Russia 101110

Basic Political Developments Medvedev arrives in Seoul on official visit

o Russian President arrives in Seoul for visit, G20 summit o UPDATE 1-Russia calls on Koreas to renew dialogueo Russia, S.Korea urge G20 to act on protectionismo Lee, Medvedev agree on closer ties - “The two sides shared the view that

Russia’s basic science technologies and Korea’s commercialization technologies were complementary, and agreed to continue cooperation in development of IT, nanotechnologies, biotechnologies, atomic power, new materials, optical science and research on polar egions.” Lee and Medvedev were expected to reach a final agreement on how to transport Russian natural gas to South Korea from no later than 2017 and ways to develop the trans-Siberian and trans-Korean railroads. The two leaders had agreed in 2008 during Lee’s visit to Moscow to seek to connect an inter-Korean railway with Russia’s trans-Siberian line which stretches to Europe.

o Medvedev alarmed at North Korean nuclear activityo Russia, S. Korea agree to cooperate in holding international summits -

"We agreed on close cooperation and preparatory work for the APEC Summit in Vladivostok and the nuclear security summit in Korea in 2012," Lee said.

o Over 20 documents to be signed during Medvedev visito Medvedev eyes South Korean investment in Russia - "Russia is interested

in attracting Korean investors," Medvedev said. "They not only invest in jobs, but also bring modern technology and introduce modern industrial standards."

o Medvedev calls on Russian, S.Korean companies to form modernization alliances

o Trade between Russia, S.Korea reaches pre-crisis level – Medvedev: Trade between the two countries has virtually reached the pre-crisis level, totaling around $11 billion in the first half of 2010, Medvedev said at the third Russian-Korean business forum in Seoul on Wednesday.

o Gazprom and Korea's Kogas to sign road map for gas supplieso Russia firms up huge natural gas deal with S.Korea - Russia will ship at

least 10 billion cubic metres (350 billion cubic feet) of natural gas a year to South Korea from 2017 under a preliminary deal to be signed Wednesday, Moscow's energy giant Gazprom said.

o Russia's FGC UES, Hyundai to sign transformer plant deal o Report: Russia's Medvedev expresses concerns over North Korea's nuclear

programso Kim Sung-hwan: Medvedev‘s visit to Seoul will give concrete shape to

Korean-Russian Strategic Cooperative Partnership - Russian President Dmitry Medvedev starts a visit to the Republic of Korea on Wednesday

marking the 20th anniversary of the establishment of diplomatic relations between the two countries. Following the visit, the Russian president will take part in a G20 summit in Seoul. Korean Foreign and Trade Minister Kim Sung-hwan says what Korea expects from these meetings in an interview with Interfax correspondent Timur Khursandov

o Medvedev interview to South Korean mass media G20 Seoul summit to discuss IMF reforms: Russian expert - The G20 leaders

have made some important achievements at their previous summits, including the consensus reached concerning the stimulus package, the framework for sustainable and effective economic growth, and some major reforms of the IMF, Marina Larionova, head of the Moscow-based International Organizations Research Institute, said during a recent interview with Xinhua.

US and China likely to reach compromise – Russian presidential aide: “The US and China are so interconnected. Any actions that may lead to a major trade war could worsen the situation in each country. So, most likely, they will find a compromise,” Dvorkovich said.

Russian to be reinstated in Chinese schools - China is interested in developing Russian language as a school subject, Russia's deputy Education Minister said on Wednesday.

Venezuelan parliament ratifies nuclear plant constriction deal with Russia Russia, Britain to address visa issue 'in near future' - diplomat : Russia and Britain

will resume in the near future consultations on the easing of visa regulations for some groups of citizens, which have been staled for several years, the head of the economic department of the Russian Embassy in London said.

o Hopes rise for easier visas between Russia and Britain Russia to allocate $ 45 million for UN social programs Sitel: Macedonia receives invitation to join Belene NPP - Bulgarian Minister of

Economy, Energy and Tourism Traycho Traykov told Macedonian Deputy Prime Minister Vladimir Pesevski during the Vienna Economic Forum that Macedonia had an invitation to join the international project in Bulgaria.

Russian arms exporter to take part in INDO Defence 2010 Expo&Forum - "We are talking about aviation equipment (Su (Sukhoi), MiG (Mikoyan) and Il (Ilyushin) planes, Mi (Mil) and Ka (Kamov) helicopters, various weaponry and equipment for them), as well as about navy and armored equipment, weaponry for special forces, ammunition... and many other equipment that Asia-Pacific countries need," the statement said.

o Russia to sell over $50 mln worth of missiles to Indonesiao Russia offers Yak-130 trainers to Indonesia

The Georgian Foreign Ministry received a note to Russia on spies - The Georgian Foreign Ministry through the Swiss Embassy received a note from Russia. As the correspondent Rosbalt, this information was disseminated to InterpressNews citing reliable sources.

o “Spies” to appear before Georgian court o Georgia and Russia may have an exchange of spies caught - The

newspaper Moskovsky Komsomolets published a list of Georgian spies,

which can theoretically be exchanged for the Russian, although on the present position of the Russian Foreign Ministry rejects this possibility.

Canada Mulls Ban on Magnitsky Foes - Sixty Russian officials linked to the pretrial death of Hermitage Capital lawyer Sergei Magnitsky may be banned from visiting Canada and face financial sanctions in the country, Magnitsky's supporters said Tuesday.

34 sailors return to Russia after ship seized in CanadaAnother stage of Russian armed forces reforming over

Russia's upper house passes law crippling its oversight functions - Under the law, which takes effect on January 1, 2011, new members of the Federation Council will assume office within 10 days of their appointment.

Today is last Militia Day for Russian law enforcers - Militia is due to be renamed Police

o Policing police: Russian officers mark anniversary amid reform - However, the image of law enforcement in Russia remains a tarnished one. The question now is whether the reforms will be more than just a facelift and will help put both the police, and the policed, on the same side of the barricades.

Military serviceman killed in explosion in Chechnya Disabled Russian journalist convicted of slander - Mikhail Beketov, editor of the

Khimkinskaya Pravda weekly published in the district of Khimki outside Moscow, was on trial for slander after accusing the local mayor of being involved in a bid to blow up his car.

Beaten journalist Kashin came out of comao Yulia Latinyina: Who Ordered Kashin’s Attack?

Ban on commercial development a risk to economic growth - Moscow Mayor Sergei Sobyanin has ordered "strict limits" on commercial development in the centre of Moscow, according to reports in Vedomosti. The move is criticized as "crazy" by some commentators, who say that banning new office building in the city will curb growth and derail President Medvedev's dream of turning Moscow into an international financial hub.

Price hike fears on Russia's public transport - It will make it compulsory for passengers to be insured against any losses suffered in the event of an accident – and has seen radio phone-in shows bombarded with angry calls demanding a rethink.

Palace in St. Petersburg's historic center to be auctioned off Russian Press at a Glance, Wednesday, November 10, 2010

o Outrage over the gruesome beating of Kommersant reporter Oleg Kashin on Saturday grew as the U.S. State Department and Amnesty International called for justice and the Russian authorities assigned their best investigators to the case.(Moscow Times, Kommersant, Rossijskaya Gazeta)

o Russian Federation Council Speaker Sergei Mironov embarked on a collision course with the Kremlin after he opposed United Russia-backed reforms of the upper house of parliament and demanded the direct election of its members.(Moscow Times)

o Leaders of the Russian right-wing Right Cause party, which advocates modernization, a liberal free market economy and democracy, announced they would support incumbent President Dmitry Medvedev if he runs for office again in 2012. They said they would choose Medvedev over Prime Minister Vladimir Putin, who is also expected to run.(Vedomosti)

o Russian President Dmitry Medvedev is paying an official visit to Seoul, marking the 20th anniversary of diplomatic relations between Russia and South Korea.(Rossijskaya Gazeta, Vremya Novostei)

o The Latvian opposition was short of one vote in parliament to dismiss newly appointed Foreign Minister Girts Valdis Kristovskis in connection with his "xenophobic" ideas targeting the Latvian Russian-speaking community. Fifty-one out of 100 lawmakers voted against the dismissal.(Vedomosti)

o The World Bank ranked Russia fourth for the volume of money its foreign residents transferred abroad in 2009. The United States came in first, followed by Saudi Arabia and Switzerland.(Moscow Times)

o Since the beginning of October, the Russian ruble has fallen 4 percent against the dollar-euro basket, while the oil price has risen by 15 percent.(Vedomosti)

o European Commissioner for Trade Karel De Gucht said the EU would block Russia's accession to the World Trade Organization until the end of 2011 if the country did not stop raising taxes on its lumber exports. The issue was discussed during Finnish President Tarja Halonen's visit to Moscow this week.(Kommersant)

o Russian billionaire Alexander Lebedev, who owns Britain's Evening Standard and Independent newspapers, asked Prime Minister Vladimir Putin to intervene after Moscow police raided his National Reserve Bank last week.(Moscow Times)

o The Magistrates Court will announce on Wednesday its ruling on allegations by the mayor of Moscow's Khimki suburb that Mikhail Beketov, the editor of a local newspaper, accused him of igniting "political terror." Beketov, who wrote extensively about a grassroots campaign to halt the construction of a road through the ancient Khimki oak forest, was severely beaten by unidentified attackers in 2008 and is now confined to a wheelchair.(Kommersant)

o Owners of many Moscow kiosks expressed outrage after their stalls were demolished on orders from new Mayor Sergei Sobyanin.(Vremya Novostei)

o More adults smoke in Russia than in any other country, and the average life expectancy in the country is one of the shortest of any former Soviet country, the World Health Organization said.(Moscow Times)

Moscow’s Moves against Tatarstan Sovereignty Opening the Way for Radical Islamists, Kazan Expert Say

‘Every Second Russian is a Skinhead at Heart,’ Moscow Editor Says Participation in 2010 Russian Census Down from 2002 Count

US approval of arms pact with Russia looking shaky - The administration is scrambling to get enough Senate Republican support to ratify the New START treaty before the Democrats' majority shrinks by six in January. But Republicans have little incentive to give Obama a big political boost after their strong gains in last week's congressional elections.

Relaunching Missile Defense - Decisions Taken at Next Week's NATO Summit Will Strongly Affect the Alliance’s Course of Relations with Russia for the Next Decade

National Economic Trends Russian Growth May Accelerate to 5.3% Next Quarter, RenCap Says Commodity Prices May Trigger Former Soviet Rally: Russia Credit $18.6Bln in Remittances Left in 2009 - Migrant workers make Russia one of the

world's largest cash exporters, according to a World Bank report released Tuesday.

Broad monetary base declines in October - Central Bank of Russia (CBR) statistics released yesterday (9 Nov) indicate that the broad monetary base declined in October to RUB6,956bn, down 2.4% MoM.

Business, Energy or Environmental regulations or discussions AvtoVAZ, Norilsk Nickel, Polyus Gold, Sberbank: Russian Preview Generators' Unregulated Capacity Prices for 2011 May Barely Exceed Price Caps National telecom merger may be suspended - Reorganization of state-owned

telecommunications holding Svyazinvest, in which the state plans to create a national telecoms company via merging Rostelecom long-distance carrier and regional telecoms firms, may be suspended, Kommersant business daily said on Wednesday.

Sberbank might acquire the fourth largest private pension fund in Russia Highland starts mining at Belaya Gora Uncertain Future for U.S. Poultry in Russia EBRD finances EUR 20 million project in Russian regions with Finland’s Rani

Plast Aeroflot overhauls ticketing structure to improve performance Mamut acquires 3% in British retail chain HMV Russian steel projects ask for over $377m of carbon credits Russia: Light vehicle market continues to expand

Activity in the Oil and Gas sector (including regulatory) Export duty on Russian crude could rise to $302-304/tonne on Dec 1 Caspian Gas Exports to Triple by 2020 Novatek Up on Acquisitions U.S. noses into Russia's gas domain Highlights from the 8th Annual Oil & Gas Week: Gazprom Highlights from the 8th Annual Oil & Gas Week: Rosneft

Gazprom Gazprom eyes South Korean market - Russian gas giant Gazprom will start talks

with Korean Gas Corporation (Kogas) next month on a deal which could see it supply the South Korean player with at least 10 billion cubic metres of gas per year from 2017, Gazprom chief executive Alexei Miller said.

Gazprom could supply 10 bcm of gas to Korea from 2017 Gazprom considering gas pipeline construction to S Korea-Miller Russia Gazprom may sell 10 pct in Novatek-source Gazprom does not exclude new delays at Bovanenkovo Gazprom's Public Statement on draft gas law consultations at the Ministry

of Energy of the Republic of Lithuania Gazprom to place Eurobonds next week - Gazprombank report

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Full Text Articles

Basic Political Developments

Medvedev arrives in Seoul on official visithttp://en.rian.ru/world/20101110/161268675.html

02:05 10/11/2010

Russian President Dmitry Medvedev has arrived in Seoul, where he will hold bilateral talks with his South Korean counterpart Lee Myung-bak and take part in a G20 summit.

During their two-day talks, Medvedev and Lee will discuss cooperation between the countries in the energy, space, shipbuilding, fishing and military spheres during Medvedev's visit to Seoul, Russian presidential aide Sergei Prikhodko said.

More than twenty documents, including a roadmap on Russian gas supplies to South Korea, are expected to be signed during the talks, the second meeting between Medvedev and Lee in the past two month.

The two leaders are going to discuss the diversification of economic cooperation between the countries, particularly by increasing exports of hi-tech equipment.

"The parties intend to begin drawing up a joint partnership program aimed at modernization and innovative development," Prikhodko said.

Telecommunication, banking, the commercialization of innovative technologies, and environmental protection have been named as spheres of strategic cooperation between the countries, he added.

The issues of regional cooperation, especially in Siberia and the Far East, are also on the agenda, Prikhodko said.

Medvedev and Lee are also expected to address the North Korean nuclear issue during their talks.

The Russian president told South Korean media on the eve of his visit to Seoul that implementation of three-party projects between Russia and South and North Korea would help normalize the situation on the Korean Peninsula.

The construction of a pipeline to pump Russian gas via North Korea, linking the Trans-Korean Railroad with the Trans-Siberian Railway and the construction of an electricity transmission line between Russia and South Korea are among such projects. However, Medvedev said the implementation of such projects will only be possible if "tensions reduce on the Korean Peninsula and if the two Koreas follow the path of national reconciliation."

"We would like to give an additional impetus to negotiations on the implementation of large-scale infrastructure projects," Prikhodko said. "Direct support of the South Korean authorities will certainly be very important."

Lee and Medvedev last met in Moscow in 2008, when the two presidents agreed to step up bilateral cooperation, including in international effort to resolve tensions on the Korean Peninsula.

MOSCOW, November 10 (RIA Novosti)

Russian President arrives in Seoul for visit, G20 summit http://english.peopledaily.com.cn/90001/90777/90853/7194651.html

13:11, November 10, 2010

Russian President Dmitry Medvedev arrived in Seoul earlier Wednesday for a visit for South Korea prior to the upcoming G20 summit set to start Thursday.

The Russian leader's visit is a return visit for his South Korean counterpart Lee Myung-bak's trip to Moscow two years ago.

The two leaders will hold talks late Wednesday to discuss ways to further expand bilateral cooperation between the two nations, which has been upgraded to a so-called " strategic partnership" in 2008.

Bolstering bilateral cooperation on energy, resources and modernization of the Russian economy will be part of the agenda on the table, Lee's office Cheong Wa Dae said in a press release.

They will also touch upon global issues, including the issues related to the Democratic People's Republic Korea (DPRK) and regional security, it added.

After the summit, the two leaders will attend the signing ceremony of about 40 accords mainly focusing in economic and cultural aspects. The two leaders will then hold a joint press conference, according to Cheong Wa Dae.

Source: Xinhua

UPDATE 1-Russia calls on Koreas to renew dialoguehttp://in.reuters.com/article/idINTOE6A908920101110

2:27pm IST

(Adds details)

SEOUL, Nov 10 (Reuters) - Russia urged North and South Korea to return to the negotiating table on Wednesday, saying the heightened tension on the divided peninsula is hurting regional stability.

Russian President Dmitry Medvedev held talks with his South Korean counterpart, Lee Myung-bak, in Seoul on Wednesday ahead of the Nov. 11-12 G20 summit.

"Russia confirmed that it supports North-South Korea dialogue, and said that it would be a key element to strengthen peace and stability in the region," a joint a statement issued by South Korea's presidential office said.

A Soviet-era supporter of North Korea, Moscow is one of five regional powers, along with the United States, China, Japan, South Korea, involved in stalled six-party talks on dismantling Pyongyang's nuclear arms programme.

Tension on the peninsula rose after Washington and Seoul blamed North Korea for the March sinking of a South Korean corvette, the Cheonan, which killed 46 sailors.

North Korea has consistently denied responsibility. Russia has refused to take sides, irritating authorities in Seoul. Medvedev did not mention the Cheonan during Wednesday's briefing.

Last month, Russia warned that "conflict" could break out any day between North and South Korea, saying tension between the two countries was at its worst in a decade.

North and South Korea are technically still at war, their 1950-53 conflict having ended with a truce rather than a peace treaty.

Washington has said six-party talks, stalled for two years, can only resume after the two Koreas hold bilateral talks. Seoul says this is not possible until Pyongyang shows sincerity on denuclearisation. (Editing by Nick Macfie)

Russia, S.Korea urge G20 to act on protectionismhttp://in.reuters.com/article/idINSEL00318720101110

12:58pm IST

SEOUL, Nov 10 (Reuters) - Russia and South Korea on Wednesday gave a positive assessment of the G20's actions to overcome the global financial crisis, but said more needed to be done on regulatory reform and protectionism.

"The two countries agreed that the G20 should do more fiscal balancing, financial regulation reform and preventing trade protectionism," said a statement issued by South Korea's presidential office after Russian President Dmitry Medvedev met his South Korean counterpart Lee Myung-bak in Seoul. (Editing by Alex Richardson)

Lee, Medvedev agree on closer tieshttp://www.koreaherald.com/national/Detail.jsp?newsMLId=20101110000827

2010-11-10 18:08

President Lee Myung-bak and Russian President Dmitry Medvedev on Wednesday agreed to extend bilateral economic and scientific cooperation during their summit talks in Seoul.

“The two countries decided to devise collaboration programs for modernization and innovation in the near future, with emphasis on telecommunication, finance, commercialization of innovative, application technologies, areas of environmental protection such as green growth and energy conservation,” Seoul and Moscow said in a joint statement after the summit meeting.

“The two sides shared the view that Russia’s basic science technologies and Korea’s commercialization technologies were complementary, and agreed to continue cooperation in development of IT, nanotechnologies, biotechnologies, atomic power, new materials, optical science and research on polar egions.” Lee and Medvedev were expected to reach a final agreement on how to transport Russian natural gas to South Korea from no later than 2017 and ways to develop the trans-Siberian and trans-Korean railroads. The two leaders had agreed in 2008 during Lee’s visit to Moscow to seek to connect an inter-Korean railway with Russia’s trans-Siberian line which stretches to Europe.

Lee and Medvedev also exchanged ideas on the development of far eastern Siberia, the modernization of the Russian economy and the latest situations on the Korean Peninsula as well as Northeast Asia, Lee’s office said.

The two presidents attended the signing of two agreements on simplified procedures for maritime transport and extension of resident workers’ visas, in addition to nine memoranda of understanding on cooperation for economic modernization, broadcasting and telecommunication, and resource development in far eastern Siberia among others. The two countries inked another 10 MOUs.

“President Lee suggested efforts to increase the trade volume between the two countries as it is still relatively small considering the size of the economies,” Lee’s spokesperson Kim Hee-jung said.

The trade volume between Korea and Russia in the nine months to September amounted to $12.4 billion and is expected to reach around $18 billion by the end of the year.

Seoul and Moscow said in the joint statement that the two-day forum on bilateral exchanges in various areas dubbed the Korea-Russia Dialogue, which started Wednesday, was timely as the two countries celebrate their 20th anniversary of diplomatic ties this year.

It is Medvedev’s first visit to South Korea since his inauguration in May 2008. The two presidents have held five summits so far since the first in July 2008 at the expanded G8 summit in Tokyo, Japan. During his three-day visit through Friday, Medvedev will attend the G20 summit.

Later on Wednesday, Lee held summit talks with Australian Prime Minister Julia Gillard, during which they agreed to make joint efforts to speed up the ongoing negotiations for a bilateral free trade pact.

Lee and Gillard exchanged views on how to work together at the G20 summit, improve bilateral ties and collaborate on regional and international issues, Lee’s office said.

Leaders of Malawi, Russia, Australia, Canada, the U.S., Argentina, South Africa, Vietnam, India, Mexico, Britain, Saudi Arabia, the U.N., the OECD and the IMF arrived in Korea Wednesday for the two-day G20 summit. Leaders of other participating nations are scheduled to arrive Thursday.

On Thursday, Lee is set to hold back-to-back summit meetings with the leaders of Britain, Germany, the U.S., China and Brazil.

By Kim So-hyun (sophie@heraldm.com)

Medvedev alarmed at North Korean nuclear activityhttp://in.reuters.com/article/idINIndia-52794320101110

7:39am IST

MOSCOW (Reuters) - Russian President Dmitry Medvedev voiced alarm over North Korea's nuclear weapons programme in an interview published on Tuesday on the eve of his visit to South Korea.

Medvedev told South Korean media that Pyongyang's programme "presents a systemic challenge to the international nuclear non-proliferation regime" and said he was worried about nuclear activities close to Russia's borders.

"Naturally it alarms us that North Korea's nuclear ambitions create military and political tension in Northeast Asia, in direct proximity to Russia's eastern frontiers," Medvedev said in the interview posted on the Kremlin website.

"Not to mention that the North Korean nuclear testing ground is located just a little more than 100 km (62 miles) from our territory."

North Korea's nuclear activities are likely to come up in Medvedev's talks with South Korean President Lee Myung-bak and with world leaders attending a G20 summit in South Korea this week, including President Barack Obama and China's Hu Jintao.

As in the past, Medvedev stressed that the stand-off must be resolved through peaceful diplomacy.

A Soviet-era supporter of North Korea, Moscow is one of five regional powers -- along with the United States, China, Japan, South Korea -- pressing Pyongyang to curb nuclear activities.

But six-way talks to denuclearise the Korean peninsula have been frozen since December 2008 because of disputes over how to verify North Korean steps to disable its nuclear programme, and Pyongyang declared the process dead earlier this year.

Russia has voiced disquiet at Pyongyang's tests of nuclear devices and a long-range missile since 2006.

Russia has also leaned harder on Iran, a longtime trade partner and weapons client, to rein in its nuclear energy programme in recent months, but Medvedev suggested North Korea was more of a threat.

"Despite the fact that Iran is often given special attention, I should note that Tehran, unlike Pyongyang, has not declared itself a nuclear power, has not tested a nuclear weapon and ... has not threatened to use one," he said.

The Kremlin chief's remarks preceded the imminent publication -- delayed for months by China in an effort to protect states with which it has close relations -- of a U.N. report

suggesting that North Korea may have supplied Syria, Iran and Myanmar with banned nuclear technology.

(Reporting by Steve Gutterman; editing by Mark Heinrich)

November 10, 2010 10:37

Russia, S. Korea agree to cooperate in holding international summitshttp://en.rian.ru/russia/20101110/161272941.html

11:48 10/11/2010

Russia and South Korea have agreed to cooperate in their preparations for the APEC summit in the Russian Far East and a summit on nuclear security in South Korea in 2012, South Korea's President Lee Myung-bak said on Wednesday.

"We agreed on close cooperation and preparatory work for the APEC Summit in Vladivostok and the nuclear security summit in Korea in 2012," Lee said.

Lee noted that South Korea and Russia have agreed to combine forces against major global threats, including climate change, international terrorism and the war on drugs.

SEOUL, November 10 (RIA Novosti)

Over 20 documents to be signed during Medvedev visit

http://www.itar-tass.com/eng/level2.html?NewsID=15666232&PageNum=0

10.11.2010, 05.53

MOSCOW, November 10 (Itar-Tass) - A package of 20 documents has been prepared for signature during Russian President Dmitry Medvedev's current official visit to the Republic of Korea (ROK), presidential aide Sergei Prikhodko has announced. The visit began on Wednesday.

Prikhodko said, "It is planned to sign a sizeable package of documents, including intergovernmental agreements and a number of inter-agency memorandums, and joint action programmes in the fields of modernization and innovations, transport, tourism, financial services, agriculture, customs and regional cooperation, (documents) between prosecutor's offices, as well as those in the sphere of communications and mass media, specifically a treaty on cooperation between the news agencies of Russia and ROK, ITAR-TASS and Yonhap."

"It is also planned to reach tangible commercial accords between the business companies of the two countries. In particular, Gazprom and the South Korean company Kogas expect to sign a Roadmap for the supply of Russian gas to ROK; Mechel is to sign a Memorandum of Intent with the metallurgical company POSKO, while the Federal network company of the United Energy System is to sign agreements on cooperation with the Hyundai Heavy Industries Company.

"As a result of the talks the leaders are to adopt a Joint Statement," the presidential aide said.

"During the forthcoming talks, the leaders of Russia and ROK are planning to devote special attention to matters aimed at developing trade-and-economic cooperation, and at diversifying it to reduce the share of primary commodities in the Russian export pattern and to increase the share of the reciprocal deliveries of hi-tech products," Prikhodko said. "The sides intend to begin to work out a joint programme for partnership for the purposes of modernization and innovations-based development," he pointed out.

"Such fields as communication and telecommunications, banking, the commercialization of innovative and applied research efforts as well as cooperation in nature conservation, including a 'green growth' programme and energy-saving have been determined as strategic areas of interaction," the Kremlin expert specified.

Prikhodko said the presidents of Russia and ROK are also planning to discuss regional cooperation, primarily that in reference to the solution of large-scale tasks concerning the economic development of Russia's Siberia and the Far East with the implementation of Russo-South Korean projects for the development of infrastructure, the agri-industrial sector, fisheries and fish processing, transport, and logistics.

As far as international matters are concerned, the leaders of the two countries are to compare their positions on the main items that are on the agenda of the G-20 summit, and discuss in detail the problems relating to efforts to ensure peace and stability on the Korean Peninsula, as well as to form a reliable security mechanism in Northeast Asia, interaction between Russia and ROK at the United Nations Organization, counteraction to the challenges and threats to international security and strategic stability, the global climate change problems, and other matters of current importance concerning world politics, Prikhodko pointed out.

Medvedev eyes South Korean investment in Russiahttp://en.rian.ru/russia/20101110/161272430.html

10:58 10/11/2010

Russian President, Dmitry Medvedev on Wednesday called on South Korean businesses to invest in Russia.

Medvedev, who is currently on an official two-day visit to South Korea, will hold bilateral talks with his South Korean counterpart Lee Myung-bak to discuss energy, space, shipbuilding, fishing and military cooperation.

"Russia is interested in attracting Korean investors," Medvedev said. "They not only invest in jobs, but also bring modern technology and introduce modern industrial standards."

Medvedev said Russia and Korea should diversify trade cooperation since the current trade structure is vulnerable to market instabilities.

The Russian leader invited Korean businessmen to the St. Petersburg International business forum in June 2011.

More than twenty documents, including a roadmap on Russian gas supplies to South Korea, are expected to be signed during the talks, the second meeting between Medvedev and Lee in the past two months.

SEOUL, November 10 (RIA Novosti)

Medvedev calls on Russian, S.Korean companies to form modernization alliances

http://www.rbcnews.com/free/20101110111332.shtml

      RBC, 10.11.2010, Seoul 11:13:32.At a meeting between Russian and South Korean business representatives in Seoul today, Russian President Dmitry Medvedev urged Russian and South Korean companies to set up 'modernization alliances.' "We are ready to not only sell, but more importantly, to learn from our partners and form modernization alliances," the Russian leader stated. As he went on to note, South Korean companies possess extensive experience in the sphere of applied technologies and their commercialization, whereas Russia has numerous fundamental scientific developments that its eastern partners may find to be quite interesting. The president is confident that the said alliances can be formed in the sphere of energy efficiency, as well as in medical, computer, space and nuclear technologies.

      Medvedev also pointed out that trade between Russia and South Korea reached $11bn in the first half of 2010. "That is good, but at the same time - it is not enough," he said, adding that trade between South Korea and the U.S., Japan and China had amounted to hundreds of billions of dollars.

Trade between Russia, S.Korea reaches pre-crisis level – Medvedevhttp://www.interfax.com/newsinf.asp?id=200848

SEOUL. Nov 10 (Interfax) - Russian President Dmitry Medvedev has said that bilateral investment between Russia and South Korea will increase each year.

Trade between the two countries has virtually reached the pre-crisis level, totaling around $11 billion in the first half of 2010, Medvedev said at the third Russian-Korean business forum in Seoul on Wednesday.

"On the one hand, this is good, but on the other, we understand this is little," he said.

The figure is quite far from those reflecting trade between South Korea and countries like the United States, Japan and China, which amount to hundreds of billions of dollars, he said.

"There is space for us to grow. Closing this gap certainly depends primarily on those who are present in this hall. I hope that trade and investment will increase each year," the Russian president said.

The current structure of bilateral trade remains quite vulnerable to crises, he said. Two-thirds of Russian exports to South Korea are mineral commodities and petroleum products, Medvedev said. "Of course, we will continue to supply these types of goods, but nevertheless we should seek to diversify our cooperation," he said.

Russia is keen to attract Korean investors who not only invest their money and create new jobs, "but also, and that is the most important thing today, bring modern technologies and implement a modern production culture," Medvedev said.

The Russian president took the opportunity and invited all Korean businessmen present in the hall to visit Russian business platforms, including the international economic forum due to be held in St. Petersburg in June 2011.

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Gazprom and Korea's Kogas to sign road map for gas supplieshttp://www.tradingmarkets.com/news/stock-alert/hyhzf_pkx_gazprom-and-korea-s-kogas-to-sign-road-map-for-gas-supplies-1294385.html

Posted on: Tue, 09 Nov 2010 09:51:23 EST

Seoul, Nov 09, 2010 (RosBusinessConsulting via COMTEX) --

Gazprom and South Korea's state gas corporation Kogas are set to sign a road map for the implementation of a project on Russian natural gas supplies to the republic. According to the Kremlin's press office, the document will be signed during Russian President Dmitry Medvedev's official visit to South Korea on November 10-11. Furthermore, mining and

metallurgical company Mechel is poised to sign a memorandum of intent on cooperation with the metallurgical company POSCO, and Federal Grid Company hopes to sign a cooperation agreement with Hyundai Heavy Industries Co., Ltd. The Russian leader's press office also indicated that a number of bilateral agreements was expected to be signed during the visit, including an intergovernmental agreement and interdepartmental memorandums, joint action programs on modernization and innovations, transportation, communication and mass media, tourism, financial services, agriculture, and customs and regional cooperation, to name just a few.

For full details on (HYHZF) HYHZF. (HYHZF) has Short Term PowerRatings at TradingMarkets. Details on (HYHZF) Short Term PowerRatings is available at This Link.

Russia firms up huge natural gas deal with S.Koreahttp://www.google.com/hostednews/afp/article/ALeqM5iKIaWyMUFsJgTjegBFgUQTkuTI5w?docId=CNG.736ad4cc4829f350c53be1828396ba2f.921

(AFP) – 1 hour ago

SEOUL — Russia will ship at least 10 billion cubic metres (350 billion cubic feet) of natural gas a year to South Korea from 2017 under a preliminary deal to be signed Wednesday, Moscow's energy giant Gazprom said.

Commercial talks will start next month on the deal, Gazprom head Alexey Miller told reporters on the sidelines of a visit by President Dmitry Medvedev to Seoul.

"We currently see a growing market in Korea," Miller said. "Our partners are interested in increasing gas supplies."

Miller said the delivery method -- a pipeline, compressed gas or liquefied gas -- had yet to be agreed. He had no details on the value of the deal.

When the initial agreement was signed in 2008, an official quoted by Yonhap news agency said the gas imports would be worth about 90 billion dollars over three decades.

South Korea, one of the world's largest consumers of natural gas, is trying to diversify its sources from Southeast Asia and the Middle East.

It has a separate 20-year deal to import 1.5 million tonnes of liquefied natural gas from Russia's Sakhalin Energy every year.

Russia holds the world's largest natural gas reserves, estimated at 1,680 trillion cubic feet.

Russia's FGC UES, Hyundai to sign transformer plant dealhttp://en.rian.ru/business/20101110/161272198.html

10:44 10/11/2010

Russia's Federal Grid Company (FGC UES) and South Korea's Hyundai will sign a contract on the construction of an electric transformer plant in Russia's Far East, Primorye territory governor Sergei Darkin said on Wednesday.

"The overall investment will amount to several dozen million dollars. It will be a modern plant which will build electric transformers for our country and there'll be a 'smart' nets project to save electricity," Darkin said, adding the contract will be signed during Russian President Dmitry Medvedev's visit to South Korea.

The companies plan to finish the construction of the factory which will create about 300 new jobs in 18 months, he said.

SEOUL, November 10 (RIA Novosti)

Report: Russia's Medvedev expresses concerns over North Korea's nuclear programshttp://www.google.com/hostednews/canadianpress/article/ALeqM5iRKInDdOQoMutdHauvfCR3YbvEZw?docId=5086446

By The Associated Press (CP) – 2 hours ago

SEOUL, South Korea — Russian President Dmitry Medvedev expressed concerns over North Korea's nuclear weapons programs as he arrived in Seoul for a Group of 20 summit, a news report said Wednesday.

"North Korea's nuclear ambition is creating political and military tension in Northeast Asia and Russia's eastern region, which naturally makes us feel uneasy," South Korea's JoongAng Ilbo newspaper quoted Medvedev as saying in an interview.

He also noted that North Korea's nuclear test site is only about 60 miles (100 kilometres) from Russian territory, it said.

North Korea carried out two nuclear tests in 2006 and in 2009 in the country's northeastern area, drawing international sanctions each time.

Just before the second test, North Korea walked out of six-nation talks aimed at ending its nuclear programs. North Korea has recently expressed its willingness to rejoin the negotiations, which involve the two Koreas, the United States, China, Russia and Japan.

Seoul and Washington have said North Korea must first take specific moves to demonstrate its sincerity.

Medvedev reaffirmed his country's commitment to a diplomatic solution to end North Korea's nuclear programs, the newspaper said.

The Russian president was expected to discuss the nuclear dispute as well as other regional and financial issues with South Korean President Lee Myung-bak on Wednesday ahead of a two-day gathering of G-20 leaders, including President Barack Obama.

Meanwhile, a South Korean newspaper reported Wednesday that a North Korean researcher involved in the country's missile and nuclear programs was arrested on espionage charges along with his father.

Kim So In, a senior researcher at North Korea's National Academy of Science, was accused of helping his father Kim Song Il, a researcher at the North's Yongbyon nuclear complex, leak nuclear secrets to a foreign agency, South Korea's Chosun Ilbo newspaper cited an unidentified high-level North Korean source as saying.

It said Kim's family was sent to North Korea's infamous Yodok political prison camp in May.

The National Intelligence Service, South Korea's top spy agency, said it believes the report's credibility is low. It did not provide any further details.

November 09, 2010

Kim Sung-hwan: Medvedev‘s visit to Seoul will give concrete shape to Korean-Russian Strategic Cooperative Partnershiphttp://www.interfax.com/interview.asp?id=200814

Russian President Dmitry Medvedev starts a visit to the Republic of Korea on Wednesday marking the 20th anniversary of the establishment of diplomatic relations between the two countries. Following the visit, the Russian president will take part in a G20 summit in Seoul. Korean Foreign and Trade Minister Kim Sung-hwan says what Korea expects from these meetings in an interview with Interfax correspondent Timur Khursandov

Question: What does Korea expect from the upcoming G20 summit and in particular from the visit of President Medvedev? Are any bilateral agreements or contracts to be signed during the visit?

Answer: Korea and Russia have embraced a similar stance with regard to enhancing the role of the G20 and the two countries have therefore been reinforcing cooperation in this regard.Moreover, Russia has demonstrated a keen interest in establishing a system to protect the marine environment following the recent oil spill in the Gulf of Mexico. Korea, as the G20 Chair, is cooperating closely with Russia on this matter through the Energy Experts Group.The upcoming visit by President Dmitry Medvedev, on the occasion of the 20th anniversary of the establishment of diplomatic relations between Korea and Russia, is expected to be of value in giving concrete shape to the ‘Strategic Cooperative Partnership‘ between the two countries and developing the future-oriented relationship.President Lee Myung-bak and President Dmitry Medvedev will hold a summit meeting and engage in in-depth discussions on ways to increase substantive cooperation in such areas of mutual interest as energy and natural resources, the development of the Russian Far East and Siberia, and Russia‘s economic modernization. The two Leaders will also discuss the situation on the Korean Peninsula and in Northeast Asia, as well as mutual cooperation in the international arena including the G20 Summit.During President Dmitry Medvedev‘s visit, a number of agreements and MOUs will be signed in various fields in which practical cooperation is under way.Q.: Modernization has lately been one of Russia‘s top priorities. Are Korea and Korean companies ready to help Russia modernize its economy and in which tangible ways could Korea contribute to this?A.: Korea is an excellent partner in the process of Russia‘s economic modernization, given that Korea has emerged as one of the world‘s IT powers in such a short period. The five priority areas of Russia‘s economic modernization are the focus of attention for Korean companies as future engines of growth. They are interested in technology exchanges with Russian partners and participation in the development of the Skolkovo Innovation Center.High-ranking government officials and business people from both countries gathered in Seoul on October 13th to hold a joint forum on cooperation in the area of economic modernization, which was indeed a good starting-point for the promotion of cooperation between our two countries. There is huge potential for mutually beneficial cooperation between the two countries. Combining Korea‘s excellent technology, which can readily be put to commercial use, and Russia‘s original technology will lead to a win-win situation for both countries.Q.: The number of Russian tourists visiting the Republic of Korea has steadily increased. Are there any plans to introduce a visa waiver program for Russian citizens to boost exchanges in the field of tourism?A.: I am pleased to note the dynamic development of bilateral relations, including the increase in people-to-people exchanges between the two countries. As part of the efforts to enhance people-to-people exchanges between the two countries, we recently concluded the ‘Agreement on the Facilitation of the Issuance of Visas for Short-term Visits’. Furthermore, we will sign the ‘Agreement on Temporary Labour Activities’ at the upcoming summit between the two leaders on the occasion of the G-20 Seoul Summit.

For the development of bilateral relations, both sides need to accord serious consideration to the conclusion of a ‘Visa Waiver Agreement for Ordinary Passport Holders of the ROK and Russia‘. Q.: Is the Republic of Korea interested in developing cooperation with Russia in the field of energy? What are the possibilities for joint projects? Do you expect any large-scale deals or contracts in this field in the near future?A.: Russia has vast reserves of oil, natural gas and minerals while Korea is one of the largest importers of energy resources. The two countries are cooperating actively in this field. Korea started importing Russian oil through the Eastern Siberia-Pacific Ocean oil pipeline (ESPO) and LNG from Sakhalin gas field last year.Korea is interested not only in importing Russia‘s energy resources, but also in carrying out joint projects with Russia for the exploitation of its oil, gas and mineral resources. Being geographically close to Russia and having excellent industrial technology, Korea can be an excellent partner for the Russian government which is actively pursuing plans to develop energy resources in the Russian Far East and Siberia.Many companies from our two countries are actively engaged in consultations for the development of energy resources in the Russian Far East and Siberia. We hope these consultations lead to concrete joint projects in this field. Q.: The Six-Party Talks are still in a deadlock. Will this issue be raised during President Medvedev‘s visit? Can the talks resume in the near future? Is the Six-Party Talks format still alive or is it necessary to look for some other formats to tackle the problem?A.: Both of our governments share the view that realizing the denuclearization of North Korea is essential for peace and stability on the Korean Peninsula and in Northeast Asia. President Lee and President Medvedev are planning to discuss ways to achieve the denuclearization of North Korea through the Six-Party Talks at the upcoming summit. Despite North Korea‘s recent statement on its willingness to return to the Six-Party Talks and implement the Joint Statement of September 19, 2005, Pyongyang has not demonstrated sincerity toward denuclearization. There has been no evident substantial change in North Korea‘s attitude and behaviour toward the nuclear issue.For the Six-Party Talks to lead to substantial progress in the nuclear issue and not be a venue for dialogue for dialogue‘s sake, North Korea must first demonstrate sincerity toward denuclearization by taking concrete action.The five parties, Korea, Russia, United States, China and Japan share the position that the Six-Party Talks is a useful framework for the realization of the denuclearization of North Korea. The ROK continues to engage in diplomatic efforts to realize complete, verifiable and irreversible denuclearization of North Korea in close consultation with other countries in the Six-Party Talks. We will lay the groundwork for the resumption of the talks through bilateral and multilateral consultations including inter-Korean dialogue within the Six-Party Talks framework.

Interview to South Korean mass mediahttp://eng.kremlin.ru/news/1277

November 9, 2010, 19:00

QUESTION: Mr President, 20 years have gone by now since the Republic of Korea and Russia established diplomatic relations. Over this time fruitful contacts have developed between the South Korean and Russian governments, thanks to the personal friendship between our countries’ leaders. But relations in the private sector, including cooperation between companies, have not succeeded in reaching the level of our intergovernmental relations. Mr President, could you give an assessment of Russian-South Korean relations over the last 20 years and tell us about the new development areas that our countries should focus on in the future?  

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Over the last two decades, since we established diplomatic relations, our countries have made big strides in all cooperation areas and are now moving confidently towards the goal of achieving the strategic partnership that our countries’ leaders set in 2008.

Russia and South Korea have active political, economic, and cultural cooperation and work together closely on the international stage too. The number of our people travelling to each other’s countries is growing all the time. This reflects our peoples’ growing interest in each other and development of the ties between us. 

I do not think that our business cooperation lags behind our political relations. We are successfully implementing a number of big joint projects. South Korean investment in the Russian economy came to around $600 million in the first half of 2010. Our bilateral trade was up by 82.2 percent in value terms over the first eight months of 2010 compared to 2009, and was close to $11 billion. We hope that our bilateral trade will top $17 billion for the year as a whole.

I agree that our achievements are in large part the fruit of our regular top-level contacts. The Russian and South Korean presidents have met more than 20 times since our countries established diplomatic relations. This shows that our political dialogue has a stable foundation not tied to the circumstances of the moment, and that our leaders see each other as reliable partners for the future.

My cooperation with President Lee Myung-bak is no exception. South Korean President’s official visit to Moscow in September 2008 saw us adopt an extensive joint declaration that we consider a basic long-term document.  

President Lee Myung-bak took part in the Global Policy Forum in Yaroslavl this year. The main result of our meeting on that occasion was an agreement to intensify our cooperation in all areas related to modernisation and put the emphasis on the innovation component in our countries’ economies.

I will make an official visit to Seoul very soon, during which we will sign a number of documents that I hope will strengthen our cooperation at all levels and in a broad range of areas.

QUESTION: Mr President, what do you think are the components for a successful Group of Twenty summit?

DMITRY MEDVEDEV: The G20 has become a unique global-scale anti-crisis centre. Its summits in 2008-2010 drew up programmes for coordinated action by the leading economies and the international financial institutions to take us out of the crisis and reform the world’s financial and economic system. The Pittsburgh Declaration and the decisions that came out of the Toronto summit have created a common platform for action between countries with different economic models. The growing convergence in countries’ approaches towards resolving the key global economic and financial issues is also thanks to the G20.

I think the main task for the G20 summit in Seoul on November 11-12, 2010, will be to preserve the spirit of unity and readiness for joint effort that has helped the G20 to make progress in overcoming the crisis. We now need to consolidate the gains made in the global economy’s post-crisis recovery. The main thing in this context is to draw up and implement policies that reflect the balance of interests on all sides. 

The consolidating role of the G20 was the basis for the optimistic global economic development outlook that the IMF presented at the Toronto summit. Implementing this development outlook requires us to carry out measures ensuring sustainable and balanced global growth in the medium term. The Seoul summit is set to adopt the G20’s action plan for the next 3-5 years, which contains individual macroeconomic policy recommendations for the different countries. The G20 countries’ coordinated action in this area is the guarantee against a repeat of crises in the future.   

The G20 must continue its work on reforming the global financial system. Considerable progress has already been made here. Voting power in the World Bank has been substantially redistributed in favour of the developing countries and countries in transition. The same now needs to happen in the IMF. The reform plan approved by the G20 finance ministers’ meeting in Gyeongju on October 22-23, 2010, is the result of a compromise and will unquestionably help to raise the IMF’s legitimacy in the short term, though it does not resolve the main issue, that of giving the developing countries a greater say in the IMF decision-making process. Reform of the IMF must continue.

South Korea’s presidency of the G20 is playing an important part in implementing these policies. This is the first time that a country not part of the G8 has set the agenda for the G20 summit. South Korea has done a lot of organisational work, come up with a number of interesting initiatives adding specific substance to the summit’s agenda, made much effort to keep countries not in the G20 informed, ensured the G20’s cooperation with international organisations, and developed partnership relations with the business community, getting it involved in carrying out programmes to overcome the crisis. We place great importance on the South Korean presidency’s new initiative to facilitate international development. There can be no discussing development issues in today’s world after all without the ‘new donors’ – the big developing countries – taking part.  

All of this gives us reason to expect that the Seoul summit will be an important international event that confirms the G20’s role as a guarantor of sustainable global economic development.

QUESTION: The Republic of Korea seeks cooperation with Russia in a wide variety of areas. Mr President, which areas do you think have the most potential for our bilateral cooperation? Some experts think that Russia could draw on South Korea’s experience as a country that has undergone rapid economic growth. How do you view South Korea as an economic partner? 

DMITRY MEDVEDEV: As I said, Russian-South Korean economic relations are showing confident development. As for the most promising cooperation areas, President Lee Myung-bak and I agreed that they should be related to our modernisation goals and raising our countries’ innovation potential. I think all of the conditions are in place for achieving this quality shift in our relations.

The Republic of Korea is a country with a modern and fast-growing economy, Russia’s third-biggest partner in the Asia-Pacific region after China and Japan, and this explains our obvious interest in cooperation with your country.

It is enough to take a look at our foreign trade figures to see what potential our trade and economic cooperation have. Our bilateral trade underwent a more than 8-fold increase in 2002-2008. Unfortunately, the crisis caused a drop in bilateral trade, but judging by this year’s figures we are gradually returning to the pre-crisis level.

Investment cooperation is an important part of our economic ties. South Korean companies show considerable interest in joint projects and invested around $1.3 billion in the Russian economy last year, almost $500 million of this as direct investment.

It is pleasing to see that South Korean investment is expanding into new areas in Russia, coming not just to Moscow now but to other regions too. To give a few examples, Hyundai Motors has invested in a car assembly plant producing 100,000 cars a year in St Petersburg and a 500-Mwt capacity electricity power station in Kemerovo Region, while LG Electronics and Samsung Electronics have invested in household appliances and electronics production projects in the Moscow and Kaluga Regions.

We are interested above all in attracting investment to the Russian Far East and in developing joint enterprises in sectors such as the automotive sector, gas processing, information technology, construction, natural resources development, electricity, forestry, agriculture and fishing.

The Republic of Korea is a large consumer market for Russian energy resources, on a par with China and Japan, and this is also one of the main areas for our cooperation, as is clearly reflected in the partnership between Gazprom and Kogaz, and the Sakhalin-1 and Sakhalin-2 projects.

Cooperation to develop the Trans-Siberian Railway’s transit potential and that of the Russian Far East ports for transporting South Korean goods to Europe is also an area offering big opportunities. 

Russia is building modernisation partnerships with individual countries and with groups of countries. We have set five priority modernisation areas: computer, telecommunications, and nuclear technology, medical technology and the space sector, and creation of an energy-efficient economy. We are therefore interested in the experience of South Korea’s innovation and technology cluster known as Daedeok Innopolis located in Daejeon, which we could draw on in developing our Skolkovo innovation centre and the new university campus on Russky Island. 

QUESTION: Despite the efforts made by the countries concerned, North Korea continues to carry out its nuclear programme and threaten the Korean Peninsula’s stability. 

Mr President, do you think that the six-party talks are the only way to resolve the North Korean nuclear problem? If you take this view, could you tell us what Russia is doing now to get these talks going again, and also, what part can Russia play in persuading North Korea to renounce its nuclear programme and resolve the problems on the Korean Peninsula in general? 

DMITRY MEDVEDEV: First of all, this issue represents a challenge to the entire international nuclear non-proliferation regime. Iran has been the main focus of attention, but I want to point out that Tehran, unlike Pyongyang, has not proclaimed itself a nuclear state, and has not tested nuclear weapons, and all the more so has not threatened to use them. 

Of course we are worried about the military and political tension that North Korea’s nuclear ambitions are causing so close to Russia’s eastern borders, not to mention the fact that North Korea’s nuclear test site is located just a little more than 100 kilometres from our territory.

But we continue to take the view that this problem must be resolved exclusively through political and diplomatic means, as part of the effort to strengthen the nuclear non-proliferation regime. This is also the aim of the UN Security Council resolutions that call directly for a resumption of the six-party talks. It is pleasing to see the efforts underway now to resume the negotiating process. I note in particular the efforts made by China, chairing the process, and also the proposals made by our South Korean and American colleagues. Russia is not standing idle of course. We are working actively with our partners in the talks and chair the Working Group on forming a regional peace and security mechanism.

QUESTION: The sinking of the South Korean corvette Cheonan in the Yellow Sea in March this year had a negative impact on the complex geopolitical situation in northeast Asia. Russia’s negative reaction to the conclusions of the South Korean official

investigation into the sinking was a source of regret for many people in the Republic of Korea. 

Mr President, what efforts do you think the countries directly connected to the incident and the international community in general should make now to overcome the negative consequences the ship’s sinking has had? Also, will Russia make public the conclusions reached by Russian military specialists?

DMITRY MEDVEDEV: We are concerned by the developments on the Korean Peninsula and the confrontational and tense atmosphere that remains there.

You raise the sinking of the South Korean naval corvette Cheonan in March, and its consequences. The Chairman of the UN Security Council approved what we think was a balanced and objective statement on this incident on July 9.

As for the Russian experts’ conclusions, they have not been officially published anywhere, and nor could they be published, for they were intended for our internal analysis in reaching a decision on the Cheonan incident in the UN Security Council.

This naval vessel’s sinking with the resulting death of 46 sailors was unquestionably a tragedy, with which we sympathise, and which will not be so easily forgotten. But we need now to look to the future and think about how to avoid full-scale military and political crisis on the Korean Peninsula.

QUESTION: We know that the Russian government is making great efforts to develop Eastern Siberia and the Far East as part of its long-term development strategy. To have the Republic of Korea take part in this development would benefit both countries. But in reality South Korean government and business are not yet playing as active a part in this work as they could. Mr President, what is your view on this situation?

DMITRY MEDVEDEV: We do indeed hope that South Korean business will take an active part in the projects we are carrying out within the programme to develop the Eastern Siberian and Far East regions until 2025, as well as in other projects of interest to South Korean business.

We are steadily improving our investment climate and creating a favourable environment for investors. This is a key factor in our national economic modernisation. Amendments to our immigration laws came into force in July this year, abolishing quotas on hiring highly qualified foreign specialists. The programme to privatise state-owned assets also offers attractive opportunities for potential investors. We are continuing our consistent efforts to de-bureaucratise the economy. We have drafted and sent to the parliament a package of draft laws introducing tax breaks for investment in high technology and social services. Russia established the post of investment ombudsman in August 2010, and appointed First Deputy Prime Minister Igor Shuvalov to this post.

We are set to sign a bilateral intergovernmental agreement on temporary employment for our citizens in each other’s countries during my upcoming visit to Seoul. This will simplify the immigration formalities for our citizens in each other’s countries and facilitate joint projects.  

Developing Siberia and the Far East is indeed one of our state policy priorities. Investment in the Far East’s economy has risen more than 16-fold over the last 9 years. The region has received 250 billion rubles [more than $8 billion] in 2010, and we plan to invest a further 2 trillion rubles over the next five years.  

But we make no secret of the fact that without full-fledged cooperation with our foreign partners and an inflow of foreign investment and technology it will be difficult to achieve the region’s rapid development. We already have successful examples of cooperation in the region, such as construction of the Eastern Siberia-Pacific Ocean oil pipeline, the Sakhalin-Khabarovsk-Vladivostok gas pipeline, the construction of an oil refinery, a gas-chemical plant, and LNG [liquefied natural gas] and mineral fertiliser production plant.  

We are also carrying out big projects to develop shipbuilding and repairs in the region. Work began in November 2009 on the modern Russian-South Korean Zvezda-D.S.M.E. and Russian-Singaporean Vostok-Raffles shipyards, which have $5 billion worth in shipbuilding contracts. Another big step in developing sea transport was the opening in the middle of last year of an international freight and passenger ferry link between Sakaiminato (Japan), Donghae (Republic of Korea), and Vladivostok, which has given tourism a big boost. 

Of course, we also welcome South Korean investment in building the facilities for the 2012 APEC summit. One of these projects, the Far East Federal University, is set to become the leading university and research centre for the Primorye Territory and the entire Russian Far East.

QUESTION: South Korean Government hopes to achieve successful tripartite collaboration between South Korea, Russia and North Korea in the development of Eastern Siberia and the Russian Far East. That includes projects aimed at developing Russia’s rich natural resources with the participation of Korean technology, capital and labour, which North Korea can provide.

Mr President, how do you assess the chances of success for such trilateral cooperation?

DMITRY MEDVEDEV: We have always supported broad international cooperation, including in the trilateral format, for the implementation of economic projects not only in Russia but also on the Korean peninsula. Major cross-border projects can be realised only through joint efforts. Among such projects we include, in particular, the construction of the pipeline and power lines, as well as a railway line linking the Trans-Siberian Railway with the Trans-Korean Railway.

Other promising areas of cooperation include the development of natural resources and infrastructure modernisation in the Russian Far East, such as the construction projects for the APEC summit in Vladivostok, the implementation of environmental initiatives in the Lake Baikal and Kamchatka regions. Proposals have been made regarding the possible involvement of Russian companies in Kaesong inter-Korean business dialogue and the Kumgangsan tourism project.

I am confident that these projects will bring more than just economic dividends to Russia, the Republic of Korea and the Democratic People’s Republic of Korea. They will help normalise the situation on the Korean Peninsula, address North Korea’s economic problems and increase its involvement in regional economic relations in Northeast Asia.

At the same time the implementation of such projects is possible only if tension on the Korean peninsula is reduced and the two Koreas move towards reconciliation. Russia has consistently supported inter-Korean dialogue. We are ready to continue to contribute to this process in any way we can.

QUESTION: South Korea has high hopes for cooperation with Russia in the energy sphere, including participation in developing oil and gas fields in Eastern Siberia and the [Russian] Far East, and the import of oil and gas produced in those regions. But, despite South Korea’s great expectations, there has been no significant progress in this area.

In particular, because of the North Korean nuclear issue, there has been no movement forward in the implementation of the plan to build a natural gas pipeline connecting South Korea to the Russian Far East via North Korea. In addition, there are a number of controversial issues with Russian gas supplies to the Republic of Korea.

Mr President, what steps do you think should be taken to address these issues? Does the Russian Government plan to act more actively to change North Korea’s stand?

DMITRY MEDVEDEV: I agree that our energy cooperation has great potential, and it is not limited to oil and gas projects, but also includes coal mining, power generation and power plant engineering. We are also interested in developing cooperation in these areas in the trilateral format, with the involvement of North Korea, as I mentioned earlier.

At present, in particular, negotiations are being held regarding the organisation of mutual supplies of electricity between Russia and South Korea through the territory of North Korea. Russian companies INTER RAO UES, IDGC Holding and Rosenergo are discussing opportunities for cooperation with South Korean partners in the modernisation of Russian electricity distribution networks. They are analysing South Korea’s experience in developing and applying advanced technology to improve energy efficiency, energy conservation and the use of renewable energy.

Mechel is actively cooperating with Hyundai Steel on the supply of coking coal. In the oil and gas industry, Gazprom is collaborating with Korean companies KOGAS and the

Korea National Oil Corporation (KNOC). In addition, such projects as Sakhalin-1 and Sakhalin-2 have been developing actively.

November 9, 2010, 19:00

G20 Seoul summit to discuss IMF reforms: Russian experthttp://english.peopledaily.com.cn/90001/90777/90853/7194405.html

09:46, November 10, 2010Leaders gathering at the upcoming G20 Seoul summit will, among other things, discuss additional reforms of the International Monetary Fund (IMF), says an expert from Russia's leading think tank.

The G20 leaders have made some important achievements at their previous summits, including the consensus reached concerning the stimulus package, the framework for sustainable and effective economic growth, and some major reforms of the IMF, Marina Larionova, head of the Moscow-based International Organizations Research Institute, said during a recent interview with Xinhua.

The latest decision adopted by the IMF's governing board on increasing quota shares of emerging economies and developing countries was also an important achievement, Larionova said. The decision will have to be confirmed by the G20 leaders in Seoul.

French President Nicolas Sarkozy, whose country was scheduled to take over the G20 rotating presidency following the Seoul summit, would obviously further this agenda, she said.

The IMF has adopted two additional mechanisms, one supporting economies in crisis with so-called financial safety net and the other redistributing quota shares in favor of developing countries, which may surpass six percent, Larionova said.

"This is more than they agreed in Pittsburgh," she said. "Of course, this is not enough for developing countries, but this is some shift forward."

"The third achievement which might be skeptical, however is the change in the governing board," she said.

Members of the European Union earlier sacrificed two seats in the 24-member executive board in favor of developing countries, she said, but "so far it is still not clear which members will leave the board and in what order, and which countries will take over."

She said the issue will have to be resolved at the G20 summit, which will be held

Thursday and Friday, and during subsequent IMF meetings.

Larionova said the G20 leaders have intended to make a number of new commitments through a multi-year action plan on development, focusing on investment and stimulus measures to support growth in developing countries.

However, the expert warned of the risks that the broader the agenda G20 members adopted, the more criticism they may face as being ineffective in concrete actions.

The G20 leaders will also discuss energy aspects, fossil fuel subsidies and corruption apart from financial and economic topics, she said.

In particular, they may discuss tensions over the American decision to stabilize the U.S. economy by printing extra greenbacks to buy 600 billion U.S. dollars in Treasury bonds over the next eight months.

Some experts have voiced concerns for possible currency wars, but Larionova believed Russia would not take participate.

"Russia is as interested as the other G20 members in balancing the current accounts, the trade flows, limiting at least reliance of Russian population, Russian business and international business on one currency," she said.

Larionova said currency wars would not be a topic of the agenda at the Seoul summit, because "the chair -- the South Korean presidency -- is very cautious of this, even though the exchange rate flexibility will be discussed."

Source: Xinhua

US and China likely to reach compromise – Russian presidential aidehttp://russiatoday.com/news/g20-currencies-trade-dvorkovich/

Published: 10 November, 2010, 09:03

There will be no trade war between the US and China, and more financial coordination is needed to ensure a stable economic recovery, presidential aide Arkady Dvorkovich told RT ahead of the G20 summit in South Korea.

“The US and China are so interconnected. Any actions that may lead to a major trade war could worsen the situation in each country. So, most likely, they will find a compromise,” Dvorkovich said.

As for the upcoming summit’s agenda, Dvorkovich said that the discussion points at G20 summits have already become tradition, with the leaders looking at macroeconomic imbalances and how to coordinate anti-crisis and overall macroeconomic policies.

“This time sole leaders will probably focus on the issues related to the international monetary system, currency markets and instabilities that can be created by the recent decisions to expand monetary mission in the US and potential protectionist measures in other countries to make sure that national currency markets are stable,” he said.

Dvorkovich added that the G20 summits will gradually move to a long-term agenda.

“It is happening already but it will take time. It is still a developing format,” Dvorkovich said.

As for Russia, it wants a more coordinated approach from its partners, he said.

“We don’t need surprises from our partners. We want a more intensive policy dialog between central banks and finance ministries. This can lead to a greater stability on the markets. Also we believe that we should pay more attention to issues connected with energy security, which is our traditional area of concern,” Dvorkovich said.

Russian to be reinstated in Chinese schoolshttp://en.rian.ru/world/20101110/161271098.html

09:35 10/11/2010

China is interested in developing Russian language as a school subject, Russia's deputy Education Minister said on Wednesday.

Ivan Lobanov said China plans to send a group of school principals to Russia "to exchange methods of teaching Russian language."

"This is the result of successful negotiations by the Russian Education Ministry the Russian Embassy in China," Lobanov said.

Russian was one of the main foreign languages taught in Chinese schools during the Soviet era, but was gradually replaced by English and other European languages in the 1980s and 1990s.

BEIJING, November 10 (RIA Novosti)

Venezuelan parliament ratifies nuclear plant constriction deal with Russiahttp://en.rian.ru/world/20101110/161270300.html

07:02 10/11/2010

The Venezuelan parliament has ratified an agreement with Russia on nuclear cooperation, which includes the construction of a nuclear plant in Venezuela, local media reported.

A report issued on Tuesday by a parliamentary commission in charge of the deal said "with the launch of the nuclear power plant Venezuela will be able to save up to a billion dollars a year by exporting 15 million barrels of oil which are now spent on producing the equivalent volume of electricity."

The opposition has claimed that the agreement, signed during Venezuelan President Hugo Chavez to Russia on October 15, was "unbeneficial for Venezuela."

The Russian state-run nuclear corporation said it was ready to build a nuclear plant in Venezuela "within ten years or earlier," which would make it the first Russian company to build a nuclear facility in Latin America.

BUENOS AIRES, November 10 (RIA Novosti)

Russia, Britain to address visa issue 'in near future' - diplomathttp://en.rian.ru/world/20101110/161270086.html

06:13 10/11/2010

Russia and Britain will resume in the near future consultations on the easing of visa regulations for some groups of citizens, which have been staled for several years, the head of the economic department of the Russian Embassy in London said.

Speaking during the World Travel Market (WTM) exhibition in London, Karen Malayan said the Russian Federal Tourism Agency and British national tourism organization Visit Britain had agreed to address the issue in the near future.

Strict visa regulations have been a major obstacle for the development of tourism between Russia and Britain.

Britain froze negotiations with Russia on the issue following the controversial death of former KGB officer Alexander Litvinenko in London in 2006. Litvinenko died of radioactive poisoning in a London hospital, and British investigators accused agent-turned-businessman Andrei Lugovoi of murder, and demanded his extradition, sparking a major diplomatic row.

Soured relations between Moscow and London were then hampered by Russia's bureaucratic pressure on the British Council and Britain's criticism of Moscow following the Russian-Georgian military conflict in August 2008.

LONDON, November 10 (RIA Novosti)

Hopes rise for easier visas between Russia and Britainhttp://themoscownews.com/international/20101110/188189265.html?referfrommn

by Andy Potts at 10/11/2010 11:27

 

Getting visas to travel between Britain and Russia could be easier in the near future after the two countries agreed to resume talks on the issue.

And that’s good news for anyone who has endured the rounds of form-filling required to travel between Moscow and London.

Karen Malayan, head of the economic department of the Russian Embassy in London told delegates at the World Travel Market that there had finally been a thaw in the frosty relations between the two sides, RIA Novosti reported.

The Russian Federal Tourism Agency and the UK’s national tourism organisation Visit Britain have agreed to return to the issue in the near future.

 

Present problems

At the moment applying for even simple tourist visas between the two countries is a time-consuming and expensive business.

While recent moves to outsource visa applications to dedicated agencies has cut out some of the hassles – and ended the long queues outside consulates – it has also pushed up costs.

Meanwhile Britain’s insistence on would-be tourists from Russia having to give fingerprints and submit details of earnings and bank statements is a major turn-off for many potential visitors.

And both sides agree that this is harming the tourist trade between the two countries.

 

Political football

Britain and Russia froze negotiations on the issue in 2006 following the controversy over the death of former KGB officer Alexander Litvinenko in London.

British police demanded the extradition of Andrei Lugovoi, now a member of Russia’s Duma, prompting a major row when Russia refused to hand him over for trial.

And Westminster and the Kremlin also clashed over the Georgian conflict of 2008 and restrictions on the British Council’s work in Russia.

 

More than just Moscow

Russia is keen to develop international tourism and promote destinations beyond Moscow, St. Petersburg and the Golden Ring.

At the London-based World Travel Market, Rosturism is presenting several new projects.

And with a packed sporting calendar heading to the country in the near future, 2013 Universiade host Kazan and 2014 Winter Olympic city Sochi are being pushed into the spotlight.

Kazan was presented as Russia’s “Third Capital” for the UK market, while new developments on Russian Railways – including the Sapsan high-speed links and upgraded routes around the Olympic venues – also got a strong pitch.

Russia to allocate $ 45 million for UN social programs http://english.ruvr.ru/2010/11/10/32946299.html

Nov 10, 2010 03:22 Moscow Time

Russia will allocate $ 45 million for UN social programs in 2011. This was reported by Dmitry Birichevsky – a representative of the Russian delegation in New York at the United Nations Conference on voluntary contributions. Russia will make the largest contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria and the World Food Program - up to $ 20 million.

   The U.S. reported unwillingness to invest in this area prior to approval of its budget.

Sitel: Macedonia receives invitation to join Belene NPP http://www.focus-fen.net/index.php?id=n234936

10 November 2010 | 09:25 | FOCUS News AgencyHome / Southeast Europe and BalkansSkopje. Macedonia has received an invitation to participate in Belene nuclear power plant, Macedonian Sitel television station reports.Bulgarian Minister of Economy, Energy and Tourism Traycho Traykov told Macedonian Deputy Prime Minister Vladimir Pesevski during the Vienna Economic Forum that Macedonia had an invitation to join the international project in Bulgaria. Pesevski expects that the proposal will be extended officially in the next few days and then Macedonia will make an analysis whether it is profitable to have a share in the nuclear power plant. “It is a good idea to discuss and analyze. If the region is politically stable, the proposal is very interesting. On the other hand, if each country decides to generates its electricity with own sources, its price will be higher. We will discuss the options and send a reply within a reasonable term,” said Pesevski.The television station says the Macedonian Academy of Sciences and Arts has recently presented a research for building a nuclear power plant in Macedonia.The idea to join Belene has received various opinions in the public in Macedonia.

Russian arms exporter to take part in INDO Defence 2010 Expo&Forumhttp://en.rian.ru/world/20101110/161269052.html

03:03 10/11/2010

Russia will present a large number of military equipment and technologies during the INDO Defence 2010 Expo&Forum due in Indonesia on November 10-13, state-run arms exporter Rosoboronexport said.

"Today the potential for developing military and technical cooperation between Russia and Asia-Pacific countries is very big: this arms market remains quite capacious, and Russia offers the entire spectrum of the most advanced weapons and military equipment," the company said in a press release.

"We are talking about aviation equipment (Su (Sukhoi), MiG (Mikoyan) and Il (Ilyushin) planes, Mi (Mil) and Ka (Kamov) helicopters, various weaponry and equipment for them), as well as about navy and armored equipment, weaponry for special forces, ammunition... and many other equipment that Asia-Pacific countries need," the statement said.

Russia's new generation advanced military aircraft trainer Yak-130s, which attracts special attention around the world, will also be presented at the exhibition, along with Tor, Buk, S-300 and Igla missile systems, the document said.

MOSCOW, November 10 (RIA Novosti)

November 10, 2010 11:21

Russia to sell over $50 mln worth of missiles to Indonesiahttp://www.interfax.com/newsinf.asp?id=200868

JAKARTA. Nov 10 (Interfax-AVN) - The Russian arms exports monopoly Rosoboronexport has signed a contract at an arms exhibition in Indonesia to sell air-to-air missiles worth over $50 million to that country.

va dp

Russia offers Yak-130 trainers to Indonesia

http://www.defenseworld.net/go/defensenews.jsp?id=5222&h=Russia%20offers%20Yak-130%20trainers%20to%20Indonesia

The 4th Indonesia’s Official Tri-Service Defense Exhibition INDO DEFENCE 2010 EXPO & FORUM, which is being held in the capital of Indonesia, Jakarta, (Java Island, HALIM PERDANAKUSUMA Air Force Base, 10-13 Nov.), is viewed by the Rosoboronexport State Corporation, the sole enterprise in Russia authorized to export the whole range of defense and dual-use products, technologies and services, as the most important forum to discuss all aspects of military technical cooperation with its regional partners.

      Today the prospects of military technical cooperation between Russia and APR countries are very bright: this arms market has large capacity and Russia offers the entire range of the most up-to-date armaments and military equipment. These encompass air materiel (Su, MiG, IL aircraft, Mi and Ka helicopters, a variety of armaments and equipment for them), naval weaponry, armored vehicles, weapons for special operations forces, ammunition for previously supplied systems, as well as many other items, what the APR countries need. The exhibition will address all these aspects.

      In particular, a unique Russian two-seater combat trainer, the Yak-130, is nowadays attracting much attention of specialists. As is known, the Yak-130 has been selected by the Russian Air Force as a main vehicle for pilot training and is being fielded with the Russian Armed Forces. It arouses great interest around the globe: according to experts, this is an all-new Russian production program for advanced aircraft offering such high capabilities.

      The exhibition in Jakarta is conducted under the auspices of the Ministry of Defense and the Ministry of Industry and Trade of Indonesia. According to forecasts, this year it will host 700 companies from over 40 countries. Rosoboronexport’s participation in

INDO DEFENCE 2010 is another step towards strengthening the long-term mutually beneficial cooperation with partners in the Asia-Pacific Region (APR). The vast experience of successful interaction provides all the necessary opportunities.

      As is known, 2010 is very special year for Indonesia and Russia: 60 years ago the two countries established diplomatic relations, while 50 years ago Moscow and Jakarta signed the agreements that laid a unique basis for the development of full-fledged military technical cooperation.

The Georgian Foreign Ministry received a note to Russia on spies

http://www.rosbalt.ru/2010/11/10/788250.html

GOOGLE TRANSLATIONRosbalt-Caucasus 10.11.2010, 10:12 NewsBILISI, November 10. The Georgian Foreign Ministry through the Swiss Embassy received a note from Russia. As the correspondent Rosbalt, this information was disseminated to InterpressNews citing reliable sources.In accordance with the note, Russia wants to get information and personal data of four Russian nationals detained by the Georgian counter-intelligence - in Tbilisi, he is charged with spying for Russia. According to the same source, in the coming days, Georgia, through the Swiss Embassy, will give the Russian side is interested in her information.Recall, on the eve of the Russian Foreign Minister Sergei Lavrov told reporters that Russia requires consular access to the Russians detained in Georgia on spying charges, but no talks will not lead, PRIME-TASS."We demand consular access. We want to make sure that among those people are our citizens ", - emphasized Minister of Foreign Affairs. "Negotiations on this occasion is not conducted in such cases. This is a provocation "- the minister noted.November 5 deputy director of counterintelligence Ministry of Internal Affairs of Georgia Otar Ordzhonikidze has officially confirmed that the country's detained a group of people engaged in espionage in favor of Russia. Total detained 13 people, four of them - the citizens of Russia. Among the detained Russian citizens - the general director of the branch Saybolt in Georgia and Armen Gevorgyan, Deputy Director General Ruben Shikoyan, businessman Peter Devshiradze and Yuri Skrylnikov. Suspected Georgian citizens - businessmen Bakur Kiguradze and Ruslan Galogre, six pilots of the Georgian Air Force - Vyacheslav Pluzhnikov, Gabriel Ustalishvili, David Meshidze, Gela Kakabadse, Gocha Diasamidze, Tariel Abashidze and a sailor, Edward Abdulaev Radio operator. They are accused of transferring classified information about the GRU cooperation of the armed forces of Georgia and other countries, the procurement of the Georgian Ministry of Defense, spying on people and export of classified information outside of Georgia.Charges against them include imprisonment from 8 to 20 years.According to an informed source from ITAR-TASS news agency, detained in Georgia have no relation to the Russian security services.

In the opinion of Russian diplomats, the time for provocation was not chosen by chance on the eve of a series resonant international events - the summits of NATO and the OSCE.

“Spies” to appear before Georgian court http://www.aysor.am/en/news/2010/11/10/spy-georgia-russia/

Wednesday, November 10

Moscow demands to permit Russian diplomats’ meeting with Russian citizens detained in Georgia on suspicion of espionage. Tbilisi promises that their rights will not be violated.

According to Tbilisi’s information, Russian citizens suspected of espionage are Armen Gevorgyan, Ruben Shikoyan, Petro Devrishadze, and Yuri Skrilnikov.

Tbilisi does not negotiate with Moscow over the issue, however, Deputy Foreign Minister of Georgia Nino Kalandadze told BBC that Georgian Foreign Ministry has already received Russia’s note asking to provide information about the arrested persons.

The official said that Russia applied to them asking to give a possibility to meet with the arrested persons.

She said Georgia does not negotiate with Russia on that issue.

“First of all because according to Georgian legislation they are suspected of espionage which means that they are to appear before the Georgian court and if their guilt is proved, they will be tried in accordance with Georgia’s legislation,” Nino Kalandadze stated.

TODAY, 11:34

Georgia and Russia may have an exchange of spies caught

http://news-russia.info/politics/4132-gruzija-i-rossija-mogut-provesti-obmen-pojjmannymi-shpionami.html

GOOGLE TRANSLATIONToday, 10:51The newspaper Moskovsky Komsomolets published a list of Georgian spies, which can theoretically be exchanged for the Russian, although on the present position of the Russian Foreign Ministry rejects this possibility. Russian Foreign Minister Sergei Lavrov assured that even the negotiations will not, but all speculation - nothing more than a provocation.

In the Georgian spies are serving sentences in Russia appear: a staff member of the Foreign Intelligence Georgian Zaza Harkeladze (11 years imprisonment), two lieutenant-colonel of the Ministry of Defense - Khvichia Imerlishvili (13 years in prison) and Marlene Bogdanov (real name Balashvili) (15 years in prison) officer Ministry of Defense of South Ossetia, Eduard Gobozov. In addition to the above, the disposal of the Russian side, there are five other people - mostly former soldiers of Georgian origin.

As stated by the Georgian side, in spite of the categorical Russia's unwillingness to publicly acknowledge the detention of Russian spies, the Russian Foreign Ministry through the Swiss Embassy, has sought information about the convicts.

Canada Mulls Ban on Magnitsky Foes http://www.themoscowtimes.com/news/article/canada-mulls-ban-on-magnitsky-foes/422088.html

10 November 2010The Moscow Times

Sixty Russian officials linked to the pretrial death of Hermitage Capital lawyer Sergei Magnitsky may be banned from visiting Canada and face financial sanctions in the country, Magnitsky's supporters said Tuesday.

The Canadian parliament's international human rights subcommittee discussed the move at a hearing attended by Hermitage head William Browder last week, said a statement published on the "Law and Order in Russia" blog, which is maintained by Magnitsky's supporters.

The United States, Britain and Poland are currently considering similar bills, with the Polish legislation capable of closing the whole Schengen zone to the blacklisted officials, among whom are investigators and prosecutors who kept Magnitsky in jail for 11 months until his death in November 2009.

Magnitsky, arrested on tax charges, died of health problems, but his supporters said he was intentionally denied medical help and the case against him was fabricated by corrupt officials whom he had accused of tax fraud.

34 sailors return to Russia after ship seized in Canada

http://www.calgaryherald.com/sailors+return+Russia+after+ship+seized+Canada/3804478/story.html

Agence France-Presse November 9, 2010 10:00 PM  

Dozens of sailors stranded for weeks in Canada after their cruise ship was seized over unpaid debts have returned to Russia while the ship is to be sold, a Russian embassy official said Tuesday.

The Russian owner of the Lyubov Orlova is "frantically" looking for a buyer in order to avoid it being auctioned off by Canadian authorities at a cut rate to pay back a $250,000 debt owed to a Canadian company that had chartered it, the official said.

The Lyubov Orlova's 51 crew were stuck in St. John's, N.L., since Sept. 25.

Thirty-four of them returned home to Russia on Sunday.

Another stage of Russian armed forces reforming overhttp://english.ruvr.ru/2010/11/10/32956205.html

Nov 10, 2010 09:40 Moscow Time

Another important stage of reforming the Russian armed forces, namely the setting up of new military districts, is over ahead of schedule. This came in a statement earlier today by Defence Minister Anatoly Serdiukov. He was speaking during an offsite meeting of the Ministry Board in Khabarovsk. The parties to the meeting also took up replacing the military hardware that’s grown outdated. Scrapping such hardware will create major fiscal resources for the acquisition of new types of weapons.  

Russia's upper house passes law crippling its oversight functionshttp://en.rian.ru/russia/20101110/161273137.html

12:03 10/11/2010

MOSCOW, November 10 (RIA Novosti) - The upper house of the Russian parliament on Wednesday approved a bill reducing its own powers to approve newly appointed members.

Under the law, which takes effect on January 1, 2011, new members of the Federation Council will assume office within 10 days of their appointment.

The law was harshly criticized by House Speaker Sergei Mironov as it strips the Federation Council of the power to conduct official checks on candidates.

Mironov, who leads the pro-Kremlin A Just Russia party, said on Tuesday the new procedure would "further increase corruption risks and erode the system of checks and balances in relations between the federal center and the regions."

He also reiterated his call to restore a direct popular vote for members of the upper house.

Currently each Russian region sends two unelected representatives to the 166-seat Federation Council.

Today is last Militia Day for Russian law enforcers http://english.ruvr.ru/2010/11/10/32975221.html

Nov 10, 2010 10:26 Moscow Time

Today is the last time that Russian police, officially known as Militia, are celebrating their professional holiday Militia Day. Militia is due to be renamed Police, so the Interior Ministry is already referring to the holiday in its own papers as “Interior Ministry Professional Holiday”. The Russian President has already submitted to parliament a draft law to rename Militia, and the draft is expected to be approved and become law as of March 1st next year.  

Policing police: Russian officers mark anniversary amid reformhttp://russiatoday.com/news/police-professional-holiday-scandals/

Published: 10 November, 2010, 07:55

Russia's police are marking their professional holiday on Wednesday, but it comes at a difficult time for the force. After a string of high-profile scandals, its image is tarnished.

A reform of the law enforcement system is underway, but restoring public trust in police is now an extremely hard task.

It has been over a year since drunken police officer Denis Yevsyukov killed two and wounded seven others, but the case remains one of the most alarming in a series of high-profile police scandals.

And it came as a blow to people like former officer Alexander Popryadukhin, who won the title “Hero of the Soviet Union” for his work. He warns that there are still many “Yevsyukovs” out there.

“I'm a former policeman myself, but even I try to avoid police officers – they have guns and they can shoot,” Popryadukhin told RT.

It was also last year when a young officer tried to blow the whistle on police corruption with an internet video and sparked a political storm.

Police officer Alexey Dymovsky called for a national inquiry and accused police chiefs of ordering officers to jail innocent people. The appeal prompted a wave of similar revelations as other officers came forward.

The Interior Ministry itself admits that more than 100,000 offences involving police officers were registered in 2009 alone.

In response to the scandals, President Dmitry Medvedev ordered a multibillion-dollar reform of the Interior Ministry last December.

The new measures set out to make clearer the rights of the police and of those they detain.

One of the main talking points, however, became the new name for the force – leaving behind the old term “militia” and going back to the internationally more accepted “police.”

Many said trust remained the biggest concern, and were worried about the costs of the name change.

The proposals will be implemented next year, in what will be a crucial stage in the force's history.

However, the image of law enforcement in Russia remains a tarnished one. The question now is whether the reforms will be more than just a facelift and will help put both the police, and the policed, on the same side of the barricades.

Military serviceman killed in explosion in Chechnya

http://www.itar-tass.com/eng/level2.html?NewsID=15666636&PageNum=0

10.11.2010, 09.18

GROZNY, November 10 (Itar-Tass) - A soldier of the RF Interior Troops has been killed in an explosion in Chechnya.

“An unidentified explosive device went off on the outskirts of the village of Tangi of the Urus-Martan district in mountain-woody terrain on Tuesday during a reconnaissance and search operation,” an Interior source said. “A contract serviceman was wounded in the blast, he died on the way to hospital,” the source added.

Police are investigating the incident.

Disabled Russian journalist convicted of slander http://news.smh.com.au/breaking-news-world/disabled-russian-journalist-convicted-of-slander-20101110-17nks.html

November 10, 2010 - 7:39PM

A Russian court Wednesday convicted of slander a journalist confined to a wheelchair and brain damaged after a brutal attack two years ago but relieved him of any punishment, reports said.

Mikhail Beketov, editor of the Khimkinskaya Pravda weekly published in the district of Khimki outside Moscow, was on trial for slander after accusing the local mayor of being involved in a bid to blow up his car.

"The court finds Beketov guilty of slander by knowingly spreading false information tarnishing the honour and professional reputation of an individual," the ITAR-TASS news agency quoted judge Arkady Khalatov as saying.

He was ordered by the Khimki court to pay nominal damages of 5,000 rubles (160 US dollars) but Khalatov then instructed that Beketov escape any punishment due to the time that had elapsed since the offence was committed.

The journalist made the allegations against the mayor of Khimki, Vladimir Strelchenko, in September 2007 in a television interview.

Beketov, who has undergone eight operations and has to live in a clinic, sustained brain damage in the November 2008 attack which also forced the amputation of a lower leg and fingers.

He had been following controversial plans to build a highway through the forest in Khimki, an issue also covered by Kommersant reporter Oleg Kashin who was severely beaten at the weekend in an attack that shocked Russia.

Beketov appeared in the courtroom in a wheelchair and accompanied by doctors. His injuries mean that he was barely able to communicate with his lawyer and could not give a personal statement to the court.

Strelchenko said in court that he was saddened by the attack on Beketov but had no intention of withdrawing his suit.

Beketov's lawyer Andrei Stolbunov said that he would appeal the verdict and did not rule out turning to international human rights courts, ITAR-TASS reported.

Beaten journalist Kashin came out of coma

http://www.dni.ru/society/2010/11/10/202251.html

GOOGLE TRANSLATION10:55 / 10.11.2010Abused attacked by unidentified correspondent of Kommersant newspaper, Oleg Kashin recovered after medication sleep and came back to consciousness. The journalist remained in critical condition is stable in intensive care 36-th city hospital and is connected to a ventilator."He came to himself.'s Eyes open, but is still on the machine. Now doctors are trying to remove it from the ventilator," - said Wednesday the doctors of the medical establishment.Doctors believe that in the coming days, Oleg Kashin, who as a result of the beating were broken jaw, will speak and give testimony. Investigators are waiting for this moment, because in their view, the words of the chief witness - the battered journalist - will be able to "shed light" on this resonant case and provide invaluable assistance in investigating and solving crimes.Recall, an employee of the publishing house "Kommersant" Oleg Kashin was beaten on the night of Nov. 6 about 00:40 near the entrance of his house in central Moscow on Pyatnitskaya street. Two unidentified men waylaid a journalist, knocking him to the ground and began to methodically beat him down. Then one of the intruders held Kashin, and the second hit him a shock mountings to the body and head.Journalist, struck his head, a broken jaw, leg and fingers. In serious condition was taken to Kashin resuscitation. He had an operation on the jaw, and on Tuesday an operation to restore the phalanges of fingers.By beating Kashin Investigative Committee of the Russian prosecutor's office opened a criminal case under article "Attempted murder, committed by a group of persons." Russian President Dmitry Medvedev asked to take all necessary measures to solve the crime. The matter is under special control of the interior minister and prosecutor general. The investigation and colleagues Kashin believed the attack is related to the professional activities of journalists.

Yulia Latinyina: Who Ordered Kashin’s Attack?November 9th, 2010

Russian civil society is up in arms over the savage beating of Kommersant journalist Oleg Kashin. In the early hours of November 6, 2010, Kashin was nearly killed by two unknown assailants – a scene that was caught on tape and later leaked to the media, causing even more of an outrage. Protesters have been continually demanding that the perpetrators be found and brought to justice, and a presidential order put the investigation directly under the supervision of the prosecutor general.

Attacks on journalists are far from rare in Russia, and so is impunity. While suspects often abound, 94% of murder cases have never been resolved. Writing for Yezhednevny Zhurnal, noted journalist Yulia Latynina lays out the most likely perpetrators of Kashin’s brutal attack.

Kashin – Who Ordered the Attack?

http://www.theotherrussia.org/2010/11/09/yulia-latynina-who-ordered-kashins-attack/

By Yulia LatyninaNovember 8, 2010Yezhednevny Zhurnal

The attack on Kommersant journalist Oleg Kashin is notable for the fact that, like in an Agatha Christie novel, its circle of suspects is finite and small.

The first suspect is Khimki Mayor and Afghan war veteran Strelchenko. The same thing happens to all of Strelchenko’s opponents – their skulls get broken. Exactly two years ago, they broke the skull of Mikhail Beketov; on the anniversary of Beketov’s beating, they broke the skull of Khimki Right Cause leader Fetisov, and a day later – Oleg Kashin.

What do we have here in Khimki, Chechnya? Who is Mayor Strelchenko – Ramzan Kadyrov?

The second suspect is the manager of the Federal Agency for Youth Matters, a close associate of Surkov, the spiritual leader of the Putenjugend – Vasily Yakemenko.

In August 2010, Kashin uncovered and expanded upon an unappetizing story about Yakemenko.

A young girl attending Selinger, Anastasia Korchevskaya, decided to promote herself by bragging about her proximity to the top command, and posted a photo of herself with Yakemenko online with the caption: “Selinger 2008. Yakemenko still thinks I’m madly in love with him.” Yakemenko commented in response: “Korchevskaya, if you came to me two times at night in my tent, it doesn’t mean I think you’re in love with me.”

The page was then deleted, but Kashin managed to make a screenshot and generally did everything possible to expand upon the story. It turned out that Yakemenko not only uses his authority to sleep with schoolchildren, but he also brags on LiveJournal that he screws

them in tents. Kashin is not a simple person; he has cooperated with the Kremlin on multiple occasions (it is only worth nothing how he insisted that Private Sychev’s legs fell off on their own accord), and his position could be seen not just as the position of an enemy, but worse – the position of a traitor.

To declare Kashin to be an enemy of the people as a result of this issue was awkward. In the pedofuhrer’s place, it was worth it to wait and latch onto some other one of Kashin’s writings. And, for sure, when Kashin did an interview for Kommersant with the head of the antifascists who were rampaging against the Khimki administration, the Young Guard website, which is under Yakemenko’s jurisdiction, came out with an article entitled “Journalist-*traitors* (my emphasis – Y.L.) must be punished!”

In the interview with Anonymous (an unprecedented step that Kommersant went ahead with the publication of an anonymous interview, but that’s just it – Anonymous’s name is well known), Khimki is called “absolute evil,” and Strelchenko – “a bandit from the 90s.” But the most important thing is that Anonymous marked the beginning of “a new level of social evolution in our country.” The very existence of these kinds of youth movements, capable of instantaneous organization, self-sacrifice, and going to prison, and the enthusiasm with which the anarchists were greeted by Khimki residents who happened along their path, was a threat to the status and the money that people who love to screwing schoolchildren in Selinger are accustomed to.

And this came through very clearly in the Young Guard article. The article ended like this: “We cannot be under the thumb of information extremists. They are enemies, and that means they will be punished.”

Punished – how? Here is just a shortened list of beatings whose authors have never been found. The epidemic of beatings of Polish diplomats, the beating of Marina Litvinovich (”You need to be more careful, Marina!” she was told by one of the men who was standing nearby when she woke up), the beating of Lev Ponomarev. The murder of antifascists; the investigation of their connections with the Kremlin needs to look at the organizations Russian Verdict and Russian Image, which were joined by Nikita Tikhomirov and Yevgeniya Khasis – the presumed murderers of Markelov and Baburova.

Finally, we mustn’t fail to mention the third candidate. Oleg Kashin is extremely well known as the creator of the expression “sh!tty Turchak,” referring to the governor of Pskovskaya Oblast, former coordinator of youth policy for United Russia, Selinger guest and son of Putin’s friend – Andrei Turchak.

The writing on Kashin’s blog, however, was not about Turchak, but about Kaliningrad Governor Boos: “Compare him with any governor, not even with Ramzan and not with Tuleyev, with any sh!tty Turchak – is this Boos uncompromising?” – wrote Kashin.

If you think about the tone used on the Internet, the remark can be seen almost as innocent: but the son of Putin’s friend suddenly personally demanded that Kashin “apologize within 24 hours,” and then even took the time to call a press conference,

where he called Kashin’s retort “informational trash.” “Now I know what kind of person this is, he is not a journalist as I understand it.”

I mention Andrei Turchak, by the way, for the completeness of the list: since, although the epithet “sh!tty Turchak” is now stuck with the former coordinator of youth policy for United Russia, this whole story looks more like a routine dirty internet fight than anything else. As opposed to the stories of Strelchenko and Yakemenko.

And so, like in an Agatha Christie novel, the list of suspects has been defined, and there is no chance that the crime was committed by the yardkeeper on the side. Interrogations on this case need to be carried out on Khimki Mayor Strelchenko, youth movement leader Vasily Yakemenko, and Governor Andrei Turchak. In the best case scenario, there will be talk about a semi-independent initiative by some kind of fascist organizations who were upset about the interview with Anonymous. But it’s most likely that one of these two, and not three – either Strelchenko or Yakemenko – decided that he would get away with everything. And let’s note: all of this is connected to Khimki in one way or another.

And another thing. Yes, I understand that there is more than one suspect. But, in my view, it is stupid to walk around with signs saying “find the criminals” and “take measures,” refraining from naming the suspects. If you guys are going to ask them to “find the criminals,” then they’re going to respond “we’re looking.” Gelman deserves honor and praise for writing that he thinks Yakemenko is behind the attack.

Ban on commercial development a risk to economic growth

http://www.businessneweurope.eu/dispatch_text13568

bneNovember 10, 2010

Moscow Mayor Sergei Sobyanin has ordered "strict limits" on commercial development in the centre of Moscow, according to reports in Vedomosti. The move is criticized as "crazy" by some commentators, who say that banning new office building in the city will curb growth and derail President Medvedev's dream of turning Moscow into an international financial hub.

According to the business daily, on Monday Sobyanin - who has said he expects a revamp of the city's development plan to be on his desk by March - ordered strict limits on construction of new office and retail projects inside the Third Ring. The move is thought to be inspired by the mayor's stated commitment to reduce the Russian capital's chronic traffic problems.

Vedomosti appears to believe that the order would apply to projects already underway, pointing out that, according to Cushman & Wakefield, work is underway on 50 projects

inside the Third Ring, with a total area of 1m square meters, whilst another 200 projects (4.8 million sq. m.) have been announced.

However, it's the bigger picture that has some worried. Although former mayor Yury Luzhkov put similar measures in place two years ago when he banned new administrative, business or commercial centres larger than 1,500 square meters in downtown Moscow, the effect has so far been limited due to the crisis, which practically halted new projects anyway.

However, as the economy recovers, Sobyanin's reiteration of the order could create serious problems, not only for developers, but for the economy overall. An unnamed source from one of the international real estate consultants in Moscow told BNE that the idea is "ridiculous", pointing out the it would drag on economic growth for both the city and the country, and would scupper any hopes of turning the Russian capital into an international financial hub.

"There's a fundamental undersupply of office in Moscow," the source complained. "Commercial rents are already amongst the highest in the world. This will only exacerbate the situation and seems the quickest way to make Moscow uncompetitive."

Price hike fears on Russia's public transporthttp://themoscownews.com/business/20101110/188189126.html?referfrommn

by Oleg Nikishenkov at 10/11/2010 11:03

Insurance for passengers on Moscow’s public transport system sounds like a sensible idea – but the plan has sparked fears of price hikes.

A new law, which was adopted by the Duma on its first reading on Friday, could come into force as soon as January next year and will include the metro, buses, trolleybuses, trams and minibuses.

It will make it compulsory for passengers to be insured against any losses suffered in the event of an accident – and has seen radio phone-in shows bombarded with angry calls demanding a rethink.

 

Carriers’ concern

The carriers will be responsible for taking out the policies, and insurance companies said it will not exceed one per cent of their costs, meaning the difference in ticket prices will be kopeks, rather than roubles.

And they added that passengers will benefit from compensation ranging from 23,000 roubles ($740) for damager property to over 2 million roubles ($65,000) in the event of a fatal accident.

But the public is already reeling from steep increases in fares earlier this year with single metro tickets jumping 18 per cent and trips on trams, trolley buses and buses up 20 per cent – and Jan. 1 is traditionally the time for the annual price rise.

 

Negligible impact

Andrei Veselkov, director of the Insurance Today media group, which publishes magazines on the insurance industry, said fare hike would not exceed the inflation on petrol.

By his calculations only 15 kopeks of a 20 rouble ticket would go on passenger insurance compared to nine roubles on fuel and 4.50 roubles in profit.

Veselkov added that passengers would only end up paying the negligible increase as transparency will prevent excessive price risis.

“If insurance companies compete among themselves, passengers won’t notice anything,” he told The Moscow News.

 

Official boundaries

Andrei Romanov, head of the carriers unit in Rosgosstrakh’s transport department, said that the rate, which will be established through agreements between the insurer and the carrier, depends on different factors. This will include the level of security provided by the carrier and the condition of the vehicle.

“When the economic rationale for the draft law was developed, the government set the insurance rate boundaries,” Romanov said by telephone. “The share of passengers’ insurance for carriers should not exceed 1 per cent of their overall costs.”

Romanov also said that similar measures have been established in Belarus, Moldova, Kazakhstan and some states of the US.

Palace in St. Petersburg's historic center to be auctioned offhttp://en.rian.ru/russia/20101110/161270576.html

07:49 10/11/2010

A St. Petersburg palace that once belonged to Grand Duke Mikhail Mikhailovich of Russia will be put up for auction on Wednesday with the initial price of 700 million rubles ($22.7 million), the St. Petersburg Property Fund said on its website.

Two buildings of the palace, located in St. Petersburg's historic center, on the bank of the Neva River, are included in the federal list of historical monuments. It was built in 1885 by Russian architect Maximilian Messmacher for Mikhail Mikhailovich, a grandson of Emperor Nicholas I.

However, Mikhail Mikhailovich never lived in the palace as he was sent into exile after marrying Countess Sophie of Merenberg, a granddaughter of Russian poet Alexander Pushkin, without his parents' permission.

The palace, which is built in a Neo-Renaissance style, is now under reconstruction.

ST. PETERSBURG, November 10 (RIA Novosti)

Russian Press at a Glance, Wednesday, November 10, 2010http://en.rian.ru/papers/20101110/161270854.html

08:46 10/11/2010

POLITICS

Outrage over the gruesome beating of Kommersant reporter Oleg Kashin on Saturday grew as the U.S. State Department and Amnesty International called for justice and the Russian authorities assigned their best investigators to the case.

(Moscow Times, Kommersant, Rossijskaya Gazeta)

Russian Federation Council Speaker Sergei Mironov embarked on a collision course with the Kremlin after he opposed United Russia-backed reforms of the upper house of parliament and demanded the direct election of its members.

(Moscow Times)

Leaders of the Russian right-wing Right Cause party, which advocates modernization, a liberal free market economy and democracy, announced they would support incumbent President Dmitry Medvedev if he runs for office again in 2012. They said they would choose Medvedev over Prime Minister Vladimir Putin, who is also expected to run.

(Vedomosti)

Russian President Dmitry Medvedev is paying an official visit to Seoul, marking the 20th anniversary of diplomatic relations between Russia and South Korea.

(Rossijskaya Gazeta, Vremya Novostei)

The Latvian opposition was short of one vote in parliament to dismiss newly appointed Foreign Minister Girts Valdis Kristovskis in connection with his "xenophobic" ideas targeting the Latvian Russian-speaking community. Fifty-one out of 100 lawmakers voted against the dismissal.

(Vedomosti)

ECONOMY

The World Bank ranked Russia fourth for the volume of money its foreign residents transferred abroad in 2009. The United States came in first, followed by Saudi Arabia and Switzerland.

(Moscow Times)

Since the beginning of October, the Russian ruble has fallen 4 percent against the dollar-euro basket, while the oil price has risen by 15 percent.

(Vedomosti)

European Commissioner for Trade Karel De Gucht said the EU would block Russia's accession to the World Trade Organization until the end of 2011 if the country did not stop raising taxes on its lumber exports. The issue was discussed during Finnish President Tarja Halonen's visit to Moscow this week.

(Kommersant)

SOCIETY

Russian billionaire Alexander Lebedev, who owns Britain's Evening Standard and Independent newspapers, asked Prime Minister Vladimir Putin to intervene after Moscow police raided his National Reserve Bank last week.

(Moscow Times)

The Magistrates Court will announce on Wednesday its ruling on allegations by the mayor of Moscow's Khimki suburb that Mikhail Beketov, the editor of a local newspaper, accused him of igniting "political terror." Beketov, who wrote extensively about a grassroots campaign to halt the construction of a road through the ancient Khimki oak forest, was severely beaten by unidentified attackers in 2008 and is now confined to a wheelchair.

(Kommersant)

Owners of many Moscow kiosks expressed outrage after their stalls were demolished on orders from new Mayor Sergei Sobyanin.

(Vremya Novostei)

HEALTH

More adults smoke in Russia than in any other country, and the average life expectancy in the country is one of the shortest of any former Soviet country, the World Health Organization said.

(Moscow Times)

Moscow’s Moves against Tatarstan Sovereignty Opening the Way for Radical Islamists, Kazan Expert Sayhttp://georgiandaily.com/index.php?option=com_content&task=view&id=20382&Itemid=72

November 10, 2010

Paul Goble

Staunton, November 9 – Moscow’s decision to ban the use of the term president for the leaders of the non-Russian republics and its insistence that Tatarstan drop references to the sovereignty of that republic have not only created an identity crisis in that republic but led some of its leaders to suggest that Tatarstan should position itself as a Muslim republic.

And while even that step, Kazan political scientist Sergey Sergeyev says, almost certainly has been coordinated with some Russian leaders, it constitutes a serious threat because radical Islam in Russia typically grows in the shadow of “official Islam” and, “as is well known, it is impossible to escape from [such] a shadow” (www.regnum.ru/news/1344066.html).

Just before the November holidays, the Duma passed a law banning the use of the term president for republic leaders, and Moscow dispatched Valery Zorkin, the chairman of the Russian Federation Constitutional Court to Kazan apparently to press for further changes in Tatarstan’s constitution.

In contrast to his earlier remarks and the expectations of many, Farid Mukhametshin, the chairman of Tatarstan’s State Council, indicated that Kazan is now prepared to go along with Moscow, but at the same time, former republic president, Mintimir Shaimiyev, who

now serves as advisor to the current republic head, talked about a bigger role for Islam in Tatar life.

These two themes came together in a comment by Gusman Iskhakov, the head of the Muslim Spiritual Directorate of Tatarstan. He suggested that the elimination of the institution of the presidency of Tatarstan was leading to “a crisis of Tatar identity” and noted that “now our culture and religion are flourishing” (www.islam.ru/rus/2010-11-03/#34572).

To sort this out, the Regnum.ru news agency turned to Sergeyev, who has often served as a commentator on Tatarstan affairs for that and other Moscow outlets in the past. The political scientist said that he was surprised Mukhametshin had surrendered so quickly, but he said Shaimiyev’s comments were utterly consistent with his past statements.

Only a few weeks ago, the head of the Tatarstan State Council had declared that “to do away with the presidency” was the personal right of the leaders of those republics who wanted to take that step but that this does not affect Tatarstan, which he said would find it “hard” to change its constitution.

What appears to have taken place, Sergeyev continued, is the kind of exchange that Moscow and Kazan have often engaged in: Moscow has agreed to allow the head of Tatarstan to retain his powers if the latter agrees to adopt the center’s requirement that he not label himself as president.

Moscow has reason to be grateful to Tatarstan for the smooth transition from Shaimiyev to Rustam Minnikhanov and for delivering the required percentage of votes for United Russia – although, Sergeyev continued, the 70 percent Kazan came up with doesn’t seem so impressive now that some North Caucasians are promising to deliver 120 percent in the future!

More significant, the Kazan political scientist said, are the words of Shaimiyev about Islam as “one of the vectors of Tatarstan politics” and Tatarstan as the center of the moderate Russian Islam which the center has suggested it is quite prepared to support, especially in contrast to the radical Islamism found elsewhere.

Sergeyev said that he was “practically certain” that Moscow had agreed in advance with Shaimiyev’s declaration, given that Kazan is now oriented “not to Saudi Arabia but to Singapore” and given that a Tatar Muslim will find it easier to talk with Muslim leaders than does “the Russian [Foreign Minister Sergey] Lavrov.”

That does not mean, however, that what Shaimiyev is talking about is without real dangers, Sergeyev said. On the one hand, this interest in religious identity “can be a sublimation of the activity of Tatar leaders because their possibilities in the political sphere are being limited.”

And on the other, there is a danger that this will open the way for “radical Islam which develops in Russia as a shadow of ‘official Islam’ and with which ‘official Islam’ struggles as with a competitor. But, as is well known,” Sergeyev continues, “it is impossible to escape from [one’s] shadow.”

*****

Many others are now discussing the impact of doing away with republic presidencies, and on Ryazan blogger, Vladimir Frolov, has pointed out an interesting aspect of the new Russian legislation: it bans the use of the word president but it doesn’t restrict how the republic leaders might style themselves otherwise (frolovchik.livejournal.com/84339.html).

As a result, he said, the Russian Federation may soon see an explosion in the number of titles regional leaders use. “In Ryzan, Smolensk, Tver and Vladimir oblasts,” he suggests, the leaders may call themselves “grand dukes.” In Rostov, Krasnodar, Orenburg, Chita, and Amur oblasts and Primorsky kray, perhaps “atamans.”

Meanwhile, the leaders of Tatarstan and Kalmykia might call themselves “khans,” and the heads of Chechnya, Ingushetia and Daghestan could identify as “emirs,” and the leader of Yakutia-Sakha as “a toyon.” Few of these are likely but the possibilities are as Frolov suggests almost endless as the latest unintended consequence of Russian legislation.

‘Every Second Russian is a Skinhead at Heart,’ Moscow Editor Sayshttp://georgiandaily.com/index.php?option=com_content&task=view&id=20383&Itemid=72

November 10, 2010

Paul Goble

Staunton, November 9 – Russia has relatively few active skinheads (150) and neo-Nazi groups (150) for a country of its size, a Russian Internet editor says, but Moscow’s failure to address ethnic issues has created a situation in which polls suggest “every second Russian is a skinhead at heart,” thus providing implicit support for the nationalists of the radical right.

In a comment posted on the Osobaya bukhva site today, Viktor Tsvetkov notes that the Russian Federation is not the only country having problems with tolerance and multi-culturalism or the integration of ethnically and religious distinct immigrant groups into the broader society (www.specletter.com/politika/2010-11-09/kazhdyi-vtoroi-rossijanin-v-dushe-skinhed.html).

But German Chancellor Angela Merkel’s recent suggestion that multi-culturalism “isn’t working,” that Germans are attached to Christian values,” and that “those who do not accept them have no place here” had particular resonance in Russia because of the large number of Muslims both indigenous and immigrant there.

In Europe, “after World War II, nationalism was banned from big politics for a long time, but now,” Tsvetkov points out, “formerly taboo slogans are being taken up” again and without the shame or restraint of every times. Europeans still say they “love” or “tolerate” all people just as they did, but increasingly they are demanding that immigrants do all the adapting.

It would be strange if Russia did not face a similar challenge. “The roots of the conflict are very similar: the clash of various cultures and mutual lack of understanding on the background of economic problems.” And it would be equally strange if Russians did not react in many of the same ways Europeans are, the Osobaya bukhva editor says.

But there is an important difference. Russia has never been a mono-ethnic country, and many of the minorities that so many ethnic Russians are now angry about are indigenous nations rather than immigrants. Moreover, Russian attitudes appear to be leading the country into an absolute “dead end” given the failure of the powers that be to address it adequately.

Tsvetskov points to the ethnic clashes in the military unit near Perm and the shooting of a North Caucasian dancing in the middle of the night in Stavropol to show that officials clearly don’t know what to do. In the first case, they tried to suppress information about it, and in the second, they ignored the multiple factors at work.

This “short-sightedness and indifference” is obvious to everyone, the editor continued. “Doesn’t the Defense Ministry know that where people from the Caucasus republics assemble in a group, they will begin to live as their parents taught them and not as their father-commanders ordered?” And doesn’t the Stavropol militia recognize the way in which dancing in the middle of the night could affect people?

As Tsvetkov notes, Galina Kozhevnikova, the deputy head of the SOVA information-analytic center which tracks ethnic and religious affairs, points out that while the number of skinheads and radical groups is small, “more than half of Russians support neo-Nazi ideas” when it comes to dealing with minorities.

Thus, she continued, “this is a question not of the number of little groups but of the number of people who share neo-nazi views and support xenophobia as a whole because the neo-Nazis in the absence of such attitudes could not exist; they need to operate on the silent support of society” at large.”

Given that environment, Tsvetkov says, “can anyone be surprised by the appearance of demands of our citizens to create ‘an ethnic Russian republic’?” Or at the collection of signature in support of separating out Stavropol kray from the North Caucasus Federal

District? “all this is based not on a heightened sense of national self-consciousness but on simple fear.”

Economists and demographers say that Russia needs more immigrants, but Tsvetkov says, there are no visible efforts by the government now to socialize the arrivals and help them fit in, a task especially difficult when Russians don’t want to consider them as people even though they want to hear them cite Pushkin from memory.

“The arguments of those who continue to support the idea of ‘Russia as a family of peoples’ are becoming ever fewer. Anger and lack of understanding, in contrast, are becoming ever greater and greater.” As a result, people are asking “what unites all of us besides state borders?”

And ever more often, Tsvetkov says, “one can hear the response: ‘Nothing.’”

Some Russians are trying to do something about this, but it is unclear whether they can succeed and reverse the current trend. Last week in Sochi, the Multi-National Russia Youth Forum came up with the idea that it is necessary to adopt and apply an “ethical code for multi-national Russia.”

Such a document, the editor continued, would declare Russian society to be “a single social community consisting of representatives of various ethnoses and start out from a recognition of the unqualified right of the individual to freedom of choice of his own ethnic and religious identities.”

Putting that in simpler terms, Tsvetkov says, “it is being suggested that we identify ourselves first of all as citizens of the Russian Federation and then as Russians (Tatars, Buryats and so on), Orthodox (Muslims, Buddhists, and so on)” – a proposal that he suggested represented “a noble undertaking.”

But there are good reasons to think such calls face an uphill battle. “Artificial constructs of citizenship by their significance do not compare with natural forms of identity including nationality and religion” – something that the collapse of the USSR highlighted for all in the post-Soviet region.

“Of course,” Tsvetkov continues, “it is possible to recall the Western model of the supremacy of law over all cultural distinctions and contradictions. However after the acknowledgement of Merkel and the French cleansings of the Roma, this experience too does not look so convincing.”

Keeping things together by force is always a possibility but that approach entails serious costs. Thus, “the method of convincing people remains.” But that is a hard task, especially if the powers that be prefer to ignore what is going on and “every other Russian” sympathizes with those who would oppress religious and ethnic minorities.

Tsetkov’s article is only one of the cries from the heart following the November 4 National Unity Day demonstrations conducted across the Russian Federation by ultra-nationalists, skinheads, and neo-Nazis, some of whom carried Nazi slogans like “Arbeit Macht Frei” (blog.humanrightsfirst.org/2010/11/charged-week-in-russia-skinheads.html).

And while these protests too were relatively small given the size of the country, they are disturbing because they underscore the point Tsvetkov makes: The active extremists are not all that numerous, but the share of the population that sympathizes with at least some of their messages is much larger and seems certain to play a role in Russia’s future.

Participation in 2010 Russian Census Down from 2002 Counthttp://georgiandaily.com/index.php?option=com_content&task=view&id=20381&Itemid=72

November 10, 2010

Paul Goble

Staunton, November 9 – The share of residents in the Russian Federation who did not take part either directly or indirectly in the just-completed national census more than doubled from the 2002 enumeration, rising from five percent to 11 percent, with only slightly more than half of all Russians assumed the new count as accurate, according to the results of a new poll.

The All-Russian Center for the Study of Public Opinion (VTsIOM), a survey organization widely thought to have close ties with the powers that be, interviewed 1600 people in 46 federal subjects October 30-31 concerning their experiences with the census that had concluded in most places the week before (wciom.ru/index.php?id=195&uid=13982).

According to the VTsIOM survey, 65 percent of those surveyed said they had been personally contacted by census takers, 11 percent fewer than said they had been interviewed during the course of the 2002 count. Twenty-two percent more had their census information provided by relatives, but the share which did not take part at all rose from five percent to 11 percent.

Elderly people were more likely to be interviewed than younger ones and residents of the Urals and Siberia more than those of other regions, VTsIOM found. Those whose data was supplied by relatives tended to be younger – especially in the 18 to 24-year-old cohort --and from the southern regions of the country.

Of those contacted, 92 percent told VTsIOM that they had been surveyed at their residences. Four percent said they had visited census offices over all, with that figure rising to 11 percent in Moscow and in St. Petersburg. And two percent of those

questioned by VTsIOM said they had provided their census information over the telephone.

According to the VTsIOM sample, 58 percent of Russian residents said that they “do not doubt” that the census results will “reliably reflect the situation in the country,” but 29 percent took the opposition point of view with skeptics especially numerous in the two capitals (43 percent), and those who did not participate (68 percent).

Given the problems that surfaced after the 2002 count, which failed to meet international standards for a census by failing to contact personally at least 90 percent of the estimated sample, it is notable that the VTsIOM poll suggests that Russian census takers again failed to meet that standard.

Indeed, many people in the blogosphere have expressed skepticism about all these numbers, and the fact that suspicions are so high in Moscow and St. Petersburg and among those who declared to VTsIOM that they did not take part guarantees that as more results from this enumeration come out over the next two years, many of them will be disputed.

Given how important the census is for everything ranging from budget transfers to intra-Russia haj quotas, those disputes are likely to cast a shadow over this count just as dark as the one that still hangs over the 2002 census. And that in turn means that many in the Russian Federation will continue to believe that the last accurate census was the last, 1989, Soviet one.

US approval of arms pact with Russia looking shaky

http://www.google.com/hostednews/ap/article/ALeqM5hF9vNCJ6MXDUI5rxMbnDMeueL3dQ?docId=f508a4ba27a94720b83778d606ada511

(AP) – 34 minutes ago

WASHINGTON (AP) — Senate approval of President Barack Obama's nuclear weapons treaty with Russia once looked to be nearly a sure thing. Now it's in jeopardy.

The administration is scrambling to get enough Senate Republican support to ratify the New START treaty before the Democrats' majority shrinks by six in January. But Republicans have little incentive to give Obama a big political boost after their strong gains in last week's congressional elections.

Some Republicans argue that the treaty would limit U.S. missile defense options and does not provide adequate procedures to verify that Russia is living up to its terms.

A failure to win passage could trip up one of the administration's top foreign policy goals, improved relations with Russia.

November 9, 2010Relaunching Missile Defensehttp://www.russiaprofile.org/page.php?pageid=International&articleid=a1289319295

By Eric SlivaSpecial to RIA Novosti

Decisions Taken at Next Week's NATO Summit Will Strongly Affect the Alliance’s Course of Relations with Russia for the Next Decade

On November 19, NATO leaders will convene in Lisbon to vote on the alliance’s new strategic concept. Billed as the blueprint for a “NATO 3.0,” the concept aims to update NATO for the security challenges of the 21st century. Amidst calls for deeper cooperation with Russia, plans for a NATO-wide missile defense program pose a strategic dilemma for President Dmitry Medvedev, who will attend the separate Russia-NATO Council. If Moscow lends its tacit or active support for the missile shield, it could trigger a sea change in its relationship with NATO. Conversely, a return to heated opposition to American-led missile defense would threaten the foundation of Russia’s rapprochement with the United States.

What are the limits for self-reinvention and cooperation between former Cold War adversaries? The answer to this question may become clearer after the strategic concept faces ratification. Personally drafted by NATO General Secretary Anders Fogh Rasmussen, the exact text has been kept tightly under wraps. However, in his remarks

before the German Marshall Fund in October, Rasmussen made it clear that the plan foresees a modernization of NATO’s defense capability, a reform of its crisis management in conflicts such as Afghanistan, and a push to develop “deeper, wider political and practical partnerships” with third countries. 

Russia will likely earn at most a passing mention in the concise strategic concept, but Rasmussen’s intense diplomatic efforts to improve the oft-stormy relationship between the alliance and its former adversary have demonstrated Russia’s centrality to his vision for a revitalized NATO. These efforts include the former Danish prime minister’s trip last week to Moscow, where he met Russian Foreign Minister Sergey Lavrov and president Medvedev. In his official statement, Rasmussen stressed that “NATO does not see Russia as an enemy,” but rather as “a partner of strategic importance,” and directly mentioned Afghanistan, terrorism, and missile defense as potential areas of cooperation.

Of these, it is the prospect of Russian cooperation in NATO-led missile defense that has generated the most attention in the political establishments on both sides of the Atlantic. During his visit to Moscow, Rasmussen told Interfax that such a development would “send a powerful political signal that we are, for the first time ever, cooperating to defend ourselves together.”

The Russian response has been measured, if positive. In the press conference following meetings with the leaders of France and Germany in Deauville, France, on October 19, Medvedev announced that Russia was “considering” joining the missile defense project, but emphasized that a final decision was contingent on the concrete details of any plan offered, remarking that NATO “needs to understand for itself” what role it envisions for Russia. Lavrov was more specific in his remarks at last week’s joint press conference with Rasmussen, stressing that “Russia's participation in such a possible joint endeavor will only be equal” to that of NATO. 

The insistence on cooperation as equal partners has been a standard demand of Russian negotiators since the country’s resurgence under Vladimir Putin. Such sensitivities are particularly acute when dealing with NATO in security matters, as Russian policymakers are eager to avoid the impression of operating from a position of military weakness. The existence of formidable political and technical hurdles to such an active Russian role, however, makes the realization of this demand questionable. 

At the most fundamental level, plans for substantial Russian participation in NATO missile defense will suffer from “the near complete lack of political trust” between the former Cold War adversaries, said Alexander Khramchikhin, the deputy director of the Institute for Military and Political Analysis in Moscow. To be sure, last year has seen significant improvement in Russia’s bilateral relations with NATO members, most notably Poland and the United States, while other members such as Germany and France have directly supported Russia’s participation. Nonetheless, NATO remains divided. NATO cannot offer Russia an expanded role in security cooperation at a time “when half of NATO seeks to create European security with Russia and the other half wants security

from Russia,” argued Otfried Nassauer, the director of the Berlin Information Center for Transatlantic Security.

Although the Barack Obama administration is firmly behind Russia’s involvement, Nassauer believes it is an open question whether the militaries on both sides will work to provide the level of access and information needed to make systems truly compatible. For any level of true cooperation, the American defense industry would need to ensure that Russian components such as the S-300 defense missiles could function smoothly alongside or within the NATO system. However, Nassauer argues, the American defense industry has a natural competitive incentive to ensure incompatibility with Russian systems, unless faced with strong political pressure, which is unlikely to materialize. As Khramchikhin notes, even the new START treaty signed by presidents Obama and Medvedev in April faces an uncertain future in light of the Republican victories in last week’s midterm elections.

A decision by Medvedev to support NATO missile defense would thus carry the risk that NATO assurances of partnership equality would prove politically or militarily unrealizable.  Having supported the idea in principle, however, Russia would have lost the chance to mount a credible campaign against the shield, and would at best be left to accept a junior role in NATO’s system, or develop its own at considerable cost.

A strategy to actively oppose the shield would likely entail even worse consequences. Obama’s decision in 2009 to abandon plans for unilateral missile defense in the face of impassioned Russian resistance laid the foundation for subsequent bilateral cooperation on Iran and nuclear disarmament, even when both sides denied any quid pro quo at the time. While Russia’s position regarding NATO missile defense has so far been restrained, this is likely related to the lack of any clear specifics, warns Khramchikhin. As these plans take shape, Medvedev could play to Russiaґs deeply ingrained mistrust of NATO to support a campaign against the plans. The development of missile defense in the face of active Russian resistance would smother hopes for deeper cooperation with NATO and threaten the recent thaw in relations with the West.

So far Medvedev has exercised flexible diplomacy, keeping Russia’s options open with his cautious acceptance of the plans. This has solidified his reputation abroad as a pragmatic reformer, even if his domestic reception has been mixed. Hedging, however, is not without its own risks. “The longer we drag this out, the less chance we will have for real participation,” said Andrey Zagorsky, a political analyst at the Moscow State Institute of International Relations. With all signs pointing to ratification next week of Rasmussen’s draft for a new strategic concept featuring missile defense, Medvedev could soon be forced to decide just how far he is willing to go in integrating his country into Europe’s security landscape.

National Economic Trends

Russian Growth May Accelerate to 5.3% Next Quarter, RenCap Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=afseOVh2ElsM

By Paul Abelsky

Nov. 10 (Bloomberg) -- Russia’s economy may grow next quarter at the fastest pace since 2008 as government spending, rebounding consumer demand and bank lending spur recovery, Renaissance Capital said.

Gross domestic product may grow an annual 5.3 percent in the first three months of 2011, RenCap said in a report today. That would be the biggest quarterly increase since the third quarter of 2008. GDP this quarter may increase 3.6 percent, putting growth for the year at a “disappointing” 3.7 percent, the Moscow-based investment bank said.

“Barring another external shock, we think increasing consumption, loan growth and loose fiscal policy will likely drive faster growth than the market currently expects in 2011,” Roland Nash, RenCap’s Moscow-based chief strategist, wrote in the report.

Russia, the world’s biggest energy exporter, and other emerging markets face a better outlook and less uncertainty than developed economies, Finance Minister Alexei Kudrin said last month. Russia’s economy expanded an annual 5.2 percent in the second quarter and 2.9 percent in the previous three months.

Russia’s economy grows by about half a percentage point for every $10 increase in the price of oil, according to Deputy Economy Minister Andrei Klepach. Crude in New York has gained 9 percent so far this year and hit a two-year high of $87.63 a barrel yesterday.

RenCap’s forecast for next year suggest that the “the worrying slowdown in growth in the second half of 2010 is a result of temporary factors, rather than a sign of a deeper malaise,” Nash said.

GDP slid a seasonally adjusted 0.7 percent in the third quarter from the previous period after posting gains for four quarters in a row, according to the Economy Ministry.

The Economy Ministry forecasts growth of 3.9 percent to 4.5 percent in the next three years. The government estimates GDP will increase 4 percent in 2010 after last year’s 7.9 percent contraction, the biggest since the Soviet Union’s collapse in 1991.

To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@bloomberg.net.

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net.

Last Updated: November 10, 2010 02:00 EST

Commodity Prices May Trigger Former Soviet Rally: Russia Credit http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aGgou9uXzsKU

By Halia Pavliva and Denis Maternovsky

Nov. 10 (Bloomberg) -- Russian and Kazakh debt is catching up with the rest of emerging markets as commodities prices rise after the U.S. decision to add money to the economy.

Russia’s government bond due in 2015 climbed after the Federal Reserve pledged Nov. 3 to buy $600 billion in Treasury securities through next June, pushing the yield down 11 basis points to near a record low 2.860 percent yesterday. The yield on 11.75 percent notes due in 2015 of KazMunaiGaz National Co., the Kazakh state oil and gas producer, fell 20 basis points, or 0.20 percentage point, to 5.09 percent. Benchmark bond yields in Brazil and South Africa, two other emerging-market commodities exporters, reached two-week and 10-day highs in the same period.

Russian dollar bonds have returned 12.9 percent this year, compared with a 17.1 percent advance for notes from the largest developing nations, JPMorgan Chase & Co. indexes show, as sluggish growth and declining interest rate deterred investors. Brazilian foreign-currency notes advanced 15.1 percent and Philippines debt climbed 18.5 percent in the same period. Rising prices for oil, gas and metals boost revenue for Russia and other members of the Commonwealth of Independent States whose recovery is tied to global commodity prices.

“There is a decent chance you can get outperformance because we are in a pretty decent environment for commodities,” said Ian McCall, a director at Argo Capital Management in London who manages $500 million of emerging-market debt. The former Soviet Union “benefits the most of the group, as countries like Russia and Kazakhstan are commodities exporters,” McCall said.

Commodities Rally

Prices for commodities increased to the highest level since 2008 after the Fed announced it will buy more Treasury bills to inject money into the economy, a process in the U.S. and U.K. known as quantitative easing.

Commodities have surged to a two-year high, as cotton and gold reached records, silver touched the highest level in 30 years, and corn futures advanced to the highest price since August 2008. The Standard & Poor’s GSCI Index of 24 commodities gained as much as 1.5 percent yesterday to the highest since Oct. 2, 2008.

“The announcement by the Fed is definitely supportive for emerging-market credits,” said Sergey Dergachev, who helps manage $6 billion of emerging-market debt at Union Investments in Frankfurt. The Fed’s buying of bonds in the U.S. “will prolong the

relatively attractive risk appetite and Russian issuers should benefit from this ‘hunt for yield,’” he said.

‘Implicit Hedge’

Russia is the world’s biggest energy exporter, while Kazakhstan, holder of more than 3 percent of the world’s oil according to BP Plc, is the largest uranium producer. Russia pumped 10 million barrels of crude a day last year, versus 2.3 million for Kazakhstan. The relative cheapness of Russian and Kazakh debt is an added lure for investors as oil prices rise.

“Russian assets offer an implicit hedge against the potential inflationary consequences of quantitative easing by the Fed,” Scott Licamele, a partner at foreign-exchange broker LoginFX in Moscow, said by telephone. “As a major commodities exporter, the economy will continue to perform with a weaker dollar and correspondingly higher oil and metals prices.”

The ruble gained 0.5 percent to 30.6255 per dollar in Moscow yesterday, and has weakened 1.1 percent versus the greenback so far this year. Non-deliverable forwards, or NDFs, which provide a guide to expectations of currency movements and interest rate differentials and allow companies to hedge, show the ruble at 30.8635 per dollar in three months.

Default Swaps

The cost of protecting Russian debt against non-payment for five years using credit-default swaps rose 3.5 basis points to 139 yesterday, down from this year’s peak of 217 points, according to data provider CMA. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a debtor fail to adhere to its agreements.

Credit-default swaps for Russia, rated Baa1 by Moody’s Investors Service, its third-lowest investment grade, cost 10 basis points more than contracts for Turkey, which is rated four levels lower at Ba2. Russia swaps cost as much as 40 points less on April 20. Brazil stood at 97 points.

The extra yield investors demand to hold Russian debt rather than U.S. Treasuries fell 1 basis point to 196 points, according to JPMorgan EMBI+ indexes. The difference compares with 132 for debt of similarly rated Mexico and 177 for Brazil, which is rated two steps lower at Baa3 by Moody’s.

Eurobonds Undervalued

“We recommend paying attention to Eurobonds of CIS countries, particularly Russian Eurobonds as those are currently undervalued compared with other emerging markets,

such as Brazil and Mexico,” Dmitri Gritskevich, fixed income analyst at Promsvyazbank in Moscow, said in a telephone interview.

The yieldspread on Russian bonds is 40 basis points below the average for emerging markets, near to the smallest difference since September 2009 and down from a 15-month high of 105 in February, according to JPMorgan Indexes. Russian notes yield 14 basis points more than Brazilian bonds and 53 points more than Mexico’s.

Russia expects gross domestic product will grow 4 percent this year compared with 7.5 percent for Brazil and 10.5 percent for China, according to official forecasts.

Kazakhstan’s GDP expanded 7.5 percent in the first nine months of the year, Prime Minister Karim Massimov said Oct. 25.

“I assume Russia and CIS credits to perform very well and better than Asian and Latin American names, but should risk- aversion materialize, Russia and the CIS should be hit much harder,” said Dergachev at Union Investments.

To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net

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

Last Updated: November 10, 2010 02:14 EST

$18.6Bln in Remittances Left in 2009 http://www.themoscowtimes.com/business/article/186bln-in-remittances-left-in-2009/422100.html

10 November 2010By Derek Andersen

Migrant workers make Russia one of the world's largest cash exporters, according to a World Bank report released Tuesday.

The Migration and Remittances Factbook 2011 ranked Russia fourth for 2009 among countries whose foreign residents transfer money abroad, with $18.6 billion leaving its borders. The United States came in first, followed by Saudi Arabia and Switzerland. Russia came in 19th among remittance-receiving countries, taking in $5.6 billion.

According to the report, there are currently 12.3 million immigrants working in Russia, representing 8.7 percent of the population. There are 11.1 million Russians, or 7.9 percent of the population, working abroad. Russia ranks second among countries receiving immigrants, following the United States, and third among countries providing emigrants, after Mexico and India.

Former Soviet republics are the largest source of immigrants to Russia and the most popular destinations for Russian emigrants. The exchanges of workers between Russia and Ukraine and between Russia and Kazakhstan are among the most sizeable in the world.

Outflow from Russia increased sharply through most of this decade, rising from $3.23 billion in 2003 to a peak of $26.15 billion in 2008. The decline in 2009 was in line with worldwide trends, as the effects of crisis-related unemployment and new immigration quotas were felt.

Similarly, remittance inflow into Russia rose from $1.5 billion in 2003 to $6 billion in 2008, before falling to $5.4 billion in 2009.

A supplementary brief to the 2011 report predicts that remittance flows into developing countries will rise by 6 percent this year, 6.2 percent next year, and 8.2 percent in 2012, but it cautions that the fragility of economic recovery, fluctuating currency and commodities prices and rising anti-immigrant sentiment could affect that growth.

Anti-immigrant sentiment is rising. "Hundreds of Tajik labor migrants have been the victims of deception by employers," the Labor Migrants of Tajikistan association states on its web site. "Documents are forged; wages are not paid; civil servants behave rudely."

"Such cases have become more frequent in the last two years," the statement says.

The World Bank brief also says remittance outflow from Russia is closely tied to the price of crude oil. The authors conclude that the immigrant population and remittance outflow are expected to rise steadily in Russia in the short term.

Broad monetary base declines in October

http://www.businessneweurope.eu/dispatch_text13568

Renaissance CapitalNovember 10, 2010

Central Bank of Russia (CBR) statistics released yesterday (9 Nov) indicate that the broad monetary base declined in October to RUB6,956bn, down 2.4% MoM. Cash money increased to RUB5,095bn. Correspondent accounts of commercial banks with the CBR accounted for RUB586bn in October. OBR holdings reached RUB866bn last month (vs RUB810bn in September). Bank deposits in the CBR, however, fell to RUB223bn (vs RUB510bn in September).

Traditionally, Russia's banking system liquidity has been supplied via two channels: Budget expenditures (i.e., Reserve Fund) and CBR FX interventions. Neither the former

nor the latter was used in Sep-Oct. With regard to the Reserve Fund, the budget has been financed via the domestic bond market since April, thus not affecting the monetary base. Furthermore, the CBR indeed sold around $4bn via FX interventions in October.

As such, the recent monetary base dynamics indicate that liquidity conditions have worsened. During the summer, free banking system liquidity (correspondent accounts plus bank deposits) exceeded RUB1trn and are barely over RUB800bn now. Still, money market rates remain at a comfortable level of 2.25-2.75%. However, we expect the deteriorating liquidity environment to be temporary. In our view, federal budget expenditures will contribute around RUB3trn in total for October- December (with at least RUB500bn in fresh injections from the Reserve Fund). The CBR will redeem RUB200bn of the OBR-14 issue in December.

Business, Energy or Environmental regulations or discussions

AvtoVAZ, Norilsk Nickel, Polyus Gold, Sberbank: Russian Previewhttp://www.businessweek.com/news/2010-11-10/avtovaz-norilsk-nickel-polyus-gold-sberbank-russian-preview.html

November 10, 2010, 2:07 AM EST

By Jason Corcoran

Nov. 10 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow.

The 30-stock Micex Index gained 1.7 percent to 1,594.72 at the close in Moscow. The dollar-denominated RTS Index increased 1.9 percent to 1,659.48.

OAO AvtoVAZ (AVAZ RX): New car sales in Russia climbed 22 percent to 1.5 million vehicles for the first 10 months this year, compared to the same period last year, according to a statement yesterday from the Association of European Businesses. AvtoVAZ, Russia’s biggest carmaker, added 3.1 percent to 37.33 rubles on the Micex stock exchange.

OAO GMK Norilsk Nickel (GMKN RX): Copper topped $4 a pound, extending a rally to a 28-month-high as speculation mounted that the dollar will weaken and as commodity prices surged. Norilsk Nickel, Russia’s largest miner, climbed 3.7 percent to 6,081.49 rubles on the Micex Stock Exchange.

OAO Polyus Gold (PLZL RX): Gold futures rose to another record high of $1,424 an ounce on concern that Ireland and Greece will struggle to repay bondholders, boosting demand for the precious metal as an alternative to currencies. Polyus, the country’s biggest gold producer, advanced 3.5 percent to 1,642.12 rubles.

OAO Sberbank (SBER03 RX): Russia’s largest lender acquired almost 75 percent in lottery company OOO Sportloto, the state- controlled bank said yesterday in a statement, without giving the price. Sportloto signed a contract with the government to operate 12 lotteries supporting the 2014 Winter Olympics in the Black Sea resort of Sochi. Sberbank fell 0.2 percent to 103.73 rubles on the Micex Stock Exchange.

--Editor: Glenn J. Kalinoski

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

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

Generators' Unregulated Capacity Prices for 2011 May Barely Exceed Price Caps

http://www.businessneweurope.eu/dispatch_text13568

AtonNovember 10, 2010

Interfax reported yesterday (9 Nov) that according to the preliminary results of the capacity auction for 2011, unregulated capacity prices in the three free_flow zones (FFZ) which were deemed competitive -the Center, Urals, and Siberia FFZs - were set at RUB125,000, RUB127,000, and RUB200,000/MW per month, respectively. According to one source, regulators may impose a price cap for unregulated capacity payments in Siberia FFZ, because it significantly exceeds the price cap (by 66%) for the second pricing zone of RUB120,000/MW. We remind readers that earlier, the Federal Antimonopoly Service ruled that the remaining 26 of 29 FFZs lacked sufficient competition and would therefore have price ceilings set on capacity payments.

Bottom line The reported unregulated capacity prices in the Center and Urals FFZs of RUB125,000/MW and RUB127,000/MW are only 11% and 13% respectively above the price cap established for the first pricing zone (European Russia and Urals) of RUB112,500/MW. We do not see these prices as substantially different.

According to Interfax, the regulator likely believes the unregulated capacity price in Siberia FFZ is too high and may introduce a price cap there, as well. This suggests to us that the regulator is willing to alter the rules of the game on the fly in order to constrain electricity prices.

Some investors may have expected the regulator to allow unregulated capacity prices to be much higher than the price caps; if so, they may now be disappointed. Overall, we consider the news as largely neutral to marginally negative for generation companies.

National telecom merger may be suspendedhttp://en.rian.ru/business/20101110/161273157.html

12:04 10/11/2010

MOSCOW, November 10 (RIA Novosti) - Reorganization of state-owned telecommunications holding Svyazinvest, in which the state plans to create a national telecoms company via merging Rostelecom long-distance carrier and regional telecoms firms, may be suspended, Kommersant business daily said on Wednesday.

The paper said the Economic Development Ministry, at an October meeting with Deputy Prime Minister Sergei Ivanov, had proposed suspending the reorganization to calculate how many percent in the new company shareholders would have.

Minutes of the meeting, obtained by Kommersant, say the government should take into account the Economic Development Ministry's position, under which "it is reasonable to suspend all merger procedures" until other merger scenarios have been considered. The government should also approve a model for Svyazinvest and Rostelecom's reorganization.

Kommersant also said that the Telecommunications Ministry, Economic Development Ministry, Finance Ministry, national development bank Vnesheconombank and Deposit Insurance Agency are to work out a model under which the government will maintain control over Rostelecom after mergers with regional firms before November 30.

Vedomosti business daily said that the government, wary of losing control of the united telecoms company, had initiated a check of ratios to be used when swapping regional telecoms' preferred shares for ordinary shares in Rostelecom.

It quoted a Svyazinvest source as saying that the reorganization cannot be stopped because Rostelecom had already starting buying shares from regional telecoms shareholders dissenting with the mergers.

It quoted a Telecommunications Ministry spokesman as saying that suspending the reorganization was economically unreasonable and illegal as it was approved by majority of shareholders, while ratios calculated by Ernst & Young had been confirmed by Morgan Stanley.

Sberbank might acquire the fourth largest private pension fund in Russia http://www.businessneweurope.eu/dispatch_text13568

VTB CapitalNovember 10, 2010

News: According to RBC-Daily, Sberbank is negotiating the purchase of Electroenergetiki, Russia's fourth largest private pension fund. Combined with the current bank's own pension fund, it might become the third largest private pension fund in Russia. The paper estimates the size of the deal at USD 120- 150mn.

Our View: The acquisition would allow Sberbank to strengthen its position on the pension funds market. However, the size of the deal is immaterial for the bank and hence is neutral for the stock. We are reiterating our Buy recommendation for Sberbank.

Dmitry Dmitriev

Highland starts mining at Belaya Gora http://www.businessneweurope.eu/dispatch_text13568

Alfa BankNovember 10, 2010

Yesterday Highland Gold announced that mining had begun at its Belaya Gora property. This is in line with previous company guidance for a 4Q10 start. Nevertheless, we considerate it mildly POSITIVE for the stock, as this step increases confidence that the company will be able to deliver growth.

During the first stage of the project (2010-2012), ore from Belaya Gora will be trucked 66 km for processing to the company's mill at Mnogovershinnoye. We estimate the contribution from Belaya Gora at 25 koz in 2011 (~11% of the company's total). The company plans to launch a stand-alone 1.5 mln t milling facility at Belaya Gora in mid-2012.

Barry Ehrlich

Uncertain Future for U.S. Poultry in Russiahttp://www.foodsafetynews.com/2010/11/uncertain-future-for-us-poultry-in-russia/

by Helena Bottemiller | Nov 10, 2010

Although U.S. poultry was only recently allowed back in Russia, it seems American chicken is still being eased out.

After a meeting between presidents Barack Obama and Dmitry Medvedev in late June, Russia agreed to lift a ban on American poultry that began in January.  Prime

Minister Vladimir Putin had called U.S. poultry unsafe because it is treated with antimicrobial chlorine.

Details of the renewed export agreement were finalized in July, but resolving the dispute has been anything but smooth.

Last week, again citing safety and quality concerns, Russian officials announced a new ban, this time on using frozen poultry in processed products. 

The U.S. Department of Agriculture and the poultry industry say there is no scientific basis or food safety rationale for Russia's claims.

"Freezing is a long used, internationally accepted method of securing the safety of food products, including poultry and poultry products," said a USDA spokeswoman.

Whether this is a safety concern or a trade dispute, Putin seems intent on getting his country chicken self-sufficient by 2015.

The loss of the Russian market would be a huge blow to American poultry producers--this year's ban is estimated to have cost them $400 million in sales.  Russia has been the largest export market for U.S. poultry, a relationship that worked well in the past because Americans tend to gobble up white meat, while Russians prefer dark meat.

But, as a Washington Post reporter in Moscow pointed out last month, American poultry has been falling out of favor in Russia for some time.

"Russians liked [leg quarters] so much that they took to calling them 'Bush legs,' after the first President Bush," wrote Will Englund. "But in the new pecking order, they come in close to the bottom."

"For the first nine months of this year, they were banned outright, on the grounds that the chlorine disinfectant used by U.S. producers is unhealthy," continues Englund. "Now, after a relentless full-court press by the U.S. industry, and hard-nosed bargaining over Russia's entry into the World Trade Organization, they're coming in again, washed with a different antimicrobial solution.  But Russian shoppers complain about their water content, and worry, after a campaign in the Russian press, about hormones and antibiotics."  

EBRD finances EUR 20 million project in Russian regions with Finland’s Rani Plasthttp://finchannel.com/news_flash/Banks/75182_EBRD_finances_EUR_20_million_project_in_Russian_regions_with_Finland%E2%80%99s_Rani_Plast/

10/11/2010 10:46 (00:35 minutes ago) The FINANCIAL -- The EBRD has extended a long-term loan of EUR 8 million to the Russian subsidiary of Finland’s Ab Rani Plast Oy to finance the construction of a plant in Russia’s Kaluga Region.

According to EBRD, the plant will supply Russian industrial clients with flexible packaging for agriculture, consumer goods, electric insulation and pallet wrapping.

“This project is a major investment in the future and one of the biggest in Rani Plast's history. Our long-term goal is to become Russia’s leading supplier of plastic film and the decision to build a plant next to our customers is our response to the rapid growth of the Russian market. This is something we have dreamt of for 15 years,” said Mikael Ahlbäck, Managing Director of Rani Plast.

Finland’s Lemminkäinen is building the EUR 20 million plant on a turnkey basis at its industrial park in Kaluga. Under this type of contract, Lemminkäinen is responsible for the transfer to the Russian subsidiary of Finland’s Ab Rani Plast Oy of the land plot, infrastructure, design permission and the plant.

“The EBRD is delighted to support Rani Plast’s new plant in Russia. Medium-sized businesses have an important contribution to make to Foreign Direct Investment in Russia. Rani Plast is renowned for good quality products and high environmental and health and safety standards, as well as the very best industry practices,” said Eric Rasmussen, the EBRD’s Director for Industry, Commerce and Agriculture in Russia.

The maturity of this EBRD’s loan is nine years.

Rani Plast is a mid-size, family-owned company, specialising in manufacturing of multi-layered plastic film for the flexible packaging sector. It is the biggest producer of plastic film industrial packaging in Scandinavia.

Rani Plast has been exporting its products to Russia since 1963, meeting the Russian packaging industry’s demand for high quality polyethylene film.

Aeroflot overhauls ticketing structure to improve performance http://www.bsr-russia.com/en/airlines-a-airports/item/1126-aeroflot-overhauls-ticketing-structure-to-improve-performance.html

Written by Elena Toporikova on Tuesday, 09 November 2010 17:43 | Published in Airlines & Airports

Aeroflot, has overhauled its ticketing and pricing structure to offer six classes of airfare. For business travellers there are now two groups ‘Status’ and ‘Comfort, ’ and for regular

cabin travellers there are now four classes of ticket - ‘Status,’ ‘Comfort,’ ‘Freeze,’ and ‘Promo.’

 

Aeroflot hopes the changes will simplify their rules surrounding air fares, reducing the time it takes to make a booking, alteration or cancellation and enhancing the quality of service. Each fares group corresponds with certain fares rules which include general conditions such as minimum and maximum stay requirements, alteration, cancellation and refund policies together with discounts for children, baggage allowances and similar terms and conditions.

Aeroflot's CEO Vitaly Savelyev emphasised that Aeroflot is constantly improving its service, implementing innovative business ideas and state-of-the-art technologies. Such changes secure Aeroflot’s position as the market leader in Russian aviation.

Aeroflot is the largest Russian airline with 898 routes to 169 countries. In the first 9 months of the current year 8,532,800 chose to travel with Aeroflot.

November 10, 2010 10:00

Mamut acquires 3% in British retail chain HMVhttp://www.interfax.com/newsinf.asp?id=200835

LONDON. Nov 10 (Interfax) - Russian businessman Alexander Mamut has acquired 3% of the shares in British company HMV Group, which owns a retail chain that sells music, films, computer programs and books.

According to a statement issued by HMV, the fund Channel Trustees Limited, which represents Mamut's interest, acquired 3.06% in HMV.

According to analysts quoted by the business newspaper Financial Times, Mamut might have acquired the shares because of their current low price.

HMV owns 700 stores in seven countries with annual sales revenue totalling over 2 billion pounds.

Mamut owns a stake in the company SUP, which, in turn, owns the internet resource LiveJournal.

IH

Russian steel projects ask for over $377m of carbon credits

http://www.businessneweurope.eu/dispatch_text13568

bneNovember 10, 2010

Eight Russian projects which have reduced greenhouse gas emissions in the iron and steel industry are among a total of 58 projects which have taken part in the second round of applications for carbon credits from Russia's Sberbank, Steel Business Briefing reports.

Russia has lagged behind other countries in granting approval businesses which reduce carbon emissions to receive carbon credits but for the first time approved one group of projects worth 30m Emissions Reduction Units (ERUs) earlier this year.

Sberbank is offering another 30m ERUs, worth more than $553m according to a recent European auction, to a second group of projects which have successfully reduced emissions as part of the UN Joint Implementation programme.

The 8 projects so far approved have asked for more than 20m ERUs. The state-owned bank should decide on which projects receive ERUs in this round by 22 November.

The largest project on the list is Magnitogorsk Iron & Steel's (MMK) switch from open-hearth furnaces to electric arc furnaces. It is asking for 7m credits to represent the 7m tonnes of CO2 equivalent emissions it has saved since the start of 2008.

In addition to six projects to upgrade or improve the efficiency of iron and steel production and rolling, Air Liquide-Severstal, which provides oxygen to Severstal's basic oxygen furnaces, also applied.

In the first round of applications Evraz was granted the right to 2.12m ERUs, while Metalloinvest was granted 3.2m. They should receive the credits by the end of the year, according to SSB.

ERU futures and options contracts will begin trading on the London-based European Climate Exchange (ECX) on 8 November.

Russia: Light vehicle market continues to expandhttp://www.automotiveworld.com/news/oems-and-markets/84605-russia-light-vehicle-market-continues-to-expand-in-oct

By: David Isaiah, Wednesday, November 10, 2010, AutomotiveWorld.com

Light vehicle sales in Russia continued to improve, as October saw sales of passenger cars and LCVs rise by 62% year-on-year to 188,478 units. Comparatively, the industry had reported sales of 116,676 light vehicles in October 2009.

"A further increase in growth to 62% from October 2009 takes the year-to-date growth above 20% for the first time this year. This continued recovery is very encouraging across all segments of the industry and leads us to revising our full-year industry forecast to 1.8 million units," said David Thomas, chairman of the Association of European Businesses Automobile Manufacturers Committee (AEB AMC).

Last month's sales were also higher than that reported in September 2010, of 185,953 units.

Last month, the country's light vehicle market was led by AvtoVAZ/Renault-Nissan, which accounted for sales of 70,001 vehicles, up 79% compared with the 39,012 units sold a year earlier. All of the individual brands – AvtoVAZ, Renault, Nissan and Infiniti – recorded sales growth from a year earlier.

General Motors followed, with sales totalling 15,970 units, up 77% from 9,000 a year ago, while Volkswagen Group came third, with 12,690 (+78%). Among those brands that failed to record year-on-year sales growth last month were Suzuki (-11%), Alfa Romeo (-75%), Mini (-17%), Jaguar (-38%), Subaru (-13%) and Chrysler (-67%).

The bestselling brands in October were Lada with 50,251 cars sold (+78%), Chevrolet with 10,710 (47%) and Renault, which accounted for 10,112 units (+63%). The top-three bestselling models were all from Lada: the 2105/2107, followed by the Priora and Kalina models.

Published on Wednesday, November 10, 2010

Activity in the Oil and Gas sector (including regulatory)November 10, 2010 11:47

Export duty on Russian crude could rise to $302-304/tonne on Dec 1http://www.interfax.com/newsinf.asp?id=200878

MOSCOW. Nov 10 (Interfax) - The export duty on Russian crude oil could rise to $302-304/tonne on December 1, from $290.6 at present.

Alexander Sakovich, the Finance Ministry official in charge of customs payments, told Interfax that Russian crude averaged at $82.33 a barrel in the observation period October

15-November 10, inclusive. It could average at $84-$87 if current trends persist in the three days that remain until the observation period ends. The average for the whole period would then be $82.570$83 a barrel, and the maximum duty on that basis would be $302-$304/tonne.

Sakovich said the discounted export duty on East Siberian oil and, for the first time, Caspian oil, could be $107-$108 a tonne in December.

The duty on east Siberian oil is currently $98.8 a tonne.

Sakovich said a decision by the Customs Union commission for the discounted duty to extend to the Caspian oil ought to come into effect in the first ten days of December.

The duty on light petroleum products might be $216-$217/tonne on December 1, and that on dark products $117, up from $208.1 and $112.1, respectively, at present.

Pr

Caspian Gas Exports to Triple by 2020 http://www.themoscowtimes.com/business/article/caspian-gas-exports-to-triple-by-2020/422094.html

10 November 2010Bloomberg

Caspian gas exports may more than triple in the next decade, allowing consumers in Europe and China to diversify supply, the International Energy Agency said Tuesday.

Producers including Turkmenistan and Azerbaijan will export almost 100 billion cubic meters of gas in 2020, compared with less than 30 bcm last year, the Paris-based agency said in its World Energy Outlook.

Caspian producers already ship gas to China through the Trans-Asian pipeline, which runs through Turkmenistan, Kazakhstan and Uzbekistan. Europe is also looking at Caspian gas as it seeks supplies for the OMV-led Nabucco pipeline, which would allow it to lessen its dependence on Russian fuel.

"The Caspian region has the potential to make a significant contribution to ensuring energy security in the rest of the world," the IEA said in its report.

Oil output from the Caspian will also rise, with Kazakhstan ranked fourth in the world for production growth in volume terms between now and 2035. The region's crude output

will peak at about 5.4 million barrels a day from 2025 to 2030, equivalent to about half of Russia's current production.

Novatek Up on Acquisitions http://www.themoscowtimes.com/business/article/novatek-up-on-acquisitions/422114.html

10 November 2010

Gas producer Novatek rose to a record high on Tuesday, after the board approved the purchase of a controlling stake in two West Siberian gas projects. Shares jumped by 6 percent to 278.51 rubles at the close in Moscow.

Novatek agreed Monday to buy a 51 percent stake in Sibneftegas, which holds licenses for the Beregovy, Khadyryakhinsky, Pyreiny and Zapadno-Zapolyarnoye fields in the Yamal-Nenets autonomous district.  

The acquisition may add 12 percent to Novatek’s gas output from 2011, UralSib Financial said. “Novatek has proven once again that it is able to snatch up value-accretive deals that ensure the company’s growth,” Troika Dialog said in a research note.

The board also approved the acquisition of a 51 percent stake in SeverEnergia by Novatek’s joint venture with Gazprom Neft, from its partner’s parent company, for at least $1.5 billion. The company said it plans to issue eurobonds of the same value, with a maturity of 10 years. 

(Bloomberg)

U.S. noses into Russia's gas domainhttp://www.ctv.ca/generic/generated/static/business/article1791600.html

Daniel Fineren and Edward McAllister

The United States may play a role this winter in loosening Russia’s grip on the European market for natural gas by shipping liquefied natural gas across the Atlantic.

Awash with domestic shale gas and with little need to import extra fuel, the United States has started re-exporting LNG cargoes, which firms had previously imported under contract, to countries where gas prices are much higher.

Such shipments could contribute to a growing pool of cheaper LNG going to Russia’s biggest export market this winter. In the longer term, U.S. plans to build plants to liquefy shale gas could create another rival to Russian pipelines.

The first re-export cargo from the United States to Britain – a key access point for LNG into northern Europe via an Interconnector pipeline to Belgium – is set to sail over the weekend.

“It is a landmark shipment,” said Zach Allen at NATS LNG analysts in Raleigh North Carolina.

“LNG has, through the Interconnector, played a major role in reducing intake of Russian gas into western Europe.”

U.S. shale gas has already forced many LNG producers that had hoped to supply the North American market to find alternative buyers, with many cargoes ending up in Europe and driving spot gas prices below the price of oil-indexed Russian gas.

U.S. re-exports to Europe are the latest sign that increases in shale gas production have transformed the global gas market. The International Energy Agency said on Tuesday that a decade-long period of oversupply was likely to push oil-indexed gas sellers to accept lower prices.

In February, Russian gas export monopoly Gazprom postponed it’s Shtokman LNG project because the United States, its target market, did not need more imports.

Major European pipeline gas supplier Statoil has been forced to find alternative markets for LNG it had hoped to send to the United States, often selling it into Europe.

Qatar, the world’s largest producer and exporter of LNG, has also pushed into both Norwegian and Russian markets by making large deliveries of cheap LNG into Britain and Belgium.

U.S. LNG imports have fallen to contractual minimums as gas prices have sagged, forcing importers whose terminals are sitting idle to change strategy and re-export to make the most of higher prices overseas.

U.S. gas at $4.1 per million British thermal units (mmbtu) was about $3.3/mmbtu below U.K. prices on Tuesday and just under half the price of Russian gas in Europe in October, according to International Monetary Fund data.

About 20 billion cubic feet of gas has already been re-exported from the United States this year, with some sent to Asia, where buyers have paid nearly $10 per mmbtu, and some to Latin America and the Middle East.

More of those U.S. loaded cargoes could head to Britain over coming months, given that winter price increases are sharper in northern Europe than in the United States and that imports by South American and Middle Eastern buyers are usually confined to summer.

“U.S. exports to Europe will remain rather exotic, but they underline once again the big risks for Russia of focusing some of its future projects on U.S. markets,” said Valery Nesterov, energy analyst at Moscow-based Troika Dialog brokerage.

“The first U.S. LNG cargo for Europe is of course a symbolic event, but I would not overestimate it.”

The number of cargoes redirected from the United States to Europe this winter will be limited, because most shipments will probably head directly from producing countries, but the ongoing shale gas boom could lead to the export of American gas by tanker. Cheniere Energy, operator of the Sabine Pass import terminal in Louisiana, announced plans in June to build a liquefaction plant at the terminal. It said on Tuesday that U.S. bank Morgan Stanley hoped to secure some of its export capacity. Pending approval, the plant would export U.S.-produced shale gas to markets all over the globe from 2015.

It would be the first U.S. LNG export plant in 40 years – following the old Kenai facility which supplies Asia from Alaska – and would be well placed to supply Europe.

“LNG supplies from the United States can help lower gas prices in Europe and Asia and ultimately help lift prices in the States,” said Mikhail Korchemkin from Pennsylvania-based East European Gas Analysis.

Highlights from the 8th Annual Oil & Gas Week: Gazprom http://www.businessneweurope.eu/dispatch_text13568

Renaissance CapitalNovember 10, 2010

Gazprom presented yesterday (9 Nov) at Renaissance Capital's 8th Annual Oil & Gas week in Moscow. Key points from yesterday's presentation included the following:

• Gazprom expects to significantly diversify its geographic revenue mix, reducing the share of exports to Europe from 52% (2010) to 37% by 2020, while the share of domestic sales is expected to increase from 30% (2010) to 35% by 2020, and new markets (China and LNG) will account for about 15% of total sales by 2020.

• The company expects netback parity to be achieved by 2014, following 15% per year tariff growth during 2011- 2013 and assuming no significant rise in the oil price.

• Gazprom expects European imports to rise to 450-500bcm in the next 20 years (from 270bcm currently), while Chinese imports could grow to 200bcm (from about 10bcm

currently).

• The final terms of a gas export contract with China are expected to be signed next year, with first deliveries via the Western route to be launched from 2015 (30bcm), and potentially further deliveries (38bcm) from East Siberia (Chayanda field) from 2018.

• Gazprom believes its reserves base is sufficient to support an increase in production to about 700bcm/year by 2030, with approximately 520bcm coming from new fields. The annual capex requirement is estimated at about RUB900bn, with half for transportation infrastructure and 28% for upstream.

Ildar Davletshin

Highlights from the 8th Annual Oil & Gas Week: Rosneft http://www.businessneweurope.eu/dispatch_text13568

Renaissance CapitalNovember 10, 2010

Rosneft presented at Renaissance Capital's 8th Annual Oil & Gas Week in Moscow yesterday (9 Nov). Key points of yesterday's presentation included the following:

• Rosneft estimates about $800mn in PBT savings from the four-month extension of the reduced export duty for Vankor, and an additional $600mn in savings from the transportation of crude to China by pipeline instead of rail.

• The company is confident it can maintain growth for another 10 years, helped by the ramp-up of production at Vankor and the potential launch of the Yurubcheno-Takhomskoye (Y-T) field in 2015, although no decision on launching the Y-T field has been made yet (expected before year-end). No final decision on the Vankor production plan for 2011 has been made either, with the preliminary range at 14-17mnt.

• It sees future tax changes as quite favourable, including the likely increase in downstream taxation (termination of tax subsidy) if it comes together with lower upstream taxation. Rosneft expects its $7bn of capex through 2015 for modernisation of refineries to generate an IRR above 20% and increase the refining margin to about $12/boe from $5/boe as a result of better product mix.

• Rosneft intends to monetise its vast gas reserves (1,784bcm of 3P reserves) through higher gas deliveries, planning to ship over 30bcm of gas by 2018.

• The company does not see foreign acquisitions as its top priority, planning to maintain a target leverage of 0.8x net debt/EBITDA at least until YE10, while remaining open to cooperation with foreign partners on exploration and refining projects in Russia.

Ildar Davletshin

Gazprom

Gazprom eyes South Korean markethttp://www.upstreamonline.com/live/article236139.ece

Russian gas giant Gazprom will start talks with Korean Gas Corporation (Kogas) next month on a deal which could see it supply the South Korean player with at least 10 billion cubic metres of gas per year from 2017, Gazprom chief executive Alexei Miller said.

News wires  10 November 2010 07:08 GMT

Miller added that while Europe remained Russia's number one gas export market, Asian markets could soon catch up.

Reuters also quoted Miller saying that South Korea's National Oil Corporation was interested in developing oilfields in Russia.

Published: 10 November 2010 07:08 GMT  | Last updated: 10 November 2010 07:08 GMT

Gazprom could supply 10 bcm of gas to Korea from 2017http://in.reuters.com/article/idINWLA755620101110

12:03pm IST

SEOUL, Nov 10 (Reuters) - Russia's Gazprom (GAZP.MM: Quote, Profile, Research) will in December start commercial talks with South Korea's Kogas (036460.KS: Quote, Profile, Research) on delivering at least 10 billion cubic metres of gas a year from 2017, Gazprom's CEO Alexei Miller said.

The chief executive of Russia's state gas export monopoly also said on Wednesday that Korea's National Oil Company (KNOC) was interested in developing oil fields in Russia.

Miller also said that Europe remained Russia's number one gas export market, but added that Asian markets could reach comparable levels in the near future. (Writing by Lidia Kelly; editing by Maria Kiselyova)

Gazprom considering gas pipeline construction to S Korea-Miller

http://www.itar-tass.com/eng/level2.html?NewsID=15666937

10.11.2010, 10.32

SEOUL, November 10 (Itar-Tass) - Gazprom is considering building a gas pipeline to South Korea, CEO of the Russian gas monopoly Alexei Miller told reporters on Wednesday. He added that the sides are considering a land version of the construction of this pipeline

“During the pre-investment feasibility study we analysed the options of gas supplies to the Republic of Korea, in particular, the variant of pipeline natural gas, compressed natural gas and liquefied natural gas,” Miller continued. “All options have been analysed, presented by the companies to each other, and in the course of further negotiations the version of the delivery will be finally determined. The variant of gas supplies to the Republic of Korea through a pipeline is also possible,” he said.

Miller also noted that the option of building a pipeline under the sea is not considered. Answering a question whether the issue of gas supplies via North Korea is being considered, the Gazprom head said: “a land version of the gas supply is under consideration.”

“Decisions on the gas pipeline will be taken at the time, which will allow for the start of physical supplies of Russian gas to South Korea in 2017,” he said. “The decision will be made in due time,” Miller added.

Gas reserves of the Republic of Korea are extremely limited, and today the country actually doesn’t produce gas from its fields. At the same time, gas consumption in Korea amounted to 21.9 bcm in 2002. According to the forecasts, gas consumption in the country is expected to grow 1.5-fold by 2010 and to double by 2020. At present, the gas market of Korea entirely depends on LNG import. A well-developed gas transmission network linking the coastline LNG terminals with the main gas consumption centres has been created in the country. That’s why not only power producers, but also manufacturing companies and the citizens are among major gas consumers. Set up in 1983, the Kogas company is the sole operator of the Korean gas transmission network. The State holds 62 percent of the company’ s assets. Construction and operation of LNG terminals and gas distribution grids, implementation of gas projects abroad and R&D in the gas sector are the core activities of the company. The company possesses 3 LNG terminals and gas pipelines with the total length of 2,442 km.

Gazprom is implementing a staged strategy of expanding its presence on the liquefied natural gas (LNG) market. This helps to extend the company’s business geography. In

2005 Gazprom supplied its first LNG cargo to the USA, in 2006 – to the Great Britain, Japan and South Korea. Gazprom’s entry in the Sakhalin II project gives a strong impetus for the completion of a large-scale project targeted at supplying energy carriers to Asia-Pacific and North America. In 2009 the first Russian LNG plant was launched in Sakhalin.

Russia Gazprom may sell 10 pct in Novatek-sourcehttp://af.reuters.com/article/energyOilNews/idAFLDE6A908L20101110

Wed Nov 10, 2010 7:02am GMT

MOSCOW Nov 10 (Reuters) - Gazprom (GAZP.MM), the world's top natural gas company, is looking to sell a 10 percent stake in Novatek (NOTK.MM), Russia's second-largest gas producer, a source told Reuters on Wednesday.

"Yes, Gazprom is considering such a possibility," the source said when asked if the company plans to sell almost half of its stake in Novatek.

A Gazprom's spokesman declined to comment.

Gazprom holds 19.4 percent in Novatek.

In March, Russian business daily Kommersant said that Gazprom planned to swap more than half of its holding in Novatek for 51 percent of a small natural gas firm. [ID:nLDE622035]

(Reporting by Vladimir Soldatkin; editing by Lidia Kelly)

Gazprom does not exclude new delays at Bovanenkovohttp://www.barentsobserver.com/gazprom-does-not-exclude-new-delays-at-bovanenkovo.4840885-16178.html

2010-11-09 Deputy leader of Gazprom Andrei Kruglov does not exlude that the launch of the huge Bovanenkovo gas field in Yamal is postponed if market demands do not meet expectations.

Talking at a conference this week, the Gazprom official indicated that the Bovanenkovo field could see another postponement, Oilru.com reports. Last year, the Gazprom leadership informed that the launch of the giant field will be postponed to Q3 2012, a year later than originally planned.

Kruglov told the conference participants that project progress will again be adjusted if demands drop.

-At the moment, the time frames are unchanged, we are progressing in line with schedules, Kruglov underlined. –However, if we see that the volumes of gas in the market do not meet expectations, we will take such a decision, he added, RIA Novosti reports.

The Bovanenkovo field is being connected with major infrastructure projects. A pipeline is being laid across the Baidarata Bay and through the Komi Republic, and a railway is to connect the field with existing rail grids in the Yamal-Nenets region.

The railway line is reported to be ready for transport operations by the end of 2010 and the construction of a local Bovanenkovo airport is progressing.

Gazprom's Public Statement on draft gas law consultations at the Ministry of Energy of the Republic of Lithuaniahttp://www.gazprom.com/press/news/2010/november/article105323/

09.11.2010 18:20

JSC Gazprom (“Gazprom”) as a shareholder in AB Lietuvos Dujos (“LD”) provides this statement in the context of the public consultation regarding the draft gas law on November 9, 2010 at the Ministry of Energy of the Republic of Lithuania (“Lithuania”). The Minister of Energy invited Gazprom to participate and we thank him for this opportunity to put on the public record our concerns, suggestions and unfortunately also our objections to the consultation and law-making process put in place by the Lithuanian government purportedly to implement the Third European Directive 2009/73/EC (the “Gas Directive”) into Lithuanian law.

We understand that Lithuania is legally permitted to derogate from the Gas Directive. In addition, the Gas Directive provides for a range of alternatives for its implementation, each of which is a valid and potentially appropriate alternative. Unfortunately Lithuanian government by approving the Concept of Law based on ownership unbundling has opted only in favour of the most severe option that has immense negative financial and operational impact on LD which is also to the detriment of Gazprom being shareholder of LD since 2004. Regrettably, Lithuanian government has not yet performed an analysis of the economic impact and consequences that will cause ownership unbundling once has been implemented.

It should be noted that according to a concept of ownership unbundling, LD will be apparently forced, among other things, to legally and functionally split off its gas transmission business into a new company, which will create significant additional costs and will eventually lead to higher gas prices. Once the proposed legislation based on the

Concept of Law is implemented Gazprom – as shareholders in LD – will be compelled either to sell its shares in the new gas transmission business or relinquish its operational influence to the Lithuanian State, the minority shareholder. We would like to stress that since 2004 Gazprom has contributed (together with the other private shareholder E.ON Ruhrgas International GmbH) much to develop LD to become a very modern and efficient gas company which guarantees a secure gas supply for Lithuania and its consumers. Nowadays LD is one of the most successful Lithuanian companies. In either alternative, ownership unbundling will have a severe impact on our rights and unnecessarily damages a successfully operating company. Given these and other difficulties it raises it is no surprise that other European States choose to not implement ownership unbundling.

In taking its steps, the Government of Lithuania has misapplied and misused the Gas Directive, falsely asserting that the Gas Directive does not permit to postpone its implementation (“Derogation”) in order to allow the current ownership structure to remain in place until alternative gas supplies are available. The Government of Lithuania has taken these steps without providing the foreign shareholders with a meaningful opportunity to discuss the fundamental legal and factual issues. No explanation has been provided as to how the circumstances of Lithuania’s gas supply differ from those of Latvia or Estonia, two EU Member States that have derogated. Indeed, the Government has offered the explanation that Lithuania is interconnected with Latvia as a basis for unbundling. This explanation is false and misleading because no gas is supplied to Lithuania through this interconnection and the Directive acknowledges that none of Latvia, Estonia or Lithuania is part of an interconnected system.

In light of the damage to LD and Gazprom that will be caused by ownership unbundling, we have repeatedly and legitimately questioned why Lithuania is absolutely determined to opt for this particular alternative amongst all alternatives available to it for the implementation of the Gas Directive. There were and are no competition issues with respect to third party access to the gas grid owned by LD. As such, there is no reason for any urgent action. Especially there is no pressure from the Gas Directive because Derogation is the most reasonable solution if there is only one gas supplier (i.e. an isolated market) as it is the case in Lithuania so far. What we and the wider Lithuanian public should expect and must receive is a clear and substantiated explanation why ownership unbundling is needed now and will in fact further the goals of the Gas Directive, specifically to increase competition in the Lithuanian gas market, and why and on what basis the other options available under the Gas Directive have been dismissed out of hand. Thus far, no explanation has been provided to us by the Lithuanian government, despite our repeated requests.

It is important for the Lithuanian public to appreciate that there are equally valid and lawful alternatives for the implementation of the Gas Directive, including the Derogation option. In fact, the European Commission accepts that ownership unbundling is not an appropriate means to further the goals of the Gas Directive in isolated gas markets such as Lithuania. The Derogation option is therefore one option in place to address the Lithuanian situation. Today, Lithuania has only one natural gas supplier. We understand

that the government now plans to have an LNG terminal in place in 2014. Similarly, Lithuania is not yet connected to the Western European gas grid and therefore cannot buy gas on the European spot markets. It is for the Lithuanian government to engage with Poland to build an interconnector to the Western European gas grid. Until the Lithuanian government has provided preconditions for access to alternative natural gas resources, there is no urgent need to push through ownership unbundling. Opting for a Derogation buys time for all involved to make informed choices and is therefore in the best interest of all.

The Government invited the foreign shareholders to participate in sessions of the Working Group representing that it was fully authorized to discuss and reconsider the choice of ownership unbundling and the availability of derogation. In reliance on this representation, the foreign shareholders attended two sessions of the Working Group but when they offered views and assistance with respect to these fundamental issues, their participation was characterized as “abusive” and “non-constructive”.

Under the present ownership structure, AB Lietuvos Dujos is professionally managed, heavily regulated and its costs and price structures are fully transparent. Since privatization of AB Lietuvos Dujos, the company has operated for the benefit of its customers without Lithuanian regulatory sanction.

We conclude that it is premature to approve the current draft legislation implementing the Gas Directive by choosing ownership unbundling. The drafting process must be re-opened if Lithuania is not to violate its international commitments (the Russian-Lithuanian Treaty on the Promotion and Mutual Protection of Investments) to investors such as ourselves, let alone Lithuanian constitutional requirements. If Derogation is chosen, the question of the other implementation alternatives can be postponed and addressed without any undue and unnecessary haste at such time when the Lithuanian government has provided the framework for access to alternative natural gas resources. This is a simple and legitimate request and we trust that the Lithuanian people understand our underlying rationale.

On behalf of JSC Gazprom

Valery Golubev

Deputy Chairman of the Management Committee

11/10 11:17   Gazprom to place Eurobonds next week - Gazprombank reporthttp://www.interfax.com/