOW, March 1 | Tue Mar 1, 2011 3:00am EST

MOSCOW, March 1 (Reuters) - Russia's top gas producer Gazprom (GAZP.MM) paid 22.3 billion roubles ($773.2 million) for giant gas field Kovykta, auctioned off on Tuesday, Interfax news agency quoted a source as saying.

Rights to the field, with enough reserves to cover world gas demand for 8 months, were held by a unit of Anglo-Russian oil firm TNK-BP (TNBP.MM), BP's (BP.L) Russian joint venture.

Starting price for the field was set at 15.084 billion roubles.

(Reporting by Vladimir Soldatkin; editing by Lidia Kelly)

UPDATE 1-Gazprom wins bidding for giant Kovykta gas fieldhttp://www.reuters.com/article/2011/03/01/russia-gas-kovykta-idUSLDE72005320110301

Tue Mar 1, 2011 1:35am EST

* Starting price set at $520 million

* Win will allow Gazprom to forge its ties with China

* State holding Rosneftegaz was another bidder

(Adds details)

MOSCOW, March 1 (Reuters) - Russian gas export monopoly Gazprom (GAZP.MM) bought the assets of the bankrupt operator of the Kovykta gas field on Tuesday, and will obtain the right to develop the field's 2 trillion cubic metres of reserves.

Victory at an auction will allow Gazprom to forge deeper ties with China, where the Russian energy giant plans to start exporting gas in 2015.

"The licence will be re-registered, and the winner has the pre-emptive right to acquire the licence," a spokesman for the sale organiser said.

He declined to say how big Gazprom's winning bid was. The starting price at the auction, held in the Siberian city of Irkutsk, was set at 15.084 billion roubles ($522 million).

Gazprom, which outbid state holding Rosneftegaz, owner of Russia's top oil company Rosneft (ROSN.MM), was not immediately available for comment.

"The acquisition of Kovykta might prove an important catalyst for Gazprom," Deutsche Bank analysts said last week.

Rights to the field, with enough reserves to cover world gas demand for 8 months, were held by a unit of Anglo-Russian oil firm TNK-BP (TNBP.MM), BP's Russian joint venture.

TNK-BP last year filed to bankrupt its Kovykta subsidiary, RUSIA Petroleum, to recover its investments, after failing to win approval to to export gas from the field, strategically located near Lake Baikal, to China.

In 2007, TNK-BP had agreed in 2007 to sell Kovykta to Gazprom for about $1 billion, but the deal collapsed due to disagreements over price.

Media have speculated that Russia's second-largest gas producer, Novatek (NOTK.MM), in which influential trader Gennady Timchenko holds a stake of more than 20 percent, might emerge as the eventual owner of the field. (Reporting by Vladimir Soldatkin; Editing by Douglas Busvine)

Venezuela Assigns Gazprom New Gas Exploration Areashttp://www.automatedtrader.net/real-time-dow-jones/49646/venezuela-assigns-gazprom-new-gas-exploration-areas

First Published Monday, 28 February 2011 08:23 pm - © 2011 Dow Jones

CARACAS -(Dow Jones)- Venezuela has redrawn the gas explorations rights of Russian energy company Gazprom, assigning it two new areas in the Gulf of Venezuela in exchange for $20 million, according to the government's daily legislative record published Monday.

Gazprom originally purchased licenses for two blocks in 2005 but had not seen results, leading to the shift.

For nearly a decade, Venezuela has attempted without success to exploit its offshore natural gas reserves, which are among the largest deposits in the world.

-By Ezequiel Minaya, Dow Jones Newswires; ezequiel.minaya@dowjones.com; 58-414-120-5738

Gazprom Offers Deposit in Russian North to PetroVietnam Venture http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a0_KeKsCKPJc

By Anna Shiryaevskaya

March 1 (Bloomberg) -- OAO Gazprom and Vietnam Oil & Gas Group, known as PetroVietnam, may jointly develop a natural-gas field in Russia’s north.

Gazprom offered the Severo-Purovskoye deposit in the Yamal- Nenets region to its joint venture with PetroVietnam, called Gazpromviet, said ZAO Gazprom Zarubezhneftegaz, the gas producer’s international projects unit, in a statement on its website yesterday. The field holds proved reserves of about 60 billion cubic meters.

In addition to projects in Vietnam, the two companies agreed to develop the Nagumanovskoye field in Russia’s Orenburg region, close to Kazakhstan, in 2008, the unit said.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

Last Updated: March 1, 2011 01:30 EST

Experts divided over Gazprom’s efficiencyhttp://www.hurriyetdailynews.com/n.php?n=gazprom8217s-inefficiency-divides-experts-2011-02-28

Monday, February 28, 2011SAMUEL DOVERI VESTERBYEISTANBUL - Hürriyet Daily News

Decreasing natural gas prices since mid-2008 have put the debate about Gazprom’s alleged market inefficiency, corruption and mismanagement under the spotlight. Falling revenue for the Russian gas-exporting giant has reopened debates about inefficiency and wastefulness, while other specialists point to ‘politicized accusations’ and a lack of concrete evidence against the company

Falling natural gas prices have reopened the controversial subject of Gazprom’s alleged accounts of gross inefficiencies, corruption and economic mismanagement.

While prices have plummeted below $6 on the Henry Hub, or HH, price scale since 2009, academics remain divided about the company’s reputation with regards to accusations of unprofitability and incompetence.

“Gazprom's problem is massive mismanagement and corruption leading to inefficiency,” said Anders Aaslund, professor at the Russian Academy of Natural Sciences and director of the Stockholm Institute of East European Economics.

Beyond high corruption and cronyism, Gazprom’s second problem is related to unprofitability as a result of being “a high-cost producer in a low-price environment,” Aalund told the Hürriyet Daily News & Economic Review.

Concerns about Gazprom’s levels of economic inefficiency are part of a longer and ongoing debate that has also seen serious accusations of substantial energy waste and government cronyism.

Other specialists have noted that such accusations are widely politicized due to their ideological and strategic influences, which evade technical evidence while focusing on defaming the company instead.

“Gazprom is not necessarily a highly efficient company, but most negative commentaries come from people who have ideological views about Russia and Gazprom,” said Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies.

“They have little conception of the complexity and the amount of work needed to make these kinds of statements about the gas industry either in Russia or elsewhere,” he told the Daily News.

Mismanagement claims countered by ‘politicization’ accusations

Falling natural gas prices could be uncovering the seriousness of Gazprom’s accounts of mismanagement, while other experts accuse such allegations of lacking evidence and specifically targeting Russia for political purposes.

While prices during the past decade brought vast profits to Gazprom, more recent “gas-gluts” witnessed since 2008-2009 have led economists to propose that a dramatic decrease in profits could result in the unmasking of an extremely mismanaged company with rampant inefficiencies.

“Gazprom succeeded in the mid-2000s thanks to the very high European prices that will not come back for the foreseeable future,” said Aaslund.

As gas prices decreased, Gazprom’s core problems have nonetheless remain unresolved, which has meant exposing the company’s “poor efficiency and great corruption,” he told the Daily News.

Other specialists have concluded that such allegations of mismanagement are entirely unfounded, with neither data nor evidence supporting the controversial claims.

“This is nonsense unless properly documented, meaning that we need data, never mind generalized statements,” said Stern.

“Provide us with concrete examples and hard data as to what Gazprom has done or not done in terms of waste, and how this has changed over time,” he told the Daily News.

Another issue related to the extent to which such claims are politicized is whether there is a conscious effort to shy away from criticizing inefficient OECD companies, while instead focusing on Gazprom.

“The chattering classes accusing Gazprom of having failed to invest pre-2008 and saying that it would not be able to meet its contractual commitments in Europe, were many of the same people who now accuse Gazprom of wasting money on irrelevant investment post-2008,” according to Stern.

Although debates surrounding verifiable data are endless, Aaslund said empirical evidence of systematic corruption exists, while Gazprom sells itself short as a consequence.

“The general perception from ample anecdotal evidence is that kickbacks of 50 to 60 percent are standard for Gazprom procurement of infrastructure projects. This means that the cost for a kilometer of pipeline is about three times what it is for normal firms,” he said.

As a consequence, certain pipelines become unviable. “Nabucco is likely to be built thanks to Gazprom's unreliability, arrogance and high prices,” Aaslund told the Daily News.