BP

Russia’s Rosneft says BP offer ‘very interesting’.

Russia’s biggest oil firm Rosneft on Friday called “very interesting” a proposal from BP to take an equity stake in a deal that could see the British group quit its troubled TNK-BP joint venture.The comments by Rosneft CEO Igor Sechin — the right-hand-man of President Vladimir Putin on energy — intensified expectations that Rosneft will acquire the 50 percent stake BP wants to sell in its lucrative Russian business.
The announcement came just a day after reports said Rosneft was seeking a $10-15 billion loan to buy BP’s half of a lucrative but fractious company it runs with some of Russia’s best-connected and most powerful businessmen.
“We think this is a very interesting proposal,” Sechin told reporters at a company board meeting in the Black Sea port of Sochi.
The Russian oil champion and BP last year tore up a $16 billion share swap and joint Arctic oil exploration agreement after it was successfully challenged by the TNK-BP oligarch shareholders who wanted the deal for themselves.
The venture pays BP billions in annual dividends and was last year responsible for about a quarter of its oil output.
But it has also been the source of constant board battles and a drag on the company’s stock because of occasional interventions from the Russian state on the side of the billionaires.
The sale by BP of its entire TNK-BP stake for cash and shares in Rosneft could bolster its shaky standing in the world’s largest oil producing country and give it potential access to coveted Arctic oil.
Putin unexpectedly received BP’s chief executive and chairman for closed-door talks this week that Sechin said included a formal proposal from the British firm to swap shares under a TNK-BP buyout arrangement.
Sechin did not directly address the swap possibility while admitting that his firm was looking at “market mechanisms” that could ease through a deal in which BP could end up holding about 12.5 percent of Rosneft’s shares.
But he stressed that the two sides would not be pressed into immediate action by market expectations — ones fuelled in part by Putin’s own announcement that Rosneft would welcome foreign partners at this stage.
The Vedomosti business daily reported that the government had still not approved the share swap idea because cabinet liberals wanted to keep Sechin from expanding the state’s sway over the private oil sector.
A deal would represent a triumph for BP after a year in which it saw its biggest competitors — from Texas-based ExxonMobil to Italy’s ENI and Norway’s Statoil — strike big deals to develop some of the world’s most sought-after sections of the sea.
Rosneft had 12 offshore fields to licence in recent months and has decided to select foreign partners who have not only the experience and technology but also financing and their own global assets to offer in return.
It has already awarded seven contracts and has only two Arctic lots left in separate sections of the Barents Sea.
The possibility of losing out on those last offers and then leaving its TNK-BP venture would have been a brutal blow to BP chief Bob Dudley after a decade of tireless efforts to build better Kremlin relations.
The British group reaffirmed on Friday that “BP is considering further investment in Russia regardless of who we sell our stake to.”
“Therefore if we are successful in selling our stake in TNK-BP then we would be interested in investing some of the proceeds in buying shares in Rosneft,” it said in a statement.
Rosneft meanwhile announced agreeing with state energy export monopoly Gazprom — the only other company with rights to Russia’s Arctic energy fields — a plan to “jointly operate offshore field development infrastructure.”
The announcement came the same day number two producer Lukoil became the last major Russian private oil company to concede that it stood no chance of joining forces with Rosneft in the north.
“We have halted our negotiations,” Lukoil chief executive Vagit Alekperov told reporters in Sochi.

Russian Economy

The Future Would Be Bright for the Russian Economy If Only the Kremlin Were Willing to Reform.

As Russia’s Prime Minister and President-elect Vladimir Putin prepares to reoccupy the Kremlin in May, the country’s Economic Development Ministry has been forecasting nothing but a bright future. The global economy would face two major crises before 2030, either of which could lead to a long period of slow economic growth, said the ministry. The resulting global slowdown would lessen demand for Russian goods, particularly hydrocarbons, and that, in turn, would compel the government to cut down on social spending. However, a future global financial crisis could also make Russia stronger by providing the right incentives to reform the economy, the ministry said.

The ministry suggested two possible scenarios for the country’s economic development until 2030: the “innovation” or “best case scenario” and the “conservative scenario,” where energy resources will play the main part in the economy. Under the best-case scenario, Russia’s gross domestic product (GDP) is expected to grow at an average of 4.4 percent annually until 2030 – far below the six to seven percent growth promised by Putin, Deputy Minister Andrei Klepach told journalists on Friday. In the so-called conservative scenario, which relies on Russia’s energy and raw material potential, Russia’s long-term economic growth will not exceed 3.5 to 3.6 percent per year. This compares with the ministry’s own GDP growth estimate for 2012, which was reversed to 3.4 percent from 3.7 percent projected earlier. Last year, Russia’s economy grew by 4.3 percent. “In either case, Russia expects to maintain a balanced budget, with the size of public debt not exceeding 20 to 25 percent of the GDP by 2030,” Klepach said.

A comparatively lower public debt will give the government a lot of room for budget maneuvering. “Spending on innovations will consume only 2.2 percent of the GDP or six percent of the total budget spending on average, and will increase to 2.8 percent of the GDP by 2030,” Klepach said. Spending on the economy will increase to 7.1 percent of the GDP in 2030 from five percent in 2011. Education spending as a percentage of the GDP will grow from four percent last year to 5.3 percent in 2030, while health expenditures will climb from 3.9 percent in 2011 to 5.1 percent in 2030. However, defense spending will drop to 3.7 percent of the GDP in 2030 from about 5.5 percent last year, and so will social spending – from 12.6 percent in 2011 to 11.4 percent in 2030.

The Russian economy will expand at a faster pace than the world economy under the best case scenario, with its share of global GDP reaching 37 percent in 2030, up from a mere three percent in 2010. Russia will increase its natural gas production from 670.5 billion cubic meters in 2011 to 900 billion cubic meters by 2030, while oil output is expected to remain at 510 million tons over the same period. The scenario also assumes that oil prices would remain at $105 per barrel from 2011 to 2015, rising gradually to $151 by 2030. Russia is also expected to leapfrog ahead of other European countries to close the gap in income per capita and the quality of life of its citizens. Per capita income is expected to increase from 48 percent of the euro zone level to about 95 percent in 2030, while the share of the middle class will rise from 22 percent in 2010 to around 48 percent in 2030.

But the principal risks ahead are lower oil and gas prices that could result from a decline in global demand. Oil and gas revenues would drop by half from 11 percent of the GDP in 2012 to 5.3 percent in 2030, according to the ministry’s long-term forecast. However, the level of overall consolidated budget receipts is expected to dip only slightly, the ministry said. “Income projections into the budget system will remain relatively stable in the long term – or more precisely – they will decline slightly: from 38 percent of the GDP in 2012 to 37 percent of the GDP in 2020, and down to 35 or 36 percent of the GDP in 2030,” Klepach said. Even such semi-stable growth potential might not compensate for the projected losses in oil and gas revenues, he said.

To achieve macroeconomic and structural policies set out in the optimistic scenario, the government hopes to expand the tax base and improve the system of current tax collection in addition to significantly changing the structure of government spending. The government also needs to roll back subsidies on public utilities such as gas and electricity and cut back on the number of state officials. The measures, which the government will consider on April 26, should enable the budget system to support the modernization of the economy, said the ministry. “Economic stability would be maintained by reducing the budget deficit level to 1.5 to two percent of the GDP by 2025,” Klepach said. “But even those measures will not completely save the budget or significantly reduce the non-oil deficit.”

UK immigration

UK immigration rules tightened to keep out human rights abusers.

The government is to announce tough immigration requirements that would ban non-EU citizens who have been accused of serious human rights abuses, including torture or murder, from visiting the UK.

The measures in the government’s Human Rights Report, to be launched by the Foreign Office on Monday, will allow ministers to refuse entry where credible evidence exists of past or continuing human rights abuses.

The new rules, however, would not constitute a blanket ban on visas for human rights-abusing foreign officials, with ministers still able to rule that individuals – including human rights-abusing heads of state – can visit the UK if it is regarded as part of a policy of engagement on human rights.

The change has been driven by Foreign Office ministers and deputy prime minister Nick Clegg.

At present, the UK does not have a list of those who are banned from visiting, as each case is considered on its merits. Officials admit that there have been times where they have wanted to deny entry to individuals but have struggled because they are not allowed to simply on the basis of their human rights record. Currently, the individuals targeted by the new rules could only have been excluded if they were viewed as a threat to national security.

The new rule will say: “Foreign nationals from outside the European Economic Area may only come to the UK if they satisfy the requirements of the immigration rules. Where there is independent, reliable and credible evidence that an individual has committed human rights abuses, the individual will not normally be permitted to enter the UK.”

The new rules have been in part drawn up following the controversy over the death of Russian lawyer Sergei Magnitsky, who was working for Hermitage Capital, a British investment fund, and died in 2009 in a pre-trial detention centre after deliberate abuse by officials.

Although the doctor involved, Larisa Litvinova, was cleared of culpability in Russia, officials have suggested those involved – like Litvinova – could be excluded.

One official told the Observer: “What this will mean is that rich and powerful people around the world, including eastern Europe, parts of Asia and Africa, won’t have an open ticket to the UK if they are involved in torture, murder or illegal detention – no matter if it happens here in the UK or not.”

Russia to launch

Russia to launch round-the-world trip.

On May 20 May, the ship Sedov will set out on a 14-month circumnavigation from St. Petersburg. The ship is entered into the Guinness Book of World Records as the world’s biggest sailing vessel. Built in Germany in 1921, the legendary Sedov is taking this latest voyage to celebrate Russia’s 1150th anniversary. The first tribal union under the Rurik dynasty is believed to have emerged in 862 in the north of Russia. The ship will cross three oceans and visit 21 countries.

There will be 200 people on board, half of whom will be cadets from the Murmansk State Technical University, who will work on shifts during the voyage. The cadet groups, which are made up entirely of second year students will change twice: in Casablanca, Morocco, and in Vladivostok, in Russia’s Far East.

“To tell the truth, I’ve never been abroad. This will be a huge experience for me, as well as a great opportunity to see the world,” said Dmitry Stolpovsky, an 18-year-old cadet.

Stolpovsky, who will join the project in Casablanca and stay on board as far as Vladivostok, says his parents are very proud he was picked for the project. Yet the desire to see the world is not the only reason motivating Stolpovsky: His favorite rock band Mumiy Troll will also be on board.

“The main idea of this voyage is to show the flag. Russia is the world’s biggest naval power, and we must show to the world that we are open to everyone and pursue peaceful goals,” said Alexander Savelov, spokesman for Russia’s Federal Agency for Fishery. The Sedov, which is owned by the agency, will be its first circumnavigating the globe for the first time.

“I am a fan of Mumiy Troll. It’s great they will be with us. They are real stars and, I hope they will remain on board until the end,” Stolpovsky said.

The members of Mumiy Troll, which was formed in Vladivostok in 1983, promise to fulfill the cadet’s dream. “The idea of recording an album during a sea voyage goes back to my childhood. It began to take real shape more than a year ago, during our Navy Tour voyage, when we staged concerts on Russian warships,” said the band’s lead singer Ilya Lagutenko

Mumiy Troll is extremely popular in Russia and many of its songs are about the sea. They hope that through the voyage they will attract more fans around the world.

At the 30 ports where the Sedov will drop anchor, the sailors will welcome locals on board. “In cooperation with Russia’s Ministry of Foreign Affairs, embassies, consulates and other representatives of Russia, various cultural and entertainment events will be staged on the ship,” Savelov said.

Lagutenko said that the events could be used to show locals a new side of Russia: “The ship’s arrival in any country shows not just our flag but also our friendliness.”

It will be the fourth round-the-world tour for the Sedov’s captain, Nikolai Zorchenk, yet he says the journey never gets old. “Brazil, Chile, Peru – these are all new, exotic places for me, and I very much want to visit them,” Zorchenko said. The countries the Sedov will visit include Germany, Sweden, Norway, France, Morocco, the United States, South Korea, Japan, China, Singapore, Mauritius, South Africa, Senegal, Spain, Brazil, Uruguay, Argentina, Chile and Peru.

“It was not very difficult to organize the trip, only it isn’t so cheap. The project will be bankrolled by the state budget and private companies, including [Russia’s second-largets natural gas producer] Novatek,” said Savelov.

Russian reserves

Italian oil giant Eni looks to Russian reserves for future expansion.

While Italy’s largest oil company Eni announced an impressive 13-percent increase in first quarter profits on Friday, the company’s new accord with Russia’s Rosneft to explore the untapped reserves of the Arctic Sea promises more growth in the future.

Eni announced an adjusted net profit of 2.48 billion euros (3.29 billion U.S. dollars) for the quarter driven by the resumption of production in Libya and higher oil prices.

The company’s Chief Executive Paolo Scaroni welcomed what he called “excellent results” and noted that the strategic agreement it endorsed with state-controlled Rosneft this week was a good sign for the future.

“I’m very pleased with the agreement we have signed with Rosneft as it underpins our exploration opportunities for many years to come, further boosting our prospects of long-term growth,” Scaroni said on Friday.

Scaroni and Rosneft President Eduard Khudainatov signed the accord in Moscow on Wednesday in front of Russian Prime Minister and president-elect Vladimir Putin.

It provides for the joint development of licenses in the Black Sea and the Barents Sea, exchange of technology and personnel and Rosneft’s acquisition of a participating interest in Eni’s international projects.

The deal follows a similar accord reached recently between Rosneft and U.S. energy giant ExxonMobil in which the Russian company will get a 30-percent stake in projects in the United States, the Gulf of Mexico and Canada in exchange for access to Arctic and Black Sea reserves.

Under the latest accord, Eni will take a 33.33-percent stake in the project while giving the state-controlled Rosneft access to Eni projects outside Russia.

“Rosneft is committed to doing business with world-class majors that have offshore production expertise, cutting-edge technologies and are ready to invest in long-term hi-tech projects in Russia,” Khudainatov said.

“I strongly believe that our partnership will help boost the two companies’ resource base and capitalization,” he said.

The companies will explore the Fedynsky and Central Barents fields in the Barents Sea and the Western Chernomorsky field in the Black Sea — offshore fields estimated to have total recoverable reserves of 36 billion barrels of oil.

Rosneft believes the Barents Sea fields are very promising because of their proximity to an offshore area in Norway where at least three large fields have been discovered in recent years.

Seismic data and the recent discovery of hydrocarbons in the Romanian section of the Black Sea means it is highly likely that oil and gas will be found at the Western Chernomorsky field, according to the company.

Eni is thrilled with the potential of the new exploration which will begin amid what it described as a “challenging” economic slowdown and volatile market conditions in 2012.

“We have gained access to two vast and extremely promising areas in Russia, a great hydrocarbon producer,” Scaroni said.

“This success is the result of our long standing relationship with Russia, of the recent developments in west Siberia upstream and of our discoveries in the Norwegian Barents Sea, the first in the area,” he said.

Professor Carlo Andrea Bollino, an energy economist at Luiss University in Rome, told Xinhua that the new accord was significant.

“This is important because the Arctic could be the new frontier. It is close to Canada and it is close to Russia,” Bollino said. “It is very important for the explorations of these fields.”

“The significance of this deal is demonstrated by the fact that Putin was present. It was blessed by the Russian president-(elect),” Bollino said.

In its 2012 market outlook released on Friday, Eni said it expected international oil prices to be supported by growing demand from China and other emerging economies with a full year average price of 113 U.S. dollars a barrel for benchmark Brent crude.

Eni is looking to make Russia’s “first partner” in the production of hydrocarbons and together they will consider areas of interest in North Africa, Alaska of the United States and northern Europe.

Putin’s announcement this month that Russia would abolish duties levied on the exports of hydrocarbons produced in Russia’s Arctic offshore areas and a reduction in the mineral extraction tax has promoted fresh interest from foreign firms.

Last week, Eni started pumping hydrocarbons for the first time at the Samburgskoye field in Siberia and recently renegotiated its partnership with Gazprom, another Russian gas company.

The Italian energy giant also sees potential for growth in China after signing a production agreement with the China National Offshore Oil Corporation earlier in April.

In its earnings report on Friday, Eni said exploration of Block 30/27, which is 400 km off the coast of Hong Kong in the deep water of the South China Sea, had “high exploration potential.”

Eni has been present in China since 1980 and holds equity of 16.33 percent in two offshore Blocks located in the South China Sea (16/08 and 16/19), which have daily production of around 10,000 barrels a day.

Gas partner Russia

EU urges gas partner Russia to back carbon capture.

The European Commission, which has begun talks with the EU’s biggest natural gas supplier Russia on cementing energy ties until 2050, said both sides had to work on burying carbon emissions or gas would have only a short future as a fuel.

Energy Commissioner Guenther Oettinger told an EU-Russia conference in Brussels that, for the 27-member bloc to continue using gas beyond around 2030-2035, it needed carbon capture and storage (CCS) technology to limit greenhouse gas emissions.

CCS captures climate-warming emissions from power plants and stores the carbon underground, for example in depleted natural gas fields under the sea. But the technology is commercially unproven and costly to build.

“Unfortunately, progress within the EU is very slow. I am also not aware of major activities in the Russian Federation on this issue. We have a joint interest to start working on this issue and develop joint activities,” Oettinger said.

Together with Russian Energy Minister Sergei Shmatko, the Commission has agreed to work on an “EU-Russia 2050 road map”, Oettinger said, to guide ties between the European Union and its biggest gas supplier.

The Commission, the EU executive, is also seeking a legally-binding EU-Russia agreement, which it has been negotiating with Moscow since 2008.

Relations between the two sides have often been tense as the Commission seeks to reduce its dependence on Russia and to liberalise its internal market.

THIRD ENERGY PACKAGE

Russian pipeline gas export monopoly Gazprom has taken issue with EU law requiring a separation in ownership between suppliers and infrastructure, such as the Nord Stream pipeline, majority-owned by Gazprom, which runs from Russia to Germany.

Gazprom is also leading the South Stream pipeline project into southern Europe.

Oettinger said the EU was “prepared to look at specific cases, with the aim to find pragmatic solutions within the given legal situation”.

Ilya Galkin, a senior official in the Russian energy ministry, welcomed the prospect of “a new long-term policy”, but said the EU law known as the third energy package was a problem for investment security.

“We have received expressions of interest regarding investment into the South Stream project from many EU countries.”

“They support this project directly, but the situation is quite unclear, as far as the protection of investors is concerned,” he added.

The South Stream is a rival to Commission-backed plans to bring in gas from Central Asia and the Caspian through a route known as the Southern Corridor as an alternative to Russian supplies.

Oettinger said this did not contradict its relationship with Russia, the EU’s prime gas supplier.

“We will continue our efforts to ensure a direct and sizeable access to the hydrocarbon source of the Caspian and Central Asian region. We ask Russia to respect our choices and the choices of the countries in the region.” (Editing by Anthony Barker)

Russia Forms Anti-Piracy

Russia Forms Anti-Piracy Task Force.

Russia has formed an anti-piracy naval task force in the Mediterranean, the Northern Fleet press service said on Saturday.

The force, to be led by the Udaloy class destroyer Vice Admiral Kulakov, will combat piracy in the most dangerous part of the world’s oceans, press chief Vadim Serga said.

The task force will arrive in the Gulf of Aden in early May to join an anti-piracy mission off the Somali coast.

The new task force will replace the Russian Pacific Fleet’s task force led by the Admiral Tributs destroyer. The Admiral Tributs, the Pechenega tanker and a rescue tugboat arrived in the Gulf of Aden on January 12 and escorted five convoys of commercial ships since then.

Task forces from the Russian Navy, usually led by Udaloy class destroyers, operate in the area on a rotating basis.

Russian warships have successfully escorted more than 130 commercial vessels from various countries through pirate-infested waters off the Somali coast since 2008, when Russia joined the international anti-piracy mission in the region.

Middle East money

Middle East money flows into Russian power group.

Middle East investors are pumping $175 million into Russian power generator Enel OGK-5 in what is thought to be the largest injection by a Gulf investor into the country so far, members of the investment consortium said.

Italy’s Enel, which acquired a 56.4 percent stake in OGK-5 as part of reforms to break up Russia’s Soviet-era power monopoly, was not a party to the transaction.

Russia has been trying to attract investment from around the world for various projects and the Middle East’s oil wealth is a key area to tap. Investment so far from the region has been minimal, according to figures from London-based research firm Preqin.

“It’s the trillion dollar question,” Kirill Dmitriev, head of Russia’s $10 billion state-backed investment fund, told Reuters, when asked why Middle East investors were shy about investing in Russia.

Dmitriev runs the Russian Direct Investment Fund (RDIF), created last year to co-invest alongside foreigners to give them greater comfort in Russia’s uncertain business environment, often criticized for corruption. The RDIF is among the consortium of investors in OGK-5.

“There are real issues with investing in Russia but also major perception gaps,” Dmitriev added.

He said the RDIF fund was created because “there was the sense that there were large investment pools all over the world and yet there was no concerted effort to communicate to them the Russian value proposition.”

The Middle East investment is being made by AGC Equity Partners, Dmitriev and the private equity firm said.

Dmitriev said it was the largest Middle Eastern investment in Russia to date. Preqin said it has no record of any larger deals.

AGC sources and manages investments for clients including sovereign funds according to its website, and it has a dedicated team in the Middle East. The company represents a consortium of Middle East institional investors in the deal, AGC said.

“There are a lot of opportunities in Russia, we believe,” said Walid Abu-Suud, co-CEO of AGC Equity Partners. “It is a high-growth market, with under tapped investment potential (and) a well-educated professional labor market.”

“We believe a lot of the issues (of investing in Russia) would be alleviated by investing with the RDIF,” Abu-Suud said.

The deal to buy a 26.4 percent stake in Enel OGK-5 was announced in March, but the consortium announced at the time did not include the Middle Eastern investors.

The buyer group also comprises Xenon Capital Partners’s Rusenergo Fund and the Macquarie Renaissance Infrastructure Fund. They are buying the shares from Russian power group InterRao in a deal with a total value of $625 million.

“We think OGK-5 is going to show significant growth in EBITDA, in our view it was a good time to buy the asset,” said Hamid Gayibov from Xenon Capital Partners. “It promises a significant dividend yield.”

Russia–OpEd

Kremlin’s Tack Set On NATO Hub In Russia – OpEd.

The government of Russia is wrapping up the technical details of a transit deal with the U.S. and NATO that is going to ease the Western coalition’s efforts to withdraw equipment from Afghanistan by 2014, according to the Ulyanovskaya Pravda newspaper. [1] The news came at a time when the Obama administration is promoting a reduction in the number of American troops in war zones outside the country. The opening of the NATO transit hub in the city of Ulyanovsk became possible after several meetings between Russia’s foreign affairs officials and NATO representatives in Riga, Latvia. The Russian newspaper also highlighted the projected amount of cargo containers (60,000-70,000) that are going to be shipped through Ulyanovsk from 2012 to 2014. The first twelve shipments of cargo from Afghanistan are planned to be destined to the United Kingdom, says Ulyanovskaya Pravda.

The Kremlin’s move drifts across the board of Russia’s regional strategy of containing NATO cooperation with the ex-Soviet republics in the CIS. It has not been a secret that Moscow was extensively involved in controversy with the U.S. and NATO base at Manas in the Kyrgyz Republic. According to ex-President Bakiyev of Kyrgyzstan, who was ousted from power as a result of the violent uprising (coup d’etat) in April 2010, “Russian anger at his decision to extend the lease on a US air base was a factor in his overthrow.” [2] A similar opinion has circulated in the hallways of the Obama administration as well, as Simon Shuster writes in the article for Time magazine. [3] Confidential sources in the government of the Kyrgyz Republic say that the Kremlin is behind crucial announcements related to the U.S. and NATO transit hub at Manas near Bishkek, including recent statements from the newly-elected President Atambayev. [4]

As the cat is out of the bag, it is unclear how soon President-elect of Russia Vladimir Putin will deal with the future arrangements over the prolonged stay of the U.S. and NATO personnel in Bishkek, since President Atambayev has been expressing displeasure with the Manas airbase lease extension. But local experts familiar with the “hidden drives” of Kyrgyz politics in Bishkek say that Moscow most likely will push for a re-adjustment of rhetoric regarding the base in Kyrgyzstan as Russia’s leadership is currently doing. The Obama administration is aware of the tricks that come with negotiations on the lease of the airbase in the Kyrgyz Republic. The key to successful savoir-faire regarding the Manas transit hub’s prospects after the 2014 deadline could be achieved through diplomatic channels between Washington and Moscow. Besides having geopolitical dominance in Kyrgyzstan, the Kremlin allows the Kyrgyz political establishment to have commercial opportunities in the Russian domestic market.

The Kremlin’s “carrot and stick” policy toward the corrupt regimes of Central Asia played well with the rulers of Kyrgyzstan. There is no exception with the current authorities in Bishkek either. Moscow evidently takes care of the Kyrgyz officials loyal to the leadership of Russia, as it did with the Kyrgyz ex-Minister of Defense Esen Topoyev who was awarded the position of adviser to the director of Russia’s state arms corporation Rosoboronexport after a significant boost to the Kremlin’s military interests in Kyrgyzstan. Mr. Topoyev was one of the major supporters of the Russian airbase (Kant) on the outskirts of Bishkek. Kant airfield is within a twenty-mile proximity to the U.S. and NATO transit hub Manas.

However, a withdrawal of the Western coalition troops from Afghanistan creates an unavoidable security dilemma for the leadership of Russia in the near future. Prior to the U.S. and NATO intervention in Afghanistan, the Kremlin along with Tehran was involved in arming the United Front of Afghanistan, then led by Ahmad Shah Massoud. [6] The twist with the case of the world-renowned arms dealer from Russia, Victor Bout, highlights another angle of the squabble regarding the Kremlin’s realpolitik approach. The Los Angeles Times newspaper’s investigative report into Mr. Bout’s arms-dealing activity revealed quite appalling information about his clandestine work in Afghanistan with Taliban commanders in the late 1990s. According to the LA Times article from 2002, Mr. Bout was “sheltered by a Russian government” while American and British officials had been investigating his questionable business. [7] Despite the obstacles, Victor Bout was arrested after a sting operation by the U.S. Drug Enforcement Administration in 2008 and extradited from Thailand to the United States in 2010. In April 2012, Mr. Bout was sentenced to 25 years in prison by a federal judge in New York. [8]

Meanwhile, the mainstream media in Bishkek accused Moscow of applying double standards in Kyrgyzstan by playing Manas airbase against the interests of the sovereign Kyrgyz Republic. Russia’s foreign affairs ministry responded to the Kyrgyz media allegations by pointing at the international treaties between Russia and NATO member states enabling the transportation of non-lethal goods via Russian territory. Foreign affairs officials also reminded Bishkek that a decision by Kyrgyz President Atambayev on closing the U.S. and NATO air operations in Bishkek after 2014 was welcomed by the government of Russia. [9]

Medvedev

Criminal suspects should not be granted foreign citizenship – Medvedev.

President Dmitry Medvedev has said that Moscow is opposed to suspects on Russia’s wanted list being granted citizenship and residence permits in foreign countries.

When it comes to law-abiding citizens, he said, there is no problem. However, in case with people “who are wanted and pursued by the authorities, we believe such actions [as granting citizenship to those people] are unfriendly,” Medvedev said speaking at a joint media conference with his Finnish counterpart Tarja Halonen.

“We are confident that people who are suspected of or charged with criminal offences of the territory of any country should not be given [citizenship or a residence permit], especially in the situation when it refers to relations between two friendly… countries,” the Russian leader stated. “Actually, according to general rules such persons should be extradited,” Medvedev said. These people are unlikely to beautify Finnish society, or bring peace and quiet with them, he added.

Journalists asked the Russian head of state to comment on the cases when Russian citizens from the republics of Chechnya and Ingushetia – including those on the wanted list – are welcomed abroad.

Halonen, for her part, said that granting asylum in Finland is a judicial rather than political procedure. She added that she personally was taking part in working out the rules. “Such decisions may cause different opinions, but in Finland they are made by court,” she said as quoted by Itar-Tass.

Mixed families’ problems

The issue of senior people being able to join their relatives living in Finland has been especially sensitive since the story of elderly Russian woman Irina Antonova, who was not allowed to stay with her daughter, drew huge public attention in both countries. The 82-year-old lady, who was already in poor health, had to go back to Russia where she has no relatives to take care of her.

Another sensitive issue – family conflicts between spouses of different citizenships – has also been raised. President Dmitry Medvedev said that even though divorces in mixed families are handled on the basis of national law, the resonance they create in other countries must be considered.

“Such conflicts must be handled with special tact, attention and scrupulousness,” Medvedev said.

Tarja Halonen said that when divorces between Russians and Finns do not go smoothly, the authorities both “in Finland and Russia must treat these mixed families on an equitable footing without discriminating against anyone.” She stressed, Interfax cites, that the governments of the two states act exclusively in the interests of children and their families.

No alternative to visa-free travel between Russia and the EU

“If we want to develop relations in all spheres, there are no any alternatives to visa-free travel between Russia and the EU,” President Medvedev said. If problems with introducing a visa-free regime arise, he said, they will definitely not come from the Russian side. According to the Russian leader, problems should be resolved within the European Union.

“The EU should take stock of the package of bilateral and multilateral agreements with countries it has already established visa-free travel,” he said. “Look at the list of those countries and decide whether problems will arise after the signing of a similar agreement with Russia.”

“We count on the assistance from our partners and from Finland on this issue and we hope they will manage to convince the states which have not made up their minds yet on the pace of Russia’s joining the visa-free space,” Medvedev said.

His Finnish counterpart said she has no doubts that an agreement on the matter will be signed.

“As you know, this process is not at all easy. Russia has already submitted its draft agreement. In the European Union this issue refers to the competence of the European Commission which makes decisions,” she said, writes Interfax.

Dmitry Medvedev arrived in Finland on Tuesday to discuss a wide range of issues, including cooperation between Russia and the EU, and European security.

On Tuesday Finnish president Tarja Halonen together with her husband gave Dmitry Medvedev a tour of her summer residence, which is located on the south-western coast of the country. Medvedev in his turn thanked his Finnish counterpart for the warm welcome.

Tarja Halonen stressed that she is attaching great importance to this meeting.

“Whenever I am asked why we develop relations with Russia, I always say that we are good neighbors, and good neighbors should meet regularly to exchange information and to carry on their good relationship,” Halonen said.

This is the fifth meeting between Medvedev and Halonen and the second time Medvedev has been on a state visit to Finland.

“I used to like coming [to Finland] in summer; however, I had a different status then,” confessed Dmitry Medvedev. “The weather is nice here, which is in contrast with what we have in Moscow,” said Medvedev, referring to the unusually high summer temperatures in Central Russia currently.

The official program of the visit has started on Wednesday.

Syrian Crisis

The Russian approach to the Syrian Crisis too pragmatic?

After the Russian parliamentary and presidential elections in December 2011 and March 2012, the opposition’s protests in various parts of the country, mostly in Moscow, were temporarily sensationalized by some Western media outlets.

But the state culture of the Russian political system was hardly challenged by these protests. And Putin’s presidency, for the third time after a victory in the first round of the presidential election, will face many problems, in both its international and national agendas. The Syria crisis is one of them.
Even at a time when the presidential elections dominated Russian politics, Syria’s crisis remained one of the top issues of the Kremlin’s foreign policy. While trying to finalize its new cabinet’s structure, Putin is also attempting to play an active role in the Syria crisis with adept diplomat Sergey Lavrov.
While dictators fell from their long-occupied seats as a result of the popular movements that erupted in December 2010 in Tunisia and the Arab world, international support has been one of the many factors behind Bashar al-Assad remaining in power. With the support of China and Russia — permanent members of the United Nations Security Council — the Assad “government” has remained determined to fight to protect its existing regime in the country.
First of all, Russia is not an ordinary supporter of the Assad administration. In addition to providing political support, it is Syria’s largest supplier of weapons. According to the Stockholm International Peace Research Institute in 2011, Russia has supplied 78 percent of the Assad regime’s imported weapons during the past five years. In addition to providing arms, Russia postured its navy in the eastern Mediterranean to make clear its support for Syria, unlike the passivity it displayed during Libya’s revolution. Russian officials, despite the cease-fire initiated in Syria on April 12, are determined to preserve their naval presence near Syria’s coast.
The Russian role in the UN Security Council should be highlighted as well. Apart from blocking resolutions, the Russian stance also determines the Chinese stance. It appears that China has used its veto power less often than it has abstained. Since 1970, China has used its veto power eight times, Russia 13 times, and the United States 83 times in UN Security Council decisions. Taking into consideration China’s sparing use of its veto, analysts believe China took cues from Russia on how to vote in the UN Security Council on this issue.
Russia: an influential actor
For all these reasons, Russia stands out as an influential actor among those involved in the Syria crisis. The Annan plan, which went into effect on April 12, Moscow’s declarations of support for the Assad regime and communiqués with Damascus have placed Russia in this position. However, while the international community experiences deep anxiety over Assad’s failure to abide by the cease-fire, the argument can be made that that Russia is developing a “plan B.” It is important to reflect on the importance of Russian Deputy Foreign Minister Gennady Gatilov’s announcement just before the cease-fire. He stated that Russia is ready to negotiate with the representatives of the Syrian opposition. From the beginning there has been a dialogue between Moscow and the Syrian opposition. Around the time when these statements were released, the Russian foreign minister also met with the opposition groups from Syria on April 17-18. He will meet with the Popular Front for Change and Liberation (PFCL) from Syria on April 26-27 as well.
Furthermore, Russia no longer insists on allowing Assad to remain in power. That is because, as Russian authorities have remarked, Moscow’s support for Assad must not be interpreted as Russia supporting the Arab leader, but rather as supporting the establishment of stability in Syria. As its image in the Middle East has worsened because of its support for the Assad regime, Russia’s shifting stance could also be understood as an attempt to improve its public relations.
It is difficult to claim that there has been a radical change in Russia’s stance. But Moscow has given the impression that it has taken this new position for strategic reasons, although it has not rushed itself for two reasons. The first reason is Russia’s regional and global interests. In his article, published in Moskovskie Novosti on Feb. 27 under the title “Russia and the Changing World” — referring to Western policies in the Middle East — Putin wrote that, Russia incurred political and economic losses in the past, and may seek different results in the Syrian situation. In the meantime, attempting to remain a “great power” on the worldwide political scene, Russia seems to be uncomfortable with the fact that the US bypasses the UNSC when it does not produce the desired results. The second major problem for Russia is the fragmented character of the opposition. For this reason, Russia is unsure with whom it could cooperate in Syria in the post-Assad period. As a result, the Kremlin, even as the Assad regime weakens, believes that the administration is the best alternative for now.
With its current policy, Russia gives the impression that it is unwilling to take risks and that it has a plan B. This demonstrates Russia’s pragmatic foreign policy. However, considering the fragility of the application of the Annan plan and the behavior of the Assad administration since April 12, it is a matter of international concern how Russia will react in the coming days, especially if global and regional actors become more unhappy with orders from Damascus. Prime Minister Recep Tayyip Erdoğan has said that he has the impression that China will not be as enthusiastic as before to support Assad’s policies and that the current priority of the international community is to have talks with Russia. Erdoğan’s feelings toward Beijing are open to discussion. Regardless, it is certain that Moscow is the key player here and Putin, as the new president, will be the key actor.
As Assad continues to violate the Annan plan, his room to maneuver is narrowing. This also negatively affects the pragmatic position of Assad supporters, particularly his supporters in the Middle East. Furthermore, as the crisis in Syria deepens, the possibility of a divided Syria in the aftermath of Assad’s possible ousting becomes stronger. In this sense, those who seek stability in Syria should particularly expect a divided Syria in the long run, since this possibility will most certainly affect the entire Middle East.

Russian tycoon

Russian tycoon wants $2.7 million back from Christie’s for fake art.

One of Russia’s richest men, oil oligarch Viktor Vekselberg has begun a High Court battle in London against Christie’s auction house. The businessman claims a painting his fund bought in 2005 is a fake and is demanding a $2.7 million refund.

Viktor Vekselberg filed the case with the Supreme Court of Great Britain against the world’s leading auction house, in 2010. The court fight is over the painting, Odalisque which Vekselberg’s company bought as a work by Russian painter Boris Kustodiev. However according to Vekselberg, an independent expert revealed the artwork couldn’t be by Kustodiev’s hand.

Careful analysis of the Cyrillic signature said to be that of Kustodiev and dated 1919 was made by leading Russian experts. The experts revealed that it couldn’t be made before the 1940s, as the artist died in 1927. Information that the artwork is a fake was made public in 2009. Odalisque then appeared on the pages of the “Fake Paintings Catalogue,” published by the Federal Cultural Heritage Protection Service.

Christie’s auction house still insists, that its attribution was correct and plans to hold another examination to prove their claim that the artwork is a Kustodiev.

Kremlin policies

‘Russian general’s remarks run counter to Kremlin policies’.

An Iranian military source has said that Russian Army General Nikolai Makarov’s remarks about NATO’s missile defense system are in “obvious contradiction” to policies adopted by Russia’s high-ranking political officials.

“The threat is always there, so we closely monitor the nuclear program developments of many countries,” Makarov, the chief of the General Staff, told RT television in a recent interview.
“The analysis that we conducted together with the Americans confirms that, yes, there is a probability that the threat exists. And we agreed that it is necessary to create a missile defense system,” he said.
The Iranian source told the Persian service of IRNA on Saturday, “Such remarks will undermine the security of Russia and the region,” adding, “Giving in to expansionist policies of the United States and NATO will move the region toward instability.”
He also said that most military analysts believe that NATO’s missile defense system is not meant to counter missile programs of Iran and North Korea, but it is targeted at the “Russia’s strategic depth.”
In addition, he said that “overnight” changes in policies of a country like Russia will create distrust.

Russia-Germany

Russia-Germany: strategic partners in Europe and Asia.

At a media briefing after the talks, Guido Westerwelle stressed in particular that the new German federal government is ready to continue the strategic partnership with Russia because it meets the interests of both parties.

Both ministers also made a statement that the Nord Stream gas pipeline project, so important for the whole European community, is advancing at an appropriate speed and both countries will continue to develop it.

Sergey Lavrov also said that “We have discussed the disarmament issues and Moscow welcomes the German decision to ratify the adoptive Treaty on Conventional Forces in Europe (CFE Treaty). He added that Russia is always open for discussion of that topic.

“Russia expects closer co-operation with NATO countries on Afghanistan,” Lavrov said, “to effectively develop a common strategy.”

According to Sergey Lavrov, that would mean the development of a collaboration between NATO forces in Afghanistan and the Collective Security Treaty Organization (CSTO) forces, which regularly conduct operations against drug traffickers on Afghan borders.

RT political commentator Peter Lavelle pointed out that “these are the first events after getting a president of the EU, so this bilateral relationship goes on and this is the first test case in a way.” And although not enough time has passed to tell whether or not there was some real progress, “the German Foreign Minister is a very important person in Europe,” added Lavelle.

Media buzz

Media buzz as US confirms Russian troops to train on American soil.

The US has confirmed that Russian troops will carry out joint anti-terror drills on American soil in May. Reports of the unprecedented initiative had triggered hysteria in American public debate, with claims of the US fraternizing with “the enemy.”

­Commander Wendy L. Snyder, US Defense Press Officer for policy told The New American in an e-mail the Russian soldiers will be invited by the US government.

This is part of a “formal bilateral exchange program between the US and Russia that seeks to develop transparency and promote defense reform,” she wrote.

Around twenty airborne Russian troops with arrive in Fort Carson, Colorado to take part in the training program targeting “terrorists”. It will be the first time Russian soldiers have conducted military training on American territory.However, the landmark news of the Russian troops’ arrival was not greeted with enthusiasm by everyone. Fear-mongering reports in US media called the exercise “a front” for the Russians to turn US weapons against the Americans and “take and hold Denver airport.”

Citing an erroneous report that it said came from the Federal Service for Military-Technical Cooperation, US website theblaze.com claimed just that.

“Russian airborne troops (using US weapons that they had previously trained with at Fort Carson) will fly to and then parachute from their planes having the objectives of seizing the CIA’s main computer facility in Denver, the NSA’s main computer facility in Bluffdale, Utah, and taking control of main runways and terminals of the Denver International Airport,” the publication wrote.

The report goes on to say the exercise is for the “evacuation of the key personnel and equipment previously ‘freed’ from the CIA’s Denver base.”

There is currently no information either in English or in Russian that describes such a drill on the Federal Service for Military-Technical Cooperation website.It is unclear where these reports originated, as RT verified with Russian Airborne Forces spokesperson Col. Aleksandr Kucherenko that he had said nothing pertaining to the capture of Denver airport.

RT reported on the story on Wednesday, citing Kucherenko who announced that “Airborne troops from Russia and the United States will hold joint anti-terror drills in the US state of Colorado between May 24 and 31.”

Besides the military drills, the Russian soldiers are expected to get a taste of local life at a baseball game in Colorado Springs.

Foreign troops operating and training in the United States have been a continuous bone of contention in American public debate.

Paul Watson, writing for prisonplanet.com says that their presence touches upon latent fears of “global UN peacekeeping troops being used to quell unrest inside America.”

Drills involving outside troops also raise worries that the US would have to “rely on foreign mercenaries to restore order, confiscate weapons or even incarcerate citizens during a national emergency, because of the likelihood that Americans would refuse to carry out such orders against other Americans,” Watson writes.

Soccer pitches in Russia better

Soccer pitches in Russia better ‘for chickens and goats’.

Russian Premier League pitches are a disgrace and, in at least one case, more suitable for chickens and goats than professional soccer, the world players’ union FIFPro said in a report on Friday.

Russia has been awarded the 2018 World Cup and football in the country is booming, yet FIFPro said it had heard from players that pitches had been overlooked.

“The quality of the pitches in Russia is disgraceful,” former Torpedo Moscow player Vladimir Leonchenko, a member of the union’s technical committee, was quoted as saying by FIFPro.

“There is enough money. We are talking here about clubs with budgets of 70 million euros [US$92.7 million] to 80 million euros. But there is simply no willingness and also no knowledge to invest in the pitches. This is very bad for the image of Russian football,” Leonchenko said.

Leonchenko added that from the beginning of March every year, matches in Russia should be played only in the south of the country and on the artificial surface in the Luzhniki Stadium in Moscow.

“Not only are the other pitches at the start of March in an appalling condition, but also, by playing on them in that period, you destroy the pitches for the rest of the season,” he said.

Cameroon forward Samuel Eto’o, who plays for Anzhi Makhachkala, was quoted by FIFPro as saying that the pitches had turned out to be a far bigger problem for him than the freezing cold, which he had expected to be his main concern.

“When I was considering the possibility to go to Russia, I was told that the main problem is the cold. But after a while in Russia I understood that the main problem of Russian football is the condition of the pitches,” the former Barcelona and Inter forward said.

“The present pitches do not allow us to play as we can. This is not football, this is something else,” he added.

He was backed by his Anzhi teammate Vladimir Gabulov.

“The Russian pitches are worse than those on which Eto’o played in his childhood in Africa,” he said.

FIFPro also carried the views of other Russian Premier League players about pitches they had played on recently.

The most outspoken was Roman Shirokov of Zenit St Petersburg.

“How can you play in such a garden?” he said, referring to an unidentified Premier League pitch.

“If the groundsman has chickens and goats, let him use it. You just cannot play football here,” Shirokov added.

Russia to send man to moon by 2030

Russia is planning to send a manned mission to the moon by 2030, Russian space agency Roscosmos said.

According to the Russian space strategy published on the Roscosmos website, Moscow has set several way-points for its space exploration activities — 2015, 2020, 2030 and the period after 2030.

Roscosmos will resume lunar exploration by 2015 using an unmanned space ship. Russia is also planning to send a manned mission to the moon by 2030, the space agency said.
In January, Roscosmos head Vladimir Popovkin voiced plans to set up manned moon research bases with European and US partners, saying there were plans to either set up a moon base or to launch an orbital station.
To that end, Russia is currently developing a “prospective manned transportation system” to be sent to the moon, he said.
Russia is also planning to send two unmanned moon missions by 2020, Luna-Glob (Lunar Sphere) and Luna-Resurs in 2015.
The launch timeframe, however, may be reviewed because the two spacecraft are being built with the same technologies as Russia’s failed mission to Mars moon Phobos, which proved vulnerable to cosmic radiation.
The Phobos-Grunt mission, launched in November last year, was designed to bring back rock and soil samples from Martian moon Phobos. However, it got stuck in an Earth orbit after its engines failed to put it on course for the Red Planet. The spacecraft fell to the earth in January.
The moon base project has similarities to Cold War-era plans to create a permanent outpost on the moon, which has been envisioned by some Soviet and US scientists since the late 1950s.

Russian-U.S. space station

Russian-U.S. space station crew returns to Earth.

A Soyuz capsule carrying two Russian cosmonauts and a U.S. astronaut from the International Space Station (ISS) landed safely in Kazakhstan on Friday.
The Soyuz TMA-22 parachuted down onto the steppe in the former Soviet republic of Kazakhstan, landing on schedule and on target north of the town of Arkalyk after a three-hour descent from the orbital outpost.

Space officials, technicians and relatives of the crew watching footage on a big screen at Russian Mission Control outside Moscow burst into applause when footage taken from a helicopter showed the capsule touchdown.

“We are landing!” big block lettering on the screen said.

The cramped capsule brought veteran NASA astronaut Daniel Burbank and Russians Anton Shkaplerov and Anatoly Ivanishin back to Earth after nearly six months aboard the ISS.

Speaking on NASA TV, a NASA spokesman at the site said it had been “one of the most pinpoint and precise landings” of a Soyuz returning from the station.

Shkaplerov, the first to be pulled from the capsule resting on its side on the steppe, smiled and gave a thumbs up after support personnel sat him in a chair and wrapped a blue blanket over his legs, in spite of temperature of more than 70 F (21 C).

Ivanishin followed with a broad grin and then Burbank, who chuckled as he answered questions from medical personnel.

Their trip to the station in November was the first since the U.S. space agency NASA ended its 30-year shuttle programme, leaving the 16 nations investing in the $100-billion station to rely solely on Russia to ferry crews for the time being.

The mission had been delayed by safety fears after an unmanned Russian Progress craft taking supplies to the station broke up in the atmosphere in August.

That was one of five botched Russian launches the past year that marred celebrations of the 50th anniversary of Soviet pilot Yuri Gagarin’s first human space flight and hurt Moscow’s pride.

The launch failures included a long-awaited unmanned mission to return samples from the Martian moon Phobos.
Russian cosmonaut Oleg Kononenko, NASA’s Don Pettit and European Space Agency astronaut Andre Kuipers remain aboard the ISS, where they would arrive in December.

Russia Stocks Drop

Russia Stocks Drop for First Week in Three on Government Concern.

Russian stocks declined for the first week in three on concern President-elect Vladimir Putin’s new government won’t undertake changes necessary to reform the economy amid signs the global recovery is slowing.

The 30-stock Micex Index (INDEXCF) added 0.3 percent to 1,473.50 by the 6:45 p.m. close in Moscow, paring its steepest weekly drop in a month to 2.1 percent.

OAO Mechel (MTLR), Russia’s biggest producer of coal for steelmakers, lost 0.1 percent, while OAO EON Russia, the Moscow unit of Germany’s biggest utility, traded down 0.2 percent. OAO Aeroflot, the country’s largest airline, gained 4.1 percent, the most since Dec. 30. The dollar-denominated RTS Index was little changed at 1,593.97. Markets are open today to replace the April 30 public holiday.

Russia’s new government lineup is due to be announced after Putin’s inauguration on May 7. The former KGB officer, who was president from 2000 to 2008 before having to step down because of term limits, pledged during his campaign to boost pensions and support for small business. Emerging-market stock funds posted their third consecutive week of outflows on concern the European debt crisis may worsen, according to EPFR Global.

“Everyone is looking for some kind of a game plan from the new government,” Roland Nash, chief investment strategist at Verno Capital in Moscow, who helps manage $200 million in Russian equities, said by phone today. “There is a lot of uncertainty right now and the markets tend to hate uncertainty.”

Putin, who won his third term as president on March 4, has backtracked on a promise by current President Dmitry Medvedev — whom he asked to be his premier — to return to direct elections for governors, saying on April 11 that he will retain the right to veto candidates.

Euro Confidence, U.S. Jobs

Urals crude, the country’s main export earner, rose 0.2 percent to $117.36 yesterday, gaining 1.5 percent from last week, the first weekly advance in seven.

Oil may decline next week after economic confidence in the euro region fell and more Americans than estimated filed applications for unemployment benefits, a Bloomberg survey showed. Sixteen of 37 analysts, or 43 percent, forecast oil will retreat through May 4. Russia’s budget relies on oil and gas for about 50 percent of its revenue.

Under an Economy Ministry development proposal submitted to the government for approval, the oil and gas industry would make up about 10 percent of the country’s gross domestic product by 2030, from 20 percent currently.

Putin vowed to boost pensions and salaries for state workers and the military during campaigning, pledges that will contribute to a 4.8 trillion-ruble ($164 billion) increase in spending through 2018, according to Capital Economics Ltd. He also vowed to reverse “repressive” state policies and reduce government holdings in major non-commodity companies.

‘Unsteady’

“We don’t know what reforms they are going to implement, what the new cabinet is going to look like,” Nash said. “Until we have an understanding what the new government is going to do, the market will remain unsteady.”

The Micex will be open for trading on May 7 and 8 and closed on April 30, May 1 and 9 due to public holidays.

Russian shares have fallen 2.9 percent so far this month and trade at 5.4 times estimated earnings. That compares with a 2.1 percent loss for the MSCI Emerging-Market Index (MXEF) which trades at 10 times projected earnings.

The Market Vectors Russia ETF (RSX), a U.S.-traded fund that holds Russian shares, gained 0.5 percent to $29.89 in New York yesterday, the highest level since April 20. Futures expiring in June on the RTS Index added 0.2 percent to 155,225.

Mechel, Aeroflot, OGK-3

Mechel fell to 260.8 rubles. Trading volumes totalled 97,787, or 22 percent of the average three-month trading activity for the shares. EON Russia declined to 2.655.

Aeroflot rallied 4.2 percent to 48.81 rubles, the biggest daily gain since Dec. 30. The company boosted passenger numbers by 29 percent to 3.6 million from January to March, compared with a year earlier, Russia’s aviation authority reported yesterday on its website. The stock’s trading volume totalled 3.85 million, equivalent to 169 percent of the three-month average.

OAO OGK-3, the Russian electricity utility majority-owned by OAO Inter RAO UES, fell 1.3 percent to 1.057 rubles, the lowest closing level since Feb. 14.

Russian Patriarch

Thousands of Bulgarians Meet Russian Patriarch in Plovdiv.

Thousands of people met the head of the Russian Orthodox Church in the center of Bulgaria’s second largest city of Plovdiv, chanting “Russia” and accompanying clerics in their procession with church banners.

Patriarch Kirill of Moscow and All Russia, who arrived in Bulgaria on a visit on Friday, earlier on Saturday met with President Rosen Plevneliev and Prime Minister Boyko Borisov.

Prior to arriving in the center of the southern Bulgarian city, the Russian patriarch visited monuments to honor the memory of Russian warriors who fell in the battle for the liberation of Bulgaria in the Russo-Turkish War of 1877-1878 and World War II.

The procession ended near the St. Marina Cathedral, where Patriarch Kirill was met by 97-year-old Patriarch Maxim of Bulgaria, who came to the city from Sofia for a joint prayer with the head of the sister church, as well as by Metropolitan Nicholas of Plovdiv and top city administration officials.

The patriarch wished those who gathered that God show mercy to Plovdiv and its residents, and presented an icon of Our Lady of the Sign to the St. Marina Cathedral.

In a speech in front of the war monuments earlier in the day, the Russian patriarch urged people to retain the idea of sacrifice in modern society, which, he said, is being ousted by “consumption psychology.”

“We are at a place where you ask yourself what huge importance sacrifice has in a person’s life. If people did not sacrifice, there would have been no great achievements or victories,” the Russian Church leader said.

“We bow our heads in memory of the heroes who sacrificed themselves for the sake of other people,” Patriarch Kirill told hundreds of locals and journalists near the Plovdiv war monuments.

Russia-China

Russia, China announce progress on $4 bn fund.

Russia and China on Saturday firmed up plans to raise capital for a joint $4 billion investment fund as a top Chinese official, who is set to be the next premier, visited for talks.

Progress on a joint investment fund was announced at an economic forum attended by Chinese Vice Prime Minister Li Keqiang and Igor Shuvalov, the influential first deputy of Russian Prime Minister Vladimir Putin, who will return to the Kremlin for a third term as president on May 7.

“The creation of the Russian-Chinese investment fund by the Russian Direct Investment Fund and China Investment Corporation will become an example of effective cooperation in the economic sphere between Russia and China,” said Kirill Dmitriyev, general director of Russia’s investment fund.

The Russian fund and the Chinese sovereign wealth fund will each contribute $1 billion (755 million euros) to the joint venture, while the rest is expected to come from Chinese investors, Dmitriyev said in a statement, adding the fund would become operational by the end of June.

Machine-building, agriculture, transportation, and timber processing are among the sectors to be targeted for investment, with 70 percent of the resources directed to Russia and 30 percent to China. Plans to establish the fund were first announced late last year.

Li, who is tagged to take over as premier from Wen Jiabao, on Friday held separate talks with outgoing President Dmitry Medvedev and Putin.

Russia’s economy is heavily dependent on oil and gas, and analysts say that Medvedev’s heavily-publicised modernisation drive during his four years in office has had limited success.

During the economic forum Russian and Chinese companies signed a total of 27 commercial agreements and contracts, the Russian economic ministry said.

China’s official Xinhua news agency, quoting Li, said the deals were worth $15 billion. Representatives from the Russian economic ministry could not immediate confirm the figure or provide their own estimates.

Zenit

World Football – Zenit defend Russian title.

Ten-man Zenit St Petersburg beat Dynamo Moscow 2-1 on Saturday to secure their second consecutive Russian Premier League title with three games to spare.

Luciano Spalletti’s team, backed by Russian energy giant Gazprom, only needed a draw in the top-of-the-table clash to clinch a third domestic title since 2007 and fourth in total.

Zenit midfielder Roman Shirokov fired the home side in front on the half-hour and fellow Russia international Alexander Kerzhakov doubled the lead from the spot six minutes later.

Moldova defender Alexandru Epureanu pulled one back for the visitors just before the break but Zenit held on for a deserved win to stretch their lead over Dynamo to 15 points.

Zenit had to play with 10 men for most of the second half after their Russia midfielder Konstantin Zyryanov was sent off after picking up a second booking.

In Moscow, Serbia winger Zoran Tosic scored twice to lead CSKA to a 2-1 win over city rivals Spartak as the army side leapfrogged their opponents into third place.

CSKA, who recorded their first victory in six matches since they beat Spartak by the same score last month, are now level with Dynamo on 69 points. Spartak are fourth a point behind.

Cameroon striker Samuel Eto’o scored twice and set up another goal as wealthy Anzhi Makhachkala, coached by former Russia boss Guus Hiddink, beat Lokomotiv Moscow 3-1 to move into fifth spot with 66 points.

Lokomotiv and Russia striker Roman Pavlyuchenko was forced to leave the game midway through the second half after suffering a leg injury.

“Roman will probably miss the rest of the season,” Lokomotiv coach Jose Couceiro told reporters. “As for his Euro 2012 chances, that is up to Russia coaches to decide.”

Lavrov’s Message

Russian Envoy Conveys Lavrov’s Message to Iranian FM.

The verbal message was conveyed to Salehi in a meeting at the venue of the Iranian foreign ministry on Saturday morning.

During the meeting, the two diplomats also discussed bilateral issues as well as regional and international developments.

The message came after Lavrov reiterated Moscow’s opposition to any further UN sanctions and actions by other nations and groups, including the EU oil ban which comes into force in July, and warned the European Union that its ban on purchasing Iranian oil would end up hurting the bloc’s member states.

“The European Union is rejecting purchases of Iranian oil, even though very many EU countries depend on this oil,” Foreign Minister Sergei Lavrov said in an interview on state-run Rossiya 24 television.

“One can say, of course, that the deficit will be covered, but (some) refineries are geared specifically to Iranian oil … and readjusting them will demand substantial investments that the EU can hardly afford now,” he said.

“The unilateral sanctions to which our Western partners resort, bypassing the Security Council, only strengthen … those in Iran who are sure the West is not interested in resolving issues linked with non-proliferation of nuclear technologies, but is interested in regime change,” Lavrov said.

Speaking ahead of a second round of talks next month between Iran and the six world powers – Russia, China, the United States, Britain, France and Germany – he suggested the focus should be on coaxing Tehran into cooperation with the prospect of relief from sanctions.

Russia has been calling for a “step-by-step” resolution to the dispute.

Iran should be presented with “a concrete and realistic road map, a kind of program that would be based on the principle of an action for an action,” Lavrov said.

He repeated Russia’s proposal that as a start, Iran could freeze the number of centrifuges for uranium enrichment at current levels, while global powers would refrain from imposing new sanctions and freeze a number of boycotts and embargos already imposed against Tehran.

Russia says the centrifuge proposal was discussed at an initial round of negotiations in Istanbul. Iranian and Western officials have said little about the proposal.

After over a year of stalled talks, Tehran and the six world powers resumed negotiations in Istanbul earlier this month and are due to attend a second round of talks in Baghdad on May 23.

Both sides said the Istanbul talks were positive.

Vladimir Putin and Dmitry Medvedev

Vladimir Putin and Dmitry Medvedev harvest corn in southern Russia

Vladimir Putin and Dmitry Medvedev have put on a Soviet-style show of unity that would make their Communist predecessors proud, personally harvesting corn in southern Russia.

Keen to keep their profiles high ahead of a parliamentary election in December and a presidential poll in March, the two men leapt into Russian-made combine harvesters and took to the corn fields of Russia’s Stavropol region.

Dressed casually with their every move faithfully followed by state TV, they then symbolically poured the corn they had harvested into a waiting truck in a move that appeared designed to underline the fact that they really are a team.

The publicity stunt, which took place on Tuesday, saw Mr Putin, currently the prime minister, harvest six tons of corn. He talked excitedly about his farming feat afterwards. “It was fantastic! I really enjoyed it,” said Mr Putin, dressed in a big brown winter coat.

Not to be outdone, Mr Medvedev, the current president, also harvested six tons of corn, and went on to extol the virtues of Russian combine harvesters in the manner of a Soviet leader of old.

“I liked it because the equipment was modern and Russian,” he said, dressed in a black leather jacket. Soviet leader Nikita Khrushchev was a big fan of corn, ordering it to be planted all over the former Soviet Union in a strategy that was later deemed to be deeply flawed.

Russia WTO

Russia on cusp of joining WTO after Georgia compromise

Russia’s prime minister, Vladimir Putin, who may wait until his return to the presidency next year to sign the country in to the WTO. Photograph: Denis Sinyakov/EPA

Russia finally appears on the verge of success in its 18-year quest to join the World Trade Organisation after Georgia lifted its long-held opposition to Moscow’s membership.

Russia is the only major trading nation that remains outside the WTO, a source of embarrassment for a country that considers itself a major economic power.

Georgia’s opposition was the last stumbling block to Russia’s membership, a politicised stance taken after the two countries went to war over South Ossetia in 2008.

Tbilisi said on Thursday that it had agreed to a Swiss-brokered compromise that allows international monitoring of trade at the disputed borders with South Ossetia and Abkhazia, the two breakaway Georgian republics that Russia has recognised as independent. Russia must now also accept the proposal.

“From now on, from [the] Georgian perspective, the Russian Federation can become a member of the WTO provided that it also agrees to the proposal,” the Georgian government said. Referring to Abkhazia and South Ossetia, it added that it was “fully aware that these talks were not the appropriate forum to reverse the ongoing illegal occupation of 20% of the Georgian territory by the Russian military”.

Russia has indicated that it hopes to become a WTO member by the end of the year. A ministerial conference has been set for December. Yet some analysts say the deal may be put off until next year so it can be signed once Vladimir Putin returns to the presidency.

Moscow continues to face a strong anti-WTO lobby that supports nationalist, protectionist measures. Last week, President Dmitry Medvedev said “we will survive” if the years-long quest to join the trade body fails.

Russia and the European Union finalised their negotiations on Russia’s accession last week. Moscow first applied to join the WTO in 1993 in the wake of the Soviet Union’s collapse.

Disney

Disney to Launch Russia Channel

Walt Disney Co. said it reached a deal to start a Disney Channel in Russia, after more than three years of effort.

The new channel is to be a joint venture between Disney and UTH Russia, a media holding company. UTH’s Seven TV is to become Disney Channel. Disney will own 49% of the channel with UTH holding the other 51%.

Russia’s Interfax news agency said Disney was spending $300 million for its stake. Disney declined to discuss financial terms.

Russian regulators blocked a similar attempt in 2008, but gave their final blessing to the new deal after Disney Chief Executive Robert Iger met with Russian Prime Minister Vladimir Putin.

UTH Russia is headed by CEO Ivan Tavrin. Mr. Tavrin was also CEO of Disney‘s partner in the planned 2008 venture, Media-One. Disney was to have invested an estimated $230 million for 49% of that venture.

“The [2008] deal didn’t go through then for a variety of reasons,” Mr. Iger said in a telephone interview. “I’m not sure anyone knows exactly why.”

Mr. Iger added that the venture announced Thursday entailed “a significantly different kind of deal than the last one, in a variety of ways.” He didn’t elaborate.

The new channel will be broadcast over the air in 54 urban markets, starting early in 2012. An exact date wasn’t announced. The Russian channel is to be the 101st Disney Channel. The Russian channel is to be free to viewers and carry ads, unlike the U.S. basic-cable version of the channel.

Describing his meeting Thursday with Mr. Putin, Mr. Iger said: “He endorsed the parners that we’re working with and the strategy.”

Interfax reported that Mr. Putin told Mr. Iger: “I hope that your participation in the joint work will be useful from the business point of view and will be a positive start on the media market.”

Russia

Russia is hoping that the United States will make reciprocal efforts to break a deadlock over the European missile shield, Russia’s envoy to NATO Dmitry Rogozin said.

“We expect that the United States and its NATO allies will, after all, make steps to meet Russia halfway, because Russia has demonstrated its absolute creativity in search of a compromise,” Rogozin said after a meeting with NATO Secretary General Anders Fogh Rasmussen on Wednesday.

“However, we are still at a dead end because the United States stubbornly refuses to provide Russia with serious legally-binding guarantees [that the European missile shield will not be aimed against Russia],” Rogozin said.

The diplomat added that Russian Deputy Defense Minister Anatoly Antonov, Russia’s point man for arms control negotiations, will outline the Russian position on the issue to envoys from NATO member-countries at a Russia-NATO Council’s meeting on November 15.

Russia and NATO agreed to cooperate on the so-called European missile defense system at the Lisbon Summit in November 2010. NATO insists there should be two independent systems that exchange information, while Russia favors a joint system with full-scale interoperability.

NATO has said it was ready to offer Moscow written assurances that the European missile shield being built is not directed against Russia but has refused so far to provide the legally binding commitments demanded by Moscow.

Norilsk

Russia Norilsk plans $35 bln in investments to 2025

* Calls for output increases of 19% nickel, copper 49%

* Says platinum-group to grow by 42 pct

* Aims to stay lowest-cost producer of nickel

MOSCOW, Oct 27 (Reuters) – The board of Russian miner Norilsk Nickel has approved a strategy that envisages investing $35 billion in 2011-2025 to expand its resource base and raise output, Norilsk said on Thursday.

“It is expected that by improving efficiency of production operations at the current deposit and initiating new projects in Russia, nickel production will grow by at least 19 percent, copper production by 49 percent and platinum-group metals production by 42 percent by 2025,” a Norilsk statement said.

Norilsk, the world’s biggest nickel and palladium producer, plans to raise nickel output this year to 300,000-315,000 tonnes from 297,329 tonnes in 2010 and keep copper output at 380,000-390,000 tonnes versus 388,872 tonnes.

It expects its palladium output to be 2.85-2.87 million ounces, compared with 2.861 million in 2010, and its platinum output at 705,000-720,000 ounces, up from 693,000 ounces last year.

Norilsk aims to maintain its position as the nickel producer with the lowest cost of production, it said.

It will expand its resource base considerably through further geological exploration in the regions where it operates and through participation in new projects, including starting production of coal and iron ore, molybdenum, chrome and other metals, Norilsk said.

It said it expected the strategy to lead to significant growth in revenue and profits.

“In accordance with the approved document, by this time (2025) Norilsk Nickel should be among the top five mining and metallurgy companies in the world in terms of market capitalization,” the statement said.

UC RUSAL , the world’s top aluminium producer and owner of a quarter of Norilsk, said on Thursday its representatives on the board did not participate in the meeting as they were not provided with the documents it examined.

“Our representatives were not present at the meeting, but they voted against the strategy in written form,” a RUSAL spokeswoman said.

RUSAL has two representatives on the 13-strong Norilsk board.

Norilsk has a long-standing dispute over its management between rival oligarchs Vladimir Potanin, whose Interros investment company holds about 30 percent of Norilsk, and Oleg Deripaska, who controls RUSAL. (Reporting By Aleksandras Budrys; Editing by Lidia Kelly and Jane Baird)

Energy Department

Energy Department Facing Scrutiny for Loan to Russian Subsidiary

The Energy Department’s $730 million conditional loan commitment to Severstal, a Russian company led by a multibillionaire, has come under fire from Rep. Darrell Issa, chairman of the House Committee on Oversight and Government Reform.

“The government is taking the risk, but getting the short end of the reward,” the California Republican told Fox News about the project designed to improve an advanced high-strength steel plant in Dearborn, Michigan.

Severstal is controlled by Alexei Mordashov, a chief executive whose net worth is listed at $18.5 billion by Forbes magazine, and is known to have close ties to the Kremlin.

Issa asked Energy Secretary Steven Chu why taxpayer money is needed when “announcements made by Severstal during the loan consideration process indicated that the company had ample means to carry out the project.”

But the Energy Department says tax dollars have not been spent, and career staffers are still doing their due diligence on the project.

The department also believes the project would support more than 2,500 construction jobs and more than 260 permanent manufacturing jobs in Michigan.

Duma

Ex-Mayor Seeks Duma Seat From Jail

A former Siberian mayor accused of extorting a half million-dollar bribe is running for a State Duma seat from jail, a Communist deputy said Monday.

Former Bratsk Mayor Alexander Serov received the paperwork confirming his candidacy Friday.

Serov was detained in February after obtaining what investigators said was a bribe of 15 million rubles ($510,000) from an Irkutsk businessman.

Serov, who later resigned as mayor, faces up to 12 years in prison if convicted, yet maintains his innocence.

Duma Deputy Sergei Obukhov said his colleagues in the Communist Party witnessed Serov’s detention and “how the evidence was falsified.”

He also said Serov enjoys “enormous” public support including rallies attended by thousands of people.

The 2005 federal law on Duma elections doesn’t ban candidates under criminal investigation or convicts from running, but requires candidates to reveal this information to election officials.

The Communist Party has asked election officials, the Investigative Committee and prosecutors to assist Serov with his campaign, including meetings with journalists and the public, from behind bars, Interfax reported.

Germany

‘Spies’ Caught in Germany

Russian intelligence has come under a new barrage of criticism for using ineffective Cold War-era tactics following the arrest of two suspected deep-cover spies in Germany.

The suspects apparently caught red-handed while listening to 1970s-style encrypted radio messages from Moscow appear to have much in common with the 10 sleeper agents uncovered in the United States last year.

German prosecutors said Friday that a couple living in Marburg, had been arrested on accusations of spying for an unspecified foreign intelligence service, which media identified over the weekend as Russia’s Foreign Intelligence Service.

German bloggers identified the suspects as Andreas and Heidrun Anschlag, information also published by Kommersant on Monday.

The couple was said to have operated in Germany for more than 20 years, similar to the agents arrested in the U.S. in June 2010. They were in close contact with Chapman, who has become a national celebrity since returning to Russia in a prisoner swap, Focus magazine reported, quoting unidentified investigators.

A video by the local Oberhessische Presse newspaper showed a bungalow in Michelbach where the two were arrested by masked commandos last Tuesday.

Neighbors said the family, with a grown-up daughter, led an unassuming life since renting the house a year ago, the daily reported.

Steffen Haidinger, a spokesman for the German prosecutor general’s office, refused to comment on the reports, as did spokesman for the Russian Embassy in Berlin, explaining that German authorities had not offered any official information about the case.

Experts expressed bewilderment as to how the German-based couple could have gathered any meaningful information. They pointed out that Marburg, which has a famously left-leaning university, might have served as a recruiting ground for spies during the Cold War, but could hardly be a useful base today.

“This is absurd. There are no U.S. forces or anything else of interest anywhere nearby,” said Alexander Rahr, an analyst with the German Council of Foreign Relations.

But German media reports suggested that the pair was engaged in industrial espionage because Andreas Anschlag worked in an auto components firm.

Research by The St. Petersburg Times also showed that the family used to live not far from the U.S. air bases Rammstein and Bƒchel before moving to Marburg.

Other experts said that working with encrypted radio messages is bizarre in the 21st century, where the Internet offers intelligence agencies far easier and safer communications. Vladislav Belov, a researcher with the European Studies Center and the Moscow State International Relations Institute, noted that the Federal Security Service voiced fears earlier this year that the uncontrolled use of certain e-mail and voice services could threaten national security.

An official in the Foreign Intelligence Service told Izvestia that the couple was part of a group that had effectively retired from the agency.

St.Petersburg

More than 300,000 of St. Petersburg’s faithful came to see the Belt of the Virgin Mary, an Orthodox relic that arrived in Russia for the first time from Greece last week, RIA Novosti reported.

St. Petersburg became the first Russian city to host the relic, brought from the Vatopedi Monastery on Mount Athos. After being kept at the city’s Novodevichy Monastery for four days, the relic was taken to Yekaterinburg.

People waited in long lines to see the relic, access to which was open for 24 hours. Women with small children were let in without standing in line, and a street vendor opened Saturday outside the monastery to keep the masses of believers nourished.

However, the St. Petersburg eparchy later expressed hope that the next time a relic arrives in the city, the organizers will be better prepared, RIA Novosti reported.

Prime Minister Vladimir Putin, who was visiting the city on Oct. 20, the day the relic arrived, greeted the belt at Pulkovo Airport (see photo, page 1).

This is the first time the relic has left Greece since it was moved to the Vatopedi monastery. Twenty monks from Athos accompanied it to Russia, Interfax reported.

The belt is normally taken to a Greek city once a year at the request of believers. The monastery refused earlier requests from other countries, including the U.S. and Romania, but an exception was made for Russia, Interfax reported.

The relic will stay in Russia until Nov. 23, and will be taken to 12 cities including Moscow, Norilsk, Vladivostok, Krasnoyarsk, Nizhny Novgorod, Diveyevo, Saransk, Samara, Rostov-on-Don and Kaliningrad.

According to legend, the belt and robe of the Virgin Mary were given to two widows in Jerusalem not long before her death. It was subsequently kept in Palestine for many years. In about 408 AD, the belt was brought to Constantinople and placed in a church.

Orthodox disciples believe that the belt possesses great strength and helps women to conceive children.

US women

Two US women arrested in Moscow for undressing in public

Two PETA activists from the United States were arrested in Moscow for their attempt to undress in front of the International Trade Center, officials with the law-enforcement agencies of the Russian capital said.

“Two US female citizens were arrested for holding an unauthorized picket in which they removed their clothes in public,” officials said.

A message from PETA said that the Moscow event was held under the title “Wear Your Own Skin”. Two US activists of the movement for the ethical treatment of animals stripped down to their bikinis in an attempt to attract people’s attention to atrocities of the fashion industry. The women tried to urge the visitors of the International Trade Center not to purchase leather, fur and wool clothing and shoes, Interfax reports.

It was a brave action to hold indeed. It is cold in Moscow now: daytime temperatures reach only 5-7 degrees Centigrade above zero.

Alexander Lukashenko

The West deeply disappointed in Belarusian opposition

Belarusian leader Alexander Lukashenko stated that all attempts to arrange revolutions via the Internet in his country failed. Is it really so? For the time being, Lukashenko’s regime has successfully repulsed all attempts of the opposition to protest. Is Lukashenko’s regime strong enough under the condition of the worsening economic situation in the country?

Pravda.Ru asked expert opinion from the chief of the Department for Belarus of the Institute for the CIS, Alexander Fadeev.

“Revolution in Belarus failed – that’s a fact. However, it is not an achievement of the Belarusian KGB and other special services. It is only the statement of fact – the potential for protests in the country is not strong enough. There are no mass protests in the country at all.

“I’d like to say here that the Belarusian authorities previously tried to control the Internet by restricting access for people, but those attempts did not prove to be effective. For example, it goes about the requirement to show passports when visiting Internet cafes and so on. Belarusian officials realize now that people can get the information that they need if they try. It is very hard to cut access to information nowadays.

“Those forces that pinned their hopes on the opportunity of “Internet revolutions” in Belarus believed that the ongoing economic crisis in the country would help them. Needless to say that Belarus does not have such trump cards as natural resources. We have to point out the mistakes that the sitting administration has made so far.

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“The Belarusian currency has lost 89 percent of its value as a result of the crisis. Independent experts name a different number – 200 percent. The inflation rate in Belarus is expected to exceed 100 percent as of the year-end. Prices on essential goods and food products have grown considerably. The situation has been extremely intense recently at this point.

“However, the colossal impoverishment of common Belarusians has not led to mass protests. Those people, who wanted that to happen, did not take account of the Belarusian mindset. It is absolutely normal for the majority of the Belarusians to scold the authorities at home in the kitchen. They don’t take to the streets to do that.

“Many people found a way out of the problem – the labor migration, as it happened during the 1990s. For example, there were as many as 500,000 Belarusian labor immigrants working in Russia during the 1990s. Some 200,000 more came to work to Ukraine. This trend has been getting stronger recently. You can come to the Belorusky Railway Station in Moscow and see it for yourself.

“Many Belarusian people come to Russia for earnings now, and Russia is happy to welcome them. The majority of those people are highly qualified specialists. As you can see, the Belarusians prefer not to protest. They go somewhere else for earnings.

“The West has taken a lot of effort to destabilize the situation in Belarus. The entire Belarusian opposition is supported by the West, especially by the European Union. I can even give you the names of the countries that are involved in this process most. They are Lithuania, Poland and the Czech Republic. The majority of Belarusian immigrants of the opposition live in those countries. They used the Internet to struggle against Lukashenko’s regime. But they also used the Internet to receive financial help from the West.

“The opposition of Belarus has not been able to achieve anything in nearly 15 years. They have no unity. Many opposition activists are not ethnic Belarusians. They are Poles or Lithuanians. They have narrow interests so there’s no chance to count for success. This is presumably pro-Western and Russophobic opposition. There are no pro-Russian opposition activists there. There is also a weaker part of the Belarusian opposition – the nationalist part. They hope that Belarus will be able to do without the West and Russia, but they have no chances for success.

“The Belarusian opposition has the same leaders for more than a decade already. What makes them better than Lukashenko? It appears that the West has been disappointed with the carriers of the “Belarusian democracy.”   The EU and the USA already try to find other opportunities for destabilizing the situation in Belarus.

“The state of affairs in the country may change, of course. One may say that the changes are not going to be positive for the sitting administration. Lukashenko should not ignore the danger that comes from the Internet.”

October 2014
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